10-KPeriod: FY2005

GLOBAL PAYMENTS INC Annual Report, Year Ended May 31, 2005

Filed August 15, 2005For Securities:GPN

Summary

Global Payments Inc. (GPN) reported a strong fiscal year ended May 31, 2005, with significant growth across its key business segments. Revenue increased by 24.6% to $784.3 million, driven by robust performance in direct merchant services and a substantial surge in consumer-to-consumer money transfer offerings. This growth was further bolstered by acquisitions completed in late fiscal year 2004, including the Europhil acquisition which expanded their international money transfer capabilities. Profitability also saw a marked improvement, with operating income rising by 41.8% to $160.1 million, resulting in an expanded operating margin of 20.4%. Net income grew by 48.8% to $92.9 million, leading to a diluted EPS of $2.33, up from $1.60 in the prior year. The company is strategically focused on increasing market penetration, expanding into new geographic regions, and investing in technology to enhance its offerings. Significant events include the planned stock split and ongoing integration of recent acquisitions, positioning GPN for continued expansion in the electronic payment processing and money transfer markets.

Key Highlights

  • 1Revenue grew 24.6% to $784.3 million in fiscal year 2005, driven by direct merchant services and money transfer operations.
  • 2Operating income increased by 41.8% to $160.1 million, with operating margins improving to 20.4%.
  • 3Net income rose by 48.8% to $92.9 million, and diluted EPS increased from $1.60 to $2.33.
  • 4Completed the acquisition of Europhil in December 2004, expanding international money transfer services.
  • 5Acquired the remaining 49% interest in the Cash & Win product line, consolidating ownership.
  • 6Announced a two-for-one stock split, to be effective in October 2005.
  • 7Continued investment in technology and infrastructure, including a planned data center relocation.

Frequently Asked Questions

Revenue growth in fiscal year 2005 was primarily driven by strong performance in the direct merchant services segment, a significant increase in consumer-to-consumer money transfer offerings, and the contributions from acquisitions completed in late fiscal year 2004, notably the Europhil acquisition.

Profitability saw substantial improvement. Operating income increased by 41.8% to $160.1 million, and operating margins expanded from 17.9% to 20.4%. Net income grew by 48.8% to $92.9 million, resulting in a strong increase in diluted earnings per share to $2.33.

In fiscal year 2005, Global Payments completed the acquisition of Europhil, a group of companies involved in money transmittal services, expanding their international reach. They also acquired the remaining 49% interest in the Cash & Win product line, which provides credit and debit card cash advance services to the gaming industry.

Yes, Global Payments announced a two-for-one stock split, to be effected as a stock dividend, expected to be distributed in October 2005. This will double the number of outstanding shares and proportionally adjust stock options and exercise prices.