Why Global Payments Stock Blasted Nearly 17% Higher on Wednesday
Key Points
It edged past analyst estimates for fourth-quarter profitability.
It also launched a sizable share repurchase program.
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Veteran fintech company Global Payments (NYSE: GPN) put a bow on its 2025 Wednesday. The company released its final set of earnings for the year, and on an earnings beat in its fourth quarter and encouraging guidance, it pleased Mr. Market. Investors reacted by pushing the stock's price up by almost 17% that day.
A bottom-line beat and a big share buyback plan
For the quarter, Global Payments booked net revenue not in accordance with generally accepted accounting principles (GAAP) of $2.32 billion. That represented growth of 1% year-over-year. Non-GAAP (adjusted) net income rose more steeply, advancing 5% to nearly $755 million, or $3.18 per share.
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The company's revenue broadly met analyst expectations; however, it topped the consensus pundit projection of $3.16 per share for adjusted net income.
Compounding the earnings beat, Global Payments also announced two shareholder-pleasing moves. Its board has authorized a stock buyback plan of up to $2.5 billion, $550 million of which is to be bought in an accelerated repurchase initiative.
The board also approved a new quarterly dividend of $0.25 per share, matching the payouts it's distributed since September 2021. That dividend yields 1.2%, and will be paid on March 30 to investors of record as of March 9.
Transformation time
Global Payments also proffered guidance for the entirety of 2026. The company is anticipating that adjusted net revenue will grow by around 5% over the 2025 figure, while adjusted net income should land at $13.80 to $14. Investors were surely happy with the latter range in particular, as it is 13% to 15% higher than last year's result, and exceeds the consensus analyst estimate of $13.78.
Recently, Global Payments has been undergoing a business transformation into a leaner, more focused fintech. This plays to its historic strengths, and it's clear the pivot is working. I wouldn't be surprised if the company posted even higher numbers than it's anticipating.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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