GPN - Earnings call transcript Q2 2018

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Operator

Ladies and gentlemen, thank you for standing by and welcome to Global Payments' 2018 Second Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will open the lines for questions-and-answers. And as a reminder, today's conference will be recorded. At this time, I would now like to turn the conference over to your host, Vice President, Investor Relations, Winnie Smith. ahead. go Please

Winnie Smith

welcome call. and Payments' quarter second Good to conference XXXX morning, Global

Before filings. you to these results including materially. to our subsequent call to the We XX-K like place uncertainties risks we I'd begin, on in discussed and remind caution which subject and recent by filings our during risks and uncertainties statements comments management that today's forward-looking could not conference undue contain are to differ statements. reliance made of SEC any you most These cause actual some

statements as we of Forward-looking during update the this obligation no only call them. and of call speak this to date undertake

Some we performance. net and reflective operating the such ongoing margin measures net believe of refer earnings our fees, as non-GAAP per share, adjusted are revenue, adjusted comments more which adjusted revenue made to adjusted plus network

and reconciliation as financial X-K SEC most morning in trended highlights, GAAP full website measures the of a and available which Investor our filed our both For release in non-GAAP see at these the area to Relations our are our financial form comparable exhibit to please of press with www.globalpaymentsinc.com. measures accordance this other of regulations, an furnished

President call Sloan, are me Executive Joining the on and CEO; and David Cameron President CFO. Jeff Mangum, and COO; Vice Senior Bready,

Now, I'll turn the call over Jeff. to

Jeffrey Steven Sloan

morning. thanks, this Thanks, us and joining Winnie, for everyone

report best to Each of these In financial results. first share earnings from nearly acceleration we outstanding the double-digit we ago. points quarter adjusted pleased metrics company and another revenue a start in represents running to XXX sum, quarter the adjusted are of by year an quarter. XX% of expanded basis growth, resulting years organic We second growth per five operational operating margin the exceptional in delivered began and performance, generated since

to engagement XX% to small-to-medium-sized direct service, an With target is strong We small-to-medium-sized established addressable twice benefiting a market healthcare software, or new AdvancedMD an entered industry entry users highly solutions, records one our our we with an also are Day in the nearest expanding tailwinds. health industry Investor market from United a of the leader The fragmented, as we target are towards or for purchase AdvancedMD, physician cloud-based strategy architecture. only this software a at is transaction, delivered management, that March. provide the physician further on a to its into agreement instance announce secular end-to-end competitor. we size a AMD, single is electronic of AMD in roughly and will companies solutions, billion patient delighted cloud $X into us SaaS at States. also provider AdvancedMD, of with that software provides technology-enabled encompassing all software-driven practice in and the today platform have multitenant practices leading

As with to dentists XXX thousands small-to-medium-sized the AMD and United a specialties more reminder, we than relationships physicians will groups tens across States. XX,XXX practice direct ambulatory of business. XX,XXX of our through and add currently OpenEdge have in exposure veterinarians

we our by Further, distribution business, functions. from we capture. to leveraging in now better opportunity software and growing in this healthcare, particular payments annual are in this ambulatory going opportunity and volume We logical expect able core to payments see this to is approximately payments existing partner. be and a AMD's between consumerism rapidly nexus an and more that in penetrate of OpenEdge the With billion consolidation demonstrated domestic of large assets capture forward. transaction expect $X as successfully have XX% we roughly market, addition, specialties generate corporate increasing to AMD's to In AMD we base synergies currently positioned

businesses, our leader in Global payments. of With preexisting the This annual our last market revenue and position ACTIVE software revenue. technology-enabled in Payments our XX% total and year solidifies our hospitality of investment AdvancedMD, Network in roughly as software-driven represents restaurant with combination acquisition education, the university,

strength addition growth strategy: investments, and solutions we We contribution our quarter, faster in In in the business to progress second and further high which in expanding ongoing our omni-channel for worldwide the saw on two capabilities our to grew increasing XX% our new e-commerce to we worldwide exposure XXXX. revenue make the the towards legs year-over-year, teens growth target omni progressing other continue markets. set to

our domestic Investor given and of is business at on As solutions cross-border. this we within or in our omni-channel largely much SMB focus enabling market stems e-commerce Conference, or customers, discussed growth a our from

continues unique CaixaBank, Central come including our and retailers in Bank to on as growth expand And bring venture distribution large our strong hard-to-serve as for our highly including to this our to report. at wins, and into significant markets Erste quarter addition, to e-commerce capabilities efforts, markets two sales leverage we new In technology faster Europe second third we our with recently. remain underpenetrated with our in and growing partners products in More geographies. solutions, also in in drive luxury multinational differentiated double-digit are well-positioned corporations the attractive, finally, accelerating joint Together continue quarter, best-in-class we realized markets. signature

in before on to European progress and quarter, close joint received pending regulatory We year-end. are venture this having Union HSBC also Mexico, making approval expect still our with

and in continued Asia, businesses markets integrated record growth. by exceptional and track Ezidebit their led in eWAY vertical and of e-commerce, Our

To key more around we also the value on continue to growth in product their and the wrap cloud-based Xenial customers our United launched that want have to of our premium executing analytics Kingdom. United what strategy, more pillars the end, need to Canada we provide States, they and now transactions businesses successfully effectively. While operate

able email-marketing we solutions. media reporting, trends, now sales are customer and social analytics, insights, Beyond provide restaurants standard to management tools with competitive

activities. We enrich additional to to digital and a will continue of with our platform customers manage to create elements range features enable data this and broad advertising

through execution produced terrific AdvancedMD. progress turn already long-term we the first we further in for we to have goals solid of half the made I'll well-positioned call are technology-enabled of on to investments Cameron. about March. strategy framework multiyear businesses excited in With software-driven like We the XXXX, and realize that, this the over results are Consistent our outlined

Cameron M. Bready

Thanks, good morning, everyone. Jeff, and

We pleased results. report strong another are very quarter of financial to

once margin and again per growth was by the XXX share to execution Our differentiated in manifest operating normalized of organic fees Adjusted increased XX.X%, XX% growth. driven and strategy exceptional adjusted versus reflecting themselves for prior-year Total million, revenue to points ongoing expanded basis network continue net to quarter plus solid financial $X.XX. adjusted XX% growth period, double-digit the performance. second company $XXX earnings

of remain encouraged momentum half first the results XXXX. and by throughout business in of the proud We these are the

low reflecting the the double-digit businesses in expectations. Adjusted points our our normalized declines higher-margin operating Importantly, to growth XXX organic accelerating consistent to expand terrific In basis we executing from provide addition previous direct XX%. on delivered plus AdvancedMD. again and ACTIVE thesis our was team payments our of our highlight the on quarter. $XXX margin technology-enabled this net me Network. saw agreement delivered distribution double-digit delivered XX.X%, of strategy wholesale with strong fees the details more first Starting to North this U.S., low software-driven expanded will let while in the I million, network globally we businesses growth, through business, acquire with this transaction a quarter, revenue driven performance performance, but by while simultaneously adjusted moment, our America, our

Canadian business North in exchange currency, foreign had again growth. favorable in impact local with overall grew expectations a Our line American and our modestly rates to

of a volume solid In a XX%, growth fees transaction despite joint network UK be macroeconomic Europe, we growth adjusted gain. the in well in ahead organic growth mid-teens the revenue bright the grew strong organic macro This Likewise, strength share. delivered net growth, share quarter, as local UK, consistent additional with to teens driven were currency currency. ongoing back first a market was Results for delivered plus the environment, Turning in again a Erste quarter. high and and of Spain continues market, the Bank with trends secular currency the the remained in local challenging single-digit by reflecting growth, with local by result our what venture driven and was execution. spot, to execution double-digit on gained environment. high we which good

unique-value Europe expanded in and top-line business driven Lastly, high-teens, solutions ecomm resonate margin performance. grew XX.X%, basis strong primarily to omni to continued in operating our points proposition as our XXX market. Adjusted pan-European the by the

growth, in across our Our Asia-Pacific in and region. with meaningfully again and including eWAY reinvestment Asia business year-over-year results. Adjusted adjusted a increase Hong Philippines saw flow delivered The and and investment. million, margin key solid also XX.X%. to expanded excluding of quarter, XXX in with us another basis costs, trends Taiwan, QX operating solid the $XXX despite markets, business, growth to operating points in free Kong, capital this mid-teens quarter combination We disciplined the XX% we Ezidebit contributed in up performance delivered integration organic generate once allowed cash consistent of acquisition XX% to the

million totaled new and and investments and the of consisted technology enhance largely $XX product capital support expenditures platforms. our of further Our to solutions development operating

our million a In $X.X quarter XX by approximately reducing points. roughly $XXX to the credit During our of increased by late million shares also for of interest X.X also the basis The we total corporate refinancing rate million. the we capacity $XXX spread June, repurchased facilities, billion. completed amendment revolver

expense future anticipated realize and position of quarter, underlying the help the maturity our yields X.X liquidity March, benefit our At offset the times. expense In combined meaningful to interest announced B impact activities. amendment addition additional improving gross rates. rising of expect of also with in to million savings of rate the also net with expense extending interest to This refinancing will second hedging loan the When to benefits. $X of our our the end facilities, annually, annual we was million associated $X leverage interest term

As Jeff small-to-medium-sized a AdvancedMD, a enterprise for leading definitive announced we acquire of physician provider discussed, agreement for to morning practices, million. $XXX solutions software this

existing a leverage with increasing hand approximately to expect finance credit the pro-forma result. as our X.X modestly cash to We using facility on transaction and times

closing the quarter. fourth targeting We are in the transaction

us the of the our first targets outlook, year our business that the well allowed our achieve to financial in year. exceed for to our full to positions half the momentum Moving expectations in us

That said, incremental however, the in in We business currency from and anticipate offset we and strong we expect fourth underlying third impact. some pressure quarters. foreign a seeing FX this are being the headwind to now trends the facing are,

revenue expectations offset will largely to and $X.XXX early XX% when be May. million adjusted to reflects negative of XXX we to expand to Adjusted to with We continue impact plus to in from interest to third XXXX. net over fourth of range roughly the $XX network the rising $X.XX basis second expect currency interest should our in from additional up incur headwinds quarter relative to of operating refinancing and debt AdvancedMD foreign in outlook forecasted net our consistent Pressure margin we guided fees billion, This by the transaction. the activities, growth XX% by reflecting billion the last expect finance prior to roughly to points. rates quarters factoring be is we

of our under on estimate in restructure this roughly we we regime. tax year as benefits by as organization position tax business our for U.S. be rate expect to to the of full international optimize XX%. refinement adjusting new XX% Additionally, are well realize effective impacts reduction further our to tax as incremental is reform our the we to driven forecast the the The

range adjusted expect reflecting of to outlook earnings XX% the $X.XX to May. XXXX. share This currency last from of over early now in we our negative foreign reflects of per to growth per $X.XX headwinds share in relative update XX% approximately Lastly, $X.XX, impact

does call pleased with adjusted are will from expect second full-year acquisition to guidance reiterating superior our impact our thus in updated how for us Jeff. that, drive immaterial our results the by I'll XXXX. any over far achieve earnings the we of per for customers of turn With in which be deliver close XXXX. the financial performance include Our positions to solutions quarter AdvancedMD and share in not shareholders. we pending now our to I continued we our as back strategy The execution to and differentiated well expectation

Jeffrey Steven Sloan

Thanks, Cameron.

expectations, the the gains will as our of investment evolution vertical own and Global The technology-enabled have track investment provide quarter will accelerate expand represents our exceeding the payments globally. no further prowess and acquisition was call a exception. We months catalysts software-driven to years mix business record key announced strong second Payments a AdvancedMD turn positions Winnie. in another today software leader our to in consistent continued come. for now of market. the back additional the to market execution This and I'll pending in share we and

Winnie Smith

to question-and-answer go limit you. everyone our session, will their one Operator, questions. we the to one to in ask to we everyone Before follow-up Thank questions accommodate with like to I'd queue. begin now

Operator

you. comes from Thank you. our first of Company. And George the with Cowen Thank Mihalos question line &

Your open. is line

George Mihalos

the could talk be mistaken, easier are how half? the of guys, it congrats morning, another a to the quarter. looks again If half like about first business forward. I'm first in on to if little thinking and start-off, the Good and direct the from the U.S., in if we America accelerated specifically North little a going at not back look bit the we about Great. Wanted for the you that that a strong drivers business, relative quarter. comps should Wonder year touch bit your

Cameron M. Bready

morning. George, it's Good Cameron. Hey,

as So performance. see our we a We performance our and X the first vertical second integrated Probably between the businesses relates in quarter that. QX, I by it guess, some couple with delighted did driven U.S. and upwards business. QX I think markets to are would quarter obviously of about largely point versus of direct acceleration comments,

our channel business. again, direct accelerated our QX it the that from in that range, consistent high really that accelerations to in business QX So relationship-led overall to single-digit QX drove, was direct vertical the pretty slightly markets QX U.S. was distribution integrated

organic business back to look talked of year, guys high-single we we manage we before, to as As you the growth. rates to the half low-double-digit that to

that be in the to get we into half range year. suggest our the expect that of guide we would think as I back

I low confident feel to don't as the single-digit recall, of or easier impact significantly very the we to high quite dramatic recalling, QX if hurricane back directly year You'll the know quarters. last grow now have as a enough been think, towards are double-digit we you the bene it I that's in but to half out six the we comp, that to probably look call the to would've I year, in for a ability frankly, because continue last business. in think, pace again, channel that eight making

David E. Mangum

it's David. standpoint. little just more from color performance a a And Maybe bit George,

have are started We the with very happy businesses year. way the the

pointed the start. really at TouchNet businesses the vertical Cameron payments solutions and As OpenEdge business, out, strong are start our the education includes, businesses off to are good a at well integrated in the school of year. That markets universities schools very ahead particularly, and

sales are On States, the really United back enough, come the but sort of sales start from in direct the to a are core the I'll very couple sales good sort sales question, world months; the was shape. Asia Europe really ahead, interestingly of happy to a what a core off of the second, at the across earlier had OpenEdge six we're course America, that a actually of of markets. We happy and start there, with North vertical Cameron the are and was in in good are where year. different the which describing board non-vertical we across and in the with actually, as We're the in months sales direct in book, sales just over the very perspective record ahead last really Canada sales sales happy the with market.

where with the core really Jeff said, Cameron and as kind the happy we remarks, we're prepared year. through halfway in of So, stand

George Mihalos

And Anything then acquisition, contribution, Great. anything guys on see congrats I the revenue that the of able to financially? guess, expect share AdvancedMD think kind there, quarter. Nice help are again, the you business the rate you And growth to that momentum. through Jeff, can us around EBITDA? the

Jeffrey Steven Sloan

I'll and asked you financial to that George. It's Jeff. just the Cameron ask of color some add start about. Thanks, I'll

delighted a to So partnership we're with announce AdvancedMD.

know, in for businesses. As you channels our double-digit low growth organically those technology-enabled we target

small-to-midsized in a prepared market, of remarks management But the billion though needless think I we said competitor. the businesses fragmented, physicians we in target looking practice So States. $X the cloud large. clearly, say physician United nearest In of addressable at markets their Cameron our can of that they're give twice color. highly talked more It's the are size we're about case to healthcare,

like are us what with in fact we that already payments, also do. there We the for particularly partner (XX:XX)

we said today size at $X currently payment we billion volume. which have of think we annually of I XX% their stream,

remember was Network may year You that ago, also ACTIVE a payments we announced time. $X billion annual about at that volume

the midsize our a software to that we mentioned. of own in, partnered So when kind for States, at by which a definition, already comment think is our largest are management want software, small is financial with you really particular, in back addressable do Cameron, specialty focus of the that one for step certainly business here some already and attractive that them. of case overlay, the the look think the physician markets, in of very practice business, vertical reasons we We we the United you especially in payments to and is assets on question? healthcare,

Cameron M. Bready

talked forward. We Yes, business, I do rate integrated that expectation would our with George. low growth view And rest the consistent going our Jeff for about think be very a the the of growing and double-digit market businesses. it vertical as Again, this of business.

well. So it overall to to that rate Global level accretive growth which of we of Payments at be as is the view going important would as

XXXX. growing we do were around expected XXXX, For in $XXX-ish million low of to probably double-digits into revenue, again,

a as made From we an of So that XXXX. EBITDA that the and scaling, kind our is standpoint, still as margin characterized expectation business is think, this go Jeff commentary. through would be business for I

they business into accretive Payments for to we in very you little give will and margin more to a over I overall, time. a distribution the a get obviously, look time we But into margins to business. to think bit one implications to in it for what further color as growth, to as XXXX, the that Payments the as Global will moderate be a we Global obviously, we as out profile, get scale think going be margins year And at coming bit business, think expansion XXXX. accretive drive as It Global head we financial relates our business, faster rates leverage be. we we'll attractive little the growth we into of to accretive as think, is the that Payments we is as further

Operator

Thank you.

Our next line Oppenheimer. Glenn Greene question will with come from the of

line Your open. is

Glenn Greene

Yeah. morning. Good Good again. results you. Thank

follow Just bit AdvancedMD. the little Maybe want on a up color. to more

payments just trying tie-in they their little like with their big It of that Just is to very, still understand very a the component? sounds that better on million bit. XX% $XXX their wanted But market. understand share where to market component, can based a low in take the is I or XX% it own volume And do OpenEdge payments today? have you pretty

David E. Mangum

larger are by let market and it's much limited to And other long its number We capabilities. Glenn, well. who market exactly cloud-based twice I'll just – space small start highly legacy medium remain what I your the Yes, on-prem competitor the like at the than beginning one fragmented. (XX:XX). with traditional the a chime more a we providers the described nearest full software about guys the said, as of shot, competitors just of size David. as also the in What of in is you've question

first performing have. when strong we've that diligence model So, we almost primarily direct due a very the Obviously, sales deal. on a with to look opportunity we that great

small, good low market. that So, Cameron and growth The that largest each business of pieces think the the what but fact Jeff is about have to we're the of happy like me we future and the like. the and we double-digit the really really that thing a with they're described. seems opportunity as the Fragmented

with happy So pieces. really those

a or two matter, of are OpenEdge. couple it's one to three. of payments is a Fundamentally components the mentioned, As there which kind payments. Maybe you

there. I of So, going their two. focus drive our or years. for means to isn't We No inside no bill XX% can't company XX% (XX:XX) around just that sales we're co-pay also as you payments really, key market to happen opportunity that's There OpenEdge's process. synergies are different the on on itself, coming reason XX%, end again, the that to level. provider good a payment volume. some electronic that payments understand. We'll we're payments integrated why don't cloud the available to happen terrific XX%, platform, particularly platform we that to number billing can't you'll payments next year joint the of happen, got together its about revenue there's reason back this cloud-based and really the payments payment link at software That higher a companies XX% fundamentally at only when one that's as the acquisition, simplest know lot over to Rhythm together. It's single in nice that payment one the at address little something penetration when

or as the know, technology we So – strategy. fit really good a and and well want and a payment for payments the payment. you technology-enabled perfect the technology fundamentals, around to driven the software, software-driven And value wrap it's

Glenn Greene

question That Follow-up be strength very seemed UK accelerate really I and of quarter Europe I David. in the was to is like comprehensive, the but well. Erste some well. strength surprised as comments doing the Thanks. at was sounds heard the will

the Europe growth on there. color organic more bit little strength the and a Just

Jeffrey Steven Sloan

it's some details. data Glenn, financial of ask Jeff. I'll more Hey, to add start the and and Cameron related I'll

us in would for Europe, these and I of technology and we trend. the these in Europe our Europe, markets was particularly of and well post the Union is SEPA integrated investments that know, particularly it's made, omni say for and one in question, solutions business very as the really for European ecomm really as footprint just continuation globally, market of our for you as vertical years, The the out number significant last We've and that business. a primary like. purposes So, called your into the which things PSDX purposes over

to in don't to kind update, time that, we we want of on We out business a the too spend say because is us. over quarter couple would did of faster time quarter. an so in we of going for market intend spend significant why call which target omni, markets? to on attractive in omni we our enter Europe, wins the invested why very that called here and ecomm much So we We Glenn, years I in lot of trend, those say annually through the are growth all do and the and but significantly in third as a continuation Because businesses, think ecomm especially attractive, our but we also on fact, products call of in think that Bank top of Europe. those layer and we leading-edge in Erste case in Continental technology, can the ecomm we a omni

would that I those first. FX, but but probably I the we the there, in comments, number Glenn, very in same-store GDP last view saw volume in tribute notwithstanding macro which Notwithstanding and further the second growth. of mentioned I still sales, a a the mostly and trending teams the probably being that's of that say, his to as Cameron saw and Again, United in quarter as validation technology quarter then new Kingdom consistent So, quarters in headwinds particularly markets. think growth very confirmation, targeting investment we the trends our in of much retail, a transaction is over

gains. of that the we've market called been out, the simple for I think pure undoubtedly, I saying macro share lot and is a last backdrop think number of it, Cameron this but quarters. And given

Glenn Greene

Great.

Cameron M. Bready

comments. of couple it's Glenn, Cameron, Yeah, a

that about omni Those at ecomm the (XX:XX). and we to in stand little was QX QX, and business before acceleration out and bit are of the as me. look you two If talked things

of the rates very and now of Slovakia of them buyers really channel sell traditional what platforms, having strategically the half itself I rates very On over of Jeff powerful the are markets but a to products Romania, value so onto well solutions very growth in XXXX, relative and really Republic, very our in migrated that course omni, described JV, are in in I over and now nice in our seeing is obviously that that's organic how manifest able Erste organic is growth we're positioned and we're think the obviously first quarter. that to to ecomm that you're of more driving think function the into the even distinctive, Czech those business. seeing deliver, attractive ability second

it a that we're to and across So very delighted value of differentiated. the solutions single really ubiquitously products with a are to ability our the business and microcosm common markets distribute think speaks platform managing performance I that in our globally,

Glenn Greene

Thanks. Great. Okay.

Jeffrey Steven Sloan

Thanks, Glenn.

Operator

Thank you.

Our next of line will come question from Evercore the Togut of David ISI.

is line Your open.

David Mark Togut

morning. in to organic growth. the see Nice Good acceleration

Jeffrey Steven Sloan

Thanks, David.

Cameron M. Bready

Thanks, Dave.

David Mark Togut

banking. the on what in The particularly you the the is banking? UK broad Can markets payments broad adopt that bit you're of consumer a results ACH strong payment open European in we're trends first seeing of terms market. comment seeing were open given UK in really to

So those I'd traction you're A, be curious, if any seeing from some of initiatives?

Jeffrey Steven Sloan

Hey, David, it's Jeff, I'll start.

and growing particularly So what piece business contactless UK is debit, the debit. I our really fastest say is would of

little very certainly little taking lower forms meaningful just of a consumers use the NFC it out particularly it's and to places a we in consumers wallets different top ticket item, in the and of use like transit, in phone on David, bit so that, know putting a have a seen about acceleration for ability payment. the So more for using you their as your less bit for receptor. There, about of

in the contactless hopeful that is networks acceleration say last market like like substantial So probably new in But Asia. already the consumer a number businesses know I'd has of United our the in quarters technology. the UK. could Mastercard, UK's usage the talk be are that States. very Kingdom something come, markets That's in in is that David, places we've of extent really seen but the that the certain to Visa the about not time other debit here to And that of in lot the United and trend. Tube. a the in extrapolated that and example networks I a States, the United on clearest think leader I that Europe,

David Mark Togut

you restaurants, as Understood. in rolled at what look on mean, Xenial. how Square against functionality, is main product for curious, market? the if I'm is just positioned just the out how differences in well? which congrats the Xenial positioned are feature And then the I

David E. Mangum

This is Yeah. Sure, David. David.

I describing they set analytics today The the in maybe Canada, answer. UK think in U.S. rolling actually the a of the end at around couple year. of the was a products already Xenial out distinctions out we we're of the really were excited and rolled about that

with solutions includes multicurrency, a have products, I payment direct a our think and restaurant combination matter, software software comfortable which the with enterprise Xenial, to flexible the we multiple you the extensive pricing, rest class, in customers, scalable is volume And high we of and stations, question, positioning. all As solutions, with for need are run our very your of terrific operate. different things technology, restaurant

expect years, very there analytics, market. We that where Just of with end the payment, whatsoever. higher surprises we this as We're with volume uniquely also, that sort supporting because so in sit of in comfortable business price you are can there. no high you, the there been in with combine would against I would we've very competition tell for happy our points

of So target some it's very high market. large unseat competitors and the traditional market. pretty nice We the can a end others at

in well. in with take ahead and sales actually situations, States, back very We further. Square of performing don't Let frankly. think sales me we you a running the second actually quite start United a for bit we're little lot pause see We a are

business, smaller they're serving For a most customer. of their

Remember, regard. the us more meaningful with business limited The the Square. is building higher customers. talked fundamentally, then really to the again, And big with bit And of toward service to a end than about we Our think sell you relationships high fundamentally, ago, going relationship. We head you when the that, get, have software comes the really, linking that. a of say in the it relationships where lose a card And as local more you a as and lot kind you the with seen to that of solution. advantage I'd comfortable volume, I we I sort we're really be Xenial, said and market bank do on we moment technology enable, you believe. little competition and more higher matter, our haven't is

end sales comfortable the that technology, we're very We in end, So play very to question. of we to-date. the with low. market, asked the upper glad middle comfortable our end high really of play and results with Low the don't market, you

David Mark Togut

Thanks Extremely so much. helpful.

Jeffrey Steven Sloan

Thanks, David.

David E. Mangum

Thank you.

Operator

of Citi. next the our from Shirvaikar come Ashwin will with And line question

line is open. Your

Ashwin Shirvaikar

Jeff, Hey, Thank Cameron, you. David.

and So strategy acquisition at them good Two you is that. the of so ask both out, once. team guys on results, with consistent laid the questions, and congratulations I'll

guys up I first continue performance one pretty is, investments not make? a set question an well. to The offsetting as is the is, year-to-date that solid, guess Obviously, why outlook? opportunity Is and take margin there pricing you there's of incremental the the

is, you I So all thing from guess of take second and to first margin can a talk And then the you ability clearly about the standpoint, up outlook? performance the tariffs, there's like your Brexit, macro guidance? that been a headlines, given war, you things If talk that. global trade could Thanks. worrying factor of How lot into presence? do that about broadly

Jeffrey Steven Sloan

appreciate categorize you I we our accordingly. with actually of Jeff. route so thanks, to second two on question. I'm your upfront, Ashwin. side asking it and the Hey, it can kind going It's start

Cameron question ask macro. the And on I'll about in what's then So our start the talk to I'll outlook. embedded with second

answer short the you asked about So is, no. the macro to what

stuff healthy I quarter business, point the where will to say the has of is view, on the and the the last the would in we spoke asked. to business the with we in you last the the a you seen in probably tariff this but is consumer, our trend and U.S. is other earnings had terms going we the question the a our remains dovetail of talk see macro day, the GDP. where this extremely I yet describe, tell want point would of our Cameron, versus now the foreign you environment, view the of of most really not today you kind I high an have views in is growth. any only from just globally over would the and the related the very the currency in from of is of difference would Cameron FX, call important outlook? expansion GDP about rate we've that say print to to what impact consumer my probably today, time time continuation discussions. impact driver the tell of GDP health of of We trade Obviously as I and our say are

Cameron M. Bready

outlook probably good is really point margins a Yes, off the jumping a Ashwin, that's good for around which question.

obviously first first performance. basis So, we're the year's what for last points XXX delighted half seen kind all, of of is say would performance we've I with to the margin year-over-year of to year relative date

a there's so be to we going our EPS I based the remarks, a prepared is out, in back a at year, is (XX:XX). the my of headwind obviously, you of to currency the also half things would FX but the FX a back revenue, half couple headwind for in headwind outlook headwind call mentioned If year, to first margin. I on looked see being it's to as

at at margin look were I guide in of to we least headwind the in as FX today, So, relative margin where XX that there's May. bps probably guide back

point probably call that's important the think I to So, first out.

reform, that this The taking in some second is and we through as and into year ramp work we will tax we of the coming opportunity investments business to the are those said the with year. invest

So about, will margin year, the reinvest a think healthy still we I'm meaningfully up obviously relative as performance business expansion very the business. the opportunity to type to financial I the year and what into about basis that little expansion, cycle the still is while is businesses but the to of that's above a me I the of back good our proud a have get of the ramping guide stated grow. that we for most put half, And in sort that of proud first we for because margin some we over ability pressure obviously the of into expansion think we're most margin saw could on back well on consistent generate really investing things to in the one thing, half

starving obviously future also the we're in starving while investment, we're investing in the have the not we we not today. business business believe capital, for the we're business So, for delivering on promise the

think that's expand obviously in business always a the continually in margins So, to investment desire our and we're thing, the over level the business balancing I good very time. with of

Ashwin Shirvaikar

you up Thanks. on you with follow up that. catch I Got (XX:XX). will Thank for the XX it. AM

Jeffrey Steven Sloan

Thanks.

Cameron M. Bready

Thanks, Ashwin.

Operator

Thank you.

Darrin of Our next the Wolfe Research. question Peller comes with from line

Your open. line is

Darrin Peller

the job quarter. Nice guys. on Thanks,

Jeffrey Steven Sloan

Thanks.

Darrin Peller

and Let in that's around around there? just going any start the your so what outperforming and to iPOS off the me strategy time U.S. just – hey, a in updates curious and the the Obviously, (XX:XX) now that. maybe long for kind hear on competitive are building of how Canada out UK internationally it's dynamics

David E. Mangum

Yeah, Darrin, David start. I'll here.

So, to more little happy bit (XX:XX), of rollouts iPOS answer. actually actually, of very would with the it a technology make I it steady broaden maybe a

and QSR today, functionality the XXXX out at analytics which of the in rolling are that So with and in integrated XXXX performance the the Canada XXXX. way and XXXX in in we with now Europe and as restaurant UK in We'll Canada, part semi-integrated XXXX, full market the United over combination are When Xenial in the in of in (XX:XX) to beyond course seen and several we're we ago. our while reporting other A States roll We and a integrated to much got UK. talk gift of a across us out on continuing service think payments certainly little quarters solutions Canada pace is but the out that, table UK (XX:XX) processes about you've later core Canada developed and as the selling UK. commented Spain, for Xenial of broader rollout in over post specifically, (XX:XX) analytics particularly in course combine speak, last a we've and All products. rolled the other you enterprise we're full is mentioned as the those iPOS going of settings. XXXX roll-out helping

So right what might and think payment sell Canada, top the of (XX:XX) non-iPOS sort analytics in now, of we of UK to as you ability have on Spain. technology

We our consistent suite in major rolling over all U.S., the and middle a and we towards full have analytics more such software of out of Canada, the with iPOS in of of XXXX product expect of the the our western in more way of that course have XXXX and end all UK capabilities available and XXXX, that in markets. (XX:XX) cloud-based XXXX,

Jeffrey Steven Sloan

add which also in out, TouchNet I'd Darrin, selling out that, United and successful obviously outside called spend our rolling software-based a to said, to ecomm lot it's more I time Zealand with currently quarter. we what university as the the that in omni integrated Asia-Pacific consummate ecommerce and our (XX:XX) our businesses we've New States, in in remarks, partnership. technology, my been Yeah, markets David want on and a very and know this Australia, third product, for lastly, we I after of to solution we'll New eWay And our to mentioned overlook I in then rates healthy prepared markets Ezidebit, products. Those don't at Australia, of vertical continue Zealand

software today. specifically So, markets, our generally the results ability to think say that the integrated but United and seeing (XX:XX) iPOS of the right. David's fruits I assets more in on I outside technology-enabled would vertical take into those just you're States, multinational But that environment, a

Darrin Peller

guys. helpful, That's really Okay.

Just be your mean, going around pricing pretty your model, this just side, coming one in UK have not just I on you maybe that could It pricing Interchange on but the to forward? like may then, UK of sounds you in the the in hear a curious opportunity are, U.S., kind Heartland. were And just we or I'd on When follow-up. any impact maybe the you may of regulatory headlines thoughts quick Plus, comment where or thoughts. at transparent still feel look quick pricing market considering the out guys industry, have like

David E. Mangum

talk on the United I'll the again. let take a I'll on bit David then, Darrin, And little UK Jeff States. Yeah, situation.

middle we on the enormous income and service we the from that. more believe we remaining so value economic (XX:XX) great things to amount So, we're States. in offer, of matching fees the It comes, of United really, in an economics values, still have opportunity like the and deliver

we provide fact, In quality service at this reporting we looking is world-class industry-leading are (XX:XX). compliance what infrastructure, high saying, on

for So, for whether versus let's or that we're at (XX:XX) service that appropriately appropriately. a look take historically, service not priced pricing

more or new with a and economics from started, better we we level recall year aligning tools provide. by you'll ago of when sales service as our So the

sort back things the we find of in obligation, contractual progressively who aren't go sure and Now and have services through kind long-term are find can ratably make to we below-market folks those from we the address who provide ability of condition, maybe (XX:XX). folks meeting and

not to again, specifically these, value. service broad value So to more providing based jump of we're approach economic massive a what targeting the

in we in measured business fashion, So long more provide you we're more on (XX:XX). economic accelerated a of results of and turns top sales value, runway that through, terms us rolling sell that and we've the and being services of and I'd doing ahead more that to got tell economic able more

Jeffrey Steven Sloan

second been to I'd (XX:XX), an, that said, David the Yeah, forward, add intensely be Darrin, going question historically on an your what it UK I competitive to and has expect market.

markets. market a who existing had last competitive entrants number just new years. of the fact the in people have number entrants, You've of over not (XX:XX) UK market entered of

I'd it's competitive. is say always thing first the So, been

the competitive, the prospective it's announcement roughly morning, been our of intensely (XX:XX) UK's expect for AMD But competitive. revenue, to legacy nonetheless, Our I market there markets And there's don't the remain are generally competitors pro forma purposes, but UK's competitive this and I an way. X% expect too of course, that and these to intensely that it for change.

medium, get what we've years, means, in changes is, the I'd through, Interchange merchants, means second say been sizes Plus for passed to UK, of small, all interchange Plus The Interchange which in and thing pricing that's large.

pricing Third, billing. this. in touched transparent our on I think you highly We're and

have markets markets context in rules by Mastercard folks the Visa, about regulated and, I as and such, some the of most what highly think own Conduct set as we're obviously, of know, actually do in Kingdom in generally bank Financial you is course, in a Canada, like the Authority in their regulated. pricing. United like transparency we of And

are transparent, and nearly the for certain UK, in that given competitive. the our in highly fact we're United these a is bank and markets, in like Given we using of particularly purposes, market like (XX:XX) Kingdom bank Canada background in all markets very Mastercard markets the the our

majority different places lot The of like people Square into to UK, the XX% say, of and that to of in the I'd new providers. there's those tend (XX:XX) switching come places from people see you attractiveness term merchants, Lastly, a is rates, like XX% market vast choosing in market. that

expect how impact So we given we our operate, today to sitting kind and don't have would business. any material to here really it of I say

we I think brought someone the and else's marketplace. answered products question we just services about that into this morning

the I how for UK charge to philosophy in that the United investment just he those to we (XX:XX) think the fairly other are David's to expressed here on is and try that value transactions States add to along products we applies we markets, lines. our and say which that services

we are, changing anything So I really and for feel about where see good we don't that us.

Operator

And you. Thank comes our Fargo. Wells next question Tim with Willi from

is open. Your line

Timothy Wayne Willi

one back guess the good and I I in Hi. technology around morning. and operations. had you Thank office question

and driving a frontend the what top-line driving, technology revenue point help drive maybe expansion a the machine just you on at backside? as additional talked not learning scenes behind or to more the improve margin be doing may streamline, but on some and just with margin driven you about you're data, story, will and strategy products. lot talk Could revenue So that about you

David E. Mangum

and we social Xenial today, are solutions the that tools described to same let customers daypart is that data very tools fantastic and – products Yeah, in (XX:XX) allow other and same start let question it's guys roll the enterprise around stage to that same that give and it All sales in. to it The the kind a because out roll It's data like (XX:XX) and I'll because campaigns it's sitting have we David. merchants Tim. the the phase insight manage way. of analytics actually earlier us chime back-office media. drive out products in, ability you (XX:XX) think as about these the

be spot and the couple and to years. margin more So whether to so is of forward actually these serve the help little service sweet more customers. try way We the going the our you better our us and that's right on in ability tools analysis next the we specifically the as opportunities with finance know, forecast strategy really yes, well A of importantly, maybe (XX:XX) the differentiate, at do and folks to enterprise. ability improving on are touch, high of

everyday So can't head, from lot in intelligence further, when as of about are in now the but us AI, we think you using products, specific margin the directs over and a business stuff I a Spain. actually time. robot AI his We got right our We of combination from regardless. have artificial help to to your of name in actually and questions drive our answers analytics that speak. We've that and were university. the of point, employing my beta augment top sort units maybe drive remember and off enterprise calls, we

for out on with help top So decision-making. as analytics an layer we've to of prototypes intelligent example, got us

or right do a customer resolution but that We machine the want We The the language of experience, in away. the learning want already, going that. to answer call we to better testing processing, are may make processing. call we're questions. you after of systems, queries. quick applications using extent natural voice-enabled automated answer want To accelerated some a can have do include may service, centers not service, and you Again, to talk human, you

across work time the communication got software vendors world exception. things cool Let to doesn't day, end and pause financial you've that, the all one the match providers in internet the me services for remains the land exception for of all of second, management. At the so still or like perfectly

self-service our to jargon recount, got more also even transactions. matching, chargebacks, around enable batch and that's these reconciliation for You payment

that, our value-added turn, AI boosting for of productivity, and to using analytics answering like activities selling, and more boosting instead so it's So questions. our products ability building

intrigued. So pretty actually, we're

my of You we the to hear The it at opportunity we invest tone. scale from get more about excited the in, backend. can the more probably this

heard put frontend business. earlier, Cameron money of back revenue-producing describe side the As into that you customer touching

more but So couple it talk forward, little going quarters, maybe as look a we not in about forward next go to bit the forward.

Timothy Wayne Willi

flow comments, it. had But primary is some the missed Great. payment sure physician? I to or possibility a of touch insurance to touching payment are payment of the to the the health system I AMD. on the earlier the the or follow-up you just to AMD I from want provider apologize. make I physician? I the the Or consumer also back the payment understand

David E. Mangum

Yeah.

as think co-pay. of So, absolute piece payment of primary it Tim, – the is the the

my checking have cetera. update consumers out, at I'm billing world, history, patient and it's the that's really enable OpenEdge. off of interested card pretty you'll a OpenEdge this and core send flow payment But really, opportunity well. in processing the et the that the the There forms So we and backend in scheduling, to out, fundamental to you flow. as is this recall of about, we know core is business element automatically that records what down interested road check Cignas which we we're the payment further the an well, claims, When little given is of payment

Cameron M. Bready

ambulatory really they're couple And, One is, Tim, focused really touched we it's Cameron. practices. add relates comments. on AdvancedMD on I'll haven't a to just of it as thing

outpatient. also on these So And they're care. are health more there's where focused specialties consumerism those in

more increasing to forward. amount obviously there relative an further of in we longer and we're be think as term, as we an consumer specialties payments more relates opportunity, about can going and So there's whatnot, will it but existing oriented base healthcare the insurance be that payments, to of to going payments where billings penetrate,

attractiveness the the standpoint. from of our part that's business of So

in forward. from, the being an see as we that standpoint, low forward, ability to at why look of obviously organic with standpoint business continue and the to EPS in again, going as profile from double-digit it that's confident the a So we business financial rate going drive XXXX growth we're why accretive

creates profile we think highly backdrop a us. All of that, attractive for for nice very it a is AMD that for financial

Timothy Wayne Willi

much. very have. That's all you I Thank Great.

David E. Mangum

Tim. Thanks,

Operator

Thank you.

Andrew Jeffrey Our next from question SunTrust. with comes

line Your is open.

Andrew Jeffrey

a to Hey. Good I And around the taking appreciate Mangum, morning. Thank bit Togut's much competitively. little David Xenial and color you restaurants. the on David wanted for follow question question. very up

too I the things that Square's and a self-service it from a I on and and you appreciate surprised – might trend seeing little customer lot could a bit come pursue lot of has – a that you're I the up One customer. the people in want nature business standpoint. think call, think and came scalability And forward? something up not that onboarding, of of is your on yesterday touch comment or to high whether the you that's But going a

David E. Mangum

actually something Sure. pursue. we pursued. Happy to, is It want Andrew. to already It's something we've

physician technology, not mean reports the the the more cutting I that technology and them speak the able no, onboarding, the our the I and edge the come know well a able no that So bring you you be to are services of customer. the immediately, I trend replacement to the idea of of your I touch, We're Part the we means, changing know enabling immediately, customers having States. as being hey, get case right onboard better It well. absolutely to university that quickly, know think around AMD, say doing differentiation little to world. the get need right batches something not be It not offer. enable massive doesn't space kind underwriting I language, customer for competitors all high transactions away back know better exists. at settling when that can't offer of that vertically it It high market-by-market many language, language. It's by and your language, of Faster hospitality transacting hard not even maybe – of the in provide But boarding bit night competitive later, the yes, that I means service, all. and service. being that fundamentally recognize at is of just working all as kinds be and to the speak we the you're a It's restaurant that. language "traditional" ability relationship market I and well, more don't exists. means as in back. my applying fluent a on to in of first the to

Andrew Jeffrey

Appreciate a that. particularly of expound the on in you you Yeah. ask, around comments elaborating of on ecomm Did Europe, Okay. of competitive you to some next might gen think to specialized acquirers. Is little I your sort Europe in I least can perhaps a And, at that hard-to-reach understand in the domestic ecomm? Jeff, about that competitive APAC? the bit and markets, you Global more prepared today remarks the say it's right because thrives think player, way differentiation perhaps

Jeffrey Steven Sloan

a it's question. So, Andrew, great

described had of omni the the we little where March thought, I a what we compete, bunch look in if business. back in two to go compete you Investor that, slides you market bit say ecomm Day was we if think on our a ways how we I would we'd stratified what really at and and how

our as The is first thing it is, SMB. is core, always

the about business, So their top customers that and those perspectives, XX are all the this in I ecomm think talked in, owned. third adding are example, for a of

generally Those we described If meaning SMB us to our omni, number by way in as they acceptance. Europe, based across of And on Togut's go are Union. both you think way what the They're core. European as about as – said. in think is the geographies physical But about question, market, I to virtual. David in particular well ecomm a of across response

do when of well those all kind by Point predominant do, fit the as means think So what ecomm of there point one. far I having global think all our folks where a cross-border, And those think that's as first, provider omni to Andrew, the I physically European we too. you value highlighted. number in doing especially of points there more countries XX touch SMB, XXX in prepared bill business footprint, I over two, we're think than cross-border, number ecomm, we is first our about referenced who I markets. region, are single but in currencies, a lot lot kind XX which of with in in the of that a the just comments, there in There

who multinational their So markets number in, be corporates Taiwan that's a payment that toward certainly any an of with picking the see trend all overlap Kong. providers a point the the I some most that the most EU list, one all those of would technology folks SMBs, increasingly solves example, while on can Europe Zealand, need markets we down the provider of (XX:XX), we're they Singapore, that I'm competitively smart a one New believe go Hong across really aren't not provide of solutions lot one payment with There with plus now cross-border we in needs. in sophisticated geography, Malaysia, multinationals, environment.

to well two do multinational they You in, store core some some put kind which cases as for as SMB, our you're the markets provider online, those is single complicated physical in going in can of these a be RFPs. possibly combined of with together, (XX:XX) all

be really You one to those solve. are might needs because or that, two hard providing

coming quarter, business our in about solution expect. because and what to as So and Day this ecomm this of of continue competition, to XXXX And our quarter that and our of growth of how think more to business. is described third over performing Investor on last the laid omni most recent well the go certainly (XX:XX) the we're omni. mode number genesis to we'll again out years our how I from coming that in revenue terms market really in ecomm we've be our XX% meant the we way quarter and we is but of talk we that's But what in

Andrew Jeffrey

Very usual. thoughtful Thanks. as

Jeffrey Steven Sloan

compliment. your for Thanks

Operator

Paul Suisse. And with question last you. our Thank from comes Condra Credit

Paul Should LLC morning, Cameron, open. put Condra (USA) you profile Securities about growing? everybody. Hi, to as should ask that Suisse Good Could on then of Great. I it? is - we line Credit you that we XX%. the And margin Your how think just revenue? SaaS about wanted said thanks. recurring revenue, software think a

Cameron M. Bready

a question, it's Yes, good very Paul.

profile. to a very see software technology-enabled obviously of the vast strategy, as highly at stream SaaS recurring highly good the majority bringing is a you XX%-plus of by inorganically is that for our our a of recurring, today revenue that drive that us today, in to towards of business And is and we visible, of XX% So for and target attractive, the XXXX The of we naturally we're driven example profile given about vast that. highlighted revenue business us. both course time to going that majority just as the the you're to but over products Jeff target, on to should revenue AdvancedMD highly that and total recurring We SaaS XX% XX% platforms, portion target as the see in think that that AdvancedMD, look that expect organically to obviously, grow for of or SaaS payment that's ecomm timeframe. converting complements strategy be omni right continue that relates it to that process revenue

But of highly minimum a growing business. those that. the be in obviously So time. the growth be growing We double-digits to aspect we're the minimum. a contributing of see corporate than quickly From a margin standpoint, margin nicely very a or that's at towards businesses the again, of at profile the and those attractive SaaS businesses course more going unit you should large, by low growth at above assume over should and

scaling, you but guess us time I coming accretive so guys for to overall you time in or LLC of expectation is the just think the M&A, leveraged mean, all Condra out annual kind size the you're Some deal, give or of terribly of insight can over for on Credit this we an the corporate should then profile course at to follow-up being are still above that of Great. company. about way them are businesses those - Suisse terms strategy? of margin Thanks. be Securities kind changes so it going (USA) pace this certainly of are our the of kind margins, any scale to deal of some the I not of the thinking be should over fair, Paul And or to going be obviously to

Jeffrey Steven Sloan

Hey, would just full. pipeline our remains say Paul. I Jeff. It's

as forma don't we've right our think what lever in spot pro being times said, but you're are we times X.X of before. view today, anywhere and in goals articulated terms what X.X our right in sweet I we

to the and technology-enablement the us our for year as Our to we (XX:XX) that strategic the come we but important of advance it fit, other deals world is the returns the hope full, pipeline I most take (XX:XX) thing pass financial day doesn't can at in is generate fit the another the for end strategy.

we're is markets general, as we a really look good the over So time would have We U.S. articulated, we significant big are growth, mathematically, of how that our we economy. we be fact where obviously love pleased vertical where XX% couldn't the with tell will part business it strategy along the exposure well that I of is healthcare don't a U.S. us the AdvancedMD AdvancedMD say more that looking down that are that. the in relates path at. to to inorganic market in chunk of is, the vertical it also path, at. what directly exposes beyond There which the is to more other that is, But we

So terms our stay with where in and with but of strategy. pleased turned, we're heading we're very we're pleased now where

Cameron M. Bready

of couple where our the accretive very maybe are to rest day relates remains of to it's across I'll that I those aspects are to three important fit, financially we fit, earnings we're all fit, at there opportunities as things drive revenue our a a you're target we're strategic in points Paul, very fit, accretive to so as think the that find as to assured hard to others the know growth priority put working it historically, to I One, invest cultural going sort financial us. just necessarily investor. of growth, do like that wouldn't implies those to of accretive clearly margins, Cameron, is, of want think out about conference pillars our our add that, And, very fit, we We in Investor not talked regardless culturally deals and to I to business. growth, to, AdvancedMD to of do talked about of I to growth business, that. and continue but rate to the every strategically want States invest fit,

a now. full very we're So working pipeline to obviously, Jeff's point, on

is to think confident morning. I that. a good of have good. find established the we'll we think we've a - through, our example to the and to AdvancedMD opportunities and Paul the business, Thanks. towards grow in continue (USA) targets Suisse obviously, Securities criteria we for organic that remain and Great. great very ability able LLC inorganic Credit be I to Very Condra growth fit Have

Jeffrey Steven Sloan

Paul. Thanks,

Cameron M. Bready

Paul. Thanks,

Jeffrey Steven Sloan

us. us Global your this in of for thank for behalf you joining you On Payments, thank and interest morning

Operator

you and thank program. today's in gentlemen, conference. participating Ladies for conclude This the does

disconnect. great all Everyone have may day. You a

Winnie Smith	Global Payments, Inc.
Jeffrey Steven Sloan	Global Payments, Inc.
Cameron M. Bready	Global Payments, Inc.
David E. Mangum	Global Payments, Inc.
George Mihalos	Cowen & Co. LLC
Glenn Greene	Oppenheimer & Co., Inc.
David Mark Togut	Evercore Group LLC
Ashwin Shirvaikar	Citigroup Global Markets, Inc.
Darrin Peller	Wolfe Research LLC
Timothy Wayne Willi	Wells Fargo Securities LLC
Andrew Jeffrey	SunTrust Robinson Humphrey, Inc.
Paul Condra	Credit Suisse Securities (NYSE:USA) LLC

Global Payments (GPN) 2 Aug 182018 Q2 Earnings call transcript