• Adjusted Net Revenue (Full Year 2024): $9.15 billion, an increase of 6% from the prior year.
• Adjusted Operating Margin (Full Year 2024): Improved 40 basis points to 45%.
• Adjusted Earnings Per Share (Full Year 2024): $11.55, an increase of 11% compared to 2023.
• Adjusted Net Revenue (Q4 2024): $2.29 billion, an increase of 5%.
• Adjusted Operating Margin (Q4 2024): Increased 40 basis points to 45.2%.
• Adjusted Earnings Per Share (Q4 2024): $2.95, an increase of 11% or 12% on a constant currency basis.
• Merchant Solutions Adjusted Net Revenue (Q4 2024): $1.76 billion, reflecting growth of 6%.
• Issuer Solutions Adjusted Net Revenue (Q4 2024): $542 million, reflecting growth of 3% on a constant currency basis.
• Adjusted Free Cash Flow (Q4 2024): Approximately $814 million, representing roughly 110% conversion rate of adjusted net income.
• Adjusted Free Cash Flow (Full Year 2024): $2.7 billion, representing a roughly 95% conversion rate of adjusted net income.
• Capital Expenditures (Full Year 2024): $675 million, equating to roughly 7% of revenue.
• Net Leverage Position (End of Q4 2024): Decreased to 3.2 times.
• Available Liquidity (End of Q4 2024): $3.8 billion.
• Weighted Average Cost of Debt: 3.36%.
• Share Repurchases (Full Year 2024): 12.7 million shares for $1.5 billion.

• Warning! GuruFocus has detected 5 Warning Signs with GPN.

Release Date: February 13, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Global Payments Inc (NYSE:GPN) achieved 6% adjusted net revenue growth for the full year 2024, with record adjusted operating margins and double-digit adjusted earnings per share growth.
• The company generated approximately $3 billion of adjusted free cash flow and returned $1.8 billion to shareholders.
• GPN expanded its POS and software business, achieving high teens new locations growth in 2024, particularly in the restaurant and retail verticals.
• The company successfully completed 17 customer implementations in its Issuer Solutions segment in 2024, ending the year with record traditional accounts on file of $885 million.
• GPN's operational transformation initiatives are expected to unlock more than $600 million of annual run rate operating income benefit by the first half of 2027, an increase from the initial outlook of $500 million.

Negative Points

• The company faced incremental FX headwinds, which impacted financial results despite achieving growth targets.
• GPN is in the process of exiting several small markets in Asia Pacific where it is subscale and sees limited opportunity for expansion.
• The company is experiencing softer hiring trends in its pay card business, negatively impacting growth by nearly a point.
• Commercial card volumes remain consistent with previous trends, as corporates continue to take a cautious approach to spending.
• GPN's transformation initiatives, while beneficial, are causing some disruption in the business, particularly in the first half of 2025.

Q & A Highlights

Q: Can you provide an update on the progress of your transformation initiatives and their impact on Merchant growth rates? A: Cameron Bready, CEO, highlighted early positive signs from the transformation, such as increased collaboration across the organization and harmonization of operating models. He noted that while the first half of 2025 might see modest disruption due to these changes, the benefits are expected to materialize more significantly in the second half, particularly in the Merchant segment.

Q: How much of the 6% Merchant growth guidance is expected to come from acquisitions? A: Joshua Whipple, CFO, explained that the acquisition of Cake Payments will contribute about 50 basis points to growth, while the orchestration platform acquisition will have a minimal impact.

Q: What macroeconomic conditions are factored into your 2025 guidance? A: Cameron Bready stated that the guidance assumes a stable macroeconomic environment similar to the end of 2024, with stable labor trends and moderated inflation. He acknowledged potential uncertainties related to post-election economic policies in the US.

Q: Can you elaborate on the expected timing and impact of operational transformation savings? A: Joshua Whipple mentioned that most savings from the operational transformation will be realized in 2026 and beyond, with over $200 million expected in 2026 and more than $400 million in 2027, reaching a full run rate of $600 million by 2028.

Q: What are your plans regarding joint ventures and potential asset sales? A: Cameron Bready discussed efforts to streamline operations by exiting certain joint ventures and subscale markets. He emphasized focusing on markets where Global Payments can achieve scale and growth, while considering divestitures of businesses that may operate better independently.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.