gpn-20240331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☑						QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024


☐						TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-16111

GLOBAL PAYMENTS INC.

(Exact name of registrant as specified in charter)


Georgia						58-2567903
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

3550 Lenox Road, Atlanta, Georgia

30326

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (770) 829-8000


Securities registered pursuant to Section 12(b) of the Act
Title of each class	Trading symbol	Name of exchange on which registered
Common stock, no par value	GPN	New York Stock Exchange
4.875% Senior Notes due 2031	GPN31A	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes

☐

☑

The number of shares of the issuer’s common stock, no par value, outstanding as of April 26, 2024 was 255,249,780.

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GLOBAL PAYMENTS INC.

FORM 10-Q

For the quarterly period ended March 31, 2024

TABLE OF CONTENTS


		Page
PART I - FINANCIAL INFORMATION
ITEM 1.	Unaudited Consolidated Statements of Income for the three months ended March 3 1 , 202 4 and 20 23	4
	Unaudited Consolidated Statements of Comprehensive Income for the three months ended March 3 1 , 202 4 and 20 23	5
	Consolidated Balance Sheets at March 3 1 , 202 4 (unaudited) and December 31, 202 3	6
	Unaudited Consolidated Statements of Cash Flows for the three months ended March 3 1 , 202 4 and 202 3	7
	Unaudited Consolidated Statements of Changes in Equity for the three months ended March 3 1 , 202 4 and 20 2 3	8
	Notes to Unaudited Consolidated Financial Statements	9
ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	26
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	36
ITEM 4.	Controls and Procedures	36
PART II - OTHER INFORMATION
ITEM 1.	Legal Proceedings	37
ITEM 1A.	Risk Factors	37
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
ITEM 5.	Other Information	37
ITEM 6.	Exhibits	38
	Signatures	39

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PART I - FINANCIAL INFORMATION

ITEM 1—FINANCIAL STATEMENTS

GLOBAL PAYMENTS INC.

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)


	Three Months Ended
	March 31, 2024		March 31, 2023

Revenues	$	2,420,187	$	2,292,447
Operating expenses:
Cost of service	922,390		947,753
Selling, general and administrative	1,045,545		1,043,126
Loss on business disposition	—		244,833
	1,967,935		2,235,712
Operating income	452,252		56,735

Interest and other income	35,928		11,153
Interest and other expense	(162,147)		(122,945)
	(126,219)		(111,792)
Income (loss) before income taxes and equity in income of equity method investments	326,033		(55,057)
Income tax expense (benefit)	19,382		(31,399)
Income (loss) before equity in income of equity method investments	306,651		(23,658)
Equity in income of equity method investments, net of tax	16,411		19,238
Net income (loss)	323,062		(4,420)
Net income attributable to noncontrolling interests	(9,755)		(6,621)
Net income (loss) attributable to Global Payments	$	313,307	$	(11,041)

Earnings (loss) per share attributable to Global Payments:
Basic earnings (loss) per share	$	1.22	$	(0.04)
Diluted earnings (loss) per share	$	1.22	$	(0.04)

See Notes to Unaudited Consolidated Financial Statements.

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GLOBAL PAYMENTS INC.

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)


	Three Months Ended
	March 31, 2024		March 31, 2023

Net income (loss)	$	323,062	$	(4,420)
Other comprehensive income (loss):
Foreign currency translation adjustments	(84,360)		37,450
Income tax (expense) benefit related to foreign currency translation adjustments	2,694		(187)
Net unrealized gains (losses) on hedging activities	29,116		(48,051)
Reclassification of net unrealized (gains) losses on hedging activities to interest expense	(2,662)		1,386
Income tax (expense) benefit related to hedging activities	(6,388)		10,950
Other, net of tax	—		(22)
Other comprehensive income (loss)	(61,600)		1,526

Comprehensive income (loss)	261,462		(2,894)
Comprehensive income (loss) attributable to noncontrolling interests	(13,332)		12,995
Comprehensive income (loss) attributable to Global Payments	$	274,794	$	(15,889)

See Notes to Unaudited Consolidated Financial Statements.

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GLOBAL PAYMENTS INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)


	March 31, 2024		December 31, 2023
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	2,167,616	$	2,088,887
Accounts receivable, net	1,054,193		1,120,078
Settlement processing assets	5,617,576		4,097,417
Prepaid expenses and other current assets	830,548		767,377
Total current assets	9,669,933		8,073,759
Goodwill	26,728,023		26,743,523
Other intangible assets, net	9,797,023		10,168,046
Property and equipment, net	2,200,366		2,190,005
Deferred income taxes	80,241		111,712
Notes receivable	731,429		713,123
Other noncurrent assets	2,567,735		2,570,018
Total assets	$	51,774,750	$	50,570,186
LIABILITIES AND EQUITY
Current liabilities:
Settlement lines of credit	$	1,095,901	$	981,244
Current portion of long-term debt	1,579,357		620,585
Accounts payable and accrued liabilities	2,630,789		2,824,979
Settlement processing obligations	5,209,972		3,698,921
Total current liabilities	10,516,019		8,125,729
Long-term debt	15,565,705		15,692,297
Deferred income taxes	2,062,885		2,242,105
Other noncurrent liabilities	643,996		722,540
Total liabilities	28,788,605		26,782,671
Commitments and contingencies
Redeemable noncontrolling interests	143,069		507,965
Equity:
Preferred stock, no par value; 5,000,000 shares authorized and none issued	—		—
Common stock, no par value; 400,000,000 shares authorized at March 31, 2024 and December 31, 2023; 255,130,560 issued and outstanding at March 31, 2024 and 260,382,746 issued and outstanding at December 31, 2023	—		—
Paid-in capital	18,806,396		19,800,953
Retained earnings	3,706,873		3,457,182
Accumulated other comprehensive loss	(297,438)		(258,925)
Total Global Payments shareholders’ equity	22,215,831		22,999,210
Nonredeemable noncontrolling interests	627,245		280,340
Total equity	22,843,076		23,279,550
Total liabilities, redeemable noncontrolling interests and equity	$	51,774,750	$	50,570,186

See Notes to Unaudited Consolidated Financial Statements.

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GLOBAL PAYMENTS INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)


	Three Months Ended
	March 31, 2024		March 31, 2023
Cash flows from operating activities:
Net income (loss)	$	323,062	$	(4,420)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization of property and equipment	117,919		105,983
Amortization of acquired intangibles	343,217		301,267
Amortization of capitalized contract costs	32,883		29,336
Share-based compensation expense	40,117		89,566
Provision for operating losses and credit losses	19,409		29,859
Noncash lease expense	15,397		15,810
Deferred income taxes	(111,886)		(160,040)
Equity in income of equity method investments, net of tax	(16,411)		(19,238)
Facilities exit charges	—		5,164
Loss on business disposition	—		244,833
Other, net	(5,619)		10,521
Changes in operating assets and liabilities, net of the effects of business combinations:
Accounts receivable	50,934		30,767
Settlement processing assets and obligations, net	(24,689)		248,710
Prepaid expenses and other assets	(120,774)		(119,479)
Accounts payable and other liabilities	(247,242)		(209,113)
Net cash provided by operating activities	416,317		599,526
Cash flows from investing activities:
Business combinations and other acquisitions, net of cash and restricted cash acquired	(2,557)		(4,046,785)
Capital expenditures	(145,441)		(162,195)
Other, net	—		2,187
Net cash used in investing activities	(147,998)		(4,206,793)
Cash flows from financing activities:
Net borrowings from (repayments of) settlement lines of credit	133,228		(281,411)
Net borrowings from (repayments of) commercial paper notes	(1,093,043)		1,048,620
Proceeds from long-term debt	4,609,000		4,708,140
Repayments of long-term debt	(2,628,548)		(1,555,954)
Payments of debt issuance costs	(29,391)		(11,593)
Repurchases of common stock	(800,048)		(202,785)
Proceeds from stock issued under share-based compensation plans	11,031		6,103
Common stock repurchased - share-based compensation plans	(41,140)		(28,323)
Distributions to noncontrolling interests	(4,748)		(6,218)
Contributions from noncontrolling interests	89		—
Purchase of capped calls related to issuance of convertible notes	(256,250)		—
Dividends paid	(63,616)		(65,750)
Net cash provided by (used in) financing activities	(163,436)		3,610,829
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(34,035)		18,584
Increase in cash, cash equivalents and restricted cash	70,848		22,146
Cash, cash equivalents and restricted cash, beginning of the period	2,256,875		2,215,606
Cash, cash equivalents and restricted cash, end of the period	$	2,327,723	$	2,237,752

See Notes to Unaudited Consolidated Financial Statements.

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GLOBAL PAYMENTS INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(in thousands, except per share data)


	Shareholders' Equity
	Number of Shares	Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Global Payments Shareholders’ Equity		Nonredeemable Noncontrolling Interests		Total Equity		Redeemable Noncontrolling Interests
Balance at December 31, 2023	260,383	$	19,800,953	$	3,457,182	$	(258,925)	$	22,999,210	$	280,340	$	23,279,550	$	507,965
Net income				313,307				313,307		7,693		321,000		2,062
Other comprehensive loss						(38,513)		(38,513)		(15,001)		(53,514)		(8,086)
Stock issued under share-based compensation plans	1,132	11,031						11,031				11,031
Common stock repurchased - share-based compensation plans	(322)	(42,663)						(42,663)				(42,663)
Share-based compensation expense		40,117						40,117				40,117
Repurchases of common stock	(6,062)	(808,365)						(808,365)				(808,365)
Distributions to noncontrolling interests								—		(4,748)		(4,748)
Contributions from noncontrolling interests								—		89		89
Reclassification of redeemable noncontrolling interest to nonredeemable noncontrolling interest								—		358,872		358,872		(358,872)
Purchase of capped calls related to issuance of convertible notes, net of taxes of $61,573		(194,677)						(194,677)				(194,677)
Cash dividends declared ($0.25 per common share)				(63,616)				(63,616)				(63,616)
Balance at March 31, 2024	255,131	$	18,806,396	$	3,706,873	$	(297,438)	$	22,215,831	$	627,245	$	22,843,076	$	143,069


	Shareholders' Equity
	Number of Shares	Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Global Payments Shareholders’ Equity		Nonredeemable Noncontrolling Interests		Total Equity	Redeemable Noncontrolling Interests
Balance at December 31, 2022	263,082	$	19,978,095	$	2,731,380	$	(405,969)	$	22,303,506	$	236,704

SEC Form 10-Q filed by Global Payments Inc.