GLOBAL PAYMENTS INC

Global Payments Inc. is a leading payments technology company delivering innovative software and services to customers globally, with worldwide reach spanning North America, Europe, Asia-Pacific and Latin America. The payments technology industry provides financial institutions, businesses and consumers with payment processing services, merchant acceptance solutions and related business management software and value-added services. The industry continues to grow as a result of wider merchant acceptance and increased use of credit and debit cards, advances in payment solutions and processing technology and migration to ecommerce, omnichannel and contactless payment solutions. The proliferation of credit and debit cards, as well as other digital payment solutions, has made the acceptance of digital payments a necessity for many businesses, regardless of size, in order to remain competitive. Certain macroeconomic drivers have further accelerated the use of digital payments, the need for development of technologies and digital-based solutions and the expansion of ecommerce, omnichannel and contactless payment solutions. The increased use of cards and the availability of more sophisticated technology services to all market segments have resulted in an increasingly competitive and specialized industry.

The Merchant Solutions segment competes with financial institutions, merchant acquirers and other financial technology companies that provide businesses with merchant acquiring, business management software and related services. In the United States, primary competitors include Fiserv, Inc., Chase Paymentech Solutions, LLC, Elavon, Inc., a subsidiary of U.S. Bancorp, Bank of America Merchant Services, Wells Fargo Merchant Services, Toast, Inc., Stripe, Inc., Shopify Inc. and Block Inc. Internationally, the company competes with financial institutions as well as providers such as Worldline, Nexi, Adyen, Block and Stripe. Competitive strengths include technology solutions, global footprint and distribution, scalable operating environment and technology infrastructure, strong long-lasting partner relationships, and a disciplined acquisition approach.

The company generates the majority of its revenue from services priced as a percentage of transaction value or a specified fee per transaction, depending on the payment type or the market. It also earns software subscription and licensing fees, as well as other fees for specific value-added services, which may be unrelated to the number or value of transactions. The primary customer segments are merchants of all sizes, financial institutions, and technology partners. The company operates through a multi-channel, global technology infrastructure that provides scalable and innovative service offerings and a consistent service experience to merchants, customers, financial institutions and other partners worldwide.

Through the Merchant Solutions segment, the company provides payments technology and software solutions globally, enabling customers to accept card, check and digital-based payments. Comprehensive offerings include authorization, settlement and funding services, customer support, chargeback resolution, reconciliation and dispute management services, terminal rental, sales and deployment, payment security services, consolidated billing and reporting. The company also offers a wide array of business management software solutions, including specialty point-of-sale software, that streamline business operations to customers in numerous vertical markets, as well as commerce enablement solutions and services including data analytics and customer engagement, human capital management and payroll, accounts receivable automation, inventory management and reporting. The segment is organized across three business pillars: Point-of-Sale and Software Solutions, Integrated and Embedded Solutions, and Core Payments Solutions. The Point-of-Sale and Software Solutions business provides advanced payments technology integrated into point-of-sale systems and business management software solutions that the company owns, with capabilities in cloud-based POS for restaurant and retail and leading software in verticals including education, real estate, and communities. The Integrated and Embedded Solutions business provides advanced payments technology embedded into business management software solutions owned by technology partners, and integrates capabilities with shopping carts, ordering platforms, marketplaces and other digitally-oriented businesses. The Core Payments Solutions business offers payments technology services, software and other commerce enablement solutions directly to customers across numerous verticals through direct sales forces worldwide, as well as referral partnerships. For the year ended December 31, 2025, Point-of-Sale and Software Solutions revenues were $1,321,636 thousand ¹, Integrated and Embedded Solutions revenues were $3,407,539 thousand ², and Core Payments Solutions revenues were $2,976,703 thousand ³.

The Issuer Solutions business, presented as a discontinued operation, is a leading provider of comprehensive commerce solutions supporting the payment ecosystem for issuers, with offerings including core processing, enterprise tokenization, cardholder payments, authorizations, card production, document production and archival, contact center services, managed services, fraud strategy, implementation services, consulting solutions and professional services. The company also provides specialized solutions such as virtual cards, accounts payable and expense management, commercial processing and real-time alerts. Issuer Solutions revenues are primarily derived from long-term processing contracts with financial institutions and other financial services providers, with payment processing services revenues generated primarily from charges based on the number of accounts on file, transactions and authorizations processed, statements generated and/or mailed, managed services, cards embossed and mailed, and other processing services for cardholder accounts on file. Most of these customer contracts have prescribed annual minimums, penalties for early termination, and service level agreements that may affect contractual fees if specified service levels are not achieved. Issuer Solutions revenues also include software subscription, licensing fees, loyalty redemption services and professional services.

In January 2026, the company acquired 100% of Worldpay Holdco, LLC from Fidelity National Information Services, Inc. and affiliates of GTCR LLC and divested its Issuer Solutions business to FIS. Consideration paid to GTCR for its ownership interest in Worldpay consisted of approximately $6.2 billion in cash ⁴ and 43.3 million shares ⁵ of Global Payments common stock. Consideration received for the divestiture of the Issuer Solutions business consisted of approximately $7.7 billion in cash ⁶ and FIS' ownership interest in Worldpay. In September 2025, the company completed the sale of Heartland Payroll Solutions, Inc. to Acrisure, LLC for approximately $1.1 billion ⁷, including up to $75 million ⁸ of contingent consideration. In December 2024, the company completed the sale of AdvancedMD, Inc. for approximately $1.1 billion ⁹ and up to $125 million ¹⁰ of contingent consideration. During the year ended December 31, 2025, the company used $1,191.0 million ¹¹ to repurchase and retire 13.2 million ¹² shares of its common stock. On November 14, 2025, the company issued $6.2 billion ¹³ aggregate principal amount of senior unsecured notes. On May 15, 2025, the company entered into a credit agreement providing for an unsubordinated unsecured $7.25 billion ¹⁴ revolving credit facility. The company paid dividends to common shareholders in the amount of $238.5 million ¹⁵ during the year ended December 31, 2025.

Revenues for the year ended December 31, 2025 were essentially flat at $7,705.9 million ¹⁶, compared to $7,736.0 million ¹⁷ for the prior year despite the effects of the dispositions of the AdvancedMD and Payroll Solutions businesses. Consolidated operating income for the year ended December 31, 2025 was $1,754.6 million ¹⁸, compared to $1,974.5 million ¹⁹ for the prior year. Consolidated operating margin for the year ended December 31, 2025 was 22.8% ²⁰ compared to 25.5% ²¹ for the prior year. Income from continuing operations was $1,128.7 million ²² compared to $1,359.0 million ²³ for the prior year. Diluted earnings per share from continuing operations was $4.43 ²⁴ compared to $5.04 ²⁵ for the prior year. Net cash provided by operating activities was $2,656.6 million ²⁶ and $3,057.6 million ²⁷ for the years ended December 31, 2025 and 2024, respectively.

The company currently expects its transformation initiatives to generate more than $650 million ²⁸ of annual run-rate operating income benefit by the first half of 2027. The company expects to continue to incur incremental expenses related to the transformation program through the first half of 2027.

The company is focusing on enhancing its capabilities in cloud-based POS and software solutions in select vertical markets, further investing in its leadership position in integrated payments and embedded solutions where it offers tailored operating models and commercial structures for partners and clients, and leveraging its core payments channels globally to build on its broad capabilities. The company also seeks to deliver innovative commerce enablement solutions globally to expand its position as a client-centric, product-led company, including investing in AI capabilities and strategic partnerships to position its platforms to support agent-driven commerce, and enabling frictionless, best-in-class customer experiences to create longer-term relationships. The company expects to continue to expand into new markets and pursue additional acquisitions and joint ventures in existing markets to increase its scale and improve its competitiveness. The company believes that the number of digital payment transactions will continue to grow and that an increasing percentage of these will be facilitated through emerging technologies, and expects an increasing portion of its future capital investment will be allocated to support the development of new and emerging technologies, including technology modernization, innovation and integration through strategic partnerships. The company also believes new markets will continue to develop and expand in areas that have been previously dominated by paper-based transactions, expecting industries such as education, government and healthcare, as well as recurring payments and B2B payments, to continue to see transactions migrate to digital-based solutions.

The company is streamlining its organization and operating environments through its transformation program to deliver a global, unified operating company. The company has consolidated its technology organizations and teams under common leadership to enhance speed and quality of product development with a customer-centric, solutions-led mindset, and has centralized its operations functions to enhance its servicing model and focus on improving the client journey. The company expects its transformation initiatives to generate more than $650 million ²⁹ of annual run-rate operating income benefit by the first half of 2027. Merchant Solutions operating income increased $152.9 million ³⁰ and operating margin increased 2.1% ³¹ primarily due to the favorable effect of cost reduction initiatives associated with the new operating model and transformation initiatives.

The company continues to invest in new technology solutions and infrastructure to support its growing business and the ongoing consolidation and enhancement of its operating platforms, including new product development and innovation to further enhance and differentiate its suite of technology and software solutions available to customers, along with migration of certain underlying technology platforms to cloud environments to enhance performance, improve speed to market and drive cost efficiencies. The company also continues to execute on integration and business transformation activities, such as combining business operations, streamlining technology infrastructure, eliminating duplicative corporate and operational support structures and realizing scale efficiencies.

The company made capital expenditures of $617.8 million ³² and $674.9 million ³³ during the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025, the remaining amount available under the share repurchase program was $676.5 million ³⁴. On January 29, 2026, the Board of Directors approved an increase to the existing share repurchase program authorization, which raised the total available authorization to $2.5 billion ³⁵. On February 18, 2026, the company entered into an ASR agreement to repurchase an aggregate $550.0 million ³⁶ of shares of common stock. The company paid dividends to common shareholders in the amounts of $238.5 million ³⁷ and $252.8 million ³⁸ during the years ended December 31, 2025 and 2024, respectively. On January 29, 2026, the Board of Directors declared a cash dividend of $0.25 ³⁹ per share payable on March 30, 2026 to common shareholders of record as of March 9, 2026.

The company is exposed to general economic conditions, including the effects of currency fluctuations, inflation, rising interest rates, tariff increases, global trade relations, international tensions, higher rates of unemployment, and other conditions that affect the overall level of consumer, business and government spending, which could negatively affect its financial performance. A strengthening of the U.S. dollar or other significant fluctuations in foreign currency exchange rates could result in an adverse effect on future financial results. Inflationary pressure or interest rate fluctuations could adversely affect the business and financial performance as a result of higher costs and/or lower consumer spending. The company also may experience the effects of heightened geopolitical and economic instability or increased difficulty of conducting business in a country or region due to actual or potential political or military conflict or action.

The company faces risks from the integration of Worldpay, including the inability to successfully combine the business in a manner that permits achievement of enhanced revenue opportunities and cost savings, complexities associated with managing the combined businesses, potential adverse reactions from business relationships, and diversion of management attention. The company also faces risks from its business transformation and reorganization activities, which may not deliver expected benefits within anticipated timeframes and may disrupt business activities. The payments technology industry is highly competitive and highly innovative, and some competitors have greater financial and operational resources, which may give them an advantage with respect to pricing and the ability to develop new and disruptive technologies.

The company faces material risks from its inability to protect systems and data from continually evolving cybersecurity threats, as it processes and stores sensitive business and personal information including credit and debit card numbers, bank account numbers, and social security numbers, and has experienced all incident types described in its risk factors in the past. The company is a regular target of malicious attempts to gain unauthorized access, and while it maintains insurance, such coverage may be insufficient to cover all losses. The company also faces significant risk from the integration of Worldpay, as the combination of two independent businesses is complex, costly and time consuming, and the company must manage the separation of its Issuer Solutions business simultaneously. The company's substantial indebtedness, with $16.4 billion ⁴⁰ in aggregate principal amount of senior unsecured notes outstanding as of December 31, 2025, could adversely affect it and limit business flexibility by requiring a large portion of cash flow from operations to service and repay debt. The company's allowance for credit losses increased to $50.2 million ⁴¹ from $24.0 million ⁴² as of December 31, 2024, a 109% increase, reflecting exposure to merchant chargeback losses and fraud. The company's balance sheet includes significant amounts of goodwill and other intangible assets, which together accounted for approximately 40% ⁴³ of total assets as of December 31, 2025, and impairment of a portion of these assets could adversely affect results.

Management's message emphasizes a refreshed strategy focusing resources, efforts and investments on areas of the business that will drive the best opportunities for growth, with a commitment to excellence in execution and delivering flawlessly at scale globally. The company is streamlining its organization and operating environments through a transformation program to deliver a global, unified operating company, and expects these transformation initiatives to generate more than $650 million ⁴⁴ of annual run-rate operating income benefit by the first half of 2027. Key strategic priorities include enhancing capabilities in cloud-based POS and software solutions in select vertical markets, further investing in the leadership position in integrated payments and embedded solutions, leveraging core payments channels globally, delivering innovative commerce enablement solutions globally including investing in AI capabilities, and enabling frictionless, best-in-class customer experiences.