Global Payments Inc. (NYSE:GPN) Q4 2018 Earnings Conference Call Transcript

Feb 13, 2019 • 08:00 am ET


Global Payments Inc. (NYSE:GPN) Q4 2018 Earnings Conference Call Transcript


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Jeffrey S. Sloan

of over 24% rounding out a fantastic 2018. Results this quarter and year were again fueled by our unwavering focus on the three pillars of our growth strategy and broad-based strength across our technology businesses.

As a reminder, we expect technology-enabled distribution to represent 60% of our revenue and drive a significant portion of our growth by the end of 2020 with a balanced portfolio across owned SaaS, partnered software, and e-commerce and omnichannel assets. We made substantial progress against this objective in 2018 and our results highlight the successes our strategic initiatives have produced to date. As it relates to our software-driven payment strategy, we meaningfully enhanced our portfolio during 2018 with the addition of two marquee vertical markets businesses, SICOM and AdvancedMD. It is worth noting that we have a long track record of integrating technology businesses over many years while also retaining and motivating leadership and accelerating growth beginning with APT in 2012, followed by PayPros in 2014, and Heartland in 2016, we have proven our ability to sustain momentum in technology enablement.

Our investments have created differentiated, defensible, resilient and more predictable model and we fully expect to do the same going forward as we continue to advance this strategy. The integration of SICOM with Xenial is well underway. We are already going to market with combined solutions and initial customer reception has been overwhelmingly positive. One early data point, we recently signed a large coffee chain with more than 300 locations in the Pacific Northwest to our existing roster of 50,000 quick service restaurants or QSRs.

The restaurant vertical is the quintessential example of the type of market we target; sizable, worldwide in scope, distinctive, recession-resistant, and relatively insulated from disintermediation especially at the QSR level. Through the combination of Xenial and SICOM, the end-to-end SaaS capabilities we offer to every customer segment of the vertical uniquely position us as a one-stop shop for software, mobile, and payment services in this $4 billion target addressable market worldwide.

Our footprint is broad and diverse, spanning restaurants and food service management providers across 60-plus countries. More to come on our market-leading suite of tech solutions on our first quarter 2019 call. Turning to AdvancedMD or AMD, referrals by its specialized sales force to OpenEdge increased 50% year-on-year in the month of January alone while the team also made hundreds of referrals to Heartland payroll in the first 60 days post close.

At the same time, the Heartland sales organization has begun leveraging existing relationships with physician practices in the communities they serve to bring new customer opportunities to AMD. The proof is in the performance and AMD had terrific sales results in the fourth quarter with bookings up nearly 50% year-over-year to the highest level in its history. As we expected when we announced the transaction in August 2018, the outlook for this business could not be brighter.

Finally, ACTIVE also had strong bookings momentum once again in the fourth quarter as it continues to acquire new