First Data’s continued losses, laden with debt and milked by KKR minions makes its upcoming IPO for fools. The Company, valued at $40 billion, managed to lose $26 million in the second quarter which it blames on foreign currencies – total mismanagement and lack of foresight.
Consolidated revenue for the second quarter was $2.9 billion, up 1% versus the prior year period. Segment revenue, which modifies consolidated revenue for the exclusion of various pass through items and other impacts, was $1.8 billion for the quarter, up 1% versus the prior year period, or up 5% excluding currency impacts.
For the second quarter, the net loss attributable to First Data was $26 million, a 24% improvement from the $34 million loss in the prior year period. The prior year period was positively impacted by an $80 million after-tax gain on the sale of Electronic Funds Source, LLC (EFS).
In the second quarter of 2015, the Company realigned its operating segments. Following the realignment, the Company is now reporting results of operations in the following three reportable segments: Global Business Solutions (GBS), Global Financial Solutions (GFS), and Network & Security Solutions (NSS). All segment information has been retroactively adjusted to reflect this change.
Global Business Solutions provides retail point-of-sale merchant acquiring and eCommerce services, next-generation offerings such as mobile payment services, as well as the Company’s cloud-based Clover® point-of-sale operating system and its marketplace of proprietary and third-party business apps. GBS segment revenue for the second quarter was $1.1 billion, up 2% versus the prior year period, or up 5% on a constant currency basis. North America revenue of $835 million increased 3% versus the prior year period due to increased hardware sales and revenue from its merchant suite of solutions.
Global Financial Solutions provides credit and retail private-label card processing, output services and next-generation offerings, such as its VisionPLUS Flex software, which enables card issuers to manage all of their payments-related products and services as a single, integrated “one-stop-shop” solution. GFS segment revenue for the second quarter was $353 million, down 3% versus the prior year period, or up 3% on a constant currency basis. North America revenue of $207 million was up 5% due to internal growth and increased card personalization volume related to EMV demand. EMEA revenue was $103 million, down 16%, or down 2% on a constant currency basis due to yield pressure on renewed contracts.
Network & Security Solutions provides a wide range of network services such as Electronic Funds Transfer (EFT) Network Solutions, Stored Value Network Solutions, and Security and Fraud Management Solutions. NSS segment revenue for the second quarter was $356 million, up 6% versus the prior year period. EFT Network Solutions revenue of $123 million increased 6% due to new business. Security and Fraud Management Solutions revenue of $98 million increased 7% due to growth in business security solutions. Stored Value Network Solutions revenue of $80 million declined 1% due to the EFS sale in the prior year period. Excluding the EFS sale, Stored Value Network Solutions revenue was up 10% due to increased transaction growth. NSS segment revenue in the quarter was adversely impacted by $8 million due to the sale of EFS.
On June 9, 2015, First Data acquired Transaction Wireless Inc. (TWI), a San Diego-based provider of digital stored value products that offer gift card programs, loyalty incentives, and integrated marketing solutions for retailers, partners, and consumers. The acquisition complements First Data’s 2014 acquisition of GyftTM, a consumer-facing digital platform that enables consumers to buy, send, reload, manage, and redeem virtual closed-loop cards using mobile devices.
2Q/14: $382 million
3Q/14: $353 million
4Q/14: $420 million
1Q/15: $260 million
2Q/15: $409 million
Source: First Data;
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