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Core Viewpoint - Global Payments Inc. demonstrates strong financial performance and growth potential, supported by a positive outlook from Raymond James, which has raised the price target for the stock. Financial Performance - The company reported adjusted earnings per share (EPS) of $3.26, exceeding the Zacks Consensus Estimate of $3.23, marking a 12% increase compared to the previous year [2] - Revenue for the third quarter rose by 3% to $2.4 billion, driven by strong performance in the Merchant and Issuer Solutions segments, surpassing consensus expectations by 0.9% [3] - The operating margin expanded by 110 basis points to 45%, attributed to reduced expenses and gains in core segments [3] Stock Performance - The current stock price for GPN is $79.51, reflecting an increase of approximately 3.12% or $2.41 [4] - Over the past year, the stock has fluctuated between a high of $120 and a low of $65.93, with a market capitalization of approximately $19.29 billion [4] - Raymond James reaffirmed its "Outperform" rating for GPN and raised the price target from $100 to $105 [5]

Core Insights - Global Payments' new point-of-sale software, Genius, has seen significant market acceptance since its launch for restaurants and retail in Q2 [1][3] - The company aims to become a pure-play merchant solutions provider and is focusing on enabling agentic commerce for its customers [2][7] Sales Performance - In markets where Genius was launched, sales to new locations increased by over 20% year-over-year in Q3, with monthly recurring revenue from new sales rising 75% from June to September [3] - The average deal size for Genius more than doubled during this period, indicating strong market resonance [3] Product Expansion - Following the success of Genius for small and medium-sized businesses, the software's features were expanded in September to support enterprise clients and in October for higher education institutions [4] - Franchisees of several leading quick-service restaurant brands have selected Genius for deployment across more than 400 locations [4] Geographic Reach - Genius is currently available in the U.S., Canada, Mexico, the U.K., and Austria, with plans to expand to Germany by the end of the year and to Ireland, Spain, and the Czech Republic in early 2026 [5] Strategic Transactions - Global Payments is planning to acquire Worldpay and divest its Issuer Solutions, with both transactions expected to close in Q1 2026 [6] - The U.K.'s Competition and Markets Authority has cleared the acquisition of Worldpay [6] Future Opportunities - The company is eager to complete the Worldpay transaction to enhance its strategy of becoming a pure-play merchant solutions provider, focusing on sustainable growth and value creation [7] - Global Payments is also preparing for agentic commerce through a partnership with Google to enable various agentic payment types [8]

Core Insights - Global Payments Inc. (GPN) reported third-quarter 2025 adjusted earnings per share (EPS) of $3.26, exceeding the Zacks Consensus Estimate of $3.23, with a year-over-year increase of 12% [1][8] - Adjusted net revenues rose 3% year over year to $2.4 billion, surpassing the consensus mark by 0.9% [1][8] - The strong performance was driven by growth in Merchant Solutions and Issuer Solutions, alongside a reduction in operating expenses [1][8] GPN's Operating Performance - Adjusted operating income for the quarter was $1.1 billion, reflecting a 5.5% year-over-year increase [2] - Adjusted operating margin expanded by 110 basis points to 45% [2] - Total operating expenses decreased by 20.9% year over year to $1.2 billion, primarily due to lower selling, general, and administrative expenses [2] Q3 Segmental Performances of Global Payments - **Merchant Solutions**: Adjusted revenues reached $1.9 billion, a 2.2% year-over-year increase, exceeding the Zacks Consensus Estimate by 0.7% [3] - Adjusted operating income for this segment increased by 4.4% year over year to $962.3 million, also beating the consensus estimate [3] - **Issuer Solutions**: Adjusted revenues were $561.8 million, growing 6.2% year over year and surpassing the Zacks Consensus Estimate by 1.8% [4] - Adjusted operating income improved by 9.6% year over year to $263.5 million, exceeding the consensus estimate [4] GPN's Financial Position (As of Sept. 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 billion from $46.9 billion at the end of 2024 [5] - Long-term debt decreased to $13.3 billion from $15.1 billion at the end of 2024 [5] - Total equity increased to $23.3 billion from $22.9 billion at the end of 2024 [5] Capital Deployment Update - GPN repurchased shares worth $1.2 billion in the first nine months of 2025 [7] - A quarterly dividend of 25 cents per share was declared, payable on December 26, 2025 [7] GPN's 2025 Outlook Reaffirmed - Adjusted net revenue growth on a constant currency basis is expected to be between 5% and 6% in 2025 [9] - Adjusted EPS growth is anticipated to be between 10% and 11% in 2025 [9] - The company expects to convert nearly 90% of adjusted net income into adjusted free cash flow [9] - The annual adjusted operating margin is projected to increase by more than 50 basis points in 2025 [9]

Core Viewpoint - Global Payments reported quarterly earnings of $3.26 per share, exceeding the Zacks Consensus Estimate of $3.23 per share, and showing an increase from $3.08 per share a year ago, indicating a positive earnings surprise of +0.93% [1] Financial Performance - The company achieved revenues of $2.43 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 0.90%, and up from $2.36 billion in the same quarter last year [2] - Over the last four quarters, Global Payments has exceeded consensus EPS estimates three times and has also topped consensus revenue estimates three times [2] Stock Performance - Global Payments shares have declined approximately 31.2% since the beginning of the year, contrasting with the S&P 500's gain of 16.5% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating it is expected to perform in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $3.19 on revenues of $2.34 billion, while for the current fiscal year, the estimate is $12.18 on revenues of $9.31 billion [7] - The trend of earnings estimate revisions for Global Payments was mixed ahead of the earnings release, which may influence future stock performance [6] Industry Context - The Financial Transaction Services industry, to which Global Payments belongs, is currently ranked in the bottom 39% of over 250 Zacks industries, suggesting potential challenges ahead [8]

Financial Data and Key Metrics Changes - The company reported adjusted net revenue of $2.43 billion for Q3 2025, reflecting a 6% increase from the prior year on a constant currency basis, excluding dispositions [31] - Adjusted operating margins expanded by 110 basis points to 45%, or 80 basis points excluding dispositions, due to strong execution and benefits from the transformation [32] - Adjusted earnings per share (EPS) increased by 12% on a reported basis and 11% on a constant currency basis, reaching $3.26 [33] - Adjusted free cash flow for the quarter was approximately $784 million, representing a conversion rate of adjusted net income to adjusted free cash flow of about 100% [38] Business Line Data and Key Metrics Changes - Merchant solutions generated adjusted net revenue of $1.88 billion for the quarter, reflecting approximately 6% growth on a constant currency basis, excluding dispositions [33] - The POS and software business achieved high single-digit growth, excluding dispositions, with a notable increase in new Genius locations sold, seeing a 37% monthly increase since launch [34] - Issuer Solutions generated adjusted net revenue of $562 million for the third quarter, reflecting over 5% growth on a constant currency basis, marking an acceleration from the first half of the year [36] Market Data and Key Metrics Changes - International markets showed relative strength with high single-digit constant currency revenue growth across Central Europe and Asia-Pacific, benefiting from strong secular payment trends [35] - The macroeconomic backdrop remains stable, supporting the view that consumer spending is resilient [33] Company Strategy and Development Direction - The company is focused on transforming into a pure-play merchant solutions provider, with the anticipated closing of the Worldpay acquisition and divestiture of Issuer Solutions expected in Q1 2026 [4][26] - A significant investment of approximately $1 billion annually is dedicated to merchant and commerce enablement solutions, aimed at accelerating the product roadmap and delivering differentiated value [45] - The integration strategy emphasizes growth, competitiveness, and innovation while unifying under a single brand [27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the trajectory of the business, expecting adjusted earnings per share growth at the high end of the 10%-11% range on a constant currency basis for the full year [43] - The company anticipates returning $7.5 billion to shareholders between 2025 and 2027 while simultaneously deleveraging to three times within 18-24 months of closing the Worldpay transaction [46] - Management highlighted the importance of leveraging increased scale and realizing meaningful synergies to generate significantly more leverage-free cash flow [46] Other Important Information - The company has appointed two new independent directors to its board, enhancing leadership skills and financial technology expertise [29] - A new ad hoc integration committee has been established to oversee the integration of Worldpay following the acquisition [29] Q&A Session Summary Question: Thoughts on capital returns given the massive amount of free cash flow - Management expects to return close to $9 billion from dispositions and cash flow generation between 2025 and 2027, prioritizing capital returns to shareholders while also investing in business growth [50] Question: Insights on Genius and competitive landscape - The company is winning in various markets, with 90% of new sales to new customers and a 37% increase in new locations sold since the launch of Genius [56] - Management noted that the pricing environment remains constructive, focusing on value-based pricing rather than being the low-cost provider [63] Question: Organic growth components and Salesforce expansion - Organic growth is driven by new sales productivity and stable same-store sales trends, with efforts to harmonize pricing structures across portfolios [70] - The company is sourcing sales talent broadly, targeting software salespeople with consultative sales experience [73]

Financial Data and Key Metrics Changes - The company reported adjusted net revenue of $2.43 billion for Q3 2025, a 6% increase from the prior year on a constant currency basis, excluding dispositions [31] - Adjusted operating margins expanded by 110 basis points to 45%, or 80 basis points excluding dispositions [32] - Adjusted earnings per share (EPS) was $3.26, reflecting a 12% increase on a reported basis and 11% on a constant currency basis [33] - Adjusted free cash flow for the quarter was approximately $784 million, representing a conversion rate of adjusted net income to adjusted free cash flow of approximately 100% [38] - The company reduced its net leverage position to 2.9 times at the end of Q3, down from 3.15 times at the end of Q2 [40] Business Line Data and Key Metrics Changes - Merchant solutions generated adjusted net revenue of $1.88 billion for the quarter, reflecting approximately 6% growth on a constant currency basis, excluding dispositions [33] - The POS and software business achieved high single-digit growth, excluding dispositions, for Q3 [33] - Issuer Solutions generated adjusted net revenue of $562 million for Q3, reflecting over 5% growth on a constant currency basis, marking an acceleration from the first half of the year [36] Market Data and Key Metrics Changes - The international markets demonstrated relative strength with high single-digit constant currency revenue growth across Central Europe and Asia-Pacific [35] - The company added nearly 60 new partners globally during the quarter, with about half of these new ISV partners located outside North America [35] Company Strategy and Development Direction - The company is focused on transforming into a pure-play merchant solutions provider, with the anticipated closing of the WorldPay acquisition and divestiture of Issuer Solutions in early 2026 [44][46] - A significant annual capital investment of approximately $1 billion is dedicated exclusively to merchant and commerce enablement solutions [45] - The integration of AI is enhancing the product development lifecycle, enabling faster innovation and improved velocity across the technology portfolio [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the trajectory of the business, expecting adjusted earnings per share growth to be at the high end of the 10%-11% range on a constant currency basis for the year [43] - The company anticipates continued strong free cash flow generation, with expectations to return $7.5 billion to shareholders between 2025 and 2027 [46] - Management noted that the macroeconomic backdrop remains stable, supporting the view that consumer spending is resilient [33] Other Important Information - The company closed the divestiture of its payroll business in September, allowing for an incremental $500 million of capital to be returned to shareholders through an accelerated share repurchase program [6] - The company partnered with Google to enable agentic commerce using the Agent Payments Protocol, enhancing secure and reliable commerce for customers [6] Q&A Session Summary Question: Thoughts on capital returns given the massive amount of free cash flow - Management expects to return close to $9 billion from dispositions and cash flow generation between 2025 and 2027, prioritizing capital returns to shareholders while also investing in business growth [50] Question: Insights on Genius wins and competitive landscape - Management indicated that initial wins with Genius are coming from both competitive takeaways and new customers, with a notable increase in new annual recurring revenue (ARR) since its launch [55][56] Question: Pricing environment and backbook sales - Management stated that the pricing environment remains constructive, focusing on value-based pricing rather than being the low-cost provider, while also harmonizing pricing structures across portfolios [62]

Financial Data and Key Metrics Changes - The company reported adjusted net revenue of $2.43 billion for Q3 2025, a 6% increase from the prior year on a constant currency basis, excluding dispositions [32] - Adjusted operating margins expanded by 110 basis points to 45%, or 80 basis points excluding dispositions, due to strong execution and transformation benefits [32] - Adjusted earnings per share (EPS) reached $3.26, reflecting a 12% increase on a reported basis and 11% on a constant currency basis [33] - Adjusted free cash flow for the quarter was approximately $784 million, representing a conversion rate of adjusted net income to adjusted free cash flow of nearly 100% [39] Business Line Data and Key Metrics Changes - Merchant solutions generated adjusted net revenue of $1.88 billion for the quarter, reflecting approximately 6% growth on a constant currency basis, excluding dispositions [33] - The POS and software business achieved high single-digit growth, excluding dispositions, with a notable increase in new Genius locations sold, seeing a 37% monthly increase since launch [34] - Issuer Solutions generated adjusted net revenue of $562 million for the third quarter, reflecting over 5% growth on a constant currency basis, marking an acceleration from the first half of the year [37] Market Data and Key Metrics Changes - International markets showed relative strength with high single-digit constant currency revenue growth across Central Europe and Asia-Pacific, benefiting from strong secular payment trends [36] - The macroeconomic backdrop remains stable, supporting the view that consumer spending is resilient [33] Company Strategy and Development Direction - The company is focused on transforming into a pure-play merchant solutions provider, with plans to close the WorldPay acquisition and divestiture of Issuer Solutions in Q1 2026 [4][5] - A partnership with Google was announced to enable agentic commerce, enhancing the company's capabilities in emerging commerce channels [5] - The company is investing approximately $1 billion annually in capital investment dedicated to merchant and commerce enablement solutions, aiming to accelerate product development and innovation [45][46] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the trajectory of the business, expecting adjusted earnings per share growth at the high end of the 10%-11% range on a constant currency basis for the full year [44] - The anticipated closing of the WorldPay acquisition is seen as a pivotal moment for the company's evolution, enhancing operational efficiency and maximizing cash flow [45] - Management highlighted the importance of leveraging increased scale and realizing meaningful synergies to generate significantly more leverage-free cash flow [46] Other Important Information - The company repurchased $500 million in shares during the third quarter, bringing total share repurchases to approximately $1.2 billion year-to-date [39] - The net leverage position was reported at 2.9 times at the end of Q3, down from 3.15 times at the end of Q2, indicating faster-than-anticipated deleveraging [40] Q&A Session Summary Question: Thoughts on capital returns given the free cash flow generation - Management reiterated the commitment to return capital to shareholders, expecting to return close to $9 billion from cash flow generated in the business between 2025 and 2027 [48] Question: Insights on Genius and competitive landscape - Management noted that the company is winning in various markets, with 90% of new sales to new customers and a significant increase in new annual recurring revenue since launching Genius [52][53] Question: Pricing environment and competitive actions - Management stated that the pricing environment remains constructive, focusing on delivering value rather than being the low-cost provider, while remaining price competitive [58][59] Question: Organic growth components and pricing increases - Management highlighted that organic growth is driven by new sales productivity and stable same-store sales trends, with ongoing efforts to harmonize pricing structures across portfolios [60][62]

3Q 2025 earnings Forward-looking statements This presentation may contain certain forward-looking statements within the meaning of the "safe-harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, which are based on current expectations, estimates and projections about the industry and geographies in which we operate, and beliefs of and assumptions made by our management, involve risks, uncertainties and assumptions that could significantly affect the fi ...

Financial Performance - Consolidated revenues were $2,007.6 million for the three months ended September 30, 2025, a 0.5% increase from $1,997.7 million in the same period of 2024[124] - For the nine months ended September 30, 2025, consolidated revenues were $5,773.1 million, a 0.5% decrease from $5,802.8 million in 2024[133] - Operating income for the three and nine months ended September 30, 2025 was $778.0 million and $1,585.3 million, respectively, compared to $442.7 million and $1,277.7 million in the prior year, resulting in operating margins of 38.8% and 27.5%[142] - Income from continuing operations was $473.3 million and $928.7 million for the three and nine months ended September 30, 2025, compared to $303.9 million and $868.8 million for the prior year[149] - Diluted earnings per share for the three and nine months ended September 30, 2025 were $1.86 and $3.67, respectively, reflecting a decrease in diluted weighted-average shares outstanding to 240.2 million and 243.6 million shares[150] Segment Performance - The Merchant Solutions segment operating income for the three months ended September 30, 2025, increased by 6.0% to $749.99 million compared to $707.55 million in 2024[130] - The operating margin for the Merchant Solutions segment improved to 37.4% for the three months ended September 30, 2025, compared to 35.4% in 2024[130] - Revenues in the integrated and embedded solutions service line increased by $56.3 million (6.8%) and $158.6 million (6.7%) for the three and nine months ended September 30, 2025, respectively, while revenues in point of sale and software solutions decreased by $37.2 million (9.8%) and $110.5 million (9.6%) in the same periods[136] Expenses and Cost Management - Operating expenses for the three months ended September 30, 2025, decreased by 20.9% to $1,229.6 million from $1,554.9 million in 2024[130] - Selling, general and administrative expenses decreased by $84.6 million (10.8%) and $186.5 million (8.0%) for the three and nine months ended September 30, 2025, respectively, with expenses as a percentage of segment revenues at 34.9% and 37.2%[139][140] - The company incurred acquisition and transformation expenses of $205.1 million for the three months ended September 30, 2025[130] - Corporate expenses increased by $51.1 million (19.3%) and $161.1 million (23.6%) for the three and nine months ended September 30, 2025, primarily due to higher acquisition and transformation costs[141] Cash Flow and Capital Management - Cash and cash equivalents totaled $2,785.3 million as of September 30, 2025, with $1,304.1 million available for general purposes[160] - Operating activities provided net cash of $2,141.4 million for the nine months ended September 30, 2025, reflecting net income adjusted for noncash items[162] - Net cash from investing activities was $79.6 million for the nine months ended September 30, 2025, compared to a cash outflow of $846.6 million for the same period in 2024[163] - Cash used for acquisitions was $201.9 million in 2025, down from $373.8 million in 2024, while capital expenditures were $449.6 million in 2025 compared to $490.9 million in 2024[163] - The company anticipates capital expenditures to be approximately $700 million for the year ending December 31, 2025[163] Financing Activities - Net cash used in financing activities was $2,126.0 million for the nine months ended September 30, 2025, significantly higher than $446.0 million in 2024[164] - Proceeds from long-term debt were $4,899.1 million in 2025, down from $7,637.9 million in 2024, while repayments were $5,972.8 million in 2025 compared to $5,803.0 million in 2024[165] - The company repurchased 13,171,490 shares of common stock for $1,191.1 million during the nine months ended September 30, 2025, at an average price of $84.61 per share[168] - Dividends paid to common shareholders were $179.5 million in 2025, a decrease from $190.5 million in 2024[169] Strategic Initiatives and Acquisitions - The company expects transformation initiatives to generate over $650 million of annual run-rate operating income benefit by the first half of 2027[120] - The company completed the sale of Heartland Payroll Solutions for approximately $1.1 billion, recognizing a gain of $343.9 million during the three months ended September 30, 2025[117] - The proposed acquisition of Worldpay involves approximately $6.1 billion in cash and 43.3 million shares of common stock, with a simultaneous divestiture of the Issuer Solutions business for approximately $7.5 billion in cash[117] - The company plans to complete the acquisition of Worldpay and divest its Issuer Solutions business, with expectations of future financial and operational benefits[187] - The company’s future performance and strategic initiatives are contingent on successful integration of acquisitions and operational initiatives[187] Risk Factors and Forward-Looking Statements - The company acknowledges that actual revenues and growth rates may differ materially from forward-looking statements due to various risks and uncertainties[188] - The company emphasizes the importance of reviewing risk factors discussed in its Annual Report on Form 10-K for the year ended December 31, 2024[188] - Forward-looking statements are subject to significant risks and uncertainties, and the company disclaims any obligation to publicly update these statements[189] - The company cautions against placing undue reliance on forward-looking statements, which are only valid as of their date[189] - The company’s market risk exposure is discussed in its Annual Report on Form 10-K for the year ended December 31, 2024[190]