Vantiv, Inc. announced financial results for the first quarter ended March 31, 2014. Revenue increased 8% to $537.6 million in the first quarter as compared to $498.0 million in the prior year period. Net revenue increased 6% to $288.5 million in the first quarter as compared to $272.9 million in the prior year period, primarily due to a 6% increase in transactions. On a GAAP basis, net income attributable to Vantiv, Inc. was $28.1 million or $0.18 per diluted share during the first quarter, compared with $26.1 million or $0.18 per diluted share in the prior year period. Pro forma adjusted net income increased 15% in the first quarter to $77.6 million as compared to $67.4 million in the prior year period. Pro forma adjusted net income per share increased 26% to $0.39 for the first quarter as compared to $0.31 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.)
Vantiv’s scale and integrated business model continue to drive superior profitability as reflected by the Company’s first quarter adjusted EBITDA margin of 46.3%, representing approximately 40 basis points in margin expansion over the prior year period. Adjusted EBITDA increased to $133.7 million in the first quarter from $125.2 million in the prior year period. (See Schedule 7 for a reconciliation of GAAP net income to adjusted EBITDA.)
“Our business continues to perform well, and I am proud of our double digit pro forma adjusted net income per share growth,” said Charles Drucker, president and chief executive officer at Vantiv. “We are capitalizing on the strong secular trends in the payments industry by not only focusing on our traditional channels, but also by pursuing high growth verticals and channels to drive growth.”
*Merchant Services*
Net revenue increased 7% to $205.3 million in the first quarter as compared to $191.6 million in the prior year period, primarily due to a 6% increase in transactions and a 1% expansion in net revenue per transaction. Sales and marketing expenses increased by 2% above the prior year period, to $71.8 million.
*Financial Institution Services*
Net revenue increased to $83.2 million in the first quarter from $81.3 million in the prior year period, primarily due to a 7% increase in transactions, which was partially offset by a shift in the mix of our client portfolio that resulted in a lower average rate per transaction. Sales and marketing expenses increased by 15% above the prior year period, to $6.7 million.
*Second Quarter 2014 Financial Outlook*
Based on the current level of transaction trends and new business activity, net revenue for the second quarter of 2014 is expected to be $315 to $320 million, representing growth of 6% to 8% above the prior year period. Pro forma adjusted net income per share for the second quarter of 2014 is expected to be $0.45 to $0.46, an increase of 13% to 15% above the prior year period. GAAP net income per share attributable to Vantiv, Inc. is expected to be $0.25 to $0.26 for the second quarter of 2014.
