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]

Stock Performance - Shares of Global Payments Inc (GPN) have plunged 16.4% in the past year, underperforming the industry's growth of 20.5% [1] - Peers like Fiserv, Inc (FI) and Fidelity National Information Services, Inc (FIS) have gained 51.6% and 27.1%, respectively, over the same time frame [1] - The S&P 500 index has rallied 24.8% in the past year, a stark divergence from GPN's price performance [1] - The stock moved down 21.4% from its 52-week high of $141.78 and is currently trading below its 50-day moving average, signaling downward momentum [2] Challenges - Global Payments faces challenges from rising operating expenses, which inched up 1.5% year over year in the first nine months of 2024 [4] - Intensified competition in the payment market from emerging firms threatens profitability and pricing dynamics [4][5] - The Zacks Consensus Estimate for earnings per share has seen downward revisions, with the 2024 adjusted earnings estimate pegged at $11.58 per share, indicating 11.1% year-over-year growth [7] Valuation - The company is currently trading at 8.68X forward 12-month earnings, below its five-year median of 12.65X and the industry average of 24.54X, suggesting the stock is undervalued [6] Growth Drivers - Strong contributions from the Merchant Solutions and Issuer Solutions segments have been key revenue growth drivers, with year-over-year revenue increases of 8.8% and 3.9%, respectively, in the first nine months of 2024 [9] - The company aims for adjusted net revenue growth, excluding dispositions, in the mid-single-digit percentage range for 2025 and mid to high-single digits during 2026-2027 [10] - Global Payments continues to expand its capabilities and market presence through acquisitions, partnerships, and joint ventures, with strategic priorities including enhancing business scale and accessing new markets [11] Strategic Initiatives - Significant investments in technology focus on product innovation and transitioning technology platforms to cloud environments, aiming to improve platform performance and achieve cost efficiencies [12] - The company is simplifying its POS portfolio from more than 16 brands to a single cohesive platform to boost competitiveness and operational efficiency [12] - Divestment of non-core assets is expected to have an annual revenue impact of $500-600 million starting in the second half of 2024 [12] Conclusion - Global Payments is navigating near-term challenges like rising expenses and competitive pressures, but its focus on streamlining operations, divesting non-core assets, and enhancing technology capabilities positions it for growth [13] - Current shareholders should stay put and benefit from its expanding operations and strategic initiatives, while new investors should wait for a better entry point [13]

Revenue Growth - Consolidated revenues for the three and nine months ended September 30, 2024 increased to $2,601.6 million and $7,590.5 million, respectively, compared to $2,475.7 million and $7,220.6 million for the prior year, primarily due to growth in transaction volumes[122] - Merchant Solutions revenues for the three months ended September 30, 2024 increased by 6.0% to $1,997.7 million, representing 76.8% of total revenues[145] - Issuer Solutions revenues for the three months ended September 30, 2024 increased by 2.2% to $621.1 million, representing 23.9% of total revenues[145] - Consolidated revenues for the nine months ended September 30, 2024 increased by 5.1% to $7,590.5 million compared to $7,220.6 million in the prior year[153] - Merchant Solutions segment revenues increased by 8.8% to $5,802.8 million for the nine months ended September 30, 2024, driven by growth in transaction volume and cross-selling of services[154][155][156] - Issuer Solutions segment revenues increased by 3.9% to $1,837.4 million for the nine months ended September 30, 2024, primarily due to higher transaction volume[158] Operating Income and Expenses - Merchant Solutions segment operating income for the three and nine months ended September 30, 2024 increased compared to the prior year, driven by revenue growth and the acquisition of EVO business[123] - Issuer Solutions segment operating income for the three months ended September 30, 2024 decreased compared to the prior year due to slightly higher costs[123] - Consolidated operating income for the three and nine months ended September 30, 2024 included lower acquisition and integration expenses, offset by business transformation expenses and a technology asset charge[124] - Consolidated operating expenses for the three months ended September 30, 2024 increased by 10.9% to $2,126.0 million, primarily due to higher selling, general, and administrative expenses[145] - Corporate expenses for the three months ended September 30, 2024 included $56.4 million in employee termination benefits, $59.2 million in business transformation costs, and $55.8 million in technology asset charges[147] - Selling, general and administrative expenses increased to $3,282.2 million for the nine months ended September 30, 2024, primarily due to higher corporate expenses, including employee termination benefits and business transformation costs[161][162] - Consolidated operating income increased by 23.2% to $1,500.5 million for the nine months ended September 30, 2024, with operating margin improving to 19.8% from 16.9% in the prior year[163][164] - Merchant Solutions segment operating income increased by 12.1% to $1,960.5 million for the nine months ended September 30, 2024, with operating margin improving to 33.8% from 32.8% in the prior year[149][164] - Issuer Solutions segment operating income increased by 10.3% to $322.5 million for the nine months ended September 30, 2024, with operating margin improving to 17.6% from 16.5% in the prior year[149][164] Financial Performance and Metrics - The company expects its transformation initiatives to generate more than $500 million of annual run-rate operating income benefit by the first half of 2027[130] - Cost of service as a percentage of revenues decreased to 37.0% for the nine months ended September 30, 2024, compared to 38.9% in the prior year, driven by improved operating leverage and the divestiture of the consumer business[159][160] - Interest and other income increased to $126.6 million for the nine months ended September 30, 2024, including a $18.8 million gain from the release and conversion of Visa convertible preferred shares[165][166] - The effective income tax rate for the nine months ended September 30, 2024 was 13.4%, benefiting from foreign interest income, tax credits, and a change in the assessment of valuation allowances[168] - The effective income tax rate for the three months ended September 30, 2023, was 14.1%, and for the nine months ended September 30, 2023, it was 24.9%[169] - Net income attributable to Global Payments was $315.1 million for the three months and $1,003.2 million for the nine months ended September 30, 2024[171] - Diluted earnings per share was $1.24 for the three months and $3.92 for the nine months ended September 30, 2024[172] Capital and Liquidity Management - The company had cash and cash equivalents totaling $2,941.9 million as of September 30, 2024, with $888.4 million available for general purposes[178] - Capital expenditures were $490.9 million for the nine months ended September 30, 2024, with an anticipated $670.0 million for the year ending December 31, 2024[182] - The company used $900.0 million to repurchase shares of its common stock during the nine months ended September 30, 2024[186] - The remaining amount available under the share repurchase program was $1,371.9 million as of September 30, 2024, with an increase to $2.5 billion approved on October 24, 2024[187] - The company issued $2.0 billion in aggregate principal amount of 1.500% convertible unsecured senior notes due March 2031 on February 23, 2024[189] - The company entered into capped call transactions with an initial cap price of $228.90 per share to hedge the potential dilutive effect upon the conversion of the notes[192] - The cost of $256.3 million incurred in connection with the capped call transactions was reflected as a reduction to paid-in-capital in the consolidated balance sheet as of September 30, 2024[193] - The company has $1.5 billion in aggregate principal amount of 1.000% convertible notes due August 2029, issued in 2022 with interest payable semi-annually[194] - The company has a $5.75 billion unsecured revolving credit facility maturing in August 2027[195] - As of September 30, 2024, $1.5 billion was borrowed under the revolving credit facility with an interest rate of 6.56%, leaving $4.2 billion available[196] - The company has a $2.0 billion commercial paper program, with no borrowings outstanding as of September 30, 2024[197][198] - The required leverage ratio was 4.25 to 1.00 and the interest coverage ratio was 3.00 to 1.00 as of September 30, 2024, with compliance maintained[199] - As of September 30, 2024, $788.1 million was outstanding under settlement lines of credit, with additional capacity of $2,203.7 million[202] - The weighted-average interest rate on settlement lines of credit borrowings was 5.63% as of September 30, 2024[202] - The company had $75.9 million of cash on deposit used to determine available credit for settlement lines of credit as of September 30, 2024[201] - The maximum and average outstanding balances under settlement lines of credit were $996.4 million and $534.8 million, respectively, during the three months ended September 30, 2024[202] Market Risks and Disclosures - The company is exposed to market risks, with detailed disclosures available in the Annual Report on Form 10-K for the year ended December 31, 2023[209]

Core Insights - The 2024 State of AP Report by MineralTree highlights the need for finance organizations to enhance automation in accounts payable (AP) processes to improve efficiency and reduce costs [2][4] - Less than 20% of organizations have fully automated their AP processes, indicating significant room for improvement [5][10] - The report reveals that while many organizations are satisfied with their automation efforts, few are completely satisfied, suggesting ongoing challenges in achieving optimal automation [2][5] Automation and Efficiency - Four out of five finance professionals believe that increasing automation efforts is essential to mitigate inefficiencies caused by manual processes [4] - Organizations that have automated parts of their AP processes report benefits such as faster invoice processing, improved payment cycle times, and increased team productivity [4][5] - The use of Artificial Intelligence (AI) in AP is still limited, with only 20% of businesses currently using or planning to incorporate AI in the next year [6][5] Payment Methods and Trends - There is a notable shift towards digital payment options, with vendors and buyers increasingly favoring methods like ACH and card payments over traditional checks [7] - The desire for timely and accurate payments is driving vendors to accept more digital payment methods [7] Staffing and Work Environment - The return to office mandates, coupled with a shortage of accountants, is raising concerns about staffing and retention in finance teams [8] - Automation is being leveraged to support remote and hybrid work arrangements, enhancing work/life balance for employees [8] Survey Demographics - The report is based on responses from 1,017 finance professionals involved in AP functions, along with 147 vendor organization employees, surveyed between June 17 and August 5, 2024 [9][10] - Respondents represented a diverse range of industries and company sizes, with annual revenues varying from less than $1 million to over $1 billion, and 65% falling between $10 million and $500 million [10]

Core Insights - Global Payments (GPN) reported $2.36 billion in revenue for Q3 2024, a 5.6% year-over-year increase, with an EPS of $3.08 compared to $2.75 a year ago [1] - The revenue fell short of the Zacks Consensus Estimate of $2.38 billion, resulting in a surprise of -0.89%, while the EPS also missed the consensus estimate of $3.11 by -0.96% [1] Revenue Performance - Non-GAAP Revenues from Merchant Solutions were $1.84 billion, slightly below the average estimate of $1.85 billion, reflecting a 6.7% year-over-year increase [3] - Non-GAAP Revenues from Issuer Solutions were $529.04 million, compared to the average estimate of $546.92 million, marking a 1.8% year-over-year increase [3] - Revenues from Merchant Solutions were reported at $2 billion, matching the average estimate, with a 6% year-over-year increase [3] - Revenues from Issuer Solutions were $621.13 million, below the average estimate of $633.49 million, showing a 2.2% year-over-year increase [3] Operating Income Metrics - Non-GAAP Operating Income from Merchant Solutions was $921.47 million, exceeding the average estimate of $915.32 million [3] - Non-GAAP Operating Income from Issuer Solutions was $240.39 million, below the average estimate of $258.79 million [3] - Operating Income from Merchant Solutions was $707.55 million, surpassing the average estimate of $676.07 million [3] Stock Performance - Shares of Global Payments have returned -1.4% over the past month, while the Zacks S&P 500 composite has increased by 1.8% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Exhibit 99.1 Global Payments Reports Third Quarter 2024 Results October 30, 2024 • 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 ATLANTA -- Global Pay ...

Earnings and Revenue Forecast - Wall Street analysts forecast Global Payments (GPN) to report quarterly earnings of $3 11 per share, a year-over-year increase of 13 1% [1] - Revenues are anticipated to reach $2 38 billion, reflecting a 6 6% increase compared to the year-ago quarter [1] - The consensus EPS estimate for the quarter has been revised downward by 0 2% over the past 30 days [2] Key Metrics Projections - Non-GAAP Revenues for Merchant Solutions are predicted to reach $1 85 billion, a 7 1% increase year-over-year [5] - Non-GAAP Revenues for Issuer Solutions are expected to be $546 92 million, indicating a 5 2% year-over-year increase [5] - Revenues for Issuer Solutions are forecasted at $633 49 million, a 4 2% increase from the prior-year quarter [6] - Revenues for Merchant Solutions are estimated at $2 00 billion, suggesting a 6 2% year-over-year increase [6] - Geographic Revenue for Europe is projected to reach $439 74 million, a 2 9% increase from the year-ago quarter [6] - Geographic Revenue for the Americas is expected to be $2 10 billion, a 5 8% year-over-year increase [7] - Geographic Revenue for Asia Pacific is forecasted at $62 27 million, a 2 2% decrease from the year-ago quarter [7] Operating Income Projections - Non-GAAP Operating Income for Merchant Solutions is predicted to reach $915 32 million, compared to $847 68 million in the same quarter last year [8] - Non-GAAP Operating Income for Issuer Solutions is expected to be $258 79 million, compared to $246 64 million in the same quarter last year [8] - Operating Income for Merchant Solutions is forecasted at $676 07 million, compared to $637 86 million in the same quarter last year [9] - Operating Income for Issuer Solutions is estimated at $119 35 million, compared to $113 88 million in the same quarter last year [9] Stock Performance - Shares of Global Payments have shown a return of -1 9% over the past month, compared to the Zacks S&P 500 composite's +2% change [9] - With a Zacks Rank 3 (Hold), GPN is expected to mirror the overall market performance in the near future [9]

Investors in Global Payments Inc. (GPN) need to pay close attention to the stock based on moves in the options market lately. That is because the Jan 01, 2025 $50.00 Call had some of the highest implied volatility of all equity options today. What is Implied Volatility? Implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other. It could ...

Core Viewpoint - Global Payments reported strong second-quarter earnings, driven by transaction growth and improved operating performance, although some segments missed consensus estimates [2][3][6][7]. Financial Performance - Adjusted EPS for Q2 2024 was $2.93, beating the Zacks Consensus Estimate of $2.91, and rose 11.8% year over year [2]. - Adjusted net revenues increased 5.5% year over year to $2.32 billion, surpassing the consensus mark of $2.31 billion [2]. - Adjusted operating income rose 6.4% year over year to $1.1 billion, exceeding the estimate of $1 billion, with an adjusted operating margin of 45.2% [4]. Operating Expenses - Total operating expenses were $2 billion, up 7.9% year over year, primarily due to higher selling, general and administrative expenses [5]. - Interest and other expenses decreased 16.9% year over year to $159.2 million [5]. Segment Performance - Merchant Solutions segment reported adjusted revenues of $1.81 billion, a 7.8% increase year over year, driven by double-digit growth in the ISV channel and over 20% growth in the LATAM region [6]. - Issuer Solutions segment had adjusted revenues of $526.5 million, growing 4.2% year over year but missing the consensus estimate [7]. Financial Position - As of June 30, 2024, cash and cash equivalents were $2.1 billion, total assets increased to $50.8 billion, and long-term debt decreased to $15.6 billion [8]. - Total equity declined to $23 billion from $23.3 billion at the end of 2023 [8]. Capital Deployment - The company repurchased shares worth $900 million in the first half of 2024 and declared a quarterly dividend of 25 cents per share [10]. 2024 Outlook - Adjusted net revenues are projected to be between $9.17 billion and $9.30 billion, indicating a 6-7% improvement from 2023 [11]. - Adjusted EPS is expected to be between $11.54 and $11.70, suggesting 11-12% growth from 2023 [12]. Market Position - Global Payments has a subpar Growth Score of D and a Momentum Score of F, but a value grade of B, placing it in the top 40% for this investment strategy [14]. - The stock has a Zacks Rank 3 (Hold), indicating an expected in-line return in the coming months [15].

Core Insights - Global Payments' international operations are crucial for understanding its financial resilience and growth potential [1][2] - The company's ability to tap into international markets is increasingly important for its overall financial health [2][3] Revenue Performance - Total revenue for the quarter was $2.32 billion, reflecting a year-over-year increase of 5.5% [4] - International revenue breakdown shows Europe contributed $434.38 million (18.7%), exceeding analyst expectations of $422.04 million [5] - Asia Pacific accounted for $61.81 million (2.7%), falling short of the expected $64.99 million [6] Future Projections - Analysts project total revenue for the current fiscal quarter to be $2.39 billion, a 6.8% increase year-over-year, with Europe expected to contribute $428.8 million (18%) and Asia Pacific $64.22 million (2.7%) [7] - For the entire year, total revenue is forecasted at $9.23 billion, a 6.5% improvement from the previous year, with Europe contributing $1.65 billion (17.9%) and Asia Pacific $256.26 million (2.8%) [8] Market Dynamics - The reliance on foreign markets presents both opportunities and challenges for Global Payments, necessitating close monitoring of international revenue trends [9][10]