Jack Henry & Associates reports $160.41 million net income for fiscal Q1 2027

Cover page 17 changes

2 unchanged paragraphs

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended June 30 , 2026

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

For the quarterly period ended September 30, 2026

10 unchanged paragraphs

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.

2 unchanged paragraphs

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

4 unchanged paragraphs

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

1 unchanged paragraph

On December 31, 2025, the aggregate market value of the Common Stock held by persons other than those who may be deemed affiliates of Registrant was $ 13,092,756,060 (based on the closing stock price on Nasdaq on December 31, 2025).

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Company's Proxy Statement for its 2026 Annual Meeting of Stockholders (the "Proxy Statement") are incorporated by reference into Part III of this Report to the extent stated herein. Such Proxy Statement will be filed with the Securities and Exchange Commission ("SEC") within 120 days of the Company's fiscal year ended June 30, 2026.

As of August 12, October 23, 2026, the Registrant had 70,112,608 69,618,713 shares of Common Stock outstanding ($0.01 par value).

PART I FINANCIAL INFORMATION

Forward-looking statements 2 changes

Certain statements in this report, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives and expected operating results, and the assumptions upon which those statements are based, are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"). Forward-looking statements may appear throughout this report, including without limitation, in Management's Discussion and Analysis of Financial Condition and Results of Operations. Forward-looking statements generally are identified by the words "believe," "project," "expect," "seek," "anticipate," "estimate," "future," "intend," "plan," "strategy," "predict," "likely," "should," "will," "would," "could," "can," "may," and similar expressions. Forward-looking statements are based only on management's current beliefs, expectations and assumptions regarding the future of the Company, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Such risks and uncertainties include, but are not limited to, those discussed in this Quarterly Report on Form 10-Q, those discussed in our Annual Report on Form 10-K for the fiscal year ended June 30, 2026, in particular, those included in Item 1A, "Risk Factors" of this such report, and those discussed in other documents we file with the Securities and Exchange Commission ("SEC"). Any forward-looking statement made in this report speaks only as of the date of this report, and the Company expressly disclaims any obligation to publicly update or revise any forward-looking statement, whether because of new information, future events or otherwise.

PART I. FINANCIAL INFORMATION

Financial statements 141 changes

Years Ended June 30, 2026, 2025, and 2024 41

June 30, 2026, and 2025 42

Years Ended June 30, 2026, 2025, and 2024 43

Years Ended June 30, 2026, 2025, and 2024 44

JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(In Thousands, Except Share and Per Share Data)

Cash and cash equivalents $ 25,356 $ 12,056

Receivables, net 345,823 349,111

Income tax receivable — 6,899

Prepaid expenses and other 213,459 193,488

Deferred costs 90,841 78,369

Assets held for sale 8,996 9,172

Total current assets 684,475 649,095

PROPERTY AND EQUIPMENT, net 231,257 220,470

Non-current deferred costs 236,099 226,853

Computer software, net of amortization 665,292 656,288

Other non-current assets 491,908 504,884

Customer relationships, net of amortization 40,406 42,419

Other intangible assets, net of amortization 17,571 17,962

Goodwill 827,740 827,740

Total other assets 2,279,016 2,276,146

Total assets $ 3,194,748 $ 3,145,711

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:

Accounts payable $ 25,029 $ 34,935

Accrued expenses 194,433 226,541

Accrued income taxes 27,545 —

Deferred revenues 250,773 294,763

Total current liabilities 497,780 556,239

LONG-TERM LIABILITIES:

Non-current deferred revenues 81,974 77,709

Deferred income tax liability 377,412 366,058

Other long-term liabilities 52,939 53,756

Total long-term liabilities 597,325 537,523

Total liabilities 1,095,105 1,093,762

STOCKHOLDERS' EQUITY

Preferred stock - $ 1 par value; 500,000 shares authorized, none issued

Common stock - $ 0.01 par value; 250,000,000 shares authorized;

104,707,947 shares issued at September 30, 2026;

104,597,621 shares issued at June 30, 2026

Additional paid-in capital 690,087 689,135

Retained earnings 3,822,809 3,705,165

Less treasury stock at cost

34,988,861 shares at September 30, 2026;

34,526,862 shares at June 30, 2026

Total stockholders' equity 2,099,643 2,051,949

Total liabilities and equity $ 3,194,748 $ 3,145,711

See notes to condensed consolidated financial statements.

JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(In Thousands, Except Per Share Data)

REVENUE $ 701,547 $ 644,738

Cost of Revenue 376,046 348,566

Research and Development 45,781 39,278

Selling, General, and Administrative 72,649 72,829

Total Expenses 494,476 460,673

OPERATING INCOME 207,071 184,065

Interest Income 5,092 7,139

Interest Expense ( 1,528 ) ( 886 )

Total Interest Income

INCOME BEFORE INCOME TAXES 210,635 190,318

PROVISION FOR INCOME TAXES 50,223 46,332

NET INCOME $ 160,412 $ 143,986

Basic earnings per share $ 2.29 $ 1.98

Basic weighted average shares outstanding 70,054 72,751

Diluted earnings per share $ 2.28 $ 1.97

Diluted weighted average shares outstanding 70,262 72,909

See notes to condensed consolidated financial statements.

JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited)

(In Thousands, Except Share and Per Share Data)

PREFERRED SHARES: — —

Shares, beginning of period 104,597,621 104,415,989

Shares issued for equity-based payment arrangements 84,523 72,784

Shares issued for Employee Stock Purchase Plan 25,803 24,084

Shares, end of period 104,707,947 104,512,857

COMMON STOCK - PAR VALUE $0.01 PER SHARE:

Balance, beginning of period $ 1,046 $ 1,044

Shares issued for equity-based payment arrangements 1 1

and 61 more changes in the filing

Notes to the financial statements 164 changes

Financial Statement Schedules

There are no schedules included because they are not applicable, or the required information is shown in the consolidated financial statements or notes thereto.

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Jack Henry & Associates, Inc.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Jack Henry & Associates, Inc. and its subsidiaries (the "Company") as of June 30, 2026 and 2025, and the related consolidated statements of income, of changes in stockholders' equity and of cash flows for each of the three years in the period ended June 30, 2026, including the related notes (collectively referred to as the "consolidated financial statements"). We also have audited the Company's internal control over financial reporting as of June 30, 2026, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of June 30, 2026 and 2025, and the results of its operations and its cash flows for each of the three years in the period ended June 30, 2026 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 30, 2026, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

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. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue Recognition – estimating variable consideration

As described in Notes 1 and 2 to the consolidated financial statements, the Company recorded revenue of $2.544 billion for the year ended June 30, 2026. The Company enters into contracts with its clients that may include multiple types of goods and services. The amount of revenue recognized is based on the consideration the Company expects to receive in exchange for transferring goods and services to the client. The Company's contracts with its clients frequently contain some component of variable consideration. Management estimates variable consideration in its contracts primarily using the expected value method, based on both historical and current information. Where appropriate, the Company may constrain the estimated variable consideration included in the transaction price in the event of a high degree of uncertainty as to the final consideration amount. At contract inception, management assesses the solutions and services promised in its contracts with clients and identifies a performance obligation for each promise to transfer to the client a solution or service (or bundle of solutions or services) that is distinct - that is, if the solution or service is separately identifiable from other items in the arrangement and if the client can benefit from the solution or service on its own or together with other resources that are readily available. The Company recognizes revenue when or as it satisfies each performance obligation by transferring control of a solution or service to the client. Significant judgment is used in the estimate of variable consideration of client contracts that are long-term and include varying transactional volumes.

The principal considerations for our determination that performing procedures relating to the estimation of variable consideration is a critical audit matter are significant judgment by management to estimate the variable consideration, principally, the varying volume of transactional activity. This in turn resulted in a high degree of auditor judgment, subjectivity, and effort in performing our audit procedures and in evaluating the audit evidence obtained.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the revenue recognition process, including the estimation of variable consideration. These procedures also included, among others, evaluating and testing management's process for determining the variable consideration and testing the reasonableness of management's estimation of variable consideration. Testing the estimation of variable consideration included evaluating the terms and conditions of the long-term contracts and the related significant assumptions used in the estimate of the variable consideration, principally, the use of historical transaction volumes to estimate the varying volume of transactional activity. The procedures for testing variable consideration included evaluation of the terms and conditions for a sample of contracts.

/s/ PricewaterhouseCoopers LLP

Kansas City, Missouri

We have served as the Company's auditor since 2015.

MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The management of Jack Henry & Associates, Inc. is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(e). The Company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company's consolidated financial statements for external reporting purposes in accordance with U.S. GAAP.

The Company's internal control over financial reporting includes policies and procedures pertaining to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets of the Company; provide reasonable assurance transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with U.S. GAAP, and receipts and expenditures of the Company are being made only in accordance with authorizations of management and the directors of the Company; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company's assets that could have a material effect on the Company's consolidated financial statements. All internal controls, no matter how well designed, have inherent limitations. Therefore, even where internal control over financial reporting is determined to be effective, it can provide only reasonable assurance. Projections of any evaluation of effectiveness to future periods are subject to the risk controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

As of June 30, 2026, management conducted an assessment of the effectiveness of the Company's internal control over financial reporting based on the framework established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Based on this assessment, management has concluded the Company's internal control over financial reporting as of June 30, 2026, was effective.

The Company's internal control over financial reporting as of June 30, 2026, has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report appearing in this Item 8.

JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

REVENUE $ 2,544,339 $ 2,375,288 $ 2,215,543

Cost of Revenue 1,433,651 1,360,747 1,299,477

Research and Development 176,445 162,771 148,256

Selling, General, and Administrative 299,210 283,055 278,419

Total Expenses 1,909,306 1,806,573 1,726,152

OPERATING INCOME 635,033 568,715 489,391

Interest Income 23,144 27,759 25,012

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

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

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

PROVISION FOR INCOME TAXES 150,014 130,288 116,203

NET INCOME $ 502,776 $ 455,748 $ 381,816

Basic earnings per share $ 7.00 $ 6.25 $ 5.24

Basic weighted average shares outstanding 71,866 72,874 72,867

Diluted earnings per share $ 6.98 $ 6.24 $ 5.23

Diluted weighted average shares outstanding 72,043 73,045 73,025

See notes to consolidated financial statements.

JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In Thousands, Except Share and Per Share Data)

Cash and cash equivalents $ 12,056 $ 101,953

Receivables, net 349,111 317,977

Income tax receivable 6,899 —

Prepaid expenses and other 193,488 180,151

Deferred costs 78,369 75,777

Assets held for sale 9,172 5,606

Total current assets 649,095 681,464

PROPERTY AND EQUIPMENT, net 220,470 220,964

Non-current deferred costs 226,853 207,861

Computer software, net of amortization 656,288 617,029

Other non-current assets 504,884 443,624

Customer relationships, net of amortization 42,419 48,440

Other intangible assets, net of amortization 17,962 19,791

Goodwill 827,740 804,797

Total other assets 2,276,146 2,141,542

Total assets $ 3,145,711 $ 3,043,970

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:

Accounts payable $ 34,935 $ 28,186

Accrued expenses 226,541 207,434

Accrued income taxes

Deferred revenues 294,763 290,485

Total current liabilities 556,239 535,784

LONG-TERM LIABILITIES:

Non-current deferred revenues 77,709 72,889

Deferred income tax liability 366,058 240,026

Other long-term liabilities 53,756 64,439

Total long-term liabilities 537,523 377,354

Total liabilities 1,093,762 913,138

STOCKHOLDERS' EQUITY

Preferred stock - $ 1 par value; 500,000 shares authorized, none issued

and 84 more changes in the filing

Note 1: NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 61 changes

1 unchanged paragraph

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

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

The Company enters into contracts with clients that may include multiple types of goods and services. At contract inception, the Company assesses the solutions and services promised in its contracts with clients and identifies a performance obligation for each promise to transfer to the client a solution or service (or bundle of solutions or services) that is distinct - that is, if the solution or service is separately identifiable from other items in the arrangement and if the client can benefit from the solution or service on its own or together with other resources that are readily available. Judgment is used in the identification and accounting for all performance obligations.

Determination of transaction price

The amount of revenue recognized is based on the consideration the Company expects to receive in exchange for transferring goods and services to the client. The Company's contracts with its clients frequently contain some component of variable consideration. The Company estimates variable consideration in its contracts primarily using the expected value method, based on both historical and current information. Where appropriate, the Company may constrain the estimated variable consideration included in the transaction price in the event of a high degree of uncertainty as to the final consideration amount. Significant judgment is used in the estimate of variable consideration of client contracts that are long-term and include varying transactional volumes.

Allocation of transaction price

The transaction price, once determined, is allocated between the various performance obligations in the contract based upon their relative standalone selling prices. The standalone selling prices are determined based on the prices at which the Company separately sells each good or service. For items that are not sold separately, the Company estimates the standalone selling prices using all information that is reasonably available, including reference to historical pricing data.

COMPUTER SOFTWARE DEVELOPMENT

The Company capitalizes new product development costs incurred for software to be sold from the point at which technological feasibility has been established through the point at which the product is ready for general availability. Software development costs that are capitalized are evaluated on a product-by-product basis annually for impairment and are assigned an estimated economic life based on the type of product, market characteristics, and maturity of the market for that particular product. These costs are amortized based on current and estimated future revenue from the product or on a straight-line basis, whichever yields greater amortization expense.

The Company capitalizes development costs for internal use software beginning at the start of application development. Amortization begins on the date the software is placed in service and the amortization period is based on estimated useful life. 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.

The Company considers all highly liquid investments with maturities of three months or less at the time of acquisition to be cash equivalents.

Receivables are recorded at the time of billing. The Company monitors trade and other receivable balances and contract assets and estimates the allowance for lifetime expected credit losses. Estimates of expected credit losses are based on historical collection experience and other factors, including those related to current market conditions and events.

The following table summarizes allowance for credit losses activity for the fiscal years ended June 30, 2026, and 2025:

Allowance for credit losses - beginning balance $ 6,659 $ 7,477

Current provision for expected credit losses 1,920 2,320

Write-offs charged against allowance ( 2,250 ) ( 2,977 )

Other ( 68 ) ( 161 )

Allowance for credit losses - ending balance $ 6,261 $ 6,659

PROPERTY AND EQUIPMENT AND INTANGIBLE ASSETS

Property and equipment is stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets.

Intangible assets consist of goodwill, customer relationships, computer software, and trade names acquired in business acquisitions in addition to internally developed computer software. The amounts are amortized, with the exception of those with an indefinite life (goodwill), over an estimated economic benefit period, generally three to twenty years.

The Company reviews its long-lived assets and identifiable intangible assets with finite lives for impairment whenever events or changes in circumstances have indicated that it is more likely than not that the carrying amount of its assets might not be recoverable. The Company evaluates goodwill for impairment of value on an annual basis as of January 1 and between annual tests if events or changes in circumstances indicate that it is more likely than not that the asset might be impaired.

PURCHASE OF 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. The fair values of these investments have not been estimated, as estimation is not practicable due to limited investors which reduces available comparative information. There have been no events or changes in circumstances that would indicate an impairment and no price changes resulting from observing similar or identical investments. An impairment and/or an observable price change would be an adjustment to recorded cost. Fair values will not be estimated unless there are identified events or changes in circumstances that may have a significant effect on the fair values of the investments. Equity transactions are monitored quarterly to assess whether there are indicators that fair value may be below carrying value.

Jack Henry & Associates, Inc. and subsidiaries ("Jack Henry," or the "Company") is a well-rounded financial technology company. Jack Henry 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 approximately 7,200 banks, credit unions, and diverse corporate entities.

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

1 unchanged paragraph

REPORTABLE SEGMENT INFORMATION

In accordance with U.S. GAAP, the Company's operations are classified as four reportable segments: 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.

Per share information is based on the weighted average number of common shares outstanding during the year. Stock options, restricted stock units, and performance units have been included in the calculation of income per diluted share to the extent they are dilutive. The difference between basic and diluted weighted average shares outstanding is the dilutive effect of outstanding stock options, restricted stock units, and performance units (see Note 11).

RECENT ACCOUNTING PRONOUNCEMENTS

Recently Adopted Accounting Guidance

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which enhances the transparency and decision usefulness of income tax disclosures. The ASU requires additional disclosure related to rate reconciliation, income taxes paid, and other disclosures to improve the effectiveness of income tax 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. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires more detailed disclosures of certain categories of expenses such as employee compensation, depreciation, and intangible asset amortization that are components of existing expense captions presented on the face of the consolidated statements of income. The ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. 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.

Comprehensive income for each of the fiscal years ending June three months ended September 30, 2026, 2025, and 2024, 2025, equals the Company's net income.

Allowance for Credit Losses

The Company monitors trade and other receivable balances and contract assets and estimates the allowance for lifetime expected credit losses. Estimates of expected credit losses are based on historical collection experience and other factors, including those related to current market conditions and events.

The following table summarizes allowance for credit losses activity for the fiscal three months ended September 30, 2026, and 2025:

Three Months Ended September 30,

Allowance for credit losses - beginning balance $ 6,261 $ 6,659

Current provision for expected credit losses 480 480

Write-offs charged against allowance ( 250 ) ( 335 )

Allowance for credit losses - ending balance $ 6,491 $ 6,804

Property and Equipment

Property and equipment is recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets. Accumulated depreciation at September 30, 2026, totaled $ 442,499 and at June 30, 2026, totaled $ 439,201 .

At September 30, 2026, and June 30, 2026, held for sale assets consisted of a facility with a carrying value of approximately $ 8,996 and $ 9,172 , respectively, which was included in assets held for sale on the Company's condensed consolidated balance sheets and was not included in property and equipment, net.

Intangible assets consist of goodwill, customer relationships, computer software, and trade names acquired in business acquisitions in addition to internally developed computer software. The amounts are amortized, with the exception of those intangible assets with an indefinite life (such as goodwill), over an estimated economic benefit period, generally 3 to 20 years. Accumulated amortization of intangible assets totaled $ 1,614,496 and $ 1,569,922 at September 30, 2026, and June 30, 2026, respectively.

Purchase of Investments

At September 30, 2026, and June 30, 2026, the Company had $ 33,460 in non-current investments. These investments were recorded at cost and are included within other non-current assets on the Company's condensed consolidated balance sheets. There have been no events or changes in circumstances that would indicate an impairment and no price changes resulting from observing a similar or identical investment. An impairment and/or an observable price change would be an adjustment to recorded cost. Fair values will not be estimated unless there are identified events or changes in circumstances that may have a significant effect on the fair values of the investments.

The Board of Directors has authorized the Company to repurchase shares of its common stock. Under this authorization, the Company may finance its share repurchases with available cash reserves or short-term borrowings on its existing credit facilities. 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 September 30, 2026, there were 34,527 34,989 shares in treasury stock and the Company had the remaining authority to repurchase up to 5,464 5,002 additional shares. of its common stock. The total cost of treasury shares stock at June September 30, 2026, was $ 2,343,397 2,414,300 . During the first three months of fiscal 2026, 2027, the Company repurchased 2,947 462 shares. of its common stock for $ 448,173 to be held in treasury. At June 30, 2025, 2026, there were 31,580 34,527 shares in treasury stock and the Company had the remaining authority to repurchase up to 3,411 5,464 additional shares. The total cost of its common treasury stock at June 30, 2026, was $ 2,343,397 . During the first three months of fiscal 2026, the Company repurchased 389 shares.

Deferred tax liabilities and assets are recognized for the tax effects of differences between the financial statement and tax bases basis of assets and liabilities. A valuation allowance would be established to reduce deferred tax assets if it is more likely than not that a deferred tax asset will not be realized.

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

Interim Financial Statements

The accompanying condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q of the SEC and in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") applicable to interim condensed consolidated financial statements, and do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete consolidated financial statements. The condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements and accompanying notes, which are included in its Annual Report on Form 10-K ("Form 10-K") for the fiscal year ended June 30, 2026.

In the opinion of the management of the Company, the accompanying unaudited condensed consolidated financial statements reflect all adjustments necessary (consisting of normal recurring adjustments) to state fairly in all material respects the financial position of the Company as of September 30, 2026, the results of its operations for the fiscal three months ended September 30, 2026 and 2025, changes in stockholders' equity for the fiscal three months ended September 30, 2026 and 2025, and its cash flows for the fiscal three months ended September 30, 2026 and 2025. The condensed consolidated balance sheet at June 30, 2026, was derived from audited annual financial statements, but does not contain all of the footnote disclosures from the annual financial statements.

The results of operations for the fiscal three months ended September 30, 2026, are not necessarily indicative of the results to be expected for the entire fiscal year.

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

Significant Accounting Policies

The accounting policies followed by the Company are set forth in Note 1 to the Company's consolidated financial statements included in its Form 10-K for the fiscal year ended June 30, 2026. For the fiscal three months ended September 30, 2026, there have been no new or material changes to the significant accounting policies discussed in the Company's Form 10-K for the fiscal year ended June 30, 2026, that are of significance, or potential significance, to the Company.

Note 3: REVENUE AND DEFERRED COSTS 38 changes

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

The following describes the nature of the Company's primary types of revenue:

Processing revenue is generated from transaction-based fees for electronic deposit and payment services, electronic funds transfers and debit and credit card processing. The Company's arrangements for these services typically require the Company to "stand-ready" to provide specific services on a when and if needed basis by processing an unspecified number of transactions over the contractual term. The fees for these services may be fixed or variable (based upon performing an unspecified quantity of services), and pricing may include tiered pricing structures. Amounts of revenue allocated to these services are recognized as those services are performed. Clients are typically billed monthly for transactions processed during the month. The Company evaluates tiered pricing to determine if a material right exists. If, after that evaluation, it determines a material right does exist, it assigns value to the material right based upon standalone selling price after estimation of breakage associated with the material right.

Private and public cloud

Private and public cloud revenue is generated from data and item processing services and hosting fees. The Company's arrangements for these services typically require the Company to "stand-ready" to provide specific services on a when and if needed basis. The fees for these services may be fixed or variable (based upon performing an unspecified quantity of services), and pricing may include tiered pricing structures. Amounts of revenue allocated to these services are recognized as those services are performed. Data and item processing services are typically billed monthly. The Company evaluates tiered pricing to determine if a material right exists. If, after that evaluation, it determines a material right does exist, it assigns value to the material right based upon standalone selling price.

Product delivery and services

Product delivery and services revenue is generated primarily from software licensing and related professional services and hardware delivery. Software licenses, along with any professional services from which they are not considered distinct, are recognized as they are delivered to the client. Hardware revenue is recognized upon delivery. Professional services that are distinct are recognized as the services are performed.

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 revenue is generated from software maintenance for ongoing client support and software usage, which includes a license and ongoing client support. The Company's arrangements for these services typically require the Company to "stand-ready" to provide specific services on a when and if needed basis. The fees for these services may be fixed or variable (based upon performing an unspecified quantity of services). Software maintenance fees are typically billed to the client annually in advance and recognized ratably over the maintenance term. Software usage is typically billed annually in advance, with the license delivered and recognized at the outset, and the maintenance fee recognized ratably over the maintenance term. Accordingly, the Company utilizes the practical expedient which allows entities to disregard the effects of a financing component when the contract period is one year or less.

Taxes collected from clients and remitted to governmental authorities are not included in revenue. The Company includes reimbursements from clients for expenses incurred in providing services (such as for postage, travel and telecommunications costs) in revenue, while the related costs are included in cost of revenue.

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

1 unchanged paragraph

Private and Public Cloud $ 816,097 $ 756,879 $ 682,146

Product Delivery and Services 295,076 251,730 238,723

On-Premise Support 336,830 353,128 355,085

Services and Support 1,448,003 1,361,737 1,275,954

Processing 1,096,336 1,013,551 939,589

Total Revenue $ 2,544,339 $ 2,375,288 $ 2,215,543

The tables table below present presents the Company's revenue disaggregated by type of revenue. Refer to Note 14 – 11, Reportable Segment Information, for disaggregated revenue by type and reportable segment. The majority of the Company's revenue is earned domestically, with revenue from clients outside the United States comprising less than 1% of total revenue.

Three Months Ended September 30,

Cloud Services* $ 217,701 $ 195,609

Product Delivery and Services 80,123 75,811

On-Premise Support 107,137 105,431

Services and Support 404,961 376,851

Processing 296,586 267,887

Total Revenue $ 701,547 $ 644,738

*Formerly referred to as "Private and Public Cloud". The Company changed the name of the type of revenue to Cloud Services beginning in the first quarter of fiscal 2027 to simplify presentation and improve clarity. This change does not represent any change to the products or services offered by the Company or to previously reported financial results, and prior period amounts are presented on a consistent basis.

1 unchanged paragraph

Receivables, net $ 349,111 $ 317,977

Receivables, net $ 345,823 $ 349,111

Contract Assets - Current 39,580 40,331

Contract Assets - Non-current 132,731 138,202

Contract Liabilities (Deferred Revenue) - Current 250,773 294,763

Contract Liabilities (Deferred Revenue) - Non-current 81,974 77,709

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 These amounts are included in contract assets; the current portion is reported within prepaid expenses and other in the condensed 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.

1 unchanged paragraph

For the fiscal years three months ended June September 30, 2026, 2025, and 2024, 2025, the Company recognized revenue of $ 228,518 , $ 252,710 , 86,567 and $ 270,241 89,398 , respectively, that was included in the corresponding deferred revenue balance at the beginning of the periods.

2 unchanged paragraphs

As of June September 30, 2026, estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period totaled $ 8,440,905 8,422,972 . The Company expects to recognize approximately 23 % over the next 12 months, 18 19 % in 13 - 24 13-24 months, and the balance thereafter.

The Company incurs incremental costs to obtain a contract as well as costs to fulfill contracts with clients that are expected to be recovered. These costs consist primarily of sales commissions, which are incurred only if a contract is obtained, and client conversion or implementation-related 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 condensed 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 condensed 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. Capitalized contract costs as of June September 30, 2026, and 2025, June 30, 2026, were as follows:

2 unchanged paragraphs

1 Includes current and non-current capitalized costs of $ 74,596 76,140 and $ 226,925 223,366 at June September 30, 2026, respectively, and $ 82,441 74,596 and $ 185,285 226,925 at June 30, 2025, 2026, respectively.

During For the fiscal years three months ended June September 30, 2026, 2025, and 2024, 2025, amortization of capitalized deferred contract costs totaled $ 195,671 , $ 192,439 , 51,223 and $ 175,029 47,182 , respectively. There were no impairment losses in relation to capitalized costs for the periods presented.

Note 4: FAIR VALUE OF FINANCIAL INSTRUMENTS 5 changes

8 unchanged paragraphs

Certificates of Deposit $ — $ 6,638 $ — $ 6,638

Financial Liabilities:

Credit facilities $ — $ 85,000 $ — $ 85,000

3 unchanged paragraphs

Certificates of Deposit $ — $ 4,620 $ — $ 4,620

Financial Liabilities:

Note 5: LEASES 15 changes

The Company determines if an arrangement is a lease, or contains a lease, at inception. The lease term begins on the commencement date, which is the date the Company takes possession of the property and may include options to extend or terminate the lease when it is reasonably certain that the option will be exercised. 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.

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.

The Company determines if an arrangement is a lease, or contains a lease, at inception. The lease term begins on the commencement date, which is the date the Company takes possession of the property and may include options to extend or terminate the lease when it is reasonably certain that the option will be exercised. Right-of-use ("ROU") assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. As a practical expedient, Lease agreements with lease and non-lease components are accounted for as a single lease component for all asset classes, which are comprised of real estate leases and equipment leases. ROU assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. ROU assets also include prepaid lease payments and exclude lease incentives received. The Company estimates contingent lease incentives when it is probable that the Company is entitled to the incentive at lease commencement. Since the Company's leases do not typically provide an implicit rate, the Company uses its incremental borrowing rate based upon the information available at commencement date. for both real estate and equipment leases. The determination of the incremental borrowing rate requires judgment The Company determines the incremental borrowing rate and is determined by using the Company's current unsecured borrowing rate, adjusted for various factors such as collateralization and term to align with the terms of the lease. The Company elected the short-term lease recognition exemption for all leases that qualify. Therefore, leases with an initial term of 12 months or less are not recorded on the balance sheet; instead, lease payments are recognized as lease expense on a straight-line basis over the lease term.

The Company leases certain office space, data centers, and equipment The Company's leases have with remaining terms of 6 3 months to 7 years. Certain leases contain renewal options for varying periods, which are at the Company's sole discretion. For leases where the Company is reasonably certain to exercise a renewal option, such option periods have been included in the determination of the Company's ROU assets and lease liabilities. Certain leases require the Company to pay taxes, insurance, maintenance, and other operating expenses associated with the leased asset. Such amounts are not included in the measurement of the lease liability to the extent they are variable in nature. These Variable lease costs are recognized as a variable lease expense when incurred. Certain leases include options to purchase the leased asset at the end of the lease term, which is assessed as a part of the Company's lease classification determination. The depreciable life of the ROU asset and leasehold improvements are limited by the expected lease term unless the Company is reasonably certain of a transfer of title or purchase option.

At June September 30, 2026, and 2025, June 30, 2026, the Company had operating lease assets of $ 31,806 29,850 and $ 44,761 31,806 , respectively. At June September 30, 2026, total operating lease liabilities of $ 37,821 35,707 were comprised of current operating lease liabilities of $ 8,971 9,050 and noncurrent operating lease liabilities of $ 28,850 26,657 . At June 30, 2025, 2026, total operating lease liabilities of $ 51,187 37,821 were comprised of current operating lease liabilities of $ 9,397 8,971 and noncurrent operating lease liabilities of $ 41,790 28,850 .

Operating lease assets are included within other non-current assets , and operating lease liabilities are included with within accrued expenses (current portion) and other long-term liabilities (noncurrent portion) in the Company's condensed consolidated balance sheets. Operating lease assets were recorded net of accumulated amortization of $ 43,879 41,648 and $ 41,229 43,879 as of June September 30, 2026, and 2025, June 30, 2026, respectively.

Operating lease costs for the fiscal years three months ended June September 30, 2026, 2025, and 2024, 2025, were $ 11,017 , $ 11,420 , 2,414 and $ 10,598 2,769 , respectively. Total operating lease costs for the fiscal years ended June 30, 2026, 2025, and 2024, respective quarters included variable lease costs of $ 5,956 , $ 2,744 , 927 and $ 4,087 798 , 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 condensed consolidated statements of income.

For the fiscal three months ended September 30, 2026, and 2025, the Company had operating cash flows for payments on operating leases of $ 2,572 and $ 2,731 , and ROU assets obtained in exchange for operating lease liabilities of $ 103 and $ 0 , respectively.

As of June September 30, 2026, 2025, and 2024, June 30, 2026, the weighted-average remaining lease terms term for the Company's operating leases were 55 months, 69 was 52 months and 78 55 months, respectively, and the weighted-average discount rates were 2.85 %, 2.71 rate was 2.87 % and 2.70 2.85 %, respectively.

1 unchanged paragraph

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

1 unchanged paragraph

2027 (remaining period) $ 7,703

Total lease payments $ 41,611 39,147

Less: interest ( 3,790 3,440 )

Present value of lease liabilities $ 37,821 35,707

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

Note 6: DEBT 6 changes

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 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.

On March 25, 2026, the Company entered into a five-year, revolving, unsecured credit agreement that replaced the a prior credit agreement described below. that was entered into on August 31, 2022. 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 September 30, 2026, the Company was in compliance with all such covenants. The credit agreement terminates March 25, 2031 . There was $ 85,000 and $ 40,000 outstanding under the credit facility at September 30, 2026 and June 30, 2026, respectively.

1 unchanged paragraph

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.

1 unchanged paragraph

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

The Company paid interest of $ 1,309 and $ 979 during the fiscal three months ended September 30, 2026, and 2025, respectively.

Note 7: INCOME TAXES 71 changes

The provision for income taxes consists of the following:

Federal $ 2,696 $ 109,633 $ 93,890

State 21,286 24,151 23,222

Federal 117,316 ( 5,159 ) ( 1,615 )

State 8,716 1,663 706

The tax effects of temporary differences related to deferred taxes shown on the consolidated balance sheets were:

Deferred tax assets:

Contract and service revenues $ 25,410 $ 25,489

Expense reserves and accruals (bad debts and compensation)

Leasing liabilities 9,298 12,590

Developed software and research and development amortization — 14,244

Net operating loss and tax credit carryforwards 358 212

Other, net 1,821 2,503

Total gross deferred tax assets 60,449 72,060

Valuation allowance ( 213 ) ( 182 )

Net deferred tax assets 60,236 71,878

Deferred tax liabilities:

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

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 )

Leasing right-of-use assets ( 7,819 ) ( 11,010 )

Total gross deferred liabilities ( 426,294 ) ( 311,904 )

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

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:

U.S. 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:

Computed "expected" tax expense 21.0 % 21.0 %

Increase (reduction) in taxes resulting from:

State income taxes, net of federal income tax benefits 3.5 % 3.8 %

Research and development credit ( 2.2 ) % ( 2.6 ) %

Changes to prior year uncertain tax positions

Other (net) 0.2 % 0.5 %

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

U.S. federal $ 19,354

U.S. state and local:

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. Based on state tax rules which restrict utilization of these losses and tax credits, the Company believes it is more likely than not that $ 213 of these losses and tax credits will expire unutilized. 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.

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. At June 30, 2025, the Company had $ 21,723 of gross unrecognized tax benefits, $ 19,526 of which, if recognized, would affect its effective tax rate. 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 $ 3,999 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.

A reconciliation of the unrecognized tax benefits for the fiscal years ended June 30, 2026, 2025, and 2024, follows:

Unrecognized Tax Benefits

Balance at July 1, 2023 $ 12,005

Additions for current year tax positions 3,924

Additions for prior year tax positions 4,672

Reductions for prior year tax positions —

Reductions related to expirations of statute of limitations ( 1,524 )

Balance at June 30, 2024 19,077

Additions for current year tax positions 4,480

Additions for prior year tax positions 834

Reductions for prior year tax positions ( 27 )

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

Balance at June 30, 2025 21,723

Additions for current year tax positions 4,256

Additions for prior year tax positions 720

Reductions for prior year tax positions ( 82 )

Reductions related to expirations of statute of limitations ( 2,978 )

Balance at June 30, 2026 $ 23,639

The effective tax rate decreased for the fiscal three months ended September 30, 2026, compared to the fiscal three months ended September 30, 2025, with an effective tax rate of 23.8 % of income before income taxes, compared to 24.3 % in the prior fiscal year quarter. The decrease in the Company's effective tax rate was primarily attributable to purchased tax credit benefits recognized during the current period that were not present in the prior-year quarter, as well as differences in the tax effects of stock-based compensation between the two periods.

The Company paid income taxes, including purchased tax credits and net of refunds, of $ 2,906 and $ 16,316 in the fiscal three months ended September 30, 2026, and 2025, respectively.

At September 30, 2026, the Company had $ 24,708 of gross unrecognized tax benefits before interest and penalties, $ 22,168 of which, if recognized, would affect our effective tax rate. The Company had accrued interest and penalties of $ 5,707 related to uncertain tax positions at September 30, 2026.

The U.S. federal and state income tax returns for fiscal 2023 and all subsequent years remain subject to examination as of June September 30, 2026, under statute of limitations rules. In addition, certain U.S. state income tax returns remain subject to examination as of June September 30, 2026, under the statute of limitation limitations rules for fiscal 2016 through 2022. The Internal Revenue Service ("IRS") is currently conducting an examination of the Company's U.S. federal income tax returns return for the fiscal tax years 2023 2024, and through 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 prior fiscal year 2026. and as of June September 30, 2026, these examinations are this examination is still ongoing. and The Company does not anticipate expect any findings that would be material to the consolidated financial statements. findings as a result of this examination.

Note 8: STOCK-BASED COMPENSATION 34 changes

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 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 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 .

Our operating income for the fiscal three months ended September 30, 2026, and 2025, included $ 4,914 and $ 6,317 of stock-based compensation costs, respectively.

2 unchanged paragraphs

Unit awards Shares Weighted

Fair Value Aggregate

Outstanding July 1, 2023 303 $ 190.08

Vested ( 99 ) 170.25

Outstanding July 1, 2024 325 189.68

Vested ( 122 ) 183.64

Outstanding July 1, 2025 348 183.88

Vested ( 122 ) 187.85

Outstanding June 30, 2026 361 $ 171.30 $ 49,653

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, issues 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. Restricted stock unit awards (which are unit awards that have service requirements only and are not tied to performance measures) generally vest over a period of 1 to 3 years. Performance unit awards are awards that have performance measures in addition to service requirements.

The following table summarizes non-vested restricted stock unit awards and performance unit awards as of June September 30, 2026: as well as activity for the fiscal year then ended:

Unit awards Units Weighted Average Grant Date Fair Value Per Unit

Aggregate Intrinsic Value

Outstanding July 1, 2026 361 $ 171.30

Vested ( 111 ) 171.44

Outstanding September 30, 2026 424 $ 165.46 $ 60,721

2 unchanged paragraphs

The Monte Carlo inputs used in the model to estimate fair value at the measurement date and resulting values for these performance unit awards are as follows:

Volatility 23.6 % 24.5 % 25.6 %

Risk free interest rate 3.66 % 3.72 % 4.48 %

Dividend yield 1.4 % 1.3 % 1.2 %

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.

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.

and 9 more changes in the filing

Note 9: EARNINGS PER SHARE 11 changes

1 unchanged paragraph

1 unchanged paragraph

and 11 more changes in the filing

Note 10: BUSINESS ACQUISITION 2 changes

12 unchanged paragraphs

and 2 more changes in the filing

Note 11: REPORTABLE SEGMENT INFORMATION 54 changes

1 unchanged paragraph

and 54 more changes in the filing

Note 12: SUBSEQUENT EVENTS 1 change

and 1 more change in the filing

MD&A 169 changes

1 unchanged paragraph

1 unchanged paragraph

1 unchanged paragraph

1 unchanged paragraph

1 unchanged paragraph

1 unchanged paragraph

1 unchanged paragraph

1 unchanged paragraph

and 169 more changes in the filing

Market risk 2 changes

1 unchanged paragraph

1 unchanged paragraph

and 2 more changes in the filing

Controls and procedures 5 changes

1 unchanged paragraph

and 5 more changes in the filing

Legal proceedings 1 change

and 1 more change in the filing

Other information 3 changes

and 3 more changes in the filing

Exhibits 26 changes

and 26 more changes in the filing