Global Payments Inc.
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PART I
ITEM 1 - BUSINESS
Global Payments Inc. and its consolidated subsidiaries are referred to collectively as "Global Payments," the "Company," "we," "our" or "us," unless the context requires otherwise.
Introduction
We are a leading payments technology company delivering innovative software and services to our customers globally, with worldwide reach spanning North America, Europe, Asia-Pacific and Latin America. The payments technology industry provides financial institutions, businesses and consumers with payment processing services, merchant acceptance solutions and related business management software and value-added services. Our technologies, services and team member expertise allow us to provide a broad range of solutions that enable our customers to operate their businesses more efficiently across a variety of channels around the world. Headquartered in Georgia with approximately 26,000 team members worldwide, Global Payments is a Fortune 500 company and is a member of the S&P 500. Our common stock is traded on the New York Stock Exchange under the symbol "GPN."
Business Transformation
In 2024, we launched a holistic review of our business to examine our strategy, operations and ability to deliver sustainable performance. We have refreshed our strategy and are focusing our resources, efforts and investments on the areas of the business that will drive the best opportunities for growth.
We are in the process of streamlining our organization and operating environments through our transformation program to deliver a global, unified operating company. We are aligning the Global Payments brand identity across our assets and solidifying go-to-market activities under a simplified technology environment. We are harmonizing capabilities to deliver our full suite of differentiated software and commerce enablement solutions to clients globally.
We have consolidated our technology organizations and teams under common leadership to enhance speed and quality of product development with a customer-centric, solutions-led mindset. We have also centralized our operations functions to enhance our servicing model and focus on improving the client journey, leveraging best-in-class technology and providing differentiated service experiences.
In executing and delivering on our transformation initiatives, we have incurred and anticipate incurring incremental expenses related to this program through the first half of 2027, including but not limited to changes to the recoverability of assets and our estimates of remaining useful lives. We also continue to assess our business portfolio to evaluate potential assets for disposition to further streamline our business and create value for shareholders.
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Recent Business Acquisitions and Dispositions
Acquisition of Worldpay Holdco, LLC and Disposition of Issuer Solutions
In January 2026, we acquired 100% of Worldpay Holdco, LLC (“Worldpay”) from Fidelity National Information Services, Inc. (“FIS”) and affiliates of GTCR LLC (“GTCR”) ("Worldpay Acquisition") and divested our Issuer Solutions business to FIS. Worldpay is an industry-leading payments technology and solutions company. Consideration paid to GTCR for its ownership interest in Worldpay consisted of (1) approximately $6.2 billion in cash and (2) 43.3 million shares of Global Payments common stock. Consideration received for the divestiture of our Issuer Solutions business consisted of (1) approximately $7.7 billion in cash and (2) FIS’ ownership interest in Worldpay. The acquisition of Worldpay and divestiture of our Issuer Solutions business occurred simultaneously. Both transactions are subject to customary working capital and other adjustments. We are providing certain transition services to support the Issuer Solutions business as it is integrated with FIS and are also receiving certain transition services from FIS in support of our integration of Worldpay.
Disposition of Heartland Payroll Solutions, Inc.
In September 2025, we completed the sale of Heartland Payroll Solutions, Inc. ("Payroll Solutions"), our payroll business included in our Merchant Solutions segment prior to disposition, to Acrisure, LLC ("Acrisure") for approximately $1.1 billion, including up to $75 million of contingent consideration. In connection with the transaction, we entered into a mutual referral agreement and long-term commercial partnership with Acrisure.
Disposition of AdvancedMD, Inc.
In December 2024, we completed the sale of AdvancedMD, Inc. ("AdvancedMD") for approximately $1.1 billion and up to $125 million of contingent consideration. AdvancedMD is a provider of software-as-a-service solutions to small-to-medium sized ambulatory physician practices in the United States and was included in our Merchant Solutions segment prior to disposition.
See "Note 2—Acquisitions" and “Note 3—Business Dispositions and Discontinued Operations” in the notes to the accompanying consolidated financial statements for further discussion of these and other recent transactions.
Business Segments
Beginning in the second quarter of 2025, the results of our Issuer Solutions business have been reported as discontinued operations and therefore, no longer presented as a reportable segment. Segment information presented is based on our Merchant Solutions reportable segment prior to the acquisition of Worldpay. See "Note 3—Business Dispositions and Discontinued Operations" in the notes to the accompanying consolidated financial statements for further discussion regarding the divestiture of our Issuer Solutions business and "Note 18—Segment Information" for additional information about our segments, including revenues, operating expenses, operating income and depreciation and amortization by segment, as well as financial information about geographic areas in which we operate.
In connection with the acquisition of Worldpay in 2026, we will be revising our organizational structure and related internal management reporting. Therefore, beginning in the first quarter of 2026, our reportable segments will align with that revised structure.
Merchant Solutions Segment
Through our Merchant Solutions segment, we provide payments technology and software solutions globally. Our payment technology solutions are similar around the world in that we enable our customers to accept card, check and digital-based payments. Our comprehensive offerings include, but are not limited to, authorization, settlement and funding services, customer support, chargeback resolution, reconciliation and dispute management services, terminal rental, sales and deployment, payment security services, consolidated billing and reporting.
In addition, we offer a wide array of business management software solutions, including specialty point-of-sale ("POS") software, that streamline business operations to customers in numerous vertical markets. We also provide a variety of commerce enablement solutions and services, including data analytics and customer engagement, human capital management and payroll, accounts receivable automation, inventory management and reporting that assist our customers with driving demand and operating their businesses more efficiently.
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Our value proposition is to provide differentiated, high-quality, responsive and secure services to all our customers. We also focus on providing distinctive customer service from the sales process, to onboarding, to ongoing support across our business. The majority of our revenue is generated by services priced as a percentage of transaction value or a specified fee per transaction, depending on the payment type or the market. We also earn software subscription and licensing fees, as well as other fees for specific value-added services, which may be unrelated to the number or value of transactions.
Distribution Channels
In the Merchant Solutions segment, we actively market and provide our payment services, business management software solutions and other value-added services directly to our customers and through a variety of distribution channels across three business pillars: Point-of-Sale and Software Solutions, Integrated and Embedded Solutions and Core Payments Solutions. We have a wide array and diversity of distribution channels led by one of the premiere direct sales teams in the industry. Additionally, we go to market through our broad-based financial institution partnerships, joint ventures and wholesale and indirect relationships.
Many of our payment solutions are technology-enabled in that they incorporate or are incorporated into innovative, technology-driven solutions, including software solutions, designed to enable merchants to better manage their businesses. Our technology-enabled solutions represent a substantial component of our revenues.
POS and Software Solutions. Our POS and Software Solutions business provide advanced payments technology that is integrated into point-of-sale systems and business management software solutions that we own. We have capabilities in cloud-based POS for restaurant and retail and leading software in other verticals including education (serving colleges, universities, and kindergarten through 12th grade level institutions), real estate (primarily property management), and communities (serving event organizers largely in the health and fitness market). POS and Software Solutions business offers a range of features that are being combined under our Global Payments brand identity across all of our assets. This includes unifying our POS businesses under a common brand, Genius, and leveraging our vast distribution channels to extend it globally.
Integrated and Embedded Solutions. Our Integrated and Embedded Solutions business provides advanced payments technology that is embedded into business management software solutions owned by our technology partners that operate in numerous vertical markets and countries. Further, we also integrate our capabilities with shopping carts, ordering platforms, marketplaces and other digitally-oriented businesses through the same embedded payment stack we leverage with more traditional, vertically-specific independent software vendors. We deliver these capabilities in physical and digital environments seamlessly.
Core Payments Solutions. We offer our core payments solutions through our direct sales forces worldwide, as well as referral partnerships. We offer our payments technology services, software and other commerce enablement solutions directly to customers across numerous verticals in the markets we serve. Although our primary focus is on building durable, direct relationships with merchants, we also provide our services to merchants referred by independent sales organizations ("ISOs") and financial institutions.
Credit and Debit Card Transaction Processing
Credit and debit card transaction processing includes processing the world's major international card brands, including, among others, American Express, Discover Card ("Discover"), JCB, Mastercard, UnionPay International, and Visa, as well as certain domestic debit networks, such as Interac in Canada. Credit and debit networks establish uniform regulations that govern much of the payment card industry. During a typical payment transaction, the merchant and the card issuer do not interface directly with each other, but instead rely on payments technology companies, such as Global Payments, to facilitate transaction processing services, including authorization, electronic draft capture, file transfers to facilitate funds settlement and certain exception-based, back-office support services such as chargeback resolution.
We process funds settlement under two models: a sponsorship model and a direct membership model. Under the sponsorship model, member clearing financial institutions ("Members") sponsor us and require our adherence to the standards of the networks. In these markets, we have sponsorship or depository and clearing agreements with financial institution sponsors. These agreements allow us to route transactions under the Members' control and identification numbers to clear card transactions through Mastercard and Visa. In this model, the standards of the card networks restrict us from performing funds settlement or accessing merchant settlement funds and instead, require that these funds be in the possession of the Member until the merchant has been funded.
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Under the direct membership model, we are direct members in various payment networks, allowing us to process and fund transactions without third-party sponsorship. Under this model, we route and clear transactions directly through the card brand’s network and are not restricted from performing funds settlement. Otherwise, we process these transactions similarly to how we process transactions in the sponsorship model. We are required to adhere to the standards of the various networks in which we are direct members. We maintain relationships with financial institutions, which may also serve as our Member sponsors for other card brands or in other markets, to assist with funds settlement.
How a Card Transaction Works
A typical payment transaction begins when a cardholder presents a card for payment to a merchant, at which time card and transaction information, such as the card identification number, transaction date and transaction amount, is captured and transmitted to our network. The information is captured by a POS terminal card reader or mobile device card reader, which may be sold or leased to the merchant and serviced by us, through a POS device or ecommerce portal by one of a number of services that we offer directly, or through a value-added reseller.
After the card and transaction information is captured, the POS device or ecommerce portal automatically connects to our network through the internet or other communication channel in order to receive authorization of the transaction. For a credit card transaction, authorization services generally refer to the process in which the card issuer indicates whether a particular credit card is authentic and whether the impending transaction amount will cause the cardholder to exceed defined credit limits. In a debit card transaction, we obtain authorization for the transaction from the card issuer through the payment network verifying that the cardholder has access to sufficient funds for the transaction amount.
As an illustration, shown below in the sponsorship model, on a $100.00 card transaction the card issuer may fund the Member, our sponsor, (indirectly through the card network) $98.50 after retaining $1.50 referred to as an interchange fee. The card issuer would seek reimbursement of $100.00 from the cardholder in the cardholder's monthly credit card statement. The Member would, in turn, pay the merchant $100.00. The net settlement after this transaction would require us to advance the $1.50 interchange fee to the Member. After the end of the month, we would bill the merchant a percentage, also known as the merchant discount, of the transaction amount to cover the full amount of the interchange fee and our fee from the transaction. Assuming the merchant discount in the above example is 2%, we bill the merchant $2.00 after the end of the month for the transaction, reimburse ourselves for $1.50 in interchange fees that we have previously funded to the Member and retain $0.50 as our fee for the transaction. Under some arrangements, we remit the net amount of $98.00 to the merchant, rather than funding the full $100.00 and subsequently billing the merchant at the end of the month.
Discount rates vary based on negotiations with merchants and the economic characteristics of transactions and take many forms, such as interchange plus our fee or a bundled rate that includes all fees. Interchange rates also vary based on the economic characteristics of individual transactions. Accordingly, our fee per transaction varies across our merchant base and is subject to change based on changes in discount rates and interchange rates. Our revenues on a transaction generally reflect the merchant discount, less interchange fees and payment network fees. Our profit is revenues less operating expenses, including systems costs to process the transaction and commissions paid to our sales force or external partner. Payment network fees are charged by the card brands, in part, based on the value of transactions processed through their networks.
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Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
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ITEM 2—MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and related notes included in Item 1 of Part I of this Quarterly Report and the Management’s Discussion and Analysis of Financial Condition and Results of Operations and consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2025. This discussion and analysis contains forward-looking statements about our plans and expectations of what may happen in the future. Forward-looking statements are based on a number of assumptions and estimates that are inherently subject to significant risks and uncertainties, and our actual results could differ materially from the results anticipated by our forward-looking statements.
Executive Overview
We are a leading payments technology company delivering innovative software and services to our customers globally. Our technologies, services and team member expertise allow us to provide a broad range of solutions that enable our customers to operate their businesses more efficiently across a variety of channels around the world.
We have grown organically, as well as through acquisitions, and continue to invest in new technology solutions and infrastructure to support our growing business and the ongoing consolidation and enhancement of our operating platforms. These investments include new product development and innovation to further enhance and differentiate our suite of technology and software solutions available to customers, along with migration of certain underlying technology platforms to cloud environments to enhance performance, improve speed to market and drive cost efficiencies. 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.
On January 9, 2026, we acquired 100% of Worldpay from FIS and affiliates of GTCR and divested our Issuer Solutions business to FIS. Worldpay is an industry leading payments technology and solutions company. Consideration paid to GTCR for its ownership interest in Worldpay consisted of (1) approximately $6.0 billion in cash and (2) 42.8 million shares of Global Payments common stock. Consideration received for the divestiture of our Issuer Solutions business consisted of (1) approximately $7.5 billion in cash and (2) FIS’ ownership interest in Worldpay.
Our Issuer Solutions business met the criteria to be classified as a discontinued operation, and we have presented the historical operations of our former Issuer Solutions reportable segment as discontinued operations for all periods presented. Our continuing operations consist of our Merchant Solutions reportable segment.
Prior to the completion of the Worldpay Acquisition, we operated in one reportable segment, Merchant Solutions, and certain operating overhead, shared costs and share-based compensation costs were included in Corporate. As of March 31, 2026, the determination of our organizational structure to incorporate Worldpay and the effects on our reportable segments was still in process and therefore, we have reported corporate costs and the results of operations of Worldpay from the acquisition date to March 31, 2026, within our Merchant Solutions reportable segment.
See “Note 2—Acquisition,” “Note 3—Business Dispositions and Discontinued Operations” and "Note 15—Segment Information" in the notes to the accompanying financial statements for further information.
Highlights related to our results of continuing operations for the three months ended March 31, 2026, include the following:
•Revenues for the three months ended March 31, 2026, increased to $2,969.7 million compared to $1,820.3 million for the prior year primarily due to additional revenues from the acquired operations of Worldpay.
•Merchant Solutions segment operating income and operating margin for the three months ended March 31, 2026, decreased compared to the prior year primarily due to an increase in amortization expense from acquired Worldpay intangible assets and higher acquisition and transformation expenses.
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Strategy and Business Transformation
In 2024, we launched a holistic review of our business to examine our strategy, operations and ability to deliver sustainable performance. We refreshed our strategy and focused our resources, efforts and investments on the areas of the business that will drive the best opportunities for growth.
The acquisition of Worldpay and sale of the Issuer Solutions business further catalyzes our transformation agenda. Accordingly, following the closing of those transactions, we have combined all transformation and integration activities into one program.
This program is expected to continue over the next few years. As we focus on executing and delivering integration, separation and transformation initiatives, we have incurred and anticipate incurring incremental expenses related to these activities through 2028. We also 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 and for our Worldpay integration activities to generate $600 million of annual run-rate expense synergies by year-end 2028.
Macroeconomic Effects and Other Global Conditions
We are exposed to general economic conditions, including the effects of currency fluctuations, inflation, rising interest rates, tariff increases, global trade relations, international tensions, higher rates of unemployment, and other conditions that affect the overall level of consumer, business, and government spending, which could negatively affect our financial performance. When adverse macroeconomic conditions arise, we evaluate where we may be able to implement cost-saving measures, including those related to headcount and discretionary expenses. We may also experience the effects of heightened geopolitical and economic instability or increased difficulty of conducting business in a country or region due to actual or potential political or military conflict or action.
Certain of our operations are conducted in foreign currencies. Consequently, a portion of our revenues and expenses has been and may continue to be affected by fluctuations in foreign currency exchange rates. A strengthening of the U.S. dollar or other significant fluctuations in foreign currency exchange rates could result in an adverse effect on our future financial results; however, we are unable to predict the extent of the potential effect on our financial results.
We have sought to reduce our interest rate risk through the issuance of fixed rate debt in place of variable rate debt and through interest rate swap hedging arrangements that convert a significant portion of the eligible variable rate borrowings under our revolving credit facility to a fixed rate. However, inflationary pressure or interest rate fluctuations could adversely affect our business and financial performance as a result of higher costs and/or lower consumer spending. In addition, continued inflation or a rise in interest rates could have an adverse effect on our future financial results and the recoverability of assets. However, as the future magnitude, duration, and effects of these conditions are difficult to predict, we are unable to project the extent of the potential effect on our financial results.
We regularly maintain cash balances with financial institutions in excess of the Federal Deposit Insurance Corporation insurance limit or the equivalent outside the U.S. A disruption in financial markets could negatively affect our banking partners, which could affect our ability to access our cash or cash equivalents, our ability to provide settlement services, or our customers' ability to access their existing cash to fulfill their payment obligations to us. The occurrence of these events could negatively affect our business, financial condition and results of operations.
For a further discussion of trends, uncertainties and other factors that could affect our future operating results, see the section entitled “Risk Factors” in Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2025, and subsequent filings we make with the SEC, including this Quarterly Report on Form 10-Q, and the section entitled "Forward-Looking Statements" in this Quarterly Report on Form 10-Q.
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Results of Operations
Our continuing operations consist of our Merchant Solutions reportable segment, which includes corporate costs and the results of operations of Worldpay since the acquisition date.
Key Drivers of our Results of Operations
Our revenues are dependent upon the volume of payment transactions we process and other factors (referred to herein as "transaction volume"). As a 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.
Continuing Operations
The following table sets forth key selected financial data for the three months ended March 31, 2026 and 2025, 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, 2026 and 2025 is derived from the accompanying unaudited consolidated financial statements.
| Three Months Ended March 31, 2026 | % of Revenue(1) | Three Months Ended March 31, 2025 | % of Revenue(1) | Change | % Change | ||||||||||||||||||||||||||||||
| (dollar amounts in thousands) | |||||||||||||||||||||||||||||||||||
Revenues(2) | $ | 2,969,682 | 100.0 | % | $ | 1,820,318 | 100.0 | % | $ | 1,149,364 | 63.1 | % | |||||||||||||||||||||||
Operating expenses(2): | |||||||||||||||||||||||||||||||||||
| Cost of service | $ | 1,273,614 | 42.9 | % | $ | 495,175 | 27.2 | % | $ | 778,439 | 157.2 | % | |||||||||||||||||||||||
| Selling, general and administrative | 1,711,714 | 57.6 | % | 957,177 | 52.6 | % | 754,537 | 78.8 | % | ||||||||||||||||||||||||||
| Gain on business disposition | — | (3,993) | 3,993 | NM | |||||||||||||||||||||||||||||||
| Consolidated operating expenses | $ | 2,985,328 | 100.5 | % | $ | 1,448,359 | 79.6 | % | $ | 1,536,969 | 106.1 | % | |||||||||||||||||||||||
Operating income (loss)(2): | |||||||||||||||||||||||||||||||||||
| Merchant Solutions | $ | (15,646) | $ | 367,966 | $ | (383,612) | (104.3) | % | |||||||||||||||||||||||||||
| Gain on business disposition | — | 3,993 | (3,993) | NM | |||||||||||||||||||||||||||||||
| Consolidated operating income (loss) | $ | (15,646) | (0.5) | % | $ | 371,959 | 20.4 | % | $ | (387,605) | (104.2) | % | |||||||||||||||||||||||
Operating margin(2): | |||||||||||||||||||||||||||||||||||
| Merchant Solutions | (0.5) | % | 20.2 | % | (20.7) | % | |||||||||||||||||||||||||||||
NM = Not meaningful
(1) Percentage amounts may not sum to the total due to rounding.
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(2) Revenues, operating expenses, operating income (loss) and depreciation and amortization reflect the effects of acquired businesses, including our completed Worldpay Acquisition, from the acquisition dates. See “Note 2—Acquisition” for further discussion.
Operating income (loss) and operating expenses included acquisition, transformation, and transaction expenses of $387.3 million and $94.7 million for the three months ended March 31, 2026 and 2025, respectively, which were primarily included within selling, general and administrative expenses.
Revenues
Revenues for the three months ended March 31, 2026 increased by 63.1%, from $1,820.3 million in the prior year to $2,969.7 million, primarily due to additional revenues from the acquired operations of Worldpay. The Worldpay Acquisition contributed approximately $1.2 billion in revenue growth. The remaining change was attributable to the effects of business dispositions in 2025 that were not individually significant.
Operating Expenses
Cost of Service. Cost of service for the three months ended March 31, 2026, increased $778.4 million, or 157.2%, to $1,273.6 million from $495.2 million in the prior year, primarily due to additional costs from the acquired operations of Worldpay. Cost of service as a percentage of segment revenues increased to 42.9% for the three months ended March 31, 2026, from 27.2% in the prior year. For the three months ended March 31, 2026, the Worldpay Acquisition had the effect of increasing cost of service by approximately $764.1 million and cost of service as a percentage of revenue by 13.9%.
Amortization of Acquired Intangible Assets. The most significant component of our cost of service is amortization of acquired intangible assets, which was $747.2 million and $197.2 million, or approximately 59% and 40% of cost of service, for the three months ended March 31, 2026 and 2025, respectively. The increase in amortization of acquired intangible assets for the three months ended March 31, 2026, compared to the prior year was due to the effect of the Worldpay Acquisition. These costs generally do not vary in proportion to changes in revenues, rather they are most significantly affected by acquisition activities.
Selling, General and Administrative Expenses. Selling, general and administrative expenses for the three months ended March 31, 2026, increased by $754.5 million, or 78.8%, to $1,711.7 million from $957.2 million in the prior year, primarily due to additional costs from the acquired operations of Worldpay. Selling, general and administrative expenses as a percentage of segment revenues was 57.6% for the three months ended March 31, 2026, compared to 52.6% in the prior year. For the three months ended March 31, 2026, the Worldpay Acquisition had the effect of increasing selling, general and administrative expenses by approximately $735.7 million.
Operating Income (Loss) and Operating Margin
Merchant Solutions segment operating loss for the three months ended March 31, 2026, was $15.6 million, compared to income of $368.0 million in the prior year. Merchant Solutions segment operating margin for the three months ended March 31, 2026, was (0.5)%, compared to 20.2% in the prior year. Segment operating loss reflected an increase in amortization expense from acquired Worldpay intangible assets and higher acquisition and transformation expenses. This had an unfavorable effect on operating margin of approximately 27.6% for the three months ended March 31, 2026.
Other Income and Expense, Net
Interest and other income for the three months ended March 31, 2026, decreased $4.5 million to $33.5 million, compared to $38.0 million for the prior year.
Interest and other expense for the three months ended March 31, 2026, increased $93.8 million to $242.4 million, compared to $148.5 million for the prior year, primarily due to an increase in our average outstanding borrowings.
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Income Tax Expense
For the three months ended March 31, 2026 and 2025, our effective income tax rates were 5.3% and 16.7%, respectively. The decrease in the effective income tax rate was primarily due to the jurisdictional mixture of (loss) income from continuing operations before income taxes and equity in income of equity method investments as well as related tax effects of tax credits, foreign branch operations and other earnings outside the U.S. These permanent differences, applied against lower income before income taxes in the current quarter, resulted in a decrease to the effective income tax rate.
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 from 2025 to 2027.
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 Group of Seven (G7) countries have agreed that U.S. Multi-National Entities (“MNEs”) should be excluded from certain aspects of the Pillar Two global minimum tax rules in exchange for the U.S. not imposing retaliatory taxes. On January 5, 2026, the OECD released additional guidance and announced the Side-by-Side package which introduces simplifications and new safe harbors for U.S. MNEs.
The OBBBA and Pillar Two directive did not have a material effect on our financial statements for the three months ended March 31, 2026, and we are continuing to evaluate the potential effect on future periods.
Income (Loss) from Continuing Operations
Loss from continuing operations was $192.8 million for the three months ended March 31, 2026, compared to income of $235.9 million for the prior year, reflecting the changes noted above.
Diluted Earnings (Loss) per Share - Continuing Operations
Diluted loss per share was $0.78 for the three months ended March 31, 2026, compared to earnings per share of $0.93 for the prior year. Diluted loss per share for the three months ended March 31, 2026, reflects the net loss discussion noted above as well as a 26.1 million increase in diluted weighted-average number of shares outstanding to 273.2 million shares for the three months ended March 31, 2026, compared to 247.2 million shares for the prior year.
Liquidity and Capital Resources
We have numerous sources of capital, including cash on hand and cash flows generated from operations as well as various sources of financing. In the ordinary course of our business, a significant portion of our liquidity comes from operating cash flows and borrowings, including the capacity under our revolving credit facility.
Our capital allocation priorities are to pay dividends, to repurchase shares of our common stock, to pursue acquisitions that meet our corporate objectives, to make planned capital investments in our business and to pay principal and interest on our outstanding debt. Our significant contractual cash requirements also include ongoing payments for lease liabilities and contractual obligations related to service arrangements with suppliers for fixed or minimum amounts, which primarily relate to software, technology infrastructure and related services. Commitments under our borrowing arrangements are further described in "Note 6—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." For additional information regarding our other cash commitments and contractual obligations, see "Note 7—Leases" and “Note 19—Commitments and Contingencies” in our Annual Report on Form 10-K for the year ended December 31, 2025.
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Our capital plan objectives are to support our operational needs and strategic plan for long-term growth while optimizing our cost of capital and financial position. 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 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.
We regularly evaluate our liquidity and capital position relative to cash requirements, and we may elect to raise additional funds in the future through the issuance of debt or equity or by other means. Accumulated cash balances are invested in high-quality, marketable short-term instruments. 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.
Our consolidated statements of cash flows include cash flows from discontinued operations for all periods presented, and therefore the following liquidity discussion includes both continuing and discontinued operations.
At March 31, 2026, we had cash and cash equivalents totaling $5,861.3 million. Of this amount, we considered $2,060.3 million to be available for general purposes, of which $65.1 million is undistributed foreign earnings considered to be indefinitely reinvested outside the U.S. The available cash of $2,060.3 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. Settlement-related cash balances represent funds that we hold when the incoming amount from the card networks precedes the funding obligation to the merchant. Settlement-related cash balances are not restricted in their use; however, these funds are generally paid out in satisfaction of settlement processing obligations within three business days. Merchant Reserves serve as collateral to minimize contingent liabilities associated with any losses that may occur under the merchant's agreement. While this cash is not restricted in its use, we believe that designating this cash as a Merchant Reserve strengthens our fiduciary standing with our member sponsors. 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 $263.2 million as of March 31, 2026, representing amounts subject to regulatory or legal restriction in their use, including amounts deposited by customers for prepaid card transactions, funds held as a liquidity reserve, and cash deposits held in escrow on our behalf by third parties.
Operating activities used net cash of $288.8 million for the three months ended March 31, 2026 and provided net cash of $555.1 million for the three months ended March 31, 2025. Operating cash flows for the three months ended March 31, 2026 reflect the payment of costs associated with the Transaction and certain liabilities assumed in the acquisition of Worldpay.
Investing activities provided net cash of $5,716.1 million for the three months ended March 31, 2026 and used net cash of $173.1 million for the three months ended March 31, 2025. The primary source of cash during the three months ended March 31, 2026 was the net proceeds from the sale of our Issuer Solutions business of $7,362.3 million. During the three months ended March 31, 2026 and 2025, we used cash of $1,389.2 million and $49.9 million, respectively, for acquisitions. We made capital expenditures of $261.3 million and $127.6 million during the three months ended March 31, 2026 and 2025, 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 $1.0 billion during the year ending December 31, 2026.
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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 6—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 $8,410.5 million and $31.5 million for the three months ended March 31, 2026 and 2025, respectively.
Repayments of long-term debt were $13,618.6 million and $2,546.6 million for the three months ended March 31, 2026 and 2025, respectively. Proceeds from long-term debt were $4,668.0 million and $1,551.0 million for the three months ended March 31, 2026 and 2025, 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 use of cash of $534.8 million and a source of cash of $479.2 million for the three months ended March 31, 2026 and 2025, 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, 2026 and 2025, we had net borrowings of $1,077.1 million and $867.6 million, respectively, under our commercial paper program. See section "Long-Term Debt and Lines of Credit" below for further discussion of our recent debt transactions.
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, 2026 and 2025, we had net borrowings of $675.9 million and $223.2 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, 2026 and 2025, we used $549.9 million and $446.3 million, respectively, to repurchase and retire 7,262,557 and 4,218,350 shares of our common stock, respectively. The share repurchase activity for the three months ended March 31, 2026, included the repurchase of 7,262,557 shares at an average price of $75.73 per share under an ASR agreement we entered into on February 18, 2026 with a financial institution to repurchase an aggregate of $550.0 million of our common stock during the ASR program purchase period. This ASR program was completed on March 17, 2026. The share repurchase activity for the three months ended March 31, 2025, included the repurchase of 2,449,366 shares at an average price of $102.07 per share under an ASR agreement we entered into on February 13, 2025 with a financial institution to repurchase an aggregate of $250.0 million of our common stock during the ASR program purchase period. This ASR program was completed on March 11, 2025. As of March 31, 2026, the remaining amount available under our share repurchase program was $1,950.0 million. On May 6, 2026, we entered into an ASR program to repurchase an aggregate $500.0 million of shares of common stock during the program purchase period, which will end prior to June 30, 2026. The total number of shares to be repurchased under the program will generally be based on the average of the daily volume-weighted average prices of our common stock during the repurchase period less a discount and subject to adjustments pursuant to the terms of the program.
We paid dividends to our common shareholders of $68.2 million and $61.1 million during the three months ended March 31, 2026 and 2025, respectively. We also made distributions to noncontrolling interests of $6.0 million and $10.3 million during the three months ended March 31, 2026 and 2025, respectively. On April 30, 2026, our board of directors declared a dividend of $0.25 per share payable on June 26, 2026 to common shareholders of record as of June 12, 2026.
Long-Term Debt and Lines of Credit
Senior Notes
We have $16.2 billion in aggregate principal amount of senior unsecured notes outstanding as of March 31, 2026, which mature at various dates ranging from April 2026 to August 2052. Interest on the senior notes is payable annually or semi-annually at various dates. Each series of the senior notes is redeemable, at our option, in whole or in part, at any time and from time to time at the redemption prices set forth in the related indenture.
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On March 5, 2026, we issued $1.0 billion aggregate principal amount of senior unsecured notes consisting of the following: (i) $500.0 million aggregate principal amount of 4.550% senior notes due March 2028; and (ii) $500.0 million aggregate principal amount of 5.400% senior notes due March 2033. We incurred debt issuance costs of $7.7 million, including underwriting fees, professional services fees and registration fees, which were capitalized and reflected as a reduction of the related carrying amount of the notes in our consolidated balance sheet. Interest on the senior unsecured notes is payable semi-annually on March 15 and September 15 of each year, commencing September 15, 2026. The notes are unsecured and unsubordinated indebtedness and rank equally in right of payment with all of our other outstanding unsecured and unsubordinated indebtedness. We used the net proceeds from this offering to repay outstanding indebtedness and for general corporate purposes.
On November 14, 2025, we issued $6.2 billion aggregate principal amount of senior unsecured notes consisting of the following: (i) $1.75 billion aggregate principal amount of 4.500% senior notes due November 2028; (ii) $1.7 billion aggregate principal amount of 4.875% senior notes due November 2030; (iii) $1.0 billion aggregate principal amount of 5.200% senior notes due November 2032; and (iv) $1.75 billion aggregate principal amount of 5.550% senior notes due November 2035. Interest on the senior unsecured notes is payable semi-annually on May 15 and November 15 of each year, commencing May 15, 2026. The debt issuance was completed in connection with the acquisition of Worldpay.
Convertible Notes
1.500% Convertible Notes due March 1, 2031
We have $2.0 billion in aggregate principal amount of 1.500% convertible unsecured senior notes due March 2031 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. 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.
1.000% Convertible Notes due August 15, 2029
We also have $1.5 billion in aggregate principal amount of 1.000% convertible unsecured senior notes due August 2029 that were issued in 2022 in a private placement pursuant to an investment agreement with Silver Lake Partners. Interest on the convertible notes is payable semi-annually in arrears on February 15 and August 15 of each year, beginning on February 15, 2023, to the holders of record on the preceding February 1 and August 1, respectively. The convertible notes mature on August 15, 2029, subject to earlier conversion or repurchase. The notes, which are currently convertible, are presented within long-term debt in our consolidated balance sheets based on our intent and ability to refinance on a long-term basis should a conversion event occur.
Revolving Credit Facility
On May 15, 2025, we entered into a credit agreement with a syndicate of financial institutions as lenders and 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 was made available on May 15, 2025 and (b) an additional $1.5 billion was made available upon the closing of the acquisition of Worldpay. 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
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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.
We may issue standby letters of credit of up to $500 million in the aggregate under the Revolving Credit Facility. Outstanding letters of credit under the revolving credit facility reduce the amount of borrowings available to us. The amounts available to borrow under the Revolving Credit Facility are also determined by a financial leverage covenant. As of March 31, 2026, there were borrowings of $1.6 billion outstanding under the revolving credit facility with an interest rate of 5.1%, and the total available commitments under the revolving credit facility were $4.6 billion.
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. We terminated our bridge facility on November 14, 2025.
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 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.
Commercial paper notes are expected to be issued at a discount from par, or they may bear interest, each at commercial paper market rates dictated by market conditions at the time of their issuance. The proceeds from issuances of commercial paper notes will be used primarily for general corporate purposes but may also be used for acquisitions, to pay dividends, for debt refinancing or for other purposes.
As of March 31, 2026, we had net borrowings under our commercial paper program of $1,077.5 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 4.3%.
Compliance with Covenants
The convertible notes include customary covenants and events of default for convertible notes of this type. The revolving credit agreement contains customary affirmative covenants and restrictive covenants, including, among others, financial covenants based on net leverage and interest coverage ratios, and customary events of default. As of March 31, 2026, the required leverage ratio was 4.50 to 1.00. We were in compliance with all applicable covenants as of March 31, 2026.
Settlement Lines of Credit
In various markets where we do business, we have specialized lines of credit that are restricted for use in funding settlement. The settlement lines of credit generally have variable interest rates, are subject to annual review and are denominated in local currency but may, in some cases, facilitate borrowings in multiple currencies. For certain of our lines of credit, the available credit is increased by the amount of cash we have on deposit in specific accounts with the lender. Accordingly, the amount of the outstanding lines of credit may exceed the stated credit limit. As of March 31, 2026, a total of $31.6 million of cash on deposit was used to determine the available credit.
As of March 31, 2026, we had $1,010.3 million outstanding under these lines of credit with additional capacity to fund settlement of $2,133.4 million. During the three months ended March 31, 2026, the maximum and average outstanding balances under these lines of credit were $1,017.4 million and $408.7 million, respectively. The weighted-average interest rate on these borrowings was 4.64% at March 31, 2026.
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Effect of New Accounting Pronouncements and Recently Issued Accounting Pronouncements Not Yet Adopted
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board or other standards setting bodies that may affect our current and/or future financial statements. See "Note 1—Basis of Presentation and Summary of Significant Accounting Policies" in the notes to the accompanying unaudited consolidated financial statements for a discussion of recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted.
Forward-Looking Statements
Some of the statements we use in this report, and in some of the documents we incorporate by reference in this report, contain forward-looking statements concerning our business operations, economic performance and financial condition, including, but not limited to, statements we make regarding our business strategy and means to implement the strategy; measures of future results of operations, such as revenues, expenses, operating margins, income tax rates and earnings per share; other operating metrics such as shares outstanding and capital expenditures, liquidity, deleveraging plans and capital available for allocation; statements we make regarding guidance and projected financial results for the year 2026; the effects of general economic conditions on our business; statements about the benefits of our acquisitions or dispositions such as our recently completed acquisition of Worldpay and divestiture of our Issuer Solutions business, including future financial and operating results and the successful integration of acquisitions; statements regarding our success and timing in developing and introducing new services and expanding our business; and other statements regarding our future financial performance and our plans, objectives, expectations and intentions. You can sometimes identify forward-looking statements by our use of the words "believes," "anticipates," "expects," "intends," "plan," "forecast," "guidance" and similar expressions. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
Although we believe that the plans and expectations reflected in or suggested by our forward-looking statements are reasonable, those statements are based on a number of assumptions, estimates, projections or plans that are inherently subject to significant risks, uncertainties and contingencies, many of which are beyond our control, cannot be foreseen and reflect future business decisions. Accordingly, we cannot guarantee that our plans and expectations will be achieved. Our actual revenues, revenue growth rates and margins, and other results of operations could differ materially from those anticipated in our forward-looking statements as a result of many known and unknown factors, many of which are beyond our ability to predict or control. Important factors that may otherwise cause actual events or results to differ materially from those anticipated by such forward-looking statements or historical performance include, among others, those discussed in "Item 1A - Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2025, as well as in the other information appearing in this report and other filings we make with the SEC, which we advise you to review.
These cautionary statements qualify all of our forward-looking statements, and you are cautioned not to place undue reliance on these forward-looking statements. Our forward-looking statements speak only as of the date they are made and should not be relied upon as representing our plans and expectations as of any subsequent date. While we may elect to update or revise forward-looking statements at some time in the future, we specifically disclaim any obligation to publicly release the results of any revisions to our forward-looking statements, except as required by law.
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Next expected filings
- ~2026-08-07 10-Q expected by 2026-08-15 (in 53 days)
- ~2026-11-05 10-Q expected by 2026-11-13 (in 143 days)
- ~2027-02-19 10-K expected by 2027-03-02 (in 249 days)
- ~2027-05-09 10-Q expected by 2027-05-17 (in 328 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-05-08 10-Q Quarterly Report
- 2026-05-07 8-K Other Events
- 2026-05-06 8-K Earnings Release; Financial Statements and Exhibits
- 2026-03-12 8-K Material Agreement Entered; Material Financial Obligation; Other Events; Financial Statements and Exhibits
- 2026-03-11 8-K Material Agreement Entered; Financial Statements and Exhibits
- 2026-03-05 8-K Other Events; Financial Statements and Exhibits
- 2026-02-20 10-K Annual Report
- 2026-02-19 8-K Other Events
- 2026-02-18 8-K Earnings Release; Officer/Director Change; Regulation FD Disclosure; Financial Statements and Exhibits
- 2026-01-14 8-K Officer/Director Change
- 2026-01-12 8-K Material Agreement Entered; Completion of Acquisition/Disposition; Unregistered Equity Sale; Regulation FD Disclosure; Financial Statements and Exhibits
- 2025-11-14 8-K Material Agreement Entered; Material Financial Obligation; Other Events; Financial Statements and Exhibits
- 2025-11-12 8-K Material Agreement Entered; Financial Statements and Exhibits
- 2025-11-05 8-K Other Events; Financial Statements and Exhibits
- 2025-11-04 10-Q Quarterly Report