10-QPeriod: Q1 FY2022

GLOBAL PAYMENTS INC Quarterly Report for Q1 Ended Mar 31, 2022

Filed May 2, 2022For Securities:GPN

Summary

Global Payments Inc. reported solid financial performance for the first quarter of 2022, with a notable increase in consolidated revenues and operating income. Revenues grew by 8.4% year-over-year to $2.16 billion, driven by increased transaction volumes, customer base expansion, and a broader adoption of digital payment solutions, supported by ongoing economic recovery. Operating income saw a significant jump of 36.6% to $375.9 million, with operating margins expanding to 17.4% from 13.8% in the prior year. This improvement was attributed to revenue growth outpacing fixed costs and a reduction in acquisition and integration expenses. The company's Merchant Solutions segment was a key driver of growth, with revenues up 16.2%. While the Issuer Solutions segment experienced modest growth, the Business and Consumer Solutions segment saw a revenue decline, partly due to the absence of one-time government stimulus payments that boosted the prior year's results. Looking ahead, Global Payments is navigating global uncertainties, including the situation in Ukraine and Russia, and has announced the sale of its Russian merchant business, expecting a charge in the second quarter. Despite these challenges, the company's liquidity remains strong, supported by operating cash flows and available financing, positioning it to manage its capital allocation priorities including investments, acquisitions, dividends, and share repurchases.

Financial Highlights

50 data points
Beta

Revenue

$2.16B

55.6% Gross Margin

Net Income

$244.73M

11.3% Net Margin

EPS (Diluted)

$0.87

Total Assets

$45.44B

Cash & Equivalents

$2.05B

Free Cash Flow

$630.00M

Financial Statements
Beta
Revenue$2.16B
Cost of Revenue$957.16M
Gross Profit$1.20B
SG&A Expenses$823.15M
Operating Expenses$1.78B
Operating Income$375.95M
Interest Expense$89.30M
Net Income$244.73M
EPS (Basic)$0.87
EPS (Diluted)$0.87
Shares Outstanding (Basic)282.10M
Shares Outstanding (Diluted)282.57M

Key Highlights

  • 1Consolidated revenues increased by 8.4% to $2.16 billion in Q1 2022 compared to Q1 2021.
  • 2Operating income surged by 36.6% to $375.9 million, with operating margins expanding to 17.4%.
  • 3Merchant Solutions segment revenue grew by a strong 16.2%, indicating robust performance in this core area.
  • 4Net income attributable to Global Payments increased to $244.7 million from $196.7 million.
  • 5Diluted earnings per share rose to $0.87 from $0.66 in the prior year.
  • 6The company announced the sale of its Russian merchant business, expecting a $130 million charge in Q2 2022.
  • 7Share repurchase program continues, with $1.7 billion remaining authorization as of March 31, 2022.

Frequently Asked Questions

Revenue increased by 8.4% to $2.16 billion, primarily driven by higher transaction volumes stemming from customer base growth, increased adoption of digital payment solutions, and a continued economic recovery from the COVID-19 pandemic.

Operating income increased significantly by 36.6% to $375.9 million, and operating margins improved to 17.4% from 13.8% in the prior year. This improvement was due to higher revenues and lower acquisition and integration expenses.

Global Payments sold its merchant business in Russia effective April 29, 2022, due to new sanctions. The company expects to recognize a charge of approximately $130 million in the second quarter of 2022 associated with this sale.

The company maintains a strong liquidity position with $2.05 billion in cash and cash equivalents and an available $1.7 billion under its revolving credit facility. Capital allocation priorities include investments, acquisitions, dividends, and share repurchases. Global Payments believes its current cash and borrowing capacity are sufficient to meet its needs.