What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-08-28 compared with 2025-08-25 · 176 added, 144 removed, 719 unchanged (31% of the section changed)

24 unchanged sentences

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting.

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control over Financial Reporting appearing under Item 9A.

Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits.

65 unchanged sentences

OPERATING INCOME 635,033 568,715 489,391

INTEREST INCOME (EXPENSE)

INTEREST INCOME

Interest Income 23,144 27,759 25,012

Interest Expense ( 5,387 ) ( 10,438 ) ( 16,384 )

Total Interest Income (Expense) 17,321 8,628 ( 6,114 )

Total Interest Income 17,757 17,321 8,628

INCOME BEFORE INCOME TAXES 652,790 586,036 498,019

34 unchanged sentences

Accrued income taxes

Current maturities of long-term debt

Deferred revenues 294,763 290,485

3 unchanged sentences

Deferred income tax liability 366,058 240,026

Debt, net of current maturities — 60,000

Debt 40,000 —

Other long-term liabilities 53,756 64,439

66 unchanged sentences

Expense for stock-based compensation 32,460 28,392 28,873

(Gain)/loss on disposal of assets and businesses 1,966 3,841 ( 4,517 )

Gain on disposal of assets 2,563 1,966 3,841

Changes in operating assets and liabilities:

7 unchanged sentences

CASH FLOWS FROM INVESTING ACTIVITIES:

Payment for acquisitions, net of cash acquired — — ( 229,628 )

Payment for acquisitions ( 42,390 ) — —

Capital expenditures ( 67,103 ) ( 53,358 ) ( 58,118 )

Proceeds from the sale of assets 3 904 27,939

Proceeds from sale of assets 32,827 3 904

Purchased software ( 4,108 ) ( 5,363 ) ( 7,130 )

5 unchanged sentences

Borrowings on credit facilities 480,000 350,000 475,000

Repayments on credit facilities and financing leases ( 500,000 ) ( 600,000 ) ( 650,060 )

Repayments on credit facilities ( 440,000 ) ( 500,000 ) ( 600,000 )

Purchase of treasury stock ( 448,173 ) ( 35,051 ) ( 28,055 )

Dividends paid ( 170,405 ) ( 164,644 ) ( 155,877 )

Proceeds from issuance of common stock upon exercise of stock options 2 — 1

Proceeds from stock issued for equity-based payment arrangements 1 2 —

Tax withholding payments related to share-based compensation ( 7,177 ) ( 7,726 ) ( 5,378 )

14 unchanged sentences

Jack Henry was founded in 1976 as a provider of core processing solutions for banks.

Today, the Company’s extensive array of products and services includes processing transactions, automating business processes, and managing information for approximately 7,400 banks, credit unions, and diverse corporate entities.

Today, the Company’s extensive array of products and services includes processing transactions, automating business processes, and managing information for over 7,200 banks, credit unions, and diverse corporate entities.

CONSOLIDATION

5 unchanged sentences

REVENUE RECOGNITION

The Company generates "Services and Support" revenue through software licensing and related services, private cloud core and complementary software solutions, professional services, and hardware sales.

The Company generates "Processing" revenue through processing of remittance transactions, card transactions and monthly fees, and digital transactions.

The Company generates "Services and Support" revenue through private cloud core and complementary software solutions, professional services, software licensing and related services, and hardware sales.

The Company generates "Processing" revenue through processing of remittance transactions, electronic payment services, card transactions and monthly fees, and digital transactions.

Identification of performance obligations

18 unchanged sentences

Amortization begins on the date the software is placed in service and the amortization period is based on estimated useful life.

All of the above amortization expense is included within components of operating income, primarily cost of revenue.

All the above amortization expense is included within components of operating income, primarily cost of revenue.

Capitalized development costs for software to be sold and internal use software are included within computer software, net of amortization in the Company's consolidated balance sheets.

19 unchanged sentences

PURCHASE OF INVESTMENTS

At June 30, 2025, and 2024, the Company had $ 25,750 in non-current investments.

At June 30, 2026, and 2025, the Company had $ 33,460 and $ 25,750 in non-current investments, respectively.

These investments were recorded at cost and are included within other non-current assets on the Company's consolidated balance sheets.

9 unchanged sentences

GAAP, the Company's operations are classified as four reportable segments:

Core, Payments, Complementary, and Corporate and Other (see Note 14).

Core, Payments, Complementary, and Corporate Services (see Note 14).

Substantially all the Company’s revenues are derived from operations and assets located within the United States of America.

2 unchanged sentences

The share repurchase program does not include specific price targets or timetables and may be suspended at any time.

During fiscal 2026, the Board of Directors authorized an increase of 5,000 shares to the existing share repurchase program.

At June 30, 2026, there were 34,527 shares in treasury stock and the Company had the remaining authority to repurchase up to 5,464 additional shares of its common stock.

14 unchanged sentences

Recently Adopted Accounting Guidance

In November 2023, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which improves the disclosures about a public entity's reportable segments through enhanced disclosures about significant segment expenses that are regularly provided to the chief operating decision maker.

The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and should be applied retrospectively to all prior periods presented in the financial statements.

The Company adopted this ASU effective for the fiscal year ended June 30, 2025, with retrospective application of the additional segment information for the fiscal years ended June 30, 2024, and 2023.

Additional information regarding the Company's reportable segments is included in Note 14 to the consolidated financial statements.

Not Adopted at Fiscal Year End

In December 2023, the FASB issued ASU No.

2 unchanged sentences

The ASU requires additional disclosure related to rate reconciliation, income taxes paid, and other disclosures to improve the effectiveness of income tax disclosures.

The ASU is effective for annual periods beginning after December 15, 2024, and applied on a prospective basis.

Early adoption and retrospective application is permitted.

The Company is currently evaluating the impact of this ASU on its consolidated financial statements and related disclosures.

The Company adopted this ASU for the fiscal year ending June 30, 2026, with prospective application.

Additional information regarding the Company's income tax rate reconciliations, including the application of the provisions of ASU 2023-09 for the fiscal year ending June 30, 2026, is included in Note 8 to the consolidated financial statements.

Not Adopted at Fiscal Year End

In November 2024, the FASB issued ASU No.

4 unchanged sentences

The Company is currently evaluating the impact of this ASU on its consolidated financial statements and related disclosures.

In September 2025, the FASB issued ASU No.

2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software, which amends guidance related to the accounting for internal-use software development costs.

The amendments are intended to modernize the recognition and capitalization framework to reflect current software development practices, including iterative and agile methodologies, by removing references to "development stages".

It also clarifies the criteria for capitalization, which begins when both of the following occur:

(1) management has authorized and committed to funding the software project and (2) it is probable that the project will be completed and the software will be used to perform the function intended.

The ASU is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods.

Early adoption is permitted as of the beginning of an annual reporting period.

The Company is currently evaluating the impact of this ASU on its consolidated financial statements and related disclosures.

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.

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

The Company recognizes revenue when or as it satisfies each performance obligation by transferring control of a solution or service to the client.

20 unchanged sentences

Professional services that are distinct are recognized as the services are performed.

Deconversion fees are also included within product delivery and services and are considered a contract modification.

Therefore, the Company recognizes these fees over the remaining modified contract term.

Deconversion fees are also included within product delivery and services.

Deconversion fees are amounts due from the early termination of our Private and Public Cloud, Processing Services and long-term On-premise Support contracts.

Although our contracts generally permit the client to voluntarily terminate, an early termination most commonly occurs due to the acquisition of one of our clients by another financial institution.

These terminations are considered contract modifications.

At the time the termination is signed, we evaluate the contract modification.

For the majority of terminations, there is a period of time after the termination has been signed but before services are concluded.

Because the future services to be delivered are distinct from those already delivered, the newly modified transaction price (which we refer to as deconversion revenue or fees) is allocated to all remaining performance obligations under the contract and is recognized as those services are delivered.

On-premise support

31 unchanged sentences

77,709 72,889

Contract assets primarily result from client discounts (contract incentives) where revenue is recognized and payment of consideration under the contract is contingent upon the transfer of services to a client over the contractual period.

The current portion of contract assets is reported within prepaid expenses and other in the consolidated balance sheets, and the non-current portion is included in other non-current assets.

Contract liabilities (deferred revenue) primarily relate to consideration received from clients in advance of delivery of the related goods and services to the client.

Contracts with our clients often include upfront incentive payments or credits provided to clients at or near the inception of an arrangement.

These amounts are accounted for as a reduction to the transaction price and are recognized as a reduction to revenue over the term of the related agreement as the services are delivered.

They are included in contract assets, the current portion is reported within prepaid expenses and other in the consolidated balance sheets, and the non-current portion is included in other non-current assets.

Contract liabilities (deferred

revenue) primarily relate to consideration received from clients in advance of delivery of the related goods and services to the client.

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.

9 unchanged sentences

These costs consist primarily of sales commissions, which are incurred only if a contract is obtained, and client conversion or implementation-related costs.

Capitalized contract costs classified as current, are included within prepaid expenses and other and deferred costs in the Company's consolidated balance sheets, dependent on the nature of the capitalized costs.

Capitalized contract costs classified as non-current are included within non-current deferred costs and other non-current assets in the Company's consolidated balances sheets, dependent on the nature of the capitalized costs.

Capitalized costs to obtain contracts with clients are included within prepaid expenses and other (current portion) and other non-current assets (non-current portion) in the Company's consolidated balance sheets.

Capitalized costs to fulfill contracts with clients are included within deferred costs (current portion) and non-current deferred costs (non-current portion) in the Company's consolidated balance sheets.

Capitalized costs are amortized based on the transfer of goods or services to which the asset relates, in line with the percentage of revenue recognized for each performance obligation to which the costs are allocated.

16 unchanged sentences

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.

Financial assets and financial liabilities measured at fair value on a recurring basis are as follows:

Fair values of financial assets and liabilities are as follows:

Estimated Fair Value Measurements Total Fair

3 unchanged sentences

Certificates of Deposit $ — $ 9,701 $ — $ 9,701

Financial Liabilities:

Credit facilities $ — $ 40,000 $ — $ 40,000

June 30, 2025

6 unchanged sentences

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.

The lease term is

used to determine lease classification as an operating or finance lease and is used to calculate straight-line expense for operating leases.

The lease term is used to determine lease classification as an operating or finance lease and is used to calculate straight-line expense for operating leases.

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.

24 unchanged sentences

Operating lease costs for the fiscal years ended June 30, 2026, 2025, and 2024, were $ 11,017 , $ 11,420 , and $ 10,598 , respectively.

Total operating lease costs for the fiscal years ended June 30, 2025, 2024, and 2023, included variable lease costs of approximately $ 2,744 , $ 4,087 , and $ 3,608 , respectively.

Operating lease expense is included within cost of services, research and development, and selling, general and administrative expense, dependent upon the nature and use of the ROU asset, in the Company’s consolidated statements of income.

Total operating lease costs for the fiscal years ended June 30, 2026, 2025, and 2024, included variable lease costs of $ 5,956 , $ 2,744 , and $ 4,087 , respectively.

Operating lease expense is included within cost of revenue, research and development, and selling, general and administrative expense, dependent upon the nature and use of the ROU asset, in the Company’s consolidated statements of income.

For the fiscal years ended June 30, 2026, 2025, and 2024, operating cash flows for payments on operating leases were $ 11,284 , $ 10,612 , and $ 9,306 , respectively, and ROU assets obtained in exchange for operating lease liabilities were $ 3,302 , $ 7 , and $ 19,222 , respectively.

2 unchanged sentences

Future minimum rental payments on operating leases with initial non-cancellable lease terms in excess of one year were due as follows at June 30, 2026:

Due dates Future Minimum Rental Payments

Due Dates (fiscal year) Future Minimum Rental Payments

2027 $ 10,275

Thereafter 3,137

1 unchanged sentence

interest ( 3,790 )

Present value of lease liabilities - lessee

Future lease payments include $ 5,464 related to options to extend lease terms that are reasonably certain of being exercised.

At June 30, 2025, there were $ 2,070 material legally binding lease payments for leases signed but not yet commenced.

The Company may sublease its facilities from time to time to third parties.

Sublease income is recognized on a straight-line basis over the lease term, and is included within revenue on the Company's condensed consolidated statements of income.

On September 30, 2023, the Company entered into an agreement with a third party to sublease a portion of its Elizabethtown, Kentucky facility.

The commencement date of the sublease was October 1, 2023, and it had an initial term of 57 months.

Sublease income for the fiscal years ended June 30, 2025, and 2024, was $ 887 and $ 550 , respectively.

On March 21, 2025, the sublessee provided notice to terminate a portion of the sublease agreement and reduce the square footage of their subleased space effective September 30, 2025, resulting in a termination fee of $ 332 .

The remaining space not terminated will continue to be subleased under the original terms of the agreement.

There have been no indications of impairment related to the underlying ROU asset for the remaining portion of the sublease.

Minimum Sublease Payments

At June 30, 2025, the future total minimum sublease payments to be received, including termination fees, were as follows:

Due Dates (fiscal year) Future Minimum Sublease Receipts

Total sublease receipts - lessor

Present value of lease liabilities $ 37,821

During the fiscal year ended June 30, 2026, the Company terminated a lease agreement that, in prior periods, included $ 5,464 in future lease payments related to an option to extend.

Following this termination, the Company has no remaining future lease payments related to options to extend lease terms that are reasonably certain of being exercised.

At June 30, 2026, there were $ 5,920 of material legally binding lease payments for leases signed but not yet commenced.

PROPERTY AND EQUIPMENT

13 unchanged sentences

The change in property and equipment in accrued liabilities was an increase of $ 6,960 and $ 227 for the fiscal years ended June 30, 2026, and 2025, respectively.

These amounts were excluded from capital expenditures on the statements of cash flows.

These amounts were excluded from capital expenditures on the consolidated statements of cash flows.

No material impairments of property and equipment were recorded in the fiscal years ended June 30, 2026, 2025, or 2024.

At June 30, 2025, held for sale assets include aircraft with a carrying value of approximately $ 5,606 that management has committed to sell.

During the fiscal year ended June 30, 2026, the Company received an offer to purchase one of its facilities and management has committed to a plan to sell the facility.

At June 30, 2026, the facility included assets with a carrying value of approximately $ 9,172 .

At June 30, 2025, held for sale assets included two aircraft and related equipment with a carrying value of approximately $ 5,606 .

The sales of these assets were completed during the fiscal year ended June 30, 2026, which resulted in a gain of $ 6,829 .

Total assets held for sale by the Company at June 30, 2026, and 2025, were $ 9,172 and $ 5,606 , respectively, and were included in assets held for sale on the Company's consolidated balance sheets and were not included in property and equipment, net.

14 unchanged sentences

Ending balance $ 166,554 $ 166,554

No goodwill was acquired during fiscal 2025 and 2024.

Goodwill acquired during fiscal 2026 and 2025 was $ 22,943 and $ 0 , respectively.

Goodwill consists largely of the growth potential, synergies and economies of scale expected from combining the operations of the Company with those of the entities or assets acquired, together with their assembled workforces.

No goodwill has been assigned to the Company's Corporate and Other reportable segment.

No goodwill has been assigned to the Company's Corporate Services reportable segment.

Other intangible assets

16 unchanged sentences

Computer software includes the unamortized cost of software products developed or acquired by the Company, which are capitalized and amortized over useful lives generally ranging from 5 to 15 years.

Amortization expense for computer software totaled $ 148,734 , $ 137,958 , and $ 123,210 for the fiscal years ended June 30, 2025, 2024, and 2023, respectively.

Amortization expense for

computer software totaled $ 154,212 , $ 148,734 , and $ 137,958 for the fiscal years ended June 30, 2026, 2025, and 2024, respectively.

There were no material impairments in fiscal years ended June 30, 2026, 2025, and 2024.

9 unchanged sentences

2031 38,909 3,077 1,072 43,058

The Company had $ 40,000 outstanding debt at June 30, 2026, related to credit facilities.

The Company had no outstanding debt at June 30, 2025.

The Company had $ 90,000 outstanding current maturities of long-term debt and $ 60,000 outstanding long-term debt at June 30, 2024, related to credit facilities.

Credit facilities

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

The credit agreement allows for borrowings of up to $ 600,000 , which may be increased to $ 1,000,000 by the Company at any time until maturity.

The credit agreement bears interest at a variable rate equal to (a) a rate based on 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, (iii) the sum of the Federal Funds Effective Rate for such day plus 0.50 % per annum and (iv) the Adjusted Term SOFR Screen Rate (without giving effect to the Applicable Margin) 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.

On March 25, 2026, the Company entered into a five-year, revolving, unsecured credit agreement that replaced the prior credit agreement described below.

The credit agreement allows for borrowings of up to $ 1,000,000 and allows for additional revolving credit commitments and/or term loan commitments, pursuant to the terms and subject to certain limitations set forth in the credit agreement.

The credit agreement bears interest at a variable rate equal to, at the option of the Company, either (a) a rate based on adjusted Term Secured Overnight Financing Rate ("SOFR") rate or (b) an alternate base rate (the highest of (i) 0.0%, (ii) U.S.

Bank's prime rate, (iii) the Federal Funds Rate plus 0.50 % and (iv) a one month adjusted Term SOFR rate plus 1.0 %), plus an applicable percentage in each case determined based on the Company's leverage ratio.

The credit agreement is guaranteed by certain subsidiaries of the 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 June 30, 2026, the Company was in compliance with all such covenants.

The credit facility terminates August 31, 2027 .

There was $ 0 and $ 60,000 outstanding under the credit facility at June 30, 2025, and June 30, 2024, respectively.

Term loan facility

On May 16, 2023, the Company entered into a term loan credit agreement with a syndicate of financial institutions, with an original principal balance of $ 180,000 .

Borrowings under the term loan facility bore interest at a variable rate equal to (a) a rate based on an adjusted SOFR term rate or (b) an alternate base rate (the highest of (i) 0%, (ii) the Prime Rate for such day, (iii) the sum of the Federal Funds Effective Rate for such day plus 0.50 % per annum and (iv) the Adjusted Term SOFR Screen Rate (without giving effect to the Applicable Margin) for a one month Interest Period on such day for Dollars plus 0.75 %), plus an applicable percentage in each case determined by the Company's leverage ratio.

The term loan credit agreement 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 term loan credit agreement.

The term loan credit agreement matured on May 16, 2025 , and at the maturity date the Company was in compliance with all such covenants.

There was $ 0 and $ 90,000 outstanding under the term loan at June 30, 2025, and June 30, 2024, respectively.

The credit agreement terminates March 25, 2031 .

There was $ 40,000 outstanding under the credit facility at June 30, 2026.

The credit agreement described above replaced a prior five-year senior, unsecured amended and restated credit agreement that was entered into on August 31, 2022.

The prior credit agreement allowed for borrowings of up to $ 600,000 , which could be increased to $ 1,000,000 by the Company at any time until maturity.

The prior credit agreement bore interest at a variable rate equal to (a) a rate based on an adjusted SOFR term rate or (b) an alternate base rate (the highest of (i) 0.0%, (ii) the Prime Rate for such day, (iii) the sum of the Federal Funds Effective Rate for such day plus 0.50 % per annum and (iv) the Adjusted Term SOFR Screen Rate (without giving effect to the Applicable Margin) 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 agreement 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.

The prior credit agreement's termination date was August 31, 2027 .

There was no balance outstanding under the prior credit facility at June 30, 2025.

Other lines of credit

The Company had an unsecured bank credit line which provided for funding of up to $ 5,000 and bore interest at the prime rate less 1.0 %.

The credit line expired on April 30, 2025 .

There was no balance outstanding at June 30, 2025, or 2024.

On October 31, 2024, the Company entered into a discretionary line of credit demand note, which provides for funding of up to $ 50,000 and bears interest at the prime rate less 2.0 %.

The note does not constitute a committed line of credit.

The line of credit expires on October 31, 2025 .

On October 31, 2024, the Company entered into a discretionary line of credit demand note, which provided for funding of up to $ 50,000 and bore interest at the prime rate less 2.0 %.

The note did not constitute a committed line of credit.

The line of credit expired on October 31, 2025 .

There was no balance outstanding at June 30, 2025.

On July 18, 2025, the Company entered into an unsecured committed revolving line of credit facility with a commercial bank in the amount of $ 50,000 , which bore interest at the prime rate less 1.0 %.

The line of credit expired on July 17, 2026 .

There was no balance outstanding at June 30, 2026.

The Company paid interest of $ 4,606 , $ 10,044 , and $ 15,757 during the fiscal years ended June 30, 2026 , 2025, and 2024, respectively.

13 unchanged sentences

Leasing liabilities 9,298 12,590

Software development and research and development tax amortization

Developed software and research and development amortization — 14,244

Net operating loss and tax credit carryforwards 358 212

5 unchanged sentences

Property and equipment depreciation ( 18,719 ) ( 24,232 )

Intangibles, software development, and research and development tax amortization ( 107,083 ) ( 113,623 )

Acquired intangibles amortization ( 99,799 ) ( 101,123 )

Developed software and research and development amortization ( 114,643 ) ( 5,960 )

Contract and service costs ( 185,314 ) ( 169,579 )

2 unchanged sentences

Net deferred tax liability $ ( 366,058 ) $ ( 240,026 )

The following analysis reconciles the statutory federal income tax rate to the effective income tax rates reflected above:

An income tax rate reconciliation pursuant to the disclosure requirements of ASU 2023-09 for the fiscal year ended June 30, 2026, is as follows:

Year Ended June 30,

2025 2024 2023

Amount Percent

federal statutory income tax rate $ 137,086 21.0 %

State and local income taxes, net of federal effect 1

Research and development tax credits ( 12,674 ) ( 1.9 ) %

Nontaxable and nondeductible items 4,223 0.7 %

Foreign reconciling items — — %

Worldwide changes in prior year unrecognized tax benefits ( 2,323 ) ( 0.4 ) %

Total $ 150,014 23.0 %

1 State taxes in California, Illinois, Michigan, Minnesota, New York, Pennsylvania, Tennessee and Texas made up the majority (greater than 50 percent) of the tax effect in this category.

A reconciliation of the U.S.

federal statutory income tax rate to the Company's effective income tax rate for the fiscal years ended June 30, 2025, and 2024, is as follows:

Year Ended June 30,

Computed "expected" tax expense 21.0 % 21.0 %

6 unchanged sentences

22.2 % 23.3 %

As of June 30, 2025, the Company has state NOL and tax credit carryforwards with a tax-effected value of $ 78 and $ 134 , respectively.

The Company paid income taxes, net of refunds, in the following jurisdictions for the fiscal year ended June 30, 2026:

Year Ended June 30,

federal $ 19,354

state and local:

California 2,017

New York 2,042

Pennsylvania 2,019

Total state income taxes 19,514

Total cash paid for income taxes, net of refunds received $ 38,868

The amount of income taxes paid, net of refunds, for the fiscal years ended June 30, 2025, and 2024, was $ 117,581 and $ 106,966 , respectively.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted, introducing significant changes to U.S.

federal income tax law.

Key provisions affecting the Company include the permanent restoration of immediate expensing for domestic research and development (“R&D”) expenditures, an election to deduct the unamortized balance of domestic R&D expenditures that were previously capitalized under the Tax Cuts and Jobs Act of 2017 (“TCJA”), and the reinstatement of 100% bonus depreciation for qualified property placed in service after January 19, 2025.

The legislation did not materially impact the effective tax rate in the current period, and the Company does not anticipate a material impact in future periods.

However, the Company had a significant reduction in cash tax payments and income taxes payable for the current fiscal year as well as a decrease in deferred tax assets related to the key provisions cited above.

All tax effects of the change in tax law on current or deferred tax balances have been recorded as a component of the income tax provision related to continuing operations.

As of June 30, 2026, the Company has state net operating loss and tax credit carryforwards with a tax-effected value of $ 93 and $ 265 , respectively.

The state net operating loss and tax credit carryover have varying expiration dates, ranging from fiscal 2027 to 2046.

1 unchanged sentence

Accordingly, valuation allowances of $ 213 and $ 182 have been recorded against the state net operating losses and tax credit carryforwards as of June 30, 2026, and 2025, respectively.

The Company paid income taxes, net of refunds, of $ 117,581 , $ 106,966 , and $ 145,862 in fiscal 2025, 2024, and 2023, respectively.

On July 4, 2025, the President of the United States signed into law legislation referred to as “One Big Beautiful Bill Act” (H.R.

1), which enacts substantial changes to the federal income tax law.

The legislation includes several business-focused provisions, such as the restoration of immediate expensing for domestic research and development expenditures and the reinstatement of 100% bonus depreciation for qualified property placed in service after January 19, 2025.

The Act also permanently extends key provisions from the Tax Cuts and Jobs Act (TCJA).

As the legislation was enacted after the June 30, 2025, balance sheet date, the financial implications are not included in the current fiscal year's financial statements.

The Company is in the process of assessing the impacts of the new law and plans to incorporate updates in the financial results next fiscal year beginning in the quarter ending September 30, 2025.

At June 30, 2026, the Company had $ 23,639 of gross unrecognized tax benefits, $ 21,189 of which, if recognized, would affect its effective tax rate.

1 unchanged sentence

The Company had accrued interest and penalties of $ 5,266 and $ 4,375 related to uncertain tax positions at June 30, 2026, and 2025, respectively.

The gross unrecognized tax benefits and accrued interest and penalties are recorded as other long-term liabilities in the Company’s consolidated balance sheets, except for $ 3,449 recorded as deferred income tax liability at June 30, 2025.

The gross unrecognized tax benefits and accrued interest and penalties are recorded as other long-term liabilities in the Company’s consolidated balance sheets, except for $ 3,999 and $ 3,449 recorded as a reduction to deferred income tax assets at June 30, 2026 and 2025, respectively.

The income tax provision included interest expense and penalties (or benefits) on unrecognized tax benefits of $ 705 , $ 796 , and $ 1,132 in the fiscal years ended June 30, 2026, 2025, and 2024, respectively.

9 unchanged sentences

Additions for prior year tax positions 834

Reductions for prior year tax positions ( 27 )

Reductions related to expirations of statute of limitations ( 2,641 )

8 unchanged sentences

state income tax returns remain subject to examination as of June 30, 2026, under the statute of limitation rules for fiscal 2016 through 2022.

The Company anticipates that potential changes due to lapsing statutes of limitations and examination closures could reduce the unrecognized tax benefits balance by $ 3,000 — $ 9,000 within twelve months of June 30, 2025.

The Internal Revenue Service (“IRS”) is currently conducting an examination of the Company’s U.S.

federal income tax returns for the fiscal tax years 2023, 2024, and 2025.

The IRS examination of fiscal year 2023 was initiated during the first quarter of fiscal year 2026, and the Company was notified the examination would include fiscal years 2024 and 2025 during the fourth quarter of fiscal year 2026.

As of June 30, 2026, these examinations are still ongoing and the Company does not anticipate any findings that would be material to the consolidated financial statements.

INDUSTRY AND SUPPLIER CONCENTRATION

6 unchanged sentences

STOCK-BASED COMPENSATION

The Company's pre-tax operating income for the fiscal years ended June 30, 2025, 2024, and 2023, includes $ 28,392 , $ 28,873 , and $ 28,611 , respectively, of equity-based compensation costs, of which $ 25,757 , $ 26,361 , and $ 26,427 , respectively, relates to the restricted stock plans.

The Company's pre-tax operating income for the fiscal years ended June 30, 2026, 2025, and 2024, includes $ 32,460 , $ 28,392 , and $ 28,873 , respectively, of equity-based compensation costs, of which $ 29,685 , $ 25,757 , and $ 26,361 , respectively, relates to the equity incentive plans.

Costs are recorded net of estimated forfeitures.

The total income tax benefits from equity-based compensation for the fiscal years ended June 30, 2026, 2025, and 2024, were $ 4,806 , $ 4,479 , and $ 4,495 , respectively.

These income tax benefits from stock option exercises and restricted stock vestings included income tax net excess benefits of $ 283 and $ 1,109 for the fiscal years ended June 30, 2025 and June 30, 2023, respectively, and income tax net shortfalls of $ 184 for the fiscal year ended June 30, 2024.

These income tax benefits from stock option exercises and restricted stock vestings included income tax net shortfalls of $ 739 and $ 184 for the fiscal years ended June 30, 2026 and June 30, 2024, respectively, and income tax net excess benefits of $ 283 for the fiscal year ended June 30, 2025.

On November 10, 2015, the Company adopted the 2015 Equity Incentive Plan (“2015 EIP”) for its associates 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 plan expired on November 10, 2025.

The plan allowed for grants of stock options, stock appreciation rights, restricted stock shares or units, and performance shares or units.

The maximum number of shares that were authorized for issuance under the plan was 3,000 .

On November 12, 2025, the Company adopted the 2025 Equity Incentive Plan ("2025 EIP") for its associates and non-employee directors.

The plan allows for grants of stock options, restricted stock shares or units, and performance shares or units.

The maximum number of shares authorized for issuance under the plan is 4,700 .

Stock option awards

Under the 2015 EIP, terms and vesting periods of the stock options are determined by the Human Capital & Compensation Committee of the Board of Directors when granted.

The options granted under this plan are exercisable beginning three years after grant 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 10 years after grant.

During fiscal 2025, there were no options granted or forfeited, and 12 options were exercised at a weighted average exercise price of $ 87.27 per share with a total exercise intrinsic value of $ 991 .

At June 30, 2025, there were no options outstanding.

During fiscal 2024, there were no options granted, forfeited, or exercised, and at June 30, 2024, 12 options were outstanding at a weighted average exercise price of $ 87.27 .

During fiscal 2023, there were no options granted, forfeited, or exercised, and at June 30, 2023, 12 options were outstanding at a weighted average exercise price of $ 87.27 .

All remaining options were granted on July 1, 2016.

At June 30, 2025, there was no compensation cost yet to be recognized related to options.

Restricted stock unit and performance unit awards

The Company issued unit awards under the 2015 EIP until November 10, 2025, the date on which the 2015 EIP expired.

Subsequent to this expiration, unit awards were issued under the 2025 EIP.

With respect to awards of restricted stock units and performance units, it is the intention of the Company to settle the unit awards in shares of the Company’s stock.

17 unchanged sentences

Of the 175 unit awards granted in fiscal 2026, 124 were restricted stock unit awards and 51 were performance unit awards.

The payout at release of a portion of the performance unit awards will be determined based on the Company's compound annual growth rate for revenue (excluding adjustments) for the first fiscal year vesting period, second fiscal year vesting period, third fiscal year vesting period, and the cumulative fiscal three-year vesting period compared against goal thresholds as defined in the award agreement.

The payout at release of a portion of the performance unit awards will be determined based on the expansion of the Company's non-GAAP operating margin over the first fiscal year vesting period, second fiscal year vesting period, third fiscal year vesting period, and the cumulative fiscal three-year vesting period.

The payout at release of a portion of the performance unit awards will be determined based on market conditions.

The restricted stock unit awards 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.

20 of the performance unit awards granted in fiscal 2026 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 performance unit awards will be determined based on the Company's compound annual growth rate ("CAGR") for revenue (excluding adjustments) for the three-year vesting period compared against goal thresholds as defined in the award agreement.

The performance payout at release of the other half of these performance unit awards will be determined based on the expansion of the Company's non-GAAP operating margin over the three-year vesting period compared against goal thresholds as defined in the award agreement.

31 of the performance unit awards have market conditions and 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.

The remaining 3 performance unit awards had other performance targets.

Per the Company's award vesting and settlement provisions, the performance unit awards that utilized a Monte Carlo pricing model were valued at grant on the basis of Total Shareholder Return ("TSR") in comparison to the compensation peer group made up of participants approved by the Human Capital & Compensation Committee of the Company's Board of Directors for fiscal years 2025 and 2024.

For fiscal year 2023, TSR was in comparison to the compensation peer group comprised of the Standard & Poor's 1500 Software & Services Index ("S&P 1500 S&S Index") participant companies and other participants approved by the Human Capital & Compensation Committee of the Company's Board of Directors.

Per the Company's award vesting and settlement provisions, the performance unit awards that utilized a Monte Carlo pricing model were valued at grant on the basis of Total Shareholder Return ("TSR") in comparison to the Standard and Poor's 900 Index ("S&P 900") participant companies for fiscal year 2026.

For fiscal years 2025 and 2024, TSR was in comparison to the compensation peer group made up of participants approved by the Human Capital & Compensation Committee of the Company's Board of Directors.

TSR is defined as the change in the stock price through the performance period plus dividends per share paid during the performance period, all divided by the stock price at the beginning of the performance period.

9 unchanged sentences

Beginning average percentile rank for TSR 20 % 41 % 74 %

1 For fiscal 2023, S&P 1500 S&S Index participants were included in the compensation peer group.

At June 30, 2025, there was $ 18,018 of compensation expense that has yet to be recognized related to non-vested restricted stock unit and performance unit awards, which will be recognized over a weighted-average remaining contractual term of 0.99 years.

1 For fiscal 2026, this group consisted of the S&P 900 participants.

For fiscal 2025 and 2024, this group consisted of participants approved by the Human Capital & Compensation Committee of the Board of Directors.

At June 30, 2026, there was $ 18,355 of compensation expense that has yet to be recognized related to non-vested restricted stock unit and performance unit awards, which will be recognized over a weighted-average remaining contractual term of 1 year.

The fair values of restricted stock units and performance units at release totaled $ 21,214 , $ 22,591 , and $ 16,544 for the fiscal years ended June 30, 2026, 2025, and 2024, respectively.

12 unchanged sentences

Stock options, restricted stock units, and performance units have been included in the calculation of earnings per share to the extent they are dilutive.

The two-class method for computing EPS has not been applied because no outstanding awards contain non-forfeitable rights to participate in dividends.

The two-class method for computing EPS has not been applied

because no outstanding awards contain non-forfeitable rights to participate in dividends.

There were 6 anti-dilutive weighted average shares excluded from the weighted average shares outstanding for diluted earnings per share for fiscal 2026, 18 shares were excluded for fiscal 2025, and 33 shares were excluded for fiscal 2024.

17 unchanged sentences

BUSINESS ACQUISITION

On August 31, 2022 , the Company acquired all of the equity interest in 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 purchase price adjustments, and $ 46,000 for indemnification matters under the merger agreement, which amount was released to the sellers on September 20, 2023.

The primary reason for the acquisition was to expand the Company's digital financial management solutions and the purchase was originally funded by our revolving line of credit (Note 7) 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.

Victor Technologies, Inc.

On September 30, 2025 , the Company acquired substantially all the assets of Victor Technologies, Inc.

("Victor") for $ 42,390 paid in cash.

The primary reason for the acquisition was to expand the Company's capabilities in the Payments-as-a-Service market.

Victor is a cloud-native, API-first provider of direct-to-core embedded payments solutions.

Management has completed a purchase price allocation and assessment of the fair value of acquired assets and liabilities assumed.

The recognized amounts of identifiable assets acquired, and liabilities assumed, based on their fair values as of August 31, 2022 , and taking into account the post-closing purchase price adjustment described above, are set forth below:

The recognized amounts of identifiable assets acquired, and liabilities assumed, based on their fair values as of September 30, 2025 , are set forth below:

Current assets $ 1,866

Identifiable intangible assets 18,800

Deferred revenue ( 8,104 )

Total other liabilities assumed ( 749 )

Total liabilities assumed

Total identifiable net assets 19,447

1 unchanged sentence

Net assets acquired $ 42,390

The goodwill of $ 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 Payrailz, together with the value of Payrailz's assembled workforce.

The amounts shown above include a measurement period adjustment made during the second quarter of fiscal 2026, which resulted in an adjustment to the amount recorded for goodwill.

The goodwill of $ 22,943 arising from this acquisition consists largely of the growth potential, synergies, and economies of scale expected from combining the operations of the Company with the acquired operations of Victor, together with the value of Victor's assembled workforce.

The goodwill from this acquisition has been allocated to our Payments segment and $ 22,943 is deductible for income tax purposes.

Identifiable intangible assets from this acquisition consist of customer relationships of $ 2,700 , computer software of $ 15,300 , and other intangible assets of $ 800 .

The amortization period for acquired customer relationships, computer software, and other intangible assets is over a term of 15 years, 10 years, and 15 years, respectively.

Current assets were inclusive of cash acquired of $ 577 .

The amortization period for acquired customer relationships, computer software, and other intangible assets is over a term of 10 years.

The fair value of current assets acquired included accounts receivable of $ 1,866 , none of which were expected to be uncollectible.

Costs incurred related to the acquisition of Victor were immaterial for the fiscal year ended June 30, 2026.

The accompanying consolidated statements of income for the fiscal year ended June 30, 2026, 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.

REPORTABLE SEGMENT INFORMATION

1 unchanged sentence

The Company’s operations are classified into four reportable segments:

Core, Payments, Complementary, and Corporate and Other.

Core, Payments, Complementary, and Corporate Services.

Prior to the third quarter of fiscal 2026, Corporate Services was referred to as 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 accountholder information.

The Payments segment provides secure payment processing tools and services, including ATM, debit and credit card processing services, online and mobile bill pay solutions, Automated Clearing House ("ACH") origination and remote deposit capture processing, and risk management products and services.

The Payments segment provides secure payment processing tools and services, including ATM, debit, and credit card processing services, online and mobile bill pay solutions, money movement and embedded payment capabilities, remote deposit capture processing, and risk management products and services.

The Complementary segment provides additional software, hosted processing platforms, and services, including digital/mobile banking, treasury services, online account opening, fraud/anti-money laundering (“AML”) and lending/deposit solutions that can be integrated with the Company's Core solutions, and many can be used independently.

The Corporate and Other segment includes revenue and costs from hardware and other products not attributed to any of the other three segments, as well as operating expenses not directly attributable to the other three segments.

based on various factors, including performance against trend, budget, and forecast for the fiscal years ended June 30, 2025 , 2024, and 2023.

The CODM used reportable segment revenue, costs of revenue, and segment income to evaluate segment performance and allocate resources.

The Corporate Services segment includes revenue and direct costs from hardware and other products and services and our technology infrastructure costs.

The Company's Chief Executive Officer, who is also the Company's chief operating decision maker ("CODM"), regularly evaluated segment performance and made strategic decisions on the allocation of resources to them based on various factors, including performance against trend, budget, and forecast for the fiscal years ended June 30, 2026 , 2025, and 2024.

The CODM also used reportable segment revenue, costs of revenue, and segment income to evaluate segment performance and allocate resources.

The Company has not disclosed any additional asset information by segment, as the information is not generated for internal management reporting to the CODM.

Immaterial adjustments between segments were made in fiscal 2025 to reclassify cost of revenue that was recognized in fiscal years 2024 and 2023.

These reclasses were made to be consistent with the current allocation of cost of revenue by segment.

Cost of revenue reclassed for the fiscal year ended June 30, 2024, from Complementary to Corporate and Other, was $ 4,922 .

Cost of revenue reclassed for the fiscal year ended June 30, 2023, from Core and Complementary to Corporate and Other, was $ 64 and $ 5,206 , respectively.

During the fiscal year ended June 30, 2026, the Company realigned a product from the Corporate Services segment to the Complementary segment.

As a result of this realignment, adjustments were made during the fiscal year ended June 30, 2026, to reclassify related revenue and cost of revenue recognized for the fiscal years ended June 30, 2025 and 2024, from the Corporate Services segment to the Complementary segment.

Revenue reclassed for the fiscal years ended June 30, 2025 and 2024, was $ 13,209 and $ 12,402 , respectively .

Cost of revenue reclassed for the fiscal years ended June 30, 2025 and 2024, was $ 2,970 and $ 2,840 , respectively.

Immaterial adjustments have been made between segments during the fiscal year ended June 30, 2026, to reclassify revenue and cost of revenue that was recognized for the fiscal years ended June 30, 2025 and 2024.

These reclasses were made to be consistent with the current allocation of revenue and cost of revenue by segment.

Revenue reclassed for the fiscal years ended June 30, 2025 and 2024, from the Core segment to the Complementary segment, was $ 6,353 and $ 5,471 , respectively.

Revenue reclassed for the fiscal year ended June 30, 2024, from the Core segment to the Corporate Services segment, was $ 5 .

Cost of revenue reclassed for the fiscal years ended June 30, 2025 and 2024, from the Core segment to the Complementary segment, was $ 1,864 and $ 1,768 , respectively.

Cost of revenue reclassed for the fiscal years ended June 30, 2025 and 2024, from the Core segment to the Corporate Services segment, was $ 269 and $ 277 , respectively.

June 30, 2026

Core Payments Complementary Corporate and Other Total

Core Payments Complementary Corporate Services Total

Services and Support $ 722,703 $ 100,157 $ 552,755 $ 72,388 $ 1,448,003

7 unchanged sentences

OPERATING INCOME 635,033

INTEREST INCOME (EXPENSE) 17,321

INTEREST INCOME 17,757

INCOME BEFORE INCOME TAXES $ 652,790

June 30, 2025

Core Payments Complementary Corporate and Other Total

Core Payments Complementary Corporate Services Total

Services and Support $ 690,731 $ 93,480 $ 514,888 $ 62,638 $ 1,361,737

7 unchanged sentences

OPERATING INCOME 568,715

INTEREST INCOME (EXPENSE) 8,628

INTEREST INCOME 17,321

INCOME BEFORE INCOME TAXES $ 586,036

June 30, 2024

Core Payments Complementary Corporate and Other Total

Core Payments Complementary Corporate Services Total

Services and Support $ 643,693 $ 84,655 $ 479,701 $ 67,905 $ 1,275,954

7 unchanged sentences

OPERATING INCOME 489,391

INTEREST INCOME (EXPENSE) ( 6,114 )

INTEREST INCOME 8,628

INCOME BEFORE INCOME TAXES $ 498,019

1 unchanged sentence

On August 21, 2026 , the Company's Board of Directors declared a cash dividend of $ 0.61 per share on its common stock, payable on September 23, 2026 , to stockholders of record on September 7, 2026 .

Line of Credit

On July 18, 2025 , the Company entered into a new unsecured committed revolving line of credit facility with a commercial bank in the amount of $ 50,000 , which bears interest at the prime rate less 1.0 %.

The line of credit expires on July 17, 2026 .

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES

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 8. Financial Statements and Supplementary Data