- 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
Global Payments Inc. (NYSE: GPN) today announced results for the
fourth quarter and year ended December 31, 2023.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20240214173169/en/
“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
SCHEDULE 6
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES TO GAAP MEASURES (UNAUDITED)
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands, except per share data)
Three Months Ended December 31,
2023
GAAP
Net Revenue Adjustments(1)
Earnings Adjustments(2)
Income Taxes on
Adjustments(3)
Non-GAAP
Revenues
$
2,433,812
$
(247,572
)
$
—
$
—
$
2,186,240
Operating income
$
498,715
$
510
$
479,281
$
—
$
978,506
Net income attributable to Global
Payments
$
361,296
$
510
$
478,613
$
(148,213
)
$
692,206
Diluted earnings per share attributable to
Global Payments
$
1.38
$
2.65
Diluted weighted average shares
outstanding
261,102
261,102
Three Months Ended December 31,
2022
GAAP
Net Revenue Adjustments(1)
Earnings Adjustments(2)
Income Taxes on
Adjustments(3)
Non-GAAP
Revenues
$
2,252,984
$
(230,675
)
$
—
$
—
$
2,022,309
Operating income
$
407,630
$
(5,255
)
$
495,825
$
—
$
898,201
Net income attributable to Global
Payments
$
249,306
$
(5,255
)
$
498,493
$
(99,462
)
$
643,082
Diluted earnings per share attributable to
Global Payments
$
0.94
$
2.42
Diluted weighted average shares
outstanding
265,963
265,963
----------------------------------------------------------------------------------
(1)
Includes adjustments to revenues for
gross-up related payments (included in operating expenses)
associated with certain lines of business to reflect economic
benefits to the company. For the three months ended December 31,
2023 and 2022, net revenue adjustments also included $0.5 million
and $0.7 million, respectively, to eliminate the effect of
acquisition accounting fair value adjustments for software-related
contract liabilities associated with acquired businesses.
Adjustments for the three months ended December 31, 2022 also
included a $5.9 million adjustment to exclude revenues that were
associated with certain excluded expenses of our consumer business,
which was divested in April 2023.
(2)
For the three months ended December 31,
2023, earnings adjustments to operating income included $332.5
million in cost of services (COS) and $149.2 million in selling,
general and administrative expenses (SG&A). Adjustments to COS
consisted of amortization of acquired intangibles of $332.5
million. Adjustments to SG&A included share-based compensation
expense of $35.7 million, acquisition, integration and separation
expenses of $97.5 million, facilities exit charges of $3.5 million,
employee severance charges of $7.9 million, and other items of $4.6
million. Earnings adjustments to operating income also included a
$2.4 million gain on business dispositions.
For the three months ended December 31,
2022, earnings adjustments to operating income included $302.1
million in COS and $195.8 million in SG&A. Adjustments to COS
included amortization of acquired intangibles of $300.6 million and
other items of $1.5 million. Adjustments to SG&A included
share-based compensation expense of $40.8 million, acquisition,
integration and separation expenses of $147.1 million, facilities
exit charges of $7.1 million, and other items of $0.8 million.
Acquisition, integration and separation
expenses for the three months ended December 31, 2022 included
$76.5 million related to our divested consumer business. These
incremental expenses, which include card and marketing expenses,
compensation and benefit expenses, and other expenses, were
incurred as a result of contractual obligations with the purchasers
of the consumer business and do not reflect the manner in which the
company would have operated the business and would not have
otherwise been incurred absent the transaction.
For the three months ended December 31,
2022, earnings adjustments to operating income also included a $2.1
million favorable adjustment to loss on business dispositions.
(3)
Income taxes on adjustments reflect the
tax effect of earnings adjustments to income before income taxes.
The tax rate used in determining the tax impact of earnings
adjustments is either the jurisdictional statutory rate in effect
at the time of the adjustment or the jurisdictional expected annual
effective tax rate for the period, depending on the nature and
timing of the adjustment. In addition, for the three months ended
December 31, 2023, income taxes on adjustments include the removal
of tax benefits related to corporate restructuring.
See "Non-GAAP Financial Measures"
discussion on Schedule 10.
Note: Amounts may not sum due to
rounding.
SCHEDULE 7
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES TO GAAP MEASURES (UNAUDITED)
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands, except per share data)
Year Ended December 31, 2023
GAAP
Net Revenue Adjustments(1)
Earnings Adjustments(2)
Income Taxes on
Adjustments(3)
Non-GAAP
Revenues
$
9,654,419
$
(983,454
)
$
—
$
—
$
8,670,965
Operating income
$
1,716,386
$
(17,590
)
$
2,168,728
$
—
$
3,867,524
Net income attributable to Global
Payments
$
986,233
$
(17,590
)
$
2,186,359
$
(427,595
)
$
2,727,407
Diluted earnings per share attributable to
Global Payments
$
3.77
$
10.42
Diluted weighted average shares
outstanding
261,698
261,698
Year Ended December 31, 2022
GAAP
Net Revenue Adjustments(1)
Earnings Adjustments(2)
Income Taxes on
Adjustments(3)
Non-GAAP
Revenues
$
8,975,515
$
(883,865
)
$
—
$
—
$
8,091,650
Operating income
$
640,151
$
(3,735
)
$
2,897,227
$
—
$
3,533,644
Net income attributable to Global
Payments
$
111,493
$
(3,735
)
$
2,891,721
$
(430,148
)
$
2,569,331
Diluted earnings per share attributable to
Global Payments
$
0.40
$
9.32
Diluted weighted average shares
outstanding
275,576
275,576
----------------------------------------------------------------------------------
(1)
Includes adjustments to revenues for
gross-up related payments (included in operating expenses)
associated with certain lines of business to reflect economic
benefits to the company. For the years ended December 31, 2023 and
2022, net revenue adjustments also included $2.1 million and $6.9
million, respectively, to eliminate the effect of acquisition
accounting fair value adjustments for software-related contract
liabilities associated with acquired businesses. Adjustments for
the years ended December 31, 2023 and 2022, also included a $19.7
million and $10.6 million adjustment, respectively, to exclude
revenues that were associated with certain excluded expenses of our
consumer business, which was divested in April 2023.
(2)
For the year ended December 31, 2023,
earnings adjustments to operating income included $1,321.2 million
in COS and $710.8 million in SG&A. Adjustments to COS included
amortization of acquired intangibles of $1,318.5 million and other
items of $2.7 million. Adjustments to SG&A included share-based
compensation expense of $209.0 million, acquisition, integration
and separation expenses of $433.9 million, facilities exit charges
of $18.5 million, employee severance charges of $39.4 million, and
other items of $10.0 million. Earnings adjustments to operating
income also included a $136.7 million loss on business
dispositions.
Acquisition, integration and separation
expenses for the year ended December 31, 2023 included $93.6
million related to our divested consumer business. These
incremental expenses, which include card and marketing expenses,
compensation and benefit expenses, and other expenses, were
incurred as a result of contractual obligations with the purchasers
of the consumer business and do not reflect the manner in which the
company would have operated the business and would not have
otherwise been incurred absent the transaction.
Earnings adjustments to net income also
included an allowance for current expected credit losses (CECL) of
$15.2 million within interest and other expense related to the
seller financing issued in connection with the business
dispositions.
For the year ended December 31, 2022,
earnings adjustments to operating income included $1,266.1 million
in COS and $598.9 million in SG&A. Adjustments to COS included
amortization of acquired intangibles of $1,263.0 million and other
items of $3.1 million. Adjustments to SG&A included share-based
compensation expense of $163.3 million, acquisition, integration
and separation expenses of $366.7 million, facilities exit charges
of $47.1 million, and other items of $21.8 million.
Acquisition, integration and separation
expenses for the year ended December 31, 2022 included $110.6
million related to our divested consumer business. These
incremental expenses, which include card and marketing expenses,
compensation and benefit expenses, and other expenses, were
incurred as a result of contractual obligations with the purchasers
of the consumer business and do not reflect the manner in which the
company would have operated the business and would not have
otherwise been incurred absent the transaction.
For the year ended December 31, 2022,
earnings adjustments to operating income also included a $833.1
million noncash goodwill impairment charge related to our former
Business and Consumer Solutions segment, and a $199.1 million loss
on business dispositions.
(3)
Income taxes on adjustments reflect the
tax effect of earnings adjustments to income before income taxes.
The tax rate used in determining the tax impact of earnings
adjustments is either the jurisdictional statutory rate in effect
at the time of the adjustment or the jurisdictional expected annual
effective tax rate for the period, depending on the nature and
timing of the adjustment. In addition, for the year ended December
31, 2023, income taxes on adjustments include the removal of tax
expense related to business dispositions and removal of tax
benefits related to corporate restructuring.
See "Non-GAAP Financial Measures"
discussion on Schedule 10.
Note: Amounts may not sum due to
rounding.
SCHEDULE 8
RECONCILIATION OF SEGMENT NON-GAAP
FINANCIAL MEASURES TO GAAP MEASURES (UNAUDITED)
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands)
Three Months Ended December 31,
2023
GAAP
Net Revenue Adjustments (1)
Earnings Adjustments(2)
Non-GAAP
Revenues:
Merchant Solutions
$
1,819,885
$
(149,403
)
$
—
$
1,670,482
Issuer Solutions
629,674
(99,025
)
—
530,649
Consumer Solutions
—
—
—
—
Intersegment Elimination
(15,747
)
856
—
(14,891
)
$
2,433,812
$
(247,572
)
$
—
$
2,186,240
Operating income:
Merchant Solutions
$
596,633
$
—
$
200,713
$
797,346
Issuer Solutions
117,419
510
133,074
251,003
Consumer Solutions
—
—
—
—
Corporate
(217,688
)
—
147,845
(69,843
)
Net gain on business dispositions
2,351
—
(2,351
)
—
$
498,715
$
510
$
479,281
$
978,506
Three Months Ended December 31,
2022
GAAP
Net Revenue Adjustments (1)
Earnings Adjustments(2)
Non-GAAP
Consumer Business (3)
Supplemental Non-GAAP (3)
Revenues:
Merchant Solutions
$
1,553,856
$
(144,292
)
$
—
$
1,409,564
$
—
$
1,409,564
Issuer Solutions
582,616
(81,290
)
—
501,326
—
501,326
Consumer Solutions
142,401
(5,910
)
—
136,491
(136,491
)
—
Intersegment Elimination
(25,889
)
817
—
(25,072
)
12,813
(12,259
)
$
2,252,984
$
(230,675
)
$
—
$
2,022,309
$
(123,678
)
$
1,898,631
Operating income:
Merchant Solutions
$
509,682
$
14
$
172,022
$
681,718
$
—
$
681,718
Issuer Solutions
112,025
642
129,252
241,919
—
241,919
Consumer Solutions
(14,141
)
(5,910
)
78,466
58,414
(58,414
)
—
Corporate
(201,987
)
—
118,137
(83,850
)
—
(83,850
)
Net gain on business dispositions
2,051
—
(2,051
)
—
—
—
$
407,630
$
(5,255
)
$
495,825
$
898,201
$
(58,414
)
$
839,787
------------------------------------------------------------------------------------------
(1)
Includes adjustments to revenues for
gross-up related payments (included in operating expenses)
associated with certain lines of business to reflect economic
benefits to the company. For the three months ended December 31,
2023 and 2022, net revenue adjustments also included $0.5 million
and $0.7 million, respectively, to eliminate the effect of
acquisition accounting fair value adjustments for software-related
contract liabilities associated with acquired businesses.
Adjustments for the three months ended December 31, 2022 also
included a $5.9 million adjustment to exclude revenues that were
associated with certain excluded expenses of our consumer business,
which was divested in April 2023.
(2)
For the three months ended December 31,
2023, earnings adjustments to operating income included $332.5
million in COS and $149.2 million in SG&A. Adjustments to COS
consisted of amortization of acquired intangibles of $332.5
million. Adjustments to SG&A included share-based compensation
expense of $35.7 million, acquisition, integration and separation
expenses of $97.5 million, facilities exit charges of $3.5 million,
employee severance charges of $7.9 million, and other items of $4.6
million. Earnings adjustments to operating income also included a
$2.4 million gain on business dispositions.
For the three months ended December 31,
2022, earnings adjustments to operating income included $302.1
million in COS and $195.8 million in SG&A. Adjustments to COS
included amortization of acquired intangibles of $300.6 million and
other items of $1.5 million. Adjustments to SG&A included
share-based compensation expense of $40.8 million, acquisition,
integration and separation expenses of $147.1 million, facilities
exit charges of $7.1 million, and other items of $0.8 million.
Acquisition, integration and separation
expenses for the three months ended December 31, 2022 included
$76.5 million related to our divested consumer business. These
incremental expenses, which include card and marketing expenses,
compensation and benefit expenses, and other expenses, were
incurred as a result of contractual obligations with the purchasers
of the consumer business and do not reflect the manner in which the
company would have operated the business and would not have
otherwise been incurred absent the transaction.
For the three months ended December 31,
2022, earnings adjustments to operating income also included a $2.1
million favorable adjustment to loss on business dispositions.
(3)
The supplemental non-GAAP information
excludes the results of the consumer business that was divested in
April 2023.
See "Non-GAAP Financial Measures"
discussion on Schedule 10.
Note: Amounts may not sum due to
rounding.
SCHEDULE 9
RECONCILIATION OF SEGMENT NON-GAAP
FINANCIAL MEASURES TO GAAP MEASURES (UNAUDITED)
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands)
Year Ended December 31, 2023
GAAP
Net Revenue Adjustments (1)
Earnings Adjustments(2)
Non-GAAP
Consumer Business (3)
Supplemental Non-GAAP (3)
Revenues:
Merchant Solutions
$
7,151,793
$
(614,827
)
$
—
$
6,536,966
$
—
$
6,536,966
Issuer Solutions
2,398,870
(352,987
)
—
2,045,883
—
2,045,883
Consumer Solutions
182,740
(19,713
)
—
163,027
(163,027
)
—
Intersegment Elimination
(78,984
)
4,073
—
(74,911
)
17,585
(57,326
)
$
9,654,419
$
(983,454
)
$
—
$
8,670,965
$
(145,442
)
$
8,525,523
Operating income (loss):
Merchant Solutions
$
2,345,255
$
23
$
803,262
$
3,148,540
$
—
$
3,148,540
Issuer Solutions
409,807
2,100
536,892
948,799
—
948,799
Consumer Solutions
(3,908
)
(19,713
)
96,851
73,230
(73,230
)
—
Corporate
(898,024
)
—
594,979
(303,045
)
—
(303,045
)
Net loss on business dispositions
(136,744
)
—
136,744
—
—
—
$
1,716,386
$
(17,590
)
$
2,168,728
$
3,867,524
$
(73,230
)
$
3,794,294
Year Ended December 31, 2022
GAAP
Net Revenue Adjustments(1)
Earnings Adjustments(2)
Non-GAAP
Consumer Business (3)
Supplemental Non-GAAP (3)
Revenues:
Merchant Solutions
$
6,204,917
$
(574,204
)
$
—
$
5,630,713
$
—
$
5,630,713
Issuer Solutions
2,245,623
(302,536
)
—
1,943,087
—
1,943,087
Consumer Solutions
620,482
(10,649
)
—
609,833
(609,833
)
—
Intersegment Elimination
(95,507
)
3,524
—
(91,983
)
45,931
(46,052
)
$
8,975,515
$
(883,865
)
$
—
$
8,091,650
$
(563,902
)
$
7,527,748
Operating income (loss):
Merchant Solutions
$
2,040,255
$
166
$
717,583
$
2,758,004
$
—
$
2,758,004
Issuer Solutions
356,215
6,748
519,017
881,980
—
881,980
Consumer Solutions
53,594
(10,649
)
144,991
187,936
(187,936
)
—
Corporate
(777,744
)
—
483,466
(294,278
)
—
(294,278
)
Impairment of goodwill
(833,075
)
—
833,075
—
—
—
Net loss on business dispositions
(199,094
)
—
199,094
—
—
—
$
640,151
$
(3,735
)
$
2,897,227
$
3,533,644
$
(187,936
)
$
3,345,706
----------------------------------------------------------------------------------
(1)
Includes adjustments to revenues for
gross-up related payments (included in operating expenses)
associated with certain lines of business to reflect economic
benefits to the company. For the years ended December 31, 2023 and
2022, net revenue adjustments also included $2.1 million and $6.9
million, respectively, to eliminate the effect of acquisition
accounting fair value adjustments for software-related contract
liabilities associated with acquired businesses. Adjustments for
the years ended December 31, 2023 and 2022, also included a $19.7
million and $10.6 million adjustment, respectively, to exclude
revenues that were associated with certain excluded expenses of our
consumer business, which was divested in April 2023.
(2)
For the year ended December 31, 2023,
earnings adjustments to operating income included $1,321.2 million
in COS and $710.8 million in SG&A. Adjustments to COS included
amortization of acquired intangibles of $1,318.5 million and other
items of $2.7 million. Adjustments to SG&A included share-based
compensation expense of $209.0 million, acquisition, integration
and separation expenses of $433.9 million, facilities exit charges
of $18.5 million, employee severance charges of $39.4 million, and
other items of $10.0 million. Earnings adjustments to operating
income also included a $136.7 million loss on business
dispositions.
Acquisition, integration and separation
expenses for the year ended December 31, 2023 included $93.6
million related to our divested consumer business. These
incremental expenses, which include card and marketing expenses,
compensation and benefit expenses, and other expenses, were
incurred as a result of contractual obligations with the purchasers
of the consumer business and do not reflect the manner in which the
company would have operated the business and would not have
otherwise been incurred absent the transaction.
For the year ended December 31, 2022,
earnings adjustments to operating income included $1,266.1 million
in COS and $598.9 million in SG&A. Adjustments to COS included
amortization of acquired intangibles of $1,263.0 million and other
items of $3.1 million. Adjustments to SG&A included share-based
compensation expense of $163.3 million, acquisition, integration
and separation expenses of $366.7 million, facilities exit charges
of $47.1 million, and other items of $21.8 million.
Acquisition, integration and separation
expenses for the year ended December 31, 2022 included $110.6
million related to our divested consumer business. These
incremental expenses, which include card and marketing expenses,
compensation and benefit expenses, and other expenses, were
incurred as a result of contractual obligations with the purchasers
of the consumer business and do not reflect the manner in which the
company would have operated the business and would not have
otherwise been incurred absent the transaction.
For the year ended December 31, 2022,
earnings adjustments to operating income also included a $833.1
million noncash goodwill impairment charge related to our former
Business and Consumer Solutions segment, and a $199.1 million loss
on business dispositions.
(3)
The supplemental non-GAAP information
excludes the results of the consumer business that was divested in
April 2023.
See "Non-GAAP Financial Measures"
discussion on Schedule 10.
Note: Amounts may not sum due to
rounding.
SCHEDULE 10
OUTLOOK SUMMARY (UNAUDITED)
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In millions, except per share data)
2023
2024 Outlook
Growth
Revenues:
GAAP revenues
$9,654
$10,130 to $10,260
5% to 6%
Adjustments(1)
(983
)
(960
)
Adjusted net revenue
$8,671
$9,170 to $9,300
6% to 7%
Earnings Per
Share:
GAAP diluted EPS
$3.77
$5.57 to $5.73
nm
Adjustments(2)
6.65
5.97
Adjusted EPS
$10.42
$11.54 to $11.70
11% to 12%
(1)
Includes adjustments to revenues for
gross-up related payments (included in operating expenses)
associated with certain lines of business to reflect economic
benefit to the company. Amounts also included adjustments to
eliminate the effect of acquisition accounting fair value
adjustments for software-related contract liabilities associated
with acquired businesses, as well as adjustments to exclude
revenues that were associated with certain excluded expenses of our
consumer business which was classified as assets held for sale on
our balance sheet.
(2)
Adjustments to 2023 GAAP diluted EPS
included the removal of 1) software-related contract liability
adjustments described above of $0.01, 2) acquisition related
amortization expense of $3.88, 3) share-based compensation expense
of $0.62, 4) acquisition, integration, and separation expense of
$1.22, 5) facilities exit charges of $0.05, 6) equity method
investment earnings from our interest in a private equity
investment fund of $0.02, 7) discrete tax items of $0.28, 8)
gain/loss on business dispositions of $0.40, 9) other income and
expense of $0.06, 10) the effect of noncontrolling interests and
income taxes, as applicable, and 11) other items of $0.11.
Note: nm = not meaningful.
NON-GAAP FINANCIAL MEASURES
Global Payments supplements revenues, operating income,
operating margin and net income and earnings per share (EPS)
determined in accordance with U.S. GAAP by providing these measures
with certain adjustments (such measures being non-GAAP financial
measures) in this document 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. Management believes
adjusted net revenue more closely reflects the economic benefits to
the company's core business and allows for better comparisons with
industry peers. Management uses these non-GAAP financial measures,
together with other metrics, to set goals for and measure the
performance of the business and to determine incentive
compensation.
Adjusted net revenue, adjusted operating income, adjusted
operating margin, adjusted net income and adjusted EPS should be
considered in addition to, and not as substitutes for, revenues,
operating income, net income and earnings per share determined in
accordance with GAAP. The non-GAAP financial measures reflect
management's judgment of particular items, and may not be
comparable to similarly titled measures reported by other
companies. Adjusted net revenue excludes gross-up related payments
associated with certain lines of business to reflect economic
benefits to the company. On a GAAP basis, these payments are
presented gross in both revenues and operating expenses. Adjusted
operating income, adjusted net income and adjusted EPS exclude
acquisition-related amortization expense, share-based compensation
expense, acquisition, integration and separation expense, gain or
losses on business divestitures, and certain other items specific
to each reporting period as more fully described in the
accompanying reconciliations in Schedules 6 and 7. Adjusted
operating margin is derived by dividing adjusted operating income
by adjusted net revenue. The tax rate used in determining the
income tax impact of earnings adjustments is either the
jurisdictional statutory rate in effect at the time of the
adjustment or the jurisdictional expected annual effective tax rate
for the period, depending on the nature and timing of the
adjustment.
The supplemental non-GAAP information excludes the results of
the consumer business that was divested 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240214173169/en/
Investor contact: investor.relations@globalpay.com Winnie Smith
770-829-8478 Media contact: media.relations@globalpay.com Emily
Edmonds 770-829-8755
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