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Total System Services Reports Double-Digit Revenue Growth


Mar. 8 2018, Updated 7:32 a.m. ET

Driving force

Total System Services’ (TSS) solid double-digit revenue growth was driven by strong holiday sales, which led to higher financial transactions. In 4Q17, its net revenues improved 10.8% YoY (year-over-year) to nearly $870.6 million. In the quarter, its total revenues on a GAAP[1. generally accepted accounting principles] basis grew 12.5% YoY to $1.3 billion.

In fiscal 2017, its net revenues came in at $3.4 billion, up 11.8% YoY. Its total revenues on a GAAP basis increased 18.2% YoY to $4.9 billion.

In the graph above, we can see the net revenue growth in the last five quarters for Total System Services. During this period, it grew at a CAGR (compound annual growth rate) of 2.6%.

Almost all of the company’s segments reported double-digit revenue growth, which was buoyed by higher contract wins and the successful integration of Cayan. Increased transaction volumes, coupled with strong gross dollar volume improvement, have contributed to this solid top-line growth.

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Analysts’ estimates and guidance

Yahoo Finance reported that of the 28 analysts covering Total System Services (TSS) stock, six gave “strong buy” recommendations, and nine provided “buy” ratings. Twelve analysts gave “hold” recommendations, and one analyst gave a “sell” rating.

The analysts’ average net revenue estimate for TSS for 1Q18 is $911.0 million. The fiscal 2018 net revenue estimate is ~$3.7 billion.

Total System Services projects its fiscal 2018 net revenues to be ~$3.7 billion–$3.8 billion. The company expects its total revenues on a GAAP basis for fiscal 2018 to be ~$3.9 billion–$4.0 billion.

Payment technology leaders Visa (V) and Mastercard (MA) recently reported their financial results. Visa’s net revenues for fiscal 1Q18 grew 9.0% YoY to nearly $4.9 billion. Mastercard posted 4Q17 net revenues of $3.3 billion, up 17.9% YoY on a constant currency basis.


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