Global Payments Reports Fourth Quarter and Full Year 2023 Results

  • Fourth quarter 2023 GAAP diluted earnings per share (EPS) of $1.38 and adjusted EPS of $2.65
  • Fourth quarter 2023 GAAP revenue of $2.43 billion and adjusted net revenue of $2.19 billion, both an increase of 8%
  • Expects to Launch Commerzbank Joint Venture in First Half of 2024
  • Renews Agreements with Capital One Financial and Navy Federal Credit Union

Global Payments Inc. (NYSE: GPN) today announced results for the fourth quarter and year ended December 31, 2023.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20240214173169/en/

“We are pleased with our results for the fourth quarter and full year 2023 that were ahead of our initial expectations outlined last February,” said Cameron Bready, President and Chief Executive Officer. “Importantly, we saw consistent business performance throughout the year despite ongoing uncertainties, highlighting the durability and resiliency of our business model.”

Bready continued, “We also accomplished a great deal strategically last year, including successfully closing our acquisition of EVO Payments in March, providing further penetration into integrated payments, enhancing our B2B capabilities and expanding our exposure to stronger secular growth markets. Further, we completed the exit of our Netspend Consumer and Gaming Solutions businesses. These transactions represent important milestones as we seek to advance our strategy and operate a simpler business model centered on our core corporate and financial institution customer base.”

Bready concluded, “And we are already off to a great start in 2024. Our recently announced joint venture with Commerzbank will meaningfully expand our presence in Germany. This partnership allows us to deliver a comprehensive suite of innovative payment and commerce enablement solutions to merchants in the German market, capitalizing on the digitization trends in the largest economy in Europe. We are also pleased to announce we executed multi-year renewal agreements with two of our flagship Issuer Solutions clients, Capital One and Navy Federal.”

Fourth Quarter 2023 Summary

  • GAAP revenues were $2.43 billion, compared to $2.25 billion in 2022; diluted earnings per share were $1.38, compared to $0.94 in the prior year; and operating margin was 20.5%, compared to 18.1% in the prior year.
  • Adjusted net revenues increased 8% to $2.19 billion, compared to $2.02 billion in 2022.
  • Adjusted earnings per share increased 10% to $2.65, compared to $2.42 in 2022.
  • Adjusted operating margin expanded 30 basis points to 44.8%.

Full Year 2023 Summary

  • GAAP revenues were $9.65 billion, compared to $8.98 billion in 2022; diluted earnings per share were $3.77, compared to $0.40 in the prior year; and operating margin was 17.8%, compared to 7.1% in the prior year.
  • Adjusted net revenues increased 7% to $8.67 billion, compared to $8.09 billion in 2022.
  • Adjusted earnings per share increased 12% to $10.42, compared to $9.32 in 2022.
  • Adjusted operating margin expanded 90 basis points to 44.6%.

2024 Outlook

“We are pleased with our consistent execution and how our business is positioned as we enter 2024,” said Josh Whipple, Senior Executive Vice President and Chief Financial Officer. “The company expects adjusted net revenue to be in a range of $9.17 billion to $9.30 billion, reflecting growth of 6% to 7% and adjusted earnings per share to be in a range of $11.54 to $11.70, reflecting growth of 11% to 12% over 2023. Annual adjusted operating margin for 2024 is expected to expand by up to 50 basis points.”

Whipple concluded, “Our outlook for the year reflects the continued positive momentum in our business, while also accommodating a slightly more tempered economic environment given continued uncertainty.”

Capital Allocation

Global Payments’ Board of Directors approved a dividend of $0.25 per share payable on March 29, 2024 to shareholders of record as of March 15, 2024. The Board of Directors also approved an increase in the company's share repurchase authorization capacity to $2 billion.

Conference Call

Global Payments’ management will host a live audio webcast today, February 14, 2024, at 8:00 a.m. EST to discuss financial results and business highlights. The audio webcast, along with supplemental financial information, can be accessed via the investor relations page of the company’s website at investors.globalpayments.com. A replay of the audio webcast will be archived on the company's website following the live event.

Non-GAAP Financial Measures

Global Payments supplements revenues, operating income, operating margin and net income and earnings per share determined in accordance with GAAP by providing these measures with certain adjustments (such measures being non-GAAP financial measures) in this earnings release to assist with evaluating our performance. In addition to GAAP measures, management uses these non-GAAP financial measures to focus on the factors the company believes are pertinent to the daily management of our operations. The constant currency growth measures adjust for the impact of exchange rates and are calculated using average exchange rates during the comparable period in the prior year.

Global Payments also has provided supplemental non-GAAP information to reflect the divestiture of the consumer portion of our Netspend business, which comprised our former Consumer Solutions segment, which closed in April 2023. Management believes that providing such supplemental financial information should enhance shareholders’ ability to evaluate how the business will be managed going forward.

Reconciliations of each of the non-GAAP financial measures to the most directly comparable GAAP measure are included in the schedules to this release, except for forward-looking measures where a reconciliation to the corresponding GAAP measures is not available due to the variability, complexity and limited visibility of the items that are excluded from the non-GAAP outlook measures.

About Global Payments

Global Payments Inc. (NYSE: GPN) is a leading payments technology company delivering innovative software and services to our customers globally. Our technologies, services and team member expertise allow us to provide a broad range of solutions that enable our customers to operate their businesses more efficiently across a variety of channels around the world.

Headquartered in Georgia with approximately 27,000 team members worldwide, Global Payments is a Fortune 500® company and a member of the S&P 500 with worldwide reach spanning North America, Europe, Asia Pacific and Latin America. For more information, visit company.globalpayments.com and follow Global Payments on X, LinkedIn and Facebook.

Forward-Looking Statements

Investors are cautioned that some of the statements we use in this release contain forward-looking statements and are made pursuant to the "safe-harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, which are based on current expectations, estimates and projections about the industry and markets in which we operate, and beliefs of and assumptions made by our management, involve risks and uncertainties that could significantly affect the financial condition, results of operations, business plans and the future performance of Global Payments. Actual events or results might differ materially from those expressed or forecasted in these forward-looking statements. Accordingly, we cannot guarantee that our plans and expectations will be achieved. Examples of forward-looking statements include, but are not limited to, statements we make regarding guidance and projected financial results for the year 2024; the effects of general economic conditions on our business; statements about the benefits of acquisitions or divestitures, including future financial and operating results, and the successful integration of our acquisitions or completion of anticipated benefits or strategic initiatives; statements regarding our success and timing in developing and introducing new services and expanding our business; and other statements regarding our future financial performance and the company’s plans, objectives, expectations and intentions. Statements can generally be identified as forward-looking because they include words such as “believes,” “anticipates,” “expects,” “intends,” “plan,” “forecast,” “could,” “should,” or words of similar meaning. Although we believe that the plans and expectations reflected in any forward-looking statements are based on reasonable assumptions, we can give no assurance that our plans and expectations will be attained, and therefore actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements.

In addition to factors previously disclosed in Global Payments’ reports filed with the SEC and those identified elsewhere in this communication, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: the effects of global economic, political, market, health and social events or other conditions; foreign currency exchange, inflation and rising interest rate risks; difficulties, delays and higher than anticipated costs related to integrating the businesses of acquired companies, including with respect to implementing controls to prevent a material security breach of any internal systems or to successfully manage credit and fraud risks in business units; the effect of a security breach or operational failure on our business; failing to comply with the applicable requirements of Visa, Mastercard or other payment networks or card schemes or changes in those requirements; the ability to maintain Visa and Mastercard registration and financial institution sponsorship; the ability to retain, develop and hire key personnel; the diversion of management’s attention from ongoing business operations; the continued availability of capital and financing; increased competition in the markets in which we operate and our ability to increase our market share in existing markets and expand into new markets; our ability to safeguard our data; risks associated with our indebtedness; our ability to meet environmental, social or governance targets, goals and commitments; the potential effect of climate change including natural disasters; the effects of new or changes in current laws, regulations, credit card association rules or other industry standards on us or our partners and customers, including privacy and cybersecurity laws and regulations; and other events beyond our control, and other factors included in the “Risk Factors” section in our most recent Annual Report on Form 10-K and in other documents that we file with the SEC, which are available at https://www.sec.gov.

These cautionary statements qualify all of our forward-looking statements, and you are cautioned not to place undue reliance on these forward-looking statements. Our forward-looking statements speak only as of the date they are made and should not be relied upon as representing our plans and expectations as of any subsequent date. While we may elect to update or revise forward-looking statements at some time in the future, we specifically disclaim any obligation to publicly release the results of any revisions to our forward-looking statements, except as required by law.

 

SCHEDULE 1

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

GLOBAL PAYMENTS INC. AND SUBSIDIARIES

(In thousands, except per share data)

 

 

Three Months Ended

 

Years Ended

 

December 31,

 

December 31,

 

2023

 

2022

 

% Change

 

2023

 

2022

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

$

2,433,812

 

 

$

2,252,984

 

 

8.0

%

 

$

9,654,419

 

 

$

8,975,515

 

 

7.6

%

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Cost of service

 

922,284

 

 

 

927,911

 

 

(0.6

)%

 

 

3,727,521

 

 

 

3,778,617

 

 

(1.4

)%

Selling, general and administrative

 

1,015,164

 

 

 

919,495

 

 

10.4

%

 

 

4,073,768

 

 

 

3,524,578

 

 

15.6

%

Impairment of goodwill

 

 

 

 

 

 

%

 

 

 

 

 

833,075

 

 

nm

Net (gain) loss on business dispositions

 

(2,351

)

 

 

(2,051

)

 

14.6

%

 

 

136,744

 

 

 

199,094

 

 

(31.3

)%

 

 

1,935,097

 

 

 

1,845,355

 

 

 

 

 

7,938,033

 

 

 

8,335,364

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

498,715

 

 

 

407,630

 

 

22.3

%

 

 

1,716,386

 

 

 

640,151

 

 

168.1

%

 

 

 

 

 

 

 

 

 

 

 

 

Interest and other income

 

38,881

 

 

 

8,544

 

 

355.1

%

 

 

113,711

 

 

 

33,604

 

 

238.4

%

Interest and other expense

 

(169,687

)

 

 

(121,778

)

 

39.3

%

 

 

(660,150

)

 

 

(449,433

)

 

46.9

%

 

 

(130,806

)

 

 

(113,234

)

 

 

 

 

(546,439

)

 

 

(415,829

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes and equity in income of equity method investments

 

367,909

 

 

 

294,396

 

 

25.0

%

 

 

1,169,947

 

 

 

224,322

 

 

nm

Income tax expense

 

9,272

 

 

 

47,444

 

 

(80.5

)%

 

 

209,020

 

 

 

166,694

 

 

25.4

%

Income before equity in income of equity investments

 

358,637

 

 

 

246,952

 

 

45.2

%

 

 

960,927

 

 

 

57,628

 

 

nm

Equity in income of equity method investments, net of tax

 

13,795

 

 

 

11,611

 

 

18.8

%

 

 

67,896

 

 

 

85,685

 

 

(20.8

)%

Net income

 

372,432

 

 

 

258,563

 

 

44.0

%

 

 

1,028,823

 

 

 

143,313

 

 

nm

Net income attributable to noncontrolling interests

 

(11,136

)

 

 

(9,257

)

 

20.3

%

 

 

(42,590

)

 

 

(31,820

)

 

33.8

%

Net income attributable to Global Payments

$

361,296

 

 

$

249,306

 

 

44.9

%

 

$

986,233

 

 

$

111,493

 

 

nm

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share attributable to Global Payments:

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

$

1.39

 

 

$

0.94

 

 

47.9

%

 

$

3.78

 

 

$

0.41

 

 

nm

Diluted earnings per share

$

1.38

 

 

$

0.94

 

 

46.8

%

 

$

3.77

 

 

$

0.40

 

 

nm

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average number of shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

260,375

 

 

 

265,637

 

 

 

 

 

261,126

 

 

 

275,191

 

 

 

Diluted

 

261,102

 

 

 

265,963

 

 

 

 

 

261,698

 

 

 

275,576

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Note: nm = not meaningful.

 

SCHEDULE 2

NON-GAAP FINANCIAL MEASURES (UNAUDITED)

GLOBAL PAYMENTS INC. AND SUBSIDIARIES

(In thousands, except per share data)

 

 

Three Months Ended

 

Years Ended

 

December 31,

 

December 31,

 

2023

 

2022

 

% Change

 

2023

 

2022

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net revenue

$

2,186,240

 

$

2,022,309

 

8.1

%

 

$

8,670,965

 

$

8,091,650

 

7.2

%

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted operating income

$

978,506

 

$

898,201

 

8.9

%

 

$

3,867,524

 

$

3,533,644

 

9.4

%

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income attributable to Global Payments

$

692,206

 

$

643,082

 

7.6

%

 

$

2,727,407

 

$

2,569,331

 

6.2

%

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted diluted earnings per share attributable to Global Payments

$

2.65

 

$

2.42

 

9.5

%

 

$

10.42

 

$

9.32

 

11.8

%

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Non-GAAP(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net revenue(1)

$

2,186,240

 

$

1,898,631

 

15.1

%

 

$

8,525,523

 

$

7,527,748

 

13.3

%

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted operating income(1)

$

978,506

 

$

839,787

 

16.5

%

 

$

3,794,294

 

$

3,345,706

 

13.4

%

----------------------------------------------------------------------------------

(1)

The supplemental non-GAAP information reflects the divestiture of our consumer business which closed in April 2023.

 

 

 

See Schedules 6 and 7 for a reconciliation of each non-GAAP financial measure to the most comparable GAAP measure, Schedules 8 and 9 for a reconciliation of adjusted net revenue and adjusted operating income by segment and supplemental non-GAAP information to the most comparable GAAP measure, and Schedule 10 for a discussion of non-GAAP financial measures.

 

SCHEDULE 3

SEGMENT INFORMATION (UNAUDITED)

GLOBAL PAYMENTS INC. AND SUBSIDIARIES

(In thousands)

 

 

 

Three Months Ended

 

 

 

 

 

 

December 31, 2023

 

December 31, 2022

 

% Change

 

 

GAAP

 

Non-GAAP

 

GAAP

 

Non-GAAP

 

GAAP

 

Non-GAAP

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Merchant Solutions

 

$

1,819,885

 

 

$

1,670,482

 

 

$

1,553,856

 

 

$

1,409,564

 

 

17.1

%

 

18.5

%

Issuer Solutions

 

 

629,674

 

 

 

530,649

 

 

 

582,616

 

 

 

501,326

 

 

8.1

%

 

5.8

%

Consumer Solutions

 

 

 

 

 

 

 

 

142,401

 

 

 

136,491

 

 

nm

 

nm

Intersegment eliminations

 

 

(15,747

)

 

 

(14,891

)

 

 

(25,889

)

 

 

(25,072

)

 

39.2

%

 

40.6

%

 

 

$

2,433,812

 

 

$

2,186,240

 

 

$

2,252,984

 

 

$

2,022,309

 

 

8.0

%

 

8.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

Merchant Solutions

 

$

596,633

 

 

$

797,346

 

 

$

509,682

 

 

$

681,718

 

 

17.1

%

 

17.0

%

Issuer Solutions

 

 

117,419

 

 

 

251,003

 

 

 

112,025

 

 

 

241,919

 

 

4.8

%

 

3.8

%

Consumer Solutions

 

 

 

 

 

 

 

 

(14,141

)

 

 

58,414

 

 

nm

 

nm

Corporate

 

 

(217,688

)

 

 

(69,843

)

 

 

(201,987

)

 

 

(83,850

)

 

(7.8

)%

 

16.7

%

Net gain on business dispositions

 

 

2,351

 

 

 

 

 

 

2,051

 

 

 

 

 

(14.7

)%

 

nm

 

 

$

498,715

 

 

$

978,506

 

 

$

407,630

 

 

$

898,201

 

 

22.3

%

 

8.9

%

 

 

Years Ended

 

 

 

 

 

 

December 31, 2023

 

December 31, 2022

 

% Change

 

 

GAAP

 

Non-GAAP

 

GAAP

 

Non-GAAP

 

GAAP

 

Non-GAAP

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Merchant Solutions

 

$

7,151,793

 

 

$

6,536,966

 

 

$

6,204,917

 

 

$

5,630,713

 

 

15.3

%

 

16.1

%

Issuer Solutions

 

 

2,398,870

 

 

 

2,045,883

 

 

 

2,245,623

 

 

 

1,943,087

 

 

6.8

%

 

5.3

%

Consumer Solutions

 

 

182,740

 

 

 

163,027

 

 

 

620,482

 

 

 

609,833

 

 

nm

 

nm

Intersegment eliminations

 

 

(78,984

)

 

 

(74,911

)

 

 

(95,507

)

 

 

(91,983

)

 

17.3

%

 

18.6

%

 

 

$

9,654,419

 

 

$

8,670,965

 

 

$

8,975,515

 

 

$

8,091,650

 

 

7.6

%

 

7.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

Merchant Solutions

 

$

2,345,255

 

 

$

3,148,540

 

 

$

2,040,255

 

 

$

2,758,004

 

 

14.9

%

 

14.2

%

Issuer Solutions

 

 

409,807

 

 

 

948,799

 

 

 

356,215

 

 

 

881,980

 

 

15.0

%

 

7.6

%

Consumer Solutions

 

 

(3,908

)

 

 

73,230

 

 

 

53,594

 

 

 

187,936

 

 

nm

 

nm

Corporate

 

 

(898,024

)

 

 

(303,045

)

 

 

(777,744

)

 

 

(294,278

)

 

(15.5

)%

 

(3.0

)%

Impairment of goodwill

 

 

 

 

 

 

 

 

(833,075

)

 

 

 

 

nm

 

%

Net loss on business dispositions

 

 

(136,744

)

 

 

 

 

 

(199,094

)

 

 

 

 

31.3

%

 

nm

 

 

$

1,716,386

 

 

$

3,867,524

 

 

$

640,151

 

 

$

3,533,644

 

 

168.1

%

 

9.4

%

----------------------------------------------------------------------------------

See Schedules 8 and 9 for a reconciliation of adjusted net revenue and adjusted operating income by segment to the most comparable GAAP measures and Schedule 10 for a discussion of non-GAAP financial measures.

 

Note: Amounts may not sum due to rounding.

 

Note: nm = not meaningful.

 

SCHEDULE 4

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

GLOBAL PAYMENTS INC. AND SUBSIDIARIES

(In thousands, except share data)

 

 

December 31, 2023

 

December 31, 2022

 

 

 

 

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

2,088,887

 

 

$

1,997,566

 

Accounts receivable, net

 

1,120,078

 

 

 

998,332

 

Settlement processing assets

 

4,097,417

 

 

 

2,519,114

 

Current assets held for sale

 

6,451

 

 

 

138,815

 

Prepaid expenses and other current assets

 

760,926

 

 

 

660,321

 

Total current assets

 

8,073,759

 

 

 

6,314,148

 

Goodwill

 

26,743,523

 

 

 

23,320,736

 

Other intangible assets, net

 

10,168,046

 

 

 

9,658,374

 

Property and equipment, net

 

2,190,005

 

 

 

1,838,809

 

Deferred income taxes

 

111,712

 

 

 

37,907

 

Noncurrent assets held for sale

 

327

 

 

 

1,295,799

 

Notes receivable

 

713,123

 

 

 

 

Other noncurrent assets

 

2,569,691

 

 

 

2,343,241

 

Total assets

$

50,570,186

 

 

$

44,809,014

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

Current liabilities:

 

 

 

Settlement lines of credit

$

981,244

 

 

$

747,111

 

Current portion of long-term debt

 

620,585

 

 

 

1,169,330

 

Accounts payable and accrued liabilities

 

2,823,638

 

 

 

2,442,560

 

Settlement processing obligations

 

3,698,921

 

 

 

2,413,799

 

Current liabilities held for sale

 

1,341

 

 

 

125,891

 

Total current liabilities

 

8,125,729

 

 

 

6,898,691

 

Long-term debt

 

15,692,297

 

 

 

12,289,248

 

Deferred income taxes

 

2,242,105

 

 

 

2,428,412

 

Noncurrent liabilities held for sale

 

 

 

 

4,478

 

Other noncurrent liabilities

 

722,540

 

 

 

647,975

 

Total liabilities

 

26,782,671

 

 

 

22,268,804

 

Commitments and contingencies

 

 

 

Redeemable noncontrolling interests

 

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 December 31, 2023 and 2022; 260,382,746 shares issued and outstanding at December 31, 2023 and 263,081,872 shares issued and outstanding at December 31, 2022

 

 

 

 

 

Paid-in capital

 

19,800,953

 

 

 

19,978,095

 

Retained earnings

 

3,457,182

 

 

 

2,731,380

 

Accumulated other comprehensive loss

 

(258,925

)

 

 

(405,969

)

Total Global Payments shareholders’ equity

 

22,999,210

 

 

 

22,303,506

 

Nonredeemable noncontrolling interests

 

280,340

 

 

 

236,704

 

Total equity

 

23,279,550

 

 

 

22,540,210

 

Total liabilities, redeemable noncontrolling interests and equity

$

50,570,186

 

 

$

44,809,014

 

 

SCHEDULE 5

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

GLOBAL PAYMENTS INC. AND SUBSIDIARIES

(In thousands)

 

 

Years Ended December 31,

 

 

2023

 

 

 

2022

 

 

 

 

 

Cash flows from operating activities:

 

 

 

Net income

$

1,028,823

 

 

$

143,313

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

Depreciation and amortization of property and equipment

 

458,157

 

 

 

399,486

 

Amortization of acquired intangibles

 

1,318,535

 

 

 

1,262,969

 

Amortization of capitalized contract costs

 

123,405

 

 

 

109,701

 

Share-based compensation expense

 

208,994

 

 

 

163,261

 

Provision for operating losses and credit losses

 

97,103

 

 

 

116,879

 

Noncash lease expense

 

65,307

 

 

 

78,935

 

Deferred income taxes

 

(499,974

)

 

 

(315,495

)

Equity in income of equity method investments, net of tax

 

(67,896

)

 

 

(85,685

)

Facilities exit charges

 

5,994

 

 

 

30,437

 

Distributions received on investments

 

18,267

 

 

 

45,521

 

Impairment of goodwill

 

 

 

 

833,075

 

Net loss on business dispositions

 

136,744

 

 

 

199,094

 

Other, net

 

18,545

 

 

 

993

 

Changes in operating assets and liabilities, net of the effects of business combinations:

 

 

 

Accounts receivable

 

(78,647

)

 

 

(111,974

)

Settlement processing assets and obligations, net

 

(345,898

)

 

 

(313,333

)

Prepaid expenses and other assets

 

(289,826

)

 

 

(295,980

)

Accounts payable and other liabilities

 

51,108

 

 

 

(17,157

)

Net cash provided by operating activities

 

2,248,741

 

 

 

2,244,040

 

Cash flows from investing activities:

 

 

 

Business combinations and other acquisitions, net of cash and restricted cash acquired

 

(4,225,610

)

 

 

(65,672

)

Capital expenditures

 

(658,142

)

 

 

(615,652

)

Issuance of notes receivable

 

(50,000

)

 

 

 

Repayment of notes receivable

 

50,000

 

 

 

 

Net cash from sales of businesses

 

479,067

 

 

 

(29,755

)

Proceeds from sale of investments

 

42,135

 

 

 

33,046

 

Other, net

 

1,438

 

 

 

2,496

 

Net cash used in investing activities

 

(4,361,112

)

 

 

(675,537

)

Cash flows from financing activities:

 

 

 

Net borrowings from settlement lines of credit

 

220,682

 

 

 

285,644

 

Net borrowings from commercial paper notes

 

1,367,859

 

 

 

 

Proceeds from long-term debt

 

10,336,850

 

 

 

9,812,289

 

Repayments of long-term debt

 

(9,099,938

)

 

 

(7,895,131

)

Payments of debt issuance costs

 

(12,735

)

 

 

(48,635

)

Repurchases of common stock

 

(418,272

)

 

 

(2,921,307

)

Proceeds from stock issued under share-based compensation plans

 

60,345

 

 

 

44,127

 

Common stock repurchased - share-based compensation plans

 

(41,225

)

 

 

(38,601

)

Distributions to noncontrolling interests

 

(32,997

)

 

 

(23,031

)

Proceeds from noncontrolling interests

 

26,205

 

 

 

 

Payment of contingent consideration in business combination

 

(5,222

)

 

 

(15,726

)

Purchase of capped calls related to issuance of convertible notes

 

 

 

 

(302,375

)

Dividends paid

 

(260,431

)

 

 

(273,955

)

Net cash provided by (used in) financing activities

 

2,141,121

 

 

 

(1,376,701

)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

12,519

 

 

 

(99,219

)

Increase in cash, cash equivalents and restricted cash

 

41,269

 

 

 

92,583

 

Cash, cash equivalents and restricted cash, beginning of the period

 

2,215,606

 

 

 

2,123,023

 

Cash, cash equivalents and restricted cash, end of the period

$

2,256,875

 

 

$

2,215,606

 

 

SCHEDULE 6

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP MEASURES (UNAUDITED)

GLOBAL PAYMENTS INC. AND SUBSIDIARIES

(In thousands, except per share data)

 

 

 

Three Months Ended December 31, 2023

 

 

GAAP

 

Net Revenue

Adjustments(1)

 

Earnings

Adjustments(2)

 

Income

Taxes on

Adjustments(3)

 

Non-GAAP

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

2,433,812

 

$

(247,572

)

 

$

 

$

 

 

$

2,186,240

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

$

498,715

 

$

510

 

 

$

479,281

 

$

 

 

$

978,506

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Global Payments

 

$

361,296

 

$

510

 

 

$

478,613

 

$

(148,213

)

 

$

692,206

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share attributable to Global Payments

 

$

1.38

 

 

 

 

 

 

 

$

2.65

 

 

 

 

 

 

 

 

 

 

 

Diluted weighted average shares outstanding

 

 

261,102

 

 

 

 

 

 

 

 

261,102

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31, 2022

 

 

GAAP

 

Net Revenue

Adjustments(1)

 

Earnings

Adjustments(2)

 

Income

Taxes on

Adjustments(3)

 

Non-GAAP

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

2,252,984

 

$

(230,675

)

 

$

 

$

 

 

$

2,022,309

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

$

407,630

 

$

(5,255

)

 

$

495,825

 

$

 

 

$

898,201

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Global Payments

 

$

249,306

 

$

(5,255

)

 

$

498,493

 

$

(99,462

)

 

$

643,082

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share attributable to Global Payments

 

$

0.94

 

 

 

 

 

 

 

$

2.42

 

 

 

 

 

 

 

 

 

 

 

Diluted weighted average shares outstanding

 

 

265,963

 

 

 

 

 

 

 

 

265,963

----------------------------------------------------------------------------------

(1)

Includes adjustments to revenues for gross-up related payments (included in operating expenses) associated with certain lines of business to reflect economic benefits to the company. For the three months ended December 31, 2023 and 2022, net revenue adjustments also included $0.5 million and $0.7 million, respectively, to eliminate the effect of acquisition accounting fair value adjustments for software-related contract liabilities associated with acquired businesses. Adjustments for the three months ended December 31, 2022 also included a $5.9 million adjustment to exclude revenues that were associated with certain excluded expenses of our consumer business, which was divested in April 2023.

 

 

(2)

For the three months ended December 31, 2023, earnings adjustments to operating income included $332.5 million in cost of services (COS) and $149.2 million in selling, general and administrative expenses (SG&A). Adjustments to COS consisted of amortization of acquired intangibles of $332.5 million. Adjustments to SG&A included share-based compensation expense of $35.7 million, acquisition, integration and separation expenses of $97.5 million, facilities exit charges of $3.5 million, employee severance charges of $7.9 million, and other items of $4.6 million. Earnings adjustments to operating income also included a $2.4 million gain on business dispositions.

 

 

 

For the three months ended December 31, 2022, earnings adjustments to operating income included $302.1 million in COS and $195.8 million in SG&A. Adjustments to COS included amortization of acquired intangibles of $300.6 million and other items of $1.5 million. Adjustments to SG&A included share-based compensation expense of $40.8 million, acquisition, integration and separation expenses of $147.1 million, facilities exit charges of $7.1 million, and other items of $0.8 million.

 

 

 

Acquisition, integration and separation expenses for the three months ended December 31, 2022 included $76.5 million related to our divested consumer business. These incremental expenses, which include card and marketing expenses, compensation and benefit expenses, and other expenses, were incurred as a result of contractual obligations with the purchasers of the consumer business and do not reflect the manner in which the company would have operated the business and would not have otherwise been incurred absent the transaction.

 

 

 

For the three months ended December 31, 2022, earnings adjustments to operating income also included a $2.1 million favorable adjustment to loss on business dispositions.

 

 

(3)

Income taxes on adjustments reflect the tax effect of earnings adjustments to income before income taxes. The tax rate used in determining the tax impact of earnings adjustments is either the jurisdictional statutory rate in effect at the time of the adjustment or the jurisdictional expected annual effective tax rate for the period, depending on the nature and timing of the adjustment. In addition, for the three months ended December 31, 2023, income taxes on adjustments include the removal of tax benefits related to corporate restructuring.

 

 

 

See "Non-GAAP Financial Measures" discussion on Schedule 10.

 

 

 

Note: Amounts may not sum due to rounding.

 

SCHEDULE 7

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP MEASURES (UNAUDITED)

GLOBAL PAYMENTS INC. AND SUBSIDIARIES

(In thousands, except per share data)

 

 

 

Year Ended December 31, 2023

 

 

GAAP

 

Net Revenue

Adjustments(1)

 

Earnings

Adjustments(2)

 

Income

Taxes on

Adjustments(3)

 

Non-GAAP

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

9,654,419

 

$

(983,454

)

 

$

 

$

 

 

$

8,670,965

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

$

1,716,386

 

$

(17,590

)

 

$

2,168,728

 

$

 

 

$

3,867,524

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Global Payments

 

$

986,233

 

$

(17,590

)

 

$

2,186,359

 

$

(427,595

)

 

$

2,727,407

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share attributable to Global Payments

 

$

3.77

 

 

 

 

 

 

 

$

10.42

 

 

 

 

 

 

 

 

 

 

 

Diluted weighted average shares outstanding

 

 

261,698

 

 

 

 

 

 

 

 

261,698

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 2022

 

 

GAAP

 

Net Revenue

Adjustments(1)

 

Earnings

Adjustments(2)

 

Income

Taxes on

Adjustments(3)

 

Non-GAAP

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

8,975,515

 

$

(883,865

)

 

$

 

$

 

 

$

8,091,650

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

$

640,151

 

$

(3,735

)

 

$

2,897,227

 

$

 

 

$

3,533,644

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Global Payments

 

$

111,493

 

$

(3,735

)

 

$

2,891,721

 

$

(430,148

)

 

$

2,569,331

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share attributable to Global Payments

 

$

0.40

 

 

 

 

 

 

 

$

9.32

 

 

 

 

 

 

 

 

 

 

 

Diluted weighted average shares outstanding

 

 

275,576

 

 

 

 

 

 

 

 

275,576

----------------------------------------------------------------------------------

(1)

Includes adjustments to revenues for gross-up related payments (included in operating expenses) associated with certain lines of business to reflect economic benefits to the company. For the years ended December 31, 2023 and 2022, net revenue adjustments also included $2.1 million and $6.9 million, respectively, to eliminate the effect of acquisition accounting fair value adjustments for software-related contract liabilities associated with acquired businesses. Adjustments for the years ended December 31, 2023 and 2022, also included a $19.7 million and $10.6 million adjustment, respectively, to exclude revenues that were associated with certain excluded expenses of our consumer business, which was divested in April 2023.

 

 

(2)

For the year ended December 31, 2023, earnings adjustments to operating income included $1,321.2 million in COS and $710.8 million in SG&A. Adjustments to COS included amortization of acquired intangibles of $1,318.5 million and other items of $2.7 million. Adjustments to SG&A included share-based compensation expense of $209.0 million, acquisition, integration and separation expenses of $433.9 million, facilities exit charges of $18.5 million, employee severance charges of $39.4 million, and other items of $10.0 million. Earnings adjustments to operating income also included a $136.7 million loss on business dispositions.

 

 

 

Acquisition, integration and separation expenses for the year ended December 31, 2023 included $93.6 million related to our divested consumer business. These incremental expenses, which include card and marketing expenses, compensation and benefit expenses, and other expenses, were incurred as a result of contractual obligations with the purchasers of the consumer business and do not reflect the manner in which the company would have operated the business and would not have otherwise been incurred absent the transaction.

 

 

 

Earnings adjustments to net income also included an allowance for current expected credit losses (CECL) of $15.2 million within interest and other expense related to the seller financing issued in connection with the business dispositions.

 

 

 

For the year ended December 31, 2022, earnings adjustments to operating income included $1,266.1 million in COS and $598.9 million in SG&A. Adjustments to COS included amortization of acquired intangibles of $1,263.0 million and other items of $3.1 million. Adjustments to SG&A included share-based compensation expense of $163.3 million, acquisition, integration and separation expenses of $366.7 million, facilities exit charges of $47.1 million, and other items of $21.8 million.

 

 

 

Acquisition, integration and separation expenses for the year ended December 31, 2022 included $110.6 million related to our divested consumer business. These incremental expenses, which include card and marketing expenses, compensation and benefit expenses, and other expenses, were incurred as a result of contractual obligations with the purchasers of the consumer business and do not reflect the manner in which the company would have operated the business and would not have otherwise been incurred absent the transaction.

 

 

 

For the year ended December 31, 2022, earnings adjustments to operating income also included a $833.1 million noncash goodwill impairment charge related to our former Business and Consumer Solutions segment, and a $199.1 million loss on business dispositions.

 

 

(3)

Income taxes on adjustments reflect the tax effect of earnings adjustments to income before income taxes. The tax rate used in determining the tax impact of earnings adjustments is either the jurisdictional statutory rate in effect at the time of the adjustment or the jurisdictional expected annual effective tax rate for the period, depending on the nature and timing of the adjustment. In addition, for the year ended December 31, 2023, income taxes on adjustments include the removal of tax expense related to business dispositions and removal of tax benefits related to corporate restructuring.

 

 

 

See "Non-GAAP Financial Measures" discussion on Schedule 10.

 

 

 

Note: Amounts may not sum due to rounding.

 

SCHEDULE 8

RECONCILIATION OF SEGMENT NON-GAAP FINANCIAL MEASURES TO GAAP MEASURES (UNAUDITED)

GLOBAL PAYMENTS INC. AND SUBSIDIARIES

(In thousands)

 

 

 

Three Months Ended December 31, 2023

 

 

 

 

 

 

GAAP

 

Net Revenue

Adjustments (1)

 

Earnings

Adjustments(2)

 

Non-GAAP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Merchant Solutions

 

$

1,819,885

 

 

$

(149,403

)

 

$

 

 

$

1,670,482

 

 

 

 

 

Issuer Solutions

 

 

629,674

 

 

 

(99,025

)

 

 

 

 

 

530,649

 

 

 

 

 

Consumer Solutions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intersegment Elimination

 

 

(15,747

)

 

 

856

 

 

 

 

 

 

(14,891

)

 

 

 

 

 

 

$

2,433,812

 

 

$

(247,572

)

 

$

 

 

$

2,186,240

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income:

 

 

 

 

 

 

 

 

 

 

 

 

Merchant Solutions

 

$

596,633

 

 

$

 

 

$

200,713

 

 

$

797,346

 

 

 

 

 

Issuer Solutions

 

 

117,419

 

 

 

510

 

 

 

133,074

 

 

 

251,003

 

 

 

 

 

Consumer Solutions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate

 

 

(217,688

)

 

 

 

 

 

147,845

 

 

 

(69,843

)

 

 

 

 

Net gain on business dispositions

 

 

2,351

 

 

 

 

 

 

(2,351

)

 

 

 

 

 

 

 

 

 

$

498,715

 

 

$

510

 

 

$

479,281

 

 

$

978,506

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31, 2022

 

 

 

 

GAAP

 

Net Revenue

Adjustments (1)

 

Earnings

Adjustments(2)

 

Non-GAAP

 

Consumer

Business (3)

 

Supplemental

Non-GAAP (3)

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Merchant Solutions

 

$

1,553,856

 

 

$

(144,292

)

 

$

 

 

$

1,409,564

 

 

$

 

 

$

1,409,564

 

Issuer Solutions

 

 

582,616

 

 

 

(81,290

)

 

 

 

 

 

501,326

 

 

 

 

 

 

501,326

 

Consumer Solutions

 

 

142,401

 

 

 

(5,910

)

 

 

 

 

 

136,491

 

 

 

(136,491

)

 

 

 

Intersegment Elimination

 

 

(25,889

)

 

 

817

 

 

 

 

 

 

(25,072

)

 

 

12,813

 

 

 

(12,259

)

 

 

$

2,252,984

 

 

$

(230,675

)

 

$

 

 

$

2,022,309

 

 

$

(123,678

)

 

$

1,898,631

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income:

 

 

 

 

 

 

 

 

 

 

 

 

Merchant Solutions

 

$

509,682

 

 

$

14

 

 

$

172,022

 

 

$

681,718

 

 

$

 

 

$

681,718

 

Issuer Solutions

 

 

112,025

 

 

 

642

 

 

 

129,252

 

 

 

241,919

 

 

 

 

 

 

241,919

 

Consumer Solutions

 

 

(14,141

)

 

 

(5,910

)

 

 

78,466

 

 

 

58,414

 

 

 

(58,414

)

 

 

 

Corporate

 

 

(201,987

)

 

 

 

 

 

118,137

 

 

 

(83,850

)

 

 

 

 

 

(83,850

)

Net gain on business dispositions

 

 

2,051

 

 

 

 

 

 

(2,051

)

 

 

 

 

 

 

 

 

 

 

 

$

407,630

 

 

$

(5,255

)

 

$

495,825

 

 

$

898,201

 

 

$

(58,414

)

 

$

839,787

 

------------------------------------------------------------------------------------------

(1)

Includes adjustments to revenues for gross-up related payments (included in operating expenses) associated with certain lines of business to reflect economic benefits to the company. For the three months ended December 31, 2023 and 2022, net revenue adjustments also included $0.5 million and $0.7 million, respectively, to eliminate the effect of acquisition accounting fair value adjustments for software-related contract liabilities associated with acquired businesses. Adjustments for the three months ended December 31, 2022 also included a $5.9 million adjustment to exclude revenues that were associated with certain excluded expenses of our consumer business, which was divested in April 2023.

 

 

(2)

For the three months ended December 31, 2023, earnings adjustments to operating income included $332.5 million in COS and $149.2 million in SG&A. Adjustments to COS consisted of amortization of acquired intangibles of $332.5 million. Adjustments to SG&A included share-based compensation expense of $35.7 million, acquisition, integration and separation expenses of $97.5 million, facilities exit charges of $3.5 million, employee severance charges of $7.9 million, and other items of $4.6 million. Earnings adjustments to operating income also included a $2.4 million gain on business dispositions.

 

 

 

For the three months ended December 31, 2022, earnings adjustments to operating income included $302.1 million in COS and $195.8 million in SG&A. Adjustments to COS included amortization of acquired intangibles of $300.6 million and other items of $1.5 million. Adjustments to SG&A included share-based compensation expense of $40.8 million, acquisition, integration and separation expenses of $147.1 million, facilities exit charges of $7.1 million, and other items of $0.8 million.

 

 

 

Acquisition, integration and separation expenses for the three months ended December 31, 2022 included $76.5 million related to our divested consumer business. These incremental expenses, which include card and marketing expenses, compensation and benefit expenses, and other expenses, were incurred as a result of contractual obligations with the purchasers of the consumer business and do not reflect the manner in which the company would have operated the business and would not have otherwise been incurred absent the transaction.

 

 

 

For the three months ended December 31, 2022, earnings adjustments to operating income also included a $2.1 million favorable adjustment to loss on business dispositions.

 

 

(3)

The supplemental non-GAAP information excludes the results of the consumer business that was divested in April 2023.

 

 

 

See "Non-GAAP Financial Measures" discussion on Schedule 10.

 

 

 

Note: Amounts may not sum due to rounding.

 

SCHEDULE 9

RECONCILIATION OF SEGMENT NON-GAAP FINANCIAL MEASURES TO GAAP MEASURES (UNAUDITED)

GLOBAL PAYMENTS INC. AND SUBSIDIARIES

(In thousands)

 

 

 

Year Ended December 31, 2023

 

 

GAAP

 

Net Revenue

Adjustments (1)

 

Earnings

Adjustments(2)

 

Non-GAAP

 

Consumer

Business (3)

 

Supplemental

Non-GAAP (3)

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Merchant Solutions

 

$

7,151,793

 

 

$

(614,827

)

 

$

 

$

6,536,966

 

 

$

 

 

$

6,536,966

 

Issuer Solutions

 

 

2,398,870

 

 

 

(352,987

)

 

 

 

 

2,045,883

 

 

 

 

 

 

2,045,883

 

Consumer Solutions

 

 

182,740

 

 

 

(19,713

)

 

 

 

 

163,027

 

 

 

(163,027

)

 

 

 

Intersegment Elimination

 

 

(78,984

)

 

 

4,073

 

 

 

 

 

(74,911

)

 

 

17,585

 

 

 

(57,326

)

 

 

$

9,654,419

 

 

$

(983,454

)

 

$

 

$

8,670,965

 

 

$

(145,442

)

 

$

8,525,523

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

Merchant Solutions

 

$

2,345,255

 

 

$

23

 

 

$

803,262

 

$

3,148,540

 

 

$

 

 

$

3,148,540

 

Issuer Solutions

 

 

409,807

 

 

 

2,100

 

 

 

536,892

 

 

948,799

 

 

 

 

 

 

948,799

 

Consumer Solutions

 

 

(3,908

)

 

 

(19,713

)

 

 

96,851

 

 

73,230

 

 

 

(73,230

)

 

 

 

Corporate

 

 

(898,024

)

 

 

 

 

 

594,979

 

 

(303,045

)

 

 

 

 

 

(303,045

)

Net loss on business dispositions

 

 

(136,744

)

 

 

 

 

 

136,744

 

 

 

 

 

 

 

 

 

 

 

$

1,716,386

 

 

$

(17,590

)

 

$

2,168,728

 

$

3,867,524

 

 

$

(73,230

)

 

$

3,794,294

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 2022

 

 

GAAP

 

Net Revenue

Adjustments(1)

 

Earnings

Adjustments(2)

 

Non-GAAP

 

Consumer

Business (3)

 

Supplemental

Non-GAAP (3)

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Merchant Solutions

 

$

6,204,917

 

 

$

(574,204

)

 

$

 

$

5,630,713

 

 

$

 

 

$

5,630,713

 

Issuer Solutions

 

 

2,245,623

 

 

 

(302,536

)

 

 

 

 

1,943,087

 

 

 

 

 

 

1,943,087

 

Consumer Solutions

 

 

620,482

 

 

 

(10,649

)

 

 

 

 

609,833

 

 

 

(609,833

)

 

 

 

Intersegment Elimination

 

 

(95,507

)

 

 

3,524

 

 

 

 

 

(91,983

)

 

 

45,931

 

 

 

(46,052

)

 

 

$

8,975,515

 

 

$

(883,865

)

 

$

 

$

8,091,650

 

 

$

(563,902

)

 

$

7,527,748

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

Merchant Solutions

 

$

2,040,255

 

 

$

166

 

 

$

717,583

 

$

2,758,004

 

 

$

 

 

$

2,758,004

 

Issuer Solutions

 

 

356,215

 

 

 

6,748

 

 

 

519,017

 

 

881,980

 

 

 

 

 

 

881,980

 

Consumer Solutions

 

 

53,594

 

 

 

(10,649

)

 

 

144,991

 

 

187,936

 

 

 

(187,936

)

 

 

 

Corporate

 

 

(777,744

)

 

 

 

 

 

483,466

 

 

(294,278

)

 

 

 

 

 

(294,278

)

Impairment of goodwill

 

 

(833,075

)

 

 

 

 

 

833,075

 

 

 

 

 

 

 

 

 

Net loss on business dispositions

 

 

(199,094

)

 

 

 

 

 

199,094

 

 

 

 

 

 

 

 

 

 

 

$

640,151

 

 

$

(3,735

)

 

$

2,897,227

 

$

3,533,644

 

 

$

(187,936

)

 

$

3,345,706

 

----------------------------------------------------------------------------------

(1)

Includes adjustments to revenues for gross-up related payments (included in operating expenses) associated with certain lines of business to reflect economic benefits to the company. For the years ended December 31, 2023 and 2022, net revenue adjustments also included $2.1 million and $6.9 million, respectively, to eliminate the effect of acquisition accounting fair value adjustments for software-related contract liabilities associated with acquired businesses. Adjustments for the years ended December 31, 2023 and 2022, also included a $19.7 million and $10.6 million adjustment, respectively, to exclude revenues that were associated with certain excluded expenses of our consumer business, which was divested in April 2023.

 

 

(2)

For the year ended December 31, 2023, earnings adjustments to operating income included $1,321.2 million in COS and $710.8 million in SG&A. Adjustments to COS included amortization of acquired intangibles of $1,318.5 million and other items of $2.7 million. Adjustments to SG&A included share-based compensation expense of $209.0 million, acquisition, integration and separation expenses of $433.9 million, facilities exit charges of $18.5 million, employee severance charges of $39.4 million, and other items of $10.0 million. Earnings adjustments to operating income also included a $136.7 million loss on business dispositions.

 

 

 

Acquisition, integration and separation expenses for the year ended December 31, 2023 included $93.6 million related to our divested consumer business. These incremental expenses, which include card and marketing expenses, compensation and benefit expenses, and other expenses, were incurred as a result of contractual obligations with the purchasers of the consumer business and do not reflect the manner in which the company would have operated the business and would not have otherwise been incurred absent the transaction.

 

 

 

For the year ended December 31, 2022, earnings adjustments to operating income included $1,266.1 million in COS and $598.9 million in SG&A. Adjustments to COS included amortization of acquired intangibles of $1,263.0 million and other items of $3.1 million. Adjustments to SG&A included share-based compensation expense of $163.3 million, acquisition, integration and separation expenses of $366.7 million, facilities exit charges of $47.1 million, and other items of $21.8 million.

 

 

 

Acquisition, integration and separation expenses for the year ended December 31, 2022 included $110.6 million related to our divested consumer business. These incremental expenses, which include card and marketing expenses, compensation and benefit expenses, and other expenses, were incurred as a result of contractual obligations with the purchasers of the consumer business and do not reflect the manner in which the company would have operated the business and would not have otherwise been incurred absent the transaction.

 

 

 

For the year ended December 31, 2022, earnings adjustments to operating income also included a $833.1 million noncash goodwill impairment charge related to our former Business and Consumer Solutions segment, and a $199.1 million loss on business dispositions.

 

 

(3)

The supplemental non-GAAP information excludes the results of the consumer business that was divested in April 2023.

 

 

 

See "Non-GAAP Financial Measures" discussion on Schedule 10.

 

 

 

Note: Amounts may not sum due to rounding.

 

SCHEDULE 10

OUTLOOK SUMMARY (UNAUDITED)

GLOBAL PAYMENTS INC. AND SUBSIDIARIES

(In millions, except per share data)

 

 

 

2023

 

2024 Outlook

 

Growth

Revenues:

 

 

 

 

 

 

GAAP revenues

 

$9,654

 

 

$10,130 to $10,260

 

 

5% to 6%

Adjustments(1)

 

(983

)

 

(960

)

 

 

Adjusted net revenue

 

$8,671

 

 

$9,170 to $9,300

 

 

6% to 7%

 

 

 

 

 

 

 

Earnings Per Share:

 

 

 

 

 

 

GAAP diluted EPS

 

$3.77

 

 

$5.57 to $5.73

 

 

nm

Adjustments(2)

 

6.65

 

 

5.97

 

 

 

Adjusted EPS

 

$10.42

 

 

$11.54 to $11.70

 

 

11% to 12%

(1)

Includes adjustments to revenues for gross-up related payments (included in operating expenses) associated with certain lines of business to reflect economic benefit to the company. Amounts also included adjustments to eliminate the effect of acquisition accounting fair value adjustments for software-related contract liabilities associated with acquired businesses, as well as adjustments to exclude revenues that were associated with certain excluded expenses of our consumer business which was classified as assets held for sale on our balance sheet.

 

 

(2)

Adjustments to 2023 GAAP diluted EPS included the removal of 1) software-related contract liability adjustments described above of $0.01, 2) acquisition related amortization expense of $3.88, 3) share-based compensation expense of $0.62, 4) acquisition, integration, and separation expense of $1.22, 5) facilities exit charges of $0.05, 6) equity method investment earnings from our interest in a private equity investment fund of $0.02, 7) discrete tax items of $0.28, 8) gain/loss on business dispositions of $0.40, 9) other income and expense of $0.06, 10) the effect of noncontrolling interests and income taxes, as applicable, and 11) other items of $0.11.

 

 

Note: nm = not meaningful.

NON-GAAP FINANCIAL MEASURES

Global Payments supplements revenues, operating income, operating margin and net income and earnings per share (EPS) determined in accordance with U.S. GAAP by providing these measures with certain adjustments (such measures being non-GAAP financial measures) in this document to assist with evaluating our performance. In addition to GAAP measures, management uses these non-GAAP financial measures to focus on the factors the company believes are pertinent to the daily management of our operations. The constant currency growth measures adjust for the impact of exchange rates and are calculated using average exchange rates during the comparable period in the prior year. Management believes adjusted net revenue more closely reflects the economic benefits to the company's core business and allows for better comparisons with industry peers. Management uses these non-GAAP financial measures, together with other metrics, to set goals for and measure the performance of the business and to determine incentive compensation.

Adjusted net revenue, adjusted operating income, adjusted operating margin, adjusted net income and adjusted EPS should be considered in addition to, and not as substitutes for, revenues, operating income, net income and earnings per share determined in accordance with GAAP. The non-GAAP financial measures reflect management's judgment of particular items, and may not be comparable to similarly titled measures reported by other companies. Adjusted net revenue excludes gross-up related payments associated with certain lines of business to reflect economic benefits to the company. On a GAAP basis, these payments are presented gross in both revenues and operating expenses. Adjusted operating income, adjusted net income and adjusted EPS exclude acquisition-related amortization expense, share-based compensation expense, acquisition, integration and separation expense, gain or losses on business divestitures, and certain other items specific to each reporting period as more fully described in the accompanying reconciliations in Schedules 6 and 7. Adjusted operating margin is derived by dividing adjusted operating income by adjusted net revenue. The tax rate used in determining the income tax impact of earnings adjustments is either the jurisdictional statutory rate in effect at the time of the adjustment or the jurisdictional expected annual effective tax rate for the period, depending on the nature and timing of the adjustment.

The supplemental non-GAAP information excludes the results of the consumer business that was divested in April 2023. Management believes that providing such supplemental financial information should enhance shareholders’ ability to evaluate how the business will be managed going forward.

Global Payments today announced results for the fourth quarter and year ended December 31, 2023.

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