Summary
GLOBAL PAYMENTS INC. (GPN) reported strong financial performance for the year ended December 31, 2018. The company is a leading global provider of payment technology and software solutions, operating across North America, Europe, and Asia-Pacific. A key strategic focus for GPN is its software-driven payments strategy, which has been further bolstered by recent strategic acquisitions, including SICOM Systems, Inc. and AdvancedMD, Inc. These acquisitions are expected to enhance capabilities within specific vertical markets, such as quick-service restaurants and healthcare. The company's diverse revenue streams, including transaction-based fees and software subscriptions, position it to capitalize on the ongoing shift towards electronic payments globally. Financially, the company demonstrated resilience, with revenues (excluding the impact of a new accounting standard) increasing by 12.6% year-over-year, driven primarily by organic growth. Operating income also saw a significant increase, with operating margins improving due to revenue growth and a reduction in acquisition-related expenses. While net income attributable to Global Payments saw a slight decrease, this was largely influenced by a one-time tax benefit in the prior year. The company continues to manage its debt effectively while pursuing strategic growth initiatives. Investors should note the company's active share repurchase program, reflecting a commitment to returning value to shareholders.
Financial Highlights
53 data points| Revenue | $3.37B |
| Cost of Revenue | $1.10B |
| Gross Profit | $2.27B |
| SG&A Expenses | $1.53B |
| Operating Expenses | $2.63B |
| Operating Income | $737.05M |
| Interest Expense | $195.50M |
| Net Income | $452.05M |
| EPS (Basic) | $2.85 |
| EPS (Diluted) | $2.84 |
| Shares Outstanding (Basic) | 158.67M |
| Shares Outstanding (Diluted) | 159.27M |
Key Highlights
- 1GLOBAL PAYMENTS INC. (GPN) is a global provider of payment technology and software solutions, operating in 32 countries across North America, Europe, and Asia-Pacific.
- 2The company made significant acquisitions in 2018: SICOM Systems, Inc. for approximately $409 million and AdvancedMD, Inc. for approximately $707 million, both aimed at strengthening its software-driven payments strategy and expanding into new vertical markets (restaurants and healthcare, respectively).
- 3Reported consolidated revenues of $3.37 billion for the year ended December 31, 2018, with revenues (excluding the impact of a new revenue accounting standard) increasing by 12.6% to $4.48 billion, driven by organic growth.
- 4Operating income grew by 31.9% to $737.1 million for the year ended December 31, 2018. Operating margin improved to 21.9% (or 15.6% excluding the accounting standard impact), up from 14.1% in the prior year.
- 5Net income attributable to Global Payments was $452.1 million for the year ended December 31, 2018, with diluted earnings per share of $2.84.
- 6The company has a substantial long-term debt of approximately $5.1 billion as of December 31, 2018, a portion of which was used to fund acquisitions.
- 7GPN maintains a share repurchase program, with an authorized amount of $387.8 million remaining as of December 31, 2018, and subsequently increased to $750 million in February 2019.