Global Payments(US:GPN)2022-05-08 09:55Financial Data and Key Metrics Changes - In Q1 2022, EVO Payments reported a volume growth of 26% compared to Q1 2021, marking the third consecutive quarter of volume acceleration [9] - Revenue grew by 23% on a constant currency basis, adjusted EBITDA increased by 21%, and the margin remained flat at 32% compared to the prior year [9][26] - Adjusted net income for the quarter increased by 51% to $19 million, with adjusted net income per share rising by 54% to $0.20 [28] Business Line Data and Key Metrics Changes - In Europe, constant currency revenue increased by 51% and volume increased by 40%, driven by strong sales execution and the lifting of COVID-related restrictions [12] - In the Americas, constant currency revenue increased by 9%, with an 11% volume growth attributed to bank referral channels in Mexico and Chile [21] - The tech-enabled channel in the U.S. saw a revenue increase of 13%, reflecting growth in ISV and B2B segments [23] Market Data and Key Metrics Changes - The Polish market experienced a significant increase in revenue and volume due to the influx of Ukrainian refugees, with volume up about 50% and revenue also reflecting strong growth [41][56] - The overall European market showed broad-based growth across all sectors, with a notable increase in cross-border activity and DCC revenue tripling compared to the prior year [12][27] Company Strategy and Development Direction - The company is focused on investing in technology-driven solutions to support card adoption in developing markets, particularly in Latin America and Central and Eastern Europe [35] - There is a strong emphasis on expanding tech-enabled referral networks and enhancing integrated software capabilities across all markets [15][35] - The company is preparing to launch operations in Greece, anticipating regulatory approval in Q4 2022, and is actively seeking growth opportunities in Central and South America [16][67] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the sales momentum generated in early 2022, despite global economic uncertainties stemming from the Ukraine crisis and inflation [11][30] - The company is maintaining its 2022 guidance for revenue growth of 11% to 13% and adjusted EBITDA growth of 13% to 15%, while expecting to perform at the mid- to high end of these ranges [30][31] - Management highlighted the importance of continued investment in products and services to drive long-term growth and shareholder value [37] Other Important Information - The company reported a free cash flow increase of 67% to $28 million, with a free cash flow conversion rate of 71% [29] - Capital expenditures for Q1 2022 were $8 million, down from $11 million in Q1 2021, with a focus on terminals to support new merchant onboarding [29] Q&A Session Summary Question: What contributed to the strong performance in Europe? - Management attributed the performance to excellent new merchant sales across all channels, particularly in tech-enabled divisions, and a recovery in travel and consumer spending as COVID restrictions eased [40] Question: How are trends in April affecting guidance? - Management indicated that they are maintaining guidance due to positive trends observed in various markets, while remaining cautious about potential economic impacts from the Ukraine crisis and inflation [44] Question: What is the expected impact of DCC normalizing to 2019 levels? - Management expects DCC to increase about 10% relative to full year 2019 levels, which is factored into their outlook [51] Question: What is the status of the Greece joint venture? - The company anticipates launching operations in Greece by Q4 2022, with significant preparatory work already underway [66][81] Question: How is the B2B business performing? - The B2B segment continues to show strong growth, with a focus on signing new partners and leveraging existing relationships to drive sales [82]