Group 1 - Global Payments (NYSE: GPN) has been underperforming compared to the S&P 500 Financials sector since the second half of 2021 due to its sales being heavily tied to the payment processing industry [1] - The company has faced challenges in maintaining growth, which has impacted its stock performance [1] Group 2 - The analyst emphasizes a focus on capital preservation strategies based on past experiences, particularly during the Global Financial Crisis (GFC) [1] - The analyst's background includes extensive experience in IT, virtualization, and cloud technologies, which informs their investment insights [1]

Group 1 - Global Payments (GPN) has significant potential for growth, particularly after the completion of the Worldpay transaction expected in 2026 [1] - The analyst has over 10 years of experience researching various companies across multiple sectors, including commodities and technology [1] - The analyst has transitioned from writing a blog to creating a value investing-focused YouTube channel, where extensive research on numerous companies has been conducted [1] Group 2 - The analyst expresses a beneficial long position in GPN shares, indicating confidence in the company's future performance [2] - The article reflects the analyst's personal opinions and is not influenced by external compensation [2] - There is no business relationship with any company mentioned in the article, ensuring an unbiased perspective [2]

In my previous Global Payments (NYSE: GPN ) analysis titled Global Payments: Massive Potential With Or Without Worldpay Deal, I pointed out how GPN has significant potential once the Worldpay transaction is completed in 2026, although they can do veryAs of 2025, I've got over 10 years of researching companies. In total, throughout my investing life, I estimate that I researched (in depth) well over 1000 companies, from commodities like oil, natural gas, gold and copper to tech like Google or Nokia and many ...

Group 1 - Global Payments Inc. has launched its Genius platform for quick service restaurant (QSR) and fast casual customers in the UK [1] - The Genius platform is designed for speed and scalability, integrating multiple features such as Point of Sale (POS), Kitchen, Back Office, Payments, Drive Through, and Digital Signage into one solution [1] - This launch aims to address the complex needs of quick service and fast casual restaurants [1]

Group 1: Zacks Premium Overview - Zacks Premium provides various tools for investors to enhance their stock market engagement and confidence, including daily updates on Zacks Rank and Industry Rank, Equity Research reports, and Premium stock screens [1] - The service includes access to Zacks Style Scores, which are designed to help investors select stocks with the highest potential to outperform the market in the short term [2] Group 2: Zacks Style Scores - Zacks Style Scores rate stocks using an alphabetic system from A to F based on value, growth, and momentum characteristics, with A being the highest score indicating better chances of stock outperformance [3] - The Style Scores are categorized into four types: Value Score, Growth Score, Momentum Score, and VGM Score, each focusing on different investment strategies [3][4][5][6] Group 3: Value Score - The Value Score identifies attractive and discounted stocks using various financial ratios such as P/E, PEG, Price/Sales, and Price/Cash Flow, appealing to value investors seeking good stocks at favorable prices [3] Group 4: Growth Score - The Growth Score assesses a company's financial health and future outlook by analyzing projected and historical earnings, sales, and cash flow, targeting stocks expected to experience sustainable growth [4] Group 5: Momentum Score - The Momentum Score focuses on capitalizing on price trends, utilizing factors like one-week price changes and monthly earnings estimate changes to identify optimal times for investment in high-momentum stocks [5] Group 6: VGM Score - The VGM Score combines all three Style Scores, providing a comprehensive indicator for investors who utilize multiple investment strategies, highlighting stocks with strong value, growth forecasts, and momentum [6] Group 7: Zacks Rank and Style Scores Integration - The Zacks Rank is a proprietary model that leverages earnings estimate revisions to assist investors in building successful portfolios, with 1 (Strong Buy) stocks historically yielding an average annual return of +23.75% since 1988, significantly outperforming the S&P 500 [7] - Investors are encouraged to select stocks with a Zacks Rank of 1 or 2 that also possess Style Scores of A or B to maximize potential upside [9] Group 8: Company Spotlight - Global Payments (GPN) - Global Payments, headquartered in Atlanta, GA, has been in the payment technology services sector since 1967 and has expanded through acquisitions and joint ventures [11] - GPN currently holds a Zacks Rank of 3 (Hold) with a VGM Score of B, and a Momentum Style Score of A, having seen a 13.8% increase in share price over the past four weeks [12] - The Zacks Consensus Estimate for GPN's fiscal 2025 earnings has risen by $1.07 to $12.19 per share, with an average earnings surprise of +1.5%, making it a noteworthy consideration for investors [12][13]

Group 1 - The article discusses the investment group The Dividend Kings, which aims to help investors safeguard and grow their money through high-quality dividend investments [2] - The team of analysts associated with The Dividend Kings includes Brad Thomas, Justin Law, Nicholas Ward, Chuck Carnevale, and Sebastian Wolf, who provide resources such as model portfolios, buy ideas, and company research reports [2] - The article emphasizes the importance of intelligent investing in dividend stocks and mentions a thriving chat community for members to learn and share insights [2] Group 2 - The article includes a disclosure stating that the author has a beneficial long position in several companies, including EPD, O, AMZN, NVDA, MELI, ARE, NVO, and GPN [2] - It clarifies that the opinions expressed in the article are those of the author and not influenced by any business relationships with the mentioned companies [2] - The article also notes that past performance is not indicative of future results, and no specific investment advice is provided [3]

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or ...

Core Insights - Global Payments Inc (GPN) reported second-quarter 2025 adjusted earnings per share (EPS) of $3.10, exceeding the Zacks Consensus Estimate of $3.03, with an 11% year-over-year increase [1][8] - Adjusted net revenues rose 2% year over year to $2.4 billion, slightly surpassing the consensus mark by 0.2% [1] - The strong performance was driven by growth in Merchant Solutions and Issuer Solutions, although elevated expenses partially offset the gains [1] GPN's Operating Performance - Adjusted operating income for the quarter was $1.1 billion, reflecting a 4.5% year-over-year increase [2] - Adjusted operating margin expanded by 130 basis points to 44.6% [2] - Total operating expenses increased by 2.3% year over year to $1.5 billion, primarily due to higher selling, general, and administrative expenses [2] Segmental Performances - **Merchant Solutions**: Adjusted revenues reached $1.8 billion, up 1.1% year over year, exceeding the Zacks Consensus Estimate by 0.7% [3] - Adjusted operating income for this segment increased by 3.7% year over year to $917.3 million, beating the consensus estimate of $902.5 million [3] - **Issuer Solutions**: Adjusted revenues were $547.4 million, growing 4% year over year and surpassing the Zacks Consensus Estimate by 1.1% [4] - Adjusted operating income improved by 8% year over year to $266.4 million, exceeding the consensus estimate of $255.7 million [4] GPN's Financial Position (As of June 30, 2025) - Cash and cash equivalents increased to $2.6 billion from $2.4 billion at the end of 2024 [5] - Total assets rose to $48.5 billion from $46.9 billion at the end of 2024 [5] - Long-term debt decreased to $14.2 billion from $15.1 billion at the end of 2024, with the current portion totaling $1.9 billion [5] - Total equity increased to $23.2 billion from $22.9 billion at the end of 2024 [5] Cash Flow and Capital Deployment - GPN generated operating cash flows of $818 million in the second quarter, up from $736.9 million a year ago [6] - The company repurchased shares worth $691.1 million in the first half of 2025 [9] - A quarterly dividend of 25 cents per share was declared, payable on September 26, 2025 [9] 2025 Outlook - GPN reaffirmed its 2025 guidance, expecting adjusted net revenue growth of 5% to 6% on a constant currency basis [10] - Adjusted EPS growth is anticipated to be between 10% and 11% in 2025 [10] - The company expects to convert nearly 90% of adjusted net income into adjusted free cash flow [10] - An increase of more than 50 basis points in the annual adjusted operating margin is also expected [10]

Core Insights - Global Payments (GPN) reported revenue of $2.36 billion for the quarter ended June 2025, marking a year-over-year increase of 1.6% and an EPS of $3.10 compared to $2.93 a year ago, with revenue meeting Zacks Consensus Estimate and an EPS surprise of +2.31% [1] Financial Performance - Non-GAAP Revenues for Merchant Solutions were $1.83 billion, slightly above the average estimate of $1.82 billion, reflecting a year-over-year change of +1.1% [4] - Non-GAAP Revenues for Issuer Solutions reached $547.37 million, exceeding the average estimate of $541.47 million, with a year-over-year increase of +4% [4] - Non-GAAP Revenues for Intersegment Elimination reported at $-17.86 million, compared to the average estimate of $-15.55 million, showing a year-over-year change of +19.2% [4] - Revenues for Merchant Solutions were $1.96 billion, slightly below the estimated $1.97 billion, representing a year-over-year decrease of -0.7% [4] Operating Income - Non-GAAP Operating Income for Corporate was reported at $-130.87 million, compared to the average estimate of $-127.02 million [4] - Non-GAAP Operating Income for Merchant Solutions was $917.26 million, exceeding the average estimate of $902.47 million [4] - Non-GAAP Operating Income for Issuer Solutions was $266.35 million, surpassing the average estimate of $255.74 million [4] - Operating Income for Merchant Solutions was $716.93 million, compared to the average estimate of $687.89 million [4] - Operating Income for Corporate was $-289.99 million, compared to the average estimate of $-205.89 million [4] Stock Performance - Shares of Global Payments have returned -2.8% over the past month, while the Zacks S&P 500 composite has changed by +0.5% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

PART I - FINANCIAL INFORMATION This section provides the unaudited consolidated financial statements and management's analysis of financial performance and condition [ITEM 1. FINANCIAL STATEMENTS](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This item presents the unaudited consolidated financial statements, including income, comprehensive income, balance sheets, cash flows, and equity changes [Unaudited Consolidated Statements of Income](index=3&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Income) Consolidated revenues were essentially flat for both three and six months ended June 30, 2025, compared to 2024, with net income attributable to Global Payments decreasing significantly due to higher income tax expense and lower income from continuing and discontinued operations Three Months Ended June 30 | Metric | June 30, 2025 (in thousands) | June 30, 2024 (in thousands) | Change (YoY) | | :----------------------------------- | :--------------------------- | :--------------------------- | :----------- | | Revenues | $1,956,747 | $1,971,025 | (0.7%) | | Operating income | $427,206 | $475,388 | (10.1%) | | Net income attributable to Global Payments | $241,640 | $374,760 | (35.5%) | | Basic EPS (Total) | $0.99 | $1.47 | (32.7%) | | Diluted EPS (Total) | $0.99 | $1.47 | (32.7%) | Six Months Ended June 30 | Metric | June 30, 2025 (in thousands) | June 30, 2024 (in thousands) | Change (YoY) | | :----------------------------------- | :--------------------------- | :--------------------------- | :----------- | | Revenues | $3,765,434 | $3,805,119 | (1.0%) | | Operating income | $807,302 | $834,979 | (3.3%) | | Net income attributable to Global Payments | $547,374 | $688,067 | (20.4%) | | Basic EPS (Total) | $2.23 | $2.69 | (17.1%) | | Diluted EPS (Total) | $2.23 | $2.68 | (16.8%) | [Unaudited Consolidated Statements of Comprehensive Income](index=5&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Comprehensive%20Income) Comprehensive income attributable to Global Payments significantly increased for both the three and six months ended June 30, 2025, primarily driven by positive foreign currency translation adjustments, a reversal from losses to gains compared to the prior year Three Months Ended June 30 | Metric | June 30, 2025 (in thousands) | June 30, 2024 (in thousands) | Change (YoY) | | :----------------------------------- | :--------------------------- | :--------------------------- | :----------- | | Net income | $246,098 | $389,275 | (36.8%) | | Foreign currency translation adjustments | $445,406 | $(107,605) | Significant positive swing | | Other comprehensive income (loss) | $413,268 | $(101,934) | Significant positive swing | | Comprehensive income attributable to Global Payments | $587,314 | $279,911 | 109.8% | Six Months Ended June 30 | Metric | June 30, 2025 (in thousands) | June 30, 2024 (in thousands) | Change (YoY) | | :----------------------------------- | :--------------------------- | :--------------------------- | :----------- | | Net income | $558,870 | $712,337 | (21.5%) | | Foreign currency translation adjustments | $660,470 | $(191,965) | Significant positive swing | | Other comprehensive income (loss) | $620,252 | $(163,534) | Significant positive swing | | Comprehensive income attributable to Global Payments | $1,056,394 | $554,705 | 90.4% | [Unaudited Consolidated Balance Sheets](index=6&type=section&id=Unaudited%20Consolidated%20Balance%20Sheets) Total assets increased by approximately **$1.6 billion** from December 31, 2024, to June 30, 2025, primarily driven by an increase in current assets, including assets held for sale and settlement processing assets, while total liabilities also increased, mainly due to higher current portion of long-term debt and settlement processing obligations Balance Sheet Highlights | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change | | :----------------------------------- | :--------------------------- | :--------------------------- | :------- | | Total current assets | $7,752,987 | $6,031,232 | +28.5% | | Assets held for sale | $905,442 | $0 | N/A | | Settlement processing assets | $2,077,445 | $1,599,390 | +29.9% | | Total assets | $48,518,510 | $46,890,255 | +3.5% | | Total current liabilities | $8,183,375 | $6,252,714 | +30.9% | | Current portion of long-term debt | $1,868,295 | $1,008,750 | +85.2% | | Settlement processing obligations | $2,691,637 | $1,518,541 | +77.2% | | Total liabilities | $25,096,921 | $23,873,688 | +5.1% | | Total equity | $23,249,758 | $22,855,944 | +1.7% | [Unaudited Consolidated Statements of Cash Flows](index=7&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities increased slightly year-over-year, while net cash used in investing activities decreased and net cash used in financing activities also decreased, primarily due to changes in settlement processing and commercial paper notes Six Months Ended June 30 | Metric | June 30, 2025 (in thousands) | June 30, 2024 (in thousands) | Change (YoY) | | :----------------------------------- | :--------------------------- | :--------------------------- | :----------- | | Net cash provided by operating activities | $1,372,649 | $1,338,414 | +2.6% | | Net cash used in investing activities | $(476,822) | $(697,313) | (31.6%) | | Net cash used in financing activities | $(522,267) | $(557,175) | (6.3%) | | Increase in cash, cash equivalents and restricted cash | $603,913 | $30,274 | +1894.8% | | Cash, cash equivalents and restricted cash, end of period | $3,339,888 | $2,287,149 | +46.0% | [Unaudited Consolidated Statements of Changes in Equity](index=9&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Changes%20in%20Equity) Total Global Payments shareholders' equity increased from December 31, 2024, to June 30, 2025, driven by net income and other comprehensive income, despite share repurchases and cash dividends Six Months Ended June 30, 2025 | Metric | December 31, 2024 (in thousands) | June 30, 2025 (in thousands) | Change | | :----------------------------------- | :--------------------------- | :--------------------------- | :------- | | Total Global Payments shareholders' equity | $22,280,686 | $22,593,075 | +1.4% | | Net income (loss) | N/A | $547,374 | N/A | | Other comprehensive income | N/A | $509,020 | N/A | | Repurchases of common stock | N/A | $(680,397) | N/A | | Cash dividends declared | N/A | $(121,501) | N/A | Six Months Ended June 30, 2024 | Metric | December 31, 2023 (in thousands) | June 30, 2024 (in thousands) | Change | | :----------------------------------- | :--------------------------- | :--------------------------- | :------- | | Total Global Payments shareholders' equity | $22,999,210 | $22,387,414 | (2.6%) | | Net income | N/A | $688,067 | N/A | | Other comprehensive loss | N/A | $(133,362) | N/A | | Repurchases of common stock | N/A | $(909,237) | N/A | | Cash dividends declared | N/A | $(127,042) | N/A | [Notes to Unaudited Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) This section provides detailed notes on accounting policies, business dispositions, revenues, goodwill, debt, derivatives, income tax, equity, share-based awards, and segment information [Note 1 - Basis of Presentation and Summary of Significant Accounting Policies](index=12&type=section&id=Note%201%20-%20Basis%20of%20Presentation%20and%20Summary%20of%20Significant%20Accounting%20Policies) Global Payments is a leading payments technology company, which entered into definitive agreements to acquire Worldpay and divest its Issuer Solutions business, with the latter classified as discontinued operations, and also retrospectively changed the presentation of certain cash flows from operating to financing activities - Global Payments entered into definitive agreements to acquire **100% of Worldpay** from FIS and GTCR, and simultaneously divest its Issuer Solutions business to FIS, with both transactions expected to close in the first half of 2026, subject to regulatory approvals[26](index=26&type=chunk)[27](index=27&type=chunk) - The Issuer Solutions business has been classified as discontinued operations for all periods presented due to its strategic shift and major impact on operations and financial results[27](index=27&type=chunk) - The company retrospectively changed the presentation of cash flows associated with 'Changes in settlement processing assets and obligations, net' and 'Changes in funds held for customers' from operating to financing activities, increasing net cash provided by operating activities and net cash used in financing activities by **$185.2 million** for the six months ended June 30, 2024[30](index=30&type=chunk)[31](index=31&type=chunk) [Note 2 - Business Dispositions and Discontinued Operations](index=14&type=section&id=Note%202%20-%20Business%20Dispositions%20and%20Discontinued%20Operations) The Issuer Solutions business has been classified as discontinued operations, resulting in a goodwill impairment charge, and the company also agreed to divest Heartland Payroll Solutions and recognized a gain from the sale of AdvancedMD - The Issuer Solutions business was classified as a held for sale disposal group and a discontinued operation in the second quarter of 2025, leading to a **$33.2 million goodwill impairment charge**[36](index=36&type=chunk)[37](index=37&type=chunk) Income from Discontinued Operations, Net of Tax | Period | June 30, 2025 (in thousands) | June 30, 2024 (in thousands) | Change (YoY) | | :----------------------------------- | :--------------------------- | :--------------------------- | :----------- | | Three Months Ended | $34,003 | $74,303 | (54.2%) | | Six Months Ended | $103,464 | $147,439 | (29.9%) | - Global Payments entered into a definitive agreement to divest Heartland Payroll Solutions for approximately **$1.1 billion**, expected to close in the second half of 2025, with assets held for sale including **$479.6 million in goodwill**[40](index=40&type=chunk)[41](index=41&type=chunk) - An additional gain on the sale of AdvancedMD of **$4.3 million** was recognized during the six months ended June 30, 2025, following its sale in December 2024[42](index=42&type=chunk) [Note 3 - Revenues](index=16&type=section&id=Note%203%20-%20Revenues) Consolidated revenues were slightly down, with Integrated and Embedded Solutions showing growth, while Point-of-Sale and Software Solutions and Core Payments Solutions experienced declines Consolidated Revenues (Continuing Operations) | Period | June 30, 2025 (in thousands) | June 30, 2024 (in thousands) | Change (YoY) | | :----------------------------------- | :--------------------------- | :--------------------------- | :----------- | | Three Months Ended | $1,956,747 | $1,971,025 | (0.7%) | | Six Months Ended | $3,765,434 | $3,805,119 | (1.0%) | Revenues by Service Line (Continuing Operations) | Service Line | 3 Months 2025 | 3 Months 2024 | Change (YoY) | 6 Months 2025 | 6 Months 2024 | Change (YoY) | | :----------------------------------- | :------------ | :------------ | :----------- | :------------ | :------------ | :----------- | | Point-of-Sale and Software Solutions | $348,392 | $390,584 | (10.8%) | $696,532 | $769,768 | (9.5%) | | Integrated and Embedded Solutions | $854,958 | $798,602 | +7.1% | $1,658,501 | $1,556,225 | +6.6% | | Core Payments Solutions | $753,397 | $781,839 | (3.6%) | $1,410,401 | $1,479,126 | (4.6%) | Estimated Future Revenue from Unsatisfied Performance Obligations (as of June 30, 2025) | Year Ending December 31, | Amount (in thousands) | | :----------------------- | :-------------------- | | 2025 | $183,711 | | 2026 | $244,182 | | 2027 | $170,583 | | 2028 | $94,810 | | 2029 | $57,642 | | 2030 | $20,721 | | 2031 and thereafter | $2,668 | | Total | $774,317 | [Note 4 - Goodwill and Other Intangible Assets](index=18&type=section&id=Note%204%20-%20Goodwill%20and%20Other%20Intangible%20Assets) Goodwill decreased slightly due to reclassification to assets held for sale, while other intangible assets also saw a minor decrease Goodwill and Other Intangible Assets | Asset Type | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change | | :----------------------------------- | :--------------------------- | :--------------------------- | :------- | | Goodwill | $16,742,403 | $16,777,532 | (0.2%) | | Other intangible assets, net | $4,380,462 | $4,527,382 | (3.3%) | - The change in goodwill for the six months ended June 30, 2025, included **$81.8 million acquired**, **$359.2 million from foreign currency translation**, and a reclassification of **$479.6 million** to assets held for sale related to the Payroll Solutions business[48](index=48&type=chunk) [Note 5 - Long-term Debt and Lines of Credit](index=19&type=section&id=Note%205%20-%20Long-term%20Debt%20and%20Lines%20of%20Credit) Total long-term debt remained relatively stable, as the company entered into a new **$7.25 billion** revolving credit facility and obtained committed bridge financing for the Worldpay acquisition, while commercial paper borrowings increased Total Long-Term Debt | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change | | :----------------------------------- | :--------------------------- | :--------------------------- | :------- | | Total long-term debt | $16,019,278 | $16,067,425 | (0.3%) | | Current portion of long-term debt | $1,868,295 | $1,008,750 | +85.2% | | Long-term debt, excluding current portion | $14,150,983 | $15,058,675 | (6.1%) | - A new **$7.25 billion** revolving credit facility was entered into on May 15, 2025, maturing in May 2030, replacing a previous **$5.75 billion** facility, with **$1.5 billion** outstanding and **$2.9 billion** available commitments as of June 30, 2025[54](index=54&type=chunk)[56](index=56&type=chunk)[58](index=58&type=chunk) - The company obtained **$7.7 billion** in committed bridge financing for the Worldpay acquisition on April 17, 2025, which was subsequently reduced to **$6.2 billion** on May 15, 2025, and net borrowings under the commercial paper program were **$798.1 million** outstanding at June 30, 2025[59](index=59&type=chunk)[61](index=61&type=chunk) [Note 6 - Derivatives and Hedging Instruments](index=23&type=section&id=Note%206%20-%20Derivatives%20and%20Hedging%20Instruments) The company uses net investment hedges for foreign currency risk and interest rate swaps/treasury locks for interest rate risk - Global Payments designated **€800 million** Euro-denominated senior notes as a net investment hedge, recognizing a gain (loss) of **$(81.3) million** and **$(90.7) million** in foreign currency translation adjustments for the three and six months ended June 30, 2025, respectively[68](index=68&type=chunk)[70](index=70&type=chunk) - Interest rate swaps with a notional of **$1.5 billion** had a fair value of **$(20.8) million** (liability) at June 30, 2025, while treasury locks with a notional of **$1.5 billion**, entered in June 2025, had a fair value of **$(34.3) million** (liability) at June 30, 2025[72](index=72&type=chunk)[74](index=74&type=chunk) [Note 7 - Income Tax](index=25&type=section&id=Note%207%20-%20Income%20Tax) The effective income tax rate increased significantly in 2025 due to deferred tax expense from legal entity restructuring related to the Issuer Solutions sale Effective Income Tax Rates | Period | June 30, 2025 | June 30, 2024 | | :----------------------------------- | :------------ | :------------ | | Three Months Ended | 38.1% | 17.9% | | Six Months Ended | 28.1% | 11.9% | - The higher effective tax rate in 2025 was primarily due to deferred tax expense associated with legal entity restructuring in connection with the sale of the Issuer Solutions business[76](index=76&type=chunk) - The company is evaluating the potential effects of the One Big Beautiful Bill Act (OBBBA) and the OECD Pillar Two framework on future financial statements[139](index=139&type=chunk)[140](index=140&type=chunk)[141](index=141&type=chunk) [Note 8 - Redeemable Noncontrolling Interests](index=25&type=section&id=Note%208%20-%20Redeemable%20Noncontrolling%20Interests) Redeemable noncontrolling interests are presented as temporary equity, and the option held by the minority shareholder in Greece is considered probable of becoming redeemable, leading to redemption price adjustments - Redemption price adjustments recognized in net income attributable to noncontrolling interests were **$(9.3) million** and **$(10.6) million** for the three and six months ended June 30, 2025, respectively, compared to **$3.0 million** and **$4.5 million** in 2024[81](index=81&type=chunk) - The redemption option for the Poland subsidiary expired on January 1, 2024, and was reclassified to nonredeemable noncontrolling interest[82](index=82&type=chunk) [Note 9 - Shareholders' Equity](index=26&type=section&id=Note%209%20-%20Shareholders%27%20Equity) The company continued its share repurchase program, reducing outstanding common stock, and a dividend of **$0.25 per share** was declared for September 2025 Common Stock Repurchases | Period | Shares Repurchased | Cost (in millions) | Average Price per Share | | :----------------------------------- | :----------------- | :----------------- | :---------------------- | | Three Months Ended June 30, 2025 | 3,043,484 | $231.4 | $76.02 | | Three Months Ended June 30, 2024 | 910,980 | $100.9 | $110.73 | | Six Months Ended June 30, 2025 | 7,261,834 | $680.4 | $93.70 | | Six Months Ended June 30, 2024 | 6,972,979 | $909.2 | $130.39 | - As of June 30, 2025, **$1,176.5 million** remained available under the share repurchase program[83](index=83&type=chunk) - A dividend of **$0.25 per share** was declared on July 30, 2025, payable on September 26, 2025[84](index=84&type=chunk) [Note 10 - Share-based Awards and Stock Options](index=26&type=section&id=Note%2010%20-%20Share-based%20Awards%20and%20Stock%20Options) Total share-based compensation expense slightly decreased, and unrecognized compensation expense remains for both restricted stock/performance awards and stock options Total Share-based Compensation Expense | Period | June 30, 2025 (in thousands) | June 30, 2024 (in thousands) | Change (YoY) | | :----------------------------------- | :--------------------------- | :--------------------------- | :----------- | | Three Months Ended | $39,810 | $43,245 | (8.0%) | | Six Months Ended | $79,550 | $83,362 | (4.6%) | - As of June 30, 2025, unrecognized compensation expense for unvested restricted stock and performance awards was **$204.3 million** (expected over **2.0 years**), and for unvested stock options was **$12.3 million** (expected over **1.9 years**)[88](index=88&type=chunk)[89](index=89&type=chunk) [Note 11 - Earnings per Share](index=28&type=section&id=Note%2011%20-%20Earnings%20per%20Share) Basic and diluted EPS decreased for both continuing and discontinued operations, and convertible notes were anti-dilutive and excluded from diluted EPS calculation for the periods Basic EPS (Continuing Operations) | Period | June 30, 2025 | June 30, 2024 | Change (YoY) | | :----------------------------------- | :------------ | :------------ | :----------- | | Three Months Ended | $0.86 | $1.18 | (27.1%) | | Six Months Ended | $1.82 | $2.12 | (14.2%) | Diluted EPS (Continuing Operations) | Period | June 30, 2025 | June 30, 2024 | Change (YoY) | | :----------------------------------- | :------------ | :------------ | :----------- | | Three Months Ended | $0.86 | $1.18 | (27.1%) | | Six Months Ended | $1.82 | $2.11 | (13.7%) | - Convertible notes were not included in the computation of diluted EPS for the three and six months ended June 30, 2025, as their effect would have been anti-dilutive[93](index=93&type=chunk) [Note 12 - Supplemental Balance Sheet Information](index=29&type=section&id=Note%2012%20-%20Supplemental%20Balance%20Sheet%20Information) Cash and cash equivalents increased, with a significant portion held by a small group of financial institutions, and notes receivable also increased, with interest income recognized Cash, Cash Equivalents and Restricted Cash | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change | | :----------------------------------- | :--------------------------- | :--------------------------- | :------- | | Total cash, cash equivalents and restricted cash | $3,339,888 | $2,735,975 | +22.1% | | Available for general purposes | $809,900 | N/A | N/A | | Restricted cash | $290,700 | N/A | N/A | - Notes receivable had an aggregate principal amount of **$841.0 million** outstanding at June 30, 2025, generating interest income of **$24.2 million** and **$47.7 million** for the three and six months ended June 30, 2025, respectively[101](index=101&type=chunk)[102](index=102&type=chunk) [Note 13 - Accumulated Other Comprehensive Loss](index=31&type=section&id=Note%2013%20-%20Accumulated%20Other%20Comprehensive%20Loss) Accumulated other comprehensive loss significantly decreased (improved) due to positive foreign currency translation gains, offsetting net unrealized losses on hedging activities Accumulated Other Comprehensive Loss | Component | June 30, 2025 (in thousands) | March 31, 2025 (in thousands) | Change | | :----------------------------------- | :--------------------------- | :--------------------------- | :------- | | Foreign Currency Translation Gains (Losses) | $(45,817) | $(419,337) | Significant positive swing | | Net Unrealized Gains (Losses) on Hedging Activities | $(55,683) | $(27,924) | Significant negative swing | | Total Accumulated Other Comprehensive Loss | $(103,972) | $(449,646) | (76.9%) | - Other comprehensive income (loss) attributable to noncontrolling interests was **$67.6 million** and **$111.2 million** for the three and six months ended June 30, 2025, respectively, a significant improvement from the prior year[103](index=103&type=chunk)[104](index=104&type=chunk) [Note 14 - Segment Information](index=32&type=section&id=Note%2014%20-%20Segment%20Information) The company now reports only the Merchant Solutions segment as continuing operations, with Issuer Solutions reclassified to discontinued operations, and Merchant Solutions operating income and margin increased due to cost reduction activities - Beginning in Q2 2025, Merchant Solutions is the sole reportable segment for continuing operations, as Issuer Solutions was reclassified to discontinued operations[106](index=106&type=chunk) Merchant Solutions Segment Performance | Metric | 3 Months 2025 | 3 Months 2024 | Change (YoY) | 6 Months 2025 | 6 Months 2024 | Change (YoY) | | :----------------------------------- | :------------ | :------------ | :----------- | :------------ | :------------ | :----------- | | Revenues | $1,956,747 | $1,971,025 | (0.7%) | $3,765,434 | $3,805,119 | (1.0%) | | Operating income | $716,931 | $672,525 | +6.6% | $1,331,033 | $1,252,962 | +6.2% | | Operating margin | 36.6% | 34.1% | +2.5% pts | 35.3% | 32.9% | +2.4% pts | - Merchant Solutions operating income and margin increased primarily due to favorable cost reduction initiatives and workforce alignment actions taken in 2024, while corporate expenses increased significantly due to acquisition and transformation costs[108](index=108&type=chunk)[135](index=135&type=chunk)[137](index=137&type=chunk) [Note 15 - Commitments and Contingencies](index=33&type=section&id=Note%2015%20-%20Commitments%20and%20Contingencies) The company is involved in various legal matters, but the liabilities are not expected to have a material adverse effect on its financial position - Liabilities from claims and lawsuits are not expected to have a material adverse effect on the company's financial position, liquidity, results of operations, or cash flows[109](index=109&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=34&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This item provides management's discussion and analysis of the company's financial condition, operational results, liquidity, and capital resources [Executive Overview](index=34&type=section&id=Executive%20Overview) Global Payments is a leading payments technology company undergoing strategic transformation, including the acquisition of Worldpay and divestiture of Issuer Solutions, focusing on growth areas and expecting significant operating income benefits from transformation initiatives, while navigating macroeconomic uncertainties - Global Payments is executing a strategic transformation, including the acquisition of Worldpay and divestiture of its Issuer Solutions business (classified as discontinued operations), both expected to close in H1 2026, and the company also plans to divest Heartland Payroll Solutions in H2 2025[113](index=113&type=chunk) - Transformation initiatives, launched in 2024, are expected to generate over **$650 million** of annual run-rate operating income benefit by the first half of 2027, despite incurring incremental expenses through early 2027[114](index=114&type=chunk)[115](index=115&type=chunk)[116](index=116&type=chunk) - The company faces macroeconomic risks including currency fluctuations, inflation, and rising interest rates, which could adversely affect financial performance, though the extent is difficult to predict[117](index=117&type=chunk)[118](index=118&type=chunk)[119](index=119&type=chunk) [Results of Operations - Continuing Operations](index=37&type=section&id=Results%20of%20Operations%20-%20Continuing%20Operations) Continuing operations, primarily Merchant Solutions, saw a slight revenue decline but improved operating income and margin due to cost reduction initiatives, while corporate expenses increased significantly due to acquisition and transformation costs Consolidated Revenues (Continuing Operations) | Period | June 30, 2025 (in thousands) | June 30, 2024 (in thousands) | Change (YoY) | | :----------------------------------- | :--------------------------- | :--------------------------- | :----------- | | Three Months Ended | $1,956,747 | $1,971,025 | (0.7%) | | Six Months Ended | $3,765,434 | $3,805,119 | (1.0%) | Merchant Solutions Operating Income & Margin | Period | Operating Income 2025 | Operating Income 2024 | Change (YoY) | Operating Margin 2025 | Operating Margin 2024 | Change (YoY) | | :----------------------------------- | :-------------------- | :-------------------- | :----------- | :-------------------- | :-------------------- | :----------- | | Three Months Ended | $716,931 | $672,525 | +6.6% | 36.6% | 34.1% | +2.5% pts | | Six Months Ended | $1,331,033 | $1,252,962 | +6.2% | 35.3% | 32.9% | +2.4% pts | - Corporate expenses increased by **$92.9 million (47.1%)** for the three months and **$110.0 million (26.3%)** for the six months ended June 30, 2025, primarily due to higher acquisition and transformation costs[126](index=126&type=chunk)[128](index=128&type=chunk)[135](index=135&type=chunk) [Results of Operations - Discontinued Operations](index=41&type=section&id=Results%20of%20Operations%20-%20Discontinued%20Operations) Discontinued operations (Issuer Solutions) showed revenue growth but a decrease in net income, primarily due to a significant increase in income tax expense and a goodwill impairment charge, while operating income and margin improved due to the cessation of depreciation and amortization Revenues (Discontinued Operations) | Period | June 30, 2025 (in thousands) | June 30, 2024 (in thousands) | Change (YoY) | | :----------------------------------- | :--------------------------- | :--------------------------- | :----------- | | Three Months Ended | $639,885 | $613,508 | +4.3% | | Six Months Ended | $1,260,614 | $1,216,243 | +3.6% | Operating Income & Margin (Discontinued Operations) | Period | Operating Income 2025 | Operating Income 2024 | Change (YoY) | Operating Margin 2025 | Operating Margin 2024 | Change (YoY) | | :----------------------------------- | :-------------------- | :-------------------- | :----------- | :-------------------- | :-------------------- | :----------- | | Three Months Ended | $219,912 | $97,235 | +126.2% | 34.4% | 15.8% | +18.6% pts | | Six Months Ended | $310,700 | $189,896 | +63.6% | 24.6% | 15.6% | +9.0% pts | - The increase in operating income and margin for discontinued operations was primarily due to the cessation of depreciation and amortization associated with the classification of assets as held for sale[147](index=147&type=chunk) [Liquidity and Capital Resources](index=42&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity through operating cash flows and various financing sources, with capital allocation priorities including dividends, share repurchases, acquisitions, and capital investments, and cash from operating activities increased, while cash used in investing and financing activities decreased - Net cash provided by operating activities increased by **2.6%** to **$1,372.6 million** for the six months ended June 30, 2025, primarily due to positive changes in working capital[155](index=155&type=chunk) - Net cash used in investing activities decreased by **31.6%** to **$476.8 million**, with **$205.8 million** used for acquisitions and **$279.7 million** for capital expenditures, and capital expenditures are projected to be approximately **$750 million** for the full year 2025[156](index=156&type=chunk) - Net cash used in financing activities decreased by **6.3%** to **$522.3 million**, which included **$691.1 million** for common stock repurchases and **$121.5 million** for dividends paid to common shareholders[157](index=157&type=chunk)[160](index=160&type=chunk)[161](index=161&type=chunk) [Effect of New Accounting Pronouncements and Recently Issued Accounting Pronouncements Not Yet Adopted](index=46&type=section&id=Effect%20of%20New%20Accounting%20Pronouncements%20and%20Recently%20Issued%20Accounting%20Pronouncements%20Not%20Yet%20Adopted) The company refers to Note 1 for a discussion of recently adopted and issued accounting pronouncements - Refer to Note 1 for details on recently issued accounting pronouncements, including ASU 2024-03 (Disaggregation of Income Statement Expenses) and ASU 2023-09 (Income Taxes), which are not yet adopted[177](index=177&type=chunk) [Forward-Looking Statements](index=46&type=section&id=Forward-Looking%20Statements) The report contains forward-looking statements regarding business operations, financial condition, strategic plans, and the impact of acquisitions/dispositions, which are subject to significant risks and uncertainties, and actual results may differ materially - Forward-looking statements cover business strategy, future financial and operating results, liquidity, deleveraging plans, and the anticipated benefits and timing of acquisitions and dispositions[178](index=178&type=chunk) - These statements are based on assumptions and estimates that are inherently subject to significant risks, uncertainties, and contingencies, many of which are beyond the company's control[179](index=179&type=chunk) - Actual results could differ materially from anticipated results due to various known and unknown factors, including those discussed in the 'Risk Factors' section of the Annual Report on Form 10-K[179](index=179&type=chunk) [ITEM 3. Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) For a discussion of the company's exposure to market risk, refer to the Annual Report on Form 10-K for the year ended December 31, 2024 - For a discussion of market risk exposure, refer to Part II, Item 7A, 'Quantitative and Qualitative Disclosures About Market Risk,' in the Annual Report on Form 10-K for the year ended December 31, 2024[181](index=181&type=chunk) [ITEM 4. Controls and Procedures](index=47&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, and there were no material changes in internal control over financial reporting during the quarter - As of June 30, 2025, management, including the principal executive and financial officers, concluded that the company's disclosure controls and procedures were effective[182](index=182&type=chunk) - There were no changes in internal control over financial reporting during the quarter ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[183](index=183&type=chunk) PART II - OTHER INFORMATION This section includes legal proceedings, risk factors, equity sales, defaults, other information, and exhibits [ITEM 1. Legal Proceedings](index=48&type=section&id=ITEM%201.%20Legal%20Proceedings) The company is involved in various legal claims and lawsuits, but the potential liabilities are not expected to have a material adverse effect on its financial position, liquidity, results of operations, or cash flows - The company is party to a number of claims and lawsuits incidental to its business, but the liabilities, if any, are not expected to have a material adverse effect on its financial position, liquidity, results of operations, or cash flows[184](index=184&type=chunk) [ITEM 1A. Risk Factors](index=48&type=section&id=ITEM%201A.%20Risk%20Factors) The failure to complete the Worldpay acquisition and Issuer Solutions divestiture could adversely affect the company's business, financial results, and stock price, diverting management's attention and disrupting relationships - Failure to complete the acquisition of Worldpay and divestiture of Issuer Solutions business could have an adverse effect on the company's business, financial results, results of operations, and stock price[186](index=186&type=chunk) - Risks include delays or failure to receive regulatory approvals, increased transaction expenses, negative market reactions, diversion of management's attention, negative publicity, litigation, and disruption of relationships with third parties and employees[187](index=187&type=chunk)[188](index=188&type=chunk) - There is no assurance that the anticipated benefits of the transactions will be fully realized or that integration costs will not be greater than expected, and the divestiture of Issuer Solutions may also lead to asset impairment charges and lost operating income[188](index=188&type=chunk)[189](index=189&type=chunk) [ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=49&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased common stock under its authorized program during the quarter, with a remaining authorization of **$1,176.5 million** Common Stock Repurchases (Quarter Ended June 30, 2025) | Period | Total Number of Shares Purchased | Approximate Average Price Paid per Share, Excluding Commission | | :----------------- | :----------------------------- | :------------------------------------------------------------- | | April 1-30, 2025 | 1,911,144 | $73.32 | | May 1-31, 2025 | 1,136,952 | $78.59 | | June 1-30, 2025 | 2,476 | $78.05 | | Total | 3,050,572 | $76.01 | - As of June 30, 2025, the remaining amount available under the share repurchase program was **$1,176.5 million**[190](index=190&type=chunk)[191](index=191&type=chunk) [ITEM 3. Defaults Upon Senior Securities](index=49&type=section&id=ITEM%203.%20Defaults%20Upon%20Senior%20Securities) None reported - No defaults upon senior securities were reported[191](index=191&type=chunk) [ITEM 4. Mine Safety Disclosures](index=49&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) Not applicable - Mine Safety Disclosures are not applicable to the company[192](index=192&type=chunk) [ITEM 5. Other Information](index=49&type=section&id=ITEM%205.%20Other%20Information) No other material information to report, specifically no insider trading plan adoptions, modifications, or terminations by directors or officers - No directors or officers notified the company of adopting, modifying, or terminating any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter ended June 30, 2025[193](index=193&type=chunk) [ITEM 6. Exhibits](index=50&type=section&id=ITEM%206.%20Exhibits) Lists all exhibits filed with the Form 10-Q, including transaction agreements, incentive plans, credit agreements, and certifications - Exhibits include Transaction Agreements for the Worldpay acquisition and Issuer Solutions divestiture (2.1, 2.2), the 2025 Incentive Plan (10.1), the Credit Agreement for the Revolving Credit Facility (10.3), and certifications of the Principal Executive and Financial Officers (31.1, 31.2, 32.1)[194](index=194&type=chunk) [Signatures](index=51&type=section&id=Signatures) The report is duly signed by the Chief Financial Officer on behalf of Global Payments Inc - The report was signed by Joshua J. Whipple, Chief Financial Officer of Global Payments Inc., on August 6, 2025[197](index=197&type=chunk)