GPN - Earnings call transcript Q4 2019

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to Global Payments Fourth Quarter Fiscal Year 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will open the lines for question and answers. [Operator Instructions].

As a reminder, today's conference call will be recorded.

would Senior turn Relations; Vice I to call Winnie time, host, your President this like the to over Smith. At of Investor ahead. go Please

Winnie Smith

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

begin, comments by forward-looking the statements we some call operating expected today's made I'd you management remind Before that to and of about conference during contain like financial results.

most uncertainties filings. to risks to We our statements. cause including reliance our in These results and SEC subsequent on any and discussed subject recent uncertainties are differ and statements caution could to Forward-looking actual you these risks XX-K place filings, materially. not undue

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

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

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

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

to Now Jeff. I'll over the turn call

Jeff Sloan

Winnie. Thanks,

in while XXXX history. in operational, of results the financial one expectations delivering our exceeded We our strategic, and finest

our generated payments TSYS wins play partnered has and the with markets significant merger industry faster And software, businesses, and further model. XX and industry-leading months over transformational Our channel on the competitive performance validating last driven distinctive omni pure landscape. our redefined owned, focus growth

earnings strong meaningful we and full-year, per the operating leverage, revenue grew achieved XX%. of share adjusted generated For growth,

across highlighting We businesses, also significant $XX excess our our scale. billion transactions in of processed

worldwide, who were our with all and made history, the members outstanding proud XX,XXX merger I'm of extremely simultaneously partnership executing our possible. TSYS, while in in team These results achieved largest our it

We exactly by accelerating in the do. performance into and XXXX, we fourth as we exited would quarter momentum XXXX said carrying strong

A few metrics.

more to a During season. years. increase rate annual our confidence merger three processed despite we the peak now year-on-year the holiday expense seven shorter synergies period, for provide raise a $XXX high-single-digit with calendar estimate run to billion million from These us than results transactions, within

The second quarters. our many in we time have increased as expectations

delivered per share XXXX. we growth in adjusted Finally, us year, have we all nicely in ongoing up highest earnings quarter fourth the generated rate growth for the that setting

which represents company Let's business. preview senior strategies our Solutions now for place progress Merchant our has XX% made is of aligning business go-to-market leadership consolidated substantial performance the segments. by our team in and

Power quarter included, technology-enabled integrated our call and since combined providing us resigning experience of payments J.D. customer the so making Integrated, in Milestones receiving XX business customers be merger. service Payments center for ISP support, Legacy recognized, our recognition our and the sales from agreements Global XX largest with first outstanding forces, as TSYS's an to technology payments closing respective company relationship-led combining rebranding with

more than across vertical serving X,XXX markets. unmatched our integrated Our ISP breadth business has partners XX

pipeline positioning XXXX, of production partner future growth. this a business have for terms in to new continue OpenEdge We of following robust for year in a well record partners

access, to begin and year expect We ecosystem TSYS as the provide also Canada. Genius this beginning realizing OpenEdge with benefits we international introduced synergy to partners

respective solutions in delivered we leveraged quarter their own software fourth portfolio, strong we payments growth capabilities to full-year markets. the scale our for revenue our as distribution for vertical and As our and

in cloud-based example, production which revenue demand For into is double-digits locations. strong the well is XXX its solution, point-of-sale currently generated in in growth Xenial and seeing XXXX software for

in in level, the of across digital America. the business outdoor of small franchises substantial Xenial Heartland high mid-market, restaurant boards the new at and restaurant continued with success XXXX thousands our have enterprise in menu North and our We expectations the rollout rollout of expected for of ongoing

Our new we executed revenue the the Campus to-date with Solutions business in our platform. also a partnership customer from States its doubled Further, ended analytics Quebec. University year Concordia having United largest annualized engagement and outside contract the recurring cloud-based signing

executed UCP live fourth our physical Kingdom, to Canada, of the businesses, the in and in virtual United Platform in and combine merchant States, Global Regarding Kingdom omnichannel we our Payments worlds Commerce serve United successfully complex Unified seamlessly is rollout positioning UCP now the the needs. the United Asia-Pacific. or to quarter,

multinational omnichannel this software its quarter bins also We're the begin States payment In Citi, Canada, the banking with launch an Continental making in we partnership with services on will production December, United UK, Citi to our the Europe in and acceptance basis. and great to pilot quarter. second clients we in strides activated

we forward, financial partnership network best-in-class our through enhanced to leverage with our Going relationships, significantly expect our UCP solutions. extensive to of institution cross-sell TSYS,

have customers for we TSYS's omnichannel enhance of on and experience our to solution focused API capabilities. also leading with We're worldwide the all immediate opportunity single the

Turning to the our combined are we've Heartland operating under channels distribution one now our model. and business; led relationship Salesforce aligned

to to and customized As expanded needs breadth ProPay the of used set with customer distinctive depth combined our deliver of a have we're By meet enterprise result one solution a of existing unique a as case, relationship services. and this with key large able the our to products functionality, we partner. significantly our direct are pleased pairing

cloud-based sales across distribution growth the also delivered two sales double-digit ongoing and months as our the solid with new year we channels payroll of benefit We from ended the quarter our in productivity for strongest our platform. rollout

Leave at closed continue of of successfully December, outside integration to same Desjardins time. at our We planned. portfolio the the commence businesses will the the quarter, we existing Our United is customers platform proceeding referrals and as this converting merchant acquisition end will the experience States to begin strong later momentum. Merchant and

sales outperformed in the increasing UK merchant trends, the UK In double-digits. spending in into we well ongoing new again weakness once consumer Europe, despite macro with

Erste Caixa have the and with product institutions, we Spain and Europe to to offerings look TSYS. drive We further also with financial in of forward two these with our continue now breadth partnerships terrific in results expanding particularly Central with leading with

Asia-Pacific, accelerate businesses the Kong. Hong significantly growth in notwithstanding of impact In riots the in ongoing omnichannel quarter, the our

Our poised and ongoing growth country. that software for more Australia business Education the performance Sentral in been terrific XXXX, is fires outstanding had have in despite in also terrible that

and Turning income, of revenues, to the our XX% which full-year. for achieved we the both Issuer and represents roughly combined record Solutions segment, our quarter operating revenue, transactions

ended number file. accounts also all-time the an at We of year high on

as One and and issuers biggest States government client. agreement another we for executed contracts existing a renewed Rogers as with card We managed commercial in existing customers, for well United also Capital several Bank, including one commercial and of markets, the XX the large services top both

new to with Clydesdale credit Motive Yorkshire a managed signed internationally Virgin move TSYS. processing services We and signed new several with a Health, agreement Bank for book nationwide the we amended customers Money partnership and debit including to and

The converted Walmart quarter. issuer the portfolio others One business to successfully among Capital in October, throughout

Kingdom; prime also new as-a-service, license in go initiative private hosting our & United several to the We This our proposition. prime of Hoare management one models Co. bank with enterprise our of expand live had is services. business C. business with prime and part application further with

SAS new As mentioned of modernization prime into business issuer cloud previously, on bring we as markets program. our basis part to our intend

issuer into Year, We conversion customers continue and to new robust. maintain prospects the for going remain New a our pipeline healthy

well-positioned XXXX growth for beyond. issuer summary, business continued In our in is and

strides Finally, with significant remains and business we're third roughly which making our year strategy. on already And Business segment, Consumer quarter, the our execution represents XX% accelerating finished differentiated now strong. Solutions of from the growth while our

CaixaBank with transaction effort in solutions Specifically, institutions first represents joint we international an This Money which to in an Pay markets. expand prepaid agreement multiple markets governments, recently important to signed venture step provides a corporations, and owned new into other enter our and to business consumers, diversify Europe. our to new payment across

strategic BXB also quarter, new including a ongoing The account of relationships the Pay digitization against rapidly of had consumer wins we into new digital a the payment card and and with in completed multi-year several focus, We're our exceeding fourth new pay this top expectations. set. integration payments quarter executing And initial area we registrations Samsung of our remains notable the large bank. solution growing wallet an XX opportunity with

pilot, all our Additionally, PayPal U.S. are based branded results Walmart's to of on of expanding of the prepaid distribution card we our mid-XXXX the locations. positive

as Looking XXXX, on ahead, and benefit continue the the strong meaningful pure synergies momentum strategy, play to we we drove in execute in revenue cost is with from XXXX realization TSYS. the set of our partnership and our from

rate to of have deliver goal synergies, expense of toward annual million expect years, at now the three over revenue of we continue the over to period. we the to addition million same our run achieving also sight next realize benefits In $XXX line least to $XXX

expect ramp to in the align efforts are strategy our over revenue begin to U.S. and synergies years. realizing target through And our As complete. three merchant I've mentioned, we as go-to-market already next we the our in organizations XXXX,

Specifically, be create will the and improve payment ProPay. now to Engagement able to innovative onboarding Genius to growing capability, our facilitation faster businesses this TSYS's we tailored complex markets. have through Platform With enabled payment partners support our Customer needs across merchant and new solutions of

Vital plans month this leveraging new later self-select channel POS capabilities ProPay. capabilities by We're to in launching to Heartland, this of year. accelerating and deliver Heartland enable distribution next channel our the Canada it Further, for to we're developing distribution expect the

base merchant Netspend the partner in significantly to begin our quarter. restaurants in integrating anticipate proposition also value solution We the vertical TSYS enhancing second legacy our hospitality. markets, Paycard including and payroll we Additionally, into were payroll platform, cross-selling into key

additional Canada. and already States. enable end, roadmaps to we in to customers Moreover, that against Legacy integrator TSYS supporting products the and we're development of internationally, like are TSYS's geographies To partners ProPay Genius executing legacy deliver United outside

launch engagement legacy portfolio. our we and this into customer Later the TSYS to year, expect analytics platform

available also own making businesses software merchants. our to We TSYS anticipate

continents enhancements, remain issuer While we capabilities partners begin processing our bank acquiring discussions by engage to these we extend with marrying relationships to execute initiatives opportunities for flows. revenue globally optimistic our We to across three regarding issuer existing TSYS. transaction optimize with continue near-term on processing on generating ability to in our cross-selling

addition Of course, these from retailers FIs to Payments. relationship referral label TSYS merchant possibilities Global core opportunities and are private to existing in

expanding were capabilities Lastly, actively working Netspend on businesses. we and BXC our into BXB existing

our our solution I Netspend business instant for leverage In also our the of synergies and a is we're to relationships. distinctive planning deposit in with our funding generate newly highlighted our to to solution, CaixaBank, through previously in product. partners joint a clear Pay ability at BXB Paycard addition venture option integrate at announced Netspend's as to gaming this addition Money All to our example

Paul?

Paul Todd

Jeff. Thanks,

of proud how Notably, on and have reiterate this while accomplished the in that executing we're our are in to full-year together for all expectations largest we also results months. we just outstanding fourth XXXX. our pleased the to history a both few merger and have exceeded incredibly want financial I achieved that we quarter already delivered short in the

As now we based this basis earnings revenue with SEC, we're last adjusted network an from mentioned on on reporting on feedback net call, fees. the our excluding of addition the starting quarter,

supplemental supplemental how we financials combined convention now, for of Issuer the operate financials XXXX company Consumer beginning with also filed Solutions, segments quarter. in to reflect first ended combined Business We fourth the Solutions Merchant our which three structure, this The and Solutions changes the with January. and quarters the aligns

XXXX. With net revenue for XX% reflecting $X.XX over that backdrop, billion growth delivered adjusted we the of of full-year

our was For we this count billion that above previous The guidance our billion $X.XX you high-end previously an would guidance range the additional included the $X.XX last prior on to range. convention be network call, the guidance to would of for billion of need result in to $X.XX that year included fees. comparability the non-GAAP performance gave

convention increase reminding overall profile. has worth net income, revenue operating on earnings you change but in our no the that margin per is serve our to share, income It or does impact non-GAAP

benefits. substantially and XX points. we expansion adjusted revenue of solid our on convention. mentioned expectations And we prior up exceeded of part margins, result our net adjusted the XX we the reflects by last basis with full-year which execution that expected to to top-line margin Turning synergy This to was new driven for comparable result approximately in operating expand that points for across better an a we businesses call, reported and than expected our basis stronger convention. adjusted XX.X%, on operating basis, by our On expense XXXX, our exceeded performance, margin

prior guidance of the increase XXXX of top-end $X.XX share per over to and full-year, $X.XX, adjusted reported the a For our of earnings ahead XX% of we range $X.XX.

performance with to we We are deliver our delighted were pure for we play able XXXX, execute to the continue payment on strategy. differentiated as

fourth was XX% is increase of rate margin $X.X quarter of quarter year. over adjusted the net was earnings fourth revenue of growth per to was XXXX, the and billion, an quarter, share increase Moving all compared we to a fourth $X.XX XX.X% XXX% XXXX. the highest the total Adjusted delivered operating adjusted which

Merchant and approximately adjusted momentum XX% our to closer for the TSYS Payments a XX% at which combines continue North merchant look software quarter. net revenues Taking and Global adjusted performance $X.XX billion of delivered legacy revenue, businesses Solutions by we for driven technology-enabled operating fourth segment, our the see segment margin accounts strong of In Merchant by of strategies. which driven America,

integrated combined again led in low delivered consistent growth delivered single-digit growth vertical we and Our our markets businesses high channel. relationship and double-digit

a our holiday target Our for season. Canadian slightly mid-single-digits strong the low business quarter, the grew in above back the single-digit of on

portfolio to have end merchant at the We continue momentum in December. of good Desjardins and Canada the pleased to course of the closed acquisition of have are

Europe revenue consistent achieving of the high currency growth. macro nearly solid in for revenue a company region merger. constant merchant accounts that merchant our segment UK. X% despite of for posted our long-term in UK roughly quarter business our This is the post Our represents Recall business now XX% challenging another single-digit which target also with environment

in double-digits grew and in the quarter. Spain, all Russia Central Our businesses Europe

region of business in deliver e-commerce XX% shift Hong segment by currency accounts Asia Kong Kong. our business Our Hong and new driven APAC both in nearly constant several X% merchant omnichannel grew which continued excluding quarter. wins roughly for customer in growth revenue, a Notably double-digit to this the to

rate an third million revenue quarter the net expectations. for in we the Solutions, from on constant than little a prior-year acceleration Moving quarterly adjusted $XXX the in which to more fourth growth growth quarter, consistent a is currency from record an organic delivered and basis X.X% with the Issuer sequential our

peak issuer As strong resulted significant growth holiday acceleration and several season. from a expected, the conversions

long-term with growth. Importantly, business our consistent continued the underlying for issuer outlook in trends to mid-single-digit be

roughly added We also added the of doubled of three file prior on million number XX accounts accounts the each quarters. during the quarter in

total mentioned, operating Jeff of end year us for file. number As traditional the at this was business allowed accounts Issuer the XX.X%. segment adjusted on to margin a record Reported

essentially our this quarter Business is and adjusted third continued $XXX operating million, margin on quarter This rule. Solutions and the revenue from which our represented flat sequentially delivered of And call. the prior-year a prepaid of despite is the net CFPB Consumer consistent Finally, headwinds is with effect segment from performance with last meaningful XX.X%. acceleration Adjusted the the was commentary results. for

products be to significant a the continue volume realized dollar in Samsung completed successfully the team by had of with the We contract pleased and performance of improving Pay. number while DDA integration wins and our gross trends new

leading relationships faster in this new broaden agreement Pay another plan to growth financial want milestone in how excitement as serves also institutions with our regarding to partnership an we important purchase my with Not regions. express I but example to continue our to of it Money is only CaixaBank. into expand of our XX% to strategic markets, in

close to expect mid-year. to We Pay Money

of time that the realize international our our States. business we roughly us us this potential adjusted quarter. merger. solid merger, time cash us the as at the generate all we that to And performance allow The the free to United significant footprint saw at to earnings outside flow to rate delivered XXX% the of would we continue the a expand of the today announcement said operating equal allowed at We our helps across converted for businesses to adjusted

merchant product our Canada invested to shares the roughly for side, complete develop and the portfolio On purchase Desjardins and XXX,XXX million approximately $XXX technology million. of million $XX repurchase into in CapEx business back of investment approximately reinvested $XXX in solutions, the we new to

of roughly to some leverage of the pro and the quarter end these At inclusive was X.X quarter we times at basically flat last forma deleveraging. where ended investments incremental

while grade strategy Our maintaining free strong going generation Global impressive balance Payments allocation significant balanced rating. forward, pursue cash the investment with to capital and our new capacity our sheet positions flow

outlook growth billion combined to from represents to billion adjusted expect over XX% net our we X% XX% reflecting This of revenue to XXXX, to to growth Turning X%. range $X.XX XXXX. for of $X.XX

For comparability billion. that our this count you guidance of $X.X fees, need would to prior an network includes convention to range additional

year, margin up natural expansion the XXX basis operating points expect we to points. outlook synergy XX from a we expand margin operating benefit business On of actions. basis combined to a next margin by the operating up for adjusted we expect On basis our to adjusted leverage basis, in on expense and as reported

of net range rate north in in tax TSYS forecasting legacy expect expense and to And interest companies. of as of We be XX% of year. for Global are effective the between XX% million to the rates just $XXX our standalone we historical the

We $XXX and some of capital one-time million high-$XXX the expenditures million growth costs related low range integration. expect capital our to to to combination in the a investments with be

And currently run in together, per finally, and broken mirror XX% line quarter approximate income to you from our method of to XXXX. investments expect reflecting earnings of a in range growth this we we out line the rate and in our Putting it will ownership adjusted of have XX% CapData, made primarily equity $X.XX fourth XX% notice annualized up to is all expect share that which we the equity XXXX. over $X.XX

we year. typical benefits go Given and half be that to in growth share our per half will the of relative naturally expectation adjusted revenue expense first earnings XXXX, growth and seasonality higher net the through expect to adjusted second and build our synergy the we as revenue

of Issuer client we our in-sourcing that anniversary the Solutions lapping the the expect CFPB of single year half the segments quarter segment of effect from a second discussed impact after the by one in second in we is product the beginning to and growth normalize the Solutions As benefit well known, in Consumer will we of previously. Business and have in the

Given the of roughly two quarterly growth we businesses fourth with discussed growth two the in expect be in previously the year-over-year first quarter items, what accelerate these to these thereafter. we and in consistent quarter saw

Finally, business throughout XXXX. of exited as ongoing we continue merchant the our strong we growth to XXXX expect

on couldn't we we XXXX and we're more perform in in the XXXX. be closing, In we positioned pleased momentum financial made with and build how as to significant progress strategic our

it And with Jeff. that, over I'll to back turn

Jeff Sloan

Paul. Thanks,

software, in for globally and outlook the integrated decade next leading business bright as most we solutions, The enter of our attractive as capabilities the provider markets. omnichannel owned is payments the

early to be delighted we for well position a expectations integration stage many in are raise for at are synergies efforts in underway second this expense as and quarters. Our to our time the

By businesses, expectations growth our the XXXX for and accelerate exceeding significant substantial balance competitive the our our mode quarter the and exited a grade well into Winnie? year, future. to with fourth and strong continue investment extend across to momentum we sheet, opportunities

Winnie Smith

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

Operator

[Operator Instructions]. Thank you.

Our Dave comes Baird. first question Koning from of

Your line open. is

Dave Koning

Congrats great year. guys. a on hey Yes,

Jeff Sloan

Thanks, Dave.

Paul Todd

Dave. Thanks,

Dave Koning

I us, synergies first just to that mean mechanism immediately a into that the it was what kind kind you've through Yes. QX QX? given accelerate because new all, of And organic of on? I guess then, of revenue and given coming just growth constant year currency is And the merchant growth, in should

Paul Todd

to quarter. the Dave, high we're growth expecting the may fourth continue accelerate is the year, throughout Merchant single-digit next in and kind rate Yes but want of Paul And yes growth this on and add, organic that we to year. Cameron segment saw

Cameron Bready

bit drag I a probably a the it Kong we by of that to is that in remember only Hong was is situation growth. David, on add The thing that QX, little were Yes, point impacted about Cameron. would

really see get expect would the we begin half business. as merchant As number back be XXXX, double-digits. And we to synergies we as in the we good merchant towards the generate momentum business revenue enter to of across XXXX, that close to I

Dave Koning

flow if amount basically the year secondly, good of using that that Is even buying it cash? up And great. or cash Okay, Or do, a acquisition do would the assets. of assume to of make isn't in to really kind the you guidance either your you now the after coming that? use spot full Canadian the full buybacks Spanish upside be and/or leverage

Paul Todd

we're Yes, so a be as do good structure from standpoint. prepared in capital position have said we the be Dave thrilled obviously capacity we our to that wanting of to Obviously our able do we're in remarks, in business. to to do of around strategic capital kind the have to growth the kind the kind continue guidance, of scenarios. of things we in various deployment we're assumptions And

a be the of we fourth some see some so throughout there'll some you'll that deleveraging, things, share be overall baked there'll of where be the do year us acquisitions, quarter there'll And did like kind how into guide. in the repurchase, and is combination

Operator

you. Thank

Shirvaikar Our comes from Ashwin next question of Citigroup.

is Your line open.

Ashwin Shirvaikar

commentary you year, to UK set the the well of the way extent say so the Asia, what to account, in bridge taken already that Good outlook. if on morning I appreciate tend to reporting, you helpful. guide. macro just in prior out can I you up the provided the initial there, outlook do Thanks. folks, underlying terms piece to congratulations it's Money Pay ask I quarter, to break of and have impact? is in the about want each your that know already prior you in could conditions assumptions do against into But

Jeff Sloan

will of question back to well, as in is join Jeff. and I say it's part Ashwin, I Yes, the ask start on I Cameron healthy. would very will consumer your the

through prepared the think, health quarter. fourth momentum I into as And to we we saw continuing in Paul that his XXXX. continue to, expect remarks, alluded

in peak As record billion the for up peak period the single-digits I despite period. year-over-year the high shorter we volumes saw mentioned holiday during prepared transactions us, X comments,

as we consumer. underlying of where our are a the reflects I our and kind the health guidance confidence And company think of in

that I a Spain. alluded or half saw ago. remain pointed pleased in of the a probably Erste to we Europe But in of Europe, riots the of United of we with And in Cameron question be that of XXXX commentary, We relative our business, improve. response -- in in despite would Caixa out to in six difficult how continue our in we in the the particularly outperforming in back with we're been and pleased to strength Paul's UK. seven Kingdom there business back say XXXX, environment Hong performance but also minute this our Kong months the it's course, more the to Dave's Continental half expect we to Asia-Pacific very macro do

been expect of we've Hong been for that that, certainly to number be certainly number that double-digits, in So reporting ex we certainly lap an we Kong were. last improvement has the quarters, XXXX where and that would over

would think I we Ashwin, healthy. say, the consumer So pretty is

heading expectations continued our year, had this think we that coming last really of momentum this coming that I assume year. into see into that we year out

to about optimistic very enhanced do you want drive Cameron, growth. to color? we're to So any add our ability continue

Cameron Bready

just is couple I XX% Ashwin. would of just to maybe Yes, healthy. think points, America, business, which obviously a the of I merchant very North remains Jeff's point

heading in growth both We North outlook revenue American good the obviously very and business just macro the the transactions, and XXXX volume, the strong of for year. balance momentum across the into about as matter have feel

today, a been becomes sales which we an been environment, in reasonably here We've market. Brexit to more macro to Brexit is has the ground" UK, process. in the on not relatively maintain sit closer they'll continue through continue obviously environment help what what's we'll that of our in You performance if of think the muddle and environment. you XXXX. see back growth a to I year, outlook "reality asked by albeit how to stable as to trends similar UK think of environment benefiting They I very a about we slow growth up. Obviously, no the continue offset to we specifically, the the half the strong But a end saw get envision hold

be impact as little Greater be And revenues wild will much the than Asia would outbreak card. how of of on of size I little small coronavirus a business things the we through. we that the is normalized tell China do an course from a as of year, growth from highlighted, expect impact to the get that, a company. be to think to of and from X% some as able note lap we year. in we'll settle will early that our that that the impact double-digit And given protests the as across Payments less the bit whole, last There is of a back Asia low Jeff combined but Hong absorb Global given certainly to move a standpoint, out as assuming return region, to relatively more half range Kong coronavirus you

Jeff Sloan

underlying strategically Pay into It's United And, because penetrated attractive our Jeff it's again. and on different Money a to your On think strategy there. involves Ashwin question trade us bringing important to business we outside more of markets part lesser Netspend the States.

company, to I'll any So it it's other clear. just or important to the relates be financial revenue it impact but is immaterial as to us

Ashwin Shirvaikar

GPN do numbers? strategically And standpoint that your and it. ISO the a there with sort in business the type from business then you TSYS down time pricing that of the intent over do that is you Got whittling did what's intend the or to same original to

Cameron Bready

say Today, channel. is historical the the wholesale little Global's than about a of the merchant business. represents business, wholesale combined different Ashwin, bit around would I the X% Yes, of intent stance

So a a whole. Payments a bit little on than less Global for consolidated basis obviously that, as

that Our same in we're happy around that view business on stay very to is that level.

looking We're the not to actively business. exit

partners good serve well. want to very business that continue have and to We we in

is and out which our our opportunities to new in few maintain script. is, business a I that continue strategy wholesale seek that aggressively to Jeff a customers to to renew, the a around and energy combined we kind as good for going his talked But direct market continue it think will sign not we sign new channel. roughly continue it's will circumstances. our about and have channels select of to by will business largely of to go us focus of really through going a that large, distribution we in we're sort as of most We and forward and plethora flattish growth continue clearly U.S. support business to We may

Operator

Thank you.

Our Huang. next from Tien-tsin comes question

Your line open. is

Tien-tsin Huang

much. so morning. Good thanks Hey,

on Just us. question just you so a all going you on for still around industry and consolidation of

to as changed consider way? you deal that in And if do also a the has any appetite asset well? has So type that I'm changed of curious might

Jeff Sloan

Yes, said and really and over something think think we've before, say had provides as it's strategy Tien-tsin would ongoing we it's that that Jeff. many validation the we years. consolidation; I have of further adopted I

think just thought So certainly no, stuff reinforces that's we heavily and I about that we're surprise position in. a competitive

about I call, adjust say I we our raised leverage minutes given us is this the few And our today. think I of gating has heard on to transactions, we're balance I levels think been partnership you've yourself more have also out the as think, have or very us operating think think a well-positioned of really and good sheet TSYS. now as how for expense coming feel I do ago, for with guidance, is and would side can our estimates the the last been having we and TSYS, quality think great. about I item as mentioned Paul As performance twice with integration on obviously quarter, the our the

heading about are good into we I think we really kind feel where XXXX. of

transactions, businesses, So full other of of is types variety cetera. of full. or naturally software-related consolidations, pipeline our a large It's large et

as shareholder to terms be as been say everything is As to want pursuing good of But regularly and think for position in value to see I in we're always, pursue angle a we have where we the transactions. more creation. we're really appetite would right our today

Tien-tsin Huang

curious in Okay, quick on just there pricing merchant there's good. adjustments side. just impact follow-up maybe a the Thanks. overall on maybe just there? the change I'm what the any comment Any and Then just if U.S. interchange

Jeff Sloan

and not detail or is related comment obviously twice it have merchant at Jeff, often change, the least, I I'll twice Tien-tsin, start side. you pricing Yes, a more know, in usually But a if that. Cameron year than year networks as October the on interchange about

management globally in something of our business us. we true that's So that's for the expect and

that's really, So a not surprise.

services for better down for provide, end said as value can our margin change, the interchange complexity prefer company the customers better we time. more us for it and is at the we that's the merchants of or day, the before As provide any but to just a go good value-added over us it's course and more because of at pricing we we

I end to competed those I would we it's any very transparent. before it when over ever a time, and to to company, competitive it Cameron, efficient the in action say, very pricing at adjustments Paul away too, used that over will and running be as that was market relates of say would day, the obviously he pricing this are turn say

kind for It's new around world. is all markets the time this nothing see of I in we the us. So something think our

to obviously So from good as to unexpected to little it's us; down. a We on customers prices talk prefer Merchants? trends I mentioned, things. that's accommodate. well do But very course our something to of this is bit come we're you in scheme not of Cameron, news all the it's want in prepared something pricing

Cameron Bready

stable. board across would the say Yes. relatively kind of are pricing trends I

market to value-added to deliver strong earlier, our allows to the services capability to Jeff's I customers our ability capabilities a see providing level continue across that our us a and to service get to model believe tailwind point continue for the able solutions product maintain more product core to more to of environment more only drive of And part deliver. stable pricing be a is of we processing we a our services. us what innovative think those for paid providing be delivering to think our offerings. I to superior of fairly we for And

And So marketplace irrational in as behavior market in good I pricing seeing a continues which behavior of lot feel about I how in we market. relatively of certainly sort the not well. overall to be very the is rational. comforting think the We're the positioned think we're

of pass of we in businesses obviously around have obviously, business out And just all work We're efficient the are way. the to lastly part business on we're absorbing relates not to make able look running in a these of interchange Jeff's our to do time; different or to point, and have the in accommodate customers. not be that is absorbing networks And our as this a it the that globe. But to MasterCard in along to the a see these in fees that anytime we change, or any those obviously we we of the to business. that very scheme and changes do

just more it's running it's business. obviously part year. the every that So something single It's headlines but getting year, see of we this

Operator

you. Thank

comes question next Our KBW. from Steven Kwok of

Your line open. is

Steven Kwok

Great, quarter thanks and thanks. Good for questions. taking my

upside coming Just is $XXX of and there around that a could of if million elaborate and your potential million of and Thanks. guidance? you cost cost where also is the within revenue from the how first synergies, synergies, follow-up one XXXX the $XX much around $XXX million embedded was around of that's incremental like

Cameron Bready

to Cameron, the on it's Paul no Yes, Steven specific business. longer jump part, in my and the I'll that's start good first maybe morning. ask guidance, on

first broadly technology. really would part, across say the operating environments On and I

much I with of estimates think I to and most remain overhead expected savings public we on think corporate expenses initial the that we track our company very realize, there.

align think continue future want for about what that expenses the to Obviously, from and original and the make we've able rationalize for think upon specifically. to I as more improve I been business state be estimates we we to technology we to technology operating the have transaction. continue cost environments, we work merchant synergies architecture opportunities our environment through find decisions to

obviously to we today that do deliver that that talk very made. to we've the that them can on the we working having So a obviously, XX sure make to it's just upside number. already commitments will. premature raised than future And But little to that, we're hard better we about another extent new

would this make relative more talked call announced that about last on we transactions. a what The and I reminder we to would I the when point

that we is and business. to that the disrupt of synergies value success importantly, realize ensure have most two, for not do the things. the designed companies; three, combining momentum a new the in business couple long-term; One transaction, the in Our position been we the saw

we in growth seeing strong careful momentum we're strong So and decisions the as very particular. disrupt that we've the don't we're making these been the merchant in business

don't cautious the about So out to very we're we business taking we that. of think that as do ensure costs

We want for the business margin long-term of position also lastly to expansion. sort

we're long-term. actions to over the we'll sustainable I So our scale want think opportunities, do And the three to years, a going important beyond drive second that, Paul, part? have the we're even you take the continue an but of that's part to lot on margin for business, the to well. expansion next take going of touch TSYS as

Paul Todd

is the into guidance. on the Steven the guidance synergy much And of how and built

$XXX heard talk already on million last we've the the on us that expense the side. you expense call On actioned about side,

throughout additional So and fully are more progresses. actioned continue obviously, year coming action so that's and have will be guidance are items fully baked that obviously into the going in to the those to and the year we to than as going

million in more coming $XXX and that's So in the is baked some the there's then fully throughout year.

we revenue so start on is side, more them. have a the items on revenue we said of as from the seeing really XXXX tail year the the that and in to side revenue on significant in the the the back a the some will really but we side of of have revenue that we synergy a side, longer embedded half start On merchant synergies will are earlier lot more mentioned the

Steven Kwok

Unified customers that your And into? it. around expand quick and just uptake the you follow-up current then the can there geographies Thanks. Got among platform. What's Commerce other a product the are

Jeff Sloan

it’s I'll It's Steven take Yes, first. Jeff. worldwide. now that second question,

physically geographies a in XXX. because company cross additional and currently there XX sure we go in combined in countries I'm border as can So a we're

countries we sit is every and in them. not as a company, of Global XXX but is all today of UCP one Payments, where live terms So the in

around pleased very world, we're the as in where our footprint and a markets. of matter the So the I volume worldwide, that's would so majority say far vast vast, transacted we're the with is right by volumes are

customer of terms interaction. In

the mentioned previous particularly of running on think on a I up and has call, good. And UCP. overseas been with say feedback we're really the number we this customers

into I think booked the they number companies into call, the last Those business is of a we've since mentioned go and plenty those booked of running. online are live time being up when and in wins. UCP

of I are we feel say So where good very would about well it’s we today, kind selling competitively. very

a have In real year-over-year. terms point Paul some to few our just particular of fourth in past out remarks, We which in quarter in growth. them. quarter, spots prepared Canada, Asia-Pacific the business our in omnichannel grew of which in bright in his in Spain, this mentioned XX% e-commerce Russia,

want part where a So exactly clearly, be and think to omnichannel in I UCP the we is story. business, we're that big of

Operator

you. Thank

Glenn of from Oppenheimer. comes question Greene next Our

open. is line Your

Glenn Greene

Thank you. Good morning.

little where but months raised potential, of with early clients solutions to as color far back it sort a going obviously revenue before, synergy the Jeff, just in the combined just revenue synergy bit aligned the what for synergy on you're cost was goal the sort the more update for last First together, maybe conversations maybe of as seeing? three putting the

Jeff Sloan

as remarks question long where nature, I'll is Yes, add synergies. Paul on Glenn We as the start dated. I'll the on the good it and didn't is are Cameron ask to to Steven's reason Part tend them of to increase we be by now, I prepared to. and said we Jeff revenue about in mentioned feel in really those response just

of obviously come archive in, So of to to easier detail quantify and how time whereas and kind fee, the revenue takes to expense synergies the alluded us as time in that thinking that. and get to really front Cameron so now we're XXX right

as my relates But I this would that it say remarks, mentioned we're in I those to to prepared year. book as starting

I gave which Vital in like six So selling obviously few quarter, in said call the the a second into in weeks. I that going base, examples to think Heartland the is we is POS be

quarter my I into to engagement platform the base into selling -- into near the Selling Legacy So Xenial and data think customer from Global back towards Heartland, tied of analytics the Heartland the the Netspend also Paycard base. second the into year, the and half that's the data. TSYS Payments,

realized will year. that those are be throughout the things So

made have marry to what in remarks, and in finding the is optimization, my mentioned significant also We ways which acquiring progress as transaction I issuing we'll benefits. prepared call

and time, on progress since course do. to last will with that data discussions ongoing of in of terms ton in corporations primarily Europe, a ways multiple active in to large have that, because October, United costs, in customer made We've those engagement together. that our to and about and will outside acquiring provide of We efficiencies more call long but reporting States, dated, match Canada remains time and take two the issuing take analytics,

I'd overseas. also not from TSYS in States other United signing new is the in where Global not outside of in did business on in before a customers I mentioned Payments business also of that merger say, lot competitive headway takeaways TSYS as merchant providers was because have prepared my the remarks, a making acquiring

say the into we and But do XXX. what into the that are clear would feel thinking plays the to and those So I line long Glenn, dated our some time. take that And revisit future. sight We'll obviously as upping very is. in confident of timing

Glenn Greene

it to and half just the single-digit, question in mid-single-digits issuer growth expectations Then is can a the sort follow-up high XXXX merchants basis of consumer Paul appreciating issuer and combined at maybe for we second or calendar in still in profitability back segment is of scale high-level we a get optimistic? or year shooter thinking that sort of but too on

Paul Todd

are Glenn, longer-term still standpoint, kind those year, a that's on the of of From go-forward the it said, I synergies merchant in. the right side, intact. particularly as throughout as of kind -- some No, growth progress the thinking about is rates come you're

a that the the As half of the issuer, obviously to headwind anniversary one we get there to back spot in Once growth we of another we half we and this really there. the product year, single back growth that quarter strong sweet range de-conversion. talk of got about related still in mid-single-digit in longer-term

quarter, of the And story the continue first a once still and there obviously, mid-single-digit there. for the get we the on CFPB but also side, then for kind business consumer headwinds past

and that of the a more we blend guidance underpinning that's the of the together year, beginning the you we end behind overall of growth lower at at the year, of end to X% the and end that kind X% obviously the higher the gave little at when bit So up we're range.

Operator

Thank you.

next comes Darrin Our of Peller Research. from question Wolfe

is line open. Your

Darrin Peller

Hey, thanks guys.

I your are What actually where's it already? successes I'd of that like, you from -- -- you Jeff follow-up it far? feedback being and have where Genius and OpenEdge platforms. just have being expect been in the it versus cross on Is you others we you sold ramp believe selling revenue seems the your Are the guys people like kind done on are a and had I mentioned can through you so the synergies, some the to it that Clovers a the the price do early you just attrition it some like sales is around think now? curious hear that be others. had curious have those well actually how's going versus industry So points process Vital that, opportunity just get levels? competitive And for and what the then current Heartland

Cameron Bready

Yes, David to it’s that start into Cameron. Paul I will anything and they Jeff want to and jump here add. then ask

the our well thereafter. replacement, it selling POS Diamond very We rolling the specialty the and very of Vital some is obviously on register led distribution we obviously delighted think competes that launching first expect our call the we in the in said opportunity distribution had it direct And channel think is to our team have continue have be Vital it. to a marketplace, We're U.S., in in well week it be do channel early robust. the We're of are part market out the success. at the they'll actually March, capabilities the early to as We for March to position POS solution. that we that. as rolling market terrific solution. we its relationship think Heartland competitively of out And that'll sell through Conference right; You're

really side Genius OpenEdge into integrated the we've far, thus On success the good environment. with really integrated legacy the had OpenEdge,

look of wins contracts with the large put that integrated shot certainly new ramp partners done up business of of wins we solutions very at We half but be top those have new have Genius here We're get back the think leverage to about. Genius over the our being integrated I two XXXX, into to partner shortly. own drive us we those we're that on would to very our obviously across we'll exchanging a as capabilities now front. excited And on the prospects expect but able two that and winning good combined to excited about the with

The in partners other excited about already Legacy thing particularly integrated supporting TSYS we're Canada.

turn on that business footprint be already expand for we've into U.S. them to able So do, historically didn't other in the TSYS of was obviously just and markets their able been given to opportunity look have to that the merchant to the that internationally

to about, this some ability we're early last his the I seen script as thing of Jeff and in and integrated already course is capabilities to of as ramp And across excited over the the see out led year. led that leverage highlighted well already Propay early, then to business our particularly relationship it coming success. would has wins the And obviously early expect both that we've as we our the business of well highlight some

the we're self-select to add service, used of for Genius when to question, fairly paid capabilities, value more to transaction, and level customers, we Propay to can leveraging and just integrated or as part integrated or delivering bit would second innovation reflects POS I or the made To add capabilities dispersement as of our being into us solution more simply the us onboarding your those environment, I it's deliver engine appropriately to value allows whether continue earlier, we be selling a product them. can allows when comments engine more say paid little and the a Vital innovative this a around on technological get

obviously So to and business in continue nice to in of at important it growth ability the merchant our targeting. a drive the creates is terms very tailwind sustained we're levels

Darrin Peller

great. that's right, Thanks guys. All

business, Jeff Netspend as process other follow-up just do keep keep well and is I mean the any going would to that thought forward, it on have thoughts you'd quick as selling consumer it the you have thoughts you I synergy, Just business? going about cross on mean your strategic updated business want Legacy any Thanks. or Netspend

Jeff Sloan

say Darrin Jeff. would with it’s I in Yes, exactly line expectations. it's our

business. to about mentioned, flattish here quarter, we in expected of are starting think course, action, down to quarter as we're the strategies Paul we and on said think October and the I fact, this fourth first have call did we that two in see that differentiators the to in in we for improvement anniversary the second the I quarter that CFPB

we're overseas, the to is with into first successfully any and I deeper to Caixa that one as the The always year, partnership can, BXB. expand looking is heading that middle which Paul for in success into second to direction think described the go we extend our of position

And we wins mentioned that with bank that Paycard through we've had top overlaps times.

business So want to our to our to for also it value certainly, here our said all time, relates of our where Darrin consistent I've I Netspend, and stakeholders. expectations over not to we're would be. with as maximize the to But businesses, specific as say shareholders

our context, So is be to sort every doing with of that that one in Netspend. what exactly businesses now out right needs we're

change will with things the we So if at time, we said think facts we facts. some all have we and strategy. point a differentiated Obviously, the then change, those

Operator

you. Thank

question next of from Bank America. Jason Our Kupferberg of comes

Your line is open.

Jason Kupferberg

Hey, thanks, guys.

wanted organic? acquisition? clarify I all include X% headwind the that X% So the that in just to Canada from XXXX. does Is it growth Or et cetera? the to include wholesale Does

Cameron Bready

Jason. Yes,

on is combined a So yes, it basis.

the two small back what a portfolio, through. is like-for-like standpoint from that is basis, as some first and relatively the one think it's of those at kind I way benefit obviously established other So you rates. businesses really relates that's growth we obviously to anniversary said -- the are on But getting expectation the about obviously, we to of growing growing it there's components, around the some impacts items each Desjardins playing are it fundamental in once if going long-term are these to earlier a small quarter but

back message X% kind in year, to are of had this you're going performing those X% while of we've so exactly year the for line those long-term the to growth the half and for business. of rates established And in math that kind businesses with each this key the is is one of the see

Jason Kupferberg

issuer you cost organic can QX. acceleration mentioned extent you in there were synergies in currency how quantify in think Okay. and Can represented came that then those grew to a period constant just X.X% Thanks. any that the realized I And what just you QX, follow-up, as at? in then much

Cameron Bready

yes. Sure,

basis. a XXX about third quarter the issuer point the basis fourth had in quarter we So relative like-for-like on acceleration of in to kind

that I also the talked that you exactly this top and of back out product, layer that on about X.X%, growth we in would mid-single-digit we of range, if about you last it's of So headwind call, kind kind kind on say governmental squarely acceleration get this took that business. of one that our talked the you

kind growth look that of underlies the rate we're fundamental business. that at we So the managing when

As it issuer in we relates to cost quarter. synergies, got great margin quarter a the for yes, fourth

we like synergies that are in just cost company. are So we getting some throughout business the

positioned that in which expansion is So is in also embedded for great business margin the XXXX guide.

Operator

Cowen. question last come our And from will you. Thank of Mihalos George

Your line is open.

George Mihalos

is Legacy extent Solutions then and way squeezing we grew growth the we forma in the business, Legacy X% And accelerating about clarification low double-digits think was Global that a the of and X% Global in to disaggregate TSYS if appreciate rate on sort at firstly in basis, of of and performance, by can to Hey, two talking you're the year-over-year fourth it, sort for just Maybe all in then thanks pro color. X% the TSYS the look roughly the about me if quarter points we mid-single-digits? to XXXX. to and Merchant the X% XXXX the guys right

Paul Todd

it you and start overall as I'll to of so want relates add may merchant then Yes, to the kind growth. Cameron or

seven basis. fourth So that kind as it yet pure that's quarter, apples-to-apples right range, relates of percent-ish of a pretty is the kind about George on to close

then about just And accelerating growth similar, rate said the to throughout so our say then to like kind the growth you being just rate also meaningfully businesses. quarter And high remarks in that of headwind the for that single-digit I merchant want would we think and these first it prepared growth as for rates business. relates other two year. two the is a somewhat

give margin basis. remarks, substantially expansion get margin the an of fourth relates gives our to did the fourth said expectation apples-to-apples side? kind color And us expansion margin expansion expect it I in also Cameron, that prepared the As on XXXX. to we in And want the go-forward margin we good our exceeded tailwind nice Merchant basis in we for on quarter that Legacy a for quarter. annual you on

Cameron Bready

is this Cameron. George Yes,

business. So we've obviously, the combined

So and you Global a on were at we Legacy it's what basis, with that hard to saw what is, TSYS. if was which currency Hong course get constant what point about business, we would was Global the excluding the a look Legacy very definitive But XXXX. versus low Kong, a range, I say of clear consistent of double-digit view obviously, throughout is in very headwind, of which Legacy growth

we just So a of being with say Legacy little about talked headwind Hong Kong side quarter more really the on a would previously. in bit the I Global of as same the

On from they the think were range TSYS that high I side, of indicated would. kind they we in single-digit accelerating quarter the third as

jumping we into feel for and you a single-digit to business, as merchant then realize good think a you merchant which business. synergies together, get heading we through within course the year the off high which when begin the point So XXXX, that about rate of is blend I the accelerating very

George Mihalos

you. more Jeff, And assets? M&A? vertical there? in you're it on follow-up, doing a Got you quick of pipeline, fully out where in specific? to is helpful. you're any And more then interested the think Very again built more referenced you one color more that just Is M&A maybe be sort Do traditional software, strength restaurant

Jeff Sloan

the in some stuff full I stuff I likely time because looking targets but it’s software States say say, inside is mix more would have of but United inside particularly asset; being to of be mix processing of more a merchant Yes, outside, of than so is, I kind asset. would the kind pipeline a everything. at everything. where United larger we're side the lot it we the States, would we're software for George and I'd software in the likely outside is and looking of States other of that a just say that's United It's say

our We're business. of restaurant very proud

business it has of the of some despite a year-and-a-half we been I name the the prepared us, in ago Xenial, done we Slam acquisition was now really old it us. out the Heartland of called for think is call Grand remarks, for part course well which terrifically

behind front integrated software that and be icon the vertically the the of middle to wanted at to we're with scale that back in hardware, payments, end-to-end whilst So scale was from that good thing. with this but business But we're in but obviously else. think you'd also more, say scale at of like so do part more though, and we business house I analytics data to rationale deal the is to a I everything also would

some of our our the we and to And And wisely spent invested we're that but Xenial think capital really our ability $XX really prepared to locations who forma after million SICOM last period that are in pro speaks in way compared way. billion of invest in scale remarks. $X.X the broadly that businesses. of to competitors in We've XXX years I including I the is company said operating our more what today. acquisition which about today, in We're

because someone at executing scale. And and So, we're to job sell where we a to I yes, restaurant do done the But always the business sure good there. business. look, want think to in be we've their if going we're market cheap, in we're wants we're exactly

we do So need I don't think to more.

opportunistic. be we'll think I

Jeff Sloan

behalf thanks interest joining of Payments, thank for in for And today. us your you Global On this morning. us

Operator

and this conference. concludes Ladies gentlemen, today's

may You disconnect. all

Global Payments (GPN) 12 Feb 202019 Q4 Earnings call transcript