Global Payments Reports First Quarter 2022 Results

May 2, 2022

Reaffirms Outlook for 2022

Signs Letter of Intent with Caixabank for Card Issuing Technologies

Reports Progress On Strategic Review of Netspend Consumer Business

Exits Russian Business

ATLANTA--(BUSINESS WIRE)-- Global Payments Inc. (NYSE: GPN) today announced results for the first quarter ended March 31, 2022.

"The resilience of our business continued through the first quarter of 2022 with performance exceeding our expectations despite incremental macro headwinds throughout the period," said Jeff Sloan, Chief Executive Officer. "We are especially pleased with the results for our Merchant Solutions business, which again demonstrated ongoing momentum as our strategies for differentiated growth continue to win in the marketplace.”

Sloan continued, "We are delighted to announce that Caixabank has now signed a letter of intent memorializing Global Payments as its technology partner for its card issuing businesses following our selection as the finalist company early in 2022. This is the largest new customer LOI for our Issuer Solutions business since 2013 and would more than double our implementation pipeline, providing opportunities for accelerated growth over the next several years. In conjunction with recent wins with a debit focus, our partnership with Caixabank positions Global Payments as a leading debit technology provider across Europe.

“We also continue to make progress on refining our portfolio mix by simplifying the composition of our businesses and maintaining our focus on our core corporate customers. First, we are pleased to report that we have made progress with the strategic review of the Netspend consumer business that we announced this past February.”

Sloan concluded, “Second, in regards to the exit of our Russian business, this has been a difficult time for our team members, customers and partners across the region and especially in Ukraine. We have provided financial and humanitarian support to those impacted.”

First Quarter 2022 Summary

  • GAAP revenues were $2.16 billion, compared to $1.99 billion in the first quarter of 2021; diluted earnings per share were $0.87 compared to $0.66 in the prior year; and operating margin was 17.4% compared to 13.8% in the prior year.
  • Adjusted net revenues increased 8% to $1.95 billion, compared to $1.81 billion in the first quarter of 2021.
  • Adjusted earnings per share increased 14% to $2.07, compared to $1.82 in the first quarter of 2021.
  • Adjusted operating margin of 41.1% expanded 50 basis points.

2022 Outlook

“We are pleased with our strong financial performance in the first quarter, which exceeded our expectations despite the ongoing impacts of the pandemic, incremental headwinds from the war in Europe and adverse foreign currency exchange rates,” said Paul Todd, Senior Executive Vice President and Chief Financial Officer. “We achieved high-single-digit adjusted net revenue growth, adjusted operating margin expansion and mid-teens adjusted earnings per share growth driven by consistent execution of our technology-enabled strategy.

“For 2022, the company continues to expect adjusted net revenue to be in a range of $8.42 billion to $8.50 billion, reflecting growth of 9% to 10% (10% to 11% on a constant currency basis) over 2021, and adjusted earnings per share to be in a range of $9.45 to $9.67, reflecting growth of 16% to 19% (17% to 20% on a constant currency basis) over 2021. We are raising our expectation for annual adjusted operating margin for 2022 to expand by up to 125 basis points (up to 175 basis points excluding acquisitions), an increase from the prior outlook of up to 100 basis points (up to 150 basis points excluding acquisitions).”

Todd concluded, “This outlook presumes continuing recovery from the pandemic worldwide and a stable global macroeconomic environment throughout 2022.”

Capital Allocation

Global Payments’ Board of Directors approved a dividend of $0.25 per share payable June 24, 2022 to shareholders of record as of June 10, 2022.

Conference Call

Global Payments’ management will host a live audio webcast today, May 2, 2022, 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.globalpaymentsinc.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, income, operating income, operating margin 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.

Reconciliations of each of the non-GAAP financial measures to the most directly comparable GAAP measure are included in the schedules to this release.

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 25,000 team members worldwide, Global Payments is a Fortune 500® company and a member of the S&P 500 with worldwide reach spanning over 170 countries throughout North America, Europe, Asia Pacific and Latin America. For more information, visit www.globalpayments.com and follow Global Payments on Twitter (@globalpayinc), LinkedIn and Facebook.

Forward-Looking Statements

Investors are cautioned that some of the statements we use in this report 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, uncertainties and assumptions 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 2022; the effects of the COVID-19 pandemic on our business, including estimates of the effects of the pandemic on our revenues, financial operating results and liquidity; timing and completion of anticipated benefits of acquisitions or strategic initiatives; our success and timing in developing and introducing new services; and future financial and operating results. 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, including the effects and duration of, and actions taken in response to, the COVID-19 pandemic and the evolving situation involving Ukraine and Russia; our ability to meet our liquidity needs in light of the effects of the COVID-19 pandemic or otherwise; difficulties, delays and higher than anticipated costs related to integrating the businesses of Global Payments and TSYS, 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 the Company’s 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, foreign currency exchange and interest rate risks; 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, such as acts of terrorism, and other factors included in the “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021, and in other documents that we file with the SEC, which are available at https://www.sec.gov. Any forward-looking statements speak only as of the date of this communication or as of the date they were made, and we undertake no obligation to update 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

 

March 31,

 

 

2022

 

 

 

2021

 

 

% Change

 

 

 

 

 

 

Revenues

$

2,156,254

 

 

$

1,990,007

 

 

8.4

%

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

Cost of service

 

957,158

 

 

 

925,246

 

 

3.4

%

Selling, general and administrative

 

823,149

 

 

 

789,502

 

 

4.3

%

 

 

1,780,307

 

 

 

1,714,748

 

 

3.8

%

 

 

 

 

 

 

Operating income

 

375,947

 

 

 

275,259

 

 

36.6

%

 

 

 

 

 

 

Interest and other income

 

1,711

 

 

 

4,234

 

 

(59.6

) %

Interest and other expense

 

(93,283

)

 

 

(83,141

)

 

12.2

%

 

 

(91,572

)

 

 

(78,907

)

 

16.1

%

 

 

 

 

 

 

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

 

284,375

 

 

 

196,352

 

 

44.8

%

Income tax expense

 

52,218

 

 

 

20,675

 

 

152.6

%

Income before equity in income of equity method investments

 

232,157

 

 

 

175,677

 

 

32.1

%

Equity in income of equity method investments, net of tax

 

17,479

 

 

 

22,733

 

 

(23.1

) %

Net income

 

249,636

 

 

 

198,410

 

 

25.8

%

Net income attributable to noncontrolling interests, net of income tax

 

(4,903

)

 

 

(1,729

)

 

183.6

%

Net income attributable to Global Payments

$

244,733

 

 

$

196,681

 

 

24.4

%

 

 

 

 

 

 

Earnings per share attributable to Global Payments:

 

 

 

 

 

Basic

$

0.87

 

 

$

0.66

 

 

31.8

%

Diluted

$

0.87

 

 

$

0.66

 

 

31.8

%

 

 

 

 

 

 

Weighted-average number of shares outstanding:

 

 

 

 

 

Basic

 

282,100

 

 

 

296,425

 

 

 

Diluted

 

282,567

 

 

 

297,671

 

 

 

 

SCHEDULE 2

NON-GAAP FINANCIAL MEASURES (UNAUDITED)

GLOBAL PAYMENTS INC. AND SUBSIDIARIES

(In thousands, except per share data)

 

 

Three Months Ended

 

March 31,

 

 

2022

 

 

2021

 

% Change

 

 

 

 

 

 

Adjusted net revenue

$

1,952,654

 

$

1,812,218

 

7.7

%

 

 

 

 

 

 

Adjusted operating income

 

802,471

 

 

735,115

 

9.2

%

 

 

 

 

 

 

Adjusted net income attributable to Global Payments

 

584,841

 

 

541,363

 

8.0

%

 

 

 

 

 

 

Adjusted diluted earnings per share attributable to Global Payments

$

2.07

 

$

1.82

 

13.7

%

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

See Schedules 6 and 7 for a reconciliation of each non-GAAP financial measure to the most comparable GAAP measure and Schedule 8 for a discussion of non-GAAP financial measures.

 

SCHEDULE 3

SEGMENT INFORMATION (UNAUDITED)

GLOBAL PAYMENTS INC. AND SUBSIDIARIES

(In thousands)

 

 

 

Three Months Ended

 

 

 

 

 

 

March 31, 2022

 

March 31, 2021

 

% Change

 

 

GAAP

 

Non-GAAP

 

GAAP

 

Non-GAAP

 

GAAP

 

Non-GAAP

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Merchant Solutions

 

$

1,473,019

 

 

$

1,337,193

 

 

$

1,267,872

 

 

$

1,149,820

 

 

16.2

%

 

16.3

%

Issuer Solutions

 

 

511,501

 

 

 

442,543

 

 

 

500,251

 

 

 

439,380

 

 

2.2

%

 

0.7

%

Business and Consumer Solutions

 

 

195,772

 

 

 

195,772

 

 

 

243,585

 

 

 

243,585

 

 

(19.6

) %

 

(19.6

) %

Intersegment Elimination

 

 

(24,038

)

 

 

(22,854

)

 

 

(21,701

)

 

 

(20,567

)

 

(10.8

) %

 

(11.1

) %

 

 

$

2,156,254

 

 

$

1,952,654

 

 

$

1,990,007

 

 

$

1,812,218

 

 

8.4

%

 

7.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income:

 

 

 

 

 

 

 

 

 

 

 

 

Merchant Solutions

 

$

444,530

 

 

$

632,117

 

 

$

339,989

 

 

$

532,142

 

 

30.7

%

 

18.8

%

Issuer Solutions

 

 

58,102

 

 

 

188,733

 

 

 

68,455

 

 

 

189,788

 

 

(15.1

) %

 

(0.6

) %

Business and Consumer Solutions

 

 

33,658

 

 

 

51,121

 

 

 

61,923

 

 

 

80,862

 

 

(45.6

) %

 

(36.8

) %

Corporate

 

 

(160,343

)

 

 

(69,500

)

 

 

(195,108

)

 

 

(67,677

)

 

17.8

%

 

(2.7

) %

 

 

$

375,947

 

 

$

802,471

 

 

$

275,259

 

 

$

735,115

 

 

36.6

%

 

9.2

%

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

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

 

Note: Amounts may not sum due to rounding.

 

SCHEDULE 4

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

GLOBAL PAYMENTS INC. AND SUBSIDIARIES

(In thousands, except share data)

 

 

March 31, 2022

 

December 31, 2021

 

 

 

 

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

2,045,277

 

 

$

1,979,308

 

Accounts receivable, net

 

972,961

 

 

 

946,247

 

Settlement processing assets

 

1,450,419

 

 

 

1,143,539

 

Prepaid expenses and other current assets

 

683,753

 

 

 

641,891

 

Total current assets

 

5,152,410

 

 

 

4,710,985

 

Goodwill

 

24,793,799

 

 

 

24,813,274

 

Other intangible assets, net

 

11,292,243

 

 

 

11,633,709

 

Property and equipment, net

 

1,716,257

 

 

 

1,687,586

 

Deferred income taxes

 

22,754

 

 

 

12,117

 

Other noncurrent assets

 

2,457,797

 

 

 

2,422,042

 

Total assets

$

45,435,260

 

 

$

45,279,713

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

Current liabilities:

 

 

 

Settlement lines of credit

$

497,345

 

 

$

484,202

 

Current portion of long-term debt

 

120,226

 

 

 

78,505

 

Accounts payable and accrued liabilities

 

2,550,112

 

 

 

2,542,256

 

Settlement processing obligations

 

1,699,491

 

 

 

1,358,051

 

Total current liabilities

 

4,867,174

 

 

 

4,463,014

 

Long-term debt

 

11,723,798

 

 

 

11,414,809

 

Deferred income taxes

 

2,725,980

 

 

 

2,793,427

 

Other noncurrent liabilities

 

723,503

 

 

 

739,046

 

Total liabilities

 

20,040,455

 

 

 

19,410,296

 

Commitments and contingencies

 

 

 

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, 2022 and December 31, 2021; 281,434,153 issued and outstanding at March 31, 2022 and 284,750,452 issued and outstanding at December 31, 2021

 

 

 

 

 

Paid-in capital

 

22,338,086

 

 

 

22,880,261

 

Retained earnings

 

3,068,683

 

 

 

2,982,122

 

Accumulated other comprehensive loss

 

(247,205

)

 

 

(234,182

)

Total Global Payments shareholders’ equity

 

25,159,564

 

 

 

25,628,201

 

Noncontrolling interests

 

235,241

 

 

 

241,216

 

Total equity

 

25,394,805

 

 

 

25,869,417

 

Total liabilities and equity

$

45,435,260

 

 

$

45,279,713

 

 

SCHEDULE 5

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

GLOBAL PAYMENTS INC. AND SUBSIDIARIES

(In thousands)

 

 

Three Months Ended

 

March 31, 2022

 

March 31, 2021

 

 

 

 

Cash flows from operating activities:

 

 

 

Net income

$

249,636

 

 

$

198,410

 

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

 

 

 

Depreciation and amortization of property and equipment

 

99,665

 

 

 

96,372

 

Amortization of acquired intangibles

 

329,007

 

 

 

329,201

 

Amortization of capitalized contract costs

 

25,906

 

 

 

21,050

 

Share-based compensation expense

 

38,399

 

 

 

37,165

 

Provision for operating losses and credit losses

 

28,523

 

 

 

23,405

 

Noncash lease expense

 

21,555

 

 

 

27,066

 

Deferred income taxes

 

(80,841

)

 

 

(56,390

)

Equity in income of equity method investments, net of tax

 

(17,479

)

 

 

(22,733

)

Distribution received on investments

 

6,022

 

 

 

438

 

Other, net

 

6,127

 

 

 

(6,285

)

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

 

 

 

Accounts receivable

 

(34,191

)

 

 

(37,141

)

Settlement processing assets and obligations, net

 

48,198

 

 

 

21,714

 

Prepaid expenses and other assets

 

(115,904

)

 

 

(33,128

)

Accounts payable and other liabilities

 

25,377

 

 

 

262

 

Net cash provided by operating activities

 

630,000

 

 

 

599,406

 

Cash flows from investing activities:

 

 

 

Business combinations and other acquisitions, net of cash acquired

 

(4,726

)

 

 

(11,074

)

Capital expenditures

 

(156,102

)

 

 

(86,159

)

Other, net

 

5

 

 

 

293

 

Net cash used in investing activities

 

(160,823

)

 

 

(96,940

)

Cash flows from financing activities:

 

 

 

Net borrowings from settlement lines of credit

 

16,497

 

 

 

108,488

 

Proceeds from long-term debt

 

1,529,157

 

 

 

1,987,005

 

Repayments of long-term debt

 

(1,176,496

)

 

 

(1,575,435

)

Payments of debt issuance costs

 

(1,706

)

 

 

(6,819

)

Repurchases of common stock

 

(649,654

)

 

 

(802,955

)

Proceeds from stock issued under share-based compensation plans

 

7,940

 

 

 

17,705

 

Common stock repurchased - share-based compensation plans

 

(26,295

)

 

 

(39,437

)

Distributions to noncontrolling interests

 

(5,534

)

 

 

 

Dividends paid

 

(70,243

)

 

 

(57,574

)

Net cash used in financing activities

 

(376,334

)

 

 

(369,022

)

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

 

(36,147

)

 

 

(21,141

)

Increase in cash, cash equivalents and restricted cash

 

56,696

 

 

 

112,303

 

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

 

2,123,023

 

 

 

2,089,771

 

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

$

2,179,719

 

 

$

2,202,074

 

 

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 March 31, 2022

 

 

GAAP

 

Net Revenue Adjustments(1)

 

Earnings Adjustments(2)

 

Income

Taxes on Adjustments(3)

 

Non-GAAP

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

2,156,254

 

$

(203,600

)

 

$

 

$

 

 

$

1,952,654

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

$

375,947

 

$

3,612

 

 

$

422,913

 

$

 

 

$

802,471

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Global Payments

 

$

244,733

 

$

3,612

 

 

$

423,578

 

$

(87,082

)

 

$

584,841

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share attributable to Global Payments

 

$

0.87

 

 

 

 

 

 

 

$

2.07

 

 

 

 

 

 

 

 

 

 

 

Diluted weighted average shares outstanding

 

 

282,567

 

 

 

 

 

 

 

 

282,567

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31, 2021

 

 

GAAP

 

Net Revenue Adjustments(1)

 

Earnings Adjustments(2)

 

Income
Taxes on Adjustments(3)

 

Non-GAAP

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

1,990,007

 

$

(177,789

)

 

$

 

$

 

 

$

1,812,218

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

$

275,259

 

$

1,749

 

 

$

458,107

 

$

 

 

$

735,115

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Global Payments

 

$

196,681

 

$

1,749

 

 

$

450,935

 

$

(108,002

)

 

$

541,363

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share attributable to Global Payments

 

$

0.66

 

 

 

 

 

 

 

$

1.82

 

 

 

 

 

 

 

 

 

 

 

Diluted weighted average shares outstanding

 

 

297,671

 

 

 

 

 

 

 

 

297,671

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

(1)

 

Represents 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 March 31, 2022 and March 31, 2021, net revenue adjustments include $3.6 million and $1.7 million, respectively, to eliminate the effect of acquisition accounting fair value adjustments for software-related contract liabilities associated with acquired businesses.

 

(2)

 

For the three months ended March 31, 2022, earnings adjustments to operating income included $329.2 million in cost of services (COS) and $93.7 million in selling, general and administrative expenses (SG&A). Adjustments to COS represent amortization of acquired intangibles of $329.0 million and other items of $0.2 million. Adjustments to SG&A include share-based compensation expense of $38.4 million, acquisition and integration expenses of $51.0 million and other items of $4.3 million.

 

For the three months ended March 31, 2021, earnings adjustments to operating income included $329.2 million in COS and $128.9 million in SG&A expenses. Adjustments to COS represent amortization of acquired intangibles of $329.2 million. Adjustments to SG&A include share-based compensation expense of $37.2 million and acquisition and integration expenses of $91.7 million. Net income attributable to Global Payments also reflects the removal of $6.3 million of equity method investment earnings from our interest in a private equity investment fund.

 

(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.

 

See "Non-GAAP Financial Measures" discussion on Schedule 8.

 

Note: Amounts may not sum due to rounding.

 

SCHEDULE 7

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

GLOBAL PAYMENTS INC. AND SUBSIDIARIES

(In thousands)

 

 

 

Three Months Ended March 31, 2022

 

 

GAAP

 

Net Revenue Adjustments (1)

 

Earnings Adjustments(2)

 

Non-GAAP

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

Merchant Solutions

 

$

1,473,019

 

 

$

(135,826

)

 

$

 

$

1,337,193

 

Issuer Solutions

 

 

511,501

 

 

 

(68,958

)

 

 

 

 

442,543

 

Business and Consumer Solutions

 

 

195,772

 

 

 

 

 

 

 

 

195,772

 

Intersegment Eliminations

 

 

(24,038

)

 

 

1,184

 

 

 

 

 

(22,854

)

 

 

$

2,156,254

 

 

$

(203,600

)

 

$

 

$

1,952,654

 

 

 

 

 

 

 

 

 

 

Operating income:

 

 

 

 

 

 

 

 

Merchant Solutions

 

$

444,530

 

 

$

80

 

 

$

187,508

 

$

632,117

 

Issuer Solutions

 

 

58,102

 

 

 

3,532

 

 

 

127,099

 

 

188,733

 

Business and Consumer Solutions

 

 

33,658

 

 

 

 

 

 

17,463

 

 

51,121

 

Corporate

 

 

(160,343

)

 

 

 

 

 

90,843

 

 

(69,500

)

 

 

$

375,947

 

 

$

3,612

 

 

$

422,913

 

$

802,471

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31, 2021

 

 

GAAP

 

Net Revenue Adjustments(1)

 

Earnings Adjustments(2)

 

Non-GAAP

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

Merchant Solutions

 

$

1,267,872

 

 

$

(118,052

)

 

$

 

$

1,149,820

 

Issuer Solutions

 

 

500,251

 

 

 

(60,871

)

 

 

 

 

439,380

 

Business and Consumer Solutions

 

 

243,585

 

 

 

 

 

 

 

 

243,585

 

Intersegment Eliminations

 

 

(21,701

)

 

 

1,134

 

 

 

 

 

(20,567

)

 

 

$

1,990,007

 

 

$

(177,789

)

 

$

 

$

1,812,218

 

 

 

 

 

 

 

 

 

 

Operating income:

 

 

 

 

 

 

 

 

Merchant Solutions

 

$

339,989

 

 

$

294

 

 

$

191,859

 

$

532,142

 

Issuer Solutions

 

 

68,455

 

 

 

1,455

 

 

 

119,878

 

 

189,788

 

Business and Consumer Solutions

 

 

61,923

 

 

 

 

 

 

18,939

 

 

80,862

 

Corporate

 

 

(195,108

)

 

 

 

 

 

127,431

 

 

(67,677

)

 

 

$

275,259

 

 

$

1,749

 

 

$

458,107

 

$

735,115

 

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

(1)

 

Represents 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 March 31, 2022 and March 31, 2021, net revenue adjustments include $3.6 million and $1.7 million, respectively, to eliminate the effect of acquisition accounting fair value adjustments for software-related contract liabilities associated with acquired businesses.

 

(2)

 

For the three months ended March 31, 2022, earnings adjustments to operating income included $329.2 million in COS and $93.7 million in SG&A. Adjustments to COS represent amortization of acquired intangibles of $329.0 million and other items of $0.2 million. Adjustments to SG&A include share-based compensation expense of $38.4 million, acquisition and integration expenses of $51.0 million and other items of $4.3 million.

 

For the three months ended March 31, 2021, earnings adjustments to operating income included $329.2 million in COS and $128.9 million in SG&A. Adjustments to COS represent amortization of acquired intangibles of $329.2 million. Adjustments to SG&A include share-based compensation expense of $37.2 million and acquisition and integration expenses of $91.7 million.

 

See "Non-GAAP Financial Measures" discussion on Schedule 8.

 

Note: Amounts may not sum due to rounding.

 

SCHEDULE 8

OUTLOOK SUMMARY (UNAUDITED)

GLOBAL PAYMENTS INC. AND SUBSIDIARIES

(In billions, except per share data)

 

 

 

2021

 

2022 Outlook

 

% Change

Revenues:

 

 

 

 

 

 

GAAP revenues

 

$8.52

 

$9.22 to $9.30

 

8% to 9%

Adjustments(1)

 

(0.78)

 

(0.80)

 

 

Adjusted net revenue

 

$7.74

 

$8.42 to $8.50

 

9% to 10%

 

 

 

 

 

 

 

Earnings Per Share:

 

 

 

 

 

 

GAAP diluted EPS

 

$3.29

 

$4.50 to $4.72

 

37% to 43%

Adjustments(2)

 

4.87

 

4.95

 

 

Adjusted EPS

 

$8.16

 

$9.45 to $9.67

 

16% to 19%

(1)

 

Represents 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 include adjustments to eliminate the effect of acquisition accounting fair value adjustments for software-related contract liabilities associated with acquired businesses.

 

(2)

 

Adjustments to 2021 GAAP diluted EPS include the removal of 1) software-related contract liability adjustments described above of $0.02, 2) acquisition related amortization expense of $3.39, 3) share-based compensation expense of $0.47, 4) acquisition and integration expense of $0.89, 5) facilities exit charges of $0.15, 6) other items of $(0.01), 7) equity method investment earnings from our interest in a private equity investment fund of $(0.16) and 8) discrete tax items of $0.12. Adjustments to 2021 GAAP diluted EPS include the effect on noncontrolling interests and income taxes, as applicable.

NON-GAAP FINANCIAL MEASURES

Global Payments supplements revenues, income, operating income, operating margin and 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. 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 EPS 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 and integration expense 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. Adjusted net revenue and adjusted EPS range on a constant currency basis excludes the estimated impact of foreign currency fluctuations and is calculated using average exchange rates during 2021. Adjusted EPS for 2022 excludes the impact of any impairment losses. 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.

Investor contact:
investor.relations@globalpay.com
Winnie Smith
770-829-8478

Media contact:
media.relations@globalpay.com
Emily Edmonds
770-829-8755

Source: Global Payments Inc.

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