Total System Services, Inc. (NYSE:TSS) Q1 2018 Earnings Conference Call - Final Transcript
Apr 24, 2018 • 05:00 pm ET
Institute, a global leader in defining and advancing the standards of ethical business practices. This is the sixth time TSYS has been named to this prestigious list.
Also, in March, we were honored to be named the top 10 most innovative company in Georgia by the Technology Association of Georgia. And lastly, I am incredibly proud that our Chief Information Officer, Patty Watson, was named as one of the Most Influential Women in Payments by PaymentsSource, who recognizes the 25 most influential women across the industry each year. This is the second time Patty has been named for this prominent list, which is no surprise to many of us at TSYS. These honors and recognitions are a true testament to the dedication, hard work and loyalty of our nearly 12,000 team members around the world.
Now, I would like to provide a few comments on each of our business segments. In Issuer Solutions, we carried over the momentum from 2017 with a strong start to 2018. In the first quarter, we set a new record for net revenue of $423.6 million, a 6.7% constant currency increase over the first quarter of last year. This is the fifth straight quarter of achieving record level net revenue. Segment operating income was also a new record at $151 million, exceeding the previous record set in the third quarter of last year. We ended the first quarter with $578.6 million traditional accounts on file, yet another record, and the operating margin expanded 108 basis points.
On the business development front, we added the Commercial Card business with the Bank of Oklahoma and the Bank of the West. In addition, we renewed contracts with several of our longstanding clients, including KeyBanc, Target, City National and Capital One in the UK. To continue the good news on the business development front, JPMorgan Chase will begin offering our Virtual Payment Precept solution for strategic commercial to our payable solution for corporations.
And finally in March, we announced an agreement with Walmart to implement our new patent pending payment solution, Advanced AuthControl at all Walmart and Sam's Club's locations nationwide. In addition to Advance AuthControl, we continue to see progress related to executing on our product roadmap and new product development initiatives that I have discussed the past few quarters; to include, take discussion of service, fraud servicing and its fleet management and a new data and analytics platform. Our product teams continue to work diligently and demonstrate their ability to execute and deliver innovative new products and services to our customers.
The issuing team continues to execute on their growth plans and we're very pleased with the first quarter results and excited about this momentum going forward.
Now, let's turn to our Merchant Solutions segment. Our integration activities associated with Cayan continued to move along quickly. As a result of the Cayan acquisition somewhat that realigns as management within this segment. As far as the realignment, we are pleased that Henry Helgeson, Co-Founder and CEO of Cayan,