Global Payments(GPN) - 2021 Q1 - Quarterly Report

Financial Performance - Consolidated revenues for Q1 2021 increased by 4.5% to $1,990.0 million, compared to $1,903.6 million in Q1 2020, driven by increased transaction volumes and consumer spending due to easing COVID-19 restrictions [80]. - Operating income for Q1 2021 rose to $275.3 million, up from $244.0 million in Q1 2020, with an operating margin of 13.8%, compared to 12.8% in the prior year [72]. - Revenues from the Merchant Solutions segment increased by 4.3% to $1,267.9 million, while the Issuer Solutions segment saw a slight decline of 0.7% to $500.3 million [79]. - The Business and Consumer Solutions segment experienced a significant revenue increase of 19.4% to $243.6 million, attributed to higher consumer spending and stimulus payments [83]. - Net income attributable to Global Payments increased to $196.7 million for Q1 2021, compared to $143.6 million in the prior year [92]. - Diluted earnings per share for Q1 2021 was $0.66, an increase from $0.48 in the prior year [93]. - Cash flow from operating activities provided net cash of $599.4 million for Q1 2021, up from $436.6 million in the prior year [99]. Expenses and Costs - Cost of service decreased by 0.9% to $925.2 million, with cost of service as a percentage of revenues improving to 46.5% from 49.1% in the prior year [84]. - Selling, general and administrative expenses rose by 8.8% to $789.5 million, with these expenses as a percentage of revenues increasing to 39.7% from 38.1% [85]. - Corporate expenses for Q1 2021 increased by $44.5 million to $195.1 million, primarily due to acquisition and integration expenses [87]. Shareholder Actions - The company entered into an accelerated share repurchase agreement to repurchase $500 million of common stock, completing the program by March 31, 2021 [72]. - The company repurchased $803.0 million of its common stock during Q1 2021, compared to $421.2 million in the prior year [106]. Debt and Financing - The company issued $1.1 billion of 1.200% senior unsecured notes due February 2026 to fund debt redemption and general corporate purposes [72]. - The company issued $1.1 billion in senior unsecured notes due March 2026 on February 26, 2021 [111]. - As of March 31, 2021, the company had $459.4 million outstanding under settlement lines of credit, with additional capacity to fund settlement of $1,361.5 million [116]. Cash and Liquidity - As of March 31, 2021, the company had cash and cash equivalents totaling $2,082.4 million, with $1,112.6 million available for general purposes [97]. - The company used $96.9 million in investing activities during Q1 2021, primarily for acquisitions and capital expenditures [102]. Future Outlook and Risks - The ongoing effects of COVID-19 are expected to continue impacting revenues and earnings in 2021, although a recovery is anticipated throughout the year [74]. - The company anticipates potential disruptions and costs related to the integration of Global Payments and TSYS, which may impact business operations [123]. - Risks associated with market competition and the ability to expand into new markets are highlighted as critical factors for future growth [123]. - The impact of the COVID-19 pandemic on future revenues and operations remains a significant concern [123]. - Forward-looking statements include expectations for revenues, expenses, operating margins, and earnings per share, reflecting significant risks and uncertainties [122]. - The company does not commit to updating forward-looking statements unless required by law, indicating potential volatility in future projections [124]. Commitments and Obligations - Commitments and contractual obligations increased to a total of $2,064.3 million, with estimated purchase obligations of $404.5 million for the remainder of 2021 [118]. - Estimated purchase obligations include $232.7 million for 2022, $334.0 million for 2023 and 2024, and $339.0 million for 2025 and 2026 [118]. - No off-balance sheet arrangements have been entered into that would materially affect financial condition or results of operations [120]. Compliance and Accounting - The company emphasizes the importance of maintaining compliance with Visa and Mastercard requirements to ensure operational stability [123]. - The company has not adopted any new accounting pronouncements that would materially affect current financial statements [121].