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Vantiv Reports Fourth Quarter and Full-Year 2015 Results

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Vantiv Reports Fourth Quarter and Full-Year 2015 Results

       
             
  • Fourth quarter net revenue increased 13% to $453 Million and pro forma adjusted net income per share increased 23% to $0.65
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  • Fourth quarter Merchant Services net revenue increased 14% and Financial Institution Services net revenue increased 7%
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  • Fourth quarter adjusted EBITDA margin expanded by 100 basis points to 49.1%
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  • Full-year net revenue increased 20% to $1,682 Million and pro forma adjusted net income per share increased 20% to $2.24
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CINCINNATI, Feb. 3, 2016 - Vantiv, Inc. (NYSE:  VNTV) ("Vantiv" or the "company") today announced financial results for the fourth quarter and full-year ended December 31, 2015. For the fourth quarter, revenue increased 16% to $852 million as compared to $734 million in the prior year period. Net revenue increased 13% to $453 million as compared to $402 million in the prior year period, reflecting strong growth in both of our segments. On a GAAP basis, net income attributable to Vantiv, Inc. was $51 million or $0.31 per diluted share as compared to $69 million or $0.35 per diluted share in the prior year period. Pro forma adjusted net income increased 22% to $128 million as compared to $105 million in the prior year period. Pro forma adjusted net income per share increased 23% to $0.65 as compared to $0.53 in the prior year period. (See Schedule 2 for pro forma adjusted net income and Schedule 6 for GAAP net income reconciliation to pro forma adjusted net income.)

For the full-year 2015, revenue increased 23% to $3,160 million as compared to $2,577 million in the prior year. Net revenue increased 20% to $1,682 million as compared to $1,403 million in the prior year. On a GAAP basis, net income attributable to Vantiv, Inc. was $148 million or $0.95 per diluted share in 2015 as compared to $125 million or $0.75 per diluted share in the prior year. Pro forma adjusted net income increased 21% to $449 million as compared to $372 million in the prior year. Pro forma adjusted net income per share increased 20% to $2.24 as compared to $1.87 in the prior year. (See Schedule 2 for pro forma adjusted net income and Schedule 7 for GAAP net income reconciliation to pro forma adjusted net income.)

Vantiv's scale and superior cost structure continue to drive high levels of profitability. For the fourth quarter, adjusted EBITDA margin expanded by 100 basis points to 49.1% as compared to 48.1% in the prior year period, primarily due to cost synergies created by the on-going integration of Mercury Payment Systems ("Mercury"). For the full-year 2015, adjusted EBITDA margin was flat as compared to the prior year, primarily due to impacts from the Mercury acquisition, which were offset by cost synergies realized during the year. (See Schedule 8 for a reconciliation of GAAP net income to adjusted EBITDA.)

"Our strong results in 2015 demonstrate how our strategy to invest in our core strengths while expanding into high-growth channels and verticals has successfully generated sustainable organic growth across our business," said Charles Drucker, president and chief executive officer at Vantiv. "I am proud of the way that our people have navigated the changes in the payments industry to make this a great year while simultaneously positioning us for continued future success."

Merchant Services
 
For the fourth quarter, Merchant Services net revenue increased 14% to $363 million as compared to $318 million in the prior year period, primarily due to an 8% increase in transactions and a 5% increase in net revenue per transaction as our high growth channels continued to grow at above market rates. Sales and marketing expenses increased 16% to $125 million in the fourth quarter as compared to $108 million in the prior year period, primarily due to new sales growth.

For the full-year 2015, Merchant Services net revenue increased 25% to $1,336 million as compared to $1,067 million in the prior year, primarily due to a 17% increase in transactions and a 7% increase in net revenue per transaction. The Mercury acquisition was completed during the second quarter of 2014. On a pro forma organic basis, Merchant Services net revenue would have increased 14% for full-year 2015 as compared to the prior year if we had owned Mercury throughout both years. Sales and marketing expenses increased 30% to $479 million for the full-year as compared to $368 million in the prior year, due to new sales growth, as well as impacts from the Mercury acquisition. 

Financial Institution Services
 
For the fourth quarter, Financial Institution Services net revenue increased 7% to $90 million as compared to $84 million in the prior year period, primarily due to a 4% increase in transactions and a 3% increase in net revenue per transaction primarily due to value added services including the impact of EMV card reissuance. Sales and marketing expenses decreased 14% to $7 million in the fourth quarter as compared to $8 million in the prior year period.

For the full-year 2015, Financial Institution Services net revenue increased 3% to $346 million as compared to $336 million in the prior year as a 6% increase in transactions was partially offset by lower net revenue per transaction. Sales and marketing expenses decreased 11% to $25 million for the full-year from $28 million in the prior year.

Full-Year and First Quarter 2016 Financial Outlook
 
Based on the current level of transaction trends and new business activity, net revenue for the full-year 2016 is expected to be $1,795 to $1,825 million, representing an increase of 7% to 9% above the prior year. Pro forma adjusted net income per share is expected to be $2.55 to $2.61 for the full-year, representing an increase of 14% to 17% above the prior year. GAAP net income per share attributable to Vantiv, Inc. is expected to be $1.27 to $1.33 for the full-year 2016.

For the first quarter of 2016, net revenue is expected to be $405 to $410 million, representing an increase of 8% to 9% above the prior year period. Pro forma adjusted net income per share for the first quarter of 2016 is expected to be $0.51 to $0.53, representing an increase of 13% to 18% above the prior year period. GAAP net income per share attributable to Vantiv, Inc. is expected to be $0.18 to $0.20 for the first quarter of 2016.

Earnings Conference Call and Audio Webcast
 
The company will host a conference call to discuss the fourth quarter and full-year 2015 financial results today at 8:00 a.m. EST. The conference call can be accessed live over the phone by dialing (800) 967-0627, or for international callers (913) 981-5549, and referencing conference code 806419. A replay will be available approximately two hours after the call concludes and can be accessed by dialing (888) 203-1112, or for international callers (719) 457-0820, and entering replay passcode 806419. The replay will be available through Wednesday, Feb. 17, 2016. The call will also be webcast live from the company's investor relations website at http://investors.vantiv.com. Following completion of the call, a recorded replay of the webcast will be available on the website.

ABOUT VANTIV
 
Vantiv, Inc. (NYSE: VNTV) is a leading payment processor differentiated by an integrated technology platform. Vantiv offers a comprehensive suite of traditional and innovative payment processing and technology solutions to merchants and financial institutions of all sizes, enabling them to address their payment processing needs through a single provider. We build strong relationships with our customers, helping them become more efficient, more secure and more successful. Vantiv is the second largest merchant acquirer and the largest PIN debit acquirer based on number of transactions in the U.S. The company's growth strategy includes expanding further into high-growth channels and verticals, including integrated payments, ecommerce, and merchant bank. Visit us at the new www.vantiv.com, or follow us on Twitter, Facebook, LinkedIn, Google+ and YouTube
       
  © 2016 Vantiv, LLC. All Rights Reserved. All trademarks, service marks and trade names referenced herein are the property of their respective owners. Vantiv and other Vantiv products and services mentioned herein as well as their respective logos are registered trademarks or trademarks of Vantiv, LLC in the U.S. and other countries.

Non-GAAP and Pro Forma Financial Measures
  This earnings release presents non-GAAP and pro forma financial information including net revenue, adjusted EBITDA, pro forma adjusted net income, and pro forma adjusted net income per share. These are important financial performance measures for the company, but are not financial measures as defined by GAAP. The presentation of this financial information is not intended to be considered in isolation of or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. The company uses these non-GAAP and pro forma financial performance measures for financial and operational decision making and as a means to evaluate period-to-period comparisons. The company believes that they provide useful information about operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to key metrics used by management in its financial and operational decision making. Reconciliations of these measures to the most directly comparable GAAP financial measures are presented in the attached schedules.

Forward-Looking Statements
  This release contains forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical fact or relating to present facts or current conditions included in this release are forward-looking statements including any statements regarding guidance and statements of a general economic or industry specific nature. Forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, guidance, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as "anticipate," "estimate," "expect," "project," "plan," "intend," "believe," "may," "should," "can have," "likely" and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events.

The forward-looking statements contained in this release are based on assumptions that we have made in light of our industry experience and our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. As you review and consider information presented herein, you should understand that these statements are not guarantees of future performance or results. They depend upon future events and are subject to risks, uncertainties (many of which are beyond our control) and assumptions. Although we believe that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect our actual future performance or results and cause them to differ materially from those anticipated in the forward-looking statements. Certain of these factors and other risks are discussed in the company's filings with the U.S. Securities and Exchange Commission (the "SEC") and include, but are not limited to: (i) our ability to adapt to developments and change in our industry; (ii) competition; (iii) unauthorized disclosure of data or security breaches; (iv) systems failures or interruptions; (v) our ability to expand our market share or enter new markets; (vi) our ability to identify and complete acquisitions, joint ventures and partnerships; (vii) failure to comply with applicable requirements of Visa, MasterCard or other payment networks or changes in those requirements; (viii) our ability to pass along fee increases; (ix) termination of sponsorship or clearing services; (x) loss of clients or referral partners; (xi) reductions in overall consumer, business and government spending; (xii) fraud by merchants or others; (xiii) a decline in the use of credit, debit or prepaid cards; (xiv) consolidation in the banking and retail industries; (xv) the effects of governmental regulation or changes in laws; and (xvi) outcomes of future litigation or investigations. Should one or more of these risks or uncertainties materialize, or should any of these assumptions prove incorrect, our actual results may vary in material respects from those projected in these forward-looking statements. More information on potential factors that could affect the company's financial results and performance is included from time to time in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of the company's periodic reports filed with the SEC, including the company's most recently filed Annual Report on Form 10-K and its subsequent filings with the SEC.

Any forward-looking statement made by us in this release speaks only as of the date of this release. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

CONTACTS
  Investors
 
Nathan Rozof, CFA
  Investor Relations
  (866) 254-4811
  (513) 900-4811
  IR@vantiv.com

Media
  Andrew Ciafardini
 
Corporate Communications
 
(513) 900-5308
 
Andrew.Ciafardini@vantiv.com


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