NJ-based Heartland Payment Systems (HPS) reported Small and Mid-Sized Enterprise (SME) transaction processing volume was a quarterly record $23.8 billion for Q2/15, up 16.5% from the second quarter of 2014, the fourth consecutive quarter of double-digit acceleration. Quarterly net revenue was a record $203.9 million, up 27.9% from the second quarter of 2014, with organic net revenue growth of 12.5% for the quarter.
Same store sales were up 3.4%. Net volume attrition was 9.8% for the second quarter, down from 12.6% in the second quarter of 2014 and up only marginally from the first quarter of 2015.
SME card transaction processing volume growth for the quarter was 16.5% compared to the second quarter of 2014, the fifth consecutive quarter in which the rate of SME transaction processing volume growth accelerated, driven by new margin installs and improved net volume attrition. Core Visa and MasterCard volume processed in the quarter was up 12.0% compared to the second quarter of 2014, also sequentially accelerating growth from the first quarter of 2015.
Total non-card revenue growth was 75% for the quarter, of which over 20% was organic growth with the balance attributable to recent acquisitions.
The Adjusted Operating Margin for the second quarter of 2015 was 23.9%, up from the prior year second quarter, despite the continuing investments in Heartland Commerce, out-of-scope solutions, marketing, and security initiatives, and the year-over-year increase in sales and incentive compensation, as well as a final quarterly loss from Leaf. Comparatively, the prior year second quarter operating margin was also impacted by Leaf’s operating loss and the correction of a billing error at Heartland School Solutions as previously reported.
For full year 2015, HPS expects net revenue to grow 18% to 20%, to between approximately $795 million and $805 million,
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