Summary
Global Payments Inc. (GPN) reported its financial results for the three months ended August 31, 2012. The company experienced a significant increase in revenue, up 9% year-over-year, driven primarily by growth in its U.S. ISO channel and benefits from reduced interchange expenses due to legislation. However, operating income saw a notable decrease of 26% due to substantial expenses related to a processing system intrusion incident that occurred earlier in the year. The intrusion incident resulted in $24.0 million in expenses during the quarter, bringing the total life-to-date expenses to $108.4 million. This includes an accrual for fraud losses, fines, and other charges from card networks, as well as costs for investigation, remediation, and credit monitoring services. While the company is pursuing insurance recoveries, the full impact of this event remains uncertain and could materially affect future financial performance. Despite these challenges, the company continues to grow its revenue and expand through strategic acquisitions, including the recent purchase of the remaining stake in its Asia-Pacific business and the acquisition of Accelerated Payment Technologies (APT).
Financial Highlights
49 data points| Revenue | $590.29M |
| SG&A Expenses | $281.42M |
| Operating Expenses | $509.80M |
| Operating Income | $80.49M |
| Net Income | $46.67M |
| EPS (Basic) | $0.29 |
| EPS (Diluted) | $0.29 |
| Shares Outstanding (Basic) | 157.21M |
| Shares Outstanding (Diluted) | 158.09M |
Key Highlights
- 1Revenue increased by 9% to $590.3 million for the three months ended August 31, 2012, compared to the same period in the prior year.
- 2Operating income decreased by 26% to $80.5 million, with operating margins declining from 20.0% to 13.6% year-over-year.
- 3A processing system intrusion incident incurred $24.0 million in expenses during the quarter, bringing the total life-to-date expenses related to the incident to $108.4 million.
- 4North America Merchant Services revenue grew 13% driven by the U.S. ISO channel and reduced interchange expenses due to the Durbin amendment.
- 5International Merchant Services revenue remained flat due to unfavorable foreign currency exchange rates, although local currency growth was solid.
- 6The company entered into an agreement to purchase the remaining 44% of its Asia-Pacific business (GPAP) for $242.0 million.
- 7Global Payments completed the acquisition of Accelerated Payment Technologies (APT) for $413 million after the reporting period, to expand its direct distribution channel in the U.S.