Global Payments Inc. shares are up more than 4% in midday trading Wednesday, after the financial-technology company beat expectations on the bottom line and increased its share buyback program.
The company posted a “clean” quarter, according to Buckingham Research analyst Chris Brendler, and saw strong showings from some of its recent acquisitions. Global Payments GPN, +4.35% said that bookings for AdvancedMD, a medical software company that it acquired late last year, rose nearly 50% as cross-selling benefits kicked in.
The latest earnings report comes amid heightened merger activity in the merchant-acquiring space, and in financial technology more broadly, including Fiserv Inc.’s FISV, +0.20% $22 billion deal for First Data Corp. FDC, +0.14% that was announced a month ago. There has been some concern among analysts and investors that this consolidation could hurt stand-alone peers, but Global Payments Chief Executive Jeff Sloan told MarketWatch that the First Data/Fiserv combination “validates the shift we’ve made into technology distribution.”
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Sloan expects the company to continue benefiting from several tech-focused areas, including rising adoption of mobile payments and e-commerce solutions in general, as well as a gravitation toward more software-as-a-service and cloud-based sales. These areas represent “cross-currents with global overlay,” he said, as Global Payments pushes further into fast-growing international markets.
He’s upbeat about a new financial-institution partnership in Mexico as well as the company’s opportunities in Canada, Asia, and Latin America.
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Sloan said that technology offerings are of keen interest to financial-institution partners in Europe, where the banking landscape is more concentrated than in the U.S., as banks try to use their tech to grow market share. There are more players on the U.S. banking scene, however, which has limited the ways in which banks leverage software offerings. “That is going to change,” Sloan told MarketWatch, as he predicts that bank-based technology distribution will become more important in the U.S. market going forward.
“Increasingly in the payments business, the winners and losers are separated by the tech investments they’re making and the ongoing digitization of the value chain,” he said. “The competitive moat between us and everyone else is really evident.”
Shares have gained 12% over the past three months, while the S&P 500 SPX, +0.38% has risen 1%.