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Alliance Data’s Epsilon Segment Posted Stellar Results in 4Q15

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Revenues rose 38% YoY

Alliance Data Systems’ (ADS) revenues rose 38% YoY (year-over-year) from $440 million in 4Q14 to $608 million in 4Q15. For the full year 2015, revenues rose 41% to $2.1 billion from $1.5 billion in 2014. Organic revenue and adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) rose 5% YoY.

Epsilon is a “next generation marketing agency” and it manages the entire customer marketing lifecycle including some of the largest consumer databases for Fortune 1000 companies. Its clients include Hilton Hotels (HLT), Pfizer (PFE), and Nestle (NSRGF).

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Card services

Revenues from Alliance Data’s Card Services segment increased 20% YoY from $654 million in 4Q14 to $785 million in 4Q15. For the full year 2015, revenues rose 24% YoY to $3.0 billion from $2.4 billion in 2014.

Adjusted EBITDA for this segment also rose 16% in 4Q14 and in the full year 2015. While credit sales increased 22% from $6.4 billion to $7.8 billion in 4Q15, they rose by an impressive 31% YoY in 2015 to $24.7 billion from $18.9 billion in 2014.

Pfizer constitutes 7.3% of the Health Care Select Sector SPDR Fund (XLV).

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