Acquisition and Divestiture - Global Payments announced the divestiture of its Issuer Solutions business for $13.5 billion and the acquisition of Worldpay for a net purchase price of $22.7 billion, reflecting an 8.5x adjusted EBITDA multiple for Worldpay[2] - The acquisition will enhance Global Payments' capabilities to serve over 6 million customers and enable approximately 94 billion transactions annually[4] - The acquisition of Worldpay is seen as a strategic move to simplify Global Payments' business model and enhance its financial profile[5] Financial Projections - The combined company is expected to achieve pro forma adjusted net revenue of approximately $12.5 billion and adjusted EBITDA of approximately $6.5 billion, processing $3.7 trillion in payment volume globally[3] - Global Payments expects adjusted earnings per share for Q1 2025 to be $2.69, reflecting a growth of approximately 10% on a constant currency basis[19] - The company reaffirmed its full-year 2025 outlook for adjusted net revenue, adjusted operating margin, and adjusted earnings per share[20] Synergies and Cost Management - The transaction is anticipated to generate annual run-rate cost synergies of $600 million and revenue synergies of at least $200 million over three years post-closing[13] - Global Payments plans to issue $7.7 billion of debt to finance the acquisition, with an expected net leverage of approximately 3.5x at closing[15][17] Regulatory and Closing Conditions - The transaction is expected to close in the first half of 2026, subject to regulatory approvals[18] - The company faces uncertainties related to regulatory approvals and the ability to meet closing conditions for the transaction[29] Risks and Challenges - Risks include potential difficulties in integrating Worldpay's business and realizing anticipated cost savings from the transaction[29] - There are concerns about maintaining key personnel and potential business disruptions resulting from the transaction[29] - The company is exposed to macroeconomic pressures, including inflation and rising interest rates, which could impact future performance[29] - Increased competition in existing markets and challenges in expanding into new markets are significant risks[29] - The company must comply with Visa and Mastercard requirements, which could affect its operations[29] Forward-Looking Statements - Management's expectations regarding future plans and objectives are subject to change pending finalization of Q1 2025 results[29] - Forward-looking statements are based on current estimates and may differ materially from actual results[29] - The company disclaims any obligation to publicly release updates to forward-looking statements, except as required by law[29]

Sale of Industry-Leading Payments Technology and Solutions Company Marks an Important Milestone in GTCR's Strategic Transformation in Partnership with Leaders Strategy™ CEO Charles Drucker CHICAGO, April 17, 2025 /PRNewswire/ -- GTCR, a leading private equity firm, announced today the signing of a definitive agreement to sell Worldpay (the "Company"), a global leader in merchant acquiring and payments processing, to Global Payments (NYSE: GPN) for $24.25 billion as part of a transformative three-way transa ...

Core Insights - Global Payments (GPN) has shown a total revenue of $2.29 billion for the quarter ending December 2024, reflecting a 4.7% increase year-over-year [4] - The company's international operations are crucial for assessing its financial resilience and growth prospects, particularly in a tightly interconnected global economy [2][3] International Revenue Performance - Europe contributed $449.34 million, accounting for 19.63% of total revenue, surpassing the consensus estimate of $437.09 million by 2.8% [5] - Asia Pacific generated $70.92 million, representing 3.10% of total revenue, exceeding the projected $66.23 million by 7.09% [6] - The previous quarter's contributions from Europe and Asia Pacific were $462.95 million (19.64%) and $66.68 million (2.83%), respectively, while the year-ago quarter figures were $406.03 million (18.57%) and $69.44 million (3.18%) [5][6] Revenue Forecasts - Analysts project GPN's revenues for the ongoing fiscal quarter to be $2.21 billion, a 1.4% increase from the previous year, with Europe and Asia Pacific expected to contribute $420.71 million (19%) and $62.42 million (2.8%) respectively [7] - For the entire year, total revenue is forecasted at $9.37 billion, a 2.3% improvement from the previous year, with Europe contributing $1.77 billion (18.9%) and Asia Pacific $263.01 million (2.8%) [8] Market Dependency and Trends - GPN's reliance on international markets for revenue presents both opportunities and challenges, making the monitoring of overseas revenue trends essential for predicting future performance [9] - Wall Street analysts are closely tracking these trends, especially in light of increasing international interdependencies and geopolitical tensions [10]

Financial Performance - Consolidated revenues for the year ended December 31, 2024 increased to $10,105.9 million, compared to $9,654.4 million for the prior year, primarily due to growth in transaction volume [228]. - Consolidated revenues for the year ended December 31, 2024 increased by $451.5 million, or 4.7%, to $10,105.9 million from $9,654.4 million in the prior year [257]. - Merchant Solutions segment revenues increased by $536.9 million, or 7.5%, to $7,688.7 million, primarily due to a $479.5 million increase in transaction volume and a $189.3 million contribution from the acquisition of EVO [258]. - Issuer Solutions segment revenues increased by $84.8 million, or 3.5%, to $2,483.7 million, driven by a $74.3 million increase in transaction volume [259]. - Consolidated operating income for the year ended December 31, 2024 was $2,333.6 million, representing a 36.0% increase from $1,716.4 million in the prior year [254]. - Operating income rose to $2,333,605,000 in 2024, up 36% from $1,716,386,000 in 2023 [379]. - Net income attributable to Global Payments increased to $1,570.4 million from $986.2 million in the prior year, with Merchant Solutions segment operating income rising by $267.7 million [279]. - Net income attributable to Global Payments increased to $1,570,365,000 in 2024, compared to $986,233,000 in 2023, reflecting a 59.3% growth [379]. - Basic earnings per share reached $6.18 in 2024, a significant increase from $3.78 in 2023 [379]. Business Transactions - The sale of AdvancedMD, Inc. in December 2024 was completed for approximately $1 billion, with a recognized gain of $273.1 million during the year [228]. - The company completed the sale of the consumer portion of its Netspend business in Q2 2023, impacting its Consumer Solutions segment [224]. - The Consumer Solutions segment reported no revenues for the year ended December 31, 2024, following the disposal of the consumer business in April 2023 [259]. - The company recognized net losses of $243.6 million on the consumer business disposition during the years ended December 31, 2023, and $71.9 million in 2022 [337]. - The company reported a net loss on business dispositions of $273,134,000 in 2024, compared to a gain of $136,744,000 in 2023 [379]. Operating Expenses and Income - Operating income for the year ended December 31, 2024 included lower acquisition and integration expenses and share-based compensation expense [228]. - Selling, general and administrative expenses increased by $211.5 million, or 5.2%, to $4,285.3 million, with expenses as a percentage of revenues at 42.4% [265]. - Corporate expenses increased by $96.9 million, or 10.8%, to $994.9 million, driven by costs associated with business transformation initiatives and employee termination benefits [269]. - The operating income included a $273.1 million gain on the sale of AdvancedMD, which positively impacted operating margin by approximately 4.1%, while higher corporate costs negatively affected the margin by about 2.5% [271]. Cash Flow and Capital Management - Cash and cash equivalents totaled $2,538.4 million as of December 31, 2024, with $1,067.5 million available for general purposes [285]. - Operating activities generated net cash of $3,532.7 million for the year ended December 31, 2024, up from $2,248.7 million in the prior year [287]. - Cash used in investing activities was $173.9 million, significantly lower than $4,361.1 million in the prior year, with $487.1 million allocated for acquisitions [288]. - The company repurchased $1,552.0 million worth of common stock during the year ended December 31, 2024, retiring 12.7 million shares [292]. - The board of directors approved an increase in the share repurchase program authorization to $2.5 billion, with $1,850.0 million remaining as of December 31, 2024 [293]. - Dividends paid to common shareholders amounted to $252.8 million for the year ended December 31, 2024, compared to $260.4 million in the prior year [294]. Debt and Financing - The company has issued $2.0 billion in aggregate principal amount of 1.500% convertible senior notes due March 2031 [228]. - Issued €800 million of 4.875% senior unsecured notes due March 2031, net proceeds of €790.6 million used for general corporate purposes [297]. - Issued $2.5 billion of senior unsecured notes with varying maturities and interest rates, net proceeds used to refinance debt and for acquisition-related expenses [298]. - Issued $2.0 billion of senior unsecured notes with interest rates ranging from 1.500% to 2.900%, proceeds used to repay prior credit facility debt [299]. - Entered into a $5.75 billion revolving credit facility maturing in August 2027, with capitalized debt issuance costs of $12.3 million [313]. - As of December 31, 2024, the company had $1,500.0 million in borrowings outstanding under the revolving credit facility with an interest rate of 5.86% [315]. - The total available commitments under the revolving credit facility were $3.7 billion as of December 31, 2024 [315]. - The company has a $2.0 billion commercial paper program, which is backstopped by the revolving credit agreement [316]. - The company had interest rate swaps with a total notional amount of $1.5 billion to hedge changes in cash flows attributable to interest rate risk on a portion of its variable-rate debt instruments [354]. Market and Industry Outlook - The payments technology industry is expected to continue growing due to wider merchant acceptance and increased use of digital payment solutions [233]. - The company anticipates continued expansion into new markets and additional acquisitions to improve competitiveness [232]. - The company is focusing on technology modernization and innovation to support the development of new and emerging technologies [234]. Internal Controls and Compliance - The company maintained effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) [371]. - The determination of performance obligations for Issuer Solutions revenue contracts was identified as a critical audit matter due to the judgment required in evaluating contract terms [365]. - The company’s tax return positions are fully supportable, but unrecognized tax benefits existing at December 31, 2024, would affect the provision for income taxes in the future if recognized [343]. Revenue Recognition - The company recognizes revenue for payment services based on a daily basis, reflecting the services performed each day [411]. - Customer contracts may include subscription-based SaaS arrangements, with revenue recognized over time on a ratable basis over the contract term [421]. - The company measures revenues for its services on a daily basis, directly ascribing variable fees to the distinct day of service [418].

4Q and full year 2024 earnings Use of Non-GAAP Financial Measures This presentation will reference certain non-GAAP financial information. Reconciliation of each non-GAAP financial measure to the most directly comparable GAAP measure is included in the Appendix to this presentation and the Investor Relations section of our website at www.globalpayments.com, except for forward-looking measures where a reconciliation to the corresponding GAAP measures is not available due to the variability, complexity and li ...

Financial Data and Key Metrics Changes - For the full year 2024, adjusted net revenue was $9.15 billion, a 6% increase from the prior year, with a slight headwind from currency and the AdvancedMD disposition [46] - Adjusted operating margin for the full year improved by 40 basis points to 45%, resulting in adjusted earnings per share of $11.55, an 11% increase compared to 2023 [46][57] - In Q4, adjusted net revenue was $2.29 billion, a 5% increase, with a constant currency growth of approximately 6.5% [47] Business Line Data and Key Metrics Changes - Merchant Solutions achieved adjusted net revenue of $1.76 billion for Q4, reflecting growth of 6% or more than 7% on a constant currency basis [47] - The POS and software business saw a 35% increase in new POS rooftops in Q4, driven by new software bundles and the Genius rebranding [48] - Issuer Solutions produced adjusted net revenue of $542 million for Q4, reflecting 3% growth on a constant currency basis, driven by improved transaction volumes [53] Market Data and Key Metrics Changes - Central Europe, Poland, Greece, and Latin America achieved double-digit growth in 2024, benefiting from strong secular payment trends [51] - The company added 26 million traditional accounts on file in Q4, largely driven by growth with existing customers [54] - The education business saw new sales with university customers increase by more than 30% in 2024 [15] Company Strategy and Development Direction - The company launched a broad transformation agenda to focus on areas with the most attractive growth opportunities [8] - A significant operational transformation program was initiated to streamline and simplify the business structure [25] - The company aims to unify its Merchant Solutions business under the Genius brand, with plans for global rollout starting in 2025 [31] Management's Comments on Operating Environment and Future Outlook - Management expects a stable macro environment for 2025, with continued stable labor trends and decreasing inflation [96] - The company anticipates adjusted net revenue growth of 5% to 6% for 2025, excluding dispositions, with a forecast for adjusted operating margin expansion [59][60] - Management is confident in the growth outlook for the Issuer business, supported by a strong implementation pipeline and modernization efforts [122] Other Important Information - The company generated approximately $3 billion of adjusted free cash flow in 2024 and returned $1.8 billion to shareholders [11] - The net leverage position decreased to 3.2x at the end of Q4, consistent with long-term targets [57] - The company plans to return approximately $2 billion to shareholders in 2025, including an accelerated share repurchase plan [63] Q&A Session Summary Question: Early evidence of progress on initiatives - Management noted early evidence of collaboration and operational efficiencies from the transformation initiatives, with expectations for revenue benefits to materialize in the second half of 2025 [77][83] Question: Clarification on Merchant growth guidance - The company expects approximately 0.5% contribution from acquisitions to the Merchant growth guidance, with minimal impact from the orchestration platform acquisition [88] Question: Macro backdrop in guidance - Management forecasts a stable macro environment for 2025, with some uncertainty regarding future economic policies [96][98] Question: Impact of winding down enterprise customer contracts - The process has begun, with some impacts already absorbed in the guidance for 2025 [100][103] Question: Update on Issuer segment trends - The company expects modest improvement in the Issuer segment throughout 2025, with a strong pipeline of projects and renewed contracts [119][122]

Core Insights - Global Payments (GPN) reported revenue of $2.29 billion for the quarter ended December 2024, a year-over-year increase of 4.7% [1] - The company's EPS for the same period was $2.95, compared to $2.65 a year ago [1] - Revenue fell short of the Zacks Consensus Estimate of $2.31 billion, resulting in a surprise of -0.82% [1] - The EPS also missed the consensus estimate of $2.96, with a surprise of -0.34% [1] Financial Performance Metrics - Non-GAAP Revenues for Merchant Solutions were $1.76 billion, below the estimated $1.78 billion, reflecting a year-over-year increase of 5.5% [4] - Non-GAAP Revenues for Intersegment Elimination were -$16.10 million, slightly better than the estimated -$16.33 million, with an 8.1% year-over-year change [4] - Non-GAAP Revenues for Issuer Solutions were $542.10 million, compared to the estimated $550.66 million, marking a 2.2% year-over-year increase [4] - Reported Revenues for Issuer Solutions were $646.28 million, exceeding the average estimate of $631.18 million, with a year-over-year change of 2.6% [4] - Revenues for Merchant Solutions were $1.89 billion, below the four-analyst average estimate of $1.93 billion, showing a year-over-year change of 3.6% [4] Operating Income Analysis - Non-GAAP Operating Income for Merchant Solutions was $852.03 million, below the average estimate of $863.54 million [4] - Non-GAAP Operating Income for Corporate was -$72.42 million, slightly worse than the estimated -$72.27 million [4] - Non-GAAP Operating Income for Issuer Solutions was $254.44 million, compared to the average estimate of $262.55 million [4] - Operating Income for Merchant Solutions was $652.41 million, slightly below the estimated $654.10 million [4] - Operating Income for Corporate was -$212.32 million, worse than the average estimate of -$200.56 million [4] - Operating Income for Issuer Solutions was $119.93 million, exceeding the average estimate of $118.68 million [4]

Core Viewpoint - Global Payments reported quarterly earnings of $2.95 per share, slightly missing the Zacks Consensus Estimate of $2.96 per share, but showing an increase from $2.65 per share a year ago, indicating a year-over-year growth in earnings despite the miss [1][2]. Financial Performance - The company posted revenues of $2.29 billion for the quarter ended December 2024, which was below the Zacks Consensus Estimate by 0.82%, but an increase from $2.19 billion in the same quarter last year [2]. - Over the last four quarters, Global Payments has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2]. Stock Performance - Global Payments shares have declined approximately 2.9% since the beginning of the year, contrasting with the S&P 500's gain of 2.9% [3]. - The stock currently holds a Zacks Rank 4 (Sell), indicating expectations of underperformance in the near future [6]. Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $2.86 on revenues of $2.23 billion, while for the current fiscal year, the estimate is $12.74 on revenues of $9.44 billion [7]. - The trend of estimate revisions for Global Payments has been unfavorable ahead of the earnings release, which may impact future stock performance [6]. Industry Context - The Financial Transaction Services industry, to which Global Payments belongs, is currently ranked in the top 35% of over 250 Zacks industries, suggesting a favorable industry outlook [8]. - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could be a useful metric for investors [5].

Financial Performance - Fourth quarter 2024 GAAP diluted earnings per share (EPS) increased by 63% to $2.25, while adjusted EPS rose by 12% in constant currency to $2.95[2]. - Fourth quarter 2024 GAAP revenue reached $2.52 billion, marking a 3% increase, and adjusted net revenue was $2.29 billion, up 6.5% in constant currency excluding dispositions[6]. - For the full year 2024, GAAP revenues totaled $10.11 billion, a 4.7% increase from $9.65 billion in 2023, with diluted EPS rising to $6.16 from $3.77[6]. - Net income attributable to Global Payments for the fourth quarter was $567.2 million, a 57% increase from $361.3 million in the same quarter of 2023[19]. - Adjusted net revenue for Q4 2024 was $2,289,015, a 4.7% increase from $2,186,240 in Q4 2023[21]. - Adjusted net income attributable to Global Payments for the year ended December 31, 2024, was $2,942,560, up 7.9% from $2,727,407 in 2023[21]. - Net income for the year ended December 31, 2024, was $1,644,153,000, a 60% increase from $1,028,823,000 in 2023[29]. - The company reported a diluted earnings per share of $6.16 for 2024, compared to $3.77 in 2023, representing a substantial increase of 63.5%[33]. Revenue Growth - The 2025 outlook includes expected constant currency adjusted net revenue growth of 5% to 6% and adjusted EPS growth of 10% to 11%[5]. - Merchant Solutions revenue for Q4 2024 was $1,885,923, a 5.5% increase from $1,670,482 in Q4 2023[24]. - Issuer Solutions revenue for Q4 2024 was $646,284, a 2.6% increase from $629,674 in Q4 2023[24]. - For the three months ended December 31, 2024, the company's net revenue was $2,515,386 thousand, a 3.4% increase from $2,433,812 thousand in the same period of 2023[39]. - For the year ended December 31, 2024, the total net revenue reached $10,105,894 thousand, up from $9,654,419 thousand in 2023, marking a 4.6% increase[41]. Operating Income and Margins - Operating income for the fourth quarter increased by 67.1% to $833.1 million, compared to $498.7 million in the prior year[19]. - Adjusted operating margin for the fourth quarter expanded by 40 basis points to 45.2%[6]. - Adjusted operating income for Q4 2024 reached $1,034,048, reflecting a 5.7% growth compared to $978,506 in Q4 2023[21]. - The company’s operating income for 2024 was $2,333,605,000, compared to $1,716,386,000 in 2023, marking a year-over-year increase of approximately 36%[33]. - The operating income for the three months ended December 31, 2024, was $1,034,048 thousand, compared to $978,506 thousand for the same period in 2023, reflecting a 5.7% increase[39]. Shareholder Returns and Capital Management - The company plans to return approximately $2 billion to shareholders in 2025[5]. - A $250 million accelerated share repurchase plan has been initiated[2]. - The net cash used in investing activities for 2024 was $(173,891,000), a significant reduction from $(4,361,112,000) in 2023, highlighting improved capital allocation[29]. - The company reported a net cash increase of $479,100,000 in 2024, compared to an increase of $41,269,000 in 2023, demonstrating strong cash generation capabilities[29]. Assets and Liabilities - Total assets decreased to $46,890,255 as of December 31, 2024, down from $50,570,186 in 2023[28]. - Total liabilities decreased to $23,873,688 as of December 31, 2024, compared to $26,782,671 in 2023[28]. - Cash and cash equivalents increased to $2,538,416 as of December 31, 2024, from $2,088,887 in 2023[28]. Business Transformation and Future Outlook - The company expects to achieve over $600 million in annual run-rate operating income benefits from its transformation by the first half of 2027[2]. - The company believes that providing supplemental financial information enhances shareholders' ability to evaluate future business management[52]. - The company anticipates a foreign exchange impact of approximately 2% on revenues for 2025[48]. - The company’s GAAP diluted EPS for 2025 is projected to grow by 4% to 5%, with constant currency adjusted EPS expected to increase by 10% to 11%[48]. Adjustments and Non-GAAP Measures - Adjusted operating income, net income, and EPS exclude various expenses including acquisition-related amortization and share-based compensation[51]. - Adjusted operating margin is calculated by dividing adjusted operating income by adjusted net revenue, excluding results from the consumer business disposed in April 2023[52]. - Adjustments to operating income for the year ended December 31, 2024, included $1,369.1 million in cost of sales (COS) and $688.8 million in selling, general and administrative (SG&A) expenses[41]. - The company reported a net gain on business dispositions of $273.1 million for the year ended December 31, 2024, compared to a loss of $136.7 million in 2023[41][42].

Company Overview - Global Payments (GPN) is expected to report a year-over-year increase in earnings, with a projected EPS of $2.96, reflecting an 11.7% increase, and revenues of $2.31 billion, up 5.6% from the previous year [3][12] - The earnings report is scheduled for February 13, 2025, and the actual results will significantly influence the stock price depending on whether they meet or exceed expectations [2][3] Earnings Estimates and Revisions - The consensus EPS estimate has been revised 0.53% lower in the last 30 days, indicating a bearish sentiment among analysts regarding the company's earnings prospects [4][10] - The Most Accurate Estimate is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -0.49%, which complicates the prediction of an earnings beat [10][11] Earnings Surprise History - In the last reported quarter, Global Payments was expected to post earnings of $3.11 per share but delivered $3.08, resulting in a surprise of -0.96% [12] - Over the last four quarters, the company has beaten consensus EPS estimates three times, indicating some potential for positive performance despite recent revisions [13] Comparison with Industry Peers - Fidelity National Information Services (FIS), a competitor in the financial transaction services industry, is expected to report an EPS of $1.35, representing a 43.6% year-over-year increase, with revenues projected at $2.63 billion, up 4.9% [17] - FIS has a higher Most Accurate Estimate leading to an Earnings ESP of 0.41% and a Zacks Rank of 2 (Buy), suggesting a higher likelihood of beating the consensus EPS estimate compared to Global Payments [18]