Global Payments Q3 Earnings Beat on Merchant Solutions Strength

Core Insights - Global Payments Inc. (GPN) reported third-quarter 2025 adjusted earnings per share (EPS) of $3.26, exceeding the Zacks Consensus Estimate of $3.23, with a year-over-year increase of 12% [1][8] - Adjusted net revenues rose 3% year over year to $2.4 billion, surpassing the consensus mark by 0.9% [1][8] - The strong performance was driven by growth in Merchant Solutions and Issuer Solutions, alongside a reduction in operating expenses [1][8] GPN's Operating Performance - Adjusted operating income for the quarter was $1.1 billion, reflecting a 5.5% year-over-year increase [2] - Adjusted operating margin expanded by 110 basis points to 45% [2] - Total operating expenses decreased by 20.9% year over year to $1.2 billion, primarily due to lower selling, general, and administrative expenses [2] Q3 Segmental Performances of Global Payments - Merchant Solutions: Adjusted revenues reached $1.9 billion, a 2.2% year-over-year increase, exceeding the Zacks Consensus Estimate by 0.7% [3] - Adjusted operating income for this segment increased by 4.4% year over year to $962.3 million, also beating the consensus estimate [3] - Issuer Solutions: Adjusted revenues were $561.8 million, growing 6.2% year over year and surpassing the Zacks Consensus Estimate by 1.8% [4] - Adjusted operating income improved by 9.6% year over year to $263.5 million, exceeding the consensus estimate [4] GPN's Financial Position (As of Sept. 30, 2025) - Cash and cash equivalents increased to $2.6 billion from $2.4 billion at the end of 2024 [5] - Total assets rose to $48 billion from $46.9 billion at the end of 2024 [5] - Long-term debt decreased to $13.3 billion from $15.1 billion at the end of 2024 [5] - Total equity increased to $23.3 billion from $22.9 billion at the end of 2024 [5] Capital Deployment Update - GPN repurchased shares worth $1.2 billion in the first nine months of 2025 [7] - A quarterly dividend of 25 cents per share was declared, payable on December 26, 2025 [7] GPN's 2025 Outlook Reaffirmed - Adjusted net revenue growth on a constant currency basis is expected to be between 5% and 6% in 2025 [9] - Adjusted EPS growth is anticipated to be between 10% and 11% in 2025 [9] - The company expects to convert nearly 90% of adjusted net income into adjusted free cash flow [9] - The annual adjusted operating margin is projected to increase by more than 50 basis points in 2025 [9]