10-QPeriod: Q1 FY2021

GLOBAL PAYMENTS INC Quarterly Report for Q1 Ended Mar 31, 2021

Filed May 4, 2021For Securities:GPN

Summary

GLOBAL PAYMENTS INC. (GPN) reported solid financial results for the first quarter of 2021, demonstrating a recovery trajectory following the impacts of the COVID-19 pandemic. Revenues increased by 4.5% year-over-year to $1.99 billion, driven by recovering transaction volumes as COVID-19 restrictions eased and increased consumer spending, partly boosted by government stimulus payments. The company also saw an improvement in profitability, with operating income rising by 12.8% to $275.3 million and operating margin expanding to 13.8%. This was attributed to revenue growth, realization of merger-related cost synergies, and effective cost-saving measures. Despite ongoing integration expenses and increased selling, general, and administrative costs, the company's strategic focus on cost management and integration benefits is yielding positive results. GPN also actively managed its capital structure, including a significant share repurchase program and the issuance of new senior unsecured notes.

Financial Highlights

51 data points
Beta

Revenue

$1.99B

53.5% Gross Margin

Net Income

$196.68M

9.9% Net Margin

EPS (Diluted)

$0.66

Total Assets

$44.26B

Cash & Equivalents

$2.08B

Free Cash Flow

$599.41M

Financial Statements
Beta
Revenue$1.99B
Cost of Revenue$925.25M
Gross Profit$1.06B
SG&A Expenses$789.50M
Operating Expenses$1.71B
Operating Income$275.26M
Interest Expense$81.20M
Net Income$196.68M
EPS (Basic)$0.66
EPS (Diluted)$0.66
Shares Outstanding (Basic)296.43M
Shares Outstanding (Diluted)297.67M

Key Highlights

  • 1Consolidated revenues grew 4.5% to $1.99 billion, recovering from COVID-19 impacts.
  • 2Operating income increased by 12.8% to $275.3 million, with operating margin improving to 13.8%.
  • 3Merchant Solutions segment revenue increased 4.3% to $1.27 billion, showing signs of recovery.
  • 4Business and Consumer Solutions segment saw strong revenue growth of 19.4% to $243.6 million, boosted by stimulus payments.
  • 5The company actively managed its capital structure by issuing $1.1 billion in senior unsecured notes and repurchasing approximately $803 million in common stock during the quarter.
  • 6Cost of service as a percentage of revenue decreased to 46.5% from 49.1%, benefiting from merger synergies and cost-saving actions.
  • 7Diluted Earnings Per Share (EPS) improved to $0.66 from $0.48 in the prior year's comparable period.

Frequently Asked Questions

Consolidated revenues increased by 4.5% to $1.99 billion in the first quarter of 2021, compared to $1.90 billion in the same period of 2020. This growth was primarily driven by an increase in transaction volumes as COVID-19 restrictions eased and higher consumer spending, including stimulus-driven spending.

The company expects the COVID-19 pandemic to continue to have an adverse effect on its revenues and earnings in 2021, but anticipates a recovery throughout the year. They are closely monitoring the evolving effects and are prepared to adjust strategies and investments accordingly.

In February 2021, Global Payments issued $1.1 billion in 1.200% senior unsecured notes due March 2026, using the proceeds to refinance existing debt. The company also repurchased approximately $803 million of its common stock during the quarter, demonstrating a commitment to capital return and optimization.

Yes, operating income increased by 12.8% to $275.3 million, and the operating margin expanded to 13.8% from 12.8% in the prior year. This improvement was driven by revenue growth, merger-related cost synergies, and cost-saving initiatives.