Jack Henry & Associates Inc. and its competitors say there is high interest in offering new consumer technologies such as mobile remote deposit capture and mobile banking in general.
But Jack Prim, Jack Henry’s chief executive, said during a Nov. 3 conference call to discuss quarterly earnings he doubts the technology will be a significant revenue generator for the technology industry. Jack Henry’s ProfitStars subsidiary announced the availability of a mobile remote deposit capture service in September (see story).
The service “gets a lot of press, it’s a cute application, but nobody’s going to make any money with that,” Prim said in response to an analyst’s question, adding mobile remote deposit capture “is not a needle-mover for anybody.”
Peter Heckmann, a senior research analyst with Avondale Partners LLC, was not surprised by the Prim’s comment about the technology. “Mobile deposit has become one of those buzz items,” he says. “While it’s a must-have, it’s a must-have because there is a cool factor attached to it. But the actual adoption by consumers remains quite low.”
Banking consolidation can be a curse for some technology vendors, but it has helped Jack Henry cushion declines in spending on some of its traditional product lines.
Executives at the Monett, Mo.-based company said during the call that mergers and other consolidation activity involving its clients have helped grow its support and services revenue, which increased 35.1% during its fiscal first quarter ended Sept. 30 compared with year earlier, to $210.6 million from $155.9 million.
The increase offset a 16.6% drop in license revenue, to $9.5 million from $11.4 million, and a 1.3% dip in hardware sales, to $14.8 million from $15 million.
The overall spending appetite is returning among financial institutions, but “cautious optimism is still the order of the day for our customers,” Prim said.
Overall, the company’s revenue grew 28.8% during the quarter, to $234.8 million from $182.3 million, and net income rose 20.9%, to $31.8 million from $26.3 million.
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