10-QPeriod: Q3 FY2014

GLOBAL PAYMENTS INC Quarterly Report for Q3 Ended Nov 30, 2014

Filed January 8, 2015For Securities:GPN

Summary

GLOBAL PAYMENTS INC. (GPN) reported solid financial performance for the three and six months ended November 30, 2014. Total revenues saw a significant increase of 10.0% for the quarter and 10.9% for the six-month period, driven by growth across both its North America and International merchant services segments. Net income attributable to Global Payments also showed a positive trend, increasing by 6.5% for the quarter and 8.4% for the six-month period. The company continued its strategic growth through acquisitions, notably the acquisition of Ezidebit in Australia and New Zealand, which is expected to bolster its integrated solutions offerings and establish a direct distribution channel. These strategic moves, coupled with organic growth in key markets, demonstrate a commitment to expanding market share and enhancing its global payment solutions platform. Investors can look to the continued revenue growth and expanding international presence as key indicators of the company's forward momentum.

Key Highlights

  • 1Total revenues increased by 10.0% for the three months ended November 30, 2014, reaching $697.3 million, and by 10.9% for the six months ended November 30, 2014, reaching $1,402.2 million.
  • 2Net income attributable to Global Payments increased to $74.8 million for the three months ended November 30, 2014, up 6.5% from $73.9 million in the prior year, and to $150.1 million for the six months ended November 30, 2014, up 8.4% from $138.5 million in the prior year.
  • 3Diluted earnings per share increased to $1.10 for the three months ended November 30, 2014, from $1.02 in the prior year, and to $2.20 for the six months ended November 30, 2014, from $1.88 in the prior year.
  • 4The company completed the acquisition of Ezidebit for approximately $268.1 million, aimed at establishing a direct distribution channel in Australia and New Zealand.
  • 5North America merchant services revenue grew by 9.3% for the quarter and 10.6% for the six-month period, driven by U.S. direct channels and the PayPros acquisition.
  • 6International merchant services revenue increased by 11.5% for the quarter and 11.8% for the six-month period, with strong contributions from Europe and the Asia-Pacific region.
  • 7Consolidated operating income grew by 10.8% for the three months and 13.3% for the six months, reflecting revenue growth offset by increased operating expenses related to acquisitions and variable costs.

Frequently Asked Questions

Global Payments Inc. demonstrated positive financial performance, with revenue growth of 10.0% for the quarter and 10.9% for the six-month period ended November 30, 2014. Net income attributable to Global Payments also saw an increase of 6.5% for the quarter and 8.4% for the six-month period, indicating a strengthening financial position.

The company is actively expanding through acquisitions and organic growth. A key acquisition during this period was Ezidebit in Australia and New Zealand, which is intended to establish a direct distribution channel. Additionally, the company is seeing strong performance in its existing North America and International merchant services segments, with Europe and the Asia-Pacific region showing significant revenue growth.

Recent acquisitions, such as PayPros (completed March 4, 2014) and Ezidebit (completed October 10, 2014), are contributing to revenue growth in their respective segments. While these acquisitions are driving top-line expansion, they also contribute to increased operating expenses, including amortization and other incremental costs, which are being managed within the context of overall segment performance.

Global Payments Inc. has a mix of debt financing, including a $1.25 billion term loan and a $1.0 billion revolving credit facility. As of November 30, 2014, total debt was $2.13 billion. The company reported compliance with its financial covenants and maintains a significant cash and cash equivalents balance of $644.5 million, with $223.5 million considered 'available cash,' indicating sufficient liquidity for its operations and strategic initiatives.