Global Payments(GPN) - 2024 Q3 - Quarterly Report

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$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$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$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$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$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$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$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]