Jack Henry & Associates Inc "Management meeting takeaways" (Neutral) Chiodo

Research evidence excerpt

Jack Henry & Associates Inc "Management meeting takeaways" (Neutral) Chiodo

FY 2028 more than FY 2027. Within the Core segment, management is seeing elevated

core opportunities coming to market from Fiserv (as a result of the ongoing core

consolidation) and feel comfortable that they will achieve an incremental ~15 core wins

next year in excess of the typical ~50+ cadence. Looking ahead, the company expects

FY 2028 to be the culmination of various longer-term growth drivers, including

incremental core conversions, the company's SMB initiatives gaining traction (Tap2Local

and Rapid Transfers), and faster payments (PayCenter, supporting Zelle, RTP, FedNow),

and expects to provide more details at its Investor Day in September. In summary, while

FY 2027 has a few considerations, FY 2028 is expected to be a stronger year for Jack

Henry (combination of core wins and SMB Payments revenue ramping).

AI and core switching costs/timelines: Related to potential benefits from AI on core

migration costs/timelines, management noted that the key challenge with a core

conversion is change management and training (e.g., every teller process changes with a

core conversion), which cannot be entirely resolved with AI. AI can potentially help with

this process, for example, by rewriting procedure documentation or more indirectly by

reducing headcount and lowering training needs, but the bottleneck remains client

readiness and the limits of what banks can absorb operationally (as well as pipeline

delays from contract lock-ins). That said, the company noted AI could potentially lead to

faster implementations overall, partly via a compressed product rollout sequence (e.g., if

a bank initially takes Core and Payments, could add additional product more quickly,