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Global Payments Reports Fourth Quarter and Full Year 2021 Results

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Delivers Record Fourth Quarter and Full Year 2021 Results

Sets Growth Targets for 2022

Commences Strategic Review of Netspend Consumer Business

Increases Share Repurchase Authorization to $2.0 Billion

ATLANTA, February 10, 2022--(BUSINESS WIRE)--Global Payments Inc. (NYSE: GPN) today announced results for the fourth quarter and year ended December 31, 2021.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20220210005217/en/

"We are pleased with the resilience that our businesses demonstrated during the fourth quarter of 2021 and for the full year," said Jeff Sloan, Chief Executive Officer. "We are particularly proud of the sequential improvement in our Merchant Solutions business this quarter, despite the incremental impact of COVID-19 throughout the period. We reported the best results in our history in 2021, and we expect 2022 to exceed that performance as we continue to meaningfully advance our differentiated strategies for growth.

"We are thrilled to announce that Global Payments is the finalist company in Caixabank’s selection process for a technology partner for its card issuing businesses. During the coming weeks we expect to finalize contract negotiations. Upon implementation in conjunction with our recently announced partnership with Virgin Money, we believe that Global Payments will be among the leading debit technology providers across Europe."

Sloan continued, "In addition to our selection by Caixa and the announcement of our collaboration with Virgin Money, we achieved many other significant accomplishments over the past twelve months despite a highly uncertain environment. This includes our partnership with Google to deliver innovative and seamless digital services to all manner of merchants worldwide; the expansion of our relationship with AWS for unique distribution and cutting-edge issuer technologies; our successful acquisitions of Zego and MineralTree to advance our software leadership position; and our partnership with Mercedes-Benz Stadium to enable its multi-channel commerce ecosystem and provide best-in-class experiences for fans.

"It has been an active period for capital management with more than $6 billion deployed since 2020 to expand our target addressable markets while concurrently returning capital to shareholders. Our free cash flow conversion and balance sheet provide us with ample firepower to continue to execute on our priorities."

Sloan concluded, "At the same time, we seek to refine our portfolio mix by simplifying the composition of our businesses and maintaining a singular focus on our corporate customers. As part of that initiative, we have commenced a strategic review of the Netspend consumer business; we intend to retain its B2B assets as we further expand this new pillar of our strategy."

Full Year 2021 Summary

  • GAAP revenues were $8.52 billion, compared to $7.42 billion in 2020; diluted earnings per share were $3.29 compared to $1.95 in the prior year; and operating margin was 15.9% compared to 12.0% in the prior year.

  • Adjusted net revenues increased 14.7% to $7.74 billion, compared to $6.75 billion in 2020.

  • Adjusted earnings per share increased 27.5% to $8.16, compared to $6.40 in 2020.

  • Adjusted operating margin of 41.8% expanded 210 basis points.

Fourth Quarter 2021 Summary

  • GAAP revenues were $2.19 billion, compared to $1.93 billion in the fourth quarter of 2020; diluted earnings per share were $0.72 compared to $0.61 in the prior year; and operating margin was 14.6% compared to 13.1% in the prior year.

  • Adjusted net revenues increased 13.3% to $1.98 billion, compared to $1.75 billion in the fourth quarter of 2020.

  • Adjusted earnings per share increased 18.3% to $2.13, compared to $1.80 in the fourth quarter of 2020.

  • Adjusted operating margin of 42.0% expanded 50.0 basis points.

2022 Outlook

"Our performance for the full year meaningfully exceeded our initial expectations despite the unexpected impact of COVID-19 variants, highlighting outstanding execution and the durability of our business model," said Paul Todd, Senior Executive Vice President and Chief Financial Officer. "We are pleased with how our business is positioned as we enter 2022 and the resulting financial outlook for the year.

"The company expects 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. Annual adjusted operating margin for 2022 is expected to expand by up to 100 basis points (up to 150 basis points excluding acquisitions)."

Todd concluded, "This outlook presumes continued recovery from the pandemic worldwide throughout 2022."

Capital Allocation

Global Payments’ Board of Directors approved a dividend of $0.25 per share payable March 25, 2022 to shareholders of record as of March 11, 2022. The Board also approved an increase to the existing authorization for the company's share repurchase program, raising the total available authorization to $2.0 billion.

Conference Call

Global Payments’ management will host a live audio webcast today, February 10, 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 nearly 24,000 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; the effects of actions taken by us in response to the pandemic; the anticipated benefits of the merger with TSYS , including the combined company’s plans, objectives, expectations and intentions; 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 the COVID-19 pandemic and actions taken in response; our ability to meet our liquidity needs in light of the effects of the COVID-19 pandemic or otherwise; the outcome of any legal proceedings that may be instituted against the Company or our directors; 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 impact 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, 2020, 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 December 31,

Years Ended December 31,

2021

2020

% Change

2021

2020

% Change

Revenues

$

2,193,981

$

1,930,193

13.7

%

$

8,523,762

$

7,423,558

14.8

%

Operating expenses:

Cost of service

967,997

922,195

5.0

%

3,773,725

3,650,727

3.4

%

Selling, general and administrative

905,008

756,017

19.7

%

3,391,161

2,878,878

17.8

%

1,873,005

1,678,212

11.6

%

7,164,886

6,529,605

9.7

%

Operating income

320,976

251,981

27.4

%

1,358,876

893,953

52.0

%

Interest and other income

3,311

8,275

(60.0

) %

19,320

43,551

(55.6

) %

Interest and other expense

(87,767

)

(85,073

)

3.2

%

(333,651

)

(343,548

)

(2.9

) %

(84,456

)

(76,798

)

10.0

%

(314,331

)

(299,997

)

4.8

%

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

236,520

175,183

35.0

%

1,044,545

593,956

75.9

%

Income tax expense

37,434

17,981

108.2

%

169,034

77,153

119.1

%

Income before equity in income of equity method investments

199,086

157,202

26.6

%

875,511

516,803

69.4

%

Equity in income of equity method investments, net of tax

18,092

27,616

(34.5

) %

112,353

88,297

27.2

%

Net income

217,178

184,818

17.5

%

987,864

605,100

63.3

%

Net income attributable to noncontrolling interests, net of income tax

(8,725

)

(2,175

)

301.1

%

(22,404

)

(20,580

)

8.9

%

Net income attributable to Global Payments

$

208,453

$

182,643

14.1

%

$

965,460

$

584,520

65.2

%

Earnings per share attributable to Global Payments:

Basic

$

0.72

$

0.61

18.0

%

$

3.30

$

1.95

69.2

%

Diluted

$

0.72

$

0.61

18.0

%

$

3.29

$

1.95

68.7

%

Weighted-average number of shares outstanding:

Basic

287,887

299,106

292,655

299,222

Diluted

288,466

300,493

293,669

300,516

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,

2021

2020

% Change

2021

2020

% Change

Adjusted net revenue

$

1,984,878

$

1,752,369

13.3

%

$

7,737,960

$

6,748,023

14.7

%

Adjusted operating income

$

833,472

$

726,714

14.7

%

$

3,234,347

$

2,681,311

20.6

%

Adjusted net income attributable to Global Payments

$

614,726

$

540,523

13.7

%

$

2,396,422

$

1,922,439

24.7

%

Adjusted diluted earnings per share attributable to Global Payments

$

2.13

$

1.80

18.3

%

$

8.16

$

6.40

27.5

%

_______________________

See Schedules 6 and 7 for a reconciliation of each non-GAAP financial measure 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, 2021

December 31, 2020

% Change

GAAP

Non-GAAP

GAAP

Non-GAAP

GAAP

Non-GAAP

Revenues:

Merchant Solutions

$

1,475,032

$

1,339,975

$

1,227,550

$

1,112,269

20.2

%

20.5

%

Issuer Solutions

537,623

462,904

520,239

457,005

3.3

%

1.3

%

Business and Consumer Solutions

207,831

207,804

204,731

204,731

1.5

%

1.5

%

Intersegment Elimination

(26,505

)

(25,805

)

(22,327

)

(21,636

)

(18.7

) %

(19.3

) %

$

2,193,981

$

1,984,878

$

1,930,193

$

1,752,369

13.7

%

13.3

%

Operating income:

Merchant Solutions

$

460,304

$

646,204

$

338,529

$

528,067

36.0

%

22.4

%

Issuer Solutions

80,166

200,850

...