Global Payments Inc. announced results for the fourth quarter and year ended December 31, 2017.

"We finished 2017 the way we started it: We generated double digit organic growth across our markets in the fourth quarter. 2017 was a terrific year by any measure, and we delivered the fastest rates of organic adjusted net revenue growth, margin enhancement and adjusted earnings per share growth in our history,” said Jeff Sloan, Chief Executive Officer. “We also furthered our strategic objectives to expand our presence in faster growth markets with our agreement today to create a new joint venture with HSBC in Mexico.

“The combination of our technology-enabled distribution with the continuing expansion of our faster growth geographic markets positions us well to continue our exceptional track record of market leading growth,” Sloan continued. “Finally, we are pleased to raise our growth targets in light of the progress we have made in evolving our business mix over the last several years."

Full-Year 2017 Summary

• GAAP revenues were $3.98 billion, compared to $3.37 billion in 2016; diluted earnings per share were $3.01 compared to $1.37 in the prior year; and operating margin was 14.1% compared to 10.6% in 2016.

• Adjusted net revenue grew 24% to $3.52 billion, compared to $2.84 billion in 2016.

• Adjusted earnings per share grew 26% to $4.01, compared to $3.19 in 2016.

• Adjusted operating margin expanded 120 basis points to 29.9%.

Fourth Quarter 2017 Summary

• GAAP revenues were $1,054.3 million, compared to $950.2 million in the fourth quarter of 2016; diluted earnings per share were $1.51 compared to $0.16 in the prior year; and operating margin was 14.2% compared to 8.4% in the fourth quarter of 2016.

• Adjusted net revenue grew 15% to $939.0 million, compared to $819.7 million in the fourth quarter of 2016.

• Adjusted earnings per share grew 23% to $1.07, compared to $0.87 in the fourth quarter of 2016.

• Adjusted operating margin expanded 170 basis points to 30.3%.

ASC 606

Global Payments will adopt Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”), effective January 1, 2018. Under ASC 606, GAAP revenues will now be reported net of fees paid to payment networks rather than on a gross basis with these amounts being reflected as a cost of service as they have been historically. In addition, GAAP revenues associated with our gaming cash advance products will now be reported net of associated commissions paid to casinos. These changes in presentation reduce revenues and operating expenses by the same amount and have no effect on operating income or earnings per share.

In addition to reporting GAAP results on this basis going forward, we will also report an adjusted net revenue plus network fees metric, which we believe better reflects how we manage our business and is largely consistent with our historical non-GAAP adjusted net revenue reporting convention, except with respect to the netting of gaming cash advance commissions. The netting of casino commissions reduces 2017 reported amounts by approximately $68 million and is expected to impact 2018 by an estimated $73 million. In addition, we will report adjusted operating margin based on the adjusted net revenue plus network fees metric, which again is largely consistent with our historical reporting convention.

2018 Outlook

“We could not be more pleased with our strong financial performance for 2017, and we remain excited about the momentum we have entering 2018,” stated Cameron Bready, Senior Executive Vice President and Chief Financial Officer. “As a result of this performance, for 2018 the company expects adjusted net revenue plus network fees to range from $3.88 billion to $3.97 billion, reflecting growth of 12% to 15% over comparable 2017 results and adjusted earnings per share to be in a range of $4.95 to $5.15, reflecting growth of 23% to 28% over 2017. Annual adjusted operating margin for 2018 is expected to expand by up to 110 basis points over comparable 2017 adjusted operating margin of 30.4%.”

Capital Allocation

Global Payments’ Board of Directors approved a dividend of $0.01 per share payable March 30, 2018 to shareholders of record as of March 16, 2018. The board also approved an increase to the company’s existing share repurchase program authorization, raising the total available authorization to $600 million.