What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2023-08-24 compared with 2022-08-25 · 125 added, 156 removed, 195 unchanged (59% of the section changed)

Jack Henry & Associates, Inc.

("JKHY") is a well-rounded financial technology company.

JKHY was founded in 1976 as a provider of core information processing solutions for banks.

Today, the Company’s extensive array of products and services includes processing transactions, automating business processes, and managing information for over 7,800 financial institutions and diverse corporate entities.

JKHY provides its products and services primarily to financial institutions:

• Core bank integrated data processing systems are provided to over 950 banks ranging from de novo to multi-billion-dollar institutions with assets of up to $50 billion.

The number of banks we serve has decreased in the last year due to acquisitions and mergers within the banking industry, which are discussed further under the heading "Industry Background" in this Item 1.

Our banking solutions support both on-premise and private cloud operating environments with three functionally distinct core processing platforms and more than 140 integrated complementary solutions.

• Core credit union data processing solutions are provided to credit unions of all sizes, with a growing client base of nearly 720 credit union customers.

There is one flagship core processing platform and more than 100 integrated complementary solutions that support both on-premise and private cloud operating environments.

Jack Henry & Associates, Inc.® is a well-rounded financial technology company that strengthens connections between financial institutions and the people and businesses they serve.

For more than 47 years, we have provided technology solutions to help banks and credit unions innovate faster, strategically differentiate, and successfully compete while serving the evolving needs of their accountholders.

We empower over 7,500 financial institutions and diverse corporate entities with people-inspired innovation, personal service, and insight-driven solutions that help reduce the barriers to financial health.

Mission Statement

We strengthen the connections between people and their financial institutions through technology and services that reduce the barriers to financial health.

This philosophy has always been part of our foundation and the roots on which Jack Henry was built.

Our founders, Jack Henry and Jerry Hall, were committed to their community and believed they could help financial institutions better serve the needs of people and businesses using more modern technology and services.

While much has changed since we opened for business in 1976, we continue to be focused on helping community and regional financial institutions, and we are guided by our founding principles:

do the right thing, do whatever it takes, and have fun.

We provide products and services primarily to community and regional financial institutions:

• Core bank integrated data processing systems are provided to 940 banks ranging from de novo to multi-billion-dollar institutions with assets of up to $50 billion.

The number of banks we serve has decreased in the last year due to acquisitions and mergers within the banking industry, which are discussed further under the heading "Our Industry" in this Item 1.

Our banking solutions support both on-premise and private cloud operating environments with functionally distinct core processing platforms and integrated complementary solutions.

• Core credit union data processing solutions are provided to credit unions of all sizes, with a client base of over 710 credit union customers.

We offer a flagship core processing platform and integrated complementary solutions that support both on-premise and private cloud operating environments.

• Non-core highly specialized core-agnostic products and services are also provided to financial institutions.

There are more than 100 complementary solutions that offer highly specialized financial performance, imaging and payments processing, information security and risk management, retail delivery, and online and mobile solutions.

These products and services enhance the performance of traditional financial services organizations of all asset sizes and charters, and non-traditional diverse corporate entities with over 7,800 customers, comprised of nearly 1,650 of our core customers included in our bank and credit union customers listed above, as well as over 6,150 other non-core customers.

We offer complementary solutions that include highly specialized financial performance, imaging and payments processing, information security and risk management, retail delivery, and online and mobile functionality.

These products and services enhance the performance of traditional financial services organizations of all asset sizes and charters, and non-traditional diverse corporate entities.

In total, we serve over 7,500 customers, over 1,650 of our core customers included in our bank and credit union customers listed above, and nearly 5,880 non-core customers.

Our products and services provide our customers with solutions that can be tailored to support their unique growth, service, operational, and performance goals.

Our well-rounded solutions also enable financial institutions to offer the high-demand products and services required by their customers to compete more successfully, and to capitalize on evolving trends shaping the financial services industry.

We are committed to exceeding our customers’ service-related expectations.

We measure and monitor customer satisfaction using annual surveys and randomly-generated online surveys initiated each day by routine support requests.

We believe the results of this extensive survey process confirm that our service consistently exceeds our customers’ expectations and generates excellent customer retention rates.

We also focus on establishing long-term customer relationships, continually expanding and strengthening those relationships with cross sales of additional products and services, earning new financial and non-financial clients, and ensuring our product offerings are highly competitive.

The majority of our revenue is derived from support and services provided by our private cloud services for our hosted customers that are typically on a seven-year or greater contract, recurring electronic payment solutions that are also generally on a contract term of seven years or greater, and to our on-premise customers that are typically on a one-year contract.

Less predictable software license fees, paid by customers implementing our software solutions on-premise, and hardware sales, including all non-software products that we re-market in order to support our software systems, complement our primary revenue sources.

We are committed to exceeding our customers’ expectations.

We measure and monitor customer satisfaction using a variety of surveys, such as an annual survey on the customer's anniversary date and randomly-generated online surveys initiated each day by routine support requests to ensure feedback is received throughout the year.

The results of our survey process provide assurance that our service consistently exceeds our customers’ expectations and, we believe, contribute to our excellent customer retention rates.

We are focused on establishing long-term customer relationships, continually expanding and strengthening those relationships with cross sales of additional products and services that support our clients' strategy, earning new financial and non-financial clients, and ensuring our product offerings are highly competitive.

The majority of our revenue is derived from support and services provided by our private and public cloud services for our hosted customers that are typically on a seven-year or greater contract, recurring electronic payment solutions that are also generally on a contract term of seven years or greater, and our on-premise customers that are typically on a one-year contract.

Less predictable software license fees, paid by customers implementing our

software solutions on-premise, and hardware sales, including all non-software products that we re-market in order to support our software systems, complement our primary revenue sources.

Information regarding the classification of our business into four separate segments is set forth in Note 14 to the consolidated financial statements (see Item 8).

JKHY’s progress and performance have been guided by the focused work ethic and fundamental ideals fostered by the Company’s founders 46 years ago:

• Do the right thing

• Do whatever it takes

We recognize that our associates and their collective contribution are ultimately responsible for JKHY’s past, present, and future success.

We recognize that our associates and their collective contribution are ultimately responsible for Jack Henry's past, present, and future success.

Recruiting and retaining high-quality employees is essential to our ongoing growth and financial performance, and we believe we have established an organizational culture that sustains high levels of employee engagement.

For further discussion of our human capital considerations, see "Human Capital" below.

COVID-19 Impact and Response

Since its outbreak in early calendar 2020, COVID-19 has rapidly spread and continues to represent a public health concern.

The health, safety, and well-being of our employees and customers is of paramount importance to us.

March 2020, we established an internal task force composed of executive officers and other members of management to frequently assess updates to the COVID-19 situation and recommend Company actions.

We offered remote working as a recommended option to employees whose job duties allowed them to work off-site, and we suspended all non-essential business travel.

As of August 15, 2022, the majority of our employees were continuing to work remotely either full time or in a hybrid capacity.

We have announced that our official return-to-office date is September 6, 2022, though employees have been permitted to voluntarily return to the office since May 2, 2022.

Individual decisions on returning to the office will be manager-coordinated and based on conversations with specific teams and departments.

A large number of our employees have requested to remain fully remote or participate in a hybrid approach where they would split their time between remote and in-person working.

While our business travel is normalizing, we do not expect it to return to pre-pandemic levels and continue to encourage a cautious approach to business travel activities.

We work closely with our customers who are scheduled for on-site visits to ensure their needs are met while taking necessary safety precautions when our employees are required to be at a customer site.

Delays of customer system installations due to COVID-19 have been limited, and we have developed processes to handle remote installations when available.

We expect these processes to provide flexibility and value both during and after the COVID-19 pandemic.

Even though a substantial portion of our workforce has worked remotely during the outbreak and business travel has been limited, we have not yet experienced significant disruption to our operations.

We believe our technological capabilities are well positioned to allow our employees to work remotely without materially impacting our business.

Financial impact

Despite the changes and restrictions caused by COVID-19, the overall financial and operational impact on our business has been limited and our liquidity, balance sheet, and business trends remain strong.

We experienced positive operating cash flows during fiscal 2022, and we do not expect that to change in the near term.

However, we are unable to accurately predict the future impact of COVID-19 due to a number of uncertainties, including further government actions;

the duration, severity and recurrence of the outbreak, including the onset of variants of the virus;

the effectiveness of vaccines against new variants;

the development and effectiveness of treatments;

the effect on the economy generally;

the potential impact to our customers, vendors, and employees;

and how the potential impact might affect future customer services, processing and installation-related revenue, and processes and efficiencies within the Company directly or indirectly impacting financial results.

We will continue to monitor COVID-19 and its possible impact on the Company and to take steps necessary to protect the health and safety of our employees and customers.

For a further discussion of the uncertainties and risks associated with COVID-19, see Part II, Item 1A “Risk Factors” in this Annual Report on Form 10-K.

Industry Background

Our core banking solutions serve commercial banks and savings institutions with up to $50 billion in assets.

According to the Federal Deposit Insurance Corporation (“FDIC”), there were approximately 4,790 commercial banks and savings institutions in this asset range as of December 31, 2021, and we currently support over 950 of these banks with one of our three core information processing platform and complementary products and services.

According to the Federal Deposit Insurance Corporation (“FDIC”), there were approximately 4,660 commercial banks and savings institutions in this asset range as of December 31, 2022, and we currently support 940 of these banks with one of our three core information processing platforms and complementary products and services.

Our core credit union solutions serve credit unions of all asset sizes.

According to the Credit Union National Association (“CUNA”), there were more than 5,000 domestic credit unions as of December 31, 2021, and we currently support nearly 720 of these credit unions with one flagship core information processing platform and complementary products and services.

According to the Credit Union National Association (“CUNA”), there were more than 4,850 domestic credit unions as of December 31, 2022, and we currently support over 710 of these credit unions with one flagship core information processing platform and complementary products and services.

Our non-core solutions serve financial services organizations of all asset sizes and charters and other diverse corporate entities.

2 unchanged sentences

Although the number of banks declined at a 4% compound annual rate during this period, aggregate assets increased at a compound annual rate of 6% and totaled $23.6 trillion as of December 31, 2022.

There were nine new bank charters issued in calendar year 2021, compared to six in the 2020 calendar year.

There were 15 new bank charters issued in calendar year 2022, compared to 10 in the 2021 calendar year.

Comparing calendar years 2022 to 2021, the number of mergers decreased 19%.

CUNA reports the number of credit unions declined 15% from the beginning of calendar year 2017 to the end of calendar year 2022.

Although the number of credit unions declined at a 3% compound annual rate during this

period, aggregate assets increased at a compound annual rate of 10% and totaled $2.1 trillion as of December 31, 2021.

Community and mid-tier banks and credit unions are important in the communities and to the consumers they serve.

Although the number of credit unions declined at a 3% compound annual rate during this period, aggregate assets increased at a compound annual rate of 9% and totaled $2.2 trillion as of December 31, 2022.

Community and mid-tier banks and credit unions are vitally important to the communities, consumers, and businesses they serve.

Bank customers and credit union members rely on these institutions to provide personalized, relationship-based service and competitive financial products and services available through the customer’s delivery channel of choice.

1 unchanged sentence

Financial institutions must implement technological solutions that enable them to:

• Implement e-commerce, mobile, and digital strategies that provide the convenience-driven services required in today’s financial services industry;

• Offer e-commerce, mobile, and digital strategies that provide the convenience-driven services required in today’s financial services industry.

• Maximize performance with accessible, accurate, and timely business intelligence information.

• Offer the high-demand products and services needed to successfully compete with traditional competitors and non-traditional competitors created by convergence within the financial services industry;

• Enhance the customer/member experience at varied points of contact;

• Provide the high-demand products and services needed to successfully compete with traditional and non-traditional competitors created by convergence within the financial services industry.

• Enhance the customer/member experience at multiple points of contact.

• Expand existing customer/member relationships and strengthen exit barriers by cross selling additional products and services.

• Capitalize on new revenue and deposit growth opportunities;

• Capitalize on new revenue, and deposit and loan portfolio growth opportunities.

• Increase operating efficiencies and reduce operating costs.

3 unchanged sentences

• Ensure full regulatory compliance.

JKHY’s extensive product and service offerings enable diverse financial institutions to capitalize on these business opportunities and respond to these business challenges.

We strive to establish a long-term, value-added technology partnership with each customer, and to continually expand our offerings with the specific solutions our customers need to prosper in the evolving financial services industry.

Mission Statement

We strengthen the connections between people and their financial institutions through technology and services that reduce the barriers to financial health.

Purpose Statement

To empower people and communities to gain the financial freedom to move forward.

Jack Henry’s extensive product and service offerings help diverse financial institutions meet business challenges and capitalize on opportunities.

We strive to get to know our customers, understand their strategies and challenges, and provide innovative solutions that help them achieve short- and long-term success.

Business Strategy

1 unchanged sentence

We execute this strategy by:

• Providing commercial banks and credit unions with core operating systems that provide excellent functionality and support on-premise and private cloud delivery environments with identical functionality.

• Expanding each core customer relationship by cross-selling complementary products and services that enhance the functionality provided by our core information processing systems.

• Providing non-core highly specialized core-agnostic complementary products and services to financial institutions, including institutions not utilizing a JKHY core operating system, and diverse corporate entities.

• Providing community and regional banks and credit unions with core processing systems that provide excellent functionality and support on-premise and private cloud delivery environments with identical functionality.

• Expanding each core customer relationship by cross-selling complementary products and services that enhance the functionality provided by our core processing systems.

• Providing non-core highly specialized core-agnostic complementary products and services to financial institutions, including institutions not utilizing one of our core processing systems, and diverse corporate entities.

• Developing and deploying a long-term technology modernization strategy to provide public cloud native solutions that provide clients with greater flexibility, optionality, open integration, speed to market, and other benefits.

• Maintaining a company-wide commitment to customer service that consistently exceeds our customers’ expectations and generates high levels of customer retention.

• Building, maintaining, and enhancing a protected environment and tools that help our clients and us protect customer data, assets, and comply with regulations.

• Capitalizing on our acquisition strategy.

Acquisition Strategy

We have a disciplined approach to acquisitions and have been successful in supplementing our organic growth with 34 strategic acquisitions since the end of fiscal 1999.

We have a disciplined approach to acquisitions and have been successful in supplementing our organic growth with 35 strategic acquisitions since the end of fiscal year 1999.

We continue to explore acquisitions that have the potential to:

1 unchanged sentence

• Provide products and services that can be sold to both existing core and non-core customers and outside our base to new customers.

• Accelerate our internal development efforts.

• Provide selective opportunities to sell outside our traditional markets in the financial services industry.

5 unchanged sentences

Fiscal Year Company or Product Name Products and Services

2020 DebtFolio, Inc.

("Geezeo") Provider of technology solutions and next-generation financial management capabilities primarily for the financial services industry

2023 Payrailz, LLC ("Payrailz") Provider of cloud-native modern digital payment capabilities leveraging AI and machine learning features for the financial services industry.

• Our core banking solutions support commercial banks with information and transaction processing platforms that provide enterprise-wide automation.

We have three functionally distinct core bank processing systems and more than 140 fully integrated complementary solutions, including business intelligence and bank management, retail and business banking, digital and mobile internet banking and electronic payment solutions, risk management and protection, and item and document imaging solutions.

Our core banking solutions have state-of-the-art functional capabilities, and we can re-market the hardware required by on-premise use of each software system.

We have three functionally distinct core bank processing systems and more than 140 fully integrated complementary solutions, including business intelligence and bank management, retail and business banking, digital and mobile internet banking and electronic payment solutions, fraud and risk management and protection, account origination, and item and document imaging solutions.

Our core banking

solutions have state-of-the-art functional capabilities, and we can re-market the hardware required by on-premise use of each software system.

Our banking solutions can be delivered on-premise or through our private cloud delivery model and are backed by a company-wide commitment to provide exceptional personal service.

We are a recognized market leader, currently supporting over 950 banks with our technology platforms.

• Our core credit union solutions support credit unions of all sizes with an information and transaction processing platform that provides enterprise-wide automation.

Our solution includes one flagship core processing system and more than 100 fully integrated complementary solutions, including business intelligence and credit union management, member and member business services, digital and mobile internet banking and electronic payment solutions, risk management and protection, and item and document imaging solutions.

Our solution includes one flagship core processing system and more than 100 fully integrated complementary solutions, including business intelligence and credit union management, member and member business services, digital and mobile internet banking and electronic payment solutions, fraud and risk management and protection, account origination, and item and document imaging solutions.

Our credit union solution also has state-of-the-art functional capabilities.

We also re-market the hardware required by on-premise use of the software system.

Our credit union solution can be delivered on-premise or through our private cloud delivery model, and is backed by our company-wide commitment to provide exceptional personal service.

We currently support nearly 720 credit union customers.

Our credit union solution can be delivered on-premise, through our private cloud, or through our partner private cloud delivery models.

Each is backed by our company-wide commitment to provide exceptional personal service.

• Our non-core solutions for financial institutions are specialized products and services assembled primarily through our focused diversification acquisition strategy.

1 unchanged sentence

Our non-core products and services enhance the performance of financial services organizations of all asset sizes and charters, and diverse corporate entities.

We have over 7,800 customers, including over 6,150 unique non-core customers.

These distinct products and services can be implemented individually or as solution suites to address specific business problems or needs and enable effective responses to dynamic industry trends.

2 unchanged sentences

updated with proven advances in technology;

and consistent with JKHY’s reputation as a premium product and service provider.

and consistent with Jack Henry’s reputation as a premium solution and service provider.

Core Software Systems

1 unchanged sentence

Our core banking solutions consist of three software systems marketed to banks and our core credit union solution consists of one software system marketed to credit unions.

These core systems are available for on-premise

installation at customer sites, or financial institutions can choose to leverage our private cloud environment for ongoing information processing.

These core systems are available for on-premise installation at customer sites, or financial institutions can choose to leverage our private cloud environment for ongoing information processing.

Core banking platforms are:

1 unchanged sentence

Some progressive smaller banks and de novo (start-up) banks also select SilverLake.

This system is in use by nearly 450 banks, and now automates over 9% of the domestic banks with assets less than $50 billion.

This system is in use by over 460 banks, and now automates nearly 10% of the domestic banks with assets less than $50 billion.

• CIF 20/20®, a parameter-driven, easy-to-use system that now supports approximately 300 banks ranging from de novo institutions to those with assets of $5 billion.

• Core Director®, a cost-efficient system with point-and-click operation that now supports nearly 200 banks ranging from de novo institutions to those with assets of $2 billion.

• Core Director®, a cost-efficient system with point-and-click operation that now supports approximately 180 banks ranging from de novo institutions to those with assets of over $2 billion.

Core credit union platform is:

• Symitar® (formerly known as Episys®), a robust system designed specifically for credit unions.

It has been implemented by nearly 720 credit unions with assets ranging from $3 million to $35 billion, and according to National Credit Union Administration ("NCUA") data, is the system implemented by more credit unions with assets exceeding $25 million than any other alternative core system.

It has been implemented by over 710 credit unions with assets ranging from $3 million to $35 billion, and according to National Credit Union Administration ("NCUA") data, is the system implemented by more credit unions with assets exceeding $25 million than any other alternative core system.

Customers electing to install our solutions on-premise license the proprietary software systems.

4 unchanged sentences

Customers can eliminate the significant up-front capital expenditures required by on-premise installations and the responsibility for operating information and transaction processing infrastructures by leveraging our private cloud environment for those functions.

Our core private cloud services are provided through a highly resilient data center configuration across multiple physical locations.

Our core private cloud services are provided through a highly resilient data center

configuration across multiple physical locations.

We also provide image item processing services from two host/archive sites and several key entry and balancing locations throughout the country.

2 unchanged sentences

We support the dynamic business requirements of our core bank and credit union clients with ongoing enhancements to each core system, the regular introduction of new integrated complementary products, the ongoing integration of practical new technologies, and regulatory compliance initiatives.

JKHY also serves each core customer as a single point of contact, support, and accountability.

We also serve each core customer as a single point of contact, support, and accountability.

Complementary Products and Services

3 unchanged sentences

The highly specialized solutions enable diverse financial services organizations and corporate entities to generate additional revenue and growth opportunities, increase security and mitigate operational risks, and control operating costs.

JKHY regularly introduces new products and services based on demand for integrated complementary solutions from our existing core clients, and based on the growing demand among financial services organizations and corporate entities for specialized solutions capable of increasing revenue and growth opportunities, mitigating and controlling operational risks, and/or containing costs.

The Company’s Industry Research department solicits customer guidance on the business solutions they need, evaluates available solutions and competitive offerings, and manages the introduction of new product offerings.

JKHY’s new complementary products and services are developed internally, acquired, or provided through strategic alliances.

We regularly introduce new products and services based on demand for integrated complementary solutions from our existing core clients and based on the growing demand among financial services organizations and corporate entities for specialized solutions capable of increasing revenue and growth opportunities, mitigating and controlling operational risks, and/or containing costs.

Our Industry Research department solicits customer guidance on the business solutions they need, evaluates available solutions and competitive offerings, and manages the introduction of new product offerings.

Our new complementary products and services are developed internally, acquired, or provided through strategic alliances.

Implementation and Training

1 unchanged sentence

A complete core system implementation typically includes detailed planning, project management, data conversion, and testing.

Our experienced implementation teams travel to customer facilities or work remotely with clients to help manage the implementation process and ensure that all data is transferred from the legacy system to the JKHY system.

Our implementation fees are fixed or hourly based on the core system being installed.

1 unchanged sentence

We have a comprehensive training program that supports new customers with basic training and longtime customers with continuing education.

The curricula provide the ongoing training financial institutions need to maximize the use of JKHY’s core and complementary products, to optimize ongoing system enhancements, and to fully understand dynamic year-end legislative and regulatory requirements.

Each basic, intermediate, and advanced course is delivered by system experts, supported by professional materials and training tools, and incorporates different educational media in a blended learning approach.

The program supports distinct learning preferences with a variety of delivery channels, including classroom-based courses offered in JKHY’s regional training centers, Internet-based live instruction, eLearning courses, on-site training, and train-the-trainer programs.

The training enables financial institutions to maximize the use of our core and complementary solutions, learn about ongoing system enhancements, and understand dynamic year-end legislative and regulatory requirements.

Support and Services

7 unchanged sentences

• Highly effective change management and control processes.

• A best practices methodology developed and refined through the company-wide, day-to-day experience supporting over 7,800 diverse clients.

Most on-premise customers contract for annual software support services, and this represents a significant source of recurring revenue for JKHY.

• Best practices methodology developed and refined through the company-wide, day-to-day experience supporting over 7,500 diverse clients.

Most on-premise customers contract for annual software support services, and this represents a significant source of recurring revenue for Jack Henry.

These support services are typically priced at approximately 20% of the respective product’s software license fee.

The subsequent years' service fees generally increase as customer assets increase and as additional complementary products are purchased.

Annual software support fees are typically billed during June and are paid in advance for the entire fiscal year, with proration for new product implementations that occur during the fiscal year.

Annual software support fees typically are billed during June and are paid in advance for the entire fiscal year, with proration for new product

implementations that occur during the fiscal year.

Hardware support fees also are usually paid in advance for entire contract periods which typically range from one to five years.

Most support contracts automatically renew unless the customer or JKHY gives notice of termination at least 30 days prior to contract expiration.

Most support contracts automatically renew unless the customer or Jack Henry gives notice of termination at least 30 days prior to contract expiration.

High levels of support are provided to our private cloud customers by the same support infrastructure utilized for on-premise customers.

However, these support fees are included as part of monthly private cloud fees.

JKHY regularly measures customer satisfaction using annual surveys and more frequent online surveys initiated randomly by routine support requests.

We believe the results of the surveys confirm that we consistently exceed our customers’ service-related expectations.

Hardware Systems

Our software systems operate on a variety of hardware platforms.

We have established remarketing agreements with IBM Corporation, and many other hardware providers that allow JKHY to purchase hardware and related maintenance services at a discount and resell them directly to our customers.

We have established remarketing agreements with IBM Corporation, and many other hardware providers that allow Jack Henry to purchase hardware and related maintenance services at a discount and resell them directly to our customers.

We currently sell IBM Power Systems™;

6 unchanged sentences

It is an online and mobile banking platform that helps community and regional financial institutions strategically differentiate their digital offerings from those of megabanks and other financial technology companies.

It is a complete, open digital banking platform that gives

community financial institutions attractive, fast, native applications for their customers and members and cloud-based, core-connected back office tools for their employees.

It is a complete, open digital banking platform that gives banks and credit unions attractive, fast, native applications for their customers and members and cloud-based, core-connected back-office tools for their employees.

Payment Solutions

10 unchanged sentences

The money movement options keep the consumers and businesses engaged with the financial institution.

• JHA PayCenter TM , provides our customer financial institutions with a single entry point to both Zelle and Real Time Payments ("RTP") real-time networks with plans to accommodate the Federal Reserve's FedNow in 2024, with testing to begin in 2023.

• Payrailz TM supports our technology modernization strategy by adding next generation digital payment capabilities to our payment’s ecosystem based on cloud native microservices.

Our new Money Movement payments platform includes native artificial intelligence ("AI"), Action Insights (which is predictive and proactive recommendations through AI), a flexible modern user experience, a layered security model, an automated fraud feature leveraging machine learning, and a modern and flexible administrative portal.

In addition to bill payment capabilities, we have a ‘pay a loan’ feature, an ‘open looped’ real-time person-to-person ("P2P") solution, and account-to-account ("A2A") transfer features.

• JHA PayCenter TM , provides our customer financial institutions with a single entry point to both Zelle® and Real Time Payments ("RTP") real-time networks and supports the Federal Reserve's FedNow®, which launched in July 2023.

PayCenter manages the certification process and mandatory updates from the networks, simplifies integration with toolkits and provides fraud monitoring.

Financial institutions are able to send and receive transactions instantly 24 hours a day, 365 days a year, through our core and complementary solutions.

Financial institutions can send and receive transactions instantly 24 hours a day, 365 days a year, through our core and complementary solutions.

• Payments as a Service ("PaaS") ties together and further enhances the complete array of electronic payments functionality with a front-end Payments Developers Experience Portal and back-end data analytics.

1 unchanged sentence

We invest significant resources in ongoing research and development to develop new software solutions and services and enhance existing solutions with additional functionality and features required to ensure regulatory compliance.

Our core and complementary systems are enhanced a minimum of once each year.

We enhance our core and complementary systems a minimum of once each year.

Product-specific enhancements are largely customer-driven with recommended enhancements formally gathered through focus groups, change control boards, strategic initiatives meetings, annual user group meetings, and ongoing customer contact.

3 unchanged sentences

Sales and Marketing

JKHY serves established, well-defined markets that provide ongoing sales and cross-sales opportunities.

We serve established, well-defined markets that provide ongoing sales and cross-sales opportunities.

The marketing and sales initiatives within the core business lines are primarily focused on identifying banks and credit unions evaluating alternative core information and transaction processing solutions.

3 unchanged sentences

Sales support staff provide a variety of services, including product and service demonstrations, responses to prospect-issued requests-for-proposals, and proposal and contract generation.

Our marketing

department supports sales with lead generation and brand-building activities, including participation in state-specific, regional, and national trade shows;

Our marketing department supports sales with lead generation and brand-building activities, including participation in state-specific, regional, and national trade shows;

print and online advertising;

3 unchanged sentences

and media relations.

JKHY also hosts annual national education conferences which provide opportunities to network with existing clients and demonstrate new products and services.

JKHY has sold select products and services outside the United States, primarily in Latin America and the Caribbean and Canada.

International sales accounted for less than 1% of JKHY’s total revenue in each of fiscal 2022, 2021, and 2020.

We also host annual national education conferences which provide opportunities to network with existing clients and demonstrate new products and services.

Jack Henry has sold select products and services outside the United States, primarily in Latin America, the Caribbean and Canada.

International sales accounted for less than 1% of Jack Henry’s total revenue in each of fiscal 2023, 2022, and 2021.

The market for companies providing technology solutions to financial services organizations is competitive, and we expect that competition from both existing competitors and companies entering our existing or future markets will remain strong.

Some of JKHY’s current competitors have longer operating histories, larger customer bases, and greater financial resources.

Some of our current competitors have longer operating histories, larger customer bases, and greater financial resources.

The principal competitive factors affecting the market for technology solutions include product/service functionality, price, operating flexibility and ease-of-use, customer support, and existing customer references.

12 unchanged sentences

Despite our efforts to protect our proprietary rights, unauthorized parties can attempt to copy or otherwise obtain, or use our products or technology.

We cannot be certain that the steps taken in this regard will be adequate to prevent misappropriation of our technology or that our competitors will not independently develop technologies that are substantially equivalent or superior to our technology.

Regulatory Compliance

JKHY maintains a corporate commitment to address compliance issues and implement requirements imposed by federal regulators prior to the effective date of such requirements when adequate prior notice is given.

JKHY’s compliance program is coordinated by a team of compliance analysts and auditors that possess extensive regulatory agency and financial institution experience, and a thorough working knowledge of JKHY and our solutions.

We maintain a corporate commitment to address compliance issues and implement requirements imposed by federal regulators prior to the effective date of such requirements when adequate prior notice is given.

Our compliance program is coordinated by a team of compliance analysts and auditors with extensive regulatory agency and financial institution experience, and a thorough working knowledge of Jack Henry and our solutions.

These compliance professionals leverage multiple channels to remain informed about potential and recently enacted regulatory requirements, including regular discussions on emerging topics with the Federal Banking Agencies (“FBA”) examination team and training sessions sponsored by various professional associations.

JKHY has a process to inform internal stakeholders of new and revised regulatory requirements.

Jack Henry has a process to inform internal stakeholders of new and revised regulatory requirements.

Upcoming regulatory changes also are presented to the Company’s development teams through monthly regulatory compliance meetings and the necessary product changes are included in the ongoing product development cycle.

JKHY publishes newsletters to keep our customers informed of regulatory changes that could impact their operations.

We publish newsletters to keep our customers informed of regulatory changes that could impact their operations.

Periodically, customer advisory groups are assembled to discuss significant regulatory changes.

5 unchanged sentences

All financial institutions are subject to substantial regulatory oversight and supervision.

Information regulations, usury laws, the Equal Credit Opportunity Act, the Fair Housing Act, the Electronic Funds Transfer Act, the Fair Credit Reporting Act, the Bank Secrecy Act, the USA Patriot Act, the Gramm-Leach-Bliley Act, the Community Reinvestment Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act.

The compliance of JKHY’s products and services with these requirements depends on a variety of factors, including the parameters set through the interactive design, the classification of customers, and the manner in which the customer utilizes the products and services.

Our products and services must comply with the extensive and evolving regulatory requirements applicable to our customers, including but not limited to those mandated by federal truth-in-lending and truth-in-savings rules, the Privacy of Consumer Financial Information regulations, usury laws, the Equal Credit Opportunity Act, the Fair Housing Act, the Electronic Funds Transfer Act, the Fair Credit Reporting Act, the Bank Secrecy Act, the USA Patriot Act, the Gramm-Leach-Bliley Act, the Community Reinvestment Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act.

The compliance of Jack Henry’s products and services with these requirements depends on a variety of factors, including the parameters set through the interactive design, the classification of customers, and the manner in which the customer utilizes the products and services.

Our customers are contractually responsible for assessing and determining what is required of them under these regulations and then we provide solutions that assist them in meeting their regulatory needs through our products and services.

We cannot predict the impact these regulations, any future amendments to these regulations or any newly implemented regulations will have on our business in the future.

JKHY is not chartered by the Office of the Comptroller of Currency ("OCC"), the Board of Governors of the Federal Reserve System, the FDIC, the NCUA or other federal or state agencies that regulate or supervise depository institutions.

However, operating as a service provider to financial institutions, JKHY’s operations are governed by the same regulatory requirements as those imposed on financial institutions, and subject to periodic reviews by FBA regulators who have broad supervisory authority to remedy any shortcomings identified in such reviews.

JKHY provides private cloud services through JHA OutLink Processing Services™ for banks and EASE Processing Services™ for credit unions.

JKHY provides data centers and electronic transaction processing through JHA Card Processing Solutions™, internet banking through NetTeller® and Banno TM online solutions, bill payment through iPay, network security monitoring and Hosted Network Solutions ("HNS") through our Gladiator® unit, cloud services through Hosted Partner Services and Enterprise Integration Services, and business recovery services through Centurion Disaster Recovery ® .

The private cloud services provided by JKHY are subject to examination by FBA regulators under the Bank Service Company Act.

Jack Henry is not chartered by the Office of the Comptroller of Currency ("OCC"), the Board of Governors of the Federal Reserve System, the FDIC, the NCUA or other federal or state agencies that regulate or supervise depository institutions.

However, operating as a service provider to financial institutions, Jack Henry’s operations are governed by the same regulatory requirements as those imposed on financial institutions, and subject to periodic reviews by FBA regulators who have broad supervisory authority to remedy any shortcomings identified in such reviews.

We provide private cloud services through JHA OutLink Processing Services™ for banks and EASE Processing Services™ for credit unions.

We provide data centers and electronic transaction processing through JHA Card Processing Solutions™, internet banking through NetTeller® and Banno TM online solutions, bill payment through iPay, network security monitoring and Hosted Network Solutions ("HNS") through our Gladiator® unit, cloud services through Hosted Partner Services and Enterprise Integration Services, and business recovery services through Centurion Disaster Recovery ® .

Our private cloud services are subject to examination by FBA regulators under the Bank Service Company Act.

These examinations cover a wide variety of subjects, including system development, functionality, reliability, and security, as well as disaster preparedness and business recovery planning.

2 unchanged sentences

In our increasingly interconnected environment, information is inherently exposed to a growing number of risks, threats, and vulnerabilities.

As a provider of products and services to financial institutions, we take extreme caution and due care in processing and storing sensitive, personally identifiable information securely.

We prioritize protecting our associates, clients, and their private data from the ever-evolving cyber threat environment and ensuring the resiliency of such information.

As a provider of products and services to financial institutions, we use industry standard policies and procedures to process and store sensitive, personally identifiable information securely.

We prioritize

protecting our associates, clients, and their private data from the ever-evolving cyber threat environment and ensuring the resiliency of such information.

We have an established information and cybersecurity program maintained by a team of diverse, highly skilled cybersecurity professionals, as well as a portfolio of investments in modern technology including artificial intelligence and machine learning.

The program incorporates industry-standard frameworks, policies, and practices designed to protect the confidentiality and privacy of JKHY’s and our clients’ information.

The program incorporates industry-standard frameworks, policies, and practices designed to protect the confidentiality and privacy of Jack Henry’s and our clients’ information.

Additionally, we maintain insurance that includes cybersecurity coverage.

3 unchanged sentences

Critical services provided to our clients are subject to annual System and Organization Controls ("SOC") reviews by independent auditors.

SOC reports are made available to clients via the client communications portal.

Information and cybersecurity leadership reports to the Risk and Compliance Board committee and the full Board of Directors quarterly, on information security and cybersecurity matters.

1 unchanged sentence

Our Employees

As of June 30, 2022, we had 6,847 full-time employees.

As of June 30, 2023, we had approximately 7,120 full-time and part-time employees.

Our employees are not covered by a collective bargaining agreement and there have been no labor-related work stoppages.

1 unchanged sentence

Our people and culture strategy focuses on attracting, engaging, and retaining qualified, diverse, and innovative talent at all levels of the Company.

We are a committed equal opportunity employer and all qualified candidates receive consideration for employment without regard to race, color, religion, national origin, age, disability, sex,

sexual orientation, gender, gender identity, pregnancy, genetic information, or other characteristics protected by applicable law.

We are a committed equal opportunity employer and all qualified candidates receive consideration for employment without regard to race, color, religion, national origin, age, disability, sex, sexual orientation, gender, gender identity, pregnancy, genetic information, or other characteristics protected by applicable law.

Beyond nondiscrimination compliance, we are committed to fostering a respectful, diverse, and inclusive workplace in which all individuals are treated with respect and dignity.

We continue to concentrate efforts on diversity, equity, inclusion, and belonging and have hired employees in the human resources function to focus on this important area.

We seek nontraditional talent streams to help identify candidates from underrepresented groups, including through our internship program and our newly launched apprenticeship program.

Our internship program focuses on attracting college and university students to paid work in JKHY departments related to their studies, while our apprenticeship program offers paid training and work for candidates (either students or non-students) with little to no traditional experience in the field, such as learning computer coding.

Both our internship program and our apprenticeship program can lead to full-time employment.

We have sought to expand our sources for candidates for these programs, including by increasing our recruiting efforts at historically black colleges and universities and through relationships with non-profits that promote employment opportunities for veterans.

We continue to concentrate efforts on diversity, equity, inclusion, and belonging and continue to hire employees in the human resources function to focus on this important area.

We seek nontraditional talent streams to help identify candidates from underrepresented groups, including through our internship and apprenticeship programs.

Our internship program focuses on attracting college and university students to paid work in Jack Henry departments related to their studies, while our apprenticeship program offers paid training and work for candidates (either students or non-students) with little to no traditional experience in the field, such as learning computer coding.

Both our internship and apprenticeship programs can lead to full-time employment.

We continue to engage our Business Innovation Groups (“BIGs”) to develop attraction and retention suggestions and practices that advance a diverse, equitable, and inclusive culture.

Our BIGs are company-sponsored groups open to all employees.

As of June 30, 2022, we had approximately 1,700 unique associates participating in six active BIGs, with five focused on inclusion for specific communities — women, people of color, remote associates, LGBTQ+, and veterans — and one focused on environmental and sustainability topics.

While BIGs allow associates to connect and support each other, they also function to assist us in addressing bona fide business problems through input and suggestions.

As of June 30, 2023, we had over 1,840 unique associates participating in seven active BIGs, with six focused on inclusion for specific communities — women, people of color, remote employees, LGBTQ+, veterans, and people with disabilities — and one focused on environmental and sustainability topics.

While BIGs allow employees to connect and support each other, they also function to assist us in addressing bona fide business problems through input and suggestions.

For example, these groups work with executive leadership to actively improve our talent attraction processes for prospective employees.

They also provide education, training, and conversation opportunities to all employees to advance diversity, inclusion, understanding, and innovation throughout the Company.

We seek to actively listen to our employees throughout the year using a defined and continual listening strategy designed to gather regular feedback on well-being, engagement, leadership, ethics, culture and values, and other top of mind topics.

They also provide education, training, and conversation opportunities to all employees to increase belongingness and to advance diversity, inclusion, understanding, and innovation throughout the Company.

JHAnywhere, a BIG formed previously to provide community and resources for the then minority of employees working remotely, was discontinued in July 2023 due to the proliferation of remote work resulting from the COVID-19 pandemic to the extent that such efforts became a company-wide focus that went beyond the capacity of a single BIG to support.

The Company remains focused on equipping all employees with the tools necessary to effectively communicate, collaborate, and build connections in a remote environment, including ensuring leaders have the skills needed to effectively lead dispersed teams.

We seek to actively listen to our employees throughout the year using a defined and continuous listening strategy designed to gather regular feedback on well-being, engagement, leadership, ethics, culture and values, and other top of mind topics.

These surveys allow us to respond to employee concerns, benefit from employee perspectives, and better design and develop processes to support our Company culture.

Employees can learn about changes through our quarterly employee update videos or all-employee town hall meetings delivered by senior management.

Employees can learn about changes

through our jhDaily online news center, regular email communications, monthly Manager Forum events, quarterly employee update videos or all-employee town hall meetings delivered by senior management.

Training and Development

Our success depends not only on attracting and retaining talented employees, but also in developing our current employees and providing new opportunities for their growth.

We offer our employees numerous live and on-demand training programs and resources to help them build knowledge and improve skills.

These trainings include mandatory programs, such as security awareness, as well as recommended but optional programs in areas including leadership development;

We offer our employees numerous live and on-demand courses, resources, and training programs to help them build knowledge, improve skills, and develop their career at Jack Henry.

Learning opportunities include mandatory courses, such as security awareness, as well as recommended content in areas including leadership development;

technical skills;

and diversity, equity, and inclusion.

Jack Tracks, a three-week virtual development event, offers employees a large selection of curated topics such as future readiness, technology trends, and education on Company solutions.

and diversity, equity, inclusion, and belonging.

Jack Tracks, an annual, company-wide virtual learning event, offers employees a large selection of curated topics such as technical and operational readiness, technology trends, company solutions, and industry trends.

Recognizing the importance of mentoring in career development, we host an internal mentorship marketplace, which allows prospective mentors and mentees to connect and self-initiate a mentoring relationship.

We also make career mobility and personal development plan resources available to all employees.

In fiscal 2022, we strengthened our leadership capacity by providing training on effective coaching practices to all leaders and offered a virtual summit for the Company’s most senior leaders focused on alignment to top priority business initiatives.

We recognize and value the contribution of our employees who develop, improve, and support our technology solutions and we provide additional development opportunities for them to advance their technical expertise.

This includes access to on-demand technical training libraries, certification programs, and classes facilitated by external experts.

Career mobility and personal development resources are available to all employees through dedicated intranet sites.

We continue to strengthen our leadership capacity by providing training on effective coaching practices to leaders of the Company.

We recognize and value the contribution of our employees who develop, improve, and support our technology solutions.

Access to on-demand technical training libraries, customized learning plans, certification programs, and classes facilitated by external experts are available to advance their technical expertise.

When there is a critical skill need or where the technology landscape is rapidly changing, we provide unique learning solutions to align employees' development with our strategic initiatives.

Wellness and Safety

JKHY emphasizes the safety and well-being of our employees as a top priority.

We emphasize the safety and well-being of our employees as a top priority.

We define wellness comprehensively and include mental, physical, emotional, financial, psychological, and environmental considerations.

JKHY offers a competitive compensation and benefits package and supports dedicated campaigns that communicate directly to employees about financial wellness, mental health, healthful nutrition and exercise, and other wellness topics.

Our benefit plan offerings include supportive and dedicated campaigns that communicate directly to employees about financial wellness, mental health, healthful nutrition and exercise, and other wellness topics.

Employee well-being is further supported through policies such as remote work, paid parental leave, military service leave, educational assistance, and bereavement leave policies.

For more information on our COVID-19 response, see “COVID-19 Impact and Response” above.

Available Information

JKHY’s Website is easily accessible to the public at jackhenry.com .

The “Investors" portion of the Website provides key corporate governance documents, the code of conduct, an archive of press releases, and other relevant Company information.

Jack Henry’s website is easily accessible to the public at jackhenry.com .

The “Investor Relations" portion of the website provides key corporate governance documents, the code of conduct, an archive of press releases, and other relevant Company information.

Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and other filings and amendments thereto that are made with the SEC also are available free of charge on our website as soon as reasonably practical after these reports have been filed with or furnished to the SEC.

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business