Global Payments Inc. (NYSE:GPN) is a leading payments technology company delivering innovative software and services to its customers globally. The company operates in two reportable segments: Merchant Solutions and Issuer Solutions. In 2023, Global Payments generated annual revenue of $9,654,419,000 and net income of $986,233,000. The company also produced annual operating cash flow of $2,248,741,000 and free cash flow of $1,590,599,000.

Business Overview

Global Payments has a long history of growth, both organically and through strategic acquisitions. The company's technologies, services and team member expertise allow it to provide a broad range of solutions that enable its customers to operate their businesses more efficiently across a variety of channels around the world.

Financials

In the first quarter of 2024, Global Payments reported revenues of $2,420,187,000, up 5.6% from the prior year period. The company's Merchant Solutions segment generated revenues of $1,834,094,000, an increase of 14.2% year-over-year. The Issuer Solutions segment reported revenues of $602,735,000, up 5.6% compared to the first quarter of 2023. Consolidated operating income for the quarter was $452,252,000, a significant improvement from $56,735,000 in the prior year period.

Segment Performance

The strong performance in the Merchant Solutions segment was driven by an increase in transaction volumes, including from the EVO Payments business acquired in March 2023. The company also saw continued growth in its software-led strategies, including its partner ISV channel, point-of-sale software solutions and vertical market software businesses.

In the Issuer Solutions segment, the core business grew mid-single digits in the first quarter, driven by ongoing strength in volume-based revenue. The segment also benefited from 8 customer renewals during the quarter, including extensions with long-standing clients such as Virgin Money, Citizens and Scotiabank.

Geographic Performance

Geographically, Global Payments saw double-digit growth in Spain, Central Europe, Poland and Greece in the first quarter. The company's LatAm business also continued to perform well, benefiting from strong secular payment trends in Mexico and Chile.

Outlook

Looking ahead, Global Payments provided guidance for the full year 2024. The company expects reported adjusted net revenue to range from $9.17 billion to $9.30 billion, reflecting growth of 6% to 7% over 2023. Global Payments also anticipates annual adjusted operating margin to expand up to 50 basis points, driven by the benefits of its ongoing shift towards technology enablement.

At the segment level, the company expects its Merchant business to report adjusted net revenue growth of 9% or more for the full year 2024. This includes growth in the 7% to 8% range, excluding the impact of the EVO Payments acquisition and the disposition of the Gaming Solutions business. For the Issuer Solutions segment, Global Payments continues to anticipate adjusted net revenue growth in the 5% to 6% range compared to 2023.

Putting it all together, Global Payments expects adjusted earnings per share for the full year 2024 to be in the range of $11.54 to $11.70, reflecting growth of 11% to 12% over 2023. Excluding the impact of divestitures, the company expects adjusted EPS growth of 14% or more.

Conclusion

Global Payments' strong first quarter performance and positive outlook demonstrate the company's ability to execute on its software-centric strategy and capitalize on favorable secular trends in the payments industry. The company's diversified business model, with exposure to high-growth verticals and international markets, positions it well for continued success.

While the macroeconomic environment remains uncertain, Global Payments' resilient consumer trends, disciplined cost management and strategic investments position the company to deliver sustainable long-term growth and value for shareholders.