Global Payments(US:GPN)2022-05-02 13:10Financial Performance - Consolidated revenues for Q1 2022 increased by 8.4% to $2,156.3 million compared to $1,990.0 million in Q1 2021, driven by growth in transaction volumes and digital payment solutions[73]. - Operating income for Q1 2022 rose to $375.9 million, up 36.6% from $275.3 million in Q1 2021, with an operating margin increase to 17.4% from 13.8%[73]. - Merchant Solutions segment revenues increased by 16.2% to $1,473.0 million in Q1 2022, compared to $1,267.9 million in Q1 2021, attributed to a growing customer base and economic recovery[83]. - Issuer Solutions segment revenues grew by 2.2% to $511.5 million in Q1 2022, compared to $500.3 million in Q1 2021, benefiting from the inclusion of the recently acquired MineralTree business[84]. - Business and Consumer Solutions segment revenues decreased to $195.8 million in Q1 2022 from $243.6 million in Q1 2021, impacted by the absence of prior year stimulus-related spending[85]. - Net income attributable to Global Payments increased to $244.7 million for the three months ended March 31, 2022, compared to $196.7 million for the prior year[93]. - Diluted earnings per share rose to $0.87 for the three months ended March 31, 2022, compared to $0.66 for the prior year[94]. Expenses and Costs - Cost of service for Q1 2022 increased by 3.4% to $957.2 million, while as a percentage of revenues, it decreased to 44.4% from 46.5% in the prior year[86]. - Selling, general and administrative expenses rose by 4.3% to $823.1 million in Q1 2022, with a decrease in percentage of revenues to 38.2% from 39.7% in the prior year[87]. - Corporate expenses decreased by $34.8 million to $160.3 million for the three months ended March 31, 2022, compared to $195.1 million for the prior year, primarily due to lower acquisition and integration expenses[88]. Cash Flow and Investments - Operating activities provided net cash of $630.0 million for the three months ended March 31, 2022, up from $599.4 million for the prior year[101]. - Capital expenditures increased to $156.1 million for the three months ended March 31, 2022, compared to $86.2 million for the prior year, focusing on new technologies and infrastructure[102]. - The company had cash and cash equivalents totaling $2,045.3 million as of March 31, 2022, with $797.3 million available for general purposes[99]. - The company used $649.7 million for share repurchases during the three months ended March 31, 2022, compared to $803.0 million for the prior year[106]. Tax and Debt - The effective income tax rate increased to 18.4% for the three months ended March 31, 2022, from 10.5% for the prior year, primarily due to changes in valuation allowances[92]. - As of March 31, 2022, the company had $9.4 billion in aggregate principal amount of senior unsecured notes, maturing at various dates from June 2023 to August 2049[108]. Risks and Uncertainties - The company acknowledges that forward-looking statements are based on assumptions and are subject to significant risks and uncertainties, which may lead to actual results differing materially from expectations[117]. - The company emphasizes the potential impact of global events, including the COVID-19 pandemic and geopolitical tensions, on its operations and financial performance[117]. - Integration challenges and costs related to the acquisition of Global Payments and Total System Services, Inc. are highlighted as potential risks[117]. - The company faces risks associated with compliance to payment network requirements and maintaining necessary registrations[117]. - Increased competition in existing markets and the ability to expand into new markets are identified as critical factors for future growth[117]. - The company must manage risks related to data security and operational failures, which could affect its business[117]. - Environmental, social, and governance targets are noted as important commitments that the company aims to meet[117]. - The company warns of potential impacts from changes in laws and regulations, particularly regarding privacy and cybersecurity[117]. - The company disclaims any obligation to update forward-looking statements, except as required by law[118]. - For detailed market risk exposure, the company refers to its Annual Report on Form 10-K for the year ended December 31, 2021[119]. Future Outlook - The company expects to recognize a charge of approximately $130 million in Q2 2022 related to the sale of its merchant business in Russia due to sanctions imposed following the invasion of Ukraine[75]. - Currency exchange rate fluctuations negatively impacted consolidated revenues by approximately $14.7 million and operating income by approximately $4.7 million in Q1 2022[76]. - The company continues to invest in new technology solutions and innovation, focusing on enhancing its technology and cloud-based solutions[72].