SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



~~(X)~~☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

(Exact name of registrant as specified in its charter)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ~~[ X ]~~☒ No ~~[ ]~~

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files).

Yes ~~[ X ]~~☒ No ~~[ ]~~☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ~~[ ]~~

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)

Yes ~~[ ]~~☐ No ~~[ X ]~~

~~APPLICABLE ONLY TO CORPORATE ISSUERS~~

~~Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.~~

As of January ~~31, 2018,~~26, 2023, the Registrant had ~~77,261,505~~72,990,727 shares of Common Stock outstanding ($0.01 par value).

In this report, all references to ~~“JHA”,~~"Jack Henry," “JKHY,” the ~~“Company”, “we”, “us”,~~“Company,” “we,” “us,” and ~~“our”,~~“our,” refer to Jack Henry & Associates, Inc., and its wholly owned subsidiaries.

FORWARD LOOKING STATEMENTS

Certain statements in this report, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of ~~1934.~~1934 (the "Exchange Act"). Forward-looking statements may appear throughout this report, including without limitation, in Management's Discussion and Analysis of Financial Condition and Results of Operations. Forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “seek,” “anticipate,” “estimate,” “future,” “intend,” “plan,” “strategy,” “predict,” “likely,” “should,” “will,” “would,” “could,” “can,” “may,” and similar expressions. Forward-looking statements are based only on management’s current beliefs, expectations and assumptions ~~that~~regarding the future of the Company, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent risks and uncertainties ~~which may~~that could cause actual results to differ materially from ~~the forward-looking~~those expressed or implied by such statements. ~~Risks~~Such risks and uncertainties ~~that could cause actual results and events~~include, but are not limited to, ~~differ materially from such forward-looking statements are identified at “Risk Factors”~~those discussed in ~~the Company’s~~this Quarterly Report on Form 10-Q, those discussed in our Annual Report on Form 10-K for the fiscal year ended June 30, ~~2017. We undertake no~~2022, in particular, those included in Item 1A, “Risk Factors” of such report, and those discussed in other documents we file with the Securities and Exchange Commission (“SEC”). Any forward-looking statement made in this report speaks only as of the date of this report, and the Company expressly disclaims any obligation to publicly update or revise ~~publicly~~ any forward-looking ~~statements,~~statement, whether ~~as a result~~because of new information, future events or otherwise.

PART I. FINANCIAL INFORMATION

ITEM I. FINANCIAL STATEMENTS

JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share and Per Share Data)
(Unaudited)
December 31,
2017 June 30,
2017
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 57,719
$ 114,765
Receivables, net 166,827
276,923
Income tax receivable 23,630
20,135
Prepaid expenses and other 71,427
66,894
Deferred costs 49,997
41,314
Total current assets 369,600
520,031
PROPERTY AND EQUIPMENT, net 272,086
282,934
OTHER ASSETS:
Non-current deferred costs 94,438
96,847
Computer software, net of amortization 278,235
247,317
Other non-current assets 90,641
82,525
Customer relationships, net of amortization 119,925
90,433
Other intangible assets, net of amortization 39,822
36,393
Goodwill 652,329
552,465
Total other assets 1,275,390
1,105,980
Total assets $ 1,917,076
$ 1,908,945
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 13,135
$ 6,841
Accrued expenses 75,397
81,574
Deferred revenues 265,222
382,777
Total current liabilities 353,754
471,192
LONG-TERM LIABILITIES:
Non-current deferred revenues 110,466
128,607
Non-current deferred income tax liability 166,789
219,541
Debt, net of current maturities 100,000
50,000
Other long-term liabilities 12,067
7,554
Total long-term liabilities 389,322
405,702
Total liabilities 743,076
876,894
STOCKHOLDERS' EQUITY
Preferred stock - $1 par value; 500,000 shares authorized, none issued —
—
Common stock - $0.01 par value; 250,000,000 shares authorized;
103,218,206 shares issued at December 31, 2017;
103,083,299 shares issued at June 30, 2017 1,032
1,031
Additional paid-in capital 452,841
452,016
Retained earnings 1,756,419
1,585,278
Less treasury stock at cost
25,961,920 shares at December 31, 2017;
25,660,212 shares at June 30, 2017; (1,036,292 ) (1,006,274 )
Total stockholders' equity 1,174,000
1,032,051
Total liabilities and equity $ 1,917,076
$ 1,908,945


JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In Thousands, Except Share and Per Share Data)

	December 31, 2022		June 30, 2022

ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	25,763	$	48,787
Receivables, net	246,378		348,072
Income tax receivable	—		13,822
Prepaid expenses and other	127,785		125,537
Deferred costs	69,302		57,105
Assets held for sale	—		20,201
Total current assets	469,228		613,524
PROPERTY AND EQUIPMENT, net	203,360		211,709
OTHER ASSETS:
Non-current deferred costs	152,991		143,750
Computer software, net of amortization	545,377		410,957
Other non-current assets	309,178		293,526
Customer relationships, net of amortization	70,179		69,503
Other intangible assets, net of amortization	23,167		25,137
Goodwill	804,797		687,458
Total other assets	1,905,689		1,630,331
Total assets	$	2,578,277	$	2,455,564
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable	$	13,198	$	21,034
Accrued expenses	147,908		192,042

Accrued income taxes	31,668		—
Notes payable and current maturities of long-term debt	21		67
Deferred revenues	214,742		330,687
Total current liabilities	407,537		543,830
LONG-TERM LIABILITIES:
Non-current deferred revenues	70,101		71,485
Deferred income tax liability	265,019		292,630
Debt, net of current maturities	275,000		115,000
Other long-term liabilities	49,630		50,996
Total long-term liabilities	659,750		530,111
Total liabilities	1,067,287		1,073,941
STOCKHOLDERS' EQUITY
Preferred stock - $1 par value; 500,000 shares authorized, none issued	—		—
Common stock - $0.01 par value; 250,000,000 shares authorized; 104,027,008 shares issued at December 31, 2022; 103,921,724 shares issued at June 30, 2022	1,040		1,039
Additional paid-in capital	564,856		551,360
Retained earnings	2,752,212		2,636,342
Less treasury stock at cost 31,042,903 shares at December 31, 2022; 31,042,903 shares at June 30, 2022	(1,807,118)		(1,807,118)
Total stockholders' equity	1,510,990		1,381,623
Total liabilities and equity	$	2,578,277	$	2,455,564

See notes to condensed consolidated financial ~~statements~~statements.

JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Per Share Data)
(Unaudited)
Three Months Ended Six Months Ended
December 31, December 31,
2017 2016 2017 2016
REVENUE $ 374,756
$ 348,553
$ 734,690
$ 693,581

EXPENSES
Cost of Revenue 211,653
198,146
416,368
392,908
Research and Development 22,414
20,873
43,343
40,611
Selling, General, and Administrative 45,613
40,928
89,346
80,038
Gain on Disposal of a Business (189 ) —
(1,894 ) —
Total Expenses 279,491
259,947
547,163
513,557

OPERATING INCOME 95,265
88,606
187,527
180,024

INTEREST INCOME (EXPENSE)
Interest Income 146
60
293
167
Interest Expense (250 ) (184 ) (439 ) (326 )
Total Interest Income (Expense) (104 ) (124 ) (146 ) (159 )

INCOME BEFORE INCOME TAXES 95,161
88,482
187,381
179,865

PROVISION/ (BENEFIT) FOR INCOME TAXES (60,413 ) 29,668
(31,604 ) 58,807

NET INCOME $ 155,574
$ 58,814
$ 218,985
$ 121,058

Basic earnings per share $ 2.01
$ 0.76
$ 2.83
$ 1.55
Basic weighted average shares outstanding 77,218
77,814
77,250
78,114

Diluted earnings per share $ 2.01
$ 0.75
$ 2.82
$ 1.54
Diluted weighted average shares outstanding 77,565
78,180
77,606
78,512

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JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In Thousands, Except Per Share Data)

	Three Months Ended				Six Months Ended
	December 31,				December 31,
	2022		2021		2022		2021

REVENUE	$	505,314	$	493,896	$	1,034,516	$	981,952

EXPENSES
Cost of Revenue	304,589		282,825		602,849		559,460
Research and Development	36,561		29,916		69,554		56,670
Selling, General, and Administrative	56,788		55,493		114,013		106,565

Total Expenses	397,938		368,234		786,416		722,695

OPERATING INCOME	107,376		125,662		248,100		259,257

INTEREST INCOME (EXPENSE)
Interest Income	1,240		6		1,392		13
Interest Expense	(3,406)		(447)		(4,982)		(696)
Total Interest Income (Expense)	(2,166)		(441)		(3,590)		(683)

INCOME BEFORE INCOME TAXES	105,210		125,221		244,510		258,574

PROVISION FOR INCOME TAXES	24,435		29,551		57,186		60,791

NET INCOME	$	80,775	$	95,670	$	187,324	$	197,783

Basic earnings per share	$	1.11	$	1.30	$	2.57	$	2.68
Basic weighted average shares outstanding	72,962		73,580		72,929		73,798

Diluted earnings per share	$	1.10	$	1.30	$	2.56	$	2.68
Diluted weighted average shares outstanding	73,144		73,697		73,141		73,920

See notes to condensed consolidated financial ~~statements~~

statements.

JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
Six Months Ended
December 31,
2017 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 218,985
$ 121,058
Adjustments to reconcile net income from operations
to net cash from operating activities:

Depreciation 24,602
24,892
Amortization 48,711
44,568
Change in deferred income taxes (72,721 ) 8,745
Expense for stock-based compensation 4,609
4,230
(Gain)/loss on disposal of assets and businesses (1,841 ) 671
Changes in operating assets and liabilities:
Change in receivables 115,572
107,667
Change in prepaid expenses, deferred costs and other (17,105 ) (22,241 )
Change in accounts payable 5,371
1,221
Change in accrued expenses (15,386 ) (18,339 )
Change in income taxes 2,317
5,007
Change in deferred revenues (136,206 ) (113,612 )
Net cash from operating activities 176,908
163,867

CASH FLOWS FROM INVESTING ACTIVITIES:
Payment for acquisitions, net of cash acquired (137,654 ) —
Capital expenditures (12,249 ) (17,405 )
Proceeds from the sale of businesses 350
—
Proceeds from the sale of assets 205
830
Internal use software (6,025 ) (11,455 )
Computer software developed (46,936 ) (41,673 )
Net cash from investing activities (202,309 ) (69,703 )

CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings on credit facilities 100,000
50,000
Repayments on credit facilities (50,000 ) (200 )
Purchase of treasury stock (30,018 ) (103,885 )
Dividends paid (47,844 ) (43,582 )
Proceeds from issuance of common stock upon exercise of stock options 1
1
Tax withholding payments related to share based compensation (7,144 ) (5,394 )
Proceeds from sale of common stock 3,360
2,774
Net cash from financing activities (31,645 ) (100,286 )
NET CHANGE IN CASH AND CASH EQUIVALENTS $ (57,046 ) $ (6,122 )
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD $ 114,765
$ 70,310
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 57,719
$ 64,188

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JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited)
(In Thousands, Except Share and Per Share Data)

	Three Months Ended				Six Months Ended
	December 31,				December 31,
	2022		2021		2022		2021
PREFERRED SHARES:	—		—		—		—

COMMON SHARES:
Shares, beginning of period	103,953,128		103,822,265		103,921,724		103,795,169
Shares issued for equity-based payment arrangements	57,943		21,101		70,084		26,533
Shares issued for Employee Stock Purchase Plan	15,937		16,880		35,200		38,544
Shares, end of period	104,027,008		103,860,246		104,027,008		103,860,246

COMMON STOCK - PAR VALUE $0.01 PER SHARE:
Balance, beginning of period	$	1,040	$	1,038	$	1,039	$	1,038

Shares issued for Employee Stock Purchase Plan	—		1		1		1
Balance, end of period	$	1,040	$	1,039	$	1,040	$	1,039

ADDITIONAL PAID-IN CAPITAL:
Balance, beginning of period	$	560,034	$	527,255	$	551,360	$	518,960

Tax withholding related to share-based compensation	(5,174)		(1,046)		(6,731)		(1,998)
Shares issued for Employee Stock Purchase Plan	2,884		2,739		6,686		6,476
Stock-based compensation expense	7,112		6,545		13,541		12,055
Balance, end of period	$	564,856	$	535,493	$	564,856	$	535,493

RETAINED EARNINGS:
Balance, beginning of period	$	2,707,182	$	2,480,574	$	2,636,342	$	2,412,496

Net income	80,775		95,670		187,324		197,783
Dividends	(35,745)		(33,661)		(71,454)		(67,696)
Balance, end of period	$	2,752,212	$	2,542,583	$	2,752,212	$	2,542,583

TREASURY STOCK:
Balance, beginning of period	$	(1,807,118)	$	(1,613,202)	$	(1,807,118)	$	(1,613,202)
Purchase of treasury shares	—		(193,917)		—		(193,917)
Balance, end of period	$	(1,807,118)	$	(1,807,119)	$	(1,807,118)	$	(1,807,119)

TOTAL STOCKHOLDERS' EQUITY	$	1,510,990	$	1,271,996	$	1,510,990	$	1,271,996

Dividends declared per share	$	0.49	$	0.46	$	0.98	$	0.92

See notes to condensed consolidated financial ~~statements~~statements.

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JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In Thousands)
(Unaudited)
	Six Months Ended
	December 31,
	2022		2021

CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$	187,324	$	197,783
Adjustments to reconcile net income from operations to net cash from operating activities:
Depreciation	24,766		25,843
Amortization	68,946		62,610
Change in deferred income taxes	(27,611)		11,573
Expense for stock-based compensation	14,544		13,027
(Gain)/loss on disposal of assets	(7,240)		240
Changes in operating assets and liabilities:
Change in receivables	102,672		70,468
Change in prepaid expenses, deferred costs and other	(39,042)		(39,991)
Change in accounts payable	(7,696)		2,995
Change in accrued expenses	(47,544)		(35,814)
Change in income taxes	47,025		8,439
Change in deferred revenues	(125,433)		(119,822)
Net cash from operating activities	190,711		197,351

CASH FLOWS FROM INVESTING ACTIVITIES:
Payment for acquisitions, net of cash acquired	(229,628)		—
Capital expenditures	(17,376)		(22,373)

Proceeds from dispositions	27,885		38

Purchased software	(1,027)		(7,364)
Computer software developed	(81,046)		(71,353)

Net cash from investing activities	(301,192)		(101,052)

CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings on credit facilities	365,000		220,000
Repayments on financing leases	(205,042)		(80,065)
Purchase of treasury stock	—		(193,917)
Dividends paid	(71,454)		(67,696)

Tax withholding payments related to share-based compensation	(6,731)		(1,998)
Proceeds from sale of common stock	5,684		5,505
Net cash from financing activities	87,457		(118,171)
NET CHANGE IN CASH AND CASH EQUIVALENTS	$	(23,024)	$	(21,872)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	$	48,787	$	50,992
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	25,763	$	29,120

See notes to condensed consolidated financial statements.

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JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(In Thousands, Except Per Share Amounts)

~~(Unaudited)~~


~~NOTE 1.~~	~~NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES~~

NOTE 1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of the Company

Jack Henry & Associates, Inc. and subsidiaries ~~(“JHA”~~("Jack Henry," "JKHY," or the ~~“Company”~~"Company") is a well-rounded financial technology company. JKHY was founded in 1976 as a provider of ~~integrated computer systems~~core information processing solutions for banks. Today, the Company’s extensive array of products and services ~~that has developed~~includes processing transactions, automating business processes, and ~~acquired a number of banking and credit union software systems. The Company's revenues are predominately earned by marketing those systems to~~managing information for approximately 7,800 financial institutions ~~nationwide together with computer equipment (hardware), by providing the conversion~~ and implementation services for financial institutions to utilize JHA systems, and by providing other related services. JHA also provides continuing support and services to customers using in-house or outsourced systems.diverse corporate entities.

Consolidation

The condensed consolidated financial statements include the accounts of ~~JHA~~JKHY and all of its subsidiaries, which are ~~wholly-owned,~~wholly owned, and all intercompany accounts and transactions have been eliminated.

Comprehensive Income

Comprehensive income for the three and six months ended December 31, ~~2017~~2022 and ~~2016~~2021, equals the Company’s net income.

~~Prior Period Reclassification~~Allowance for Credit Losses

~~During~~The Company monitors trade and other receivable balances and contract assets and estimates the ~~first quarter~~allowance for lifetime expected credit losses. Estimates of ~~fiscal 2018, the Company's management decided~~expected credit losses are based on historical collection experience and other factors, including those related to ~~change the presentation of its income statement, along with a change in the segment structure (see Note 9), in order to more clearly align with the way management manages the Company~~current market conditions and ~~evaluates performance. Amounts within the condensed consolidated statements of income~~events.

The following table summarizes allowance for credit losses activity for the ~~three~~fiscal quarter and ~~six~~ ~~months ended~~ ~~December 31, 2016~~ ~~have been reclassified to improve comparability with the three and six months~~year-to-date periods ended December 31, ~~2017. Revenue was previously classified as license, support~~2022, and service, and hardware, and has been reclassified into one "Revenue" caption. Cost of sales was previously presented under three captions to correspond with our three lines of revenue, and has now been condensed to one caption, "Cost of Revenue". We have elected to include all operating expenses, including cost of revenue, under one expenses heading. Previously, cost of revenue was presented separately from operating expenses in order to show gross profit. Gross profit has been removed from our current presentation due to management's focus on operating income. Additionally, within operating expenses, selling and marketing expense and general and administrative expense were previously presented under two captions, but are now condensed under one caption, labeled "Selling, General, and Administrative."2021:


	Three Months Ended December 31,				Six Months Ended December 31,
	2022		2021		2022				2021
Allowance for credit losses - beginning balance	$	8,030	$	7,660	$	7,616			$	7,267

Current provision for expected credit losses	480		300		960				840
Write-offs charged against allowance	(325)		(227)		(390)				(373)
Recoveries of amounts previously written off	(1)		—		(2)				(1)

Allowance for credit losses - ending balance	$	8,184	$	7,733	$	8,184	$	8,184	$	7,733

Property and Equipment

Property and equipment is ~~stated~~recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets. Accumulated depreciation at December 31, ~~2017~~2022, totaled ~~$368,599~~$461,010 and at June 30, ~~2017~~2022, totaled ~~$345,014.~~$454,879.

Intangible Assets

Intangible assets consist of goodwill, customer relationships, computer software, and trade names acquired in business acquisitions in addition to internally developed computer software. The amounts are amortized, with the exception of those intangible assets with an indefinite life (such as goodwill), over an estimated economic benefit period, generally ~~three~~3 to ~~twenty~~20 years. Accumulated amortization of intangible assets totaled ~~$552,340~~$1,078,867 and ~~$503,653~~$1,030,800 at December 31, ~~2017~~2022, and June 30, ~~2017,~~2022, respectively.

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Investments

At December 31, 2022, and June 30, 2022, the Company had an investment in the preferred stock of Automated Bookkeeping, Inc ("Autobooks") of $18,250, which represented a non-controlling share of the voting equity as of that date. The total investment was recorded at cost and is included within other non-current assets on the Company's balance sheet. There have been no events or changes in circumstances that would indicate an impairment and no price changes resulting from observing a similar or identical investment. An impairment and/or an observable price change would be an adjustment to recorded cost. Fair value will not be estimated unless there are identified events or changes in circumstances that may have a significant adverse effect on the fair value of the investment.

Common Stock

The Board of Directors has authorized the Company to repurchase shares of its common stock. Under this authorization, the Company may finance its share repurchases with available cash reserves or borrowings on its existing ~~line-of-credit.~~line of credit. The share repurchase program does not include specific price targets or timetables and may be suspended at any time. At December 31, ~~2017,~~2022, and June 30, 2022, there were ~~25,962~~31,043 shares in treasury stock and the Company had the remaining authority to repurchase up to ~~4,029~~3,948 additional shares. The total cost of treasury shares at December 31, ~~2017 is $1,036,292.~~2022, and June 30, 2022, was $1,807,118. During the first six months of fiscal ~~2018,~~2023, the Company ~~repurchased 302 treasury~~did not repurchase any shares ~~for $30,018. At June 30, 2017, there were 25,660 shares in treasury stock~~of its common stock.

Income Taxes

Deferred tax liabilities and ~~the Company had authority to repurchase up to 4,330 additional shares.~~

~~Dividends declared per share were $0.31 and $0.28,~~ ~~for the~~ ~~three months ended December 31, 2017 and 2016, respectively, and totaled $0.62 and $0.56~~assets are recognized for the ~~six months ended December 31, 2017~~tax effects of differences between the financial statement and ~~2016, respectively.~~tax basis of assets and liabilities. A valuation allowance would be established to reduce deferred tax assets if it is more likely than not that a deferred tax asset will not be realized.

The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based upon the technical merits of the position. The tax benefit recognized in the financial statements from such a position is measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Also, interest and penalties expenses are recognized on the full amount of unrecognized benefits for uncertain tax positions. The Company's policy is to include interest and penalties related to unrecognized tax benefits in income tax expense.

Interim Financial Statements

The accompanying condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q of the Securities and Exchange Commission ("SEC") and in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") applicable to interim condensed consolidated financial statements, and do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete consolidated financial statements. The condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes, which are included in its Annual Report on Form 10-K (“Form 10-K”) for the fiscal year ended June 30, ~~2017.~~2022. The accounting policies followed by the Company are set forth in Note 1 to the Company's consolidated financial statements included in its Form 10-K for the fiscal year ended June 30, ~~2017.~~2022, with updates to certain policies included in this Note 1.

In the opinion of the management of the Company, the accompanying unaudited condensed consolidated financial statements reflect all adjustments necessary (consisting of normal recurring adjustments) to state fairly in all material respects the financial position of the Company as of December 31, ~~2017,~~2022, the results of its operations for the three and six months ~~ending~~ended December 31, ~~2017~~2022 and ~~2016,~~2021, changes in stockholders' equity for the three and six months ended December 31, 2022 and 2021, and its cash flows for the six months ~~ending~~ended December 31, ~~2017~~2022 and ~~2016.~~2021. The condensed consolidated balance sheet at June 30, ~~2017~~2022, was derived from audited annual financial statements, but does not contain all of the footnote disclosures from the annual financial statements.

The results of operations for the ~~period~~three and six months ended December 31, ~~2017~~2022, are not necessarily indicative of the results to be expected for the entire fiscal year.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

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Risks and Uncertainties

The Company has determined there was not a material impact to the Company’s condensed consolidated financial statements as of and for the quarter ended December 31, 2022, as a result of the continuing impact of the COVID-19 pandemic. However, the extent to which the COVID-19 pandemic may impact the Company's future operational and financial performance remains uncertain and difficult to predict. The Company will continue to monitor developments related to the COVID-19 pandemic.

NOTE 2:2. RECENT ACCOUNTING PRONOUNCEMENTS

The Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers in May 2014. This standard is part of an effort to create a common revenue standard for U.S. generally accepted accounting principles (U.S. GAAP) and International Financial Reporting Standards (IFRS). The new standard will supersede much of the existing authoritative literature for revenue recognition. The new model enacts a five-step process for achieving the core principle, which is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Not Yet Adopted

In August 2015, the FASB also issued ASU No. 2015-14 which deferred the effective date of the new standard by one year, but allows early application as of the original effective date. We do not intend to adopt the provisions of the new standard early, so the standard and related amendments will be effective for the Company for its annual reporting period beginning July 1, 2018, including interim periods within that reporting period. In March 2016,October 2021, the FASB issued ASU No. ~~2016-08,~~2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which ~~addresses principal versus agent considerations under~~improves the ~~new~~accounting for acquired revenue ~~standard. Additional guidance, including~~contracts with customers in a business combination by addressing diversity in practice and inconsistency related to recognition of an acquired contract liability and payment terms and their effect on subsequent revenue recognized by the acquirer. The ASU ~~No. 2016-10,~~is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. The Company plans to adopt the ASU ~~No. 2016-12,~~effective July 1, 2023, and ~~ASU No. 2016-20, also addresses specific aspects~~will apply it prospectively to business combinations occurring on or after that date.

NOTE 3. REVENUE AND DEFERRED COSTS

Revenue Recognition

The Company generates revenue from data processing, transaction processing, software licensing and related services, professional services, and hardware sales.

Disaggregation of Revenue

The tables below present the Company's revenue disaggregated by type of revenue. Refer to Note 11, Reportable Segment Information, for disaggregated revenue by type and reportable segment. The majority of the ~~new standard~~Company’s revenue is earned domestically, with revenue from customers outside the United States comprising less than 1% of total revenue.


	Three Months Ended December 31,				Six Months Ended December 31,
	2022		2021		2022		2021
Private and Public Cloud	$	153,130	$	138,340	$	302,129	$	273,982
Product Delivery and Services	58,594		79,499		116,117		131,014
On-Premise Support	78,976		78,372		192,603		188,708
Services & Support	290,700		296,211		610,849		593,704

Processing	214,614		197,685		423,667		388,248

Total Revenue	$	505,314	$	493,896	$	1,034,516	$	981,952

Contract Balances

The following table provides information about contract assets and ~~are~~contract liabilities from contracts with customers.


	December 31, 2022		June 30, 2022
Receivables, net	$	246,378	$	348,072
Contract Assets - Current	24,136		24,447
Contract Assets - Non-current	68,092		68,261
Contract Liabilities (Deferred Revenue) - Current	214,742		330,687
Contract Liabilities (Deferred Revenue) - Non-current	70,101		71,485

Contract assets primarily result from revenue being ~~considered. Entities are allowed to transition~~recognized when or as control of a solution or service is transferred to the ~~new standard by~~customer, except where invoicing is contingent upon the completion of other performance obligations or payment terms differ from the provisioning of services. The current portion of contract assets is reported within prepaid expenses and other in the condensed consolidated balance sheet, and the non-current portion is included in other non-current assets. Contract liabilities (deferred revenue) primarily relate to consideration received from customers in advance of delivery of the related goods and services to the customer.

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Contract balances are reported in a net contract asset or liability position on a contract-by-contract basis at the end of each reporting period.

The Company analyzes contract language to identify if a significant financing component does exist and would adjust the transaction price for any material effects of the time value of money if the timing of payments provides either ~~recasting prior periods (full retrospective) or recognizing~~party to the ~~cumulative effect as~~contract with a significant benefit of financing the transaction.

During the three months ended December 31, 2022, and 2021, the Company recognized revenue of $83,145 and $94,862, respectively, that was included in the corresponding deferred revenue balance at the beginning of the ~~period~~periods. For the six months ended December 31, 2022, and 2021, the Company recognized revenue of ~~adoption (modified retrospective).~~

~~The Company has taken the following steps in evaluating~~$159,393 and ~~planning for the implementation of the new standard:~~

Organization of a cross-functional implementation team whose goals are to: assess the impact of the guidance on each of our revenue streams by applying the five step model; determine new processes and procedures necessary to ensure proper revenue and cost recognition; quantify the effects of the new standard on prior and current year revenue; determine opening balances for deferred revenues and costs as of the beginning of fiscal 2017; develop disclosures required upon the adoption of the new standard; and develop new internal controls to ensure compliance with the new standard.

~~Continued implementation and testing of new revenue recognition software~~$166,273, respectively, that ~~will apply the five-step model to each of our customer contracts.~~

~~Continued comparisons of revenue recognition under current accounting methods versus under ASC 606 for each of our revenue streams.~~

~~Determinations that have been made regarding the effect of the new standard are as follows:~~

We expect the adoption of this standard to have a significant impact on our revenue recognition currently subject to Accounting Standards Codification (ASC) Topic 985. One of the most significant expected impacts relates to the recognition of license and implementation revenue on our multi-element arrangements. Under the current standard, license and implementation revenue on these arrangements is often recognized over

the maintenance period of the software due to a lack of vendor-specific objective evidence of fair value ("VSOE") for these elements. Under ASC 606, revenue for license and implementation will no longer be deferred due solely to a lack of VSOE.

This new model will require more use of judgments and estimates than the current standard, including identifying performance obligations, estimating variable consideration, and allocating the transaction price to each performance obligation. We will be required to estimate the total expected value of variable consideration, arising from items such as maintenance and transaction or item processing, at contract inception and include those estimateswas included in the total transaction price of the contract to be allocated to each performance obligation. These estimates will be modified over the term of the contract, resulting in re-allocations of the transaction price and adjustments tocorresponding deferred revenue ~~recognized on the contract.~~

~~Significant implementation matters yet to be addressed include:~~

Which transition approach will be applied. While we plan to adopt the standard using the full retrospective method, our ability to achieve that depends on system readiness, including software procured from third-party providers, and the completion of our analysis of information necessary to restate prior period consolidated financial statements.

~~Determination of opening balances for deferred revenues and costs, and the quantitative effect of the new standard on prior and current year revenues and costs.~~

~~Development of required disclosures under the new standard.~~

~~Updates to our internal controls surrounding the new processes.~~

~~The FASB issued ASU No. 2016-02, Leases, in February 2016. This ASU aims to increase transparency and comparability among organizations by recognizing lease assets and liabilities on the~~ balance sheet and requiring disclosure of key information regarding leasing arrangements. Specifically, the standard requires operating lease commitments to be recorded on the balance sheet as operating lease liabilities and right-of-use assets, and the cost of those operating leases to be amortized on a straight-line basis. ASU No. 2016-02 will be effective for Jack Henry's annual reporting period beginning July 1, 2019 and early adoption is permitted. At transition, a modified retrospective approach must be utilized to measure leases as ofat the beginning of the ~~earliest~~periods.

Amounts recognized that relate to performance obligations satisfied (or partially satisfied) in prior periods were immaterial for each period ~~presented, however,~~presented. These adjustments are primarily the ~~FASB has provided certain practical expedients,~~result of transaction price re-allocations due to changes in estimates of variable consideration.

Transaction Price Allocated to Remaining Performance Obligations

As of December 31, 2022, estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period totaled $5,654,930. The Company expects to recognize approximately 25% over the next 12 months, 20% in 13-24 months, and the balance thereafter.

Contract Costs

The Company incurs incremental costs to obtain a contract as well as costs to fulfill contracts with customers that are expected to be recovered. These costs consist primarily of sales commissions, which are incurred only if a contract is obtained, and customer conversion or implementation-related costs. Capitalized costs are amortized based on the transfer of goods or services to which the ~~Company is currently evaluating. The Company is currently assessing~~asset relates, in line with the ~~impact this new standard will have on our consolidated financial statements~~percentage of revenue recognized for each performance obligation to which the costs are allocated.

Capitalized costs totaled $410,904 and ~~when we will adopt it.~~$380,095, at December 31, 2022, and June 30, 2022, respectively.

~~ASU 2016-15 issued by~~For the ~~FASB~~three months ended December 31, 2022, and 2021, amortization of deferred contract costs totaled $34,861 and $32,154, respectively. During the six months ended December 31, 2022, and 2021, amortization of deferred contract costs totaled $76,841 and $67,998, respectively. There were no impairment losses in ~~August 2016 clarifies cash flow classification of eight specific cash flow issues and is effective~~relation to capitalized costs for ~~our annual reporting period beginning July 1, 2018. Early adoption is permitted. We do not expect any significant impact to our financial statements as a result of this standard.~~the periods presented.

NOTE 3.4. FAIR VALUE OF FINANCIAL INSTRUMENTS

For cash equivalents, certificates of deposit, amounts receivable or payable, and short-term borrowings, fair values approximate carrying value, based on the short-term nature of the assets and liabilities.

The Company's estimates of the fair value for financial assets and financial liabilities are based on the framework established in the fair value accounting guidance. The framework is based on the inputs used in valuation, gives the highest priority to quoted prices in active markets, and requires that observable inputs be used in the valuations when available. The three levels of the hierarchy are as follows:

Level 1: inputs to the valuation are quoted prices in an active market for identical assets

Level 2: inputs to the valuation include quoted prices for similar assets in active markets that are observable either directly or indirectly

Level 3: valuation is based on significant inputs that are unobservable in the market and the Company's own estimates of assumptions that we believe market participants would use in pricing the asset

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Fair value of financial assets included in ~~cash and cash equivalents, and financial liabilities~~current assets is as follows:


	Estimated Fair Value Measurements						Total Fair
	Level 1		Level 2		Level 3		Value
December 31, 2022
Financial Assets:

Certificates of Deposit	$	—	$	1,213	$	—	$	1,213
Financial Liabilities:
Revolving credit facility	$	—	$	275,000	$	—	$	275,000
June 30, 2022
Financial Assets:
Certificates of Deposit	$	—	$	1,212	$	—	$	1,212

Financial Liabilities:
Revolving credit facility	$	—	$	115,000	$	—	$	115,000

NOTE 5. LEASES

Estimated Fair Value Measurements Total Fair
Level 1 Level 2 Level 3 Value
December 31, 2017
Financial Assets:
Money market funds $ 21,581
$ —
$ —
$ 21,581
Certificate of Deposit $ —
$ 1,000
$ —
$ 1,000
Financial Liabilities:
Revolving credit facility $ —
$ 100,000
$ —
$ 100,000
June 30, 2017

Financial Assets:
Money market funds $ 68,474
$ —
$ —
$ 68,474
Certificate of Deposit $ —
$ 2,001
$ —
$ 2,001
Financial Liabilities:
Revolving credit facility $ —
$ 50,000
$ —
$ 50,000

Non-Recurring Fair Value Measurements
June 30, 2017
Long-lived assets held for sale ^(a)
$ —
$ 1,300
$ —
$ 1,300

^(a) ~~In accordance~~The Company determines if an arrangement is a lease at inception. The lease term begins on the commencement date, which is the date the Company takes possession of the property and may include options to extend or terminate the lease when it is reasonably certain that the option will be exercised. Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Lease agreements with ~~ASC Subtopic 360-10, long-lived~~lease and non-lease components are accounted for as a single lease component for all asset classes, which are comprised of real estate leases and equipment leases. ROU assets ~~held for sale with a carrying~~and lease liabilities are recognized at the commencement date based on the present value of ~~$4,575 were written down~~lease payments over the lease term. Since the Company’s leases do not typically provide an implicit rate, the Company uses its incremental borrowing rate based upon the information available at commencement date. The determination of the incremental borrowing rate requires judgment and is determined by using the Company’s current unsecured borrowing rate, adjusted for various factors such as collateralization and term to ~~their fair value~~align with the terms of ~~$1,300, resulting in an impairment totaling $3,275,~~the lease.

The Company leases certain office space, data centers, and equipment with remaining terms of 1 to 11 years. Certain leases contain renewal options for varying periods, which ~~was~~are at the Company’s sole discretion. For leases where the Company is reasonably certain to exercise a renewal option, such option periods have been included in ~~earnings for~~ the ~~period ended~~determination of the Company’s ROU assets and lease liabilities. Certain leases require the Company to pay taxes, insurance, maintenance, and other operating expenses associated with the leased asset. Such amounts are not included in the measurement of the lease liability to the extent they are variable in nature. Variable lease costs are recognized as a variable lease expense when incurred.

At December 31, 2022, and June 30, ~~2017. These~~2022, the Company had operating lease assets of $43,743 and $46,869 and financing lease assets of $20 and $65, respectively. At December 31, 2022, total operating lease liabilities of $48,116 were comprised of current operating lease liabilities of $10,246 and noncurrent operating lease liabilities of $37,870. At December 31, 2022, total financing lease liabilities of $21 were all current liabilities. At June 30, 2022, total operating lease liabilities of $51,452 were comprised of current operating lease liabilities of $10,681 and noncurrent operating lease liabilities of $40,771. At December 31, 2022, total financing lease liabilities of $67 were all current financing lease liabilities.

Operating lease assets are ~~expected to be disposed~~included within other non-current assets, and operating lease liabilities are included within accrued expenses (current portion) and other long-term liabilities (noncurrent portion) in the Company’s condensed consolidated balance sheet. Operating lease assets were recorded net of ~~by sale within twelve months~~accumulated amortization of ~~June 30, 2017.~~

~~NOTE 4. INTANGIBLE ASSETS~~

~~The estimated aggregate future amortization expense for the remainder of fiscal 2018~~$35,636 and ~~each of the next four years for all intangible assets remaining~~$31,006 as of December 31, ~~2017, is~~2022, and June 30, 2022, respectively. Financing lease assets are included within property and equipment, net, and financing lease liabilities are included within notes payable (current portion) and long-term debt (noncurrent portion) in the Company’s condensed consolidated balance sheet. Financing lease assets were recorded net of accumulated amortization of $295 and $255 as ~~follows:~~of December 31, 2022, and June 30, 2022, respectively.

Operating lease costs for the three months ended December 31, 2022, and 2021, were $3,029 and $3,327, respectively. Financing lease costs for the three months ended December 31, 2022, and 2021, were $20 and $27,

Years Ending June 30, Computer Software
Customer
Relationships
Other Intangible Assets Total
2018 (remainder) $ 33,443
$ 8,182
$ 7,613
$ 49,238
2019 62,836
16,399
11,773
91,008
2020 52,282
13,906
6,279
72,467
2021 34,637
11,750
1,717
48,104
2022 19,464
10,689
1,121
31,274
respectively. Total operating and financing lease costs for the respective quarters included variable lease costs of $962 and $441, respectively. Operating lease costs for the six months ended December 31, 2022, and 2021, were $6,088 and $6,759, respectively. Financing lease costs for the six months ended December 31, 2022, and 2021, were $40 and $55, respectively. Total operating and financing lease costs for the respective fiscal year-to-date periods included variable lease costs of $1,890 and $840, respectively. Operating and financing lease expense are included within cost of services, research and development, and selling, general & administrative expense, dependent upon the nature and use of the ROU asset, in the Company’s condensed consolidated statement of income.

For the six months ended December 31, 2022, and 2021, the Company had operating cash flows for payments on operating leases of $6,202 and $6,802, and ROU assets obtained in exchange for operating lease liabilities of $2,282 and $1,870, respectively. Operating cash flows for interest paid on financing leases for the six months ended December 31, 2022, and 2021, were $42 and $55, respectively.

As of December 31, 2022, and June 30, 2022, the weighted-average remaining lease term for the Company's operating leases was 72 months and 76 months, and the weighted-average discount rate was 2.59% and 2.58%, respectively. As of December 31, 2022, and June 30, 2022, the weighted-average remaining lease term for the Company's financing leases was 3 months and 9 months, respectively. The weighted-average discount rate for the Company's financing leases was 2.19% as of December 31, 2022, and 2.29% as of June 30, 2022.

Maturity of Lease Liabilities under ASC 842

Future minimum rental payments on operating leases with initial non-cancellable lease terms in excess of one year were due as follows at December 31, 2022*:


Due Dates (fiscal year)	Future Minimum Rental Payments

2023 (remaining period)	$	5,879
2024	10,696
2025	7,952
2026	7,046
2027	6,265
Thereafter	14,296
Total lease payments	$	52,134
Less: interest	(4,018)
Present value of lease liabilities	$	48,116

*Financing leases were immaterial to the quarter, so a maturity of lease liabilities table has only been included for operating leases.

Lease payments include $5,464 related to options to extend lease terms that are reasonably certain of being exercised. At December 31, 2022, there were $6,128 of legally binding lease payments for leases signed but not yet commenced.

NOTE 5.6. DEBT

~~Revolving~~Credit facilities

On August 31, 2022, the Company entered into a five-year senior, unsecured amended and restated credit ~~facility~~

~~The revolving~~agreement that replaced the prior credit facility described below. The credit agreement allows for borrowings of up to ~~$300,000~~,$600,000, which may be increased to $1,000,000 by the Company at any time until ~~maturity to~~ ~~$600,000~~.maturity. The credit ~~facility~~agreement bears interest at a variable rate equal to (a) a rate based on ~~LIBOR~~an adjusted Secured Overnight Financing Rate ("SOFR") term rate or (b) an alternate base rate (the highest of (i) 0%, (ii) the Prime Rate for such day, ~~(ii)~~(iii) the sum of the Federal Funds Effective Rate for such day plus 0.50% per annum and ~~(iii)~~(iv) the ~~Eurocurrency~~Adjusted Term SOFR Screen Rate (without giving effect to the Applicable Margin) for a ~~one-month~~one month Interest Period on such day for ~~dollars~~ Dollars plus 1.0%), plus an applicable percentage in each case determined by the Company's leverage ratio. The credit ~~facility~~agreement is guaranteed by certain subsidiaries of the ~~Company. The credit facility~~Company and is subject to various financial covenants that require the Company to maintain certain financial ratios as defined in the credit agreement. As of December 31, ~~2017,~~2022, the Company was in compliance with all such covenants. The ~~revolving loan~~amended and restated credit facility terminates ~~February 20, 2020. At~~

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August 31, 2027. There was $275,000 outstanding under the amended and restated credit facility at December 31, ~~2017,~~2022.

On June 30, 2022, there was ana $115,000 outstanding ~~revolving loan~~ balance ~~of $100,000. There~~on the prior credit facility that was entered into on February 10, 2020. The prior credit facility was a ~~$50,000 outstanding balance~~five-year senior, unsecured revolving credit facility. The prior credit facility allowed for borrowings of up to $300,000, which could be increased by the Company to $700,000 at any time until maturity. The prior credit facility bore interest at a variable rate equal to (a) a rate based on a eurocurrency rate or (b) an alternate base rate (the highest of (i) 0%, (ii) the U.S. Bank prime rate for such day, (iii) the sum of the Federal Funds Effective Rate for such day plus 0.50% and (iv) the eurocurrency rate for a one-month interest period on such day for dollars plus 1.0%), plus an applicable percentage in each case determined by the Company's leverage ratio. The prior credit facility was guaranteed by certain subsidiaries of the Company and was subject to various financial covenants that required the Company to maintain certain financial ratios as defined in the prior credit agreement. As of June 30, ~~2017.~~

2022, the Company was in compliance with all such covenants. The prior credit facility's termination date was February 10, 2025.

Other lines of credit

The Company has an unsecured bank credit line which provides for funding of up to ~~$5,000~~$5,000 and bears interest at the prime rate less 1%. The credit line ~~was renewed in April 2017 and~~ expires on April 30, ~~2019. At~~ ~~December 31, 2017~~, no ~~amount was outstanding.~~2023. There was ~~also~~ no balance outstanding at December 31, 2022, or June 30, ~~2017.~~2022.

Interest

The Company paid interest of ~~$355~~$2,724 and ~~$188~~$604 during the six months ended December 31, ~~2017~~2022, and ~~2016,~~2021, respectively.

NOTE 6.7. INCOME TAXES

On December 22, 2017, the Tax Cuts and Jobs Act (TCJA) was enacted into law, which includes numerous provisions that impact the Company, including reducing the U.S. federal tax rate, eliminating the Domestic Production Activities Deduction in future tax years, and providing expanded asset expensing. The TCJA reduces the U.S. federal statutory tax rate from 35% to 21%, effective January 1, 2018. For the Company’s fiscal year 2018, a blended U.S. federal statutory tax rate of approximately 28% will apply to the Company.

The effective tax rate ~~was (63.5)%~~decreased for the three months ended December 31, 2022, compared to the three months ended December 31, 2021, with an effective tax rate of 23.2% of income before income taxes, ~~for the quarter ended December 31, 2017,~~ compared to ~~33.5% for~~23.6% in the ~~same quarter~~prior fiscal year quarter. The decrease in the effective tax rate was primarily due to a larger excess tax benefit received from share-based compensation in the current fiscal ~~2017.~~ year quarter.

For the six months ended December 31, ~~2017~~2022, the effective tax rate ~~was (16.9)%,~~decreased compared to ~~32.7% for~~ the six months ended December 31, ~~2016. The significant decrease to the Company's tax rate was primarily due to $96,766 of income tax benefits recorded as a result of the TCJA in the quarter ended December 31, 2017.~~

The staff of the US Securities and Exchange Commission (SEC) has recognized the complexity of reflecting the impacts of the TCJA, and on December 22, 2017, issued guidance in Staff Accounting Bulletin No. 118 (SAB 118) which clarifies accounting for income taxes under ASC 740 if information is not available or complete and provides for up to a one year period in which to complete the required analyses and accounting. The Company relied on SAB 118 in computing its accounting for income taxes during the period ended December 31, 2017. The computation of income taxes payable, deferred tax liability, and income tax expense for the period ended December 31, 2017 reflect provisional amounts for which the income tax effects of the TCJA have not been completed, but for which reasonable estimates are available. As a fiscal year taxpayer, the Company has utilized certain estimates and forecasts of future operations in estimating both the reversal of deferred tax assets and liabilities that existed on the enactment date, as well as the generation of additional deferred tax assets and liabilities for the remainder of the year ending June 30, 2018. The Company analyzed its deferred tax balances to estimate which of those balances are expected to reverse in fiscal 2018 (at a blended U.S. federal income2021, with an effective tax rate of ~~approximately 28.0%), or thereafter (at a 21.0% U.S. federal~~23.4% of income ~~tax rate). These estimates may change as we receive additional information about~~before taxes, compared to 23.5% for the timing of deferred tax reversals. It is anticipated that any additional income tax effects from the TCJA will be recorded in the periods ending March 31, 2018 and June 30, 2018 as the deferred tax activity becomes known as a result of actual operations. same period last fiscal year.

The Company paid income taxes, net of refunds, of ~~$38,163~~$37,213 and ~~$44,539~~$40,687 in the six months ended December 31, ~~2017~~2022 and ~~2016,~~2021, respectively.

At December 31, ~~2017,~~2022, the Company had ~~$9,607~~$10,214 of gross unrecognized tax benefits ~~$8,679~~before interest and penalties, $9,083 of which, if recognized, would affect our effective tax rate. ~~This includes $3,391 of unrecognized tax benefits recorded in the period ending December 31, 2017 as a result of recent tax pronouncements. We~~The Company had accrued interest and penalties of ~~$1,318~~$1,546 and ~~$1,284~~$1,425 related to uncertain tax positions at December 31, ~~2017~~2022, and ~~2016,~~2021, respectively.

The U.S. federal ~~and state~~ income tax returns for fiscal ~~year 2014~~2019 and all subsequent years remain subject to examination as of December 31, ~~2017~~2022, under statute of limitations rules. ~~We anticipate~~The U.S. state income tax returns that remain subject to examination as of December 31, 2022, under the statute of limitation rules varies by state jurisdiction from fiscal 2016 through 2019 and all subsequent years. The Company anticipates potential changes due to lapsing of statutes of limitations, and examination closures could reduce the unrecognized tax benefits balance by ~~$500 -~~ $1,500 to $3,500 within twelve months of December 31, ~~2017.~~2022.

NOTE 7.8. STOCK-BASED COMPENSATION

Our operating income for the three months ended December 31, ~~2017~~2022, and ~~2016~~2021, included ~~$3,096~~$7,545 and ~~$3,032~~$6,956 of stock-based compensation costs, respectively. ~~For~~Our operating income for the six months ended December 31, ~~2017~~2022, and ~~2016,~~2021, included $14,544 and $13,027 of stock-based compensation costs, ~~included in operating income totaled $4,609 and $4,230,~~ respectively.

Stock Options

On November 10, 2015, the Company adopted the 2015 Equity Incentive Plan ("2015 EIP") for its employees and non-employee directors. The plan allows for grants of stock options, stock appreciation rights, restricted stock shares or units, and performance shares or units. The maximum number of shares authorized for issuance under the plan is 3,000. For stock options, terms and vesting periods of the options are determined by the Compensation Committee of the Board of Directors when granted. The option period must expire not more than ten years from the option grant date. The options granted under this plan are exercisable beginning three years after the grant date at an exercise price equal to 100% of the fair market value of the stock at the grant date. The options terminate upon surrender of the option, ninety days after termination of employment, upon the expiration of one year following notification of a deceased optionee, or ten years after grant.

~~The Company previously issued options to outside directors under the 2005 Non-Qualified Stock Option Plan (“2005 NSOP”). No additional stock options may be issued under this plan.~~

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A summary of option plan activity under ~~these plans~~this plan is as follows:


	Number of Shares	Weighted Average Exercise Price		Aggregate Intrinsic Value
Outstanding July 1, 2022	12	$	87.27
Granted	—	—
Forfeited	—	—
Exercised	—	—
Outstanding December 31, 2022	12	$	87.27	$	1,032
Vested and Expected to Vest December 31, 2022	12	$	87.27	$	1,032
Exercisable December 31, 2022	12	$	87.27	$	1,032

Number of Shares Weighted Average Exercise Price
Aggregate
Intrinsic
Value
Outstanding July 1, 2017 72
$ 50.04

Granted —
—

Forfeited —
—

Exercised —
—

Outstanding December 31, 2017 72
$ 50.04
$ 4,797
Vested and Expected to Vest December 31, 2017 72
$ 50.04
$ 4,797
Exercisable December 31, 2017 40
$ 20.55
$ 3,856

At December 31, ~~2017,~~2022, there was ~~$250 of~~no compensation cost yet to be recognized related to outstanding options. ~~The~~For options currently exercisable, the weighted average remaining contractual term ~~on options currently exercisable~~(remaining period of exercisability) as of December 31, ~~2017~~2022, was ~~1.50 years~~.3.5 years.

Restricted Stock Unit Awards

The Company issues ~~both share awards and~~ unit awards under the 2015 ~~EIP, and previously issued these through the 2005 Restricted Stock Plan.~~EIP. The following table summarizes non-vested ~~share~~restricted stock unit awards as of December 31, ~~2017, as well as activity~~2022:


Unit awards	Units	Weighted Average Grant Date Fair Value		Aggregate Intrinsic Value
Outstanding July 1, 2022	303	$	166.50
Granted	124	219.65
Vested	(91)	167.18
Forfeited	(13)	187.68
Outstanding December 31, 2022	323	$	185.86	$	56,803

The 124 unit awards granted in fiscal 2023 had service requirements and performance measures, with 82 only having service requirements. The unit awards with only service requirements were valued at the weighted average fair value of the non-vested units based on the fair market value of the Company’s equity shares on the grant date, less the present value of expected future dividends to be declared during the vesting period, consistent with the methodology for calculating compensation expense on such awards.

The remaining 42 unit awards granted in fiscal 2023 have performance measures along with service requirements. 17 of these performance and service requirement unit awards were valued at grant by estimating 100% payout at release and using the fair market value of the Company equity shares on the grant date, less the present value of expected future dividends to be declared during the vesting period. The payout at release of approximately half of these unit awards will be determined based on the Company's compound annual growth rate for revenue (excluding adjustments) for the ~~six months then ended:~~

Share awards Shares
Weighted
Average
Grant Date
Fair Value
Outstanding July 1, 2017 36
$ 73.66
Granted —
—
Vested (11 ) 57.88
Forfeited —
64.96
Outstanding December 31, 2017 25
$ 80.30

At ~~December 31, 2017, there was~~ ~~$614~~three-year vesting period compared against goal thresholds as defined in the award agreement. The performance payout at release of ~~compensation expense that has yet to be recognized related to non-vested restricted stock share~~the other half of these unit awards ~~which~~ will be ~~recognized~~determined based on the expansion of the Company's non-GAAP operating margin over ~~a weighted average~~the three-year vesting period of ~~0.78 years~~.

compared against goal thresholds as defined in the award agreement. The ~~following table summarizes non-vested~~other 25 performance and service requirement unit awards ~~as of~~ ~~December 31, 2017, as well as activity for the six months then ended:~~

Unit awards Units
Weighted
Average
Grant Date
Fair Value
Aggregate Intrinsic Value
Outstanding July 1, 2017 386
$ 67.84

Granted 103
93.94

Vested (151 ) 56.04

Forfeited (3 ) 78.13

Outstanding December 31, 2017 335
$ 81.12
$ 39,118

~~The Company utilized~~were valued at grant using a Monte Carlo pricing model as of the measurement date customized to the specific provisions of the Company’s plan ~~design to value unit~~design. Per the Company's award vesting and settlement provisions, the awards ~~subject to performance targets~~that utilize a Monte Carlo pricing model were valued at grant on the ~~grant dates.~~basis of Total Shareholder Return ("TSR") in comparison to the compensation peer group made up of participants approved by the Compensation Committee of the Company's Board of Directors for fiscal year 2023. The ~~weighted average assumptions~~Monte Carlo inputs used in ~~this~~the model to estimate fair value at the measurement date and resulting values for 81these performance unit awards ~~granted in fiscal 2018~~ are as ~~follows:~~follows.

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Monte Carlo award inputs:	Fiscal 2023
Compensation Peer Group:
Volatility	29.4	%
Risk free interest rate	2.96	%
Annual dividend based on most recent quarterly dividend	$1.96
Dividend yield	0.94	%
Beginning average percentile rank for TSR	71.0	%

~~Volatility~~	~~15.60~~		%
~~Risk free interest rate~~	~~1.55~~		%
~~Dividend yield~~	~~1.20~~		%
~~Stock Beta~~	~~0.687~~

The remaining 22 unit awards granted are not subject to performance targets, and therefore the estimated fair value at measurement date is valued in the same manner as restricted stock share award grants.

At December 31, ~~2017,~~2022, there was ~~$14,788~~$31,658 of compensation expense, excluding forfeitures, that has yet to be recognized related to non-vested restricted stock unit awards, which will be recognized over a weighted average period of ~~1.58 years~~.1.32 years.

NOTE 8.9. EARNINGS PER SHARE

The following table reflects the reconciliation between basic and diluted earnings per share.


	Three Months Ended December 31,				Six Months Ended December 31,					Three Months Ended December 31,				Six Months Ended December 31,
	2017		2016		2017		2016			2022		2021		2022		2021
Net Income	$	155,574	$	58,814	$	218,985	$	121,058	Net Income	$	80,775	$	95,670	$	187,324	$	197,783
Common share information:									Common share information:
Weighted average shares outstanding for basic earnings per share	77,218		77,814		77,250		78,114		Weighted average shares outstanding for basic earnings per share	72,962		73,580		72,929		73,798
Dilutive effect of stock options and restricted stock	347		366		356		398
Dilutive effect of stock options and restricted stock units									Dilutive effect of stock options and restricted stock units	182		117		212		122
Weighted average shares outstanding for diluted earnings per share	77,565		78,180		77,606		78,512		Weighted average shares outstanding for diluted earnings per share	73,144		73,697		73,141		73,920
Basic earnings per share	$	2.01	$	0.76	$	2.83	$	1.55	Basic earnings per share	$	1.11	$	1.30	$	2.57	$	2.68
Diluted earnings per share	$	2.01	$	0.75	$	2.82	$	1.54	Diluted earnings per share	$	1.10	$	1.30	$	2.56	$	2.68

Per share information is based on the weighted average number of common shares outstanding for the three and six months ended December 31, ~~2017~~2022 and ~~2016.~~2021. Stock options and restricted stock units have been included in the calculation of earnings per share to the extent they are dilutive. There were no31 and 25 anti-dilutive stock options or restricted stock ~~shares~~units excluded for the ~~quarter ended December 31, 2017, compared to 32 shares excluded for the quarter ended December 31, 2016. For the~~three and six months ended December 31, ~~2017~~2022, respectively, and ~~2016, respectively, there~~28 and 23 were 0excluded for the three and ~~32 anti-dilutive securities excluded.~~six months ended December 31, 2021, respectively.

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NOTE 9.10. BUSINESS ACQUISITION

~~Ensenta Corporation~~Payrailz

On ~~December 21, 2017,~~August 31, 2022, the Company acquired all of the equity interest ~~of EST Holdings, Inc.~~in Payrailz, LLC ("Payrailz"). The final purchase price, following customary post-closing adjustments to the extent actual closing date working capital, cash, debt, and ~~its wholly-owned subsidiary, EST Interco, Inc.,~~unpaid seller transaction expenses exceeded or were less than the amounts estimated at closing, was $230,205. Pursuant to the merger agreement for ~~$134,472 paid in cash. EST Holdings, Inc. and EST Interco, Inc. jointly own all~~the transaction, $48,500 of the ~~outstanding equity~~purchase price was placed in an escrow account at the closing, consisting of ~~Ensenta Corporation, a California-based provider of real-time, cloud-based solutions~~$2,500 for ~~mobile~~any final purchase price adjustments owed by the sellers, which amount was released to the sellers on December 15, 2022, in connection with post-closing adjustments, and ~~online payments and deposits. This~~$46,000 for indemnification matters under the merger agreement.

The primary reason for the acquisition was ~~partially~~to expand the Company's digital financial management solutions and the purchase was funded by ~~a draw on the Company's~~our revolving line of credit ~~facility, with the remaining amount funded by existing operating cash. The addition of Ensenta Corporation~~(Note 6) and cash generated from operations. Payrailz provides cloud-native, API-first, AI-enabled consumer and commercial digital payment solutions and experiences that enable money to ~~the JHA Payment Solutions Group expands the Company’s ability to conduct real-time transactions with third-party platforms, extending its presence~~be moved in the ~~credit union market through shared branching technology.~~moment of need.

Management has completed a preliminary purchase price allocation ~~of Ensenta Corporation~~ and ~~its~~ assessment of the fair value of acquired assets and liabilities assumed. The recognized amounts of identifiable assets acquired, and liabilities assumed, based ~~upon~~on their ~~preliminary~~ fair values as of ~~December 21, 2017~~August 31, 2022, and taking into account the post-closing purchase price adjustment described above, are set forth below:


Current assets	$	1,851

Identifiable intangible assets	119,868
Deferred revenue	(8,104)
Total other liabilities assumed	(749)
Total identifiable net assets	112,866
Goodwill	117,339
Net assets acquired	$	230,205

Current assets $ 13,950
Long-term assets 585
Identifiable intangible assets 55,001
Non-current deferred income tax liability (19,969 )
Total other liabilities assumed (8,593 )
Total identifiable net assets 40,974
Goodwill 93,498
Net assets acquired $ 134,472

The amounts shown above include a measurement period adjustment made during the second quarter of fiscal 2023 related to a working capital adjustment. The amounts shown above may change as management ~~finalizes its assessment of the fair value of acquired assets and liabilities and evaluates~~continues to evaluate the income tax implications of this business combination.

The goodwill of ~~$93,498~~$117,339 arising from this acquisition consists largely of the growth potential, synergies, and economies of scale expected from combining the operations of the Company with those of ~~Ensenta Corporation,~~Payrailz, together with the value of ~~Ensenta Corporation's~~Payrailz's assembled workforce. The goodwill from this acquisition has been allocated to our Payments segment and $117,339 is ~~not~~ expected to be deductible for income tax purposes.

Identifiable intangible assets from this acquisition consist of customer relationships of ~~$33,824,~~$6,109, computer software of ~~$16,639,~~$112,505, and other intangible assets of ~~$4,538.~~$1,254. The ~~weighted average~~ amortization period for acquired customer relationships, computer software, and other intangible assets is over a term of 15 years, 10 years, and 1015 years, respectively.

Current assets were inclusive of cash acquired of ~~$7,273.~~$577. The fair value of current assets acquired included accounts receivable of ~~$4,668,~~$978, none of which were expected to be uncollectible.

Costs incurred related to the acquisition of ~~Ensenta Corporation in~~Payrailz during the ~~second quarter of fiscal 2018~~three and six months ended December 31, 2022, totaled ~~$262~~$50 and $508, respectively, for ~~legal, valuation,~~administrative and professional services, travel, and other fees, and were expensed as incurred and reported within cost of revenue and selling, general, and administrative ~~expenses.~~expense.

The Company's ~~consolidated statements of income for the three and sixmonths ended December 31, 2017 included revenue of $928 and after-tax net income of $6,366~~resulting from Ensenta Corporation's operations. The after-tax net income included a large tax benefit recorded as a result of the Tax Cuts and Jobs Act. Excluding the effects of the Tax Cuts and Jobs Act, the Company's after-tax net income resulting from Ensenta Corporation's operations totaled $26.

~~The accompanying~~condensed consolidated statements of income for the three and six months ended December 31, ~~2017~~2022, included revenue of $2,578 and $3,316, respectively, and after-tax net loss of $5,387 and $7,251, respectively, resulting from Payrailz's operations.

The accompanying condensed consolidated statements of income for the three and six months ended December 31, 2022, and 2021, do not include any revenues and expenses related to this acquisition prior to the acquisition date. The following unaudited pro forma consolidated financial information for the six months ended December 31, 2022, and the three and six months ended December 31, 2021, is presented as if this acquisition had occurred at the beginning of the ~~earliest~~prior period presented. The pro forma net income includes estimated incremental amortization expense of $1,611 and $4,546 for the three and six months ended December 31, 2021, respectively, and $1,957 for the six months ended December 31, 2022. In addition, this unaudited pro forma financial information is provided for illustrative purposes only and should not be relied upon as necessarily being indicative of the

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historical results that would have been obtained if the acquisition had actually occurred during ~~those periods,~~this period, or the results that may be obtained in the future as a result of the acquisition.


	Three Months Ended December 31,						Six Months Ended December 31,
		2022	2021					2022	2021
			Actual		Pro forma					Pro forma		Pro forma
Revenue			$	505,314	$	495,727				$	1,036,143	$	985,124
Net Income			80,775		92,793					182,787		189,890

Three Months Ended Six Months Ended
December 31, December 31,
2017 2016 2017 2016
Revenue $ 381,110
$ 354,358
$ 747,808
$ 704,749
Net Income 156,211
59,407
220,495
122,064
Basic Earnings Per Share $ 2.02
$ 0.76
$ 2.85
$ 1.56
Diluted Earnings Per Share $ 2.01
$ 0.76
$ 2.84
$ 1.55

~~Vanguard Software Group~~

On August 31, 2017, the Company acquired all of the equity interest of Vanguard Software Group, a Florida-based company specializing in the underwriting, spreading, and online decisioning of commercial loans, for $10,744 paid in cash. This acquisition was funded using existing operating cash. The addition of Vanguard Software Group to the Company's ProfitStars® Lending Solutions Group expands functionality offered to clients, allowing for near-real-time communication with Jack Henry and Associates' core processing and ancillary solutions, and also enhances cross-sell opportunities.

Management has completed a preliminary purchase price allocation of Vanguard Software Group and its assessment of the fair value of acquired assets and liabilities assumed. The recognized amounts of identifiable assets acquired and liabilities assumed, based upon their preliminary fair values as of August 31, 2017 are set forth below:

Current assets $ 1,153
Long-term assets 9
Identifiable intangible assets 4,200
Total liabilities assumed (1,117 )
Total identifiable net assets 4,245
Goodwill 6,499
Net assets acquired $ 10,744

The amounts shown above may change in the near term as management finalizes its calculation of the fair value of acquired assets and liabilities and evaluates the income tax implications of this business combination.

The goodwill of $6,499 arising from this acquisition consists largely of the growth potential, synergies and economies of scale expected from combining the operations of the Company with those of Vanguard Software Group, together with the value of Vanguard Software Group's assembled workforce. The goodwill from this acquisition has been allocated to our Complementary segment and is expected to be deductible for income tax purposes.

Identifiable intangible assets from this acquisition consist of customer relationships of $2,234, computer software of $1,426, and other intangible assets of $540. The weighted average amortization periods for acquired customer relationships, computer software, and other intangible assets are 15 years, 10 years, and 10 years, respectively.

~~Current assets were inclusive of cash acquired of $289. The fair value of current assets acquired included accounts receivable of $847, none of which were expected to be uncollectible.~~

~~Costs incurred related to the acquisition of Vanguard Software Group were immaterial for the periods presented.~~

The Company's consolidated statements of income for the second quarter of fiscal 2018 included revenue of $395 and an after-tax net loss of $274 resulting from Vanguard Software Group's operations. For the six months ended December 31, 2017, the Company's consolidated statements of income included revenue of $493 and after-tax net loss of $398.

The accompanying consolidated statements of income for the three and six months ended December 31, 2017 do not include any revenues and expenses related to this acquisition prior to the acquisition date. The impact of this acquisition was considered immaterial to both the current and prior periods of our consolidated financial statements and pro forma financial information has not been provided.

NOTE ~~10.~~11. REPORTABLE SEGMENT INFORMATION

The Company’s operations are classified into four reportable segments: Core, Payments, Complementary, and Corporate & Other. The Core segment provides core information processing platforms to banks and credit unions, which consist of integrated applications required to process deposit, loan, and general ledger transactions, and maintain centralized customer/member information. The Payments segment provides secure payment processing tools and services, ~~including:~~including ATM, debit, and credit card transaction processing ~~services;~~services, online and mobile bill pay ~~solutions;~~solutions, Automated Clearing House ("ACH") origination and remote deposit capture processing, and risk management products and services. The Complementary segment provides additional software and services that can be integrated with our Core solutions, orand many can be used independently. The Corporate & Other segment includes hardware revenue and costs, as well as operating costs not directly attributable to the other three segments.

The Company evaluates the performance of its segments and allocates resources to them based on various factors, including performance against trend, budget, and forecast. Only revenue and costs of revenue are considered in the evaluation for each segment.

~~The prior period presented has~~Immaterial adjustments have been ~~retroactively restated~~made to ~~conform~~reclassify revenue that was recognized for the three and six months ended December 31, 2021, from the Complementary to the ~~new segment structure adopted July 1, 2017.~~Payments and Corporate and Other segments. Immaterial adjustments were also made to reclassify cost of revenue from the Complementary to the Payments and Corporate and Other segments for the three and six months ended December 31, 2021. These reclasses were made to be consistent with the current allocation of revenue and cost of revenue by segment. Revenue reclassed for the three and six months ended December 31, 2021, from Complementary to Payments was $2,977 and $5,946, respectively, and from Complementary to Corporate and Other was $2,207 and $2,941, respectively. Cost of revenue reclassed for the three and six months ended December 31, 2021, from Complementary to Payments was $1,396 and $2,754, respectively, and from Complementary to Corporate and Other was $773 and $482, respectively.


	Three Months Ended
	December 31, 2021
	Core		Payments		Complementary		Corporate & Other		Total
REVENUE
Services and Support	$	145,699	$	25,294	$	108,933	$	16,285	$	296,211
Processing	9,179		160,211		27,607		688		197,685
Total Revenue	154,878		185,505		136,540		16,973		493,896

Cost of Revenue	64,554		96,966		55,982		65,323		282,825
Research and Development									29,916
Selling, General, and Administrative									55,493


Total Expenses									368,234

SEGMENT INCOME	$	90,324	$	88,539	$	80,558	$	(48,350)

OPERATING INCOME									125,662

INTEREST INCOME (EXPENSE)									(441)

INCOME BEFORE INCOME TAXES									$	125,221



	Six Months Ended
	December 31, 2021
	Core		Payments		Complementary		Corporate & Other		Total
REVENUE
Services and Support	$	301,536	$	42,357	$	221,739	$	28,072	$	593,704
Processing	18,627		315,739		52,579		1,303		388,248
Total Revenue	320,163		358,096		274,318		29,375		981,952

Cost of Revenue	131,456		191,549		110,399		126,056		559,460
Research and Development									56,670
Selling, General, and Administrative									106,565


Total Expenses									722,695

SEGMENT INCOME	$	188,707	$	166,547	$	163,919	$	(96,681)

OPERATING INCOME									259,257

INTEREST INCOME (EXPENSE)									(683)

INCOME BEFORE INCOME TAXES									$	258,574

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This discussion and analysis should be read in conjunction with the condensed consolidated financial statements and the accompanying notes to the condensed consolidated financial statements included in this Form 10-Q for the quarter ended December 31, ~~2017.~~2022.

Jack Henry & Associates, Inc. ~~(JHA)~~("JKHY") is a well-rounded financial technology company and is a leading provider of technology solutions and payment processing services primarily for financial services organizations. Its solutions ~~are marketed and supported through three primary brands. Jack Henry Banking® is a top provider~~consist of ~~information and transaction~~integrated data processing systems solutions to USU.S. banks ranging from ~~community banks~~de novo to ~~multi-billion dollar institutions. Symitar® is a leading provider of information and transaction~~multi-billion-dollar institutions, core data processing solutions for credit unions of all ~~sizes. ProfitStars® provides~~sizes, and non-core highly specialized core-agnostic products and services that enable financial institutions of every asset size and charter, and diverse corporate entities outside the financial services industry, to mitigate and control risks, optimize revenue and growth opportunities, and contain costs. ~~JHA's~~JKHY's integrated solutions are available for ~~in-house~~on-premise installation and ~~outsourced delivery.~~delivery in our private cloud.

Our two primary revenue streams are ~~"Services~~"services and support" and ~~"Processing".~~"processing." Services and support includes: ~~"Outsourcing~~"private and public cloud" fees that predominantly have contract terms of ~~five~~seven years or longer at inception; ~~"Product~~"product delivery and services" revenue, which includes revenue from the sales of licenses, implementation services, deconversion fees, consulting, and hardware; and ~~"In-house~~"on-premise support" revenue, ~~which is~~ composed of maintenance fees which primarily contain annual contract terms. Processing revenue includes: ~~"Remittance"~~"remittance" revenue from payment processing, remote capture, and ~~automated clearing house (ACH)~~ACH transactions; ~~"Card"~~"card" fees, including card transaction processing and monthly fees; and ~~"Transaction~~"transaction and digital" revenue, which includes transaction and mobile processing fees. We continually seek opportunities to increase revenue while at the same time containing costs to expand margins.

All amounts in the following discussion are in thousands, except per share amounts.

RESULTS OF OPERATIONS

InFor the second quarter of fiscal ~~2018,~~2023, total revenue increased 8%2%, or ~~$26,203,~~$11,418, compared to the same quarter in fiscal 2022. Total revenue less deconversion fee and acquisition revenues of $6,380 and $2,578, respectively, for the current fiscal quarter and less deconversion fee revenues of $26,903 for the prior ~~year. Excluding~~fiscal quarter, results in an increase of ~~$2,809~~6%, quarter over quarter. This increase was primarily driven by growth in ~~deconversion fees quarter-over-quarter,~~data processing and ~~revenue from fiscal 2018 acquisitions of $1,323, total revenue increased 6% for the quarter.~~hosting, card processing, transaction and digital, and remittance revenues.

Operating expenses increased 8% for the second quarter of fiscal 2023 compared to the second quarter of fiscal ~~2017, mainly due to~~2022. Total operating expenses less deconversion expenses of $917, the acquisition-related expenses of $6,907, plus the gain on disposal of assets, net, of $1,207, for the current fiscal quarter, and reducing operating expenses by deconversion expenses of $2,547 for the prior fiscal year quarter, results in a 6%7% increase quarter over quarter. This increase in operating expenses was primarily driven by higher personnel costs, including benefits expenses, resulting from a 4% headcount ~~at December 31, 2017 compared to December 31, 2016, leading to~~increase in the trailing twelve months, increased ~~salaries~~direct costs in line with related revenue increases, and ~~benefits. Other reasons for the increase include~~ higher ~~direct cost of product, costs related to our new card payment processing platform and faster payments incentives, and increased~~ amortization of ~~capitalized software. The Tax Cuts and Jobs Act enacted December 22, 2017 had a large impact on our provision for~~intangible assets.

Operating income taxes, causing it to decrease 304% compared to the prior year quarter. As discussed in Note 6 of the condensed consolidated financial statements, the amounts recorded under provision for income taxes are reasonable estimates, but are subject to change as additional calculations are completed based on actual results during the third and fourth quarters of fiscal 2018.

~~Excluding the effect of the Tax Cuts and Jobs Act and other one-time tax adjustments, net income increased 6%~~decreased 15% for the second quarter of fiscal ~~2018~~2023 compared to the second quarter of fiscal 2022. Total operating income less deconversion fee operating income of $5,463, plus an acquisition operating loss of $4,329, less the gain on disposal of assets, net, of $1,207 for the current fiscal quarter, and less deconversion fee operating income of $24,356 for the prior fiscal quarter, results in a 4% increase quarter over quarter. This increase in operating income was primarily driven by increased revenue growth partially offset by increased operating expenses detailed above.

The provision for income taxes decreased 17% for the second quarter of fiscal ~~2017.~~2023 compared to the prior fiscal year second quarter. The effective tax rate for the second quarter of fiscal 2023 was 23.2% compared to 23.6% for the same quarter a year ago.

InDue to the above changes, net income decreased 16% for the second quarter of fiscal 2023 compared to the second quarter of fiscal 2022. Total net income less deconversion fee net income of $4,111, plus acquisition net loss of $5,405, less the gain on disposal of assets, net, of $909 for the current fiscal quarter, and less deconversion fee net income of $18,352 for the prior fiscal quarter, results in a 5% increase quarter over quarter.

For the six months ended December 31, ~~2017,~~2022, total revenue increased 6%5%, or ~~$41,109, over the six months ended December 31, 2016. Deconversion fees in the year-to-date period decreased $2,981~~$52,564, compared to the same ~~six months~~period in fiscal year 2022. Total revenue less deconversion fee and acquisition revenues of $10,899 and $3,316, respectively, for the current fiscal period and less deconversion fee revenues of $30,627 for the prior fiscal ~~year,~~period, results in an increase of 7%, period over period. This increase was primarily driven by growth in data processing and ~~we had revenue from 2018 acquisitions totaling $1,421. Excluding these factors from each period, total revenue increased 6%~~hosting, card processing, transaction and digital, remittance, and software usage fee revenues.

Operating expenses increased 9% for the six months ended December 31, ~~2017 increased 7%~~2022, compared to the ~~equivalent~~same period in fiscal year 2022. The increase in operating expenses was primarily driven by increased personnel costs, including benefits expenses, resulting from a 4% headcount increase in the trailing twelve months, higher direct costs in line with related revenue increases, and higher amortization of intangible assets.

Operating income decreased 4% for the six months ended December 31, 2022, compared to the same period in fiscal year 2022. Total operating income less deconversion fee operating income of $9,329, plus an acquisition operating loss of $6,126, less the gain on disposal of assets, net, of $7,384 for the current fiscal period, less deconversion fee operating income of $27,540 for the prior ~~year,~~fiscal period, results in a 3% increase period over period. This increase in operating income was primarily ~~due to~~driven by increased ~~headcount, higher direct cost of product, costs related to our new card payment processing platform and faster payments incentives, and~~revenue growth partially offset by increased ~~amortization of capitalized software. Provision~~operating expenses detailed above.

The provision for income taxes decreased ~~(154)%~~6% for the six months ended December 31, 2022, compared to the ~~prior year-to-date~~same period ~~again due~~in fiscal year 2022. The effective tax rate for the six months ended December 31, 2022, was 23.4% compared to 23.5% for the same period a year ago.

Due to the ~~Tax Cuts and Jobs Act.~~

~~Excluding the effect of the Tax Cuts and Jobs Act and other one-time tax adjustments,~~above changes, net income decreased 5% for the ~~first~~ six months ~~of fiscal 2018 increased 4%~~ended December 31, 2022, compared to the ~~first six months~~same period a year ago. Total net income less deconversion fee net income of $7,020, plus acquisition net loss of $7,275, less the gain on disposal of assets, net, of $5,556 for the current fiscal ~~2017.~~period, and less deconversion fee net income of $20,751 for the prior fiscal period, results in a 3% increase period over period.

WeOur second fiscal quarter was significantly impacted by a recent rapid slowdown of merger and acquisition activity in the financial institution industry, which has caused decreases in deconversion fee revenue, as noted, and in conversion/merger services revenue. However, we move into the third quarter of fiscal ~~2018 following strong performance in the second quarter. Significant~~2023 with significant portions of our business ~~continue~~continuing to come from recurring revenues and our ~~healthy~~ sales pipeline ~~is also~~remaining encouraging. Our customers continue to face regulatory and operational challenges which our products and services address, and ~~in these times~~ we believe they have ~~an even greater~~a great need for our solutions that directly address institutional profitability, efficiency, and security. Our strong balance sheet, access to extensive lines of credit, the continued strength of our existing

~~product line~~ lines of revenue, and an unwavering commitment to superior customer service should position us well to address current and future opportunities.

In the second quarter of fiscal 2018, we completed the acquisition of Ensenta Corporation, strengthening our electronic payments offering and making Jack Henry & Associates the leading provider of consumer remote deposit capture services.

A detailed discussion of the major components of the results of operations for the three and six months ~~ending~~ended December 31, ~~2017~~2022, follows. ~~All dollar amounts are in thousands and discussions~~Discussions compare the current fiscal year's three and six months ~~ending~~ended December 31, ~~2017~~2022, to the prior ~~year~~fiscal year's three and six months ~~ending~~ended December 31, ~~2016.~~2021.

REVENUE


Services and Support	Three Months Ended December 31,						% Change		Six Months Ended December 31,						% Change
	2022			2021					2022			2021
Services and Support	$	290,700		$	296,211		(2)	%	$	610,849		$	593,704		3	%
Percentage of total revenue	58		%	60		%			59		%	60		%

~~There was 7% growth in services~~Services and support revenue indecreased 2% for the second quarter of fiscal ~~2018~~2023 compared to the same quarter ~~last year. Excluding deconversion fees from each period presented, and excluding revenue from fiscal 2018 acquisitions,~~a year ago. Reducing services and support revenue ~~grew 6%. The increase~~for deconversion fee revenue from each quarter, which was ~~primarily due to increased product delivery~~$6,380 for the current fiscal quarter and services revenue and increased outsourcing and cloud revenue. The increased product delivery and services revenue resulted from completion of revised contractual obligations on several long-term contracts that permitted the Company to recognize previously deferred revenue related to our bundled arrangements.

~~In the six months ended December 31, 2017, services and support revenue grew 5% over the equivalent six months in~~$26,903 for the prior fiscal ~~year. Excluding deconversion fees from each period presented~~year quarter and acquisition revenue ~~from~~of $19 for the current fiscal ~~2018 acquisitions, services and support revenue grew~~quarter, results in growth of 6%~~. The~~ quarter over quarter. This increase was primarily driven by ~~an increase~~growth in ~~outsourcing~~data processing and ~~cloud revenue, along with an increase in product delivery~~hosting revenue.

Services and ~~services revenue resulting from completion of revised contractual obligations on several of our bundled arrangements.~~

~~Processing~~support revenue increased ~~8% in the second quarter of fiscal 2018 compared to the same quarter last year, primarily due to increased transaction volumes within each of the three components of processing revenue.~~

~~Each component also experienced volume growth in the fiscal year-to-date period, leading to an increase in processing revenue of 7%~~3% for the six months ended December 31, ~~2017~~2022 compared to the same period a year ago. Reducing services and support revenue for deconversion fee revenue from each period, which was $10,899 for the current fiscal period and $30,627 for the prior fiscal period, and acquisition revenue of $43 for the current fiscal period, results in growth of 7% period over period. This increase was primarily driven by growth in data processing and hosting and software usage fee revenues. Growth in software usage fee revenues reflects a continuing shift of customers to our time-based license model.


Processing	Three Months Ended December 31,						% Change		Six Months Ended December 31,						% Change
	2022			2021					2022			2021
Processing	$	214,614		$	197,685		9	%	$	423,667		$	388,248		9	%
Percentage of total revenue	42		%	40		%			41		%	40		%

Processing revenue increased 9% for the second quarter of fiscal 2023 compared to the same quarter last fiscal year. Reducing processing revenue for acquisition revenue of $2,559 for the current fiscal quarter, results in growth of 7% quarter over quarter. This increase was primarily driven by higher card processing, payment processing, including iPay and Payrailz, and Jack Henry digital revenue, including Banno, as ~~compared~~well as other processing fee revenues, primarily due to expanding volumes.

Processing revenue increased 9% for the six months ended December 31, ~~2016.~~2022, compared to the same period last fiscal year. Reducing processing revenue for acquisition revenue of $3,273 for the current fiscal period, results in growth of 8% period over period. This increase was primarily driven by higher card processing and Jack Henry digital revenue, including Banno, as well as payment processing fees, including iPay and Payrailz, and other processing fee revenues, primarily due to expanding volumes.

Cost of revenue for the second quarter of fiscal ~~2018~~2023 increased 7%8% over the prior fiscal year ~~but declined as~~second quarter. Reducing cost of revenue for deconversion costs from each quarter, which were $555 for the current fiscal year quarter and $1,601 for the prior fiscal year quarter, and for acquisition costs of $5,861 from the current fiscal year quarter, results in a ~~percentage of total revenue. The~~6% increase quarter over quarter. This increase was primarily due ~~primarily~~ to ~~expanded~~higher personnel costs, including benefits expenses, resulting from a 1% headcount ~~driving increased salaries and benefits. Other factors to~~increase in the ~~increase include~~trailing twelve months, higher direct costs in line with related increases in revenue, and increased amortization of ~~product, professional services, and amortization related to capitalized software. The Company continues to focus on cost management.~~

~~For the year-to-date period, cost~~intangible assets. Cost of revenue increased ~~6% due~~3% compared to the ~~same factors discussed above, but remained a consistent percentage of revenue.~~

Research and Development Three Months Ended December 31,
%
Change
Six Months Ended December 31, %
Change
2017 2016 2017 2016
Research and Development $ 22,414
$ 20,873
7 % $ 43,343
$ 40,611
7 %
Percentage of total revenue 6 % 6 % 6 % 6 %

~~Research and development expenses increased for both the~~prior fiscal year quarter and fiscal year-to-date period primarily due to increased salary and personnel costs, driven by a 6% increase in headcount at December 31, 2017 compared to a year ago. However, both periods remained consistent with the prior year as a percentage of total revenue.

Cost of revenue increased 8% for the six months ended December 31, 2022, compared to the same period last fiscal year. Reducing cost of revenue for deconversion costs from each period, which were $965 for the current fiscal period and $1,938 for the prior fiscal period, and for acquisition costs of $7,400 from the current fiscal period, results in a 7% increase period over period. This increase was primarily due to higher direct costs in line with related increases in revenue, higher personnel costs, including benefits expenses, resulting from a 1% headcount increase in the trailing twelve months, and increased amortization of intangible assets. Cost of revenue increased 1% compared to the prior fiscal period as a percentage of total revenue.


Research and Development	Three Months Ended December 31,						% Change		Six Months Ended December 31,						% Change
	2022			2021					2022			2021
Research and Development	$	36,561		$	29,916		22	%	$	69,554		$	56,670		23	%
Percentage of total revenue	7		%	6		%			7		%	6		%

Research and development expense increased 22% for the second quarter of fiscal 2023 over the prior fiscal year second quarter. Reducing research and development expense for the effects of acquisitions of $274 for the current fiscal quarter, results in a 21% increase quarter over quarter. This increase was primarily due to an increase in personnel costs, net of capitalization, including benefits expenses, resulting from a 13% headcount increase in the trailing twelve months, and higher internal licenses and fees. Research and development expense for the quarter increased 1% compared to the prior fiscal year quarter as a percentage of total revenue.

Research and development expense increased 23% for the six months ended December 31, 2022, compared to the same period last fiscal year. Reducing research and development expense for the effects of acquisitions of $606 for the current fiscal period, results in a 22% increase period over period. This increase was primarily due to an increase in personnel costs, net of capitalization, including benefits expenses, resulting from a 13% headcount

Selling, General, and Administrative Three Months Ended December 31,
%
Change
Six Months Ended December 31, %
Change
2017 2016 2017 2016
Selling, General, and Administrative $ 45,613
$ 40,928
11 % $ 89,346
$ 80,038
12 %
Percentage of total revenue 12 % 12 % 12 % 12 %

~~The 11%~~ increase in the trailing twelve months, and higher internal licenses and fees. Research and development expense for the current fiscal period increased 1% compared to the prior fiscal year period as a percentage of total revenue.


Selling, General, and Administrative	Three Months Ended December 31,						% Change		Six Months Ended December 31,						% Change
	2022			2021					2022			2021
Selling, General, and Administrative	$	56,788		$	55,493		2	%	$	114,013		$	106,565		7	%

Percentage of total revenue	11		%	11		%			11		%	11		%

Selling, general, and administrative expense increased 2% in the second quarter of fiscal 2023 over the same quarter in the prior fiscal year. Reducing selling, general, and administrative expense for the effects of deconversion fees from each quarter, which were $362 for the current fiscal year quarter and $946 for the prior fiscal year quarter, and for the effects of acquisitions of $772 for the current fiscal year quarter, and increasing selling, general, and administrative expense for the gain on disposal of assets, net, of $1,207 for the current fiscal year quarter, results in a 4% increase quarter over quarter. This increase was primarily due to higher personnel costs, including benefits expenses, resulting from a 5% headcount increase in the current quarter was mainly due to increased commissions, salaries, and benefits. The fiscal year-to-date increase was also driven by those factors, as well as increased professional service expenses due to contracting with outside experts in preparation for our adoption of the new ASC 606 revenue standard.trailing twelve months. Selling, general, and administrative expense remained consistent as a ~~consistent~~ percentage of total revenue ~~in both~~this fiscal quarter versus the ~~quarter~~prior fiscal year quarter.

Selling, general, and ~~fiscal year-to-date periods.~~

~~Gain on Disposal of a Business~~

~~In the second quarter of fiscal 2018, we recognized a gain related to the sale of our ATM Manager product line of $189.~~

For the six months ended December 31, 2017, gains on disposals of businesses totaled $1,894, due to the ATM Manager gain recognized in the second quarter and the first quarter sale of our jhaDirect product line. No businesses were disposed ofadministrative expense increased 7% in the six months ended December 31, ~~2016.~~2022, compared to the same period last fiscal year. Reducing selling, general, and administrative expense for the effects of deconversion fees from each period, which were $604 for the current fiscal year period and $1,149 for the prior fiscal year period, and for the effects of acquisitions of $1,436 for the current fiscal period, and increasing selling, general, and administrative expense for the gain on disposal of assets, net, of $7,384 for the current fiscal year period, results in a 13% increase period over period. This increase was primarily due to higher personnel costs, including benefits expenses, resulting from a 5% headcount increase in the trailing twelve months, increased travel expenses, and increased consulting and other professional services. Selling, general, and administrative expense remained consistent as a percentage of total revenue this fiscal period versus the prior fiscal year period.

Interest income fluctuated due to changes in invested balances and yields on invested ~~balances.~~balances during the second quarter of fiscal 2023 and six months ended December 31, 2022, compared to the same periods a year ago. Interest expense ~~remained low~~increased when compared to the prior fiscal year quarter and year-to-date period due to recent increases in prevailing interest rates, length of borrowing time, and amounts borrowed. There was a $275,000 outstanding balance under the credit facility at December 31, 2022, and $240,000 outstanding balance at December 31, 2021. The increase in the outstanding balance was primarily due to funding the Payrailz acquisition on August 31, 2022.


PROVISION FOR INCOME TAXES	Three Months Ended December 31,						% Change		Six Months Ended December 31,						% Change
	2022			2021					2022			2021
Provision for Income Taxes	$	24,435		$	29,551		(17)	%	$	57,186		$	60,791		(6)	%
Effective Rate	23.2		%	23.6		%			23.4		%	23.5		%

The change in effective tax rate for ~~both~~ the ~~current~~second quarter of fiscal 2023 and ~~prior~~six months ended December 31, 2022, compared to the same periods ~~but~~a year ago was ~~higher~~primarily due to larger excess tax benefits received from share-based compensation in the current ~~periods due in part to increased LIBOR.~~fiscal periods.


NET INCOME	Three Months Ended December 31,				% Change		Six Months Ended December 31,				% Change
	2022		2021				2022		2021
Net income	$	80,775	$	95,670	(16)	%	$	187,324	$	197,783	(5)	%
Diluted earnings per share	$	1.10	$	1.30	(15)	%	$	2.56	$	2.68	(4)	%

PROVISION FOR INCOME TAXES Three Months Ended December 31,
%
Change
Six Months Ended December 31,
%
Change
2017 2016 2017 2016
Provision for Income Taxes $ (60,413 ) $ 29,668
(304 )% $ (31,604 ) $ 58,807
(154 )%
Effective Rate (63.5 )% 33.5 % (16.9 )% 32.7 %

Net income ~~increased 165%~~decreased 16% to ~~$155,574,~~$80,775, or ~~$2.01~~$1.10 per diluted share, for the second quarter of fiscal ~~2018,~~2023 compared to ~~$58,814,~~$95,670, or ~~$0.75~~$1.30 per diluted share in the same quarter of fiscal 2022. Total net income less deconversion fee net income of $4,111, an acquisition net loss of $5,405, and the gain on disposal of assets, net, of $909, for the current fiscal quarter, and reducing operating expenses for the effects of deconversion fees of $18,352 for the prior fiscal year quarter, results in a 5% increase quarter over quarter.

Net income decreased 5% to $187,324, or $2.56 per diluted share, for the six months ended December 31, 2022, compared to $197,783, or $2.68 per diluted share in the same period of fiscal ~~2017, resulting~~2022. Total net income less the net effects of deconversion fees of $7,020, an acquisition net loss of $7,275, and the gain on disposal of assets, net, of $5,556, for the current fiscal period and reducing operating expenses for the effects of deconversion fees of $20,751 for the prior fiscal year period, results in a ~~167%~~3% increase in diluted earnings per share. Excluding the effect of the Tax Cuts and Jobs Act and other one-time tax adjustments, net income increased 6% for the second quarter of fiscal 2018 compared to the second quarter of fiscal 2017, to $62,314, and diluted earnings per share increased 7% to $0.80 per diluted share.period over period.

In the six months ended December 31, 2017, net income increased to $218,985 from $121,058 for the same period of fiscal 2017, for an increase of 81%. Diluted earnings per share increased 83% to $2.82, compared to $1.54 last year. Excluding the effect of the Tax Cuts and Jobs Act and other one-time tax adjustments, net income for the first

~~six months of fiscal 2018 increased 4% over the first six months of fiscal 2017 to $125,725, and diluted earnings per share increased 5% to $1.62.~~

REPORTABLE SEGMENT DISCUSSION

The Company is a leading provider of technology solutions and payment processing services primarily for financial services organizations.

Beginning in the first quarter of fiscal 2018, JHA changed its reportable segment structure from two customer-centric segments, Bank and Credit Union, to four product-centric segments. The change was made based on the view of our Chief Executive Officer, who is also our Chief Operating Decision Maker, that the Company could be more effectively managed using a product-centric approach and was driven by the first budgetary process under his administration.

The Company’s operations are classified into four reportable segments: Core, Payments, Complementary, and Corporate and Other. The Core segment provides core information processing platforms to banks and credit unions, which consist of integrated applications required to process deposit, loan, and general ledger transactions, and maintain centralized customer/member information. The Payments segment provides secure payment processing tools and services, including ATM, debit, and credit card processing ~~services,~~services; online and mobile bill pay ~~solutions,~~solutions; ACH origination and remote deposit capture processing; and risk management products and services. The Complementary segment provides additional software, hosted processing platforms, and services, including call center support, and network security management, consulting, and monitoring, that can be integrated with our core solutions orand many can be used independently. The Corporate &and Other segment includes ~~hardware~~ revenue and costs from hardware and other products not attributed to any of the other three segments, as well as operating costs not directly attributable to the other three segments.

~~The prior period presented has been retroactively restated to conform~~


Core
	Three Months Ended December 31,				% Change		Six Months Ended December 31,				% Change
	2022		2021				2022		2021
Revenue	$	155,390	$	154,878	—	%	$	330,514	$	320,163	3	%
Cost of Revenue	$	68,324	$	64,554	6	%	$	140,564	$	131,456	7	%

Revenue in the Core segment remained consistent and cost of revenue increased 6% for the three months ended December 31, 2022, compared to the ~~new segment structure adopted July 1, 2017.~~

Revenue in the Core segment increased ~~12%, while~~3% and cost of revenue ~~also~~ increased ~~12%,~~7% for the three months ended December 31, 2017. Excluding deconversion fees from each period, revenue increased 11%. The revenue increase was partly due to increased product delivery and services revenue being recognized as a result of completion of revised contractual obligations on several long-term contracts that permitted the Company to recognize previously deferred revenue related to our bundled arrangements. The increased revenue in the Core segment was also driven by an 8% increase in In-House Support and a 6% increase in Outsourcing and Cloud revenue. Cost of revenue remained consistent as a percentage of revenue.

~~Comparing~~ the six months ended December 31, ~~2017~~2022, compared to the ~~equivalent~~ six months ~~of fiscal 2017,~~ended December 31, 2021. Reducing Core revenue for deconversion fee revenue in both periods, which totaled $3,933 for the six months ended December 31, 2022, and $13,021 for the six months ended December 31, 2021, results in a 6% increase period over period. This increase in Core ~~segment increased 11%,~~revenue over the prior fiscal year period was primarily driven by ~~6% increases~~the growth in ~~both Outsourcing~~data processing and ~~Cloud revenue~~hosting and ~~In-House Support, as well as increased product delivery and services revenue recognized as a result of the completion of revised contractual obligations on several of our bundled arrangements.~~software usage fee revenues. Cost of revenue ~~for the Core segment~~ increased ~~9% for the year-to-date~~7% period ~~but declined~~over period primarily due to increased direct support costs and higher personnel costs. Cost of revenue increased 1% as a percentage of ~~revenue.~~revenue for the six months ended December 31, 2022, compared to the same period of fiscal 2022.


Payments
	Three Months Ended December 31,				% Change		Six Months Ended December 31,				% Change
	2022		2021				2022		2021
Revenue	$	191,487	$	185,505	3	%	$	378,026	$	358,096	6	%
Cost of Revenue	$	108,071	$	96,966	11	%	$	209,226	$	191,549	9	%

Payments
Three Months Ended December 31, % Change Six Months Ended December 31, % Change
2017 2016 2017 2016
Revenue $ 126,009
$ 119,144
6 % $ 249,163
$ 241,474
3 %
Cost of Revenue $ 59,052
$ 54,792
8 % $ 116,318
$ 110,812
5 %
Revenue in the Payments segment increased 3% for the second quarter of fiscal 2023 compared to the equivalent quarter of the prior fiscal year. Reducing Payments revenue for deconversion fee revenue in both periods, which totaled $1,336 for the second quarter of fiscal 2023 and $7,933 for the second quarter of fiscal 2022 and for revenue from acquisitions of $2,578 from the current fiscal year quarter, results in a 6% increase quarter over quarter. This Payments revenue growth was primarily due to increased card and remittance fee revenues within processing. Cost of revenue increased 11% quarter over quarter primarily due to increased direct costs in line with associated revenues and higher personnel costs. Cost of revenue as a percentage of revenue increased 4% for the second quarter of fiscal 2023 compared to the same quarter of fiscal 2022.

Revenue in the Payments segment increased 6% for the ~~second quarter of fiscal 2018~~six months ended December 31, 2022, compared to the equivalent ~~quarter last~~period of the prior fiscal year. ~~Excluding deconversion~~This Payments revenue ~~from each period and revenue from Ensenta from the second quarter of fiscal 2018, revenue increased 5% in the Payments segment. The improvement in the most recent quarter~~growth was primarily due to increased card and remittance ~~and card processing revenue.~~fee revenues within processing. Cost of revenue increased ~~8%, in part~~9% period over period primarily due to increased ~~spending related to our strategic partnership~~direct costs in line with ~~First Data~~associated revenues and ~~PSCU to expand our credit and debit card platform.~~

~~For~~higher personnel costs. Cost of revenue as a percentage of revenue increased 2% for the six months ended December 31, ~~2017, Payments~~2022, compared to the same period of fiscal 2022.


Complementary
	Three Months Ended December 31,				% Change		Six Months Ended December 31,				% Change
	2022		2021				2022		2021
Revenue	$	142,295	$	136,540	4	%	$	290,647	$	274,318	6	%
Cost of Revenue	$	59,270	$	55,982	6	%	$	117,708	$	110,399	7	%

Revenue in the Complementary segment increased 4% for the second quarter of fiscal 2023 compared to the equivalent quarter of the prior fiscal year. This Complementary revenue growth was primarily driven by increased ~~3%, despite decreased deconversion fees. Excluding deconversion~~hosting fees ~~from each six month period,~~ and ~~excluding Ensenta revenue from~~

~~fiscal 2018, revenue increased 5%.~~Jack Henry digital revenues. Cost of revenue increased ~~5% for the fiscal year-to-date period, partially~~6% quarter over quarter primarily due to increased ~~spending related~~direct costs in line with associated revenues and higher personnel costs. Cost of revenue as a percentage of revenue increased 1% for the second quarter of fiscal 2023 compared to ~~our strategic partnership with First Data and PSCU to expand our credit and debit card platform.~~

Revenue in the Complementary segment increased 6% for the ~~quarter,~~six months ended December 31, 2022, compared to the equivalent period of the prior fiscal year. This Complementary revenue growth was primarily driven by ~~increases in outsourcing~~increased hosting fees and ~~cloud services, as well as transaction and~~Jack Henry digital ~~processing. Excluding deconversion fees from each period, and Vanguard revenue from the second quarter of fiscal 2018, revenue increased 5%.~~revenues. Cost of revenue increased ~~6% for the second quarter~~7% period over period primarily due to increased direct costs in line with associated revenues and higher personnel costs. Cost of ~~fiscal 2018 compared to the second quarter of fiscal 2017, remaining consistent~~revenue as a percentage of ~~revenue.~~

~~Revenue in the Complementary segment increased 5%~~revenue remained consistent for the six months ended December 31, ~~2017~~2022, compared to the ~~prior year-to-date~~same period ~~or 4% after excluding deconversion fees and Vanguard revenue. The increase was driven by increased outsourcing and cloud services, as well as increased transaction and digital processing. Cost~~ of ~~revenue remained a consistent percentage of revenue in each six month period.~~fiscal 2022.


Corporate and Other
	Three Months Ended December 31,				% Change		Six Months Ended December 31,				% Change
	2022		2021				2022		2021
Revenue	$	16,142	$	16,973	(5)	%	$	35,329	$	29,375	20	%
Cost of Revenue	$	68,924	$	65,323	6	%	$	135,351	$	126,056	7	%

Corporate and Other
Three Months Ended December 31, % Change Six Months Ended December 31, % Change
2017 2016 2017 2016
Revenue $ 14,542
$ 15,442
(6 )% $ 28,617
$ 30,304
(6 )%
Cost of Revenue $ 52,023
$ 51,291
1 % $ 102,733
$ 98,457
4 %

~~Revenue in the Corporate and Other segment for the three and six months ended December 31, 2017 each decreased 6% mainly due to a loss of revenue from our jhaDirect product line.~~ Revenue classified in the Corporate and Other segment includes ~~revenue~~revenues from ~~hardware~~other products and ~~other products~~services and hardware not specifically attributed to any of the other three segments. Revenue ~~within this segment is expected to be lower in fiscal 2018 compared to fiscal 2017 due to the sale of the jhaDirect product line~~ in the ~~first~~Corporate and Other segment decreased 5% for the second quarter of fiscal ~~2018. For~~2023 compared to the ~~full~~equivalent quarter of the prior fiscal year. The decrease quarter over quarter was primarily due to lower user group revenues due to differences in the timing of the user conference year ~~2017, revenue from jhaDirect totaled $6,536.~~over year.

Cost of revenue for the Corporate and Other segment includes operating ~~cost~~costs not directly attributable to any of the other three segments. The ~~increased~~ cost of revenue in the second quarter of fiscal 2023 increased 6% when compared to the prior fiscal year quarter primarily due to higher internal licenses and ~~year-to-date is primarily related to increased salary~~fees and ~~benefit~~personnel costs.

Revenue in the Corporate and Other segment increased 20% for the six months ended December 31, 2022, compared to the equivalent period of the prior fiscal year. The increase period over period was primarily due to higher services and support revenue.

The cost of revenue in the six months ended December 31, 2022, increased 7% when compared to the prior fiscal year period primarily due to higher internal licenses and fees, personnel costs, and hardware costs.

LIQUIDITY AND CAPITAL RESOURCES

The Company's cash and cash equivalents decreased to ~~$57,719~~$25,763 at December 31, ~~2017~~2022, from ~~$114,765~~$48,787 at June 30, 2017. The decrease from June 30, 2017 is primarily due to our acquisitions of Vanguard Software Group and Ensenta Corporation, the latter of which was partially funded by borrowing on our revolving credit facility.2022.

The following table summarizes net cash from operating activities in the statement of cash flows:

Cash provided by operating activities ~~increased 8%~~for the first six months of fiscal 2023 decreased 3% compared to the same period last year. Cash from operations is primarily used to repay debt, pay dividends, repurchase stock, ~~and~~ for capital ~~expenditures.~~

expenditures, and acquisitions.

Cash used in investing activities for the first six months of fiscal ~~2018~~2023 totaled ~~$202,309~~$301,192 and included: ~~$137,654, net of cash acquired,~~$229,628 for ~~the purchases of Ensenta Corporation and Vanguard Software Group; $46,936~~an acquisition; $81,046 for the ongoing enhancements and development of existing and new product and service offerings; capital expenditures on facilities and equipment of ~~$12,249;~~$17,376; and ~~$6,025~~$1,027 for the purchase and development of internal use software. This was partially offset by ~~$350 of~~ proceeds from the sale of ~~businesses, and $205~~assets of ~~proceeds from asset sales.~~$27,885. Cash used in investing activities for the first six months of fiscal ~~2017~~2022 totaled ~~$69,703~~$101,052 and included ~~$41,673~~$71,353 for the development of ~~software,~~software; capital expenditures of ~~$17,405,~~$22,373; and ~~$11,455~~$7,364 for the purchase and development of internal use ~~software,~~software. This was partially offset by ~~$830 of~~ proceeds from the sale of ~~assets.~~assets of $38.

Financing activities ~~used~~provided cash of ~~$31,645~~$87,457 for the first six months of fiscal ~~2018. Cash used~~2023 and included borrowings on credit facilities of $365,000. This was ~~$50,000 for repayment~~partially offset by payments on ~~or our revolving~~ credit ~~facility, $30,018 for the purchase~~facilities of ~~treasury shares,~~$205,042, dividends paid to stockholders of ~~$47,844,~~$71,454 and ~~$3,783~~$1,047 net cash outflow from the issuance of stock and tax withholding related to stock-based compensation. ~~These uses were partially offset by borrowings of $100,000 on our revolving credit facility.~~ Financing activities used cash of $118,171 in the first six months of fiscal ~~2017 totaling $100,286. Cash used was $103,885~~2022 including repurchase of treasury stock of $193,917, $80,065 for repayments on credit facilities and financing leases, and $67,696 for the ~~purchase~~payment of ~~treasury shares, dividends paid to stockholders~~dividends. This was partially offset by borrowings on credit facilities of ~~$43,582, repayments on capital leases of $200,~~$220,000 and ~~$2,619~~$3,507 net cash ~~outflow~~inflow from the issuance of stock and tax withholding related to stock-based ~~compensation, partially offset by borrowings on our revolving credit facility of $50,000.~~compensation.

Capital Requirements and Resources

The Company generally uses existing resources and funds generated from operations to meet its capital requirements. Capital expenditures totaling ~~$12,249~~$17,376 and ~~$17,405~~$22,373 for the six months ~~ending~~ended December 31, ~~2017~~2022, and December 31, ~~2016,~~2021, respectively, were made primarily for additional equipment and the improvement of existing facilities. These additions were funded from cash generated by operations. Total consolidated capital expenditures on facilities and equipment for the Company for fiscal year ~~2018~~2023 are ~~not~~ expected to ~~exceed $70,000~~be approximately $57,000 and have been or will be funded from our credit facilities and cash generated by operations.

On August 31, 2022, the Company acquired all of the equity interest in Payrailz, LLC ("Payrailz"). The final purchase price, following customary post-closing adjustments to the extent actual closing date working capital, cash, debt, and unpaid seller transaction expenses exceeded or were less than the amounts estimated at closing, was $230,205. Pursuant to the merger agreement for the transaction, $48,500 of the purchase price was placed in an escrow account at the closing, consisting of $2,500 for any final purchase price adjustments owed by the sellers, which amount was released to the sellers on December 15, 2022, in connection with post-closing adjustments, and $46,000 for indemnification matters under the merger agreement.

The primary reason for the acquisition was to expand the Company's digital financial management solutions and the purchase was funded by our revolving line of credit and cash generated from operations. Payrailz provides cloud-native, API-first, AI-enabled consumer and commercial digital payment solutions and experiences that enable money to be moved in the moment of need.

On September 29, 2022, the Company entered into an agreement with Twilio Inc., which added contractual spend obligations for the period October 1, 2022, through September 30, 2027, of $16,350. This commitment is in addition to the commitments discussed in our Annual Report on Form 10-K for the year ended June 30, 2022.

On December 27, 2022, the Company renewed an agreement with Microsoft, Inc., which added contractual spend obligations for the period January 1, 2023, through June 30, 2026, of $20,000 for Microsoft Azure Cloud services, and added contractual spend obligations for the period January 1, 2023, through June 30, 2026, of $49,000 for Server and Application licensing under the Microsoft Server and Cloud Enrollment Program.

On August 16, 2022, the ~~first six months~~Inflation Reduction Act of ~~fiscal 2018,~~2022 (“IRA”) was signed into law. The IRA made several changes to the U.S. tax code including, but not limited to, a 1% excise tax on net stock repurchases and tax incentives to promote clean energy. The Company does not expect the IRA to have a material impact on its financial statements.

On August 31, 2022, the Company ~~repurchased 302 treasury shares for $30,018. At June 30, 2017, there were 25,660 shares in treasury stock~~entered into a five-year senior, unsecured amended and restated credit agreement that replaced the ~~Company had authority to repurchase up to 4,330 additional shares.~~

~~Revolving~~prior credit ~~facility~~

agreement described below. The ~~revolving~~ credit ~~facility~~agreement allows for borrowings of up to ~~$300,000,~~$600,000, which may be increased by the Company to $1,000,000 at any time until ~~maturity to $600,000.~~maturity. The credit ~~facility~~agreement bears interest at a variable rate equal to (a) a rate based on ~~LIBOR~~an adjusted Secured Overnight Financing Rate ("SOFR") term rate or (b) an alternate base rate (the highest of (i) 0%, (ii) the Prime Rate for such day, ~~(ii)~~(iii) the sum of the Federal Funds Effective Rate for such day plus 0.50% per annum and ~~(iii)~~(iv) the ~~Eurocurrency~~Adjusted Term SOFR Screen Rate (without giving effect to the Applicable Margin) for a one month Interest Period on such day for ~~dollars~~ Dollars plus 1.0%), plus an applicable percentage in each case determined by the Company's leverage ratio. The credit ~~facility~~agreement is guaranteed by certain subsidiaries of the ~~Company. The credit facility~~Company and is subject to various financial covenants that require the Company to maintain certain financial ratios as defined in the credit agreement. As of December 31, ~~2017,~~2022, the Company was in compliance with all such covenants. The ~~revolving loan~~amended and restated credit facility terminates ~~February 20, 2020. At~~August 31, 2027. There was $275,000 outstanding under the amended and restated credit facility at December 31, ~~2017,~~2022.

On June 30, 2022, there was a $115,000 outstanding balance on the prior credit facility that was entered into on February 10, 2020. The prior credit facility was a five-year senior, unsecured revolving credit facility. The credit facility allowed for borrowings of up to $300,000, which could be increased by the Company to $700,000 at any time until maturity. The prior credit facility bore interest at a variable rate equal to (a) a rate based on a eurocurrency rate or (b) an alternate base rate (the highest of (i) 0%, (ii) the U.S. Bank prime rate for such day, (iii) the sum of the Federal Funds Effective Rate for such day plus 0.50% and (iv) the eurocurrency rate for a one-month interest period on such day for dollars plus 1.0%), plus an applicable percentage in each case determined by the Company's leverage ratio. The prior credit facility was guaranteed by certain subsidiaries of the Company and was subject to various financial covenants that required the Company to maintain certain financial ratios as defined in the prior credit agreement. As of June 30, 2022, the Company was in compliance with all such covenants. The prior credit facility's termination date was February 10, 2025.

Other lines of credit

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Dollar amounts in this item are in thousands.

Market risk refers to the risk that a change in the level of one or more market prices, interest rates, indices, volatilities, correlations or other market factors such as liquidity, will result in losses for a certain financial instrument

or group of financial instruments. We are currently exposed to credit risk on credit extended to customers and at times are exposed to interest rate risk on outstanding debt. We do not currently use any derivative financial instruments. We actively monitor these risks through a variety of controlled procedures involving senior management.

Based on the controls in place and the credit worthiness of the customer base, we believe the credit risk associated with the extension of credit to our customers will not have a material adverse effect on our consolidated financial position, results of operations, or cash flows.

~~Based on our~~We had $275,000 outstanding debt with variable interest rates as of December 31, ~~2017,~~2022, and a 1% increase in our borrowing rate would increase our annual interest expense by ~~$1,000.~~$2,750.

ITEM 4. CONTROLS AND PROCEDURES

As of the end of the period covered by this Quarterly Report on Form 10-Q, an evaluation was carried out under the supervision and with the participation of our management, including the Company's Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), of the effectiveness of the design and operation of our disclosure controls and procedures ~~pursuant to~~as defined in Exchange Act Rules ~~13a-15~~13a-15(e) and ~~15d-15.~~15d-15(e). Based upon that evaluation (required in Exchange Act Rules 13a-15(b) and 15d-15(b)), the CEO and CFO concluded that our disclosure controls and procedures are effective to ~~ensure~~provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. For this purpose, disclosure controls and procedures include controls and procedures designed to ensure that information ~~that is~~ required to be disclosed under the Exchange Act is accumulated and communicated to the Company's management, including the CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

During the fiscal quarter ~~ending~~ended December 31, ~~2017,~~2022, there ~~was~~were no ~~change~~changes in internal control over financial reporting which were identified in connection with management’s evaluation required by Rules 13a-15(d) and 15d-15(d) under the Exchange Act, that ~~has~~have materially affected, or isare reasonably likely to materially affect, the ~~Company's~~Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are subject to various routine legal proceedings and claims arising in the ordinary course of our business. In the opinion of management, any liabilities resulting from current lawsuits are not expected, either individually or in the aggregate, to have a material adverse effect on our consolidated financial statements. In accordance with U.S. GAAP, we record a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These liabilities are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular case or proceeding.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

The following shares of the Company were repurchased during the quarter ended December 31, ~~2017:~~2022:


	Total Number of Shares Purchased	Average Price of Share	Total Number of Shares Purchased as Part of Publicly Announced Plans	Maximum Number of Shares that May Yet Be Purchased Under the Plans (1)
October 1- October 31, 2022	—	—	—	3,947,713
November 1- November 30, 2022	—	—	—	3,947,713
December 1- December 31, 2022	—	—	—	3,947,713
Total	—	—	—	3,947,713

Total Number of Shares Purchased⁽¹⁾
Average Price of Share
Total Number of Shares Purchased as Part of Publicly Announced Plans⁽¹⁾

Maximum Number of Shares that May Yet Be Purchased Under the Plans⁽²⁾
October 1- October 31, 2017 —
$ —
—
4,028,696
November 1- November 30, 2017 55
113.90
—
4,028,696
December 1- December 31, 2017 —
—
—
4,028,696
Total 55
113.90
—
4,028,696

⁽¹⁾ No shares were purchased through a publicly announced repurchase plan. There were 55 shares surrendered to the Company to satisfy tax withholding obligations in connection with employee restricted stock awards.

⁽²⁾ Total stock repurchase authorizations approved by the Company's Board of Directors as of ~~February~~May 17, ~~2015~~2021, were for 3035 million shares. Under these authorizations, the Company has repurchased and not re-issued 31,042,903 shares and has repurchased and re-issued 9,384 shares. These authorizations have no specific dollar or share price targets and no expiration dates.

101.INS* XBRL Instance Document- the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document

101.SCH* XBRL Taxonomy Extension Schema Document

101.CAL* XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF* XBRL Taxonomy Extension Definition Linkbase Document

101.LAB* XBRL Taxonomy Extension Label Linkbase Document

101.PRE* XBRL Taxonomy Extension Presentation Linkbase Document

104* Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)


			OR
☐		~~For the quarterly period ended December 31, 2017~~
OR

~~( )~~	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the transition period from ______________ to ________________



Delaware						43-1128385
(State or Other Jurisdiction of Incorporation)						(I.R.S Employer Identification No.)


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock ($0.01 par value)	JKHY	Nasdaq Global Select Market


Large accelerated filer			☒			Accelerated filer	☐

Non-accelerated filer			☐			Smaller reporting company	☐

~~Large accelerated filer~~			~~[X]~~	~~Accelerated filer~~	~~[ ]~~

~~Non-accelerated filer~~	~~[ ]~~	~~(Do not check if a smaller reporting company)~~

		~~Smaller reporting company~~	~~[ ]~~

		Emerging growth company	~~[ ]~~☐


				Page Reference

PART I		FINANCIAL INFORMATION

			~~Page Reference~~

~~PART I~~	~~FINANCIAL INFORMATION~~

ITEM 1.	Condensed Consolidated Balance Sheets as of December 31, ~~2017~~2022, and June 30, ~~2017~~2022 (Unaudited)		54

		Condensed Consolidated Statements of Income for the Three and Six Months Ended December 31, ~~2017~~2022 and ~~2016~~2021 (Unaudited)		65

		Condensed Consolidated Statements of Changes in Stockholders' Equity for the Three and Six Months Ended December 31, 2022 and 2021 (Unaudited)		6

		Condensed Consolidated Statements of Cash Flows for the Six Months Ended December 31, ~~2017~~2022 and ~~2016~~2021 (Unaudited)		7

		Notes to Condensed Consolidated Financial Statements (Unaudited)		8

ITEM 2.		Management's Discussion and Analysis of Financial Condition and Results of Operations		2021

ITEM 3.		Quantitative and Qualitative Disclosures about Market Risk		2628

ITEM 4.		Controls and Procedures		2629

PART II		OTHER INFORMATION		2629

~~ITEM1.~~ITEM 1.		Legal Proceedings		2629



ITEM 2.		Unregistered Sales Ofof Equity Securities ~~And~~and Use Ofof Proceeds		2629

ITEM 6.		Exhibits		2830

		Signatures		2931



JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share and Per Share Data)
(Unaudited)
	December 31, 2017			June 30, 2017
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	57,719		$	114,765
Receivables, net	166,827			276,923
Income tax receivable	23,630			20,135
Prepaid expenses and other	71,427			66,894
Deferred costs	49,997			41,314
Total current assets	369,600			520,031
PROPERTY AND EQUIPMENT, net	272,086			282,934
OTHER ASSETS:
Non-current deferred costs	94,438			96,847
Computer software, net of amortization	278,235			247,317
Other non-current assets	90,641			82,525
Customer relationships, net of amortization	119,925			90,433
Other intangible assets, net of amortization	39,822			36,393
Goodwill	652,329			552,465
Total other assets	1,275,390			1,105,980
Total assets	$	1,917,076		$	1,908,945
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable	$	13,135		$	6,841
Accrued expenses	75,397			81,574
Deferred revenues	265,222			382,777
Total current liabilities	353,754			471,192
LONG-TERM LIABILITIES:
Non-current deferred revenues	110,466			128,607
Non-current deferred income tax liability	166,789			219,541
Debt, net of current maturities	100,000			50,000
Other long-term liabilities	12,067			7,554
Total long-term liabilities	389,322			405,702
Total liabilities	743,076			876,894
STOCKHOLDERS' EQUITY
Preferred stock - $1 par value; 500,000 shares authorized, none issued	—			—
Common stock - $0.01 par value; 250,000,000 shares authorized; 103,218,206 shares issued at December 31, 2017; 103,083,299 shares issued at June 30, 2017	1,032			1,031
Additional paid-in capital	452,841			452,016
Retained earnings	1,756,419			1,585,278
Less treasury stock at cost 25,961,920 shares at December 31, 2017; 25,660,212 shares at June 30, 2017;	(1,036,292		)	(1,006,274		)
Total stockholders' equity	1,174,000			1,032,051
Total liabilities and equity	$	1,917,076		$	1,908,945



Non-Recurring Fair Value Measurements
June 30, 2017
Long-lived assets held for sale ^(a)	$	—	$	1,300	$	—	$	1,300



Years Ending June 30,	Computer Software		Customer Relationships		Other Intangible Assets		Total
2018 (remainder)	$	33,443	$	8,182	$	7,613	$	49,238
2019	62,836		16,399		11,773		91,008
2020	52,282		13,906		6,279		72,467
2021	34,637		11,750		1,717		48,104
2022	19,464		10,689		1,121		31,274



Share awards	Shares		Weighted Average Grant Date Fair Value
Outstanding July 1, 2017	36		$	73.66
Granted	—		—
Vested	(11	)	57.88
Forfeited	—		64.96
Outstanding December 31, 2017	25		$	80.30



Current assets	$	13,950
Long-term assets	585
Identifiable intangible assets	55,001
Non-current deferred income tax liability	(19,969		)
Total other liabilities assumed	(8,593		)
Total identifiable net assets	40,974
Goodwill	93,498
Net assets acquired	$	134,472



Current assets	$	1,153
Long-term assets	9
Identifiable intangible assets	4,200
Total liabilities assumed	(1,117		)
Total identifiable net assets	4,245
Goodwill	6,499
Net assets acquired	$	10,744


	Three Months Ended													Three Months Ended
	December 31, 2017													December 31, 2022
	Core		Payments		Complementary		Corporate & Other			Total				Core		Payments		Complementary		Corporate & Other		Total
REVENUE													REVENUE
Services and Support	$	127,787	$	10,913	$	84,528	$	14,526		$	237,754		Services and Support	$	145,650	$	19,340	$	110,380	$	15,330	$	290,700
Processing	6,611		115,096		15,279		16			137,002			Processing	9,740		172,147		31,915		812		214,614
Total Revenue	134,398		126,009		99,807		14,542			374,756			Total Revenue	155,390		191,487		142,295		16,142		505,314

Cost of Revenue	59,199		59,052		41,379		52,023			211,653			Cost of Revenue	68,324		108,071		59,270		68,924		304,589
Research and Development										22,414			Research and Development									36,561
Selling, General, and Administrative										45,613			Selling, General, and Administrative									56,788
Gain on Disposal of Businesses										(189		)

Total Expenses										279,491			Total Expenses									397,938

SEGMENT INCOME	$	75,199	$	66,957	$	58,428	$	(37,481	)				SEGMENT INCOME	$	87,066	$	83,416	$	83,025	$	(52,782)

OPERATING INCOME										95,265			OPERATING INCOME									107,376

INTEREST INCOME (EXPENSE)										(104		)	INTEREST INCOME (EXPENSE)									(2,166)

INCOME BEFORE INCOME TAXES										$	95,161		INCOME BEFORE INCOME TAXES									$	105,210


	Three Months Ended													Six Months Ended
	December 31, 2016													December 31, 2022
	Core		Payments		Complementary		Corporate & Other			Total				Core		Payments		Complementary		Corporate & Other		Total
REVENUE													REVENUE
Services and Support	$	113,887	$	11,290	$	81,134	$	15,404		$	221,715		Services and Support	310,675		37,998		228,528		33,648		610,849
Processing	6,000		107,854		12,946		38			126,838			Processing	19,839		340,028		62,119		1,681		423,667
Total Revenue	119,887		119,144		94,080		15,442			348,553			Total Revenue	330,514		378,026		290,647		35,329		1,034,516

Cost of Revenue	53,087		54,792		38,976		51,291			198,146			Cost of Revenue	140,564		209,226		117,708		135,351		602,849
Research and Development										20,873			Research and Development									69,554
Selling, General, and Administrative										40,928			Selling, General, and Administrative									114,013
Gain on Disposal of Businesses										—

Total Expenses										259,947			Total Expenses									786,416

SEGMENT INCOME	$	66,800	$	64,352	$	55,104	$	(35,849	)				SEGMENT INCOME	$	189,950	$	168,800	$	172,939	$	(100,022)

OPERATING INCOME										88,606			OPERATING INCOME									248,100

INTEREST INCOME (EXPENSE)										(124		)	INTEREST INCOME (EXPENSE)									(3,590)

INCOME BEFORE INCOME TAXES										$	88,482		INCOME BEFORE INCOME TAXES									$	244,510


INTEREST INCOME AND EXPENSE	Three Months Ended December 31,						% Change		Six Months Ended December 31,						% Change
INTEREST INCOME (EXPENSE)																	INTEREST INCOME (EXPENSE)	Three Months Ended December 31,				% Change		Six Months Ended December 31,				% Change
	2017			2016					2017			2016						2022		2021				2022		2021
Interest Income	$	146		$	60		143	%	$	293		$	167		75	%	Interest Income	$	1,240	$	6	20,567	%	$	1,392	$	13	10,608	%
Interest Expense	$	(250	)	$	(184	)	36	%	$	(439	)	$	(326	)	35	%	Interest Expense	$	(3,406)	$	(447)	662	%	$	(4,982)	$	(696)	616	%



	Total Number of Shares Purchased⁽¹⁾	Average Price of Share		Total Number of Shares Purchased as Part of Publicly Announced Plans⁽¹⁾	Maximum Number of Shares that May Yet Be Purchased Under the Plans⁽²⁾
October 1- October 31, 2017	—	$	—	—	4,028,696
November 1- November 30, 2017	55	113.90		—	4,028,696
December 1- December 31, 2017	—	—		—	4,028,696
Total	55	113.90		—	4,028,696


~~32.1~~	~~Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350.~~


~~32.2~~	~~Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350.~~


101.CAL*	~~XBRL Taxonomy Extension Calculation Linkbase Document~~


101.DEF*	~~XBRL Taxonomy Extension Definition Linkbase Document~~


101.PRE*	~~XBRL Taxonomy Extension Presentation Linkbase Document~~


			JACK HENRY & ASSOCIATES, INC.

Date:		February 9, 2023	~~JACK HENRY & ASSOCIATES, INC.~~

~~Date:~~	~~February 8, 2018~~	/s/ David B. Foss
			David B. Foss
			Chief Executive Officer and ~~President~~Board Chair

Date:		February ~~8, 2018~~9, 2023	/s/ ~~Kevin D. Williams~~Mimi L. Carsley
			~~Kevin D. Williams~~Mimi L. Carsley
			Chief Financial Officer and Treasurer