GLOBAL PAYMENTS INC 10-Q

ITEM 1—FINANCIAL STATEMENTS GLOBAL PAYMENTS INC. UNAUDITED CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share data) Three Months Ended March 31, 2025 March 31, 2024 Revenues $ 2,412,098 $ 2,420,187 Operating expenses: Cost of service 921,195 922,390 Selling, general and administrative 1,024,011 1,045,545 Gain on business disposition ( 3,993 ) — 1,941,213 1,967,935 Operating income 470,885 452,252 Interest and other income 39,389 35,928 Interest and other expense ( 157,110 ) ( 162,147 ) ( 117,721 ) ( 126,219 ) Income before income taxes and equity in income of equity method investments 353,164 326,033 Income tax expense 58,678 19,382 Income before equity in income of equity method investments 294,486 306,651 Equity in income of equity method investments, net of tax 18,286 16,411 Net income 312,772 323,062 Net income attributable to noncontrolling interests ( 7,038 ) ( 9,755 ) Net income attributable to Global Payments $ 305,734 $ 313,307 Earnings per share attributable to Global Payments: Basic earnings per share $ 1.24 $ 1.22 Diluted earnings per share $ 1.24 $ 1.22 See Notes to Unaudited Consolidated Financial Statements. 3 Table of Contents GLOBAL PAYMENTS INC. UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in thousands) Three Months Ended March 31, 2025 March 31, 2024 Net income $ 312,772 $ 323,062 Other comprehensive income (loss): Foreign currency translation adjustments 215,064 ( 84,360 ) Income tax (expense) benefit related to foreign currency translation adjustments ( 1,574 ) 2,694 Net unrealized (losses) gains on hedging activities ( 9,371 ) 29,116 Reclassification of net unrealized losses (gains) on hedging activities to interest expense 852 ( 2,662 ) Income tax (expense) benefit related to hedging activities 2,013 ( 6,388 ) Other comprehensive income (loss) 206,984 ( 61,600 ) Comprehensive income 519,756 261,462 Comprehensive income (loss) attributable to noncontrolling interests 50,676 ( 13,332 ) Comprehensive income attributable to Global Payments $ 469,080 $ 274,794 See Notes to Unaudited Consolidated Financial Statements. 4 Table of Contents GLOBAL PAYMENTS INC. CONSOLIDATED BALANCE SHEETS (in thousands, except share data) March 31, 2025 December 31, 2024 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 2,896,024 $ 2,538,416 Accounts receivable, net 1,112,308 1,081,740 Settlement processing assets 1,836,890 1,620,921 Prepaid expenses and other current assets 893,338 795,593 Total current assets 6,738,560 6,036,670 Goodwill 26,417,195 26,286,318 Other intangible assets, net 8,668,020 8,931,943 Property and equipment, net 2,352,656 2,277,593 Deferred income taxes 105,694 106,083 Notes receivable 788,075 772,297 Other noncurrent assets 2,545,906 2,479,351 Total assets $ 47,616,106 $ 46,890,255 LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY Current liabilities: Settlement lines of credit $ 727,975 $ 503,407 Current portion of long-term debt 1,180,408 1,075,708 Accounts payable and accrued liabilities 2,925,073 3,079,924 Settlement processing obligations 2,307,400 1,593,675 Total current liabilities 7,140,856 6,252,714 Long-term debt 15,014,421 15,164,659 Deferred income taxes 1,770,186 1,832,996 Other noncurrent liabilities 666,070 623,319 Total liabilities 24,591,533 23,873,688 Commitments and contingencies Redeemable noncontrolling interests 166,791 160,623 Equity: Preferred stock, no par value; 5,000,000 shares authorized and none issued — — Common stock, no par value; 400,000,000 shares authorized at March 31, 2025 and December 31, 2024; 245,361,590 shares issued and outstanding at March 31, 2025 and 248,708,899 shares issued and outstanding at December 31, 2024 — — Paid-in capital 17,678,643 18,118,942 Retained earnings 5,019,346 4,774,736 Accumulated other comprehensive loss ( 449,646 ) ( 612,992 ) Total Global Payments shareholders’ equity 22,248,343 22,280,686 Nonredeemable noncontrolling interests 609,439 575,258 Total equity 22,857,782 22,855,944 Total liabilities, redeemable noncontrolling interests and equity $ 47,616,106 $ 46,890,255 See Notes to Unaudited Consolidated Financial Statements. 5 Table of Contents GLOBAL PAYMENTS INC. UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Three Months Ended March 31, 2025 March 31, 2024 Cash flows from operating activities: Net income $ 312,772 $ 323,062 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization of property and equipment 122,839 117,919 Amortization of acquired intangibles 329,269 343,217 Amortization of capitalized contract costs 34,424 32,883 Share-based compensation expense 39,740 40,117 Provision for operating losses and credit losses 19,950 19,409 Noncash lease expense 14,162 15,397 Deferred income taxes ( 70,737 ) ( 111,886 ) Paid-in-kind interest capitalized to principal of notes receivable ( 19,499 ) ( 17,694 ) Equity in income of equity method investments, net of tax ( 18,286 ) ( 16,411 ) Distributions received on investments 7,512 — Gain on business disposition ( 3,993 ) — Other, net 19,338 12,075 Changes in operating assets and liabilities, net of the effects of business combinations: Accounts receivable ( 36,734 ) 50,934 Prepaid expenses and other assets ( 93,552 ) ( 120,774 ) Accounts payable and other liabilities ( 102,081 ) ( 158,669 ) Net cash provided by operating activities 555,124 529,579 Cash flows from investing activities: Business combinations and other acquisitions, net of cash and restricted cash acquired ( 49,886 ) ( 2,557 ) Capital expenditures ( 127,577 ) ( 145,441 ) Payment received on notes receivable 4,375 — Net cash used in investing activities ( 173,088 ) ( 147,998 ) Cash flows from financing activities: Changes in funds held for customers ( 58,461 ) ( 88,573 ) Changes in settlement processing assets and obligations, net 479,153 ( 24,689 ) Net borrowings from settlement lines of credit 223,216 133,228 Net borrowings (repayments) from commercial paper notes 867,582 ( 1,093,043 ) Proceeds from long-term debt 1,551,000 4,609,000 Repayments of long-term debt ( 2,546,613 ) ( 2,628,548 ) Payments of debt issuance costs — ( 29,391 ) Repurchases of common stock ( 446,286 ) ( 800,048 ) Proceeds from stock issued under share-based compensation plans 6,340 11,031 Common stock repurchased - share-based compensation plans ( 36,006 ) ( 41,140 ) Distributions to noncontrolling interests ( 10,327 ) ( 4,748 ) Proceeds and contributions from noncontrolling interests — 89 Purchase of capped calls related to issuance of convertible notes — ( 256,250 ) Dividends paid ( 61,124 ) ( 63,616 ) Net cash used in financing activities ( 31,526 ) ( 276,698 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash 61,790 ( 34,035 ) Increase in cash, cash equivalents and restricted cash 412,300 70,848 Cash, cash equivalents and restricted cash, beginning of the period 2,735,975 2,256,875 Cash, cash equivalents and restricted cash, end of the period $ 3,148,275 $ 2,327,723 See Notes to Unaudited Consolidated Financial Statements. 6 Table of Contents GLOBAL PAYMENTS INC. UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (in thousands, except per share data) Shareholders' Equity Number of Shares Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Total Global Payments Shareholders’ Equity Nonredeemable Noncontrolling Interests Total Equity Redeemable Noncontrolling Interests Balance at December 31, 2024 248,709 $ 18,118,942 $ 4,774,736 $ ( 612,992 ) $ 22,280,686 $ 575,258 $ 22,855,944 $ 160,623 Net income 305,734 305,734 8,224 313,958 ( 1,186 ) Other comprehensive income 163,346 163,346 36,284 199,630 7,354 Stock issued under share-based compensation plans 1,229 6,340 6,340 6,340 Common stock repurchased - share-based compensation plans ( 358 ) ( 37,342 ) ( 37,342 ) ( 37,342 ) Share-based compensation expense 39,740 39,740 39,740 Repurchases of common stock ( 4,218 ) ( 449,037 ) ( 449,037 ) ( 449,037 ) Distributions to noncontrolling interests — ( 10,327 ) ( 10,327 ) Cash dividends declared ($ 0.25 per common share) ( 61,124 ) ( 61,124 ) ( 61,124 ) Balance at March 31, 2025 245,362 $ 17,678,643 $ 5,019,346 $ ( 449,646 ) $ 22,248,343 $ 609,439 $ 22,857,782 $ 166,791 Shareholders' Equity Number of Shares Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Total Global Payments Shareholders’ Equity Nonredeemable Noncontrolling Interests Total Equity Redeemable Noncontrolling Interests Balance at December 31, 2023 260,383 $ 19,800,953 $ 3,457,182 $ ( 258,925 ) $ 22,999,210 $ 280,340 $ 23,279,550 $ 507,965 Net income 313,307 313,307 7,693 321,000 2,062 Other comprehensive loss ( 38,513 ) ( 38,513 ) ( 15,001 ) ( 53,514 ) ( 8,086 ) Stock issued under share-based compensation plans 1,132 11,031 11,031 11,031 Common stock repurchased - share-based compensation plans ( 322 ) ( 42,663 ) ( 42,663 ) ( 42,663 ) Share-based compensation expense 40,117 40,117 40,117 Repurchases of common stock ( 6,062 ) ( 808,365 ) ( 808,365 ) ( 808,365 ) Distributions to noncontrolling interests — ( 4,748 ) ( 4,748 ) Contributions from noncontrolling interests — 89 89 Reclassification of redeemable noncontrolling interest to nonredeemable noncontrolling interest — 358,872 358,872 ( 358,872 ) Purchase of capped calls related to issuance of convertible notes, net of taxes of $ 61,573 ( 194,677 ) ( 194,677 ) ( 194,677 ) Cash dividends declared ($ 0.25 per common share) ( 63,616 ) ( 63,616 ) ( 63,616 ) Balance at March 31, 2024 255,131 $ 18,806,396 $ 3,706,873 $ ( 297,438 ) $ 22,215,831 $ 627,245 $ 22,843,076 $ 143,069 See Notes to Unaudited Consolidated Financial Statements. 7 Table of Contents NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS NOTE 1— BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Business, consolidation and presentation - We are a leading payments technology company delivering innovative software and services to our customers globally. Our technologies, services and team member expertise allow us to provide a broad range of solutions that enable our customers to operate their businesses more efficiently across a variety of channels around the world. We operate in two reportable segments: Merchant Solutions and Issuer Solutions. See "Note 14—Segment Information" for further information. Global Payments Inc. and its consolidated subsidiaries are referred to herein collectively as "Global Payments," the "Company," "we," "our" or "us," unless the context requires otherwise. These unaudited consolidated financial statements include our accounts and those of our majority-owned subsidiaries, and all intercompany balances and transactions have been eliminated in consolidation. Investments in entities that we do not control are accounted for using the equity or cost method, based on whether or not we have the ability to exercise significant influence over operating and financial policies. These unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). The consolidated balance sheet as of December 31, 2024 was derived from the audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024 but does not include all disclosures required by GAAP for annual financial statements. In the opinion of our management, all known adjustments necessary for a fair presentation of the results of the interim periods have been made. These adjustments consist of normal recurring accruals and estimates that affect the carrying amount of assets and liabilities. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024. Use of estimates - The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reported periods. Actual results could differ materially from those estimates. In particular, uncertainty resulting from global events and other macroeconomic conditions are difficult to predict, and the ultimate effect could result in additional charges related to the recoverability of assets, including financial assets, long-lived assets and goodwill and other losses. These unaudited consolidated financial statements reflect the financial statement effects based upon management’s estimates and assumptions utilizing the most currently available information. Change in presentation - During the first quarter of 2025, we elected to change our presentation of cash flows associated with "Changes in settlement processing assets and obligations, net" and "Changes in funds held for customers" from operating activities to financing activities within our consolidated statements of cash flows. The change has been applied retrospectively and the prior period has been conformed to the current period presentation. This change had no effect on our consolidated statements of income, consolidated statements of comprehensive income, consolidated balance sheets or consolidated statements of changes in equity. The change in presentation resulted in an increase in net cash provided by operating activities and an increase in net cash used in financing activities of $ 113.3 million for the three months ended March 31, 2024. SEC rule changes - On March 27, 2025, the SEC voted to withdraw its litigation defense of its climate risk disclosure rules requiring disclosure of certain climate-related information and greenhouse gas emissions. 8 Table of Contents Recently issued accounting pronouncements not yet adopted Accounting Standards Update ("ASU") 2024-03 - In November 2024, the Financing Accounting Standards Board ("FASB") issued ASU 2024-03, " Disaggregation of Income Statement Expenses," which requires disclosure in the notes to financial statements of specified information about certain costs and expenses. The amendments in this update are effective for fiscal years beginning after December 15, 2026. Early adoption is permitted. The amendments should be applied either prospectively to financial statements issued for reporting periods after the effective date of this update or retrospectively to any or all prior periods presented in the financial statements. We are evaluating the potential effects of ASU 2024-03 on our consolidated financial statements and related disclosures. ASU 2023-09 - In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740): Improvement to Income Tax Disclosures," which is intended to enhance the transparency and decision usefulness of income tax information through improvements to income tax disclosures, primarily related to the rate reconciliation and income taxes paid information. The amendments in this update are effective for annual periods beginning with our year ending December 31, 2025. The amendments should be applied on a prospective basis with the option to apply the standard retrospectively. We are evaluating how the enhanced disclosure requirements of ASU 2023-09 will affect our presentation, and we will include the incremental disclosures upon the effective date. There were no accounting pronouncements adopted by the Company during the three months ended March 31, 2025. Subsequent event On April 17, 2025, we entered into definitive agreements to divest our Issuer Solutions business to Fidelity National Information Services, Inc. (“FIS”) as well as acquire 100 % of Worldpay Holdco, LLC (“Worldpay”) from FIS and affiliates of GTCR LLC (“GTCR”). Worldpay is an industry leading payments technology and solutions company. Total estimated consideration expected to be received for the divestiture of our Issuer Solutions business consists of (1) approximately $ 7.5 billion in net cash and (2) FIS’ 45 % ownership interest in Worldpay. Total estimated consideration expected to be paid to GTCR for the remaining 55 % ownership interest in Worldpay consists of (1) approximately $ 6.1 billion in cash and (2) 43.3 million shares of Global Payments common stock. The proposed divestiture of our Issuer Solutions business and acquisition of Worldpay will occur simultaneously. As part of the transaction, we obtained $ 7.7 billion in committed bridge financing. The transaction is subject to customary cash, debt and working capital adjustments. The transactions are expected to close in the first half of 2026, subject to regulatory approvals and other customary closing conditions. We will evaluate if the disposal group meets the criteria to be classified as held for sale in the quarter ending June 30, 2025, which could result in the recognition of a loss for financial reporting purposes. NOTE 2— BUSINESS DISPOSITIONS AdvancedMD, Inc. In December 2024, we completed the sale of AdvancedMD, Inc. ("AdvancedMD") for approximately $ 1 billion, subject to certain closing adjustments, and up to $ 125 million contingent upon the purchaser achieving certain specified returns. AdvancedMD is a provider of software-as-a-service solutions to small-to-medium sized ambulatory physician practices in the United States ("U.S."), and was included in our Merchant Solutions segment prior to disposition. We recognized a gain on the sale of $ 273.1 million during the year ended December 31, 2024 and an additional gain on sale of $ 4.0 million during the three months ended March 31, 2025. 9 Table of Contents NOTE 3— REVENUES The following tables present a disaggregation of our revenues from contracts with customers by geography for each of our reportable segments for the three months ended March 31, 2025 and 2024: Three Months Ended March 31, 2025 Merchant Solutions Issuer Solutions Intersegment Eliminations Total (in thousands) Americas $ 1,483,092 $ 472,429 $ ( 6,734 ) $ 1,948,787 Europe 261,135 137,716 — 398,851 Asia Pacific 64,460 10,585 ( 10,585 ) 64,460 $ 1,808,687 $ 620,730 $ ( 17,319 ) $ 2,412,098 Three Months Ended March 31, 2024 Merchant Solutions Issuer Solutions Intersegment Eliminations Total (in thousands) Americas $ 1,522,732 $ 458,605 $ ( 6,214 ) $ 1,975,123 Europe 251,051 133,702 — 384,753 Asia Pacific 60,311 10,428 ( 10,428 ) 60,311 $ 1,834,094 $ 602,735 $ ( 16,642 ) $ 2,420,187 In our Merchant Solutions segment, we actively market and provide our payment services, software and other commerce enablement solutions directly to our customers and through a variety of partner distribution channels across three business pillars: Point-of-Sale and Software Solutions, Integrated and Embedded Solutions and Core Payments Solutions. Our Point-of-Sale and Software Solutions business provides advanced payments technology that is integrated into point-of-sale systems and business management software solutions that we own. Our Integrated and Embedded Solutions business provides e-commerce solutions, advanced payments technology and commerce enablement solutions that is embedded into business management software solutions owned by our technology partners who operate in numerous vertical markets and countries. Our Core Payments Solutions business provides payments technology services and other commerce enablement solutions directly to customers across numerous verticals in the markets we serve through our direct sales force worldwide, as well as referral partnerships and other wholesale relationships. The following table presents a disaggregation of our Merchant Solutions segment revenues by business pillar for the three months ended March 31, 2025 and 2024: Three Months Ended March 31, 2025 March 31, 2024 (in thousands) Point-of-Sale and Software Solutions $ 348,141 $ 379,184 Integrated and Embedded Solutions 803,542 757,623 Core Payments Solutions 657,004 697,287 $ 1,808,687 $ 1,834,094 ASC Topic 606, Revenues from Contracts with Customers ("ASC 606"), requires that we determine for each customer arrangement whether revenue should be recognized at a point in time or over time. For the three months ended March 31, 2025 and 2024, substantially all of our revenues were recognized over time. 10 Table of Contents Supplemental balance sheet information related to contracts from customers as of March 31, 2025 and December 31, 2024 was as follows: Balance Sheet Location March 31, 2025 December 31, 2024 (in thousands) Assets: Capitalized costs to obtain customer contracts, net Other noncurrent assets $ 342,145 $ 338,960 Capitalized costs to fulfill customer contracts, net Other noncurrent assets 174,316 174,024 Liabilities: Contract liabilities, net (current) Accounts payable and accrued liabilities 219,005 242,769 Contract liabilities, net (noncurrent) Other noncurrent liabilities 50,406 50,555 Net contract assets were not material at March 31, 2025 or December 31, 2024. Revenue recognized for the three months ended March 31, 2025 and 2024 from contract liability balances at the beginning of each period was $ 76.7 million and $ 92.3 million, respectively. ASC 606 requires disclosure of the aggregate amount of the transaction price allocated to unsatisfied performance obligations. The purpose of this disclosure is to provide additional information about the amounts and expected timing of revenue to be recognized from the remaining performance obligations in our existing contracts. The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially unsatisfied at March 31, 2025. However, as permitted, we have elected to exclude from this disclosure any contracts with an original duration of one year or less and any variable consideration that meets specified criteria. Accordingly, the total amount of unsatisfied or partially unsatisfied performance obligations related to processing services is significantly higher than the amounts disclosed in the table below (in thousands): Year Ending December 31, 2025 $ 867,945 2026 972,161 2027 745,587 2028 417,952 2029 196,954 2030 120,240 2031 and thereafter 246,735 Total $ 3,567,574 11 Table of Contents NOTE 4— GOODWILL AND OTHER INTANGIBLE ASSETS As of March 31, 2025 and December 31, 2024, goodwill and other intangible assets consisted of the following: March 31, 2025 December 31, 2024 (in thousands) Goodwill $ 26,417,195 $ 26,286,318 Other intangible assets: Customer-related intangible assets $ 10,402,969 $ 10,354,686 Acquired technologies 3,060,084 3,051,188 Contract-based intangible assets 2,348,232 2,310,430 Trademarks and trade names 1,049,004 1,048,181 16,860,289 16,764,485 Less accumulated amortization: Customer-related intangible assets 4,625,208 4,420,615 Acquired technologies 2,399,052 2,306,420 Contract-based intangible assets 487,174 439,237 Trademarks and trade names 680,835 666,270 8,192,269 7,832,542 $ 8,668,020 $ 8,931,943 The following table sets forth the changes by reportable segment in the carrying amount of goodwill for the three months ended March 31, 2025: Merchant Solutions Issuer Solutions Total (in thousands) Balance at December 31, 2024 $ 16,777,532 $ 9,508,786 $ 26,286,318 Effect of foreign currency translation 117,469 9,938 127,407 Measurement period adjustments 3,470 — 3,470 Balance at March 31, 2025 $ 16,898,471 $ 9,518,724 $ 26,417,195 Accumulated impairment losses for goodwill were $ 357.9 million as of March 31, 2025 and December 31, 2024. 12 Table of Contents NOTE 5— LONG-TERM DEBT AND LINES OF CREDIT As of March 31, 2025 and December 31, 2024, long-term debt consisted of the following: March 31, 2025 December 31, 2024 (in thousands) 2.650 % senior notes due February 15, 2025 $ — $ 999,791 1.200 % senior notes due March 1, 2026 1,098,243 1,097,764 4.800 % senior notes due April 1, 2026 761,300 764,125 2.150 % senior notes due January 15, 2027 747,759 747,447 4.950 % senior notes due August 15, 2027 497,670 497,425 4.450 % senior notes due June 1, 2028 463,914 465,012 3.200 % senior notes due August 15, 2029 1,243,109 1,242,715 5.300 % senior notes due August 15, 2029 496,937 496,762 2.900 % senior notes due May 15, 2030 994,001 993,708 2.900 % senior notes due November 15, 2031 744,443 744,233 5.400 % senior notes due August 15, 2032 743,936 743,730 4.150 % senior notes due August 15, 2049 741,304 741,215 5.950 % senior notes due August 15, 2052 739,075 738,975 4.875 % senior notes due March 17, 2031 857,957 820,952 1.000 % convertible notes due August 15, 2029 1,463,828 1,461,761 1.500 % convertible notes due March 1, 2031 1,971,784 1,970,577 Revolving credit facility 1,528,000 1,500,000 Commercial paper notes 868,773 — Finance lease liabilities 16,665 16,382 Other borrowings 216,131 197,793 Total long-term debt 16,194,829 16,240,367 Less current portion 1,180,408 1,075,708 Long-term debt, excluding current portion $ 15,014,421 $ 15,164,659 The carrying amounts of our senior notes and convertible notes in the table above are presented net of unamortized discount and unamortized debt issuance costs, as applicable. At March 31, 2025, the unamortized discount on senior notes and convertible notes was $ 36.7 million, and unamortized debt issuance costs on senior notes and convertible notes were $ 88.6 million. At December 31, 2024, the unamortized discount on senior notes and convertible notes was $ 38.5 million, and unamortized debt issuance costs on senior notes and convertible notes were $ 92.8 million. The portion of unamortized debt issuance costs related to revolving credit facilities is included in other noncurrent assets in our consolidated balance sheets. At March 31, 2025 and December 31, 2024, unamortized debt issuance costs on the unsecured revolving credit facility were $ 12.2 million and $ 13.4 million, respectively. 13 Table of Contents At March 31, 2025, future maturities of long-term debt (excluding finance lease liabilities) are as follows by year (in thousands): Year Ending December 31, 2025 $ 62,692 2026 1,932,615 2027 3,692,372 2028 467,701 2029 3,253,411 2030 1,004,112 2031 and thereafter 5,865,304 Total $ 16,278,207 Convertible Notes 1.500 % Convertible Notes due March 1, 2031 We have $ 2.0 billion in aggregate principal amount of 1.500 % convertible unsecured senior notes due March 2031, which were issued in 2024 through a private placement. The net proceeds from this offering were approximately $ 1.97 billion reflecting debt issuance costs of $ 33.5 million, which were capitalized and reflected as a reduction of the related carrying amount of the convertible notes in our consolidated balance sheets. Interest on the convertible notes is payable semi-annually in arrears on March 1 and September 1 of each year, beginning on September 1, 2024, to the holders of record on the preceding February 15 and August 15, respectively. In connection with the issuance of the notes, we entered into privately negotiated capped call transactions with certain of the initial purchasers of the notes and other financial institutions to cover, subject to customary adjustments, the number of shares of common stock initially underlying the notes. The economic effect of the capped call transactions is to hedge the potential dilutive effect upon the conversion of the notes, or offset our cash obligation if the cash settlement option is elected, for amounts in excess of the principal amount of converted notes subject to a cap. The price of the capped call transactions was $ 228.90 per share. The capped call transactions met the accounting criteria to be reflected in stockholders’ equity and not accounted for as derivatives. The cost of $ 256.3 million incurred in connection with the capped call transactions was reflected as a reduction to paid-in-capital in our consolidated statement of changes in equity for the three months ended March 31, 2024, net of applicable income taxes. 1.000 % Convertible Notes due August 15, 2029 We also have $ 1.5 billion in aggregate principal amount of 1.000 % convertible notes due August 2029, which were issued during 2022 in a private placement pursuant to an investment agreement with Silver Lake Partners. Interest on the convertible notes is payable semi-annually in arrears on February 15 and August 15 of each year, beginning on February 15, 2023, to the holders of record on the preceding February 1 and August 1, respectively. The convertible notes mature on August 15, 2029, subject to earlier conversion or repurchase. The notes, which are currently convertible, are presented within long-term debt in our consolidated balance sheets based on our intent and ability to refinance on a long-term basis should a conversion event occur. Revolving Credit Facility Our credit agreement provides for an unsubordinated unsecured $ 5.75 billion revolving credit facility that matures in August 2027. As of March 31, 2025, there were borrowings of $ 1.5 billion outstanding under the revolving credit facility with an interest rate of 5.8 %, and the total available commitments under the revolving credit facility were $ 3.3 billion. 14 Table of Contents Commercial Paper We have a $ 2.0 billion commercial paper program under which we may issue senior unsecured commercial paper notes with maturities of up to 397 days from the date of issue. Commercial paper notes are expected to be issued at a discount from par, or they may bear interest, each at commercial paper market rates dictated by market conditions at the time of their issuance. The proceeds from issuances of commercial paper notes will be used primarily for general corporate purposes but may also be used for acquisitions, to pay dividends, for debt refinancing or for other purposes. As of March 31, 2025, we had net borrowings under our commercial paper program of $ 868.8 million outstanding, presented within long-term debt in our consolidated balance sheet based on our intent and ability to continually refinance on a long-term basis, with a weighted average annual interest rate of 5.0 %. The commercial paper program is backstopped by our credit agreement, in that the amount of commercial paper notes outstanding cannot exceed the undrawn portion of our revolving credit facility. As such, we could draw on the revolving credit facility to repay commercial paper notes that cannot be rolled over or refinanced with similar debt. Fair Value of Long-Term Debt As of March 31, 2025, our senior notes had a total carrying amount of $ 10.1 billion and an estimated fair value of $ 9.7 billion. As of March 31, 2025, our 1.500 % convertible notes due March 1, 2031 had a total carrying amount of $ 2.0 billion and an estimated fair value of $ 1.9 billion. The estimated fair values of our senior notes and 1.500 % convertible senior notes were based on quoted market prices in active markets and are considered to be Level 1 measurements of the fair value hierarchy. As of March 31, 2025, our 1.000 % convertible notes due August 15, 2029 had a total carrying amount of $ 1.5 billion and an estimated fair value of $ 1.5 billion. The estimated fair value of our 1.000 % convertible notes was based on a lattice pricing model and is considered to be a Level 3 measurement of the fair value hierarchy. The fair value of other long-term debt approximated its carrying amount at March 31, 2025. Compliance with Covenants The convertible notes include customary covenants and events of default for convertible notes of this type. The revolving credit agreement contains customary affirmative covenants and restrictive covenants, including, among others, financial covenants based on net leverage and interest coverage ratios, and customary events of default. As of March 31, 2025, the required leverage ratio was 4.00 to 1.00, and the required interest coverage ratio was 3.00 to 1.00. The required leverage ratio will step-down to 3.75 to 1.00 as of June 30, 2025. We were in compliance with all applicable covenants as of March 31, 2025. Interest Expense Interest expense was $ 146.7 million and $ 160.8 million for the three months ended March 31, 2025 and 2024, respectively. NOTE 6— DERIVATIVES AND HEDGING INSTRUMENTS Net Investment Hedge We have designated our aggregate € 800 million Euro-denominated 4.875 % senior notes due March 2031 as a hedge of our net investment in our Euro-denominated operations. The purpose of the net investment hedge is to reduce the volatility of our net investment in our Euro-denominated operations due to changes in foreign currency exchange rates. 15 Table of Contents Investments in foreign operations with functional currencies other than the reporting currency are subject to foreign currency risk as the assets and liabilities of these subsidiaries are translated into the reporting currency at the period-end rate of exchange with the resulting foreign currency translation adjustment presented as a component of other comprehensive income (loss) and included in accumulated other comprehensive loss within equity in our consolidated balance sheets. Under net investment hedge accounting, the foreign currency remeasurement gains and losses associated with our Euro-denominated senior notes are presented within the same components of other comprehensive income (loss) and accumulated other comprehensive loss, partially offsetting the foreign currency translation adjustment for our foreign subsidiaries. We recognized a loss on the net investment hedge of $ 9.5 million and $ 7.1 million within foreign currency translation adjustments in other comprehensive income (loss) in our consolidated statements of comprehensive income during the three months ended March 31, 2025 and 2024, respectively. Interest Rate Swaps We have interest rate swap agreements with financial institutions to hedge changes in cash flows attributable to interest rate risk on a portion of our variable-rate debt instruments. Net amounts to be received or paid under the swap agreements are reflected as adjustments to interest expense. Since we have designated the interest rate swap agreements as cash flow hedges, unrealized gains or losses resulting from adjusting the swaps to fair value are recognized as components of other comprehensive income (loss). The fair values of our interest rate swaps are determined based on the present value of the estimated future net cash flows using implied rates in the applicable yield curve as of the valuation date. These derivative instruments are classified within Level 2 of the fair value hierarchy. The table below presents information about our interest rate swaps, designated as cash flow hedges, included in our consolidated balance sheets: Fair Values Derivative Financial Instruments Balance Sheet Location Weighted-Average Fixed Rate of Interest at March 31, 2025 Range of Maturity Dates at March 31, 2025 March 31, 2025 December 31, 2024 (in thousands) Interest rate swaps (Notional of $ 1.5 billion at March 31, 2025 and December 31, 2024) Other noncurrent liabilities 4.26 % April 17, 2027 - August 17, 2027 $ 17,384 $ 7,768 The table below presents the effects of our interest rate swaps on our consolidated statements of income and statements of comprehensive income for the three months ended March 31, 2025 and 2024: Three Months Ended March 31, 2025 March 31, 2024 (in thousands) Net unrealized (losses) gains recognized in other comprehensive income (loss) $ ( 9,371 ) $ 29,116 Net unrealized (losses) gains reclassified out of other comprehensive income (loss) to interest expense $ ( 852 ) $ 2,662 As of March 31, 2025, the amount of net unrealized losses in accumulated other comprehensive loss related to our interest rate swaps that is expected to be reclassified into interest expense during the next 12 months was $ 9.3 million. 16 Table of Contents NOTE 7— INCOME TAX For the three months ended March 31, 2025, our effective income tax rate of 16.6 % differed favorably from the U.S. statutory rate primarily as a result of foreign interest income not subject to tax, tax credits and the foreign-derived intangible income deduction. For the three months ended March 31, 2024, our effective income tax rate of 5.9 % differed favorably from the U.S. statutory rate primarily as a result of a change in the assessment of the need for a valuation allowance related to certain foreign tax credit carryforwards, foreign interest income not subject to tax, tax credits and the foreign-derived intangible income deduction. NOTE 8— REDEEMABLE NONCONTROLLING INTERESTS The portions of equity in certain of our consolidated subsidiaries that are not attributable, directly or indirectly, to us, are redeemable upon the occurrence of an event that is not solely within our control. We hold a 51 % controlling interest in our subsidiary in Germany. Under the shareholder agreement, the minority shareholder has the option to compel us to purchase their shares at fair market value upon the occurrence of a specific change in control event. As of March 31, 2025, the option is not considered probable of becoming redeemable. We also own 51 % of our subsidiary in Greece and 50.1 % of our subsidiary in Chile. Under the respective shareholder agreements, the minority shareholders have the option to compel us to purchase their shares at a price per share based on the fair value of the shares, or under certain circumstances for our subsidiary in Greece, at a price determined by calculations stipulated in the shareholder agreement. The options have no expiration date. Because the exercise of each of these redemption options is not solely within our control, the redeemable noncontrolling interests are presented in the mezzanine section between total liabilities and shareholders’ equity, as temporary equity, in our consolidated balance sheets. The redeemable noncontrolling interest for each subsidiary is reflected at the higher of: (i) the initial carrying amount, increased or decreased for the noncontrolling interest's share of comprehensive income (loss), capital contributions and distributions or (ii) the redemption price. The option held by the minority shareholder in Greece, which is redeemable at a price other than fair value, is considered probable of becoming redeemable on December 8, 2025. In determining the measurement method of redemption price, we have elected to accrete changes in the redemption price over the period from the date of issuance to the earliest redemption date of the instrument using the effective interest method, applied prospectively. We have also elected to recognize the entire amount of any redemption price adjustments in net income attributable to noncontrolling interests in our consolidated statements of income. In addition, we own 66 % of our subsidiary in Poland. The redemption option held by the minority shareholder in Poland expired on January 1, 2024, and the redeemable noncontrolling interest was reclassified to nonredeemable noncontrolling interest in our consolidated balance sheet as of January 1, 2024. 17 Table of Contents NOTE 9— SHAREHOLDERS’ EQUITY We repurchase our common stock mainly through open market repurchase plans and, at times, through accelerated share repurchase ("ASR") programs. During the three months ended March 31, 2025 and 2024, we repurchased and retired 4,218,350 and 6,061,999 shares of our common stock, respectively, at a cost, including commissions and applicable excise taxes, of $ 449.0 million and $ 808.4 million, or $ 106.45 and $ 133.35 per share, respectively. The share repurchase activity for the three months ended March 31, 2025 included the repurchase of 2,449,366 shares at an average price of $ 102.07 per share under an ASR agreement we entered into on February 13, 2025 with a financial institution to repurchase an aggregate of $ 250.0 million of our common stock during the ASR program purchase period. This ASR program was completed on March 11, 2025. The share repurchase activity for the three months ended March 31, 2024 included the repurchase of 1,414,759 shares using a portion of the net proceeds from our offering of 1.500 % convertible unsecured senior notes due March 2031 through privately negotiated transactions with purchasers of notes in the offering, or one of their respective affiliates. The purchase price per share of the common stock repurchased in such transactions equaled the closing price of the common stock on February 20, 2024, which was $ 130.80 per share. As of March 31, 2025, the remaining amount available under our share repurchase program was $ 1,405.7 million. On April 24, 2025, our board of directors declared a dividend of $ 0.25 per share payable on June 27, 2025 to common shareholders of record as of June 13, 2025. NOTE 10— SHARE-BASED AWARDS AND STOCK OPTIONS The following table summarizes share-based compensation expense and the related income tax benefit recognized for our share-based awards and stock options: Three Months Ended March 31, 2025 March 31, 2024 (in thousands) Share-based compensation expense $ 39,740 $ 40,117 Income tax benefit 6,265 9,366 Share-Based Awards The following table summarizes the changes in unvested restricted stock and performance awards for the three months ended March 31, 2025: Shares Weighted-Average Grant-Date Fair Value (in thousands) Unvested at December 31, 2024 2,252 $ 126.07 Granted 1,446 105.35 Vested ( 1,027 ) 128.59 Forfeited ( 85 ) 111.46 Unvested at March 31, 2025 2,586 $ 113.27 The total fair value of restricted stock and performance awards vested during the three months ended March 31, 2025 and 2024 was $ 132.1 million and $ 131.1 million, respectively. 18 Table of Contents For restricted stock and performance awards, we recognized compensation expens e of $ 35.9 million and $ 35.6 million during the three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025, there was $ 239.1 million of unrecognized compensation expense related to unvested restricted stock and performance awards that we expect to recognize over a weighted-average period of 2.1 years. Stock Options The following table summarizes stock option activity for the three months ended March 31, 2025: Options Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value (in thousands) (years) (in millions) Outstanding at December 31, 2024 778 $ 112.91 5.5 $ 9.0 Granted 208 105.28 Forfeited ( 17 ) 111.74 Exercised ( 19 ) 54.37 Outstanding at March 31, 2025 950 $ 112.35 6.3 $ 4.5 Options vested and exercisable at March 31, 2025 605 $ 112.97 4.5 $ 4.5 We recognized compensation expense for stock options of $ 2.5 million and $ 2.8 million during the three months ended March 31, 2025 and 2024, respectively. The aggregate intrinsic value of stock options exercised during the three months ended March 31, 2025 and 2024 was $ 0.8 million and $ 13.6 million, respectively. As of March 31, 2025, we had $ 13.4 million o f unrecognized compensation expense related to unvested stock options that we expect to recognize over a weighted-average period of 2.0 years . The weighted-average grant-date fair value of stock options granted during the three months ended March 31, 2025 and 2024 was $ 44.76 and $ 54.42 , respectively. Fair value was estimated on the date of grant using the Black-Scholes valuation model with the following weighted-average assumptions: Three Months Ended March 31, 2025 March 31, 2024 Risk-free interest rate 4.01 % 4.16 % Expected volatility 47 % 45 % Dividend yield 0.88 % 0.90 % Expected term (years) 5 5 The risk-free interest rate was based on the yield of a zero coupon U.S. Treasury security with a maturity equal to the expected life of the option from the date of the grant. Our assumption on expected volatility was based on our historical volatility. The dividend yield assumption was determined using our average stock price over the preceding year and the annualized amount of our most current quarterly dividend per share. We based our assumptions on the expected term of the options on our analysis of the historical exercise patterns of the options and our assumption on the future exercise pattern of options. 19 Table of Contents NOTE 11— EARNINGS PER SHARE Basic earnings per share ("EPS") was computed by dividing net income attributable to Global Payments by the weighted-average number of shares outstanding during the period. Earnings available to common shareholders is the same as reported net income attributable to Global Payments for all periods presented. Diluted EPS is computed by dividing net income attributable to Global Payments by the weighted-average number of shares outstanding during the period, including the effect of share-based awards, convertible notes or other potential securities that would have a dilutive effect on EPS. All stock options with an exercise price lower than the average market share price of our common stock for the period are assumed to have a dilutive effect on EPS. The dilutive share base for the three months ended March 31, 2025 excluded approximately 0.8 million shares related to stock options that would have an antidilutive effect on the computation of diluted EPS. The dilutive share base for the three months ended March 31, 2024 excluded approximately 0.1 million shares related to stock options that would have an antidilutive effect on the computation of diluted EPS. The effect of the potential shares needed to settle the conversion spread on our convertible notes is included in diluted EPS if the effect is dilutive. The effect depends on the market share price of our common stock at the time of conversion and would be dilutive if the average market share price of our common stock for the period exceeds the conversion price. For the three months ended March 31, 2025, the convertible notes were not included in the computation of diluted EPS as the effect would have been anti-dilutive. Further, the effect of the related capped call transactions is not included in the computation of diluted EPS as it is always anti-dilutive. The following table sets forth the computation of diluted weighted-average number of shares outstanding for the three months ended March 31, 2025 and 2024: Three Months Ended March 31, 2025 March 31, 2024 (in thousands) Basic weighted-average number of shares outstanding 246,749 256,926 Plus: Dilutive effect of stock options and other share-based awards 411 662 Diluted weighted-average number of shares outstanding 247,160 257,588 NOTE 12— SUPPLEMENTAL BALANCE SHEET INFORMATION Cash, cash equivalents and restricted cash Cash and cash equivalents include cash on hand and all liquid investments with a maturity of three months or less when purchased. We regularly maintain cash balances with financial institutions in excess of the Federal Deposit Insurance Corporation insurance limit or the equivalent outside the U.S. As of March 31, 2025, approximately 75 % of our total balance of cash and cash equivalents was held within a small group of financial institutions, primarily large money center banks. Although we currently believe that the financial institutions with whom we do business will be able to fulfill their commitments to us, there is no assurance that those institutions will be able to continue to do so. We have not experienced any losses associated with our balances in such accounts for the three months ended March 31, 2025 and 2024. Restricted cash includes amounts that cannot be withdrawn or used for general operating activities under legal or regulatory restrictions. Restricted cash consists of amounts under legal restriction, amounts deposited by customers for prepaid card transactions and funds held as a liquidity reserve that are subject to local regulatory restrictions requiring appropriate segregation and restriction in their use. Restricted cash is included in prepaid expenses and other current assets in our consolidated balance sheets with a corresponding liability in accounts payable and accrued liabilities. 20 Table of Contents A reconciliation of the amounts of cash and cash equivalents and restricted cash in our consolidated balance sheets to the amount in our consolidated statements of cash flows is as follows: March 31, 2025 December 31, 2024 (in thousands) Cash and cash equivalents $ 2,896,024 $ 2,538,416 Restricted cash 252,251 197,559 Cash, cash equivalents and restricted cash shown in the statements of cash flows $ 3,148,275 $ 2,735,975 Notes Receivable and Allowance for Credit Losses In connection with the sale of our consumer business in April 2023, we provided seller financing consisting of a first lien seven-year secured term loan facility with an aggregate principal amount of $ 350 million bearing interest at a fixed annual rate of 9.0 % and a second lien twenty-five year secured term loan facility with an aggregate principal amount of $ 325 million bearing interest at a fixed annual rate of 13.0 %. In connection with the sale of our gaming business in April 2023, we provided seller financing consisting of an unsecured promissory note due April 1, 2030 with an aggregate principal amount of $ 32 million bearing interest at a fixed annual rate of 11.0 %. We recognized interest income of $ 23.5 million and $ 21.5 million on the notes during the three months ended March 31, 2025 and 2024, respectively, as a component of interest and other income in our consolidated statements of income. As of March 31, 2025 and December 31, 2024 , there was an aggregate principal amount of $ 825.3 million and $ 810.2 million , respectively, outstanding on the notes, including paid-in-kind interest, and the notes are presented net of the allowance for credit losses o f $ 15.2 million wi thin notes receivable in our consolidated balance sheets. Principal payments due within 12 months are included in prepaid expenses and other current assets in our consolidated balance sheets. The estimated fair value of the notes receivable was $ 828.1 million an d $ 809.3 million as of March 31, 2025 and December 31, 2024, respectively . The estimated fair value of notes receivable was based on a discounted cash flow approach and is considered to be a Level 3 measurement of the fair value hierarchy. Other noncurrent assets During the three months ended March 31, 2025, we entered into an agreement in which we acquired software and related services, of which $ 37.5 million was financed utilizing a two-year vendor financing arrangement. 21 Table of Contents NOTE 13— ACCUMULATED OTHER COMPREHENSIVE LOSS The changes in the accumulated balances for each component of other comprehensive income (loss) were as follows for the three months ended March 31, 2025 and 2024: Foreign Currency Translation Gains (Losses) Net Unrealized Gains (Losses) on Hedging Activities Other Accumulated Other Comprehensive Loss (in thousands) Balance at December 31, 2024 $ ( 589,189 ) $ ( 21,418 ) $ ( 2,385 ) $ ( 612,992 ) Other comprehensive income (loss) 169,852 ( 6,506 ) — 163,346 Balance at March 31, 2025 $ ( 419,337 ) $ ( 27,924 ) $ ( 2,385 ) $ ( 449,646 ) Balance at December 31, 2023 $ ( 215,540 ) $ ( 40,859 ) $ ( 2,526 ) $ ( 258,925 ) Other comprehensive income (loss) ( 58,579 ) 20,066 — ( 38,513 ) Balance at March 31, 2024 $ ( 274,119 ) $ ( 20,793 ) $ ( 2,526 ) $ ( 297,438 ) Other comprehensive income (loss) attributable to noncontrolling interests, which relates only to foreign currency translation, was $ 43.6 million and $( 23.1 ) million for the three months ended March 31, 2025 and 2024, respectively. NOTE 14— SEGMENT INFORMATION We operate in two reportable segments: Merchant Solutions and Issuer Solutions. Our segment structure reflects the financial information and reports used by our chief operating decision maker to make decisions regarding the business, including resource allocations and performance assessments. Our Chief Executive Officer is the chief operating decision maker ("CODM"). We evaluate performance and allocate resources based on the operating income of each operating segment. The CODM uses segment operating income in the annual budget and forecasting process, and considers budget-to-actual and forecast-to-actual variances on a monthly, quarterly and annual basis. The operating income of each operating segment includes the revenues of the segment less expenses that are directly related to those revenues. Operating overhead, shared costs and share-based compensation costs are included in Corporate. Impairment of goodwill and gains or losses on business dispositions are not included in determining segment operating income. Interest and other income, interest and other expense, income tax expense and equity in income of equity method investments are not allocated to the individual segments. The CODM does not evaluate the performance of or allocate resources to our operating segments using asset data. The accounting policies of the reportable operating segments are the same as those described in our Annual Report on Form 10-K for the year ended December 31, 2024 and our summary of significant accounting policies in "Note 1—Basis of Presentation and Summary of Significant Accounting Policies." 22 Table of Contents Information on segments, including significant segment expenses, and reconciliations to consolidated revenues, consolidated operating income and consolidated depreciation and amortization were as follows for the three months ended March 31, 2025 and 2024: Three Months Ended March 31, 2025 March 31, 2024 (in thousands) Revenues (1) : Merchant Solutions $ 1,808,687 $ 1,834,094 Issuer Solutions 620,730 602,735 Intersegment eliminations ( 17,319 ) ( 16,642 ) Consolidated revenues $ 2,412,098 $ 2,420,187 Operating expenses (1) : Merchant Solutions: Cost of service $ 488,865 $ 499,055 Selling, general and administrative 705,720 754,601 Total Merchant Solutions expenses 1,194,585 1,253,656 Issuer Solutions: Cost of service 444,808 434,201 Selling, general and administrative 66,604 62,437 Total Issuer Solutions expenses 511,412 496,638 Corporate 256,528 234,283 Intersegment eliminations ( 17,319 ) ( 16,642 ) Operating income (loss) (1) : Merchant Solutions $ 614,102 $ 580,438 Issuer Solutions 109,318 106,097 Corporate ( 256,528 ) ( 234,283 ) Gain on business disposition 3,993 — Consolidated operating income $ 470,885 $ 452,252 Depreciation and amortization (1) : Merchant Solutions $ 280,767 $ 292,333 Issuer Solutions 162,749 163,974 Corporate 8,592 4,829 Consolidated depreciation and amortization $ 452,108 $ 461,136 (1) Revenues, operating expenses, operating income and depreciation and amortization reflect the effects of disposed businesses through the respective disposal dates. See “Note 2—Business Dispositions” for further discussion. Operating income and operating expenses included acquisition and integration expens es of $ 28.4 million an d $ 78.9 million for the three months ended March 31, 2025 and 2024, respectively, which were primarily included within Corporate selling, general and administrative expenses. During the three months ended March 31, 2025, Corporate operating expenses also reflected costs of $ 66.3 million associated with our business transformation initiative, which are presented within selling, general and administrative expenses in our consolidated statements of income. 23 Table of Contents NOTE 15— COMMITMENTS AND CONTINGENCIES Legal Matters We are party to a number of claims and lawsuits incidental to our business. In our opinion, the liabilities, if any, which may ultimately result from the outcome of such matters, individually or in the aggregate, are not expected to have a material adverse effect on our financial position, liquidity, results of operations or cash flows. 24 Table of Contents