What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-04 compared with 2025-08-06 · 115 added, 104 removed, 226 unchanged (49% of the section changed)

13 unchanged sentences

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.

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.

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.

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

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

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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.

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

• On September 30, 2025, we completed the sale of Heartland Payroll Solutions, Inc.

("Payroll Solutions"), our payroll business included in our Merchant Solutions segment, to Acrisure, LLC for approximately $1.1 billion, subject to certain closing adjustments, including up to $75 million of contingent consideration.

We recognized a gain on the sale of $343.9 million during the three and nine months ended September 30, 2025 in connection with the sale.

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

• Consolidated revenues were essentially flat at $2,007.6 million and $5,773.1 million for the three and nine months ended September 30, 2025, respectively, compared to $1,997.7 million and $5,802.8 million for the three and nine months ended September 30, 2024, respectively.

• Merchant Solutions segment operating income and operating margin for the three and nine months ended September 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 nine months ended September 30, 2025 includes the gain recognized on the sale of the Payroll Sol utions business.

Strategy and Business Transformation

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Results of Operations

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

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

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

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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.

The following table sets forth key selected financial data for the three months ended September 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 September 30, 2025 and 2024 is derived from the accompanying unaudited consolidated financial statements.

Three Months Ended

June 30, 2025 % of Revenue (1)

September 30, 2025 % of Revenue (1)

Three Months Ended

June 30, 2024 % of Revenue (1)

September 30, 2024 % of Revenue (1)

Change % Change

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(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.

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

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)

Operating income included acquisition and transformation expens es of $205.1 million and $104.9 million for the three months ended September 30, 2025 and 2024, respectively, which were primarily included within Corporate selling, general and administrative expenses.

During the three months ended September 30, 2024, Corporate expenses also included charges for employee termination benefits of $56.4 million.

The following table sets forth key selected financial data for the nine months ended September 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 nine months ended September 30, 2025 and 2024 is derived from the accompanying unaudited consolidated financial statements.

Nine Months Ended

September 30, 2025 % of Revenue (1)

Nine Months Ended

September 30, 2024 % of Revenue (1)

Change % Change

18 unchanged sentences

(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.

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

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 income included acquisition and transformation expenses of $433.4 million and $236.3 million for the nine months ended September 30, 2025 and 2024, respectively, which were primarily included within Corporate expenses.

During the nine months ended September 30, 2024, Corporate expenses also included charges for employee termination benefits of $94.1 million.

Revenues from our Merchant Solutions segment increased by $10.0 million, or 0.5%, for the three months ended September 30, 2025 and decreased by $29.7 million, or 0.5%, for the nine months ended September 30, 2025.

For the three and nine months ended September 30, 2025, revenues in our integrated and embedded solutions service line increased $56.3 million and $158.6 million, respectively, or 6.8% and 6.7%, respectively, as payments continue to transition to more embedded and digital native environments.

Revenues in our point of sale and software solutions service line decreased $37.2 million and $110.5 million for the three and nine months ended September 30, 2025, respectively, or 9.8% and 9.6%, respectively.

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

Revenues in our core payments solutions service line declined $9.1 million and $77.8 million for the three and nine months ended September 30, 2025, respectively, or 1.1% and 3.4%, respectively, 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 and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024.

Cost of Service.

Cost of service for our Merchant Solutions segment for the three and nine months ended September 30, 2025 increased by $52.1 million and $36.3 million, respectively.

Cost of service as a percentage of revenues was 27.7% and 26.8% for the three and nine months ended September 30, 2025, respectively, compared to 25.3% and 26.0% in the prior year, respectively.

The increase in cost of service was primarily driven by depreciation of capital investments as part of our transformation initiatives.

The disposition of AdvancedMD had the effect of reducing cost of service as a percentage of revenues by 0.4% and 0.3% f or the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024, respectively .

Amortization of Acquired Intangible Assets.

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.

The most significant component of our cost of service is amortization of acquired intangibles, which was $207.6 million and $601.8 million for the three and nine months ended September 30, 2025 , respectively, and $213.8 million and $635.5 million for t he three and nine months ended September 30, 2024, respectively .

As a percentage of cost of service, amortization of acquired intangibles w as 37% and 39% for the three and nine months ended September 30, 2025, respectively, a nd 42% for both the three and nine months ended September 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.

The decrease in amortization of acquired intangibles in the three and nine months ended September 30, 2025 primarily reflects the effect of the disposition of the AdvancedMD business in December 2024.

Selling, General and Administrative Expenses.

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.

Selling, general and administrative expenses from our Merchant Solutions segment for the three and nine months ended September 30, 2025 decreased by $84.6 million and $186.5 million, respectively, or 10.8% and 8.0%, respectively.

Selling, general and administrative expenses as a percentage of segment revenues was 34.9% and 37.2% for the three and nine months ended September 30, 2025, respectively, compared to 39.3% and 40.2% in the prior yea r, respectively.

The primary driver of the reduction in selling, general and administrative expenses for the three and nine months ended September 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 nine months ended September 30, 2025 increased by $51.1 million and $161.1 million, respectively, or 19.3% and 23.6%, respectively.

The higher amount of corporate expenses was primarily driven by an increase in acquisition and transformation costs of $100.2 million and $197.1 million for the three and nine months ended September 30, 2025, respectively.

This was partially offset by employee termination benefits expense recognized of $56.4 million and $94.1 million for the three and nine months ended September 30, 2024, respectively.

Operating Income and Operating Margin

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.

Consolidated operating income for the three and nine months ended September 30, 2025 was $778.0 million and $1,585.3 million, respectively, compared to $442.7 million and $1,277.7 million in the prior year, respectively.

Consolidated operating margin for the three and nine months ended September 30, 2025 was 38.8% and 27.5%, respectively, compared to 22.2% and 22.0% in the prior year, respectively.

• Consolidated operating income and operating margin for the three and nine months ended September 30, 2025 included the effects of a $343.9 million gain on the sale of Payroll Solutions, which had a favorable effect on operating margin of approximately 17.1% and 6.0% for the three and nine months ended September 30, 2025, respectively;

• Consolidated operating income also reflecte d higher co rporate costs, as described above, which had an unfavorable effect on operating margin of approximat ely 2.5% and 2.8% fo r the three and nine months ended September 30, 2025, respectively;

• Merchant Solutions segment operating income increased $42.4 million and $120.5 million for the three and nine months ended September 30, 2025, respectively, and operating margin increased 2.0% and 2.2%, respectively, 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 nine months ended September 30, 2024 included operating income o f $11.1 million and $34.0 million, respectively, related to the disposed AdvancedMD business.

The disposition had the effect of increasing operat ing margin by 0.5% and 0.4% for t he three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024, respectively .

Income Tax Expense

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.

Our effective income tax rates for the three months ended September 30, 2025 and 2024 were 30.4% and 17.2%, respectively.

The changes in our effective tax rates for the three months ended September 30, 2025 from the prior year reflects the tax effect of the gain on disposition of our Payroll Solutions business.

The gain on the disposition of our Payroll Solutions business for tax reporting purposes will be higher than the gain for financial reporting purposes due to the derecognition of goodwill that is not deductible for tax reporting purposes.

Our effective income tax rates for the nine months ended September 30, 2025 and 2024 were 29.3% and 13.8%, respectively.

The changes in our effective tax rates for the nine months ended September 30, 2025 from the prior year reflects the effect of deferred tax expense recognized associated with legal entity restructuring in connection with the sale of our Issuer Solutions business and the tax effect of the gain on disposition of our Payroll Solutions business.

In addition, the effective income tax rate for the nine months ended September 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.

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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.

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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

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.

The OBBBA and Pillar Two directive did not have a material effect on our financial statements for the three and nine months ended September 30, 2025, and we are continuing to evaluate the potential effect on future periods.

Income from Continuing Operations

Income from continuing operations was $473.3 million and $928.7 million for the three and nine months ended September 30, 2025, respectively, compared to $303.9 million and $868.8 million for the prior year, respectively, 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.

Diluted earnings per share was $1.86 and $3.67 for the three and nine months ended September 30, 2025, respectively, compared to $1.13 and $3.24 for the prior year, respectively.

Diluted earnings per share for the three and nine months ended September 30, 2025 reflects the changes in net income noted above as well as a decrease of 14.7 million and 12.3 million, respectively, in diluted weighted-average number of shares outstanding to 240.2 million and 243.6 million shares, respectively, for the three and nine months ended September 30, 2025, compared to 254.9 million and 255.9 million shares for the prior year, respectively.

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.

The following tables set forth key selected financial data for discontinued operations for the three and nine months ended September 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 nine months ended September 30, 2025 and 2024 is derived from the accompanying unaudited consolidated financial statements.

Three Months Ended

June 30, 2025 % of Revenue (1)

September 30, 2025 % of Revenue (1)

Three Months Ended

June 30, 2024 % of Revenue (1)

September 30, 2024 % of Revenue (1)

Change % Change

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Revenues $ 659,828 $ 621,130 $ 38,698 6.2 %

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

Operating income $ 250,992 38.0 % $ 32,835 5.3 % $ 218,157 664.4 %

Operating margin 38.0 % 5.3 % 32.7 %

(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)

Nine Months Ended

September 30, 2025 % of Revenue (1)

Nine Months Ended

September 30, 2024 % of Revenue (1)

Change % Change

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Revenues $ 1,920,442 $ 1,837,373 $ 83,069 4.5 %

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

Operating income $ 561,692 29.2 % $ 222,731 12.1 % $ 338,961 152.2 %

Operating margin 29.2 % 12.1 % 17.1 %

(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.

Revenues for the three and nine months ended September 30, 2025 increased pri marily due to a $25.4 million and $71.6 million effect of higher transaction volume driven by cardholder activity for the three and nine months ended September 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.

Operating income and operating margin increased for the three and nine months ended September 30, 2025 primarily due to the cessation of depreciation and amortization associated with classification of the assets as held for sale and higher revenues.

Liquidity and Capital Resources

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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.

At September 30, 2025, we had cash and cash equivalents totalin g $2,785.3 million.

Of this amount, we considered $1,304.1 million to be available for general purposes, of which $65.8 million is undistributed foreign earnings considered to be indefinitely reinvested outside the U.S.

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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 $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.

We also had restricted cash of $251.4 million as of September 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 $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.

Operating activities provided net cash of $2,141.4 million a nd $2,174.1 million for the nine months ended September 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.

Investing activities provided net cash of $79.6 million for the nine months ended September 30, 2025 and we used net cash in investing activities of $846.6 million during the nine months ended September 30, 2024.

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

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.

During the nine months ended September 30, 2025 and 2024, we used cash of $201.9 million and $373.8 million, respectively, for acquisitions.

We made capital expenditures of $449.6 million and $490.9 million during the nine months ended September 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.

These investments also include new product development and innovation to further enhance and differentiate our suite of technology and cloud-based solutions available to customers.

We expect to continue to make capital investments in the business, and we anticipate capital expenditures to be approximately $750 million during the year ending December 31, 2025.

We expect to cont inue to make capital investments in the business, and we anticipate capital expenditures to be approximately $700 million during the year ending December 31, 2025.

Additionally, investing cash flows for the nine months ended September 30, 2025 includes the proceeds from the sale of Payroll Solutions.

The net proceeds from business dispositions of $709.7 million during the period is presented net of $269.6 million of customer funds that were transferred to the buyer in the transaction, along with the associated customer liability.

Financing activities include borrowings and repayments made under our various debt arrangements, as well as borrowings and repayments made under specialized lines of credit to fund daily settlement activities.

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 $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.

Net cash used in financing activities was $2,126.0 million and $446.0 million for the nine months ended September 30, 2025 and 2024, respectively.

Proceeds from long-term debt we re $4,899.1 million an d $7,637.9 million for the nine months ended September 30, 2025 and 2024, respectively.

Repayments of long-term debt we re $5,972.8 million and $5,803.0 million for the nine months ended September 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 $630.2 million and a use of cash of $57.7 million for the six months ended June 30, 2025 and 2024, respectively.

Changes in settlement processing assets and obligations, net were a source of cash of $139.8 million and $789.7 million for the nine months ended September 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 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.

During the nine months ended September 30, 2024, we had net

repayments of $1,367.9 million 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 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.

During the nine months ended September 30, 2025 and 2024, we had net borrowings of $439.4 million and net repayments of $184.5 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 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.

During the nine months ended September 30, 2025 and 2024, we us ed $1,191.1 million and $900.0 million, respectively, to repurchase and retire 13,171,490 and 6,972,979 shares of our common stock, respectively.

The share repurchase activity for the nine months ended September 30, 2025 included the repurchase of 5,909,656 shares at an average price of $84.61 per share under an ASR agreement we entered into on August 6, 2025 with a financial institution to repurchase an aggregate of $500.0 million of our common stock during the ASR program purchase period.

This ASR program was completed on September 26, 2025.

The share repurchase activity for the nine months ended September 30, 2025 also 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 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 share repurchase activity for the nine months ended September 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 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.

As of September 30, 2025, the remaining amount available under our share repurchase program was $676.5 million.

We paid dividends to our common shareholders of $179.5 million and $190.5 million during the nine months ended September 30, 2025 and 2024, respectively.

We also made distributions to noncontrolling interests of $49.2 million and $29.4 million during the nine months ended September 30, 2025 and 2024, respectively.

On October 29, 2025, our board of directors declared a dividend of $0.25 per share payable on December 26, 2025 to common shareholders of record as of December 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 June 30, 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 September 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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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.

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.

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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 six months ended June 30, 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 nine months ended September 30, 2024, net of applicable income taxes.

1.000% Convertible Notes due August 15, 2029

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

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.

As of September 30, 2025, there were borrowings of $1.5 billion outstanding under the Revolving Credit Facility with an interest rate of 5.5%, and the total available commitments under the Revolving Credit Facility were $4.1 billion.

Commercial Paper

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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 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%.

As of September 30, 2025, we ha d no borrowings outstanding under our commercial paper program.

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 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.

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

We were in compliance with all applicable covenants as of September 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 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.

As of September 30, 2025, a total of $44.3 million of cash on deposit was used to determine the available credit.

As of September 30, 2025, we had an amount of $977.8 million outstanding under these lines of credit with additional capacity to fund settlement of $1,810.0 million.

During the three months ended September 30, 2025, the maximum and average outstanding balances under these lines of credit were $977.8 million and $415.4 million, respectively.

The weighted-average interest rate on these borrowings was 4.72% at September 30, 2025.

Committed Bridge Financing

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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