Worldpay Beats 4Q Estimates, Eyes eCommerce Growth

Worldpay reported results on Wednesday (Feb. 28) that beat analyst expectations, as transactions grew in the mid-single digits.

Vantiv, based in the U.S., adopted the name Worldpay after closing the acquisition of Worldpay, based in the U.K., earlier this year.

Excluding items, including the impact of last year’s tax reform changes, the company earned $0.97 a share, better than the Street by two pennies. The top line for the legacy Vantiv business was $568.4 million — $6.4 million better than estimates.

Transactions for Vantiv grew by 6 percent, said management, and the merchant segment generated net revenue growth of 17 percent.

“Vantiv delivered double-digit merchant organic net revenue growth, as our strategy of expanding into high-growth channels and verticals continues to produce results. We nabbed some important wins. We signed a top-three wireless carrier, and we renewed one of our largest clients: Walmart,” Vantiv Chairman and CEO Charles Drucker recounted on the call.

Worldpay met expectations, as its global eCommerce business grew by 20 percent.

The combined company, said the executive, will deliver “payments on a global scale no one can match.”

Co-CEO at Worldpay Philip Jansen stated on the call that eCommerce volumes, as measured worldwide, are expected to double by 2020 with a high-teens growth rate, and cross-border payments will grow by 25 percent annually.

Focus for the company moving forward will be on verticals including B2B, healthcare and entertainment, among others.

Worldpay guided fiscal year revenue between $3.8 billion and nearly $3.9 billion for the year.

Within that guidance, said Stephanie Ferris, CFO, Vantiv, “We expect total merchant revenue to grow high single digits for the full year, consistent with the pro forma growth we saw in 2017. We expect our Technology Solutions segment to continue to grow in the mid- to upper-teens, with the first quarter continuing as eCommerce trends [come] off of a strong holiday season.”

She also told analysts that capturing synergies between the two companies proceeds apace, and that bringing the heritage Worldpay business onto the U.S. platform is something the firm is working on “diligently. It will take us a bit of time.”

Ferris gave granular details about certain segments, noting its Technology Solutions is about 50 percent Integrated Payments, 50 percent eCommerce. “Both of those businesses continue to grow very strongly for us,” she said on the call. “Expectations around those are in the mid- to upper-teens as we thought about guiding to 2018.” Elsewhere, she said, Merchant Solutions has the components of 30 percent U.K. business, and 70 percent U.S.

Brexit is impacting the U.K. side, she said, but the U.S. is seeing traction in the direct business and also the independent sales organization (ISO) side, which is up mid-single digits.

In reference to competitive dynamics, Drucker told analysts, “There’s a middle-market segment that our team is going to be developing to grab the eCommerce more in the middle-market space. Also, that as we pull in to 2019, we feel very good about capturing more and more of that space. So we’re excited.”

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