Global Payments Q4 Earnings Meet on Merchant Solutions Strength

Core Insights - Global Payments Inc. (GPN) reported fourth-quarter 2025 adjusted earnings per share (EPS) of $3.18, which was in line with the Zacks Consensus Estimate, reflecting a 12% year-over-year increase [1] - Adjusted net revenues for the quarter improved 1.4% year over year to $2.3 billion, slightly missing the consensus mark [1] - The earnings growth was driven by the Merchant Solutions business, although elevated operating expenses partially offset the positives [1] GPN's Operating Performance - Adjusted operating income reached $1 billion, marking a 3.3% year-over-year increase, with an adjusted operating margin expansion of 80 basis points to 44.7% [2] - Total operating expenses rose significantly by 42.7% year over year to $1.7 billion, attributed to higher selling, general and administrative expenses, and cost of service [2] - Interest and other expenses increased by 35.1% year over year to $204.5 million [2] Q4 Segmental Performances of Global Payments - Merchant Solutions segment reported adjusted revenues of $1.8 billion, a 0.4% year-over-year increase, surpassing the Zacks Consensus Estimate by 0.8% [3] - Adjusted operating income for Merchant Solutions increased by 2.8% year over year to $877.1 million [3] - Issuer Solutions segment saw adjusted revenues of $557.1 million, growing 5.1% year over year but missing the Zacks Consensus Estimate by 1.6% [3][4] GPN's Financial Position (As of Dec. 31, 2025) - Cash and cash equivalents stood at $8.3 billion, up from $2.4 billion at the end of 2024 [5] - Total assets increased to $53.3 billion from $46.9 billion at the end of 2024 [5] - Long-term debt rose to $19.5 billion compared to $15.1 billion at the end of 2024, with the current portion of long-term debt totaling $1.9 billion [5] - Total equity increased to $23.6 billion from $22.9 billion at the end of 2024 [5] Capital Deployment Update - The company initiated a $550 million accelerated share repurchase program and repurchased shares worth $1.2 billion in 2025 [7] Full-Year 2025 Update - Net revenues for 2025 grew by 2% year over year to $9.3 billion, with adjusted operating margin improving by 97 basis points [10] - Adjusted EPS for 2025 registered an 11% year-over-year growth to $12.22 [10] GPN's 2026 Outlook - Adjusted net revenue growth on a constant currency basis is expected to be around 5% in 2026 [11] - Adjusted EPS growth is anticipated to be between 13% and 15% in 2026, with an expected increase of around 150 basis points in annual adjusted operating margin [11] - The company aims to convert almost 90% of adjusted net income into adjusted free cash flow [11] GPN's Zacks Rank - GPN currently holds a Zacks Rank 2 (Buy) [12]