Global Payments’ Earnings Call Highlights Robust 2024 Performance

Global Payments ((GPN)) has held its Q4 earnings call. Read on for the main highlights of the call.

Global Payments recently held its earnings call for 2024, highlighting a robust financial performance with significant growth in both the Merchant and Issuer segments. Despite some challenges, the overall sentiment remains positive due to the company’s effective execution of its operational transformation and strategic initiatives.

Strong Financial Performance in 2024

Global Payments reported a 6% growth in adjusted net revenue, along with record adjusted operating margins and double-digit growth in adjusted earnings per share. The company generated approximately $3 billion in adjusted free cash flow and returned $1.8 billion to shareholders, underscoring its strong financial health and commitment to shareholder value.

Merchant Segment Success

The Merchant segment demonstrated impressive performance with over 7% growth in Q4, driven by strong results in the point-of-sale (POS) and software businesses. This growth was accompanied by a 25% increase in annual recurring revenue opportunities in North America, showcasing the segment’s robust expansion.

New Partnerships and Expansions

Global Payments expanded its relationships with major clients, including Whataburger and a multinational quick-service restaurant (QSR), and welcomed significant new clients in the education and real estate sectors. These partnerships highlight the company’s strategic focus on diversification and client growth.

Issuer Solutions Growth

The Issuer Solutions business concluded the year with record traditional accounts on file, totaling 885 million, and a promising pipeline of over 70 million accounts for future conversion, indicating strong potential for continued growth in this segment.

Operational Transformation Progress

The company increased its operational transformation target from over $500 million to more than $600 million in expected annual run rate operating income benefit by the first half of 2027, illustrating its commitment to operational efficiency and profitability.

Impact of Dispositions and FX Headwinds

Challenges such as dispositions and foreign exchange headwinds were noted, with a 175 basis point headwind expected for adjusted net revenue and adjusted earnings per share in 2025. These factors will require strategic management to mitigate their impact.

Softer Trends in Commercial Card and Paycard

The Issuer Solutions business observed softer trends in commercial card volumes and Paycard business, attributed to macroeconomic factors affecting corporate spending and hiring, which may impact future performance.

Exiting Subscale Markets

Global Payments is exiting several small markets in the Asia Pacific region where it is subscale, impacting adjusted net revenue by over 300 basis points, as part of its strategy to focus on more profitable areas.

Forward-Looking Guidance

For fiscal year 2025, Global Payments projects a constant currency adjusted net revenue growth of 5% to 6%, excluding dispositions. The company anticipates a 50 basis point expansion in adjusted operating margin and adjusted earnings per share growth of 10% to 11% on a constant currency basis, despite currency fluctuations. The Merchant Solutions segment is expected to grow around 6%, with the Issuer Solutions segment forecasted at approximately 4%. Global Payments plans to invest $780 million in capital expenditures and return about $2 billion to shareholders, aligning with its strategic focus on simplifying operations and enhancing shareholder returns.

In conclusion, Global Payments’ earnings call reflected a positive outlook, driven by strong financial performance, strategic partnerships, and operational efficiencies. Although challenges such as FX headwinds and softer trends in certain areas were acknowledged, the company’s forward-looking guidance suggests continued growth and shareholder value enhancement.