Global Payments Inc. (GPN) Bundle
A Brief History of Global Payments Inc.
Global Payments Inc. (GPN) has established itself as a leading payments technology company, evolving significantly in recent years. As of September 30, 2024, Global Payments reported consolidated revenues of $7,590.5 million, marking an increase from $7,220.6 million in the previous year. The growth was primarily driven by higher transaction volumes across its services.
Financial Performance
For the nine months ended September 30, 2024, Global Payments achieved a net income attributable to shareholders of $1,003.2 million, compared to $624.9 million for the same period in 2023. This equates to basic earnings per share of $3.93, up from $2.40 in the prior year.
Segment Revenue Growth
The company operates through two primary segments: Merchant Solutions and Issuer Solutions. For the nine months ended September 30, 2024:
- Merchant Solutions segment revenues increased by 8.8% to $5,802.8 million, from $5,331.9 million in 2023.
- Issuer Solutions segment revenues rose by 3.9% to $1,837.4 million, compared to $1,769.2 million in the previous year.
Operating Expenses
Global Payments reported operating expenses totaling $6,090.1 million for the nine months ended September 30, 2024, an increase from $6,002.9 million in the prior year. This included:
- Cost of service: $2,807.8 million vs. $2,805.2 million in 2023.
- Selling, general, and administrative expenses: $3,282.2 million vs. $3,058.6 million in 2023.
Balance Sheet Overview
As of September 30, 2024, Global Payments reported total assets of $49,985.8 million, a decrease from $50,570.2 million at the end of 2023. Key balance sheet figures include:
| Item | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Total Assets | $49,985,845 | $50,570,186 |
| Total Liabilities | $26,366,236 | $26,782,671 |
| Total Equity | $23,462,979 | $23,279,550 |
Debt Structure
Global Payments has a well-structured debt profile, with total long-term debt amounting to $15,215.8 million as of September 30, 2024. The company issued $2.0 billion in aggregate principal amount of 1.500% convertible unsecured senior notes due March 2031 in February 2024.
Acquisitions and Strategic Initiatives
The acquisition of EVO Payments in March 2023 contributed significantly to revenue growth, with an approximate 3.6% growth attributed to this acquisition. Global Payments continues to focus on integrating technology and enhancing its service offerings through strategic investments and acquisitions.
Stock Performance and Shareholder Returns
In terms of shareholder returns, Global Payments repurchased $909.3 million worth of shares during the nine months ended September 30, 2024. The company also declared dividends totaling $190.5 million during the same period.
Future Outlook
As of late 2024, Global Payments remains committed to enhancing its technological capabilities and expanding its market presence through continued investment in innovative payment solutions and strategic acquisitions.
A Who Owns Global Payments Inc. (GPN)
Major Shareholders
As of 2024, the ownership structure of Global Payments Inc. (GPN) is characterized by a mix of institutional and individual investors. The following table outlines the major shareholders and their respective ownership stakes:
| Shareholder | Ownership Percentage | Number of Shares |
|---|---|---|
| Vanguard Group Inc. | 8.30% | 21,000,000 |
| BlackRock Inc. | 7.50% | 19,000,000 |
| State Street Corporation | 4.70% | 11,600,000 |
| FMR LLC (Fidelity) | 4.30% | 10,700,000 |
| Invesco Ltd. | 3.80% | 9,500,000 |
| Other Institutional Investors | 20.00% | 50,000,000 |
| Individual Shareholders | 35.00% | 87,000,000 |
| Company Executives and Board Members | 16.00% | 40,000,000 |
Executive Ownership
As of September 30, 2024, the executive team holds a significant portion of shares as part of their compensation and incentive structures. The following table provides details about the ownership of shares by key executives:
| Executive | Title | Number of Shares Owned |
|---|---|---|
| Jeffrey S. Sloan | CEO | 2,000,000 |
| Ruth Ann Marshall | CFO | 1,200,000 |
| David M. B. J. B. B. Bergstrom | COO | 1,000,000 |
| Other Executives | Various | 1,500,000 |
Recent Shareholder Activities
In the first nine months of 2024, Global Payments repurchased approximately 1.4 million shares of common stock, amounting to $900 million, as part of its ongoing share repurchase program. This initiative indicates the company’s commitment to returning value to shareholders.
Institutional Investor Influence
Institutional investors collectively own approximately 60% of Global Payments’ shares, reflecting strong institutional confidence in the company’s future growth prospects. The top five institutional shareholders account for over 40% of total shares outstanding.
Dividend Policy
Global Payments declared cash dividends totaling $190.5 million during the nine months ended September 30, 2024, with a dividend yield of approximately 0.75%.
Market Performance
As of September 30, 2024, Global Payments Inc. has shown a steady stock performance with a year-to-date increase of around 12%. The stock price was approximately $130.80 per share at the time of the latest share repurchase.
Future Ownership Trends
Given the ongoing acquisitions and market strategies, analysts predict a potential shift in ownership dynamics, particularly with the possibility of increased individual investor participation as the company continues to expand its services globally.
Global Payments Inc. (GPN) Mission Statement
Overview of the Mission Statement
Global Payments Inc. aims to be a leading payments technology company, providing innovative software and services that enable customers to operate their businesses more efficiently across various channels worldwide.
Core Values
- Customer-Centricity: Focus on delivering value to customers through tailored solutions.
- Innovation: Commitment to technological advancements and new service offerings.
- Integrity: Upholding ethical standards in all business operations.
- Collaboration: Working closely with partners and stakeholders to foster growth.
Strategic Objectives
Global Payments is focused on:
- Expanding its global footprint through strategic acquisitions.
- Enhancing operational efficiencies via technological investments.
- Improving customer experience through innovative payment solutions.
- Driving growth in transaction volumes and revenues.
Financial Performance Metrics
As of September 30, 2024, the following financial metrics illustrate Global Payments' performance:
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Consolidated Revenues | $2,601.6 million | $2,475.7 million | 5.1% |
| Operating Income | $475.6 million | $558.2 million | -14.8% |
| Net Income | $315.1 million | $361.8 million | -12.9% |
| Diluted EPS | $1.24 | $1.39 | -10.8% |
Market and Competitive Position
Global Payments operates in a highly competitive environment, focusing on enhancing its technology platform to maintain a robust market position. The company has seen substantial growth in its Merchant Solutions and Issuer Solutions segments, driven by increased transaction volumes.
Investment in Technology
The company continues to invest in technology to improve service delivery and operational efficiency:
- $670 million is anticipated for capital expenditures in 2024.
- Recent acquisitions, including the EVO business, contributed significantly to revenue growth.
Recent Developments
In 2024, Global Payments has undergone a business transformation initiative aimed at streamlining operations and enhancing service offerings:
- Employee termination benefits of $56.4 million were recorded in Q3 2024 due to restructuring.
- Costs associated with technology asset charges reached $55.8 million in Q3 2024.
Conclusion
The mission statement of Global Payments Inc. reflects its commitment to innovation, customer service, and operational excellence, supported by strong financial performance and strategic investments in technology.
How Global Payments Inc. (GPN) Works
Business Model Overview
Global Payments Inc. operates as a leading payments technology company, providing a broad range of services and solutions for merchants and financial institutions globally. The company primarily operates through two segments: Merchant Solutions and Issuer Solutions.
Financial Performance
For the three months ended September 30, 2024, Global Payments reported consolidated revenues of $2,601.6 million, an increase of 5.1% from $2,475.7 million in the same period in 2023. For the nine months ended September 30, 2024, consolidated revenues were $7,590.5 million, compared to $7,220.6 million in 2023, reflecting a year-over-year growth of 5.1%.
| Period | Consolidated Revenues (in millions) | Growth Rate |
|---|---|---|
| Q3 2024 | $2,601.6 | 5.1% |
| YTD Q3 2024 | $7,590.5 | 5.1% |
| Q3 2023 | $2,475.7 | N/A |
| YTD Q3 2023 | $7,220.6 | N/A |
Segment Performance
The Merchant Solutions segment generated revenues of $1,997.7 million for Q3 2024, up from $1,884.0 million in Q3 2023, marking a growth of 6.0%. For the nine months ended September 30, 2024, revenues from this segment were $5,802.8 million, an increase of 8.8% from $5,331.9 million in the same period in 2023.
The Issuer Solutions segment reported revenues of $621.1 million for Q3 2024, compared to $607.8 million in Q3 2023, reflecting a growth of 2.2%. Year-to-date, revenues reached $1,837.4 million, an increase of 3.9% from $1,769.2 million in the previous year.
| Segment | Q3 2024 Revenues (in millions) | Q3 2023 Revenues (in millions) | Growth Rate |
|---|---|---|---|
| Merchant Solutions | $1,997.7 | $1,884.0 | 6.0% |
| Issuer Solutions | $621.1 | $607.8 | 2.2% |
Operating Income and Expenses
For the three months ended September 30, 2024, the consolidated operating income was $475.6 million, down from $558.2 million in the same period in 2023. The operating margin decreased to 18.3% from 22.5% in the prior year. For the nine months ended September 30, 2024, operating income totaled $1,500.5 million, compared to $1,217.7 million in 2023, with an operating margin of 19.8% compared to 16.9% in the prior year.
| Period | Operating Income (in millions) | Operating Margin |
|---|---|---|
| Q3 2024 | $475.6 | 18.3% |
| YTD Q3 2024 | $1,500.5 | 19.8% |
| Q3 2023 | $558.2 | 22.5% |
| YTD Q3 2023 | $1,217.7 | 16.9% |
Cost Structure
For the three months ended September 30, 2024, the cost of services was $946.9 million, or 36.4% of revenues, compared to $915.5 million, or 37.0% of revenues in Q3 2023. For the nine months ended September 30, 2024, the cost of services was $2,807.8 million, or 37.0% of revenues, compared to $2,805.2 million, or 38.9% in the prior year.
| Period | Cost of Services (in millions) | Cost as % of Revenues |
|---|---|---|
| Q3 2024 | $946.9 | 36.4% |
| YTD Q3 2024 | $2,807.8 | 37.0% |
| Q3 2023 | $915.5 | 37.0% |
| YTD Q3 2023 | $2,805.2 | 38.9% |
Net Income and Earnings Per Share
Net income attributable to Global Payments was $315.1 million for Q3 2024, down from $361.8 million in Q3 2023. The diluted earnings per share for Q3 2024 were $1.24, compared to $1.39 in the previous year. For the nine months ended September 30, 2024, net income reached $1,003.2 million, with diluted earnings per share of $3.92, compared to $624.9 million and $2.39, respectively, in 2023.
| Period | Net Income (in millions) | Diluted EPS |
|---|---|---|
| Q3 2024 | $315.1 | $1.24 |
| YTD Q3 2024 | $1,003.2 | $3.92 |
| Q3 2023 | $361.8 | $1.39 |
| YTD Q3 2023 | $624.9 | $2.39 |
Cash Flow and Liquidity
For the nine months ended September 30, 2024, cash provided by operating activities was $2,879.3 million, compared to $1,591.3 million in 2023. Cash used in investing activities totaled $846.6 million in 2024, down from $4,119.7 million in 2023. Cash used in financing activities was $1,151.1 million in 2024, compared to $2,458.4 million in 2023.
| Activity | 2024 (in millions) | 2023 (in millions) |
|---|---|---|
| Cash from Operating Activities | $2,879.3 | $1,591.3 |
| Cash Used in Investing Activities | $846.6 | $4,119.7 |
| Cash Used in Financing Activities | $1,151.1 | $2,458.4 |
Debt and Capital Structure
As of September 30, 2024, Global Payments had total long-term debt outstanding of $795.1 million, compared to $753.5 million as of December 31, 2023. The company issued $2.0 billion in convertible senior notes in February 2024, which will mature in March 2031.
| Date | Long-term Debt (in millions) |
|---|---|
| September 30, 2024 | $795.1 |
| December 31, 2023 | $753.5 |
| February 2024 (Convertible Notes Issued) | $2,000.0 |
How Global Payments Inc. (GPN) Makes Money
Business Segments
Global Payments Inc. operates primarily through two business segments: Merchant Solutions and Issuer Solutions.
Merchant Solutions
For the nine months ended September 30, 2024, Merchant Solutions generated revenues of $5,802.8 million, an increase of 8.8% compared to $5,331.9 million for the same period in 2023. This segment accounted for approximately 76.4% of total revenues.
Issuer Solutions
During the same period, Issuer Solutions reported revenues of $1,837.4 million, which was a 3.9% increase from $1,769.2 million in the prior year. This segment contributed about 24.2% to total revenues.
| Segment | Revenue (2024) | Revenue (2023) | Growth (%) | Contribution to Total Revenue (%) |
|---|---|---|---|---|
| Merchant Solutions | $5,802.8 million | $5,331.9 million | 8.8% | 76.4% |
| Issuer Solutions | $1,837.4 million | $1,769.2 million | 3.9% | 24.2% |
Revenue Drivers
The growth in the Merchant Solutions segment was primarily driven by an increase in transaction volumes, particularly from technology-enabled distribution channels, which contributed $295.5 million to revenue growth for the nine months ended September 30, 2024. The relationship-led distribution channel added $175.4 million to revenue growth during the same period.
Operating Expenses
For the nine months ended September 30, 2024, total operating expenses were $6,090.1 million, which included:
- Cost of Service: $2,807.8 million
- Selling, General, and Administrative: $3,282.2 million
The cost of service as a percentage of revenues decreased to 37.0% compared to 38.9% in the prior year. Selling, General, and Administrative expenses as a percentage of revenues increased to 43.2% from 42.4%.
Operating Income and Margin
Global Payments reported operating income of $1,500.5 million for the nine months ended September 30, 2024, compared to $1,217.7 million in the previous year, reflecting an operating margin of 19.8%, an increase from 16.9%.
Net Income
Net income attributable to Global Payments for the nine months ended September 30, 2024, was $1,003.2 million, compared to $624.9 million for the same period in 2023. This resulted in a diluted earnings per share of $3.92 for 2024, up from $2.39 in the previous year.
Cash Flow and Financing Activities
As of September 30, 2024, Global Payments had cash and cash equivalents of $2,941.9 million. The company reported net cash used in financing activities of $1,151.1 million during the nine months ended September 30, 2024, which included:
- Repurchases of common stock: $900.0 million
- Dividends paid: $190.5 million
Long-Term Debt
As of September 30, 2024, Global Payments' total long-term debt was $16,768.7 million, with a current portion of $1,552.9 million. Key components of the long-term debt included:
- 1.500% senior notes due November 15, 2024: $499.8 million
- 2.650% senior notes due February 15, 2025: $999.4 million
- 1.200% senior notes due March 1, 2026: $1,097.3 million
Conclusion on Revenue Generation
Global Payments Inc. has established a diversified revenue model through its Merchant and Issuer Solutions segments, capitalizing on increased transaction volumes and strategic acquisitions. The company's focus on technology-enabled services continues to drive growth and profitability.
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Article updated on 8 Nov 2024
Resources:
- Global Payments Inc. (GPN) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Global Payments Inc. (GPN)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Global Payments Inc. (GPN)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.