What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-06 compared with 2025-05-06 · 172 added, 141 removed, 158 unchanged (66% of the section changed)

9 unchanged sentences

We also continue 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.

We also furthered our business strategy through the sale of AdvancedMD, Inc.

("AdvancedMD") completed in December 2024 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.

Highlights related to our results of operations for the three months ended March 31, 2025 include the following:

• Consolidated revenues were essentially flat at $2,412.1 million and $2,420.2 million for the three months ended March 31, 2025 and 2024, respectively.

• Merchant Solutions segment operating income and operating margin for the three months ended March 31, 2025 increased compared to the prior year primarily due to the favorable effect of cost reduction activities.

Issuer Solutions segment operating income increased due to the favorable effect of an increase in revenues, while operating margin remained flat.

• Consolidated operating income for the three months ended March 31, 2025 included the favorable effects of cost reduction initiatives and a reduction in acquisition and integration expenses, partially offset by expenses related to business transformation activities.

We also furthered our business strategy through the following key transactions:

• On April 17, 2025, we entered into definitive agreements to acquire 100% of Worldpay Holdco, LLC (“Worldpay”) from Fidelity National Information Services, Inc.

(“FIS”) and affiliates of GTCR LLC (“GTCR”) and divest our Issuer Solutions business to FIS.

Worldpay is an industry leading payments technology and solutions company.

Total estimated consideration expected to be paid to GTCR for an ownership interest in Worldpay consists of (1) approximately $6.1 billion in cash and (2) 43.3 million shares of Global Payments common stock.

Total estimated consideration expected to be received for the divestiture of our Issuer Solutions business consists of (1) approximately $7.5 billion in cash and (2) FIS’ ownership interest in Worldpay as described above.

Our Issuer Solutions business met the criteria to be classified as a discontinued operation in the second quarter of 2025, as the ultimate divestiture represents a strategic shift that will have a major effect on our operations and financial results.

Accordingly, all results of the Issuer Solutions business have been presented as discontinued operations in our consolidated statements of income for the three and six months ended June 30, 2025 and 2024.

• The proposed acquisition of Worldpay and divestiture of our Issuer Solutions business will occur simultaneously.

In connection with the agreements, we initially obtained $7.7 billion in committed bridge financing.

Upon the effectiveness of the revolving credit agreement entered into on May 15, 2025 as described in "Note 5—Long-Term Debt and Lines of Credit," we reduced the commitments related to the bridge financing to $6.2 billion.

Both transactions are expected to close in the first half of 2026.

• In May 2025, we entered into a definitive agreement to divest Heartland Payroll Solutions, Inc., our payroll business included in our Merchant Solutions segment, to Acrisure, LLC for approximately $1.1 billion, including up to $75 million of contingent consideration subject to certain closing adjustments.

The transaction is expected to close in the second half of 2025.

Highlights related to our results of continuing operations for the three and six months ended June 30, 2025 include the following:

• Consolidated revenues were essentially flat at $1,956.7 million and $3,765.4 million, respectively, compared to $1,971.0 million and $3,805.1 million for the three and six months ended June 30, 2025 and 2024, respectively.

• Merchant Solutions segment operating income and operating margin for the three and six months ended June 30, 2025 increased compared to the prior year primarily due to the favorable effect of cost reduction activities.

• Consolidated operating income for the three and six months ended June 30, 2025 decreased due to an increase in expenses related to business transformation activities, partially offset by the favorable effects of cost reduction initiatives and a reduction in acquisition and integration expenses.

Strategy and Business Transformation

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These strategic, organizational and operational transformation activities are expected to continue over the next few years.

As we focus on executing and delivering transformation initiatives, we have incurred and anticipate incurring incremental expenses related to the transformation through early 2027, including but not limited to changes to the recoverability of assets.

We continue to assess a strategic review of our business portfolio to evaluate potential assets for disposition to further streamline our business and create value for shareholders.

We continue to assess our business portfolio to evaluate potential assets for disposition to further streamline our business and create value for shareholders.

We currently expect our transformation initiatives to generate more than $650 million of annual run-rate operating income benefit by the first half of 2027.

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.

As part of the transaction, we obtained $7.7 billion in committed bridge financing.

The transactions further simplify Global Payments’ business, positioning the company as a leading pure play commerce solutions provider for merchants of all sizes with global scale.

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.

Macroeconomic Effects and Other Global Conditions

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Results of Operations

We operate in two reportable segments:

Merchant Solutions and Issuer Solutions.

For further information about our reportable segments, see “Item 1.

Business—Business Segments” within our Annual Report on Form 10-K for the year ended December 31, 2024, incorporated herein by reference, and “Note 14—Segment Information” in the notes to the accompanying unaudited consolidated financial statements included in Part I, Item 1 — Financial Statements.

Key Drivers of our Results of Operations

Our revenues for both of our segments are dependent upon the volume of payment transactions we process, cardholder accounts on file and other factors (referred to herein as "transaction volume").

As the majority of our services are priced as a percentage of transaction value or specified fee per unit or transaction, many under multi-year customer arrangements, our revenues generally grow period-over-period in line with the rate of increase in transaction volume.

Our operating expenses consist primarily of amortization of intangible assets, the cost of the technology to provide services to our customers and our people costs to support the operations.

Many of those costs do not vary directly with the level of payment transactions we process for our customers, generating operating leverage.

As revenues increase, operating income and operating margin (operating income as a percentage of revenues) generally increase.

We also grow our business through strategic acquisitions of similar businesses.

Our revenues increase from the transaction volume from the customers of the acquired businesses.

As we integrate the businesses, we also are able to improve operating income and operating margin by generating synergies to lower the cost base of those businesses.

The following table sets forth key selected financial data for the three months ended March 31, 2025 and 2024, certain data as a percentage of total revenues and the changes between periods in dollars and as a percentage of the prior period amount.

The income statement data for the three months ended March 31, 2025 and 2024 is derived from the accompanying unaudited consolidated financial statements.

Beginning in the second quarter of 2025, we present the historical operations of our Issuer Solutions reportable segment as discontinued operations.

Accordingly, our continuing operations consists of our Merchant Solutions business and corporate functions.

See “Note 2—Business Dispositions and Discontinued Operations” in the notes to the accompanying unaudited consolidated financial statements for further information.

Continuing Operations

The following table sets forth key selected financial data for the three months ended June 30, 2025 and 2024, certain data as a percentage of total revenues and the changes between periods in dollars and as a percentage of the prior period amount.

The income statement data for the three months ended June 30, 2025 and 2024 is derived from the accompanying unaudited consolidated financial statements.

Three Months Ended

March 31, 2025 % of Revenue (1)

June 30, 2025 % of Revenue (1)

Three Months Ended

March 31, 2024 % of Revenue (1)

June 30, 2024 % of Revenue (1)

Change % Change

(dollar amounts in thousands)

Revenues (2) :

Merchant Solutions $ 1,808,687 75.0 % $ 1,834,094 75.8 % $ (25,407) (1.4) %

Issuer Solutions 620,730 25.7 % 602,735 24.9 % 17,995 3.0 %

Intersegment eliminations (17,319) (0.7) % (16,642) (0.7) % (677) 4.1 %

Consolidated revenues $ 2,412,098 100.0 % $ 2,420,187 100.0 % $ (8,089) (0.3) %

$ 1,956,747 100.0 % $ 1,971,025 100.0 % $ (14,278) (0.7) %

Operating expenses (2) :

Cost of service $ 498,788 25.5 % $ 504,462 25.6 % $ (5,674) (1.1) %

Merchant Solutions $ 488,865 $ 499,055 $ (10,190) (2.0) %

Issuer Solutions 444,808 434,201 10,607 2.4 %

Intersegment eliminations (12,478) (10,866) (1,612) 14.8 %

Consolidated cost of service $ 921,195 38.2 % $ 922,390 38.1 % $ (1,195) (0.1) %

Selling, general and administrative:

Merchant Solutions $ 741,028 $ 794,038 $ (53,010) (6.7) %

Issuer Solutions 66,604 62,437 4,167 6.7 %

Corporate 289,992 197,137 92,855 47.1 %

Intersegment eliminations (4,841) (5,776) 935 (16.2) %

Consolidated selling, general and administrative $ 1,031,020 52.7 % $ 991,175 50.3 % $ 39,845 4.0 %

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Merchant Solutions $ 716,931 $ 672,525 $ 44,406 6.6 %

Issuer Solutions 109,318 106,097 3,221 3.0 %

Corporate (289,992) (197,137) (92,855) 47.1 %

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Merchant Solutions 36.6 % 34.1 % 2.5 %

Issuer Solutions 17.6 % 17.6 % — %

NM = Not meaningful

(1) Percentage amounts may not sum to the total due to rounding.

(2) Revenues, operating expenses, operating income and operating margin reflect the effects of disposed businesses through the respective disposal dates.

See “Note 2—Business Dispositions” for further discussion.

Operating income included acquisition and integration expenses of $28.4 million and $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 expenses also reflected costs of $66.3 million associated with our business transformation initiative.

Consolidated revenues were essentially flat at $2,412.1 million and $2,420.2 million for the three months ended March 31, 2025 and 2024, respectively.

Merchant Solutions Segment.

Revenues from our Merchant Solutions segment for the three months ended March 31, 2025 decreased by $25.4 million, or 1.4%, to $1,808.7 million from $1,834.1 million in the prior year.

The decrease included an approximate $20 million unfavorable effect of foreign currency exchange fluctuations.

Revenues in our integrated and embedded service line increased $45.9 million, or 6.1%, as payments continue to transition to more embedded and digital native environments.

Revenues in our POS/software service line declined $31.0 million, or 8.2%;

however, without the effect of the AdvancedMD business disposed of in December 2024, revenues increased approximately 8%, driven by growth in software subscription fees.

Revenues in our core payments service line declined $40.3 million, or 5.8%, as a result of an unfavorable effect of foreign currency exchange fluctuations and a reduced emphasis on our wholesale business.

Issuer Solutions Segment.

Revenues from our Issuer Solutions segment for the three months ended March 31, 2025 increased by $18.0 million, or 3.0%, to $620.7 million from $602.7 million in the prior year.

The increase in segment revenues was primarily due to the $23.8 million effect of higher transaction volume driven by cardholder activity.

(2) Revenues, operating expenses, operating income and operating margin reflect the effects of our disposed AdvancedMD business through its disposal date.

See “Note 2—Business Dispositions and Discontinued Operations” for further discussion.

Operating income included acquisition and transformation expens es of $133.7 million and $53.6 million for the three months ended June 30, 2025 and 2024, respectively, which were primarily included within Corporate selling, general and administrative expenses.

The following table sets forth key selected financial data for the six months ended June 30, 2025 and 2024, certain data as a percentage of total revenues and the changes between periods in dollars and as a percentage of the prior period amount.

The income statement data for the six months ended June 30, 2025 and 2024 is derived from the accompanying unaudited consolidated financial statements.

Six Months Ended

June 30, 2025 % of Revenue (1)

Six Months Ended

June 30, 2024 % of Revenue (1)

Change % Change

(dollar amounts in thousands)

$ 3,765,434 100.0 % $ 3,805,119 100.0 % $ (39,685) (1.0) %

Operating expenses (2) :

Cost of service $ 987,653 26.2 % $ 1,003,516 26.4 % $ (15,863) (1.6) %

Cost of service for the three months ended March 31, 2025 decreased by $1.2 million, or 0.1%, to $921.2 million from $922.4 million in the prior year.

Cost of service as a percentage of revenues was 38.2% for the three months ended March 31, 2025, compared to 38.1% in the prior year.

Merchant Solutions Segment.

Cost of service from our Merchant Solutions segment for the three months ended March 31, 2025 decreased by $10.2 million, or 2.0%, to $488.9 million from $499.1 million in the prior year.

Cost of service as a percentage of segment revenues decreased to 27.0% for the three months ended March 31, 2025 from 27.2% in the prior year.

Selling, general and administrative:

Merchant Solutions $ 1,446,748 $ 1,548,641 $ (101,893) (6.6) %

Corporate 527,991 417,983 110,008 26.3 %

Consolidated selling, general and administrative $ 1,974,739 52.4 % $ 1,966,624 51.7 % $ 8,115 0.4 %

Gain on business disposition (4,260) — (4,260) NM

Consolidated operating expenses $ 2,958,132 78.6 % $ 2,970,140 78.1 % $ (12,008) (0.4) %

Operating income (loss) (2) :

Merchant Solutions 1,331,033 $ 1,252,962 $ 78,071 6.2 %

Corporate (527,991) (417,983) (110,008) 26.3 %

Gain on business disposition 4,260 — 4,260 NM

Consolidated operating income $ 807,302 21.4 % $ 834,979 21.9 % $ (27,677) (3.3) %

Operating margin (2) :

Merchant Solutions 35.3 % 32.9 % 2.4 %

NM = Not meaningful

(1) Percentage amounts may not sum to the total due to rounding.

(2) Revenues, operating expenses, operating income and operating margin reflect the effects of our disposed AdvancedMD business through its disposal date.

See “Note 2—Business Dispositions and Discontinued Operations” for further discussion.

Operating income included acquisition and transformation expenses of $228.3 million and $131.4 million for the six months ended June 30, 2025 and 2024, respectively, which were primarily included within Corporate expenses.

Revenues from our Merchant Solutions segment for the three and six months ended June 30, 2025 decreased by $14.3 million and $39.7 million, respectively, or 0.7% and 1.0%.

For the three and six months ended June 30, 2025, revenues in our integrated and embedded solutions service line increased $56.4 million and $102.3 million, respectively, or 7.1% and 6.6%, as payments continue to transition to more embedded and digital native environme nts.

Revenues in our point of sale and software solutions service line decreased $42.2 million and $73.2 million for the three and six months ended June 30, 2025, respectively, or 10.8% and 9.5%.

Excluding the effect of the AdvancedMD business disposed of in December 2024, revenues increased approximately 5% and 6% for the three and six months ended June 30, 2025, respectively, driven by growth in software subscription fees.

Revenues in our core payments solutions service line declined $28.4 million and $68.7 million for the three and six months ended June 30, 2025, respectively, or 3.6% and 4.6%, as a result of reduced emphasis on our wholesale business and our exit of certain markets in our Asia Pacific business.

Operating Expenses

Cost of Service Cost of service for our Merchant Solutions segment for the three and six months ended June 30, 2025 decreased by $5.7 million and $15.9 million, respectively.

Cost of service as a percentage of revenues was 25.5% and 26.2%, respectively, for the three and six months ended June 30, 2025, compared to 25.6% and 26.4% in the prior year.

The decline in cost of service is in line with the decline in revenue for the period.

The disposition of AdvancedMD had the effect of reducing cost of service as a percentage of revenues by 0.3% for the three months ended March 31, 2024.

Issuer Solutions Segment.

Cost of service from our Issuer Solutions segment for the three months ended March 31, 2025 increased by $10.6 million, or 2.4%, to $444.8 million from $434.2 million in the prior year primarily due to costs that vary with revenues.

Cost of service as a percentage of segment revenues decreased to 71.7% for the three months ended March 31, 2025 from 72.0% in the prior year primarily as a result of costs that do not vary with revenues, including the effects of amortization and depreciation as discussed below, generating operating leverage.

The disposition of AdvancedMD had the effect of reducing cost of service as a percentage of revenues by 0.3% for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024.

Amortization of Acquired Intangible Assets.

The most significant component of our cost of service is amortization of acquired intangibles, which was $329.3 million and $343.2 million, or approximately 36% and 37% of cost of service, for the three months ended March 31, 2025 and 2024, respectively.

The most significant component of our cost of service is amortization of acquired intangibles, which was $200.2 million and $394.3 million for the three and six months ended June 30, 2025, respectively, and $212.2 million and $421.7 million, for the three and six months ended June 30, 2024.

As a percentage of cost of service, amortization of acquired intangibles was approximately 40% for the three and six months ended June 30, 2025 and 42% for the three and six months ended June 30, 2024.

These costs generally do not vary in proportion to changes in revenues, but rather are most significantly affected by acquisition activities.

T he decrease in amortization of acquired intangibles in the three and six months ended June 30, 2025 primarily reflects the effect of the AdvancedMD business disposed of in December 2024.

Selling, General and Administrative Expenses.

Selling, general and administrative expenses for the three months ended March 31, 2025 decreased by $21.5 million, or 2.1%, to $1,024.0 million from $1,045.5 million in the prior year.

Selling, general and administrative expenses as a percentage of revenues was 42.5% for the three months ended March 31, 2025, compared to 43.2% in the prior year.

Merchant Solutions Segment.

Selling, general and administrative expenses from our Merchant Solutions segment for the three months ended March 31, 2025 decreased by $48.9 million, or 6.5%, to $705.7 million from $754.6 million in the prior year.

Selling, general and administrative expenses as a percentage of segment revenues was 39.0% for the three months ended March 31, 2025, compared to 41.1% in the prior year.

The primary driver of the reduction in selling, general and administrative expenses for the three months ended March 31, 2025 was lower compensation and benefits expenses as a result of certain actions taken in 2024 to align our workforce to our new operating model.

Issuer Solutions Segment.

Selling, general and administrative expenses from our Issuer Solutions segment for the three months ended March 31, 2025 increased by $4.2 million, or 6.7%, to $66.6 million from $62.4 million in the prior year.

Selling, general and administrative expenses as a percentage of segment revenues was 10.7% for the three months ended March 31, 2025, compared to 10.4% in the prior year, primarily due to higher labor and technology related costs.

Corporate expenses for the three months ended March 31, 2025 increased by $22.2 million, or 9.5%, to $256.5 million from $234.3 million in the prior year.

The higher amount of corporate expenses was primarily driven by $66.3 million incurred in the three months ended March 31, 2025 associated with our business transformation initiative announced in the third quarter of 2024, partially offset by lower acquisition and integration expenses of $50.5 million.

Selling, general and administrative expenses from our Merchant Solutions segment for the three and six months ended June 30, 2025 decreased by $53.0 million and $101.9 million, or 6.7% and 6.6%.

Selling, general and administrative expenses as a percentage of segment revenues was 37.9% and 38.4%, respectively, for the three and six months ended June 30, 2025, compared to 40.3% and 40.7% in the prior year.

The primary driver of the reduction in selling, general and administrative expenses for the three and six months ended June 30, 2025 was lower compensation and benefits expenses as a result of certain actions taken in 2024 to align our workforce to our new operating model.

Corporate expenses for the three and six months ended June 30, 2025 increased by $92.9 million and $110.0 million, respectively, or 47.1% and 26.3%.

The higher amount of corporate expenses was primarily driven by an increase in acquisition and transformation costs of $80.1 million and $96.9 million incurred in the three and six months ended June 30, 2025.

Operating Income and Operating Margin

Consolidated operating income for the three months ended March 31, 2025 was $470.9 million, compared to $452.3 million in the prior year.

Consolidated operating margin for the three months ended March 31, 2025 was 19.5%, compared to 18.7% in the prior year.

• Consolidated operating income reflected higher corporate costs, as described above, which had an unfavorable effect on operating margin of approximately 1.0% for the three months ended March 31, 2025;

• Merchant Solutions segment operating income increased $33.7 million and operating margin increased 2.4% primarily due t o the favorable effect of cost reduction initiatives as a result of certain actions taken in 2024 to align our workforce to our new operating model.

In addition, the three months ended March 31, 2024 included operating income of $10.5 million related to the disposed AdvancedMD business, which had the effect of increasing operating margin by 0.5% for the three months ended March 31, 2024;

• Issuer Solutions segment operating income increased $3.2 million primarily due to the favorable effect of the increase in revenues, while operating margin remained flat at 17.6%.

Other Income and Expense, Net

Interest and other income for the three months ended March 31, 2025 increased $3.5 million to $39.4 million, compared to $35.9 million for the prior year, primarily due to an increase in available cash within our investment pool.

Interest and other expense for the three months ended March 31, 2025 decreased $5.0 million to $157.1 million, compared to $162.1 million for the prior year, primarily due to a decrease in our average outstanding borrowings and lower average interest rates on outstanding borrowings.

Consolidated operating income for the three and six months ended June 30, 2025 was $427.2 million and $807.3 million, respectively, compared to $475.4 million and $835.0 million in the prior year.

Consolidated operating margin for the three and six months ended June 30, 2025 was 21.8% and 21.4%, respectively, compared to 24.1% and 21.9% in the prior year.

• Consolidated operating income reflected higher corporate costs, as described above, which had an unfavorable effect on operating margin of approximately 4.8% and 2.9% for the three and six months ended June 30, 2025;

• Merchant Solutions segment operating income increased $44.4 million and $78.1 million, respectively, for the three and six months ended June 30, 2025 and operating margin increased 2.5% and 2.4%, primarily due to the favorable effect of cost reduction initiatives as a result of certain actions taken in 2024 to align our workforce to our new operating model.

In addition, the three and six months ended June 30, 2024 included operating income of $12.4 million and $22.9 million, respectively, related to the disposed AdvancedMD business.

The disposition had the effect of increasing operating margin by 0.4% for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024.

Income Tax Expense

For the three months ended March 31, 2025 and 2024, our effective income tax rate was 16.6% and 5.9%, respectively.

The increase in the effective income tax rate was primarily due to a one-time favorable effect of a change in the valuation allowance related to certain foreign tax credit carryforwards in the three months ended March 31, 2024.

Our effective income tax rates for the three months ended June 30, 2025 and 2024 were 38.1% and 17.9%, respectively.

Our effective income tax rates for the six months ended June 30, 2025 and 2024 were 28.1% and 11.9%, respectively.

The changes in our effective tax rates for the three and six months ended June 30, 2025 from the prior year reflects the effect of deferred tax expense recognized during the three months ended June 30, 2025 associated with legal entity restructuring in connection with the sale of our Issuer Solutions business.

In addition, the effective income tax rate for the six months ended June 30, 2024 included the favorable effect of a change in the assessment of the need for a valuation allowance related to certain foreign tax credit carryforwards.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S.

The OBBBA includes provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework, and the restoration of favorable tax treatment for certain business provisions.

The legislation has multiple effective dates beginning in 2025.

We are currently assessing its effect on our consolidated financial statements.

Various foreign taxing jurisdictions enacted local legislation formally adopting the Global Anti-Base Erosion Model Rules ("Pillar Two"), which generally provides for a minimum effective tax rate of 15%, as established by the Organization for Economic Co-operation and Development ("OECD") Pillar Two Framework.

The effective dates were generally January 1, 2024, and January 1, 2025, for different aspects of the rules and vary by jurisdiction.

Additional jurisdictions are expected to implement the model rules under local law in the future, with varying effective dates.

The Pillar Two directive did not have a material effect on our financial statements for the three months ended March 31, 2025, and we are continuing to evaluate the potential effect on future periods of the Pillar Two implementation, pending legislative adoption by additional individual countries and the ongoing issuance of additional administrative guidance by the OECD.

More jurisdictions are expected to implement the model rules under local law in the future, with varying effective dates.

Additionally, the OBBBA includes modifications to the international tax framework.

While we continue to evaluate the effect of these legislative changes as additional guidance becomes available, uncertainty remains regarding the timing and interpretation by tax authorities in affected jurisdictions.

The Pillar Two directive did not have a material effect on our financial statements for the three and six months ended June 30, 2025, and we are continuing to evaluate the potential effect on future periods, pending legislative adoption by additional individual countries and the ongoing issuance of additional administrative guidance by the OECD.

Net Income Attributable to Global Payments

Net income attributable to Global Payments was $305.7 million for the three months ended March 31, 2025, compared to $313.3 million for the prior year, reflecting the changes noted above.

Diluted Earnings per Share

Diluted earnings per share was $1.24 for the three months ended March 31, 2025, compared to $1.22 for the prior year.

Diluted earnings per share for the three months ended March 31, 2025 reflects the changes in net income noted above as well as a 10.4 million decrease in diluted weighted-average number of shares outstanding to 247.2 million shares for the three months ended March 31, 2025, compared to 257.6 million shares for the prior year.

Income from continuing operations was $212.1 million and $455.4 million, respectively, for the three and six months ended June 30, 2025, compared to $315.0 million and $564.9 million for the prior year, reflecting the changes noted above.

Diluted Earnings per Share - Continuing Operations

Diluted earnings per share was $0.86 and $1.82, respectively, for the three and six months ended June 30, 2025, compared to $1.18 and $2.11 for the prior year.

Diluted earnings per share for the three and six months ended June 30, 2025 reflects the changes in net income noted above as well as a decrease of 11.6 million and 11.0 million, respectively, in diluted weighted-average number of shares outstanding to 243.6 million and 245.4 million shares, respectively, for the three and six months ended June 30, 2025, compared to 255.2 million and 256.4 million shares for the prior year.

Discontinued Operations

The following tables set forth key selected financial data for discontinued operations for the three and six months ended June 30, 2025 and 2024, certain data as a percentage of total revenues and the changes between periods in dollars and as a percentage of the prior-period amount.

The data for the three and six months ended June 30, 2025 and 2024 is derived from the accompanying unaudited consolidated financial statements.

Three Months Ended

June 30, 2025 % of Revenue (1)

Three Months Ended

June 30, 2024 % of Revenue (1)

Change % Change

(dollar amounts in thousands)

Revenues $ 639,885 $ 613,508 $ 26,377 4.3 %

Operating income (loss) $ 219,912 34.4 % $ 97,235 15.8 % $ 122,677 126.2 %

Operating margin 34.4 % 15.8 % 18.6 %

(1) Percentage amounts may not sum to the total due to rounding.

Six Months Ended

June 30, 2025 % of Revenue (1)

Six Months Ended

June 30, 2024 % of Revenue (1)

Change % Change

(dollar amounts in thousands)

Revenues $ 1,260,614 $ 1,216,243 $ 44,371 3.6 %

Operating income (loss) $ 310,700 24.6 % $ 189,896 15.6 % $ 120,804 63.6 %

Operating margin 24.6 % 15.6 % 9.0 %

(1) Percentage amounts may not sum to the total due to rounding.

Revenues for the three and six months ended June 30, 2025 increased primarily due to a $22.4 million and $46.2 million effect of higher transaction volume driven by cardholder activity for the three and six months ended June, 30, 2025, respectively.

Operating Income and Operating Margin

Operating income and operating margin were higher for the three and six months ended June 30, 2025 primarily due to the cessation of depreciation and amortization associated with classification of the assets as held for sale as well as higher labor and technology related costs.

Liquidity and Capital Resources

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To supplement cash from operating activities, we use a combination of bank financing, such as borrowings under our credit facilities, commercial paper program and senior note issuances, for general corporate purposes and to fund acquisitions.

Our commercial paper program provides a cost effective means of addressing our short-term liquidity needs and 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.

Our commercial paper program provides a cost effective means of addressing our short-term liquidity needs and is backstopped by our revolving credit facility, in that the amount of commercial paper notes outstanding cannot exceed the undrawn portion of our revolving credit facility.

Finally, specialized lines of credit are also used in certain of our markets to fund merchant settlement prior to receipt of funds from the card networks.

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We believe that our current and projected sources of liquidity will be sufficient to meet our projected liquidity requirements associated with our operations for the near and long term.

At March 31, 2025, we had cash and cash equivalents totalin g $2,896.0 million .

Our consolidated statements of cash flows includes cash flows from discontinued operations for all periods presented, and therefore the following liquidity discussion includes both continuing and discontinued operations.

At June 30, 2025, we had cash and cash equivalents totalin g $2,793.9 million.

Of this amount, we considered $809.9 million to be available for general purposes, of which $66.8 million is undistributed foreign earnings considered to be indefinitely reinvested outside the U.S.

The avail able cash of $816.9 million d oes not include the following:

The available cash of $809.9 million does not include the following:

(i) settlement-related cash balances, (ii) funds held as collateral for merchant losses ("Merchant Reserves") and (iii) certain funds held for customers.

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Funds held for customers, which are not restricted in their use, include amounts collected before the corresponding obligation is due to be settled to or at the direction of our customers.

We also had restricted cash of $252.3 million as of March 31, 2025, representing amounts under legal restriction, amounts deposited by customers for prepaid card transactions and funds held as a liquidity reserve.

We also had restricted cash of $290.7 million as of June 30, 2025, representing amounts under legal restriction, amounts deposited by customers for prepaid card transactions and funds held as a liquidity reserve.

These balances are subject to local regulatory restrictions requiring appropriate segregation and restriction in their use.

Operating activities provided net cash of $555.1 million a nd $529.6 million for the three months ended March 31, 2025 and 2024, respectively, which reflect net income adjusted for noncash items, including depreciation, amortization and the provision for credit losses, and changes in operating assets and liabilities.

Cash flows from operating activities increased 5% from the prior year in spite of a decrease in net income in the current year period primarily due to a noncash tax valuation allowance in the prior year period.

We used net cash in investing activities of $173.1 million and $148.0 million during the three months ended March 31, 2025 and 2024, respectively.

Operating activities provided net cash of $1,372.6 million a nd $1,338.4 million for the six months ended June 30, 2025 and 2024, respectively, which reflect net income adjusted for noncash items, including depreciation, amortization and the provision for credit losses, and changes in operating assets and liabilities.

Cash flows from operating activities increased 2.6% from the prior year primarily due to positive changes in working capital.

We used net cash in investing activities of $476.8 million and $697.3 million during the six months ended June 30, 2025 and 2024, respectively.

Cash used for investing activities primarily represents cash used to fund acquisitions and capital expenditures.

During the three months ended March 31, 2025 and 2024, we used cash of $49.9 million and $2.6 million, respectively, for acquisitions.

We made capital expenditures of $127.6 million and $145.4 million during the three months ended March 31, 2025 and 2024, respectively.

During the six months ended June 30, 2025 and 2024, we used cash of $205.8 million and $372.7 million, respectively, for acquisitions.

We made capital expenditures of $279.7 million and $324.7 million during the six months ended June 30, 2025 and 2024, respectively.

These investments include software and hardware to support the development of new technologies, infrastructure to support our growing business and the consolidation and enhancement of our operating platforms.

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Our borrowing arrangements are further described in "Note 5—Long-Term Debt and Lines of Credit" in the notes to the accompanying unaudited consolidated financial statements and below under "Long-Term Debt and Lines of Credit." Financing activities also include cash flows associated with changes in funds held from customers, changes in settlement processing assets and liabilities, common stock repurchase programs and share-based compensation programs, cash distributions made to our shareholders and cash contributions from and distributions to noncontrolling interests.

Net cash used in financing activities was $31.5 million and $276.7 million for the three months ended March 31, 2025 and 2024, respectively.

Proceeds from long-term debt we re $1,551.0 million an d $4,609.0 million for the three months ended March 31, 2025 and 2024, respectively.

Repayments of long-term debt we re $2,546.6 million and $2,628.5 million for the three months ended March 31, 2025 and 2024, respectively.

Net cash used in financing activities was $522.3 million and $557.2 million for the six months ended June 30, 2025 and 2024, respectively.

Proceeds from long-term debt we re $2,755.1 million an d $6,289.0 million for the six months ended June 30, 2025 and 2024, respectively.

Repayments of long-term debt we re $3,769.6 million and $4,430.1 million for the six months ended June 30, 2025 and 2024, respectively.

Proceeds from and repayments of long-term debt consist of borrowings and repayments that we make with available cash, from time to time, under our revolving credit facility, as well as scheduled principal repayments we make on our senior notes, finance leases and other vendor financing arrangements.

Changes in settlement processing assets and obligations, net were a source of cash of $479.2 million and a use of cash of $24.7 million for the three months ended March 31, 2025 and 2024, respectively.

Changes in settlement processing assets and obligations, net were a source of cash of $630.2 million and a use of cash of $57.7 million for the six months ended June 30, 2025 and 2024, respectively.

The change in cash from settlement processing assets and liabilities was due primarily to transaction volume and the timing of month-end.

During the three months ended March 31, 2025 and 2024, we had net borrowings o f $867.6 million and net repayments of $1,093.0 million, respectively, under our commercial paper program.

During the six months ended June 30, 2025 and 2024, we had net borrowings of $797.7 million and net repayments of $936.5 million, respectively, under our commercial paper program.

Furthermore, in connection with the issuance of convertible notes in February 2024, we paid $256.3 million to purchase privately negotiated capped call transactions to hedge the potential dilutive effect upon conversion of the notes, or offset our cash obligation if the cash settlement option were to be elected.

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Activity under our settlement lines of credit is affected primarily by timing of month-end and transaction volume.

During the three months ended March 31, 2025 and 2024, we had net borrow ings of $223.2 million and $133.2 million, respectively, under our settlement lines of credit.

During the six months ended June 30, 2025 and 2024, we had net borrowings of $87.6 million and $55.4 million, respectively, under our settlement lines of credit.

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 us ed $446.3 million and $800.0 million, respectively, to repurchase and retire 4,218,350 and 6,061,999 shares of our common stock, 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.

During the six months ended June 30, 2025 and 2024, we us ed $691.1 million and $900.0 million, respectively, to repurchase and retire 7,261,834 and 6,972,979 shares of our common stock, respectively.

The share repurchase activity for the six months ended June 30, 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 share repurchase activity for the six months ended June 30, 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.

We paid dividends to our common shareholders of $61.1 million and $63.6 million during the three months ended March 31, 2025 and 2024, respectively.

We also made distributions to noncontrolling interests of $10.3 million a nd $4.7 million during the three months ended March 31, 2025 and 2024, respectively.

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.

As of June 30, 2025, the remaining amount available under our share repurchase program was $1,176.5 million.

We paid dividends to our common shareholders of $121.5 million and $127.0 million during the six months ended June 30, 2025 and 2024, respectively.

We also made distributions to noncontrolling interests of $30.1 million a nd $10.9 million during the six months ended June 30, 2025 and 2024, respectively.

On July 30, 2025, our board of directors declared a dividend of $0.25 per share payable on September 26, 2025 to common shareholders of record as of September 12, 2025.

Long-Term Debt and Lines of Credit

We have $10.2 billion in aggregate principal amount of senior unsecured notes outstanding as of March 31, 2025, which mature at various dates ranging from March 2026 to August 2052.

We have $10.2 billion in aggregate principal amount of senior unsecured notes outstanding as of June 30, 2025, which mature at various dates ranging from March 2026 to August 2052.

Interest on the senior notes is payable annually or semi-annually at various dates.

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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.

We have $2.0 billion in aggregate principal amount of 1.500% convertible unsecured senior notes due March 2031 that 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.

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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.

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 six months ended June 30, 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.

We also have $1.5 billion in aggregate principal amount of 1.000% convertible notes due August 2029 that 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.

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Revolving Credit Facility

Our credit agreement with Bank of America, N.A., as administrative agent, and a syndicate of financial institutions, as lenders and other agents, provides for an unsubordinated unsecured $5.75 billion revolving credit facility that matures in August 2027.

On May 15, 2025, we entered into a credit agreement with Bank of America, N.A., as administrative agent, and a syndicate of financial institutions, as lenders and other agents.

The credit agreement provides for an unsubordinated unsecured $7.25 billion revolving credit facility (the "Revolving Credit Facility"), of which (a) $5.75 billion of commitments have been made available on May 15, 2025 and (b) an additional $1.5 billion of commitments will be made available upon the closing of the proposed acquisition of Worldpay described in "Note 1—Basis of Presentation and Summary of Significant Accounting Policies." Commitments under the Revolving Credit Facility may be increased to an aggregate amount not to exceed $7.5 billion.

The Revolving Credit Facility matures in May 2030 and provides for up to two one-year maturity extensions.

Borrowings under the Revolving Credit Facility may be repaid prior to maturity without premium or penalty, subject to payment of certain customary expenses of lenders and customary notice provisions.

The Revolving Credit Facility replaced our previous unsubordinated unsecured $5.75 billion revolving credit facility (the "Prior Credit Facility"), dated as of August 19, 2022, as amended, which was scheduled to mature in August 2027.

In May 2025, all borrowings outstanding under the Prior Credit Facility were either repaid or continued under the Revolving Credit Facility pursuant to the terms of the new credit agreement.

The Prior Credit Facility was terminated in connection with the execution of the Revolving Credit Facility.

Borrowings under the Revolving Credit Facility will be available to be made in US dollars, euros, sterling, Canadian dollars and, subject to certain conditions, certain other currencies at our option.

Borrowings under the Revolving Credit Facility will bear interest, at our option, at a rate equal to (i) for secured overnight financing rate based currencies or certain alternative currencies, a secured overnight financing rate (subject to a 0.00% floor) or an alternative currency term rate (subject to a 0.00% floor), as applicable, (ii) for US dollar borrowings, a base rate, (iii) for US dollar borrowings, a daily floating secured overnight financing rate (subject to a 0.00% floor) or (iv) for certain alternative currencies, a daily alternative currency rate (subject to a 0.00% floor), in each case, plus an applicable margin.

The applicable margin for borrowings other than base rate borrowings will range from 1.000% to 1.750% depending on our credit rating and is initially 1.375%.

We may issue standby letters of credit of up to $500 million in the aggregate under the Revolving Credit Facility.

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The amounts available to borrow under the Revolving Credit Facility are also determined by a financial leverage covenant.

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.

As of June 30, 2025, there were borrowings of $1.5 billion outstanding under the Revolving Credit Facility with an interest rate of 5.7%, and the total available commitments under the Revolving Credit Facility were $2.9 billion.

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.

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.

The commercial paper program is backstopped by our Revolving Credit Facility, in that the amount of commercial paper notes outstanding cannot exceed the undrawn portion of the 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.

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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%.

As of June 30, 2025, we had net borrowings under our commercial paper program of $798.1 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%.

Compliance with Covenants

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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.

As of June 30, 2025, the required leverage ratio was 3.75 to 1.00.

We were in compliance with all applicable covenants as of June 30, 2025.

Settlement Lines of Credit

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Accordingly, the amount of the outstanding lines of credit may exceed the stated credit limit.

As of March 31, 2025, a total of $47.1 million of cash on deposit was used to determine the available credit.

As of March 31, 2025, we had $728.0 million outstanding under these lines of credit with additional capacity to fund settlement of $1,981.0 million.

During the three months ended March 31, 2025, the maximum and average outstanding balances under these lines of credit were $871.8 million and $404.0 million, respectively.

The weighted-average interest rate on these borrowings was 5.29% at March 31, 2025.

Subsequent Event - Committed Bridge Financing

As discussed in further detail above in Strategy and Business Transformation, in connection with our entry into a definitive agreement to acquire Worldpay on April 17, 2025, we obtained $7.7 billion in committed bridge financing and plan to issue debt between signing and closing which will be used to replace the bridge commitment and refinance Worldpay’s outstanding debt.

As of June 30, 2025, a total of $49.2 million of cash on deposit was used to determine the available credit.

As of June 30, 2025, we had $627.9 million outstanding under these lines of credit with additional capacity to fund settlement of $2,226.8 million.

During the three months ended June 30, 2025, the maximum and average outstanding balances under these lines of credit were $1,311.3 million and $440.6 million, respectively.

The weighted-average interest rate on these borrowings was 4.87% at June 30, 2025.

Committed Bridge Financing

On April 17, 2025, in connection with our entry into the definitive agreement to acquire Worldpay, we obtained $7.7 billion in committed bridge financing, which was subsequently reduced to $6.2 billion on May 15, 2025 in connection with the entry into the Revolving Credit Facility on May 15, 2025.

Effect of New Accounting Pronouncements and Recently Issued Accounting Pronouncements Not Yet Adopted

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis