The top management at Global Payments Inc. said early Wednesday the company is beginning to reap the benefits it planned for when it paid $4 billion to acquire EVO Payments Inc., a processor with international merchant connections. The deal, which is now more than a year past its closing date, helped buoy March-quarter results for Global, the Atlanta-based company’s top management said on a conference call with equity analysts.
“The EVO integration has made substantial progress,’ noted Global chief executive Cameron Bready, adding his company is “having success bringing our services to EVO merchants in Europe,” including e-commerce sellers. EVO at the time the deal was announced in August 2022 was the 21st largest U.S.-based payments processor by dollar volume, according to the research firm TSG.
Now, Bready said Wednesday, the deal is starting to deliver for Global. The company is “well under way to realizing our target of $135 million in cost synergies within two years,” noted chief financial officer Josh Whipple, referring to cost savings that result from operating efficiencies brought on through acquisitions. Global is also now “having success in bringing our services to EVO markets in Europe,” he added.
Bready was more emphatic. “We’re more enthusiastic now about the EVO revenue opportunity than we were when we announced the transaction in 2022,” he told the analysts. Overall, he said, “as we push more software, we do expect to see some ability to drive revenue growth that outstrips volume growth.”
But it was another deal, the potential combination of Capital One Corp. and Discover Financial Services, that Global’s top brass had to address as well, as part of Global’s business is involved in supporting card-issuing banks like Cap One. The $35.3-billion deal was announced in February.
On that front, “there’s not a lot I can say,” Bready said. “We have a long track record with Capital One. We just renewed with them. Time will tell how that [deal with Discover] works out for them.” Still, he added, Global’s “record with [with Capital One] has been positive with respect to the M&A they have done.”
Global’s merchant business posted $1.68 billion in revenue for the quarter, a 16% year-over-year increase, though excluding EVO and “dispositions” the revenue increase was 8%. The company expects to see merchant revenue climb 9% for the year. The other part of Global’s business, issuer technology, posted $516 million in revenue for the quarter, up 5%.
Total adjusted net revenue for the company came to $2.18 billion, up 7%, with an adjusted operating margin of 43.5%, up 40 basis points.