Sign in
GP

GLOBAL PAYMENTS INC (GPN)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 GAAP revenue was $2.52B (+3.4% YoY) and GAAP diluted EPS was $2.25 (+63% YoY); adjusted net revenue was $2.29B (+5% YoY; +6.5% constant currency ex-dispositions) and adjusted EPS was $2.95 (+11% YoY; +12% constant currency) .
  • Adjusted operating margin expanded 40 bps to 45.2%; Merchant adjusted net revenue grew ~7% constant currency ex-dispositions and Issuer grew ~3% constant currency; segment margins were 48.3% (Merchant) and 46.9% (Issuer) .
  • 2025 outlook reiterated: constant currency adjusted net revenue growth 5–6% (ex-dispositions), adjusted EPS growth 10–11%, adjusted operating margin +50 bps; FX headwind ~175 bps; ~$2B capital return including $250M ASR; quarterly dividend $0.25 (payable Mar 28, 2025) .
  • Transformation pace increased: operational transformation annual run-rate operating income benefit now >$600M by 1H 2027 (up from >$500M); portfolio streamlining continues (AdvancedMD sale closed in Dec; exits in subscale APAC markets; JV simplifications in Europe/Mexico) .
  • Street consensus comparisons were unavailable due to SPGI request limits; see Estimates Context section for details.

What Went Well and What Went Wrong

What Went Well

  • Merchant Solutions delivered ~7% constant currency adjusted net revenue growth (ex-dispositions) with strong POS/software momentum; new POS rooftops rose ~35% YoY in Q4 and integrated added 76 ISV partners (32 international) .
  • Margins expanded: adjusted operating margin +40 bps to 45.2%; Merchant margin 48.3% (+60 bps YoY) on EVO synergies and mix; net leverage fell to 3.2x; adjusted FCF ~$814M in Q4 (~110% conversion) .
  • Transformation milestones: Genius POS brand/platform consolidation timeline laid out (US launches in Q2–Q3 2025; international rollouts in 2H 2025/2026), GenAI tooling improved dev productivity (double-digit) and ~10% faster code deployments; modernization certified with Visa/Mastercard .

Quotes:

  • “We now expect to deliver more than $600 million of annual run-rate operating income benefits through our transformation by the first half of 2027.” — CEO Cameron Bready .
  • “We expect constant currency adjusted net revenue growth to be in a range of 5% to 6%... and constant currency adjusted earnings per share growth to be in a range of 10% to 11% in 2025.” — CFO Josh Whipple .

What Went Wrong

  • Issuer showed modest growth (+3% constant currency) with commercial card softness persisting; macro caution by corporates weighed on volumes and B2B pay card trends (nearly a point drag) .
  • Reported adjusted net revenue growth decelerated sequentially (Q4 $2.29B vs Q3 $2.357B), despite constant currency acceleration; FX headwind is expected to be ~175 bps to adjusted net revenue and EPS in 2025 .
  • Portfolio exits and wholesale relationship rationalization (especially inherited via EVO) will pressure reported revenue in 2025 (~300 bps impact on adjusted net revenue from dispositions), though absorbed in guidance .

Financial Results

GAAP headline metrics

MetricQ4 2023Q3 2024Q4 2024
Revenue ($USD Billions)$2.434 $2.602 $2.515
Diluted EPS ($)$1.38 $1.24 $2.25
Operating Margin (%)20.5% 18.3% 33.1%

Adjusted performance

MetricQ2 2024Q3 2024Q4 2024
Adjusted Net Revenue ($USD Billions)$2.320 $2.357 $2.289
Adjusted EPS ($)$2.93 $3.08 $2.95
Adjusted Operating Margin (%)45.2% 46.1% 45.2%

Segment breakdown (Non-GAAP)

SegmentQ4 2023 Adjusted Net Revenue ($MM)Q4 2024 Adjusted Net Revenue ($MM)YoY %Q4 2023 Adjusted Operating Income ($MM)Q4 2024 Adjusted Operating Income ($MM)YoY %
Merchant Solutions$1,670 $1,763 +5.5% $797 $852 +6.9%
Issuer Solutions$531 $542 +2.2% $251 $254 +1.4%
Intersegment Elims$(15) $(16) (8.1%) n/an/an/a

KPIs and operating metrics

KPIQ2 2024Q3 2024Q4 2024
Merchant Adjusted Operating Margin (%)48.8% 50.0% 48.3%
Issuer Adjusted Operating Margin (%)46.8% 45.4% 46.9%
Traditional Accounts on File Added (MM)+8 +30 +26
Adjusted Free Cash Flow ($MM)~$680 ~$722 ~$814
Capex ($MM)$179 $166 $184
Net Leverage (x)<3.5x 3.3x 3.2x

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Constant currency adjusted net revenue growth (ex-dispositions)FY2025“Mid-single digits” (upper half implied; investor day) 5%–6% Slightly raised within mid-single digits
Adjusted EPS growth (constant currency)FY2025Same as investor day 10%–11% Maintained
Adjusted operating margin expansionFY2025~+50 bps excl. dispositions ~+50 bps excl. dispositions Maintained
FX headwindFY2025Not specified earlier~175 bps to adj. net revenue and EPS New/explicit headwind
Net interest expenseFY2025n/a~$500M Set
Adjusted effective tax rateFY2025n/a~19% Set
CapexFY2025~8% of revenue (investor day) ~$780M (~8% revenue) Maintained
Adjusted FCF conversionFY2025>90% (investor day) >90% Maintained
Capital returnFY2025~$2B (investor day) ~$2B (incl. $250M ASR) Maintained; ASR disclosed
DividendQ1 2025n/a$0.25 per share; payable Mar 28, 2025 New quarter declaration
Adjusted results definitionStarting Q1 2025Stock comp excluded historicallyWill include share-based comp in adjusted results Methodology change
Dispositions impactFY2025n/a>300 bps headwind to reported adjusted net revenue New detail

Segment guidance (FY2025): Merchant ~6% constant currency adj. net revenue growth ex-dispositions; Issuer ~4% constant currency; both segments ~+50 bps margin expansion (ex-dispositions) .

Earnings Call Themes & Trends

TopicQ2 2024 (Prior-2)Q3 2024 (Prior-1)Q4 2024 (Current)Trend
Transformation & OI savingsStreamline/simplify plan preview ahead of Sept investor conference Medium-term plan detailed; AdvancedMD sale announced OI benefit target raised to >$600M by 1H 2027 Increasing scope/targets
Genius POS rolloutPOS growth, pilots in Germany; attach rates >70% for embedded commerce Brand consolidation enthusiasm; bookings up 30% US launch Q2–Q3 2025; intl rollouts in 2H 2025/2026 Execution milestones defined
Issuer cloud modernizationClient-facing apps to complete in 2024; pilots started First cloud conversion; near-record pipeline >65M accounts Visa/Mastercard cloud authorization certified; selling cloud-only by end-2025 Advancing certifications/commercialization
Macro backdropTempered 2H 2024 environment; commercial card softness Weather/FX impacts; continued commercial spend caution Expect stable macro; FX headwind explicit in 2025 Stabilizing but cautious
Portfolio actions & JVsTakepayments acquired; JV in Germany launched AdvancedMD sale definitive; exits of small geographies begin APAC exits; JV stake changes (Erste/Commerz, Mexico HSBC) Ongoing simplification
Capital returns/leverageTarget low-3x by YE; buybacks ~$100M Q2 $600M ASR; authorization to $2.5B; low-3x by YE ~$2B 2025 return; $250M ASR; leverage ~3.2x exiting Q4 Sustained returns, deleveraging

Management Commentary

  • Strategic focus: “We are refocusing our strategy…unifying our organization…allowing us to unleash our full potential and play to our competitive strengths.” — CEO Cameron Bready .
  • Transformation impact: “Early evidence is incredibly positive…opportunity for efficiencies and scale…more efficient, more effective and productive technology organization.” — CEO Cameron Bready .
  • Genius roadmap: “We will go live with our Genius restaurant solutions…this May…launch Genius retail…September…begin rolling out Genius international markets in the second half.” — CEO Cameron Bready .
  • Financial posture: “We are pleased…Q4 adjusted EPS of $2.95…adjusted operating margin increased 40 bps…net leverage decreased to 3.2x.” — CFO Josh Whipple .
  • 2025 guide consistency: “This 2025 guidance is the same as the outlook we provided at our investor conference…we now expect currency to be a headwind of roughly 175 bps.” — CFO Josh Whipple .

Q&A Highlights

  • Growth cadence: Management expects modest first-half disruption from transformation (salesforce retooling, comp changes) and stronger second-half growth; both halves remain within the full-year range .
  • EPS guide mechanics: Constant currency adjusted EPS growth 10–11%; stock-based comp ~$170M included in adjusted starting Q1; FX headwind ~175 bps .
  • M&A/dispositions: AdvancedMD contributed ~1 point headwind in Q4; reported 2025 adjusted net revenue to be impacted by >300 bps from dispositions; organic growth targets are mid-single digits .
  • Wholesale and core payments: Exiting uneconomic wholesale relationships and rationalizing multinational cross-border activities; embedded in 2025 guide .
  • JV simplification: Bought out CaixaBank in Erste JV; agreed to purchase HSBC stake in Mexico JV to harmonize operations .

Estimates Context

  • Wall Street consensus via S&P Global for Q4 2024 (EPS, revenue, EBITDA) was unavailable due to SPGI daily request limits; consequently, we cannot formally score beats/misses vs consensus for Q4 2024 in this report. We anchor comparisons to company-reported guidance and historical performance where appropriate [Tool error noted; SPGI limits].

Key Takeaways for Investors

  • Narrative: Solid Q4 with adjusted margin expansion and strong Merchant execution; Issuer growth modest amid commercial card softness, but modernization and conversions support improving trajectory into 2H 2025 .
  • Catalyst path: Genius launches (US Q2–Q3; international 2H) and increased transformation savings (>$600M run-rate by 1H 2027) are medium-term re-rating drivers; watch merchant mix and software attach .
  • 2025 setup: Guidance consistent with investor day and now at upper half of mid-single digits for revenue; FX is a known headwind; dispositional headwind >300 bps to reported adjusted revenue is absorbed in targets .
  • Capital returns: ~$2B buybacks/dividends planned in 2025 including $250M ASR; dividend declared at $0.25; leverage near long-term target supports flexibility .
  • Risk watch: Commercial card demand, FX, transformation execution friction in H1; wholesale exit/core payments rationalization may dampen reported growth near-term .
  • Segment focus: Merchant margins and POS/software momentum are key to sustained expansion; Issuer modernization expands TAM and should gradually accelerate growth post-2025 .
  • Portfolio simplification: Ongoing exits in subscale geographies and JV reshaping should enhance efficiency and focus; monitor additional divestiture proceeds and redeployment .