Global Payments(GPN) - 2025 Q1 - Quarterly Report

Financial Performance - Consolidated revenues for the three months ended March 31, 2025, were $2,412.1 million, essentially flat compared to $2,420.2 million in the same period of 2024, reflecting a decrease of $8.1 million or 0.3%[95][113] - Merchant Solutions segment revenues decreased by $25.4 million, or 1.4%, to $1,808.7 million, impacted by approximately $20 million unfavorable foreign currency exchange fluctuations[95][113] - Issuer Solutions segment revenues increased by $18.0 million, or 3.0%, to $620.7 million, primarily due to a $23.8 million increase in transaction volume driven by cardholder activity[95][115] - Consolidated operating income for the three months ended March 31, 2025, was $470.9 million, representing an increase of $18.6 million or 4.1% from $452.3 million in the prior year[95][112] - Consolidated operating income increased to $470.9 million, with an operating margin of 19.5%[124] - Net income attributable to Global Payments was $305.7 million, compared to $313.3 million in the prior year[130] - Diluted earnings per share increased to $1.24, reflecting a decrease in diluted weighted-average shares outstanding to 247.2 million[131] Cost and Expenses - Cost of service for the three months ended March 31, 2025, decreased by $1.2 million, or 0.1%, to $921.2 million, with a cost of service percentage of 38.2%[95][116] - Corporate expenses included costs of $66.3 million associated with the business transformation initiative during the three months ended March 31, 2025[112] - Merchant Solutions segment cost of service decreased by $10.2 million, or 2.0%, to $488.9 million, with cost of service as a percentage of segment revenues decreasing to 27.0%[117] - Issuer Solutions segment cost of service increased by $10.6 million, or 2.4%, to $444.8 million, while cost of service as a percentage of segment revenues decreased to 71.7%[118] - Selling, general and administrative expenses decreased by $21.5 million, or 2.1%, to $1,024.0 million, with expenses as a percentage of revenues at 42.5%[120] - Merchant Solutions segment selling, general and administrative expenses decreased by $48.9 million, or 6.5%, to $705.7 million, with expenses as a percentage of segment revenues at 39.0%[121] Cash Flow and Investments - Cash flows from operating activities increased by 5% to $555.1 million, despite a decrease in net income[138] - Cash used for investing activities increased to $173.1 million, with $49.9 million allocated for acquisitions and $127.6 million for capital expenditures[139] - As of March 31, 2025, cash and cash equivalents totaled $2,896.0 million, with $816.9 million available for general purposes[136] Shareholder Returns - The company repurchased $446.3 million worth of common stock, retiring 4,218,350 shares at an average price of $102.07 per share during the three months ended March 31, 2025[143] - The company paid dividends of $61.1 million to common shareholders during the three months ended March 31, 2025, compared to $63.6 million in the same period of 2024[144] - The company declared a dividend of $0.25 per share payable on June 27, 2025, to common shareholders of record as of June 13, 2025[144] Debt and Financing - As of March 31, 2025, the company had $10.2 billion in aggregate principal amount of senior unsecured notes outstanding, maturing between March 2026 and August 2052[145] - The company issued $2.0 billion in 1.500% convertible notes due March 2031, with net proceeds of approximately $1.97 billion after debt issuance costs[146] - The company has a $5.75 billion revolving credit facility, with $1.5 billion outstanding and total available commitments of $3.3 billion as of March 31, 2025[150] - The company had net borrowings of $868.8 million under its commercial paper program, with a weighted average annual interest rate of 5.0%[153] - The company obtained $7.7 billion in committed bridge financing in connection with the acquisition of Worldpay announced on April 17, 2025[157] - The company has $728.0 million outstanding under specialized settlement lines of credit, with additional capacity to fund settlement of $1,981.0 million[156] - The required leverage ratio was 4.00 to 1.00 as of March 31, 2025, stepping down to 3.75 to 1.00 by June 30, 2025[154] Strategic Initiatives - The company expects transformation initiatives to generate more than $600 million of annual run-rate operating income benefit by the first half of 2027[98] - The sale of AdvancedMD was completed in December 2024 for approximately $1 billion, with potential additional contingent payments of up to $125 million[94] - Total estimated consideration for the divestiture of the Issuer Solutions business is approximately $7.5 billion in net cash and a 45% ownership interest in Worldpay[99] - The company continues to assess its business portfolio for potential asset dispositions to streamline operations and create shareholder value[97]