Global Payments(US:GPN)2025-02-14 22:15Financial Performance - Consolidated revenues for the year ended December 31, 2024 increased to $10,105.9 million, compared to $9,654.4 million for the prior year, primarily due to growth in transaction volume [228]. - Consolidated revenues for the year ended December 31, 2024 increased by $451.5 million, or 4.7%, to $10,105.9 million from $9,654.4 million in the prior year [257]. - Merchant Solutions segment revenues increased by $536.9 million, or 7.5%, to $7,688.7 million, primarily due to a $479.5 million increase in transaction volume and a $189.3 million contribution from the acquisition of EVO [258]. - Issuer Solutions segment revenues increased by $84.8 million, or 3.5%, to $2,483.7 million, driven by a $74.3 million increase in transaction volume [259]. - Consolidated operating income for the year ended December 31, 2024 was $2,333.6 million, representing a 36.0% increase from $1,716.4 million in the prior year [254]. - Operating income rose to $2,333,605,000 in 2024, up 36% from $1,716,386,000 in 2023 [379]. - Net income attributable to Global Payments increased to $1,570.4 million from $986.2 million in the prior year, with Merchant Solutions segment operating income rising by $267.7 million [279]. - Net income attributable to Global Payments increased to $1,570,365,000 in 2024, compared to $986,233,000 in 2023, reflecting a 59.3% growth [379]. - Basic earnings per share reached $6.18 in 2024, a significant increase from $3.78 in 2023 [379]. Business Transactions - The sale of AdvancedMD, Inc. in December 2024 was completed for approximately $1 billion, with a recognized gain of $273.1 million during the year [228]. - The company completed the sale of the consumer portion of its Netspend business in Q2 2023, impacting its Consumer Solutions segment [224]. - The Consumer Solutions segment reported no revenues for the year ended December 31, 2024, following the disposal of the consumer business in April 2023 [259]. - The company recognized net losses of $243.6 million on the consumer business disposition during the years ended December 31, 2023, and $71.9 million in 2022 [337]. - The company reported a net loss on business dispositions of $273,134,000 in 2024, compared to a gain of $136,744,000 in 2023 [379]. Operating Expenses and Income - Operating income for the year ended December 31, 2024 included lower acquisition and integration expenses and share-based compensation expense [228]. - Selling, general and administrative expenses increased by $211.5 million, or 5.2%, to $4,285.3 million, with expenses as a percentage of revenues at 42.4% [265]. - Corporate expenses increased by $96.9 million, or 10.8%, to $994.9 million, driven by costs associated with business transformation initiatives and employee termination benefits [269]. - The operating income included a $273.1 million gain on the sale of AdvancedMD, which positively impacted operating margin by approximately 4.1%, while higher corporate costs negatively affected the margin by about 2.5% [271]. Cash Flow and Capital Management - Cash and cash equivalents totaled $2,538.4 million as of December 31, 2024, with $1,067.5 million available for general purposes [285]. - Operating activities generated net cash of $3,532.7 million for the year ended December 31, 2024, up from $2,248.7 million in the prior year [287]. - Cash used in investing activities was $173.9 million, significantly lower than $4,361.1 million in the prior year, with $487.1 million allocated for acquisitions [288]. - The company repurchased $1,552.0 million worth of common stock during the year ended December 31, 2024, retiring 12.7 million shares [292]. - The board of directors approved an increase in the share repurchase program authorization to $2.5 billion, with $1,850.0 million remaining as of December 31, 2024 [293]. - Dividends paid to common shareholders amounted to $252.8 million for the year ended December 31, 2024, compared to $260.4 million in the prior year [294]. Debt and Financing - The company has issued $2.0 billion in aggregate principal amount of 1.500% convertible senior notes due March 2031 [228]. - Issued €800 million of 4.875% senior unsecured notes due March 2031, net proceeds of €790.6 million used for general corporate purposes [297]. - Issued $2.5 billion of senior unsecured notes with varying maturities and interest rates, net proceeds used to refinance debt and for acquisition-related expenses [298]. - Issued $2.0 billion of senior unsecured notes with interest rates ranging from 1.500% to 2.900%, proceeds used to repay prior credit facility debt [299]. - Entered into a $5.75 billion revolving credit facility maturing in August 2027, with capitalized debt issuance costs of $12.3 million [313]. - As of December 31, 2024, the company had $1,500.0 million in borrowings outstanding under the revolving credit facility with an interest rate of 5.86% [315]. - The total available commitments under the revolving credit facility were $3.7 billion as of December 31, 2024 [315]. - The company has a $2.0 billion commercial paper program, which is backstopped by the revolving credit agreement [316]. - The company had interest rate swaps with a total notional amount of $1.5 billion to hedge changes in cash flows attributable to interest rate risk on a portion of its variable-rate debt instruments [354]. Market and Industry Outlook - The payments technology industry is expected to continue growing due to wider merchant acceptance and increased use of digital payment solutions [233]. - The company anticipates continued expansion into new markets and additional acquisitions to improve competitiveness [232]. - The company is focusing on technology modernization and innovation to support the development of new and emerging technologies [234]. Internal Controls and Compliance - The company maintained effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) [371]. - The determination of performance obligations for Issuer Solutions revenue contracts was identified as a critical audit matter due to the judgment required in evaluating contract terms [365]. - The company’s tax return positions are fully supportable, but unrecognized tax benefits existing at December 31, 2024, would affect the provision for income taxes in the future if recognized [343]. Revenue Recognition - The company recognizes revenue for payment services based on a daily basis, reflecting the services performed each day [411]. - Customer contracts may include subscription-based SaaS arrangements, with revenue recognized over time on a ratable basis over the contract term [421]. - The company measures revenues for its services on a daily basis, directly ascribing variable fees to the distinct day of service [418].