Q4 net income of $12 million, first profit in 29 quarters since the 2007 privatization
Record Q4 results since privatization include $2.9 billion in consolidated revenue, $1.8 billion in adjusted revenue, $712 million in adjusted EBITDA, and $420 million in operating profit
Q4 adjusted revenue growth, excluding currency impacts, was 6% versus prior year, led by 8% growth in Financial Services and 13% growth in International
ATLANTA, February 10, 2015 – First Data Corporation today reported financial results for the fourth quarter ended December 31, 2014. Consolidated revenue for the fourth quarter was $2.9 billion, the highest since First Data's privatization in 2007 and up 3% versus the prior year period. Adjusted revenue, modified for items such as the exclusion of pass-through debit network fees and postage, was up 4% versus the prior year period to $1.8 billion or 6% excluding currency impacts.
“Our historic fourth quarter, and the year as a whole, demonstrated the continued transformation of First Data,” said Chairman and CEO Frank Bisignano. "This past year saw the launch of numerous new products, the development of strategic partnerships, and a significantly strengthened capital position. We look to 2015 and beyond with great anticipation as we leverage our assets, relationships, and innovative solutions to help drive the future of commerce.”
For the fourth quarter, the net income attributable to First Data was $12 million, compared to a loss of $123 million in the prior year period. Driving the increase was a material improvement in operating profit, up 17% versus the prior year period, and a reduction in interest expense. Adjusted earnings before interest, taxes, depreciation, and amortization (adjusted EBITDA) was $712 million, up 6% versus the prior year period or 8% excluding currency impacts, driven by growth in revenue and positive operating leverage. EBITDA margin for the quarter was 39%, up 1 percentage point versus the prior year period. EBITDA and EBITDA margin also constituted record highs since First Data's privatization.
For the fourth quarter, the company generated $436 million in cash flow from operations after $220 million in cash interest payments. The company finished the quarter with $1.1 billion in unrestricted liquidity.
Merchant Solutions segment revenue for the fourth quarter was $947 million, up 1% versus the prior year period. Merchant acquiring revenue increased 3% versus the prior year period. Product revenue declined 1% versus the prior year period, adversely impacted by the sale of Electronic Funds Source, LLC, (EFS) as well as the continued decline in check processing, offset by growth in equipment revenue. Segment EBITDA was $426 million, down 2% versus the prior year period. EBITDA margin for the fourth quarter was 45%, down 2 percentage points versus the prior year period. EFS contributed $12 million in revenue and $7 million of EBITDA in the fourth quarter of 2013.
Financial Services segment revenue for the fourth quarter was $383 million, up 8% versus the prior year period, a record quarterly growth rate since First Data’s privatization. Growth was driven by the continued benefit from new business wins and growth in existing portfolios and network revenue. Segment EBITDA was $201 million, up 17% versus the prior year period. EBITDA margin for the fourth quarter was 52%, up 4 percentage points versus the prior year period, reflecting positive revenue growth while holding expenses flat.
International segment revenue for the fourth quarter was $473 million, up 4% versus the prior year period. On a constant currency basis, revenue was up 13% versus the prior year period, with merchant acquiring revenue up 14% on volume growth and a portfolio sale in EMEA. Issuing revenue was up 12% on growth in volume and cards on file. Segment EBITDA was $154 million, up 15% versus the prior year period and up 23% on a constant currency basis. EBITDA margin for the fourth quarter was 33%, up 4 percentage points versus the prior year period.
In certain circumstances, results have been presented that are non-GAAP (generally accepted accounting principles) measures and should be viewed in addition to, and not in lieu of, the company's reported results. Reconciliations to comparable GAAP measures are available in the accompanying schedules and in the "Investor Relations" section of the company's website at investor.firstdata.com.
Investor Conference Call
The company will host a pre-recorded conference call and webcast on Wednesday, February 11, 2015, at 8 a.m. EST to review the fourth quarter 2014 financial results.
To listen to the call, dial (800) 708-4540 (U.S.) or (847) 619-6397 (outside the U.S.); passcode 38680859, at least 10 minutes prior to the start of the call. The call will be webcast on the “Investor Relations” section of the First Data website at investor.firstdata.com and a slide presentation to accompany the call will also be available on the website.
A replay of the call will be available through February 25, 2015, at (888) 843-7419 (U.S.) or (630) 652-3042 (outside the U.S.); passcode 38680859 and via webcast at investor.firstdata.com.
Please note: Other than the replay, First Data has not authorized, and disclaims responsibility for any recording, replay or distribution of any transcription of this call.
About First Data
First Data is the global leader in payment technology and service solutions. With 24,000 owner-associates and operations in 35 countries, the company provides secure and innovative payment technology and services to more than six million merchant locations and financial institutions around the world, from small businesses to the world’s largest corporations. Today, businesses in nearly 70 countries trust First Data to secure and process nearly 2,000 financial transactions per second, totaling $1.8 trillion a year. First Data’s unparalleled infrastructure and partnerships go “beyond the transaction” with next-generation point-of-sale technology fueled by powerful analytics to detect fraud, gain insights into consumer spending, and strengthen customer loyalty. All day, every day, First Data helps its clients thrive in the evolving world of commerce.