GPN - Earnings call transcript Q4 2018

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to Global Payments 2018 Fourth Quarter and Year-End 1Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will open the lines for questions-and-answers. [Operator Instructions] And as a reminder, today’s conference will be recorded. At this time, I would like to turn the conference over to your host, Vice President, Investor Relations, Winnie Smith. ahead. go Please

Winnie Smith

welcome year and Payments quarter fourth Good conference to call. fiscal XXXX and morning Global

XX-K on our not differ filings. materially. Before I’d today’s caution any the you These risks comments forward-looking we these some which actual and risks made that SEC filings, begin, and statements, our cause by like uncertainties to discussed management subject during to including are and conference in contains place results reliance you call undue to remind to statements. most recent subsequent uncertainties could We of

Forward-looking of we statements this during undertake this date and call speak them. only call update the as no to obligations of

the we performance. net and reflective operating of such margin ongoing made net believe measures of earnings our fees, non-GAAP as revenue, share, per are adjusted Some adjusted adjusted more which refer revenue comments to adjusted plus network

and reconciliation as financial X-K SEC most morning in trended highlights, GAAP full website measure the of a and available which Investor our filed our both For release in non-GAAP see at these the area to Relations our are our financial Form comparable exhibit to please of press with www.globalpaymentsinc.com. measures accordance this other of regulations, an furnished

Bready, call Sloan, are me Joining the on Vice CEO Senior and President Jeff Cameron Executive CFO. and

turn the to I’ll call Now, Jeff. over

Jeff Sloan

margins the XXXX earnings an adjusted history. generated revenues operationally, adjusted highest outstanding our adjusted and We was in Winnie. financially. net operating Thanks, network year strategically, for Payments per and Global company’s plus share fees,

software competitive further our to continued note. driven technology execute payment also on strategy enabled, We our widening

success upon that we rate conference earnings These were set had at for that this all well markets results which especially the for and growth constant per to that build targets of last producing had guidance last across share delivered outlined performance raised results we at each the expansion we pleased March, we growth as also addition, a able In organic the we time. time at cycle provided investor achieved. Further, margin currency double-digit our as quarter, exceeded yet the XXXX of XXXX we while the year. fastest year record are our our strong

and have of exception. We no our commitments, record track was delivering XXXX on a consistent

we experienced fourth year, specifically, again strong ecomm/omni-channel topline growth. momentum holiday to during organic Turning maintained the we and constant quarter, currency US the by a witnessed quarter all led transactional we businesses. delivering, Notably, volume Direct peak

We were this also focus technology out over and expanded growth broad our across again adjusted earnings strategy year three and of produced businesses. ramming operating per pillars based quarter strength by points XX%, and fueled our basis growth Results our of XXXX. fantastic by share margin the unwavering XX adjusted a on

enabled to the produced our portion a the initiatives balanced omni-channel of strategic with have represent results by our date. distribution in we a a and and and As XXXX, assets. reminder, growth expect substantial our ecomm drive made successes of to SaaS, against objective XX% highlights significant this XXXX across and portfolio our progress owned We revenue technology software of end partnered

strategy, and marquee and payment XXXX, followed record over Heartland in have PayPros years, that APT portfolio with technology growth. of of many enhanced businesses; while and XXXX retaining addition track long integrating in software-driven a the vertical we during to accelerating with XXXX. As two businesses also leadership noting we Beginning by motivating in it AdvancedMD. meaningfully and our relates worth is SICOM our It market XXXX

sustain We have in proven our ability momentum enablement. technology to

well The and more with and continue a is predictable expect integration advance Our do to same underway. investments resilient differentiated, SICOM have Xenial model, defensible, the to we fully strategy. going forward we created as of this

with we recently more to reception is than stoke, from billion for been early level. XX,XXX coffee type chain quint-essential Through segment has worldwide recession end-to-end dis-remediation customer resistant combined and to overwhelmingly we Xenial in the (inaudible) this service every we existing worldwide. Northwest restaurant $X data initial a of SICOM, the in and target. the We as QSR QSRs. market at at insulated restaurants relatively mobile one-stop positive. market One or payment locations targeted with of quick to are market The and XXX us and vertical a the point, especially Pacific already of and large neatly vertical, services capabilities offer going distinctive, the our Sizeable, solutions signed the of the customer addressable combination shop positions software, example

restaurants on our spanning our and across tech More diverse suite solutions of providers XX measurement is call. first plus footprint XXXX countries. Our quarter market-leading and food service come broad to on

AdvancedMD or to XX% force specialized to year-on-year January month increased its AMD, the in OpenEdge sales referrals Turning of alone. by

new relationships they team community payroll close. days begun proof the post terrific serve to with AMD. is sales in fourth had practices hundreds year-over-year with up the the also in results While the performance, bookings Heartland made AMD referrals XX% At nearly for the the history. its to time, to and bring existing in level of organization quarter, has The Heartland the customer XX in physician first opportunities in sales the leveraging highest same

this transaction be the XXXX, As not August when in the could brighter. for we business expected we announced outlook

culturally, the fantastic partnered assets time year delivered that across business we have deal. a these enter managing acquisition, approach at follow business closed core the a a software continues and It achieve momentum our with a as expectations such with align to while in with we to it approach the ACTIVE fourth opportunities since How edge and on new our starts It’s and been once and across demonstrates businesses. approach our bolsters performance to partners strategically did affective also and ACTIVE these strong existing software our strong as back very and that and is XXXX. track again those expand is half results the operating also half of progress business we in financial us to returns. the bookings we logos attractive highly in strategy unwavering The outlined sales generate and focus as XXXX. acquisitions building allowing quarter disciplined confidence we with our an of we Finally, had integrating acquire the on to on we Once businesses? identifying

customers, extensive priorities and best development and to Let’s in teams efficient we our the global take are needs invest the onshore and local the management second opportunities and capital drive continue do businesses the with in to transactionally first; capabilities of retained one to basis. also our which experience they our improve expand position. their monetize At know sources innovation market that what markets leadership solutions do decisions quest these we make and the product ensuring edge Global maintain leverage Payments support to The offshore these best, functionality. our to their a that core, in understand we inherent provide businesses in at of payments scale on growth. software

we scaled security and technology few. addition support to compliance architecture, just infrastructure through information and In provide a name

and standalone scale are a of force rates distribution technologies enhance Lastly product with and combined our significant importantly, to By better distribution accelerate growth. growth sustained we we affectively. offerings bring and cross-selling their capabilities opportunities marrying to and global collectively sales the localized equipped businesses with to worldwide more

a across of technologies largest to combination our our worldwide. integration payments the software provider Notable recent record in with OpenEdge, OpenEdge, partners we signed with proposition of and a leading date in include partners XXXX. has a management delighted software pleased competitive capabilities member-based municipality continued API markets. markets practice a number our differentiation of single leading software organizations (inaudible) local of that business in solutions to the partnership are vertical at Moving in ChiroTouch, non-profit attractive I’m ISV leader new growth all of highlights I’m XXXX in in to ASI competitive reinforcing a integrated momentum partnership and solution, ChiroTouch, This most vertical. this [Tyro] its for to ASI, to one our wins Technologies, our chiro our report wins payments. signing recent that the And government examples announce superior of

Finally, K classroom family technology platform student We to portfolio. management, XX about operations, companies engagement. pipeline recently partners Vista in market. excited the most as educational Equity we through and add PowerSchool remain PowerSchool school future in and fueling education the innovative with an this growth continue portfolio including provides opportunities

doubled month, strategy, of worldwide fourth over ability quarter. businesses more and three pillar these continued [recharged] record second of the a plus our we’ll single high have SMB unique later our of sophisticated customers for businesses, able value-add in track our provide to worlds sole in than unify to e-commerce our multinationals. this platform instance growth API. core worldwide past years. quarter, the we physical for through solutions the as The network revenues well fees its Adjusted deliver payment for omni-channel the strong Last net as and commerce X solution with virtual rollout of globally And a be our

most and acceptance worldwide. customers of lower this expect fees largest some We higher omni-channel globally which to drive code specification complex will the to and

launch ongoing partner to to expanding the our The third are To with of our element commitment markets in in in payments long faster delighted strategy we official our January, standing fundamentals. joint with of is announce end, our that Mexico. presence HSBC our venture attractive

bank faster we new key in to some assets Europe at of as financial leading beginning market markets. is Spain that and choice utilize technologies we Central we successfully institutions to final our Externally our makes sales cloud institution industry believe with relationships existing finance the that the periods management based the industry our mix e-commerce of to balanced leverage forefront a financial worldwide. and trending of from backdrop sophisticated software trends; SaaS competitive all partner markets change. technology thought point CaixaBank, resources. of Global bring accounting and best-in-class growth for joint counterparts. and durability human technologies omni-channel we our This Internally, success Erste exposure Bank the with for differentiation with a sales have and go continued our a the against to highlights partnership data and payments the and nearly infrastructure expansion are of already ventures One capabilities of the done transforming in owned and businesses of We we Mexico recent across partnered analytics most expect to future are to on we in most Payments, SaaS substantial leading like to globally, with with complex of of

in fact, just are of largest we financial reference. of user we cloud and it’s the globally technology In point (inaudible) believe one

find more Over to those make plus $X types without will attractive the their in, organically on by With to years, looking our technology find goes their partnerships. increasingly consistent we’ve substantial financial investments be inorganic turn environments time share over and of donors, investments billion last capacity less complimented alternatives they I’ll Competitors than on. in Cameron. the that the themselves invested remain and outside call five in will to technological will and as

Cameron Bready

good everyone. year, outstanding Payments. incremental deliver particularly to and execution of XXXX despite Consistent fourth headwinds financial backdrop macro Thanks in currency was quarter. anticipated in exceeding expectations, Jeff and morning us Global the year another greater a results foreign constructive our back than half strong our the allowed growth strategy the from for of

by For organic growth adjusted plus constant of predominantly net currency was driven over reflecting the growth. nearly total low year, full XX% $X.XX fees company network revenue XXXX, billion, double-digit

expanded XX.X% across XXX share we to software-driven our highlighting supported Importantly, XX.X% $X.XX. growth technology-enabled, delivered by four payment margin our performance earnings topline quarters, per increased to durability, adjusted Adjusted strategy. basis and points all operating consistent

with pipeline, of we successfully also M&A while with only results including to solidly are cycle our of were which HSBC a achieve Mexico. but in strategy completion not three guidance, We able the full executing our software and are acquisitions on the delivered delighted ahead partnership

adjusted double reflecting $XXX SICOM fees increase quarter, prior quarter low company of earnings in US, nearly an foreign Adverse foreign fourth of approximately dollar. continued led higher our again fees in fourth our was margin and growth, XXXX, an our approximately XXX In points includes currency, of basis the points and direct basis approximately XX $X.XX. end operating headwind and to to million, revenues share had from XX% billion, basis included grew network by by integrated America contributed points over quarter basis a to points XXX rates basis guidance. Canadian adjusted net businesses which points earnings to plus vertical contribution net plus expansion the business. XXX the adjusted For expanded was network the than from $X.XX headwind by $X.XX North the share markets total growth XX XX%, digit October. AdvancedMD organic Adjusted margin basis XX XX.X% when was revenue adjusted approximately expected per back which we in currency XX.X% the we quarter impacted at strength in the guided $X.XX. and per worse points

Our a adjusted basis last to operating quarter, expectations and wholesale despite business significantly consistent with North to our exchange resulting XXX XX.X% as to points American business in decline channel. mid-teens reported pivot rate. stated weakness our nearly Similar by expanded was from some from X%. impacted foreign Canadian by this in of declined expected and the adverse currency away our pressure strategy distribution dollar, recent acquisitions Canadian margin

basis, X% ahead XX% network net of plus Moving to well organic a rate. digit or adjusted fees Europe, grew high-single reported constant revenue our approximately currency on growth

mid-single local despite to GDP growth a perform currency growth delivering digit quarter. environment continues business Our UK challenging the for well

growth produced quarter our Erste growth bring environment execution our currency as in of generating business and local of solutions mid-teens the ahead to expectations. is delivered JV terrific by local again in own a exceptional and Republic, our Slovakia the our Caixa. Romania well market Pipelines market and Our ability growth collaboration excess with new in driving Spanish technology constructive Czech strong aided and meaningfully another of currency, partner, to

and due headwinds. enhance by again XXXX, flat continue foreign our was we currency impact Europe operating roughly business of grew European the compared as in Our e-commerce mid-teens differentiated to the [needed] for as quarter, adjusted XX.X% e-commerce offering widely omni-channel against to margin platform. solutions

totaled GAAP reported a Kong, Pacific currency margin was and our on Hong revenue Asia across in business again organic adjusted was XX.X%, our the markets Finally, million or the plus the free in broad XX our The drove and excluding plan $XXX acquisition and and This investments year, of growth XX% nearly million approximately that integration in foreign offset opportunities. of strong quarter performance product adjusted Australia. free reinvestment flow approximately constant an million and to capital flow the allocation XXXX full of support exchange new in significantly $XXX currency growth full operating net adverse network basis. year by and cash XX% generation cash innovation substantial Strength growth partially for for ambitious rates Malaysia, investments for supported basis Asia included businesses across delivered fees key including Asia business. as again and cost. XXXX. $XXX financial future geographies in Singapore expanded Adjusted points we strong based

ownership already know to late strategy A the billion AdvancedMD During in M&A our acquisitions completed based as technology a is our in $X.X year, SICOM we one Education, our as solutions school SaaS Central QX. enabled small Central including Australia a of in we well acquisition to invested we of strategy. provider enterprise we and leading Australia. advance and in cloud cater our vertical market well of and the have efficacy where demonstrated

executed In to Perhaps we to capital while approximately a importantly, as total million this we a shareholders. of $XXX strong sheet repurchases the a X.X year return with capacity plan addition leverage executed ending positioning the at investment balance to of against meaningful times, capital acquisitions, and of we XXXX. enter business share ratio still less allocation also

to exposure of a reducing $X.XX billion in fourth executed total the quarter, rising we our further Additionally, interest rate of swaps rates.

it hedged to is by end Our continue debt XXXX. approximately be portfolio hedged of and the to XX% we XX% expect nearly

return M&A. XXXX, our a free investment expected near-term absent Going initiatives, to That our cash leverage forward, any current flow approved us said, the through generation end, to total Board to in our shareholders growth To allocation officially repurchases. standpoint opportunities that in our available priority to from the our capital to capital million. business, given business raising support remains increase including in you and recently share an share authorization, expect reinvest $XXX our should existing repurchase to

year to of As positions XXXX, deliver we us results. another the to look momentum in business our exceptional financial ahead

also on expect to or $X.XX range reflecting currency we XXXX constant basis. $X.XX to growth a our reflects currency adjusted wholesale from XX% XX% fees to plus headwind at billion points currency to billion, exchange basis low-double XX% weighted the normalized our XXX This high a end It XXXX, revenue organic to over we which be from foreign of the constant reflects digit the XX% heavily business points XXX network to excluding cycle anticipate For basis of outlook guidance. net rates first of half will year.

fees adjusted high-single grow digits. we basis currency current digit impact by Europe, Absent to in (inaudible) low-double be Canadian We pressure outlook, as our network low to communicated. revenue respectively than which basis notwithstanding rates. basis our revenue low our digit mid-teen exchange our local the on we of to plus which will in revenue well dollar expect approximately plus million consistent which offset includes million expand Canada, Based growth are the net adjusted fees forecasting XXXX, from anticipated would We adjusted to normalized year. our from In offset expect the be more in currency points in XX $XXX guidance. XXXX, grow to by AdvancedMD a guidance. recent is be first on currency we to further ahead in of With excess initial in $XXX business. single local network roughly half will consistent with decline headwind be this to net investments and Further, from reflects as cycle of pressure basis as we much growth in also up our negative anticipated Adjusted year. Erste previously of from outlook wholesale Europe to the Canadian we headwinds direct XXXX, expect the anticipate currency this plus of due XXX largely and items, operating with and expansion we flat for the North is exchange with half underlying margin an cycle net headwinds slight SICOM partnership again impacting are margin detailed a of more in to the well reflects these rates, acquisitions will This impacts larger our expected approximately points, in of foreign guidance, our channels, the expand in the dollar US by first to mid-teens points America’s partially markets. adjusted contribute mews in predominantly which year, making operating in network fees anticipate XXX respect

to Asia to the digits, while basis expected Pacific in a approximately of rates we somewhat points, organic Ed currency is for be Central by is will negatively deliver be foreign basis Adjusted local grow basis growth rates. the exchange adverse in margin to to it currency operating although low-double XXX expand currency approximately anticipate points will headwind exchange XXX points year. XXX XXXX, expected impacted

XX% we the from over foreign to earnings of share range the exchange XXXX. currency of or $X.XX for This We share $X XX% the Absent hedging range to together, expect of tax an expense Board of headwind, would Bringing adjusted respect for $X.XX earnings XX% we and with for currently rates growth rates. growth be per interest adverse approximately over we headwind net XXXX XX% includes to an to year XXXX. million XXXX. $X.XX, $X.XX the to to to it $XXX of reflecting effective per interest and $X.XX expect expect in adjusted our approximately this forecasting all strategy rate are XX% in approximately

we XXXX, financial are to flow Lastly, adjusted capital the $X expect we significant this cash strong Payments. of approximately reinvestment generate we of Global free in milestone and a on of the million. billion investments expect forecasting, level approximately Based year for performance for $XXX

performance and substantial leading We on in are over and successes standing turn on delighted our forward the XXXX, and new, delivered software Central, in investments while our omni-channel strong that to our to we look building further With added in Jeff. and AdvancedMD, our e-comm We operational also strategy. results with long growing I’ll expanded making platform, to year markets. financial and progress assets call made delivering back our faster to to portfolio of another differentiate SICOM with XXXX. partnerships We the

Jeff Sloan

technological to differentiated alternatives. of Cameron. been will clearer it in Thanks the model business growth our difficult nature The of not industry has forefront sustain on our never those market and innovation of with few rates companies increasingly find

underscores XXXX XXXX excuses performance become. integration, don’t expectations has how XXXX the results; have a to constructed our itself. record litany of was we Our in year and mold of our need was deep Winnie. speaks performance a XXXX rather and be We a We delivering justify for our will a and have commitment could about We reaping ahead. our we in look future to our more prospects. be what optimistic today, years sowed. investment, year year of the not XXXX of tomorrow forward for on

Winnie Smith

to follow-up ask now like to to I’d go Before Thank our in accommodate one limit Operator with we begin to the their will everyone question-and-answer session, one questions. to you. everyone questions queue. we

Operator

[Operator Instructions] David of And first question will Togut come from ISI. the Evercore with line

open. Your line is

David Togut

any acquiring see acquiring term on impact company that able a if merchant as to combined they’re do they’d merger, today? long doing do you for not in state US be there anything think merchant from announced is that What the the business, you specifically (inaudible)

Jeff Sloan

start and as then It’s I’ll Cameron to well. ask join Jeff;

enabled following is really years. our is, now focus distribution for on thing been validates I say it really technology would we’ve So last the five that that first the

combined you much saying the where based heading, So they’ve relationship what domestic-only where company on that they’re think focused of bank more if is announced and distribution. they’re about context really

worldwide to say the the that institutions asked investments that is you to shown years, particularly of our over our United through to offer States, take about while the States. five technology have build, services if plus in United would enhanced we of evaluated you customer think outside the financial million we base. north $X it mile ability last our attractive I consistent I

market In it’s solutions. with Erste I globally with as And those going outlined commentary. is States larger trends solutions. in based success really the towards financial are staying and It Caixa our particularly HSBC, United Cameron really in right tremendous our areas Europe with ultimately to is of with vertical Continental technology Central institutions and those selling think in financial seeing that the his where we’re So to enhanced Europe particular come here software the large complicated FIs. Europe,

for I what businesses technical getting additional to the in the is, don’t can who haven’t is have at make able something then that have technology would make think based investments I of capacity I to in to particular they’re financial relationship going those scale certainly road. you others a to [advance]. implications don’t been investments, States But So based to is make the us David areas industry, technology the think in relationship think United heightened sense. the competition say in and those given for look years going if has domestically I down I our number that

an though of over we’ve opportunity made really the us the for and five a last think I validation years. it’s investments

Operator

next our from the question Brett comes And line Huff of with Stephens.

is line open. Your

Brett Huff

the you year tell Cameron FX full would and expansion – hits. did you you but been the through don’t ex what if us this, know can margin went M&A have I

I think tweaked XX or you did you XXX said it give that but reported, kind number? of us was a

Cameron Bready

Brett. No, a good that’s I question didn’t,

executed. half then for talking saw from XXX, bit XXX fourth from of back the quarter that pressure something absent the year we year So the little year, the the and headwinds was a FX the full in the it about we’ve in that ballpark full the XXX recent for M&A the I probably

Brett Huff

further XX a this we to investments or kind what’s to going said are into leave little it on folks taking points we bps, would sort basis metal are you (inaudible).X it reason number the what year, or a XXX be is pedal of similar the think spending the advantage of kind investment, market extra up a position is stepped a FX, and put of little the a that (inaudible) adjusted, of here on I leadership for over the behind

Cameron Bready

question would Jeff’s I reference to back comments. great a It’s Brett,

the be of business that we it to that We model. drive in our seen our in wise think course competitors continue as space. and innovation widen to proved business products continue differentiated has thing we to to do we’ve And a time very out, versus I our the particularly over the a invest technology in as them environments, heavily to believe in relates to

relates it with particular, line. through to I balancing obviously XXXX reinvestment we’re want to into have you things, what think, to couple a the we bottom As of back the always in business flow

the we that Secondly of had at from a of anniversaried a tailwind XXX, in of bit the if adoption ASC XXXX, little you obviously recall end XXXX.

a little in in you that from saw in So bit exist of benefit don’t XXXX XXXX. margin

So to our a which XXXX points basis cycle to pretty guidance, year is XX look at annually. up is relative pure to

of XXX is the We’re have previously, getting would pressure a that, we little we from XX the bit against as FX, comparison acquisition the been absent basis of again point talked absent about but relative north which targets.

as to XXXX, growth. So bottom to reinvestment relates about we continuing obviously in drive line feel as in business, striking as we’re the well really good the balance I it think strong

Operator

the next of from our with Andrew comes And line Jeffrey question SunTrust.

Your line open. is

Andrew Jeffrey

’XX sounds reach It like where in you too? behind is given world a terms elaborate you’re software could software, and maybe of little of tipping or there we a vertical vertical be the the the of year on for that out your be point a bit rest commentary terms suggesting US think integrated the particular Europe adoption? FI could talking in in this I Jeff, some partnerships somewhat regarding is there other momentum, about you might

Jeff Sloan

as as in Jeff or Europe partner owned I’ll both in the model. think inning It’s start, the in well and first second the software really listen we’re I so

entire most look in of deals ISV markets look exceed at. you of have of the individual the partnerships If the United at Payments, number we we that States probably just those Global

owned our States United financial see complex a I software. Andrew, States, the at a you pretty want look to really stream. what to was you partners to If institution United talk is outside I when in talk probably markets think software large referring businesses they similar you was, about What the vertical

strategy. So, progress Payments is ‘XX in things see at like restaurant and on a lot food do beyond you’ll what our service I think of Global and

the Xenial-SICOM XX we of sell plus is so, to nativized prepared markets. it’s is countries said all in combined restaurants restaurants, remarks things one going that already in with So, business in already the those or been our

Europe lot have lot restaurants and in Mexico. come restaurants Canada a of in in to and of We a tuned Asia and also of restaurants a in lot

‘XX, United that march announced our certainly with customer education, we’ve those ahead way, the say data XX United analytics going I’d on and already and particularly the States also last wins before been products we’re the in successful we’ve (inaudible), with Xenial very been our something So restaurants in for XXXX. outside months. over to is Canada, outside engagement States Asia By selling to already, business the Europe, and university our

I was in traction market really and outside large partners the an referring response incremental traction, what is, additional we’re wanting software from vertical to to US FI our our about talk countries. question So, to getting in David’s those

say those States. first countries progress see we we’ll second here those I day the step continued yes, So you in think the for are But markets. and the the really and further United end in at inning have along back or in to of that’s

Cameron Bready

that its add if could. let one I just me Cameron, Andrew, point to

to our software respect owned part thesis is standpoint recall of those own you owning If with internationalizing around solutions. from controlling our payment an integrated the destiny

to on a markets So and bring own we rely to we want software outside the want the we to we when US, how want them, don’t in obviously them. terms what of when to bring bring have we to of partner

to capabilities solutions, we an and and to in really growth outright our markets. the - own as software and bringing I incremental to driving So distribution these we drive solutions kind are by those our the markets where today, obviously again think owned to in markets of integrated payments own expansion of vertical and drive markets again, the it local have differentiated foreign incremental competitors obviously growth relative those we in utilizing relates

Operator

our comes William from next And line of with Blair. question Bob the Napoli

line Your open. is

Bob Napoli

yourself is like it’s to, Jeff, software as protecting various key developing loss strategy and the from organization this get to in we hear because Global the also more that I’d your Cameron, heard the able different you, little before, sure you’re bit maybe that with to lot concern building on it both how a relates how a from but you’re and I line, of of businesses manage to for investors businesses. you’ve I the software color biggest management know software making are

because the the little color, but you the and on speak mean it would overtime if I and So upfront, give – numbers could be I helpful. like themselves color I think appreciate a on gave Jeff of that, little more the of businesses I a guess for each bit you that’s color

Jeff Sloan

I’ll Jeff its Bob, Sure start. and

those coupled own to their regulatory, our oversight with with is to track compliance, elements in along of but means businesses effectively managed are on said the the lines our the produce management management? businesses those things we’ve run software a as specific an on are and for APT. really XXXX in to particular rely management software referenced local indicator those AdvancedMD, healthcare able What strategy, our best remarks, the of businesses, own that the our doing in we’re security, So been to to apply we of certainly which to those locally in markets, going market healthcare be we to example we for We record how managed at so customer this AdvancedMD. are at edge along apply we with case of or by chains, of are us. and distribution views you that the do architecture and folks edge over grown our that overtime specific prepared core The retained apply the on those that team back views technology our we all facing, that

are So it more the the AdvancedMD the were AdvancedMD APT XXXX, people people XXXX in today XXXX, running are running and did is today who in the place. running when recent, people APT who deal running we in were first September and people the and the PayPros August of

already is apply of deal also that of percentage, my view say you that we’d in to much the today. time their have, I at said functionality, of to increase like higher that example, penetrated case about own comments a We we they the statistics prepared to infrastructure the about in XX% sits that’s core gave payments and where with for the and then AdvancedMD, our which architecture integration

ability focused our our Heartland, referenced, more guidance which generate the at you you ability to remarks, for in on. are on and ‘XX, sell together that functionality we sales, these to lay ‘XX, it that its one described. purposes ways a payment those referenced look physician example, expanding that we building our is guidance but monetizing we’re then more is I generate case to to we I the honest, also in of effective that sales So the through referrals, get more and course cross-sells things our And United space XXXX the in sales States of for when revenue to that success prepared that for course, more my because just all put capabilities. this in also organic our businesses be direct And and bring. growth payroll core ability for our of of of AdvancedMD via payments double-digit own on I also OpenEdge

we So, some those the ways expanding managing of extending businesses. those think are about and and

Cameron Bready

both be particular to as address in returns the we them. and relates management Cameron, just is to wouldn’t course point to add underestimate time going that they I going with the of it it with of that’s course certainly these relates we’re several elements of culturally, generate last well key vetting as it’s Global success success expect one the which relates able expectation are we the to relates amount that run environment adapt to we’ve strategy date the tremendous able But and the able time. think a upfront strategically, to going to of to our we’ve every one as point, obviously we that are affected that from trying what to tremendous importance consummated that with a years. on we the Bob, the investment the up positioned company, to priced transactions acquisitions to we’ve of the going community, and really in of executed and over cadence keep to we business it operate, are in I understand had spent today, cultural to the as be the transaction. of We Payments, the is, obviously achieve they which we’ve to with that that obviously in they one got to businesses M&A to to the How of as a the be set be the I’ll with it

Bob Napoli

to you of verticals, you acquire significant new just continued, a seeing in business? to try avoid And are amount follow-up, your as opportunities with a competing partnership

Jeff Sloan

Jeff, would its absolutely Bob, to I said. is you say what answer yes the

commentary related FI more markets a So other not our that’s pipeline our broadly as geographies commentary, we’re being a and that well other businesses vertical and told new that’s just businesses. for

So is is whole. yes, pipeline answer the the

markets SICOM of our our are made of very restaurants significant businesses. in and of course we’ve Some growth form like changing investments in of rapidly, to XXXX those rates in accelerate the

we’re applying So static pipeline potential that no we’re time. not all there’s on But the changing the markets the pool, these seeing. skillsets limit these against rather are no

ago. in Mexico we to our couple is the of though, in just that of said got close back HSBC having number Now a of venture a joint with weeks which half ’XX acquisitions

that integrating So obviously executing focused commitment on on we’re we’re deliver those making. to that businesses very and

Operator

comes of Our JPMorgan. with next question from the Tien-tsin Huang line

Your open. line is

Tien-tsin Huang

I’m this fruit effort in the out maybe or yet bookings result hanging of the I stood you side. XX%, to up the think it you being was sales put seems like is on really What AMD early, me haven’t curious full picked said, so really low

to sustainable this is? Just level how trying booking understand

Jeff Sloan

what back listen, Cameron a speak to Well think an we our scheme said, opinion accident. as at monetizing, which think listen is we But fit we Tien, on focused we what's just this end would time of of does we're effort, is full outcomes I Jeff. excess joking the managing We trying opposite very good been and of on, solve? I great do put we're of we're that Of and at business the those We're and this the Cameron hoped business, think and we not can't to a of what AdvancedMD at to sitting is the what day of happen? me. things, day it to In can critically and the I'm the them. example with, that end growth Cameron. goes important with cross-selling, have in are At to day, course partnerships of the of lot end strategy, it's the is culture course that I in at partnering growth financial what I an spent is the AdvancedMD. for looking we that Is the that So really it not. relationships, think what of do. because

pleased think, related where I no with design. but are So, really are we things we very are, by those

pleased it's But our of you show doing we on made cross-selling to of behalf that you give the can accelerate accelerate we're in to that shareholders. the to Well in have, of for further? think increasing we important how growth. I Now we're us vertical evidence have we the we restaurants markets investments certainly are we how that opportunities continue can hope with with globalization that some and the particular,

Tien-tsin Huang

a get concern. kidding, with to such you're mean board I but it is the I about takes know curious No, sales know I I on new that why that so time was vertical, it’s I the a asked sustainability.

on and pricing to the little market as going up signing on mentioned deals on the there surprise moving the there. the just well, as especially both the a you a or market you So curious Xenial maybe side large product as bit? in any go on side spread, my follow-up these well SICOM I'm payment aggregate

Jeff Sloan

Tien, No Jeff. it's

directly is market in larger as SICOM. that my we're really biggest had at and before vertical haven't I Global partnership. We in as which we've said pleased there, of Restaurants our prepared added about course management, surprises of of weren't service is part a one remarks any food we markets, the also

that's Tien-tsin, and partnership what and we level exactly doubled for really bread Xenial really at step we QSR the had enterprise second, the that But about back SICOM the does. through Heartland and a the if you old are deal what was second, you is of like that Global SICOM a and XX. before back with Xenial XX,XXX QSRs really step for butter the If

front in and product of with of the well brought SICOM are, customers, of house middle house Global as where nice Heartland So globalization it’s enterprise some house just really at the very but that front which and back house those businesses. a the the not overlap of legacy of for is the it solutions. of overlaps as

already not by So that no we're of in are the trends, we surprised business. any

that we're before United think very I vertical I want about, nice one of (inaudible) to changing it's to said additional as work States [Global]. most technologies on in attractive that restaurant the is scale the the with the gives and and markets forefront globally. today, partners us it talk very rapidly that bank market in our outside do what of to leading

the the to an prepared I to questions that gave momentum my in strategy. more prior go has lot say of we where back is remarks indication business software of our win to a (inaudible) is and come would of business a So recent this leading

as Global I a software, response David's think that also really that first said I our the with to about So of of and and leading approach taking a validation leading that we many second, are in our honestly in for forget Payments in are technology-enablement. business question, technology with competitors is,

Cameron Bready

drive we've add in as And proven software, seen (inaudible) seen us. is what and value be for thing around economically (inaudible) obviously a to to by utilizing software the that with far historically SICOM consistent and only in a drag that and has think what means I we've more with very customers which to effective leading opportunity is, incremental I pieces from would thus payments Tien-tsin

software strategy the well as volume payment strategy the the to to ability again from the house standpoint. of anyone relative of house to the back ability again use bring the platform that the drive house, middle a thus a has economic in and house, be to distinctive brings that proven of the being I of else valuable middle and to again back think their effective house, front SICOM far very of an the the So very to solutions space, very

Operator

Goldman with comes question next of Schneider our from Jim And line Sachs. the

open. is line Your

Jim Schneider

at a since was you did see what landscape plan if the internationally. space? look like, do I forward, how partnerships environment, extending for wondering, for point, and feel you target could you It's address does been about how that this the valuations while looking you is the maybe so outlook the the maybe Erste rich in especially

Jeff Sloan

so go Jim, and I'll it's start. Jeff, ahead

the I United would our full So FI inside outside say also pipeline partnerships. is about States but pretty

So Latin for, more America about today. area, Asia in if think opportunities you sitting in that what in more we're that looking opportunities certainly we see in here area

think is security me into tone So anything of business I moved my do the it vertical EMV years the help which compliance what tone by a meaning ago, you assets of market. where and of of conversations types else has of number how interesting if that those in investments is grow those of those from was is conversations thing type today and

selling talked you it’s most institutions in which it’s acceptance one selling today, omni-channel assets which about next example, of Erste is his Europe bring very are Asia release conversation it's well about is generation selling cross-border, as in CaixaBank, e-commerce a the our remarks much in commerce interested globally really sophisticated particularly that Continental omni-channel in the With people businesses platform in well, the call if and few having Spain course imminent unified of in that of we So it's back, on e-commerce across that area have. our of in that very Cameron financial and described is unified the well think haven't about for with our we very platform selling the with in that commerce,

help So as today, me products as by how do selling cross-border in shifted those e-commerce. software via from institutions compliance I globally demand technology the market conversation that has we've financial pure both vertical and we're significant to revenue differentiated into think well from my conversations seen have increase you via grow

Cameron Bready

point it's just to add quickly. another Jim, to Cameron, that

venture remarks, Jeff in we HSBC his prepared with Mexico. in mentioned joint I a think just closed obviously

to busy working in So to as we're market well. that expand

new opportunities the into looking in FI other and with opportunities also markets, Jeff around markets in is opportunity have In with with of pipeline the the said, more but Erste addition globe, been in given us at for obviously in partnership Central we've them. in a more existing think new what number to able Europe, conversations expanding interesting thing fair - partners success about further particularly and the working expand with them, collaboration already to to I

our markets, and success to partnerships we're and the those of think success. extensions delighted partnerships those our of So I where is think same further we of dialogue expansions replicate that us can overtime to different of see about we allowing the into have strength the really

Jim Schneider

changes there far? company? the to or with then follow-up, just a can any change the disposed maybe at And given just going a you address they've portfolio and stake companies software maybe bit you're in the forward, your equity relationship Vista their Vista seeing about how about there and little relationship, maybe can it’s talk so any talk is Maybe you all gone

Cameron Bready

to start, any and Jim he I'll Jeff comments would add then ask like. that

established that our would over course the opportunities it great remains of of this mining of already say Vista. really in success we the ours I So and we've companies have call relationship with Vista payment last strong, now with had in XX months, become relationship partners portfolio since existing very their

payment mine with pleased still to to thus So gone it's continue things We the their I far. further be see of of assets. couldn't lot given think relationship a more our to opportunity say from clear have we partnerships, portfolio for how standpoint,

I more to with as incremental to very it and opportunities, existing us with have value business. relates portfolio work a them, and companies to think continue them both opportunities fits with of that nicely through continuing recent for transactions pipeline to of those around Some strong their work to drive well our them types partner ability to dialogue of they are as we in

and to to start and enterprise are they it on relates investment a As by clean fundraising companies our I financial them Payments market that funds the portfolio return acquisition, at operate they selling think But it virtue have and of and and and the stake able for good would a that thing with their that them partnership very they various relationship up of a nature that by way stock, saying in a the realize logical in Payments Global it's very Global the to to around we as I today relates being they looking the ACTIVE it as prior in buyer do. doesn't the to acquired any financial ultimately looked change,

Jeff Sloan

just But with relationship respect would that I a they've have add done fantastic that and equity is of we’ve dialogue. private ongoing firms Jeff. a number it's lot whom one a we think I Vista, of job. Jim, for of and financial an just a

warm think with going line individual a I each we interesting private companies. we into equity firms thing more companies, business, one with is than as of of we’ve kind those as rather most proposition whole, the and Vista leads we their sales differentiated approach that So see of do

are peers. I to know think in distinctive we I our that are distinctive, relative we

based step towards a broader initial as strategy come distribution to the related key but the more time, So there view over United particularly in States. this I’d here

Operator

And our with line next question the Buckingham. from of Chris Brendler comes

line Your open is

Chris Brendler

I'd a on like focus just to for US business the bit. little

software If acquisitions really bit could follow-up. like partnership about seeing competition ISVs, of a through for the of more about ownership are you detail. the you’re what the until potentially the to since and and on well and we with see how ISV little that side, and conversations organization. business a to front to just give talk Lots have side that these that's other us going, the maybe a new results starting existing the the fit in channel sign I'd of how second, space, line now trying increase I you

Jeff Sloan

in and on release a press second you said I we so the prepared Jeff, focused said are Chris, and across the balanced this is in step this I'll spectrum. as we back this technology a enablement start, for really our if approach commentary,

not that software, software, and faster-growth and means markets. on e-comm just but So software, owned omni partnered partner assets

of of Chris particularly but OpenEdge. software we expectations won Well So for partnering the those in we last that competitive talked three owned markets lot in prepared of shouldn't are are our we topic. sight it's hot restaurants of this, business in fair nature quarter also like three fantastic high our amount what about of of and I and particularly we detail vertical gave wins, gets we sometimes in a a a kind really comments and all with in context performance wins, fact where my last kind had the lose year also marquee in ‘XX our all them. lost

in of to point the municipal our chiropractors, sign one view and and the big chain facilities, results government one billing largest pudding proof’s and are largest ISV are providers. is, the of of up So they the there of the I what the largest not-for-profit think

all you has to business that for and I think need tells want those positioning competitive. you aside always Putting know because you our second, about that competitive been (inaudible).

into generally, competitive to providing there's so. market to year last or over these the and more go and but business what offering customers renewals you more a are not of competitively to in for when that that as and in by we in case sea we're and that new if to question, to evolve your the come we it's So change back in business continue XXXX up been do. OpenEdge need it, we purposes more go that more in to or our scale answer always got we're pricing business But the in more way value way

Our weren’t the business good assets bought year rights. First Mercury a it their probably last they we back two it’s 'XX, has always competitors competitor good own into not been in over it’s competitive, XXXX, Data was or not like the it’s in not that got in since (inaudible), like

solution what and us, provide our part different prepared ability wins which offer for more comment the we think value-add as had that is I three we single the in our about in our is I to that a technology mentioned. of is said partners

today. really is the unique that to either into or I thing a multinational distinctive globalize these which two geographies, other we're The of take ability is one doing and think

So sea work there the a the really been hasn't in those us economics way in change for businesses.

about fourth at the OpenEdge, recent think the think we highlighted had great I that name talked in quarter wins that. performance the proved I think by I and we we

Cameron Bready

XXXX. my it obviously heading last competition integrated OpenEdge little would terms of backdrop its space, The into quarter, perspective, And best the at look Chris, just well the and a in put if finer from growth year in with to for of of you more obviously which the partner a had on new the in that discussion ended point again mid-teens signings positions year I thing fourth XXXX, lot say US growth is, Direct the if business. business to couldn't you wouldn't do XXXX, we're do for partnership today in US We look to overall performing not at double and our was drive Direct business. of in to US our the organic that that guiding Direct for extent helping not that rate again the revenue the guide our level at business performing digit or that it's growth

of the we and we the have the (inaudible) depending of a on the a differentiated partnership the obviously to think to that's to with have the of partner I So model, own we’ve the think that what depending we again on a one strengths and signal is degree fit. have vertical optionality confidence I durability and amount

us kind into of I continue positions So execute well we extraordinarily that think for XXXX to to again heading that and as strategy. years come, on

Chris Brendler

of constant a be currency, it’s this another double-digit. on you your a think they're follow-up well was results I quarter to My just of lot as and appears low up question at thinking color. you're doing competitors great think so And and helpful, following still I put what amazing of to follow, trying really That's Europe, point. how more about

concerns of slowdown, high-single about in lot macro for from is next that Your digit investors potential a Europe? guidance year

Cameron Bready

Europe I'll in own would our cycle really say had guidance I Chris, in on European Europe. fantastic strength it's Continental for we’ve in and that Central performance frankly our business Spanish that omni-channel been our Cameron, so region, and driven business strength and our one. e-comm above touch across by that's business

able think to what with we're we've been achieve. delighted I So

in to year, and something that XXXX, obviously if part helpful the of the the better Now for overall for business our year. good was think European to we had that UK the was you back growth domestic results

of approach that's As it accordingly, the kind to that is relates UK in of and the will I of prudent digit that's growth, adapt for term year, you say the reflect assuming I'd UK. like We for but it high-single the mid-single any, a and in it think we assumptions and Obviously muddle getting particularly on what not our better would That's guiding the fall rate mentioned look what in to in going X.X% I cliff. we're be kind expecting say out forefront year. the so XXXX, off to a growth the rate play (inaudible) very, as of low a as the to it of the assumed to remarks, assuming we’re to was we're digit my the the outcome UK economy GDP today prepared the take for which for QX. XXXX. I consequently of relates lack a into we Europe guide as very remains if with Brexit outlook that kind Brexit of of we'll effectively rest saw our Brexit, QX, think UK something are to everyone's in overall was mind. growth seen affectively how

high-single rest a Romania, for and market, able digit Europe Spain, bit in Slovakia, rate little a to the us saw going to that I continue spots driven notwithstanding a Europe, we there’s at XXXX, markets in that few macro assume similar the what a we that give business environment UK but e-comm of strength I be to XXXX. softness particular, Czech Europe, think to grow by in confidence the of again omni still we in in, in fairly we're of our are the lot and think Republic,

Operator

Keane our Bank. will Deutsche Thank the Bryan last from you. And of question line come with

Your line is open.

Bryan Keane

doesn’t you and a weakness, bit is feel us of when players Wanted some weakness fourth that? in payment of help little give that volume in bit Can a you to model of different with quarter, a in saw mix. just in guys the ask, about particular, a little thinking same lot cross-border, saw slowdown saw maybe like

Cameron Bready

I'll I board, slower with It's in QX, anyone environment, was of a would that's across GDP say channels. in our think jump Putting of little distribution obvious and add of own just the would any the like rest in aside, volumes that saw the ask paying what the your think consistent we to I we UK results GDP again Bryan, that attention in Jeff markets to and and of own may go to as pretty QX. market, diversity I lead the strategy in to what I would that's we the the I volumes Cameron. to around the function then QX held in in and ability UK well. the than say coming comment, of saw UK. globe, that a those we your of distribution as and function obviously on generally very pretty a up point well, and obviously out say would how that's have the to Obviously what's happening saw most opening color say he the somewhat we technology today, our who's I

particular, on really cross-border volume, the reported then well market, players the a in to networks and the see slowdown cross-border that some in relates it we by was as other didn't As basis. obviously

the e-comm XXXX. business, where fourth volumes, the really saw that look and course of you we continue mid-teens our I majority would If heart European throughout were cross-border see is at volume what in business omni consistent, with of the we trends of in the to that quarter relatively say, see growth which we and our

hold monitor no our a up. are of going into we that's but XXXX as to XXXX. something lot Bryan, those continue guide heading businesses to that obviously closely portfolio So confidence again the how provided evidenced businesses for in we by to slowdown I it's we think of real meaningful But have

Jeff Sloan

Bryan, it's Jeff.

and all, attractive think offer right, MNCs on, our think in it speaks models value-added price on most markets just we of is the and Europe including solutions omni. those Cameron I not those think think distinctiveness it's on I those can are we to of e-comm where to SMBs differences, in and focused and faster-growth where we markets, add and first domestically markets and focused also indeed based selectively

of are we more more So think unlike are market attractive, in think they we have of some we and our some they unlike that other networks, card resilient. the deliberately markets and every are competitors that of the I are the not because market, the we we targeted described, Cameron entirety in

tell, see fourth but can I So think our what quarter time will our the you results in reflects and guidance

Bryan Keane

the impact for just will share you gaining take you it Mexico, can of JV you think fast us a with HSBC and the market? how in in start quick help do that follow-up And guys Cameron, to guys

Cameron Bready

Cameron. it's Bryan,

where So, remarks, estimate venture that’s if I you recall of XXXX. obviously you'll sort of HSBC expense see well, the the net prepared in as an my Mexico for income interest gave net for of joint impact other

more certainly strategically venture, are So, important said in that announced than joint the perhaps it we as term it we near is financially. think we when

we're Now time, joint little that ownership scale time a XXXX, to fact be joint the obviously course and business, venture. material to getting in ground, I through given nice to scale. contributor in would off company that a over the a expect venture to the be it's amount that as of take not XX% to income our the we the expect going the of just of we bit it obviously

do it in part is, acquired market far partner banking than they commercial in of they percentage have Mexico like obviously market. and greater to that our working HSBC ability our As what relates gain the we share, with about of to market the merchant a today

think from of HSBC before commercial HSBC the lot portfolio may there's just today. competitors today into in book a banking not you banking is taking that supporting Mexico with share share room, So who standpoint, of customers even to business from commercial a that get I other be capture existing

obviously we just of business. and the we'll time business think in confidence for it have in would get bit say off to lot our a little of scale that I ground effectively. I business that start is robust, a So ability to to the take the forecast grow to growth

to but material results. financial overall into 'XX, come So that a head our impact it's not going for typically XXXX 'XX more as be and on we to to

Jeff Sloan

company. behalf this on our Payments, thank in Well for for your you you us Global morning, joining and of thank interest

Operator

conclude for This Ladies thank and today's in the conference. program. gentlemen, you does participating

disconnect. great all day. a Everyone may You have

Global Payments (GPN) 13 Feb 192018 Q4 Earnings call transcript