Global Payments(US:GPN)2023-05-02 16:00Financial Performance - Consolidated revenues for Q1 2023 increased by 6.3% to $2,292.4 million compared to $2,156.3 million in Q1 2022, driven by higher transaction volumes from digital payment solutions [97]. - Merchant Solutions segment revenues rose by 9.0% to $1,605.6 million, while Issuer Solutions segment revenues increased by 6.2% to $570.9 million; Consumer Solutions segment revenues decreased by 15.0% to $143.7 million due to reduced consumer spending [100][103][104][105]. - Operating income for Q1 2023 was $56.7 million, a decline of 84.9% from $375.9 million in Q1 2022, impacted by a loss on business dispositions of $244.8 million [100][97]. - Consolidated operating income decreased to $56.7 million for the three months ended March 31, 2023, down from $375.9 million in the prior year, with an operating margin of 2.5% compared to 17.4% [110]. - Net loss attributable to Global Payments was $11.0 million for the three months ended March 31, 2023, compared to net income of $244.7 million for the prior year [115]. - Diluted loss per share was $0.04 for the three months ended March 31, 2023, compared to diluted earnings per share of $0.87 for the prior year [116]. Acquisitions and Investments - The company acquired EVO Payments, Inc. for $4.3 billion on March 24, 2023, enhancing its payment technology offerings [91]. - The sale of the consumer portion of the Netspend business was completed for approximately $1 billion, resulting in a loss of $244.8 million recognized in Q1 2023 [91]. - Cash used in investing activities was $4,206.8 million for the three months ended March 31, 2023, primarily for acquisitions totaling $4,046.8 million [124]. - The company continues to invest in new technology solutions and infrastructure to support business growth and enhance operational efficiency [90]. Financing and Capital Structure - The company issued €800 million in senior unsecured notes at 4.875% due March 2031, raising approximately $843.6 million for general corporate purposes [91]. - The company established a $2.0 billion commercial paper program to support acquisitions and other corporate needs [91]. - Financing activities provided net cash of $3,610.8 million during the three months ended March 31, 2023, compared to a net cash usage of $376.3 million in the prior year [125]. - As of March 31, 2023, cash and cash equivalents totaled $2,001.7 million, with $696.2 million available for general purposes [121]. - Interest and other expense increased to $122.9 million for the three months ended March 31, 2023, compared to $93.3 million for the prior year, due to higher average borrowings and interest rates [112]. - Corporate expenses rose to $282.7 million for the three months ended March 31, 2023, compared to $160.3 million for the prior year, driven by acquisition and integration costs [108]. - The company expects capital expenditures to grow at a similar rate as revenue growth for the year ending December 31, 2023 [124]. Debt and Leverage - As of March 31, 2023, the company had outstanding borrowings of $2,323.0 million under the revolving credit facility, with total available commitments of $2.4 billion [136]. - The company established a $2.0 billion commercial paper program in January 2023, with outstanding borrowings of $1,048.6 million at a weighted average annual interest rate of 5.87% as of March 31, 2023 [137][139]. - The required leverage ratio increased to 4.50 to 1.00 due to the acquisition of EVO, remaining in effect for up to eight consecutive quarters [141]. - The company entered into interest rate swap agreements with an aggregate notional amount of $1.5 billion in March 2023 to convert eligible borrowings from a floating rate to a fixed rate [152]. Currency and Economic Impact - Currency fluctuations negatively impacted consolidated revenues by approximately $30.4 million and operating income by approximately $10.7 million in Q1 2023 [93]. - The company has designated €800 million of Euro-denominated senior notes as a hedge against foreign currency exchange rate risk [151]. - The company expects to use proceeds from commercial paper issuances primarily for general corporate purposes, including acquisitions and debt refinancing [138]. Compliance and Internal Controls - The company plans to incorporate EVO's operations into its internal control over financial reporting program following the acquisition completed on March 24, 2023 [155]. - As of March 31, 2023, the company was in compliance with all applicable covenants [141].