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Global Payments (GPN) Q4 Earnings & Revenues Beat, Up Y/Y
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Global Payments Inc. (GPN - Free Report) reported fourth-quarter 2021 adjusted earnings per share (EPS) of $2.13, which surpassed the Zacks Consensus Estimate of $2.11. The bottom line also improved 18.3% from $1.80 per share a year ago.
Adjusted net revenues rose 13.3% year over year to $1,984.9 million for the fourth quarter from $1,752.4 million a year ago. The top line also outpaced the consensus mark of $1,966 million.
The electronics payment processing company’s fourth-quarter results benefited from robust Merchant Solutions’ performance. The ongoing economic recovery aided GPN with a higher number of transactions.
Global Payments Inc. Price, Consensus and EPS Surprise
Adjusted operating margin of 42% improved 50 basis points (bps) year over year for the quarter under review.
Total operating expenses escalated 11.6% year over year to $1,873 million due to a rise in the cost of service, and higher selling, general and administrative costs.
Adjusted operating income rose 14.7% year over year to $833.5 million.
Segmental Performances
Merchant Solutions: Revenues of this segment advanced 20.5% year over year to $1,340 million for the quarter under review. Operating income of $646.2 million climbed 22.4% year over year on global volume growth.
Issuer Solutions: The segment reported revenues of $462.9 million, which advanced 1.3% year over year. Operating income declined 1.6% year over year to $200.9 million for the fourth quarter. For 2021, it recorded more than 2 billion in buy now, pay later transactions.
Business and Consumer Solutions: Revenues of this segment inched up 1.5% year over year to $207.8 million for the quarter under review. Operating income of $45 million decreased 9% year over year.
Financial Position (as of Dec 31, 2021)
The company exited the fourth quarter with cash and cash equivalents of $1,979.3 million, which declined sequentially from $2,347.7 million.
Long-term debt amounted to $11,414.8 million, reflecting an increase from $10,709.8 million at third quarter-end. The current portion of long-term debt was $78.5 million at fourth quarter-end.
Shareholders’ equity of $25.6 billion declined sequentially from $26.1 billion.
For 2021, net cash provided by operating activities climbed to $2,780.8 million from the prior-year comparable figure of $2,314.2 million.
Capital Deployment
Management approved a quarterly dividend of 25 cents per share, which will be paid out on Mar 25, 2022 to shareholders of record as on Mar 11, 2022. The company also boosted the share buyback program by increasing the available fund to $2 billion.
2022 Guidance
GPN anticipates adjusted net revenues within $8.42-$8.50 billion for 2021, indicating an increase from the 2021 level of $7.74 billion.
Adjusted EPS is estimated between $9.45 and $9.67, suggesting an increase of 16-19% from the 2021 reported figure of $8.16.
It expects 2022 adjusted operating margin to expand up to 100 basis points from the 2021 level of 41.8%.
Headquartered in Chicago, IL, Envestnet provides wealth management software and services. The Zacks Consensus Estimate for ENV’s 2022 earnings suggests an increase of 3.3% year over year. The consensus mark for Envestnet’s revenues for 2022 indicates a 16.2% year-over-year rise.
Vasta Platform is a provider of educational and digital solutions in schools in a specific sector in Brazil. Based in Sao Paulo, VSTA’s Digital Platform business offers physical and digital e-commerce platform services. The Zacks Consensus Estimate for Vasta Platform’s bottom line indicates 27.3% year-over-year growth. The consensus mark for revenues is pegged at $177.6 million.
Palantir Technologies develops software platforms for the defense and intelligence sectors. The consensus mark for Denver, CO-based PLTR’s bottom line for 2022 implies a jump of 46.7% year over year. In the last four quarters, Palantir Technologies beat earnings estimates twice and met the same on the other two occasions, with an average surprise of 70.8%.
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Global Payments (GPN) Q4 Earnings & Revenues Beat, Up Y/Y
Global Payments Inc. (GPN - Free Report) reported fourth-quarter 2021 adjusted earnings per share (EPS) of $2.13, which surpassed the Zacks Consensus Estimate of $2.11. The bottom line also improved 18.3% from $1.80 per share a year ago.
Adjusted net revenues rose 13.3% year over year to $1,984.9 million for the fourth quarter from $1,752.4 million a year ago. The top line also outpaced the consensus mark of $1,966 million.
The electronics payment processing company’s fourth-quarter results benefited from robust Merchant Solutions’ performance. The ongoing economic recovery aided GPN with a higher number of transactions.
Global Payments Inc. Price, Consensus and EPS Surprise
Global Payments Inc. price-consensus-eps-surprise-chart | Global Payments Inc. Quote
Operating Performance
Adjusted operating margin of 42% improved 50 basis points (bps) year over year for the quarter under review.
Total operating expenses escalated 11.6% year over year to $1,873 million due to a rise in the cost of service, and higher selling, general and administrative costs.
Adjusted operating income rose 14.7% year over year to $833.5 million.
Segmental Performances
Merchant Solutions: Revenues of this segment advanced 20.5% year over year to $1,340 million for the quarter under review. Operating income of $646.2 million climbed 22.4% year over year on global volume growth.
Issuer Solutions: The segment reported revenues of $462.9 million, which advanced 1.3% year over year. Operating income declined 1.6% year over year to $200.9 million for the fourth quarter. For 2021, it recorded more than 2 billion in buy now, pay later transactions.
Business and Consumer Solutions: Revenues of this segment inched up 1.5% year over year to $207.8 million for the quarter under review. Operating income of $45 million decreased 9% year over year.
Financial Position (as of Dec 31, 2021)
The company exited the fourth quarter with cash and cash equivalents of $1,979.3 million, which declined sequentially from $2,347.7 million.
Long-term debt amounted to $11,414.8 million, reflecting an increase from $10,709.8 million at third quarter-end. The current portion of long-term debt was $78.5 million at fourth quarter-end.
Shareholders’ equity of $25.6 billion declined sequentially from $26.1 billion.
For 2021, net cash provided by operating activities climbed to $2,780.8 million from the prior-year comparable figure of $2,314.2 million.
Capital Deployment
Management approved a quarterly dividend of 25 cents per share, which will be paid out on Mar 25, 2022 to shareholders of record as on Mar 11, 2022. The company also boosted the share buyback program by increasing the available fund to $2 billion.
2022 Guidance
GPN anticipates adjusted net revenues within $8.42-$8.50 billion for 2021, indicating an increase from the 2021 level of $7.74 billion.
Adjusted EPS is estimated between $9.45 and $9.67, suggesting an increase of 16-19% from the 2021 reported figure of $8.16.
It expects 2022 adjusted operating margin to expand up to 100 basis points from the 2021 level of 41.8%.
Zacks Rank & Key Picks
Global Payments currently has a Zacks Rank #4 (Sell). Some better-ranked players in the Business Services space include Envestnet, Inc. (ENV - Free Report) , Vasta Platform Limited (VSTA - Free Report) and Palantir Technologies Inc. (PLTR - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Headquartered in Chicago, IL, Envestnet provides wealth management software and services. The Zacks Consensus Estimate for ENV’s 2022 earnings suggests an increase of 3.3% year over year. The consensus mark for Envestnet’s revenues for 2022 indicates a 16.2% year-over-year rise.
Vasta Platform is a provider of educational and digital solutions in schools in a specific sector in Brazil. Based in Sao Paulo, VSTA’s Digital Platform business offers physical and digital e-commerce platform services. The Zacks Consensus Estimate for Vasta Platform’s bottom line indicates 27.3% year-over-year growth. The consensus mark for revenues is pegged at $177.6 million.
Palantir Technologies develops software platforms for the defense and intelligence sectors. The consensus mark for Denver, CO-based PLTR’s bottom line for 2022 implies a jump of 46.7% year over year. In the last four quarters, Palantir Technologies beat earnings estimates twice and met the same on the other two occasions, with an average surprise of 70.8%.