- Third quarter 2024 GAAP diluted earnings per share (EPS) of
$1.24, a decrease of (11)%, and adjusted EPS of $3.08, an increase
of 12%
- Third quarter 2024 GAAP revenue of $2.60 billion, an increase
of 5%, and adjusted net revenue of $2.36 billion, an increase of
6%
- Reaffirms outlook for 2024
- Reaches a definitive agreement to sell AdvancedMD
- Enters into $600 million accelerated share repurchase plan
Global Payments Inc. (NYSE: GPN) today announced results for the
third quarter ended September 30, 2024.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20241030804195/en/
“We are pleased with our solid financial performance in the
third quarter, which reflects strong execution despite ongoing
macroeconomic uncertainty,” said Cameron Bready, chief executive
officer. “These results highlight the resiliency and durability of
our business as we move aggressively to position Global Payments
for the next phase of its growth journey as a leader in
payments.”
Bready continued, “We are making substantial progress on the
broad transformation agenda we detailed at our Investor Conference
in September. We have refocused our strategy and are unifying our
organization across assets and go-to-market activities, allowing us
to unleash our full potential and play to our competitive
strengths. I remain confident that our efforts to streamline and
simplify our business will unlock substantial value and support
sustainable growth well into the future, as we relentlessly pursue
our ambition to be the worldwide partner of choice for commerce
solutions.”
Bready concluded, “Consistent with these efforts, we have
reached a definitive agreement to sell AdvancedMD to Francisco
Partners. In connection with this sale, we also established a
long-term commercial partnership with AdvancedMD, whereby we will
continue to work together to deliver leading payments and commerce
enablement solutions to its customers. This transaction further
highlights the high quality assets in our portfolio and allows us
to enhance value creation for shareholders. We expect this sale to
close in the fourth quarter.”
Third Quarter 2024 Summary
- GAAP revenues were $2.60 billion, compared to $2.48 billion in
2023; diluted earnings per share were $1.24, compared to $1.39 in
the prior year; and operating margin was 18.3%, compared to 22.5%
in the prior year.
- Adjusted net revenues increased 6% to $2.36 billion, compared
to $2.23 billion in the third quarter of 2023.
- Adjusted earnings per share increased 12% to $3.08, compared to
$2.75 in the third quarter of 2023.
- Adjusted operating margin expanded 40 basis points to
46.1%.
2024 Outlook
“We are pleased with our financial and operational performance
in the third quarter and year-to-date period,” said Josh Whipple,
chief financial officer. “Notably, we produced strong adjusted free
cash flow in the third quarter and also reduced our net leverage
position by nearly a quarter-turn sequentially to 3.3 times,
positioning us well to achieve our target by year end.”
Whipple continued, “The company continues to expect adjusted net
revenue to be in a range of $9.17 billion to $9.30 billion,
reflecting growth of 6% to 7%, and adjusted earnings per share to
be in a range of $11.54 to $11.70, reflecting growth of 11% to 12%
over 2023. Annual adjusted operating margin for 2024 is still
expected to expand by up to 50 basis points.”
Whipple concluded, “Our outlook highlights the consistency of
our model and the benefits of our sharpened focus as we execute on
our strategic priorities.”
Capital Allocation
Global Payments’ Board of Directors approved a dividend of $0.25
per share payable on December 27, 2024 to shareholders of record as
of December 13, 2024. The Board of Directors also approved an
increase in the company's share repurchase authorization capacity
to $2.5 billion.
Conference Call
Global Payments’ management will host a live audio webcast
today, October 30, 2024, at 8:00 a.m. ET to discuss financial
results and business highlights. The audio webcast, along with
supplemental financial information, can be accessed via the
investor relations page of the company’s website at
investors.global payments.com. A replay of the audio webcast will
be archived on the company's website following the live event.
Non-GAAP Financial Measures
Global Payments supplements revenues, operating income,
operating margin and net income and earnings per share determined
in accordance with GAAP by providing these measures with certain
adjustments (such measures being non-GAAP financial measures) in
this earnings release to assist with evaluating our performance. In
addition to GAAP measures, management uses these non-GAAP financial
measures to focus on the factors the company believes are pertinent
to the daily management of our operations.
Global Payments also has provided supplemental non-GAAP
information to reflect the divestiture of the consumer portion of
our Netspend business, which comprised our former Consumer
Solutions segment, which closed in April 2023. Management believes
that providing such supplemental financial information should
enhance shareholders’ ability to evaluate how the business will be
managed going forward.
Reconciliations of each of the non-GAAP financial measures to
the most directly comparable GAAP measure are included in the
schedules to this release, except for forward-looking measures
where a reconciliation to the corresponding GAAP measures is not
available due to the variability, complexity and limited visibility
of the items that are excluded from the non-GAAP outlook
measures.
About Global Payments
Global Payments Inc. (NYSE: GPN) is a leading payments
technology company delivering innovative software and services to
our customers globally. Our technologies, services and team member
expertise allow us to provide a broad range of solutions that
enable our customers to operate their businesses more efficiently
across a variety of channels around the world.
Headquartered in Georgia with approximately 27,000 team members
worldwide, Global Payments is a Fortune 500® company and a member
of the S&P 500 with worldwide reach spanning North America,
Europe, Asia Pacific and Latin America. For more information, visit
company.globalpayments.com and follow Global Payments on X,
LinkedIn and Facebook.
Forward-Looking Statements
Investors are cautioned that some of the statements we use in
this release contain forward-looking statements and are made
pursuant to the "safe-harbor" provisions of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements,
which are based on current expectations, estimates and projections
about the industry and markets in which we operate, and beliefs of
and assumptions made by our management, involve risks and
uncertainties that could significantly affect the financial
condition, results of operations, business plans and the future
performance of Global Payments. Actual events or results might
differ materially from those expressed or forecasted in these
forward-looking statements. Accordingly, we cannot guarantee that
our plans and expectations will be achieved. Examples of
forward-looking statements include, but are not limited to,
statements we make regarding future financial and operating
results, including revenue, earnings estimates, liquidity, and
deleveraging plans, management’s expectations regarding future
plans, objectives and goals; market and growth opportunities;
capital available for allocation; the effects of general economic
conditions on our business; statements about the benefits of
acquisitions or divestitures, such as the proposed sale of
AdvancedMD, Inc., including future financial and operating results,
and the successful integration of our acquisitions; statements
about the completion of anticipated benefits and strategic or
operational initiatives; statements regarding our success and
timing in developing and introducing new services and expanding our
business; and other statements regarding our future financial
performance and the company’s plans, objectives, expectations and
intentions. Statements can generally be identified as
forward-looking because they include words such as “believes,”
“anticipates,” “expects,” “intends,” “plan,” “forecast,” “could,”
“should,” “will,” “would,” or words of similar meaning. Although we
believe that the plans and expectations reflected in any
forward-looking statements are based on reasonable assumptions, we
can give no assurance that our plans and expectations will be
attained, and therefore actual outcomes and results may differ
materially from what is expressed or forecasted in such
forward-looking statements.
In addition to factors previously disclosed in Global Payments’
reports filed with the SEC and those identified elsewhere in this
communication, the following factors, among others, could cause
actual results to differ materially from forward-looking statements
or historical performance: the effects of global economic,
political, market, health and social events or other conditions;
foreign currency exchange, inflation and rising interest rate
risks; difficulties, delays and higher than anticipated costs
related to integrating the businesses of acquired companies,
including with respect to implementing controls to prevent a
material security breach of any internal systems or to successfully
manage credit and fraud risks in business units; Global Payments’
ability to complete the proposed sale of AdvancedMD, Inc. on the
proposed terms or on the anticipated timeline, or at all; the
effect of a security breach or operational failure on our business;
failing to comply with the applicable requirements of Visa,
Mastercard or other payment networks or card schemes or changes in
those requirements; the ability to maintain Visa and Mastercard
registration and financial institution sponsorship; the ability to
retain, develop and hire key personnel; the diversion of
management’s attention from ongoing business operations; the
continued availability of capital and financing; increased
competition in the markets in which we operate and our ability to
increase our market share in existing markets and expand into new
markets; our ability to safeguard our data; risks associated with
our indebtedness; our ability to meet environmental, social or
governance targets, goals and commitments; the potential effect of
climate change including natural disasters; the effects of new or
changes in current laws, regulations, credit card association rules
or other industry standards on us or our partners and customers,
including privacy and cybersecurity laws and regulations; and other
events beyond our control, and other factors included in the “Risk
Factors” section in our most recent Annual Report on Form 10-K and
in other documents that we file with the SEC, which are available
at https://www.sec.gov.
These cautionary statements qualify all of our forward-looking
statements, and you are cautioned not to place undue reliance on
these forward-looking statements. Our forward-looking statements
speak only as of the date they are made and should not be relied
upon as representing our plans and expectations as of any
subsequent date. While we may elect to update or revise
forward-looking statements at some time in the future, we
specifically disclaim any obligation to publicly release the
results of any revisions to our forward-looking statements, except
as required by law.
SCHEDULE 1
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands, except per share data)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2024
2023
% Change
2024
2023
% Change
Revenues
$
2,601,552
$
2,475,691
5.1
%
$
7,590,508
$
7,220,607
5.1
%
Operating expenses:
Cost of service
946,945
915,531
3.4
%
2,807,819
2,805,237
0.1
%
Selling, general and administrative
1,179,026
1,001,964
17.7
%
3,282,232
3,058,605
7.3
%
Net loss on business dispositions
—
—
nm
—
139,095
nm
2,125,971
1,917,495
6,090,051
6,002,937
Operating income
475,581
558,196
(14.8
)%
1,500,457
1,217,670
23.2
%
Interest and other income
55,338
35,732
54.9
%
126,572
74,830
69.1
%
Interest and other expense
(155,905
)
(176,094
)
(11.5
)%
(477,210
)
(490,463
)
(2.7
)%
(100,567
)
(140,362
)
(350,638
)
(415,633
)
Income before income taxes and equity in
income of equity method investments
375,014
417,834
(10.2
)%
1,149,819
802,037
43.4
%
Income tax expense
57,378
58,936
(2.6
)%
154,593
199,748
(22.6
)%
Income before equity in income of equity
method investments
317,636
358,898
(11.5
)%
995,226
602,289
65.2
%
Equity in income of equity method
investments, net of tax
15,897
17,707
(10.2
)%
50,644
54,101
(6.4
)%
Net income
333,533
376,605
(11.4
)%
1,045,870
656,390
59.3
%
Net income attributable to noncontrolling
interests
(18,408
)
(14,775
)
24.6
%
(42,678
)
(31,454
)
35.7
%
Net income attributable to Global
Payments
$
315,125
$
361,830
(12.9
)%
$
1,003,192
$
624,936
60.5
%
Earnings per share attributable to Global
Payments:
Basic earnings per share
$
1.24
$
1.39
(10.8
)%
$
3.93
$
2.40
63.8
%
Diluted earnings per share
$
1.24
$
1.39
(10.8
)%
$
3.92
$
2.39
64.0
%
Weighted-average number of shares
outstanding:
Basic
254,402
260,232
255,355
260,890
Diluted
254,897
260,935
255,880
261,410
Note: nm = not meaningful.
SCHEDULE 2
NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands, except per share data)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2024
2023
% Change
2024
2023
% Change
Adjusted net revenue
$
2,356,931
$
2,232,442
5.6
%
$
6,864,992
$
6,484,725
5.9
%
Adjusted operating income
$
1,086,567
$
1,019,525
6.6
%
$
3,086,519
$
2,889,017
6.8
%
Adjusted net income attributable to Global
Payments
$
784,987
$
718,632
9.2
%
$
2,200,270
$
2,035,200
8.1
%
Adjusted diluted earnings per share
attributable to Global Payments
$
3.08
$
2.75
11.8
%
$
8.60
$
7.79
10.4
%
Supplemental Non-GAAP(1)
Adjusted net revenue(1)
$
2,356,931
$
2,232,442
5.6
%
$
6,864,992
$
6,339,283
8.3
%
Adjusted operating income(1)
$
1,086,567
$
1,019,525
6.6
%
$
3,086,519
$
2,815,788
9.6
%
----------------------------------------------------------------------------------
(1)
The supplemental non-GAAP information
reflects the divestiture of our consumer business which closed in
April 2023.
See Schedule 6 and 7 for a reconciliation
of each non-GAAP financial measure to the most comparable GAAP
measure, Schedule 8 and 9 for a reconciliation of adjusted net
revenue and adjusted operating income by segment and supplemental
non-GAAP information to the most comparable GAAP measure, and
Schedule 10 for a discussion of non-GAAP financial measures.
SCHEDULE 3
SEGMENT INFORMATION (UNAUDITED)
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands)
Three Months Ended
September 30, 2024
September 30, 2023
% Change
GAAP
Non-GAAP
GAAP
Non-GAAP
GAAP
Non-GAAP
Revenues:
Merchant Solutions
$
1,997,660
$
1,844,321
$
1,884,006
$
1,727,951
6.0
%
6.7
%
Issuer Solutions
621,130
529,041
607,848
519,736
2.2
%
1.8
%
Intersegment eliminations
(17,238
)
(16,431
)
(16,163
)
(15,245
)
(6.7
)%
(7.8
)%
$
2,601,552
$
2,356,931
$
2,475,691
$
2,232,442
5.1
%
5.6
%
Operating income (loss):
Merchant Solutions
$
707,546
$
921,472
$
637,864
$
847,678
10.9
%
8.7
%
Issuer Solutions
106,045
240,385
113,877
246,643
(6.9
)%
(2.5
)%
Corporate
(338,010
)
(75,289
)
(193,545
)
(74,797
)
(74.6
)%
(0.7
)%
$
475,581
$
1,086,567
$
558,196
$
1,019,525
(14.8
)%
6.6
%
Nine Months Ended
September 30, 2024
September 30, 2023
% Change
GAAP
Non-GAAP
GAAP
Non-GAAP
GAAP
Non-GAAP
Revenues:
Merchant Solutions
$
5,802,780
$
5,340,324
$
5,331,909
$
4,866,484
8.8
%
9.7
%
Issuer Solutions
1,837,373
1,571,143
1,769,196
1,515,235
3.9
%
3.7
%
Consumer Solutions
—
—
182,740
163,027
nm
nm
Intersegment Elimination
(49,645
)
(46,475
)
(63,238
)
(60,021
)
21.5
%
22.6
%
$
7,590,508
$
6,864,992
$
7,220,607
$
6,484,725
5.1
%
5.9
%
Operating income:
Merchant Solutions
$
1,960,509
$
2,596,658
$
1,748,622
$
2,351,195
12.1
%
10.4
%
Issuer Solutions
322,517
728,408
292,388
697,796
10.3
%
4.4
%
Consumer Solutions
—
—
(3,908
)
73,230
nm
nm
Corporate
(782,569
)
(238,548
)
(680,337
)
(233,203
)
(15.0
)%
(2.3
)%
Net loss on business dispositions
—
—
(139,095
)
—
nm
nm
$
1,500,457
$
3,086,519
$
1,217,670
$
2,889,017
23.2
%
6.8
%
----------------------------------------------------------------------------------
See Schedules 8 and 9 for a reconciliation
of adjusted net revenue and adjusted operating income by segment to
the most comparable GAAP measures and Schedule 10 for a discussion
of non-GAAP financial measures.
Note: Amounts may not sum due to
rounding.
Note: nm = not meaningful.
SCHEDULE 4
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands, except share data)
September 30, 2024
December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
2,941,940
$
2,088,887
Accounts receivable, net
1,150,840
1,120,078
Settlement processing assets
3,020,936
4,097,417
Prepaid expenses and other current
assets
787,366
767,377
Total current assets
7,901,082
8,073,759
Goodwill
26,959,567
26,743,523
Other intangible assets, net
9,318,535
10,168,046
Property and equipment, net
2,334,574
2,190,005
Deferred income taxes
80,714
111,712
Notes receivable
756,620
713,123
Other noncurrent assets
2,634,753
2,570,018
Total assets
$
49,985,845
$
50,570,186
LIABILITIES AND EQUITY
Current liabilities:
Settlement lines of credit
$
788,052
$
981,244
Current portion of long-term debt
1,552,863
620,585
Accounts payable and accrued
liabilities
2,730,189
2,824,979
Settlement processing obligations
3,457,773
3,698,921
Total current liabilities
8,528,877
8,125,729
Long-term debt
15,215,847
15,692,297
Deferred income taxes
1,948,610
2,242,105
Other noncurrent liabilities
672,902
722,540
Total liabilities
26,366,236
26,782,671
Commitments and contingencies
Redeemable noncontrolling interests
156,630
507,965
Equity:
Preferred stock, no par value; 5,000,000
shares authorized and none issued
—
—
Common stock, no par value; 400,000,000
shares authorized at September 30, 2024 and December 31, 2023;
254,401,583 issued and outstanding at September 30, 2024 and
260,382,746 issued and outstanding at December 31, 2023
—
—
Paid-in capital
18,810,835
19,800,953
Retained earnings
4,269,896
3,457,182
Accumulated other comprehensive loss
(269,338
)
(258,925
)
Total Global Payments shareholders’
equity
22,811,393
22,999,210
Nonredeemable noncontrolling interests
651,586
280,340
Total equity
23,462,979
23,279,550
Total liabilities, redeemable
noncontrolling interests and equity
$
49,985,845
$
50,570,186
SCHEDULE 5
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands)
Nine Months Ended
September 30, 2024
September 30, 2023
Cash flows from operating
activities:
Net income
$
1,045,870
$
656,390
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization of property
and equipment
368,905
342,025
Amortization of acquired intangibles
1,036,768
986,026
Amortization of capitalized contract
costs
102,926
90,463
Share-based compensation expense
134,361
173,325
Provision for operating losses and credit
losses
60,677
84,154
Noncash lease expense
44,205
49,805
Deferred income taxes
(251,652
)
(407,767
)
Paid-in-kind interest capitalized to
principal of notes receivable
(54,743
)
(29,113
)
Equity in income of equity method
investments, net of tax
(50,644
)
(54,101
)
Technology asset charge
55,808
—
Net loss on business dispositions
—
139,095
Other, net
22,869
36,715
Changes in operating assets and
liabilities, net of the effects of business combinations:
Accounts receivable
(39,204
)
(51,490
)
Settlement processing assets and
obligations, net
789,702
(29,857
)
Prepaid expenses and other assets
(167,511
)
(266,923
)
Accounts payable and other liabilities
(219,081
)
(127,456
)
Net cash provided by operating
activities
2,879,256
1,591,291
Cash flows from investing
activities:
Business combinations and other
acquisitions, net of cash and restricted cash acquired
(373,790
)
(4,099,766
)
Capital expenditures
(490,913
)
(500,795
)
Issuance of notes receivable
—
(50,000
)
Repayment of notes receivable
—
50,000
Net cash from sales of businesses
—
478,695
Proceeds from sale of investments
18,076
—
Other, net
6
2,187
Net cash used in investing activities
(846,621
)
(4,119,679
)
Cash flows from financing
activities:
Net repayments of settlement lines of
credit
(184,454
)
(33,328
)
Net borrowings from (repayments of)
commercial paper notes
(1,367,859
)
1,896,513
Proceeds from long-term debt
7,637,904
8,861,129
Repayments of long-term debt
(5,802,954
)
(7,628,854
)
Payments of debt issuance costs
(33,056
)
(12,735
)
Repurchases of common stock
(900,047
)
(418,271
)
Proceeds from stock issued under
share-based compensation plans
33,531
51,085
Common stock repurchased - share-based
compensation plans
(53,780
)
(37,236
)
Distributions to noncontrolling
interests
(29,356
)
(24,315
)
Contributions from noncontrolling
interests
2,116
—
Payment of deferred consideration in
business combination
(6,390
)
—
Purchase of capped calls related to
issuance of convertible notes
(256,250
)
—
Dividends paid
(190,478
)
(195,611
)
Net cash provided by (used in) financing
activities
(1,151,073
)
2,458,377
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
1,078
(35,730
)
Increase (decrease) in cash, cash
equivalents and restricted cash
882,640
(105,741
)
Cash, cash equivalents and restricted
cash, beginning of the period
2,256,875
2,215,606
Cash, cash equivalents and restricted
cash, end of the period
$
3,139,515
$
2,109,865
SCHEDULE 6
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES TO GAAP MEASURES (UNAUDITED)
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands, except per share data)
Three Months Ended September 30,
2024
GAAP
Net Revenue Adjustments(1)
Earnings Adjustments(2)
Income
Taxes on Adjustments(3)
Non-GAAP
Revenues
$
2,601,552
$
(244,621
)
$
—
$
—
$
2,356,931
Operating income
$
475,581
$
986
$
610,000
$
—
$
1,086,567
Net income attributable to Global
Payments
$
315,125
$
986
$
591,467
$
(122,591
)
$
784,987
Diluted earnings per share attributable to
Global Payments
$
1.24
$
3.08
Diluted weighted average shares
outstanding
254,897
254,897
Three Months Ended September 30,
2023
GAAP
Net Revenue Adjustments(1)
Earnings Adjustments(2)
Income
Taxes on Adjustments(3)
Non-GAAP
Revenues
$
2,475,691
$
(243,249
)
$
—
$
—
$
2,232,442
Operating income
$
558,196
$
541
$
460,787
$
—
$
1,019,525
Net income attributable to Global
Payments
$
361,830
$
541
$
464,389
$
(108,128
)
$
718,632
Diluted earnings per share attributable to
Global Payments
$
1.39
$
2.75
Diluted weighted average shares
outstanding
260,935
260,935
----------------------------------------------------------------------------------
(1)
Includes adjustments to revenues for
gross-up related payments (included in operating expenses)
associated with certain lines of business to reflect economic
benefits to the company. For the three months ended September 30,
2024 and 2023, net revenue adjustments also included $1.0 million
and $0.5 million, respectively, to eliminate the effect of
acquisition accounting fair value adjustments for software-related
contract liabilities associated with acquired businesses.
(2)
For the three months ended September 30,
2024, earnings adjustments to operating income included $347.1
million in cost of services (COS) and $262.9 million in selling,
general and administrative expenses (SG&A). Adjustments to COS
included amortization of acquired intangibles of $347.6 million and
other items of $(0.5) million. Adjustments to SG&A included
share-based compensation expense of $51.0 million, acquisition,
integration and separation expenses of $45.8 million, employee
termination benefits of $40.9 million, charges for business
transformation activities of $59.2 million, charges of $55.8
million for technology assets that will no longer be utilized under
a revised technology architecture development strategy, and other
items of $10.2 million.
For the three months ended September 30,
2023, earnings adjustments to operating income included $340.8
million in COS and $120.0 million in SG&A. Adjustments to COS
included amortization of acquired intangibles of $340.4 million and
other items of $0.4 million. Adjustments to SG&A included
share-based compensation expense of $36.6 million, acquisition,
integration and separation expenses of $75.1 million, facilities
exit charges of $3.7 million, and other items of $4.6 million.
(3)
Income taxes on adjustments reflect the
tax effect of earnings adjustments to income before income taxes.
The tax rate used in determining the tax impact of earnings
adjustments is either the jurisdictional statutory rate in effect
at the time of the adjustment or the jurisdictional expected annual
effective tax rate for the period, depending on the nature and
timing of the adjustment. In addition, for the three months ended
September 30, 2023, income taxes on adjustments include the removal
of tax expense related to business dispositions.
See "Non-GAAP Financial Measures"
discussion on Schedule 10.
Note: Amounts may not sum due to
rounding.
SCHEDULE 7
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES TO GAAP MEASURES (UNAUDITED)
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands, except per share data)
Nine Months Ended September 30,
2024
GAAP
Net Revenue Adjustments(1)
Earnings Adjustments(2)
Income Taxes on
Adjustments(3)
Non-GAAP
Revenues
$
7,590,508
$
(725,516
)
$
—
$
—
$
6,864,992
Operating income
$
1,500,457
$
1,878
$
1,584,184
$
—
$
3,086,519
Net income attributable to Global
Payments
$
1,003,192
$
1,878
$
1,559,406
$
(364,206
)
$
2,200,270
Diluted earnings per share attributable to
Global Payments
$
3.92
$
8.60
Diluted weighted average shares
outstanding
255,880
255,880
Nine Months Ended September 30,
2023
GAAP
Net Revenue Adjustments(1)
Earnings Adjustments(2)
Income Taxes on
Adjustments(3)
Non-GAAP
Revenues
$
7,220,607
$
(735,882
)
$
—
$
—
$
6,484,725
Operating income
$
1,217,670
$
(18,100
)
$
1,689,447
$
—
$
2,889,017
Net income attributable to Global
Payments
$
624,936
$
(18,100
)
$
1,707,746
$
(279,382
)
$
2,035,200
Diluted earnings per share attributable to
Global Payments
$
2.39
$
7.79
Diluted weighted average shares
outstanding
261,410
261,410
----------------------------------------------------------------------------------
(1)
Includes adjustments to revenues for
gross-up related payments (included in operating expenses)
associated with certain lines of business to reflect economic
benefits to the company. For nine months ended September 30, 2024
and 2023, net revenue adjustments also included $1.9 million and
$1.6 million, respectively, to eliminate the effect of acquisition
accounting fair value adjustments for software-related contract
liabilities associated with acquired businesses. Adjustments for
the nine months ended September 30, 2023 also included a $19.7
million adjustment to exclude revenues that were associated with
certain excluded expenses of our consumer business, which was
divested in April 2023.
(2)
For the nine months ended September 30,
2024, earnings adjustments to operating income included $1,036.3
million in COS and $547.9 million in SG&A. Adjustments to COS
included amortization of acquired intangibles of $1,036.8 million
and other items of $(0.5) million. Adjustments to SG&A included
share-based compensation expense of $134.4 million, acquisition,
integration and separation expenses of $180.4 million, employee
termination benefits of $75.9 million, charges for business
transformation activities of $59.2 million, charges of $55.8
million for technology assets that will no longer be utilized under
a revised technology architecture development strategy, and other
items of $42.2 million.
For the nine months ended September 30,
2023, earnings adjustments to operating income included $988.7
million in COS and $561.6 million in SG&A. Adjustments to COS
included amortization of acquired intangibles of $986.0 million and
other items of $2.7 million. Adjustments to SG&A included
share-based compensation expense of $173.3 million, acquisition,
integration and separation expenses of $336.4 million, facilities
exit charges of $15.0 million, employee termination benefits of
$31.5 million, and other items of $5.4 million. Earnings
adjustments to operating income also included the $139.1 million
loss on business dispositions.
Acquisition, integration and separation
expenses for the nine months ended September 30, 2023 included
$93.6 million related to our divested consumer business. These
incremental expenses, which include card and marketing expenses,
compensation and benefit expenses, and other expenses, were
incurred as a result of contractual obligations with the purchasers
of the consumer business and do not reflect the manner in which the
company would have operated the business and would not have
otherwise been incurred absent the transaction.
For the nine months ended September 30,
2023, earnings adjustments to net income also included an allowance
for current expected credit losses (CECL) of $18.2 million within
interest and other expense related to the seller financing issued
in connection with the business dispositions.
(3)
Income taxes on adjustments reflect the
tax effect of earnings adjustments to income before income taxes.
The tax rate used in determining the tax impact of earnings
adjustments is either the jurisdictional statutory rate in effect
at the time of the adjustment or the jurisdictional expected annual
effective tax rate for the period, depending on the nature and
timing of the adjustment. In addition, for the three months ended
September 30, 2023, income taxes on adjustments include the removal
of tax expense related to business dispositions.
See "Non-GAAP Financial Measures"
discussion on Schedule 10.
Note: Amounts may not sum due to
rounding.
SCHEDULE 8
RECONCILIATION OF SEGMENT NON-GAAP
FINANCIAL MEASURES TO GAAP MEASURES (UNAUDITED)
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands)
Three Months Ended September 30,
2024
GAAP
Net Revenue Adjustments (1)
Earnings Adjustments(2)
Non-GAAP
Revenues:
Merchant Solutions
$
1,997,660
$
(153,339
)
$
—
$
1,844,321
Issuer Solutions
621,130
(92,089
)
—
529,041
Intersegment eliminations
(17,238
)
807
—
(16,431
)
$
2,601,552
$
(244,621
)
$
—
$
2,356,931
Operating income (loss):
Merchant Solutions
$
707,546
$
560
$
213,365
$
921,472
Issuer Solutions
106,045
426
133,914
240,385
Corporate
(338,010
)
—
262,721
(75,289
)
$
475,581
$
986
$
610,000
$
1,086,567
Three Months Ended September 30,
2023
GAAP
Net Revenue Adjustments (1)
Earnings Adjustments(2)
Non-GAAP
Revenues:
Merchant Solutions
$
1,884,006
$
(156,055
)
$
—
$
1,727,951
Issuer Solutions
607,848
(88,112
)
—
519,736
Intersegment eliminations
(16,163
)
918
—
(15,245
)
$
2,475,691
$
(243,249
)
$
—
$
2,232,442
Operating income (loss):
Merchant Solutions
$
637,864
$
1
$
209,813
$
847,678
Issuer Solutions
113,877
540
132,226
246,643
Corporate
(193,545
)
—
118,748
(74,797
)
$
558,196
$
541
$
460,787
$
1,019,525
------------------------------------------------------------------------------------------
(1)
Includes adjustments to revenues for
gross-up related payments (included in operating expenses)
associated with certain lines of business to reflect economic
benefits to the company. For the three months ended September 30,
2024 and 2023, net revenue adjustments also included $1.0 million
and $0.5 million, respectively, to eliminate the effect of
acquisition accounting fair value adjustments for software-related
contract liabilities associated with acquired businesses.
(2)
For the three months ended September 30,
2024, earnings adjustments to operating income included $347.1
million in COS and $262.9 million in SG&A. Adjustments to COS
included amortization of acquired intangibles of $347.6 million and
other items of $(0.5) million. Adjustments to SG&A included
share-based compensation expense of $51.0 million, acquisition,
integration and separation expenses of $45.8 million, employee
termination benefits of $40.9 million, charges for business
transformation activities of $59.2 million, charges of $55.8
million for technology assets that will no longer be utilized under
a revised technology architecture development strategy, and other
items of $10.2 million.
For the three months ended September 30,
2023, earnings adjustments to operating income included $340.8
million COS and $120.0 million in SG&A. Adjustments to COS
included amortization of acquired intangibles of $340.4 million and
other items of $0.4 million. Adjustments to SG&A included
share-based compensation expense of $36.6 million, acquisition,
integration and separation expenses of $75.1 million, facilities
exit charges of $3.7 million, and other items of $4.6 million.
See "Non-GAAP Financial Measures"
discussion on Schedule 10.
Note: Amounts may not sum due to
rounding.
SCHEDULE 9
RECONCILIATION OF SEGMENT NON-GAAP
FINANCIAL MEASURES TO GAAP MEASURES (UNAUDITED)
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands)
Nine Months Ended September 30,
2024
GAAP
Net Revenue Adjustments (1)
Earnings Adjustments(2)
Non-GAAP
Revenues:
Merchant Solutions
$
5,802,780
$
(462,456
)
$
—
$
5,340,324
Issuer Solutions
1,837,373
(266,230
)
—
1,571,143
Intersegment eliminations
(49,645
)
3,170
—
(46,475
)
$
7,590,508
$
(725,516
)
$
—
$
6,864,992
Operating income (loss):
Merchant Solutions
$
1,960,509
$
560
$
635,589
$
2,596,658
Issuer Solutions
322,517
1,317
404,574
728,408
Corporate
(782,569
)
—
544,021
(238,548
)
$
1,500,457
$
1,878
$
1,584,184
$
3,086,519
Nine Months Ended September 30,
2023
GAAP
Net Revenue Adjustments(1)
Earnings Adjustments(2)
Non-GAAP
Consumer Business (3)
Supplemental Non-GAAP (3)
Revenues:
Merchant Solutions
$
5,331,909
$
(465,425
)
$
—
$
4,866,484
$
—
$
4,866,484
Issuer Solutions
1,769,196
(253,961
)
—
1,515,235
—
1,515,235
Consumer Solutions
182,740
(19,713
)
—
163,027
(163,027
)
—
Intersegment eliminations
(63,238
)
3,217
—
(60,021
)
17,585
(42,436
)
$
7,220,607
$
(735,882
)
$
—
$
6,484,725
$
(145,442
)
$
6,339,283
Operating income (loss):
Merchant Solutions
$
1,748,622
$
23
$
602,550
$
2,351,195
$
—
$
2,351,195
Issuer Solutions
292,388
1,590
403,818
697,796
—
697,796
Consumer Solutions
(3,908
)
(19,713
)
96,851
73,230
(73,230
)
—
Corporate
(680,337
)
—
447,134
(233,203
)
—
(233,203
)
Net loss on business dispositions
(139,095
)
—
139,095
—
—
—
$
1,217,670
$
(18,100
)
$
1,689,447
$
2,889,017
$
(73,230
)
$
2,815,788
----------------------------------------------------------------------------------
(1)
Includes adjustments to revenues for
gross-up related payments (included in operating expenses)
associated with certain lines of business to reflect economic
benefits to the company. For nine months ended September 30, 2024
and 2023, net revenue adjustments also included $1.9 million and
$1.6 million, respectively, to eliminate the effect of acquisition
accounting fair value adjustments for software-related contract
liabilities associated with acquired businesses. Adjustments for
the nine months ended September 30, 2023 also included a $19.7
million adjustment to exclude revenues that were associated with
certain excluded expenses of our consumer business, which was
divested in April 2023.
(2)
For the nine months ended September 30,
2024, earnings adjustments to operating income included $1,036.3
million in COS and $547.9 million in SG&A. Adjustments to COS
included amortization of acquired intangibles of $1,036.8 million
and other items of $(0.5) million. Adjustments to SG&A included
share-based compensation expense of $134.4 million, acquisition,
integration and separation expenses of $180.4 million, employee
termination benefits of $75.9 million, charges for business
transformation activities of $59.2 million, charges of $55.8
million for technology assets that will no longer be utilized under
a revised technology architecture development strategy, and other
items of $42.2 million.
For the nine months ended September 30,
2023, earnings adjustments to operating income included $988.7
million in COS and $561.6 million in SG&A. Adjustments to COS
included amortization of acquired intangibles of $986.0 million and
other items of $2.7 million. Adjustments to SG&A included
share-based compensation expense of $173.3 million, acquisition,
integration and separation expenses of $336.4 million, facilities
exit charges of $15.0 million, employee termination benefits
charges of $31.5 million, and other items of $5.4 million. Earnings
adjustments to operating income also included the $139.1 million
loss on business dispositions.
Acquisition, integration and separation
expenses for the nine months ended September 30, 2023 included
$93.6 million related to our divested consumer business. These
incremental expenses, which include card and marketing expenses,
compensation and benefit expenses, and other expenses, were
incurred as a result of contractual obligations with the purchasers
of the consumer business and do not reflect the manner in which the
company would have operated the business and would not have
otherwise been incurred absent the transaction.
(3)
The supplemental non-GAAP information
excludes the results of the consumer business that was divested in
April 2023.
See "Non-GAAP Financial Measures"
discussion on Schedule 10.
Note: Amounts may not sum due to
rounding.
SCHEDULE 10
OUTLOOK SUMMARY (UNAUDITED)
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In millions, except per share data)
2023
2024 Outlook
Growth
Revenues:
GAAP revenues
$
9,654
$10,130 to $10,260
5% to 6%
Adjustments(1)
(983
)
(960
)
Adjusted net revenue
$
8,671
$9,170 to $9,300
6% to 7%
Earnings Per
Share:
GAAP diluted EPS
$
3.77
$5.41 to $5.57
nm
Adjustments(2)
6.65
6.13
Adjusted EPS
$
10.42
$11.54 to $11.70
11% to 12%
(1)
Includes adjustments to revenues for
gross-up related payments (included in operating expenses)
associated with certain lines of business to reflect economic
benefit to the company. Amounts also included adjustments to
eliminate the effect of acquisition accounting fair value
adjustments for software-related contract liabilities associated
with acquired businesses, as well as adjustments to exclude
revenues that were associated with certain excluded expenses of our
consumer business which was classified as assets held for sale on
our balance sheet.
(2)
Adjustments to 2023 GAAP diluted EPS
included the removal of 1) software-related contract liability
adjustments described above of $0.01, 2) acquisition related
amortization expense of $3.88, 3) share-based compensation expense
of $0.62, 4) acquisition, integration, and separation expense of
$1.22, 5) facilities exit charges of $0.05, 6) equity method
investment earnings from our interest in a private equity
investment fund of $0.02, 7) discrete tax items of $0.28, 8)
gain/loss on business dispositions of $0.40, 9) other income and
expense of $0.06, 10) other items of $0.11, and 11) the effect of
noncontrolling interests and income taxes, as applicable.
Note: nm = not meaningful.
NON-GAAP FINANCIAL MEASURES
Global Payments supplements revenues, operating income,
operating margin and net income, and earnings per share (EPS)
determined in accordance with U.S. GAAP by providing these measures
with certain adjustments (such measures being non-GAAP financial
measures) in this document to assist with evaluating our
performance. In addition to GAAP measures, management uses these
non-GAAP financial measures to focus on the factors the company
believes are pertinent to the daily management of our operations.
Management uses these non-GAAP financial measures, together with
other metrics, to set goals for and measure the performance of the
business and to determine incentive compensation. Adjusted net
revenue, adjusted operating income, adjusted operating margin,
adjusted EPS and adjusted free cash flow should be considered in
addition to, and not as substitutes for, revenues, operating
income, EPS and net operating cash flows determined in accordance
with GAAP. The non-GAAP financial measures reflect management's
judgment of particular items, and may not be comparable to
similarly titled measures reported by other companies.
Adjusted net revenue excludes gross-up related payments
associated with certain lines of business to reflect economic
benefits to the company. On a GAAP basis, these payments are
presented gross in both revenues and operating expenses. Management
believes adjusted net revenue more closely reflects the economic
benefits to the company's core business and allows for better
comparisons with industry peers.
Adjusted operating income, adjusted net income and adjusted EPS
exclude acquisition-related amortization expense, share-based
compensation expense, acquisition, integration and separation
expense, gain or losses in business divestitures, business
transformation activities, and certain other items specific to each
reporting period as more fully described in the accompanying
reconciliations in Schedules 6 and 7. The tax rate used in
determining the income tax impact of earnings adjustments is either
the jurisdictional statutory rate in effect at the time of the
adjustment or the jurisdictional expected annual effective tax rate
for the period, depending on the nature and timing of the
adjustment.
Adjusted operating margin is derived by dividing adjusted
operating income by adjusted net revenue.
The supplemental non-GAAP information excludes the results of
the consumer business that was divested in April 2023. Management
believes that providing such supplemental financial information
should enhance shareholders’ ability to evaluate how the business
will be managed going forward.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241030804195/en/
Investor contact: investor.relations@globalpay.com Winnie Smith
770-829-8478 Media contact: media.relations@globalpay.com Emily
Edmonds 770-829-8755
Global Payments (NYSE:GPN)
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