Global Payments Inc. Reports Strong Growth in Fourth Quarter and Full Year 2023 Results
Revenue Growth: Q4 GAAP revenue rose to $2.43 billion, an 8% increase, with full year GAAP revenue up 7.6% to $9.65 billion.
Earnings Per Share: Adjusted EPS for Q4 increased by 10% to $2.65, while full year adjusted EPS grew by 12% to $10.42.
Operating Margin: Q4 adjusted operating margin expanded by 30 basis points to 44.8%, with full year adjusted operating margin up by 90 basis points to 44.6%.
Strategic Developments: Successful closure of EVO Payments acquisition and exit from Netspend Consumer and Gaming Solutions businesses.
2024 Outlook: Anticipates adjusted net revenue of $9.17 billion to $9.30 billion and adjusted EPS of $11.54 to $11.70.
Capital Allocation: Announced a dividend of $0.25 per share and an increase in share repurchase authorization to $2 billion.
On February 14, 2024, Global Payments Inc (NYSE:GPN) released its 8-K filing, announcing the fourth quarter and full year results for the period ending December 31, 2023. The company, a leading provider of payment processing and software solutions, operates across 30 countries with a significant portion of its revenue generated outside North America, particularly in Europe and Asia. The 2019 merger with Total System Services has further solidified its position in the industry.
For the fourth quarter of 2023, Global Payments reported a robust performance with GAAP revenues reaching $2.43 billion, an 8% increase compared to the previous year. Adjusted net revenues also saw a similar growth rate, climbing to $2.19 billion. The adjusted earnings per share (EPS) for the quarter rose by 10% to $2.65, reflecting the company's ability to outperform amidst economic uncertainties.
The full year results were equally impressive, with GAAP revenues totaling $9.65 billion, marking a 7.6% increase from 2022. Adjusted net revenues grew by 7% to $8.67 billion, and the adjusted EPS saw a significant 12% increase to $10.42. The adjusted operating margin for the year expanded by 90 basis points to 44.6%, indicating improved profitability and operational efficiency.
Financial Highlights and Strategic Achievements
Global Payments' strategic initiatives have played a crucial role in its financial success. The company completed the acquisition of EVO Payments, which enhanced its integrated payments and B2B capabilities, and exited its Netspend Consumer and Gaming Solutions businesses, streamlining its business model. The upcoming joint venture with Commerzbank is set to expand its presence in Germany, tapping into the digitization trends in Europe's largest economy. Additionally, the company has renewed agreements with key clients, including Capital One Financial and Navy Federal Credit Union, securing its position in the issuer processing space.
2024 Outlook and Capital Allocation
Looking ahead to 2024, Global Payments expects adjusted net revenue to be in the range of $9.17 billion to $9.30 billion, with adjusted EPS projected to be between $11.54 and $11.70. This outlook reflects an anticipated growth of 6% to 7% in revenue and 11% to 12% in EPS over 2023, with an adjusted operating margin expansion of up to 50 basis points. The Board of Directors has approved a dividend of $0.25 per share and increased the company's share repurchase authorization to $2 billion, demonstrating confidence in the company's financial health and commitment to delivering shareholder value.
Global Payments' consistent performance and strategic decisions have positioned it well for continued growth. The company's focus on core corporate and financial institution customer bases, coupled with its ability to adapt to market changes, suggests a promising outlook for the future.
For a detailed understanding of Global Payments Inc's financials, the full earnings release and financial statements can be accessed through the provided 8-K filing.
Explore the complete 8-K earnings release (here) from Global Payments Inc for further details.
This article first appeared on GuruFocus.
