JKHY · 10-K · 2026A · Full report

Gross Margin Drivers

JACK HENRY & ASSOCIATES INC · 2026-08-28 · Importance 37 · Surprise 32

Cost of revenue increased 5.4% to $1.434 billion in fiscal 2026, slower than revenue growth of 7.1%. Cost of revenue declined from 57% to 56% of revenue, reflecting a one-percentage-point improvement in gross margin. Higher personnel costs, direct costs generally aligned with related revenue growth, capitalized software amortization, and internal licenses and fees contributed to the increase. Payments and Complementary segment cost of revenue each declined by one or two percentage points as a share of segment revenue, respectively.

Key facts

• Jack Henry & Associates' cost of revenue increased 5.4% in fiscal 2026 compared to fiscal 2025. source
• After specified adjustments, Jack Henry & Associates' cost of revenue increased 5.7% in fiscal 2026. source
• Jack Henry & Associates' cost of revenue decreased 1% as a percentage of total revenue in fiscal 2026 compared to fiscal 2025. source
• Core segment cost of revenue increased 3.3% in fiscal 2026 compared to fiscal 2025. source
• After adjusting Core cost of revenue for deconversion costs and the prior-year contract change, Core segment cost of revenue increased 7.4%. source
• Payments segment cost of revenue increased 4.2% in fiscal 2026 compared to fiscal 2025. source
• After adjusting Payments segment cost of revenue for deconversion and acquisition costs, it increased 2.8%. source
• Payments segment cost of revenue decreased 2% as a percentage of revenue in fiscal 2026 compared to fiscal 2025. source