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GLOBAL PAYMENTS INC (GPN)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered sequential acceleration: adjusted net revenue $2.43B (+3% reported; +6% constant currency ex-dispositions), adjusted operating margin 45.0% (+110bps), and adjusted EPS $3.26 (+12% reported; +11% constant currency) .
  • EPS modestly beat Wall Street consensus; revenue (GAAP) was below consensus as most analysts benchmark adjusted net revenue, not GAAP revenue. EPS: $3.26 vs $3.23 consensus; Revenue (GAAP): $2.01B vs $2.41B consensus* .
  • Guidance reaffirmed: 2025 CC adjusted net revenue growth 5–6% ex-dispositions; adjusted EPS growth at the high end of 10–11%; >50bps adjusted operating margin expansion, FX broadly neutral for 2025; dispositions now a ~400bps headwind to reported adjusted net revenue given payroll sale .
  • Strategic catalysts: CMA clearance for Worldpay, closing now expected Q1 2026; transformation progress (Genius rollout, sales-force revamp) and strong adjusted FCF ($784M) drove de-leveraging to 2.9x, supporting capital returns and near-term sentiment .

What Went Well and What Went Wrong

What Went Well

  • Merchant momentum: adjusted net revenue growth accelerated to ~6% CC ex-dispositions; adjusted operating margin rose to 51.1% (+110bps YoY), aided by transformation benefits .
  • Genius traction: “monthly recurring revenue from new sales increased 75% from June to September,” 90% of sales to new customers, new locations sold up >20% QoQ; expanded to enterprise and higher-education use cases in September/October .
  • Cash flow and leverage: adjusted FCF ~$784M; net leverage improved to 2.9x (below 3x year-end target), enabling continued buybacks and dividend .

Quote: “We are pleased to deliver third quarter results that accelerated sequentially across our key financial metrics… positioning us well to deliver on our overall expectations for the year.” — Cameron Bready, CEO .

What Went Wrong

  • Reported GAAP revenue flat (+0.5% YoY) as dispositions and accounting for discontinued Issuer operations weigh on GAAP optics versus non-GAAP “adjusted net revenue” that better reflects total company performance .
  • Dispositions increased reported headwind: payroll sale adds ~100bps to full-year adjusted net revenue headwind; reported adjusted net revenue headwind now ~400bps (vs >300bps prior) .
  • Issuer margin expansion slowed sequentially vs Q2 (46.9% in Q3 vs 48.7% in Q2) amid project revenue phasing, though YoY improved and revenue grew ~5% CC .

Analyst concern addressed: pricing backdrop and competitive fee rollbacks elsewhere—management emphasized value-based pricing and competitiveness, not leading with price, and confidence post-Worldpay scale .

Financial Results

MetricQ1 2025Q2 2025Q3 2025Q3 2025 Consensus
GAAP Revenue ($USD Billions)$2.41 $1.96 $2.01 $2.41*
Adjusted Net Revenue ($USD Billions)$2.205 $2.361 $2.429 —
GAAP Diluted EPS ($)$1.24 $0.99 $2.64 —
Adjusted Diluted EPS ($)$2.69 $3.10 $3.26 $3.234*
GAAP Operating Margin (%)19.5% 21.8% 38.8% —
Adjusted Operating Margin (%)42.4% 44.6% 45.0% —

Notes: Values marked with * retrieved from S&P Global. Values retrieved from S&P Global.

YoY snapshots (Q3 2025 vs Q3 2024):

  • GAAP Revenue: $2.01B vs $2.00B (+0.5%)
  • Adjusted Net Revenue: $2.429B vs $2.357B (+3.0%)
  • GAAP Diluted EPS: $2.64 vs $1.24 (+113%)
  • Adjusted EPS: $3.26 vs $2.92 (+11.8%)

Segment breakdown:

SegmentQ1 2025 Adjusted Net Revenue ($MM)Q2 2025 Adjusted Net Revenue ($MM)Q3 2025 Adjusted Net Revenue ($MM)Q1 2025 Adjusted Op Margin (%)Q2 2025 Adjusted Op Margin (%)Q3 2025 Adjusted Op Margin (%)
Merchant Solutions$1,691.9 $1,831.7 $1,884.3 47.8% 50.1% 51.1%
Issuer Solutions$528.8 $547.4 $561.8 46.3% 48.7% 46.9%

KPIs and balance/cash:

KPIQ1 2025Q2 2025Q3 2025
Adjusted Free Cash Flow ($MM)~$512 ~$800 ~$784
Net Leverage (Adjusted) (x)<3.2x 3.15x 2.9x
Dividend per share ($)$0.25 (June) $0.25 (Sept) $0.25 (Dec 26)
Traditional Accounts on File (Issuer) (MM)+15 added; total N/A >900 total 917 total
New ISV Partners Added (Integrated/Embedded)—85 ~60

Guidance Changes

MetricPeriodPrevious Guidance (Q2)Current Guidance (Q3)Change
CC Adjusted Net Revenue Growth (ex-dispositions)FY 20255%–6% 5%–6% Maintained
Adjusted Operating Margin Expansion (Company)FY 2025>50bps (slightly more than) >50bps Maintained
Adjusted EPS Growth (CC)FY 2025High end of 10%–11% High end of 10%–11% Maintained
FX Impact (Full Year)FY 2025~50bps headwind Broadly neutral; modest +50bps tailwind in Q4 Improved
Dispositions Impact on Reported Adj. Net RevenueFY 2025>300bps headwind ~400bps headwind (includes payroll sale) Increased headwind
Merchant Adj. Net Rev. Growth (CC, ex-dispositions)FY 2025~6% ~6% Maintained
Issuer Adj. Net Rev. Growth (CC)FY 2025~4% ~4%; implies ~4% in Q4 due to Q3 pull-forward Clarified phasing
Adjusted FCF ConversionFY 2025>90% >90% Maintained
DividendQ4 2025—$0.25 payable Dec 26, 2025 Announced

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
Genius rollout & tractionLaunch announced; front-book focus; harmonizing POS; early momentum in restaurant/retail; dealer enthusiasm; QA on back-book conversion pace 90% sales to new customers; MRR from new sales +75% Jun–Sep; new handheld; UK/Austria launched; higher ed expansion; enterprise wins (venues/QSR) Accelerating
Sales force transformationCompensation plan revamped (from 1994 plan); 90% retention; productivity up; CRM consolidation and certification underway Double-digit increases in annual revenue per deal; mid-single-digit deal count increases; faster time-to-first-deal; recruiting 500 new North America field sellers Improving
Worldpay acquisition & regulatoryHSR clearance; integration planning kickoff; synergy framework outlined CMA clearance in UK; closing now expected Q1 2026; integration plans and board integration committee; synergy execution emphasis Progressing
Issuer Solutions modernizationGeneral availability for first modernized cloud app; >15MM accounts converted; >900MM accounts on file; margin expansion Revenue growth ~5% CC; 917MM accounts; continued modernization pace; project revenue pulled forward from Q4 Stable to improving
AI/productivity & developer platformAI in marketing, contracts, customer engagement, software dev; unified APIs and orchestration ~1M lines of AI-generated code; orchestration enabling faster innovation; merchant dashboard with generative AI interface Expanding
Macro/pricing backdropConsumer resilient; FX evolving; value-based pricing; dispositions impacting reported growth FX broadly neutral; pricing competitive but not leading with price; stable volumes; value proposition stressed Neutral

Management Commentary

  • Strategic focus and momentum: “Our Merchant business is exhibiting ongoing momentum… adjusted net revenue growth accelerating to 6% constant currency excluding dispositions.” — Cameron Bready .
  • Transaction timeline: “We… received merger control approval… from the CMA in the U.K.… expect to close… Worldpay and divestiture of Issuer Solutions in the first quarter of 2026.” — Cameron Bready .
  • Cash generation: “We… produced strong adjusted free cash flow of $784 million… de-lever to 2.9-times adjusted net leverage… below the 3.0 times target…” — Josh Whipple .
  • Product strategy: “Genius… highly modular, configurable, scalable, and extensible… average deal size more than doubled.” — Cameron Bready .
  • Capital returns and leverage: “We remain on track to return $7.5 billion to shareholders between 2025 and 2027… deliver back to three times within 18 to 24 months of closing the Worldpay acquisition.” — Cameron Bready/Josh Whipple .

Q&A Highlights

  • Pricing/competition: Management emphasized value-based pricing and competitiveness, not leading with price; confidence in price competitiveness post-Worldpay scale .
  • Genius front-book vs back-book: Focus remains on front-book wins; back-book conversions will proceed at customer pace; migration implies unlocking capabilities versus full replatforming .
  • Volume trajectory: New Genius wins already lifting volumes from Q2 to Q3; expectation for continued acceleration as footprint expands .
  • Capital returns cadence: Plan to return ~$9B including dispositions through 2027; flexibility for additional repurchases in 2025 while targeting ≤3x leverage by year-end .
  • Integration approach: Unified operating model, orchestration layer to minimize client disruption and accelerate synergy realization; board formed ad hoc integration committee .

Estimates Context

  • EPS: Adjusted EPS beat consensus by ~$0.03 ($3.26 vs $3.234)*, reflecting margin expansion and transformation benefits .
  • Revenue: GAAP revenue ($2.01B) was below consensus ($2.41B)*; note, the company and investors commonly benchmark “adjusted net revenue” ($2.43B), which excludes GAAP gross-ups and reflects total company performance including discontinued operations .
  • Implication: Estimates may need alignment to adjusted net revenue framework and updated dispositions headwinds; EPS forecasts likely trend higher given execution and FX neutrality claims .

Notes: Values marked with * retrieved from S&P Global. Values retrieved from S&P Global.

Key Takeaways for Investors

  • Transformation is translating to financials: sequential acceleration in adjusted revenue, margin, and EPS; merchant adjusted operating margin at 51.1% suggests durable operating leverage from initiatives .
  • Genius is a multi-vertical, multi-geo growth engine: strong early KPIs (MRR +75% since June, >20% QoQ new locations growth) underpin H2/H1’26 trajectory; watch enterprise and higher-ed expansion .
  • Reported revenue optics vs adjusted: for modeling, anchor on adjusted net revenue and segments; dispositions raise the reported headwind to ~400bps in FY25 .
  • Balance sheet flexibility: ~$784M adjusted FCF and 2.9x leverage provide support for buybacks and dividend; plan to return $7.5B (ex-dispositions) 2025–2027 .
  • Worldpay closing Q1’26: integration readiness (CMA clearance, orchestration strategy, governance) sets up revenue/cost synergies and omnichannel scale; potential narrative catalyst .
  • Estimates likely adjust: modest EPS upside bias given FX neutrality and execution; ensure revenue estimates align to adjusted net revenue rather than GAAP .
  • Near-term trading: sentiment supported by beat on EPS, leverage progress, and regulatory clearance; monitor Q4 FX tailwind (+50bps) and merchant/issuer phasing .

Appendix: Additional Data Points and Disclosures

  • Segment details (Q3): Merchant adjusted net revenue $1,884M; Issuer $562M; Corporate adjusted operating loss $(133)M; gain on business dispositions eliminated in non-GAAP .
  • Non-GAAP framework: Adjusted net revenue excludes gross-ups in revenue/opex; adjusted operating income excludes acquisition-related amortization, transformation/separation costs, gains on dispositions, and certain other items .
  • Dividend: $0.25 per share payable Dec 26, 2025; record date Dec 12, 2025 .
  • Partnerships: HBSE (Prudential Center, NJ Devils, 76ers) expands venue portfolio and showcases Genius deployment across F&B .