Global Payments Reports 5.1% Revenue Growth, Decline in Profitability in Q3 2024

Global Payments Inc. reported its financial results for the third quarter and the nine months ended September 30, 2024, showing notable revenue growth but a decline in profitability compared to the previous fiscal period.

For the three months ended September 30, 2024, the company generated revenues of $2,601.6 million, a 5.1% increase from $2,475.7 million in the same period of 2023. The Merchant Solutions segment contributed $1,997.7 million, up 6.0% from $1,884.0 million, while Issuer Solutions saw a 2.2% increase to $621.1 million from $607.8 million. For the nine months, total revenues reached $7,590.5 million, compared to $7,220.6 million in 2023, driven primarily by increased transaction volumes and the acquisition of EVO Payments, Inc. in March 2023.

Despite the revenue growth, operating income for the third quarter decreased to $475.6 million from $558.2 million in the prior year, reflecting a decline of 14.8%. The operating margin also fell to 18.3% from 22.5%. The decrease in operating income was attributed to higher selling, general, and administrative expenses, which rose to $1,179.0 million from $1,002.0 million, and included significant charges related to employee termination benefits and technology asset write-offs.

Net income for the third quarter was $315.1 million, down from $361.8 million in the same quarter of 2023. Basic and diluted earnings per share decreased to $1.24 from $1.39. For the nine months, net income increased significantly to $1,003.2 million from $624.9 million, with diluted earnings per share rising to $3.92 from $2.39.

The company’s cash and cash equivalents as of September 30, 2024, totaled $2,941.9 million, an increase from $2,088.9 million at the end of 2023. Total assets decreased slightly to $49,985.8 million from $50,570.2 million. Long-term debt increased to $16,768.7 million from $16,312.9 million.

Strategically, Global Payments completed the sale of its AdvancedMD business for $1.125 billion, expected to close in the fourth quarter of 2024. The company is also undergoing a transformation program aimed at streamlining operations and enhancing its technology capabilities, with expected annual run-rate operating income benefits projected to exceed $500 million by the first half of 2027.

Overall, while Global Payments experienced revenue growth, profitability was impacted by increased operational costs and strategic initiatives.