Global Payments Reports Fourth Quarter And Full Year 2023 Results

Fourth quarter 2023 GAAP diluted earnings per share (EPS) of $1.38 and adjusted EPS of $2.65
Fourth quarter 2023 GAAP revenue of $2.43 billion and adjusted net revenue of $2.19 billion, both an increase of 8%
Expects to Launch Commerzbank Joint Venture in First Half of 2024
Renews Agreements with Capital One Financial and Navy Federal Credit Union

ATLANTA--(BUSINESS WIRE)--#globalpayments--Global Payments Inc. (NYSE: GPN) today announced results for the fourth quarter and year ended December 31, 2023.

“We are pleased with our results for the fourth quarter and full year 2023 that were ahead of our initial expectations outlined last February,” said Cameron Bready, President and Chief Executive Officer. “Importantly, we saw consistent business performance throughout the year despite ongoing uncertainties, highlighting the durability and resiliency of our business model.”

Bready continued, “We also accomplished a great deal strategically last year, including successfully closing our acquisition of EVO Payments in March, providing further penetration into integrated payments, enhancing our B2B capabilities and expanding our exposure to stronger secular growth markets. Further, we completed the exit of our Netspend Consumer and Gaming Solutions businesses. These transactions represent important milestones as we seek to advance our strategy and operate a simpler business model centered on our core corporate and financial institution customer base.”

Bready concluded, “And we are already off to a great start in 2024. Our recently announced joint venture with Commerzbank will meaningfully expand our presence in Germany. This partnership allows us to deliver a comprehensive suite of innovative payment and commerce enablement solutions to merchants in the German market, capitalizing on the digitization trends in the largest economy in Europe. We are also pleased to announce we executed multi-year renewal agreements with two of our flagship Issuer Solutions clients, Capital One and Navy Federal.”

Fourth Quarter 2023 Summary

GAAP revenues were $2.43 billion, compared to $2.25 billion in 2022; diluted earnings per share were $1.38, compared to $0.94 in the prior year; and operating margin was 20.5%, compared to 18.1% in the prior year.
Adjusted net revenues increased 8% to $2.19 billion, compared to $2.02 billion in 2022.
Adjusted earnings per share increased 10% to $2.65, compared to $2.42 in 2022.
Adjusted operating margin expanded 30 basis points to 44.8%.

Full Year 2023 Summary

GAAP revenues were $9.65 billion, compared to $8.98 billion in 2022; diluted earnings per share were $3.77, compared to $0.40 in the prior year; and operating margin was 17.8%, compared to 7.1% in the prior year.
Adjusted net revenues increased 7% to $8.67 billion, compared to $8.09 billion in 2022.
Adjusted earnings per share increased 12% to $10.42, compared to $9.32 in 2022.
Adjusted operating margin expanded 90 basis points to 44.6%.

2024 Outlook

“We are pleased with our consistent execution and how our business is positioned as we enter 2024,” said Josh Whipple, Senior Executive Vice President and Chief Financial Officer. “The company expects adjusted net revenue to be in a range of $9.17 billion to $9.30 billion, reflecting growth of 6% to 7% and adjusted earnings per share to be in a range of $11.54 to $11.70, reflecting growth of 11% to 12% over 2023. Annual adjusted operating margin for 2024 is expected to expand by up to 50 basis points.”

Whipple concluded, “Our outlook for the year reflects the continued positive momentum in our business, while also accommodating a slightly more tempered economic environment given continued uncertainty.”

Capital Allocation

Global Payments’ Board of Directors approved a dividend of $0.25 per share payable on March 29, 2024 to shareholders of record as of March 15, 2024. The Board of Directors also approved an increase in the company's share repurchase authorization capacity to $2 billion.

Conference Call

Global Payments’ management will host a live audio webcast today, February 14, 2024, at 8:00 a.m. EST to discuss financial results and business highlights. The audio webcast, along with supplemental financial information, can be accessed via the investor relations page of the company’s website at investors.globalpayments.com. A replay of the audio webcast will be archived on the company's website following the live event.

Non-GAAP Financial Measures

Global Payments supplements revenues, operating income, operating margin and net income and earnings per share determined in accordance with GAAP by providing these measures with certain adjustments (such measures being non-GAAP financial measures) in this earnings release to assist with evaluating our performance. In addition to GAAP measures, management uses these non-GAAP financial measures to focus on the factors the company believes are pertinent to the daily management of our operations. The constant currency growth measures adjust for the impact of exchange rates and are calculated using average exchange rates during the comparable period in the prior year.

Global Payments also has provided supplemental non-GAAP information to reflect the divestiture of the consumer portion of our Netspend business, which comprised our former Consumer Solutions segment, which closed in April 2023. Management believes that providing such supplemental financial information should enhance shareholders’ ability to evaluate how the business will be managed going forward.

Reconciliations of each of the non-GAAP financial measures to the most directly comparable GAAP measure are included in the schedules to this release, except for forward-looking measures where a reconciliation to the corresponding GAAP measures is not available due to the variability, complexity and limited visibility of the items that are excluded from the non-GAAP outlook measures.

About Global Payments

Global Payments Inc. (NYSE: GPN) is a leading payments technology company delivering innovative software and services to our customers globally. Our technologies, services and team member expertise allow us to provide a broad range of solutions that enable our customers to operate their businesses more efficiently across a variety of channels around the world.

Headquartered in Georgia with approximately 27,000 team members worldwide, Global Payments is a Fortune 500® company and a member of the S&P 500 with worldwide reach spanning North America, Europe, Asia Pacific and Latin America. For more information, visit company.globalpayments.com and follow Global Payments on X, LinkedIn and Facebook.

Forward-Looking Statements

Investors are cautioned that some of the statements we use in this release contain forward-looking statements and are made pursuant to the "safe-harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, which are based on current expectations, estimates and projections about the industry and markets in which we operate, and beliefs of and assumptions made by our management, involve risks and uncertainties that could significantly affect the financial condition, results of operations, business plans and the future performance of Global Payments. Actual events or results might differ materially from those expressed or forecasted in these forward-looking statements. Accordingly, we cannot guarantee that our plans and expectations will be achieved. Examples of forward-looking statements include, but are not limited to, statements we make regarding guidance and projected financial results for the year 2024; the effects of general economic conditions on our business; statements about the benefits of acquisitions or divestitures, including future financial and operating results, and the successful integration of our acquisitions or completion of anticipated benefits or strategic initiatives; statements regarding our success and timing in developing and introducing new services and expanding our business; and other statements regarding our future financial performance and the company’s plans, objectives, expectations and intentions. Statements can generally be identified as forward-looking because they include words such as “believes,” “anticipates,” “expects,” “intends,” “plan,” “forecast,” “could,” “should,” or words of similar meaning. Although we believe that the plans and expectations reflected in any forward-looking statements are based on reasonable assumptions, we can give no assurance that our plans and expectations will be attained, and therefore actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements.

In addition to factors previously disclosed in Global Payments’ reports filed with the SEC and those identified elsewhere in this communication, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: the effects of global economic, political, market, health and social events or other conditions; foreign currency exchange, inflation and rising interest rate risks; difficulties, delays and higher than anticipated costs related to integrating the businesses of acquired companies, including with respect to implementing controls to prevent a material security breach of any internal systems or to successfully manage credit and fraud risks in business units; the effect of a security breach or operational failure on our business; failing to comply with the applicable requirements of Visa, Mastercard or other payment networks or card schemes or changes in those requirements; the ability to maintain Visa and Mastercard registration and financial institution sponsorship; the ability to retain, develop and hire key personnel; the diversion of management’s attention from ongoing business operations; the continued availability of capital and financing; increased competition in the markets in which we operate and our ability to increase our market share in existing markets and expand into new markets; our ability to safeguard our data; risks associated with our indebtedness; our ability to meet environmental, social or governance targets, goals and commitments; the potential effect of climate change including natural disasters; the effects of new or changes in current laws, regulations, credit card association rules or other industry standards on us or our partners and customers, including privacy and cybersecurity laws and regulations; and other events beyond our control, and other factors included in the “Risk Factors” section in our most recent Annual Report on Form 10-K and in other documents that we file with the SEC, which are available at https://www.sec.gov.

These cautionary statements qualify all of our forward-looking statements, and you are cautioned not to place undue reliance on these forward-looking statements. Our forward-looking statements speak only as of the date they are made and should not be relied upon as representing our plans and expectations as of any subsequent date. While we may elect to update or revise forward-looking statements at some time in the future, we specifically disclaim any obligation to publicly release the results of any revisions to our forward-looking statements, except as required by law.


SCHEDULE 1 CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) GLOBAL PAYMENTS INC. AND SUBSIDIARIES (In thousands, except per share data)

	Three Months Ended								Years Ended
	December 31,								December 31,
	2023			2022			% Change		2023			2022			% Change

Revenues	$	2,433,812		$	2,252,984		8.0	%	$	9,654,419		$	8,975,515		7.6	%

Operating expenses:
Cost of service		922,284			927,911		(0.6	)%		3,727,521			3,778,617		(1.4	)%
Selling, general and administrative		1,015,164			919,495		10.4	%		4,073,768			3,524,578		15.6	%
Impairment of goodwill		—			—		—	%		—			833,075		nm
Net (gain) loss on business dispositions		(2,351	)		(2,051	)	14.6	%		136,744			199,094		(31.3	)%
		1,935,097			1,845,355					7,938,033			8,335,364

Operating income		498,715			407,630		22.3	%		1,716,386			640,151		168.1	%

Interest and other income		38,881			8,544		355.1	%		113,711			33,604		238.4	%
Interest and other expense		(169,687	)		(121,778	)	39.3	%		(660,150	)		(449,433	)	46.9	%
		(130,806	)		(113,234	)				(546,439	)		(415,829	)

Income before income taxes and equity in income of equity method investments		367,909			294,396		25.0	%		1,169,947			224,322		nm
Income tax expense		9,272			47,444		(80.5	)%		209,020			166,694		25.4	%
Income before equity in income of equity investments		358,637			246,952		45.2	%		960,927			57,628		nm
Equity in income of equity method investments, net of tax		13,795			11,611		18.8	%		67,896			85,685		(20.8	)%
Net income		372,432			258,563		44.0	%		1,028,823			143,313		nm
Net income attributable to noncontrolling interests		(11,136	)		(9,257	)	20.3	%		(42,590	)		(31,820	)	33.8	%
Net income attributable to Global Payments	$	361,296		$	249,306		44.9	%	$	986,233		$	111,493		nm

Earnings per share attributable to Global Payments:
Basic earnings per share	$	1.39		$	0.94		47.9	%	$	3.78		$	0.41		nm
Diluted earnings per share	$	1.38		$	0.94		46.8	%	$	3.77		$	0.40		nm

Weighted-average number of shares outstanding:
Basic		260,375			265,637					261,126			275,191
Diluted		261,102			265,963					261,698			275,576

Note: nm = not meaningful.


SCHEDULE 2 NON-GAAP FINANCIAL MEASURES (UNAUDITED) GLOBAL PAYMENTS INC. AND SUBSIDIARIES (In thousands, except per share data)

	Three Months Ended						Years Ended
	December 31,						December 31,
	2023		2022		% Change		2023		2022		% Change

Adjusted net revenue	$	2,186,240	$	2,022,309	8.1	%	$	8,670,965	$	8,091,650	7.2	%

Adjusted operating income	$	978,506	$	898,201	8.9	%	$	3,867,524	$	3,533,644	9.4	%

Adjusted net income attributable to Global Payments	$	692,206	$	643,082	7.6	%	$	2,727,407	$	2,569,331	6.2	%

Adjusted diluted earnings per share attributable to Global Payments	$	2.65	$	2.42	9.5	%	$	10.42	$	9.32	11.8	%

Supplemental Non-GAAP⁽¹⁾

Adjusted net revenue⁽¹⁾	$	2,186,240	$	1,898,631	15.1	%	$	8,525,523	$	7,527,748	13.3	%

Adjusted operating income⁽¹⁾	$	978,506	$	839,787	16.5	%	$	3,794,294	$	3,345,706	13.4	%

----------------------------------------------------------------------------------

⁽¹⁾	The supplemental non-GAAP information reflects the divestiture of our consumer business which closed in April 2023.

	See Schedules 6 and 7 for a reconciliation of each non-GAAP financial measure to the most comparable GAAP measure, Schedules 8 and 9 for a reconciliation of adjusted net revenue and adjusted operating income by segment and supplemental non-GAAP information to the most comparable GAAP measure, and Schedule 10 for a discussion of non-GAAP financial measures.


SCHEDULE 3 SEGMENT INFORMATION (UNAUDITED) GLOBAL PAYMENTS INC. AND SUBSIDIARIES (In thousands)

	Three Months Ended
	December 31, 2023						December 31, 2022						% Change
	GAAP			Non-GAAP			GAAP			Non-GAAP			GAAP		Non-GAAP

Revenues:
Merchant Solutions	$	1,819,885		$	1,670,482		$	1,553,856		$	1,409,564		17.1	%	18.5	%
Issuer Solutions		629,674			530,649			582,616			501,326		8.1	%	5.8	%
Consumer Solutions		—			—			142,401			136,491		nm		nm
Intersegment eliminations		(15,747	)		(14,891	)		(25,889	)		(25,072	)	39.2	%	40.6	%
	$	2,433,812		$	2,186,240		$	2,252,984		$	2,022,309		8.0	%	8.1	%

Operating income (loss):
Merchant Solutions	$	596,633		$	797,346		$	509,682		$	681,718		17.1	%	17.0	%
Issuer Solutions		117,419			251,003			112,025			241,919		4.8	%	3.8	%
Consumer Solutions		—			—			(14,141	)		58,414		nm		nm
Corporate		(217,688	)		(69,843	)		(201,987	)		(83,850	)	(7.8	)%	16.7	%
Net gain on business dispositions		2,351			—			2,051			—		(14.7	)%	nm
	$	498,715		$	978,506		$	407,630		$	898,201		22.3	%	8.9	%

	Years Ended
	December 31, 2023						December 31, 2022						% Change
	GAAP			Non-GAAP			GAAP			Non-GAAP			GAAP		Non-GAAP

Revenues:
Merchant Solutions	$	7,151,793		$	6,536,966		$	6,204,917		$	5,630,713		15.3	%	16.1	%
Issuer Solutions		2,398,870			2,045,883			2,245,623			1,943,087		6.8	%	5.3	%
Consumer Solutions		182,740			163,027			620,482			609,833		nm		nm
Intersegment eliminations		(78,984	)		(74,911	)		(95,507	)		(91,983	)	17.3	%	18.6	%
	$	9,654,419		$	8,670,965		$	8,975,515		$	8,091,650		7.6	%	7.2	%

Operating income (loss):
Merchant Solutions	$	2,345,255		$	3,148,540		$	2,040,255		$	2,758,004		14.9	%	14.2	%
Issuer Solutions		409,807			948,799			356,215			881,980		15.0	%	7.6	%
Consumer Solutions		(3,908	)		73,230			53,594			187,936		nm		nm
Corporate		(898,024	)		(303,045	)		(777,744	)		(294,278	)	(15.5	)%	(3.0	)%
Impairment of goodwill		—			—			(833,075	)		—		nm		—	%
Net loss on business dispositions		(136,744	)		—			(199,094	)		—		31.3	%	nm
	$	1,716,386		$	3,867,524		$	640,151		$	3,533,644		168.1	%	9.4	%

----------------------------------------------------------------------------------

See Schedules 8 and 9 for a reconciliation of adjusted net revenue and adjusted operating income by segment to the most comparable GAAP measures and Schedule 10 for a discussion of non-GAAP financial measures.

Note: Amounts may not sum due to rounding.

Note: nm = not meaningful.


SCHEDULE 4 CONSOLIDATED BALANCE SHEETS (UNAUDITED) GLOBAL PAYMENTS INC. AND SUBSIDIARIES (In thousands, except share data)

	December 31, 2023			December 31, 2022

ASSETS
Current assets:
Cash and cash equivalents	$	2,088,887		$	1,997,566
Accounts receivable, net		1,120,078			998,332
Settlement processing assets		4,097,417			2,519,114
Current assets held for sale		6,451			138,815
Prepaid expenses and other current assets		760,926			660,321
Total current assets		8,073,759			6,314,148
Goodwill		26,743,523			23,320,736
Other intangible assets, net		10,168,046			9,658,374
Property and equipment, net		2,190,005			1,838,809
Deferred income taxes		111,712			37,907
Noncurrent assets held for sale		327			1,295,799
Notes receivable		713,123			—
Other noncurrent assets		2,569,691			2,343,241
Total assets	$	50,570,186		$	44,809,014

LIABILITIES AND EQUITY
Current liabilities:
Settlement lines of credit	$	981,244		$	747,111
Current portion of long-term debt		620,585			1,169,330
Accounts payable and accrued liabilities		2,823,638			2,442,560
Settlement processing obligations		3,698,921			2,413,799
Current liabilities held for sale		1,341			125,891
Total current liabilities		8,125,729			6,898,691
Long-term debt		15,692,297			12,289,248
Deferred income taxes		2,242,105			2,428,412
Noncurrent liabilities held for sale		—			4,478
Other noncurrent liabilities		722,540			647,975
Total liabilities		26,782,671			22,268,804
Commitments and contingencies
Redeemable noncontrolling interests		507,965			—
Equity:
Preferred stock, no par value; 5,000,000 shares authorized and none issued		—			—
Common stock, no par value; 400,000,000 shares authorized at December 31, 2023 and 2022; 260,382,746 shares issued and outstanding at December 31, 2023 and 263,081,872 shares issued and outstanding at December 31, 2022		—			—
Paid-in capital		19,800,953			19,978,095
Retained earnings		3,457,182			2,731,380
Accumulated other comprehensive loss		(258,925	)		(405,969	)
Total Global Payments shareholders’ equity		22,999,210			22,303,506
Nonredeemable noncontrolling interests		280,340			236,704
Total equity		23,279,550			22,540,210
Total liabilities, redeemable noncontrolling interests and equity	$	50,570,186		$	44,809,014


SCHEDULE 5 CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) GLOBAL PAYMENTS INC. AND SUBSIDIARIES (In thousands)

	Years Ended December 31,
		2023			2022

Cash flows from operating activities:
Net income	$	1,028,823		$	143,313
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property and equipment		458,157			399,486
Amortization of acquired intangibles		1,318,535			1,262,969
Amortization of capitalized contract costs		123,405			109,701
Share-based compensation expense		208,994			163,261
Provision for operating losses and credit losses		97,103			116,879
Noncash lease expense		65,307			78,935
Deferred income taxes		(499,974	)		(315,495	)
Equity in income of equity method investments, net of tax		(67,896	)		(85,685	)
Facilities exit charges		5,994			30,437
Distributions received on investments		18,267			45,521
Impairment of goodwill		—			833,075
Net loss on business dispositions		136,744			199,094
Other, net		18,545			993
Changes in operating assets and liabilities, net of the effects of business combinations:
Accounts receivable		(78,647	)		(111,974	)
Settlement processing assets and obligations, net		(345,898	)		(313,333	)
Prepaid expenses and other assets		(289,826	)		(295,980	)
Accounts payable and other liabilities		51,108			(17,157	)
Net cash provided by operating activities		2,248,741			2,244,040
Cash flows from investing activities:
Business combinations and other acquisitions, net of cash and restricted cash acquired		(4,225,610	)		(65,672	)
Capital expenditures		(658,142	)		(615,652	)
Issuance of notes receivable		(50,000	)		—
Repayment of notes receivable		50,000			—
Net cash from sales of businesses		479,067			(29,755	)
Proceeds from sale of investments		42,135			33,046
Other, net		1,438			2,496
Net cash used in investing activities		(4,361,112	)		(675,537	)
Cash flows from financing activities:
Net borrowings from settlement lines of credit		220,682			285,644
Net borrowings from commercial paper notes		1,367,859			—
Proceeds from long-term debt		10,336,850			9,812,289
Repayments of long-term debt		(9,099,938	)		(7,895,131	)
Payments of debt issuance costs		(12,735	)		(48,635	)
Repurchases of common stock		(418,272	)		(2,921,307	)
Proceeds from stock issued under share-based compensation plans		60,345			44,127
Common stock repurchased - share-based compensation plans		(41,225	)		(38,601	)
Distributions to noncontrolling interests		(32,997	)		(23,031	)
Proceeds from noncontrolling interests		26,205			—
Payment of contingent consideration in business combination		(5,222	)		(15,726	)
Purchase of capped calls related to issuance of convertible notes		—			(302,375	)
Dividends paid		(260,431	)		(273,955	)
Net cash provided by (used in) financing activities		2,141,121			(1,376,701	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		12,519			(99,219	)
Increase in cash, cash equivalents and restricted cash		41,269			92,583
Cash, cash equivalents and restricted cash, beginning of the period		2,215,606			2,123,023
Cash, cash equivalents and restricted cash, end of the period	$	2,256,875		$	2,215,606

Contacts

Investor contact:
investor.relations@globalpay.com
Winnie Smith
770-829-8478

Media contact:
media.relations@globalpay.com
Emily Edmonds
770-829-8755

Read full story here

First published on Wed, Feb 14, 2024

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