GPN - Earnings call transcript Q2 2021

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Global Payments Second Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will open the lines for questions and answers. [Operator instructions] At this time, I would like to turn the conference over to your host, Senior Vice President, Investor Relations, Winnie Smith. Please go ahead.

Winnie Smith

to ' welcome conference Quarter and call. morning Global Second Payments XXXX Good

I'd actual you other conditions call in to our the we to Certain results and financial like Before begin, economic are statements business remind that the about future cause to expectation. in inherent statements. operating could from by subject recent XX-K forth impact during SEC, results. risk materially set COVID-XX These We and statements factors the subsequent uncertainties, comments place to on management that including including today's our undue not most on differ forward-looking are conference these and our with contain risks, expected filing. and factors, made operations, filings you of some reliance caution our of

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

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

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

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

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

Jeff Sloan

adjusted revenue, adjusted with quarter outperforming our second adjusted targets. terrific of a delivered share We operating and margin, per Winnie. net earnings Thanks, each

XXXX quarter forecasting rates by in levels. pleased that are pre-pandemic year the for now most and growth compared realized of to full are We compounded we the the

expectations, path. have not are clawed down of to substantial that far all relative we progress made we've our COVID-XX impact back the of pre-pandemic and While

competitive our strategic to throughout we partnerships. have pandemic, the mode As through continue expand we leading

are businesses excited have with to our Bankia's Caixa agreed Spain. payments partners in we at acquire First, Bank to

with Specifically, acquiring Global This our with our market-leading XX%. of our distribution with of one addition us business, in cross-selling our in last our acquisition customers we and region. the of further one Europe, the Europe. XX to merchant of in with consisting enhances to most Bankia's in Bankia's attractive stake significant venture will distinctive in the technologies, pending This position additional roughly leading Payments' will institutions customers providing enhance the our ownership delight allow follows XXX,XXX and opportunities, commercial us agreement of joint which increased presence an % October purchase deepening markets

markets. to MoneyToPay international agreed NetSpend has diversify expand business joint purchase on into as our business to Bankia's execute Additionally, venture we our prepaid our to and continue strategy

the quarter. We expect both close to of in these fourth transactions

BXB issuer security, expansion. Second, greater accelerate to across collaboration to Amazon that e-commerce we Services, flexibility. entered markets internationalization, industry-leading our with [Indiscernible] Much leverage distribution players, delighted to partner partner partnership and Web cloud-based our platform to also of program other BXC at plan business, are we substantially well will technologies speed-to-market, and base new for customers and and provide including with AWS, we the BXB digitization, NetSpend's dedicated start-ups This NetSpend's reward specialists announce FinTech pillars payment AWS bring done to an have into with geographies. Neovacs solutions, to development and network, and increase to Netspend our we a access unique of and management, cutting-edge as digital as processing our technologies cutting-edge three have strategy our as new for

of We world's of largest continue disruption companies technology the these our one collaboration with to are deepen to thrilled markets. our go-to-market

of acquisition attractive Zego Third, convergence we our markets the vertical are and software further of payments worldwide. in have capitalizing one largest on of most in the June, pleased and to closed

quarter, As quintessence and digital And type global software, real a COVID-XX commerce, for and I has further ripe highlighted sizable, payments estate scope, of that is last in the fragmented, we $X.X of Payments. seek: penetration. accelerated It addressable the underlying my market our trends to expand continue pleasure team great as that members Zego we make attractive software-driven billion to this target to footprint. so is welcome Global market

evident our the reflected greatest and worth momentum last results. our creation developing strategic noting and we It's these of first on areas: the has been quarter to we our the we in delivered yet Company during We through have distinctive, our of have the and history the And distribution, period, XXX addition including and results public in private. our financial market In that produced recently self-evident. second-quarter running despite Since guidance diverse, generated outstanding more businesses, in results numerous with impact XXXX. over two years, variety increased we pleased The across enabling the pandemic in XXXX, in another financial consistent defensible main of X market-leading the new technologies. began be value and accomplishments, focus could that cycles, not over are of worldwide entrants entirety years. most a macroeconomic for [Indiscernible]

third performance. in businesses of achieved sales. since the further new we have in achieved and in Rather level again our Integrated have the basis, than gain several put, record ongoing Global second fueled and levels. and both our strong payments and pandemic strategies new high of the growth strong double-digit Simply solid merchant our four catalyzed We by sequential, while quarter strategy, a have in such business And spurred which we our our in record On had last producing granular marks This outperform gains market Absolute, continue businesses out place impede in XXXX. year-over-year, on performance the more bases. U.S. growth execution. quarter also pre-pandemic versus significantly our long-held led technology-enabled Payments sales to in the we and a saw share quarter. digital the relationship vertical focus share segment

Our toward began that again omni-channel early yet the with with the of XX% growth the in start in is in globally, of second quarter, e-commerce XXXX. excess accelerating the enhanced pandemic despite lapping business shift

customer capabilities. Europe its this signings that in as unified platform to our modernize acceptance commerce a payment Locker will leverage Foot includes key quarter UCP New or customer

are We to new partnerships have also xe.com. signed and pleased global Douglas subsidiary, UCP Worldwide Euronet Hunter with

State on environment solutions product as internationally, record digital universities have our Arkansas track including and both the to to Our success, be the of this in ability and has footprint to making Google the around API virtual merchant and our fourth Sheridon partnership a and launch customer Google unique physical market domestically key worlds and a the multinational deliver our on and Canada Within Big customer legacy new restaurant progress both deliver Colleges System performance and revenue proven also solution, entrants. businesses, College of pandemic. wins virtually a portal including has driver had a single a to throughout our Notably, Krystal, world, Frisch's great board they quarter. Marquee in as in the [Indiscernible] We're quick-service Fiesta in versus integrate business, this quarter, our and Google continues the TouchNet continue differentiator and remain been new Group, TouchNet market for add University vertical while our the number to quarter. Boy, we new and with and our expect key AMD

delivered our the range. business issuer long-term targeted high Our beyond growth end of

transactions. a [Indiscernible] that card We of on chain, leading a that technologies retail as post-merger one well and multi-year handle, pleased of the arm transaction with to initiatives. supercenter new Recall of range signed on are country's conference. financial provide to have optimization to at partnership investor its in More services for credit Brazil, is acquiring digital the accounts, as our us, our key to come

in partner largest modernization We global for institution, new with the for a executed our LATAM, extension another signed a Tesco, letter digital the a vision expansion UK's milestone future. Further, significant also retailer, a intent the us shared enabled into of in that'll continued with mark long-standing financial multi-year we in and our region. by market large

proof our with companies. range pleased launched partnership go-to-market PWC. Coopers digital with recently strategic the have Waterhouse agility Mercury Price are for we tech further to offers Financial extended TSYS leading-edge our platform or This technologies. to as a that support Finally, of relationship and serves relationship a industry-leading

been Managers. past. Program using diversification Neobanks, Again, has since distribution objectives of PWC As and expertise, all part of diversify the and us that playbook of with we we our expect to of in will have solutions, are XXXX, expand FinTech, to successfully distribution our clients across TSYS sizes that and one allow with deployed TSYS collaboration and the partner the our program, innovative we offer execution key Start-ups, jointly same spectrum the full of capabilities and

to continue the Issuer worldwide, and have competitive good which We the have X to our takeaways. institutions letters are on pipeline with XX business. we capitalize have Today deep in of of broad we intent fortune

Turning of end financial and financial collaboration, addition new up in XXXX. include now to technology with other last prospects the a issuers non-traditional active our AWS, These have large mix our at from unique pipeline and a XX quarter of to institutions. X we in dozen entrants

this the in market, accelerates the ones disrupting. believe that are we we growth As doing

and to for the to While that innovative in leading merchant decades continue customers. in Solutions market providing we payments of deliver novel products we buying And some, for may been have, issuer segment our to technologies out installment seem fact, segments. both

currently supporting solution global a are will enabling launch signed partnership payments XXXX. our with Visa with with a also installment Desjardin TSYS merchant in installment Visa We combined in MasterCard early in June. Canada solution. in we And customers agreement CIBC referral the installment

with legacy we And disrupt expect and arrangement successes another Finally, business to same expect our program since together with in This much our And management in unique other in capabilities, expand generated XXXX. businesses. like doing issuer is to we contexts. segment further been application the future. yet near our we've business, to distribution again, have here strategies as example AWS pieces post-sale consumer of intend a Paul. the the we our of we segment,

Paul Todd

Jeff. Thanks

the of highlight These outstanding demonstrated technology-enabled. sequential of Our differentiated our financial second execution performance exceeded XXXX quarter and meaningful strategy in our expectations. on momentum results

the operating strength delivered revenue we per revenue from the adjusted return improvement year, pleased delivered generated quarter our quarter second in in of this XX% an growth onset XXX a of XXXX, the we adjusted revenue which relative to quarter, $X.XX integrated the quarter, by net temporarily was XX% same compared Merchant XX% which led an XX% to XX.X% and businesses points performance U.S. X.XX in a achieved basis operating for same net Solutions from was of XXXX. a relationship generating XX% XXXX. U.S. in look the the same compared includes business, of XXXX, increase and period Taking mix. the of improving closer stellar of led XX% share XXX of to increase segment, XX% XXXX. business, a result the quarter, adjusted the XX.X%, prior continue net to net Notably, We The by second adjusted improvement business of prior improvement for of compared a prior and to results benefit the as from to year. a adjusted by Adjusted and recovery the growth from approximately our XX% margin we growth year, costs in adjusted Specifically, earnings period XXXX. billion pandemic. We're despite segment, XX% our at our representing the were the improvement period growth for Acquiring reduced from point an Acquiring at led XXXX, margin Integrated our to grew compared compared These billion prior compared to the technology-enabled net certain the our basis that and globally, produced revenue channels, second year, X.XX the

businesses own in to prior delivered U.S., with delighted are year, sequential As relative first for overall the XX% the to the growth compared software and portfolio of roughly solid quarter. the improvement we our achieved

XXXX. the for our with continued to see Markets half us Vertical of bookings mentioned, providing a Jeff favorable As positive second tailwind businesses trends,

customers. Additionally, businesses of Unified with in on year XX% year excess worldwide e-commerce our growth our proposition, including Platform, resonate as and UCP, Commerce or value continues saw our omnichannel to

our matter, favorably portfolio contribute businesses basis, an XXXX. have markets as a a XXXX. Regarding Asia slower businesses; and returned our also adjusted to on to Europe to while to to overall merchant compared growth combined These net our U.S. been bit on basis International growth the of a revenue when to absolute compared these across businesses recover compared

quarter, for increased million period. in performance for to the This led our of recovery Output during our driven record XXX Issuer by marking volumes the transaction which Moving to have quarter. prior-year period, second XX% Service adjusted non-volume-based grew we Solutions, an revenue many across X% the mid-single-digits delivered net business, are from was strong revenue markets, while at a the pleased the in ongoing by roughly improvement

segment also XX.X%, continue this business. to efficiencies points particularly drive issuer in quarter Our achieved This adjusted basis second-quarter business we in expanded of XXX reaching to an year, benefit operating from the of record as of a achieved efforts from margin result, second-quarter we our record prior basis and margin operating the impressive a expansion XXXX. is new income given points XXX also adjusted second

pipeline long-term well contract issuer forward. for signed team bodes during Additionally, X our our continued and momentum going extensions strong future quarter, the

X% revenue the the XXX Act year. last delivered of segment adjusted despite Finally, CARES representing million, XXXX our lapping Consumer Solutions business of growth net benefit in of

this also our serves coming quarter pandemic. across of was $X.X of proof delivered As driven out part the that businesses trends support our the of a which the our as in was over during share continue for XX.X%, accelerating growth in reminder, well performance the digital funds point of second stimulus margin double-digit to gain as The our period. disbursement billion further we a of that in business alignment this with Adjusted the of segment we XXXX, operating by strategy ahead outstanding expectations. as delivered

annual have run-rate do, well. also at would allowing we now been exactly synergies synergies despite continues and that annual at pandemic. the expense of $XXX of least as are that And integration million million have and for of pleased achievement to We run-rate least the revenue actions $XXX we executed our we said progress targeting, we

our remain we to echo track of we we our contribute the purchase of and We our and fourth of From the flow these flow will acquisition deliver cash efforts growth range businesses. $XX PayOne expect In we capital Spain this through billion, the successfully to will expense agreements free million, full Further, in our to payments continue collaborative transactions X to to 's we X business second our year. the Austria capital opportunities to today flow for year. in revenue in generated in announced I expenditures roughly June, expect in acquire of our we coming the synergies a million roughly like little re-invested business million excess closed over periods adjusted continue, Zego, or expect a the Worldline the with approximately continue six continue and revenue million XXX leverage expect excitement regarding to 's cash to businesses expenditures and XXXX, year. additional as consistent adjusted on free complete standpoint, of XXX over the a in Jeff quarter. quarter we across close XXX and in efficiency in 's to this Bankia expectations, net months merchant during XXX first segment would second-quarter cash and of for the adjusted We billion half the

pleased shareholders to are the return quarter to our have We repurchase approximately this X.X $XXX for million to cash of million. continued our of shares with

roughly of again is XX% of to Following recovery, for to net with now reflecting XX% as forward. this leverage balanced to guidance continued continuing And the X.X flat billion a going be range period basis, liquidity growth X.XX this we net our X.X debt adjusted of deployment X.X position in global XXXX. billion, leaves and a quarter, quarter a expectations billion our us on roughly of expected. capital current our ended with on Based of which for times over we are capacity increasing ample the revenue last

XXX expect We continue to to adjusted margin a operating to XXXX points standalone up basis. levels expansion of on basis compared

adjusted it target, is already Zego level, at a does the reminder, At a despite now our achieved operate we for consecutive current As growth for our be revenue business. expectations Solutions, it the net headwind our pace our currently the Merchant worldwide. from margin marks which continues the to quarter that levels, we that to our be teens around margin of segment bound increasing XX of of XX% will second assumes status. rule upper closed, outlook raised have previously, recovery high not having This merchant are as modest

increasing prior up growth XXXX, are mid-single-digit single-digit also from from our our be and We growth. range outlook to business, issuer for in the low our expect outlook, low for now to

growth continue single-digit target and our mid consumer growth with for consistent achieve expect segment We to full high long-term to the our for year, to NetSpend. business

we increased slightly first-quarter May, XXXX, anticipate our our last reflecting XXXX year adjusted on range earnings the we it lapping with XX%. $X.XX, be tax call a reminder, are relative a our expected expense the net [Indiscernible] for of Act XXXX interest CARES share full to to As to the we relatively segment in this growth despite together, lower of consistent to guidance expect our $X.XX be in to impact rate for earnings year. will per Putting XX% adjusted increasing all of while to

to Wednesday, will year. turn Jeff. outlook to back remain presumes for we raised look Investor updating upcoming you September Conference, longer-term balance the Virtual forward the over our business X. the of over our on will with expectations at the we And call host Our on that, [Indiscernible] which We I

Jeff Sloan

Thanks, Paul.

numerous the new we our worth a public count. to Throughout newbie how ahead evolved it modes companies, of business. much witnessed we look much on too and shifting multitude As of is of entrants, years, last macroeconomic reflecting market have to next we've month, cycles competition, eight

the our the say days Some near The best decade opposite. quite behind were us. times fact that said over a last number of

value believe today we and greatest delivered history in are In of period, creation record that our our track we performance. fact, during we continue to have the placed our

raised quarter today, second The our are examples. in recent most guidance the

of share trends XXXX grew through through pandemic. for gains and our U.S. despite success managing based follow we payments One goals. September. are business More rates Our target proof-point, short, The growth underscore sustained to in crisis. its the right unprecedented straightforward. on bookings for roughly original reach growth In now we expect to revenue an our XXXX reasons

team the technology Our consistency, significantly the investments many customers, have the of to support [Indiscernible]. competitive of quality distinctive our made our market-leading our and allowed partners our have years, strategies, us and expand over execution we members

it As yet of has best COVID-XX is that digitization reaffirmed We painful been, the has businesses. come. believe as our the to

You next can yourselves month. judge Winnie? that for

Winnie Smith

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

Operator

If a instructions]. like question first you from to And KBW. please question, with ask would [Operator Vasu is your Govil

Vasu Govil

Hi, results across Great taking question. thanks the for my board. here

off, looking type XX% growth? merchant to pent-up among start seeing roughly whether, forward, a as about this at I a of type accelerate lot the we of what's Could gauge consumers revenues they're that? I'm forward that lot demand [Indiscernible] pent-up to of So driving relative driving trying going you Are there's XXXX, go just that's rate of demand? maybe think just growth higher. segment, talk if could to you

Cameron Bready

the X which the the last with Thanks of to technology-enabled growth a I the of few we've businesses comments. color years across now, lead to X, XX% bit It's Hey, say investing in our little would efficacy things. and in good levels. Obviously, provide maybe for versus really morning, a would quarter, the business strategy. as Paul kick well. XX% our Cameron. continue And business, for start grew integrated I'll it I off up it's that way for including been and the ask the XXXX Vasu. plus

In from performance e-comm grew Omni teens over where also quarter, last XX% addition, high well year this it in our and the business again, topping grew level.

and to business. relative s again, to e-com very growth across strong omnichannel of see continuing the XXXX, So the

forward I strategy beyond. into want the through on growth. in it's businesses comments the balance Paul And XXXX, continue of XXXX, and know looking me, you that's we I if think deploying really any have those lot that. a see then we've heading For of that to and been to more driving don't tailwinds specific

Paul Todd

July markets said relates XXXX just merchant would press to with segment. year-over-year release, would we other growth you're The what talking segment, say, across in vertical see seen vertical Yeah, pleased the we improvement as worked in only about continuing be, markets the the far I it XX% business. well to as in when just the we've so thing improvement as the we're in relative the

So think it. covers I that yes,

Vasu Govil

accretive wanted I seems more whether But question. follow-up, buybacks just Got buybacks. ask raised to been Any front, you've versus deals. M&A? the share becoming that that I know, FinTech's evaluation it. are, where to capital And on saw on expecting do And color my you for you're and guys allocation on I the harder be M&A for harder. to given historically, focused doing the

them on thoughts. accretive, that's yes, earnings curious might possibly, And you just this makes if for growth to that, the what be you it the for doing So open term. of do? it are make at if areas some revenue something your but long sense dilutive to point, Would perhaps

Paul Todd

for about as to make the the want execute relates much capacity repurchases. quarter. cover do due talk in we the all on pleased very did a capital year. have choose significant like share to to go-forward preference the Jeff, we made share the half to this Yes, and to on maybe, deploy quarter, we we've so if is were resize did that. purchases to us, share We opportunistic back side. of allocate We repurchase it last want M&A. we are to we over we This it had to is we front guide I'll share last We along, said not have do share do M&A But Jeff When authorization not always fact is our the as of repurchase, sure and M&A the matter opportunity and repurchases M&A the to turn you the then, an that our since will to repurchasing. capital side? authorization Paul in

Jeff Sloan

of About we to question, about X.X about active while committing Yeah. on U.S. X.X on M&A the with billion, billion think six part in Bankia, in buybacks. the last today's your the been months committed M&A the front Thanks, the with last second to very months, announcements Paul. I we second X actually have

As release, in we two. very said balanced the the between think I press we've been

of owners, hard so say we've managers in eight not wouldn't deal. That's would do dilutive we say us As expect said, the would of last the a Zego market. technology also given Company we notwithstanding our quarter, years, have size nonetheless, software-driven consistent the no, the our [Indiscernible] shareholders, that, business, was premise I earnings. last immediately many is, the don't in business, But with [Indiscernible]. and the at really to. the I the particularly strategy that was Yet your look things, back we is but we expect in it discernible to change. strategy, was to deal and very the abstract, mindset announced it's and think we've real really estate a was target I question, addressable done what I been there of not going as impact not don't [Indiscernible] on We to and it or since though running not no so

Vasu Govil

very for Got it. Thank the you color. much

Jeff Sloan

you. Thank

Operator

question Shirvaikar next Ashwin is with from Your Citi.

Ashwin Shirvaikar

[Indiscernible] numbers? least, XQ of part of impact, provide of you what things versus of come was, coming yet the can volume of pandemic the with like businesses, I kind expectations Hey, Education, do events, that. see? tech-enabled hoping, Paul. at you that's if the that is lapping the recovery XQ, breakdown good What benefits forward to out or a Cameron, Jeff, and sort on results. pandemic Congratulations

would Some versus on great be XQ quantification XQ.

Paul Todd

Yeah, to Ashwin. XQ as roughly want and across XQ it the be Cameron largely largely speaking, relates expecting maybe similar to might merchant. we're But our businesses. and start I'll to off, add something

kind state. had we to beginning at the more a of return the said of to much of we expected the the normal back half year As had year,

And clearly, benefit, are continue the as from of that the so, re-openings closures. to re-open re-fueling some kind there around the will of countries world some XQ

as some right, markets of Ashwin, exactly vertical You're our relates to it businesses.

businesses. Actually, to our with back QX there the in call tailwind As low commented, the stimulus back more our we to out Yeah, it I've growth as it and you kind as very as saw be and of reopening QX been pleased more wouldn't stages digits the we're raise year into would certainly of add? low of guide QX, the consumer has talks but anything dynamics those in meaningful those businesses on static pretty we back business; the first Cameron, do kind I single and as those to once would business see out just pleased we the businesses. issuer improving be necessarily year other growth relates have half revenue anything have impact mid-single-digit half. more to netted the merchants, it of the impacts between the half across on in very the going would relates to and half XQ, in to about and to of X fundamentals there,

Cameron Bready

that businesses, technology-enabled strong couple think I to as to actually. pretty I see mentioned would only businesses. question, I we're first very the across the add points. of No, is, well, momentum just a part those previously, continuing it going in of covers your One

than better the continue June, good and businesses about continuing to poised is a think to sequentially, those how strength trend July, half highlighted, of see matter, in progress, we are as the back to Paul feel I As things year. are so

If around level be at that back whole of that year. XXXX the to versus you for the look make in the same couple the quarters XXXX, growth guide going Merchant for just work overall to averages segment, that XX% roughly have to

quarter. than faced is that against you certainly tougher we as the gives in comps QX sense in second and to how QX So the performing, a business again,

obviously think sense school particular, should we that businesses normal a a of as To those Paul's market quasi-normal the into a obviously, in get in give schools. So momentum little vertical around Once environment. bit the I hopefully you back environment, or point to we businesses. school have that

to businesses, rebound in and Many half a September, are in as year, XXXX. in of poised Here as the the booking occurring events that back seen in half very particular, is Active trends. of of has back Active. strong August well see the those

and very I poised continued again, and but market businesses is of back pandemic. continue throughout a about And help a obviously to XXXX year, how recover. as schools, are AdvancedMD to ACTIVE overall double-digit will the the think getting the particular feel the tailwind that from and nice half pace business right grow business a in to have position very healthy we matter. recover TouchNet XXXX. overall, Obviously, through in an in Those good vertical

Ashwin Shirvaikar

to all great hear. That's

regards the expansion The AWS. you're with second thing obviously I to to great of had doing what was with AWS, see

Asia the you investors the metrics any provide you can on that? update markers for useful are progress that On making can any be and business, and of

Jeff Sloan

Yeah, Ashwin, ahead it's that. answer Jeff. I'll go and

Netspend that a have but with I'd will Amazon's our and there's the Start-ups. primarily with our similar point the start the announcement -- first thing today, I announcement [Indiscernible] new one follows almost issuer me It out exactly format ago part Let that is that's today. year a part and at And scale been on we distribution. directed a on Neobanks, in particular on that FinTech program say management and BXB focus very

be it's September that our much focused something, Day, Virtual While a it a at on very obviously, talking targeted that's initiative, BXB. on template, Xth we'll lot Investor And a about. similar is very

of doing Amazon. looks we really terms the issuer our how question we're Look, We what of pleased. side. then like disclosed have again on your last outside as we're year-plus, yesterday, for, pipeline Amazon, with LOI the really, In on

XXXX. X end of spectrum XX intent Again, live the this testing issuers. I fully about out sense whole Ashwin, to with today and sent we there, a start-ups, the X at of we as Asia to to is, already including a fintechs, said an And of think live up letters over AWS, progress, and our that, calendar from about is that's the neobanks, be expect give and for on beta by basis, potential what you year. financial calendar and at as have in is XX singled give that colleagues well in of institutions. is we've end we update traditional And

So decisive we've a and X-month with start-ups, AWS in of financial now and just things business Netspend. through of internally, how We so with form have doing neobanks, happy X AWS. with quintupled a of externally, a the of are LOIs the basis. Should second progressing. pleased the we more kind at we how that be institutions couldn't number really be more recognition, on fintechs, are not but quarter,

Ashwin Shirvaikar

at look Thanks. for the the Day. We'll update Investor

Jeff Sloan

Thank you.

Operator

ISI. question is Your David next Evercore with Togut from

David Togut

and morning, Good you. Paul. Jeff, Thank Cameron,

merchant of underscore gap kind back in of really roaring business, hallmark strength in credit card debit, COVID. the strength Your with credit QX, debit fairly was results the really and with closing the

As strengthened year-plus? the you next you stay do really to think forward, for look is credit here

Cameron Bready

I'll like morning. good It's anything in Cameron. Yeah, they'd to add. kick-off, David, ask Paul I'll and Jeff chime the to if have and they

short think the answer is I question to your yes.

in and the on your obviously, since the it's of types outperformed funded stimulus we by been pandemic debit accounts. lot as growth think the prepaid was pandemic as card a credit see was is in environment, credit way, a the that XXXX. of high to normal I of more And operating those clearly debit, midst clearly on outperforming, as point, of heels the account

in seeing maybe growth a of throughout skewed that. that trends business. growth talk back we the the back into really towards on So merchant let business, But for we've credit. tell merchant credit talked we the lot pandemic, operating of to as a little course I'll XXXX a result about out issuer growth half as in those prepaid. And metrics Paul in And drive of our I our we overall, a bit environment, particularly pandemic, more we're normal in the there. as obviously good our that, same we then And XXXX, coming the feel of a see getting credit. result is of would I'll think about outperform. the lot tailwinds, But you see side the debit and certainly to expect was of a heading of book

obviously touch issuer tailwind the nice Paul, that business? So want business years. a through on you to coming the provides for the merchant

Paul Todd

Yeah.

on issuing metrics it did business. said, account have growth Cameron to good as relates As our we

saw commensurate the also there. We as transactional some a the very saw that you credit with of [Indiscernible] well, growth issuing on business strong in -- numbers the

business, on very and underscores commentary question in I seeing So dynamics issuing credit your it. yeah, we're Cameron's strong that which think also

Cameron Bready

growth, And add I his in think if roughly and just the would XX% pure our I credit highlighted Yeah. you our they grew XX%. worldwide look in merchant -- Paul of at that's Visa versus globally, second merchant businesses script, quarter. as

So we're really nice again, seeing, tailwinds.

technology-enabled market of see really where I result growth a is it relative the differentiated think strategy, we outsized overall. to our

a are So this that us morning. obviously and lot the gives guide something positive that those we confidence updated provided of in very trends it's

David Togut

I that. appreciate

opening Do physical a transactions differentiation what rollout a about new you follow-up, model GPN, see at pricing or small you remarks. credit GPM's that at of curious PayPal's threat Jeff, as with too I'm physical Zettle your being underscored card to POS? point-of-sale think debit you in Just really the significant the pay. PayPal competitive and is

Jeff Sloan

question. great David, Yes,

is start just me by ours. of Let good saying PayPal a partner

said the around the we've the side really TSYS on before, and side, As Global world. both

So got Company. of a a they We are PayPal. terrific lot for think we've respect

in specifically Zettle it point 's physical Europe their the and As i sale. of for relates David. some Zettle been time, quite i

I implying now European In it PayPal was all U.S.. fact you're when deal, the in as announced migration the was they've think mostly some

U.K. iZettle's here just and Our been specific one business let's example. as Europe, in London some the is for time. use

business both years outperformed throughout POS. i many period, and that pre-Paypal acquiring, for Our has Zettle

think It's Visa's XX% terms and Europe a the even years, business last our in iZettle for or tomorrow around competitive pointed to the you resilient, new market, don't our why just that more U.S. has look we U.S. through smart it but relates [Indiscernible]. of growth and math been as pre-pandemic, today, we in growth. is coming great it and it think pointed our iota. competitive of be our business, going growth competitors, to some Conference, competitive notwithstanding out out rightly worldwide was acquiring ratherly it resilience As same business market's yesterday. was today, month that's our day, our around And it of share strategy prepared post, that will that our in I iZettle MasterCard's in our of the vision next number compares of our anything Virtual over the and going XX%. about is take be gains, Company, at in hasn't our our growth it one America think the going of the of you as worldwide Whether XX% will like dent Investor of [Indiscernible] But I Listen, and put North to was many business, And to market at MasterCard. for and the talking certainly and remarks. was the is Visa end

Cameron Bready

top another and if in And in XXX%. David, up growth America look point to accounts, second quarter, the point-of-sale add Cameron, it just North at in a on you it's that, was business of our

So not in withstanding market vital point-of-sale solutions, distribution across the obviously and continue across landscape, restaurant, a we traction great see retail, the competitive our to point-of-sale with particularly platform.

to system and our good very up the how is So feel about again, compete the we're point-of-sale market think seeing. today, stacked I we growth in

David Togut

results. strong the on Congrats Understood.

Jeff Sloan

Thanks, David.

Operator

next Koning David from with Your is Baird. question

David Koning

have to are come what to and time, be bucket, you XXXX possible? is -- normally XXX. to to of XXX to a we I What back, percent a have come on are -- on come traction? good first know get parts we a wondering back? already had are and lot of think I if could normalizing the Yeah. guess, room A, already to business Hey, over guess lot back room merchant that still there's what some still nice we still Because think if that XXX% guess 'XX. I'm when guys. the about maybe You of that would XXX% question could would my a we Congrats. I And what trajectory

are recovered. all I question [Indiscernible] So those the guess

Cameron Bready

Cameron. it's some ask more about the David, fill in think Yeah, But Paul we are step I'll explicit where if off details. of and I today. kick Maybe and to back

If up globally, was in at quarter second pure XX%. they look XX% versus our U.S., businesses that XXXX levels. number roughly In were acquiring the you the

standpoint, So a on again, feel I we're a we pure good think pretty acquiring trajectory. from

relative normalized to still to needs Now, Europe get absent that growth a XXXX, or, a is where to we've at differently, lower have been, back, of U.S. seen rate pace pandemic. relative in to would growing to the the but it's XXXX, say more what it which than certainly Well, growing to come market. 'XX, we

high quarter. the somewhere versus single-digits, the grew Europe XXXX for So second in

recovering. fully little So we still need a more from tailwinds Europe

cross-border with the in up largely to and the half which depressed is of in of it's back still the growth, closed, level, lagging the expecting business. particularly open Asia the relates and pandemic. U.K. activity of as to to because until a pandemic, small so remain to it year, to depressed a we Europe, Asia, many very mid-July, because then, course, little of to is tailwind be But XXXX we're part markets to relative continues relative And XXXX continue course, of struggle didn't more and see the you as As know, get trends.

on would momentum begin travel is a And We to absent outsized U.S. the have have cross-border it's good the lockdowns something pandemic, reopen, XXXX, more relative continue we the to about to pandemic. given and you improve Europe of up. markets close business. to reasonably Asia, think same in for say I'd thing's we we As what pretty to to then where been get trajectory to then growth back as need the see true and the the just and pick that given

vertical markets think back to I levels to to are reasonable get the XXXX. well-poised compared

you'd in anything reopen. Paul, think know As a the year but that, half the in back we that continue I recovery market gives more the overview of schools to pretty in those markets in as to in and particular don't and recovery add good if a a I business. see, again Active

Paul Todd

up. I Yeah, sums think Good. it it

Jeff Sloan

that But produced quarte and And the said. non-U.S. comparison commercial We've quarter of add will we on purposes second questions Paul to next a July that outside but only your -- part. in echo is into half heading -- to the think re-opening a what this r favorable add would of businesses say really here U.S., say can of I the also fantastic be I'll a a to particular issuer seen of markets recently, lot answer for a to which Cameron continuing I'll Dave. in Dave, lot We issuer, only first year. and just the I too, for recently July. issuer in comment quarter

it's is part, up versus commercial versus 'XX. 'XX, not surprisingly, up really While not

We 'XX that a the outside I Adding relative starting to you because eyes it's [Indiscernible] those to think normalized, as will side Issuer and U.S. described in, favorable getting start should Ashwin, border we good re-opening in commercial probably of against yellow those on had two say, half we have I kick Dave. it if year of [Indiscernible] the well, back the be for picture, pretty 'XX XXXX. and the also elements issuer announced elements into card about half to obviously business. And Issuer, start but lastly, a a ago.

Now, think continue believe. to of at I set the the we half back time the we exam XXXX which

made I Merchant. on you're get comments similar Cameron think that going to

XXXX as into going are to You nice well. heading get a tailwind Issuer on

David Koning

know million I guess, the pace? run back said a with billion to which Zego, acquisitions rate, at like a revenue. Great XX paid dollars you you QX. looks XXX to in million, follow-up, half, a times of guess so it rooms [Indiscernible] hear my astronomical XX Is from which that Yeah. I growing in for lot just Thanks. momentum though, is great I it. [Indiscernible] almost an

Jeff Sloan

Dave, quarter. [Indiscernible] of as of well. the in our we Bankia you're acquisition also announced then second it's assets missing so Jeff, in Hey, today Worldline there. Yeah. think PayOne's And the obviously business announced I one [Indiscernible] in

Zego, tax just think asset. what the for XXX XXX get said about the million purchase price There's million. right, I was about a that So math to we was to also

about that down So million, XXX Dave. you nets

revenue. do million to a relative times is the we So X year about XXX

in that, at commentary. it's his said Paul do having think the the we this of day, end I business. mean, alluded great to Now, a

rule goes a growth surrogate XX, you think of about beyond if that. really So

XXs. did margins think into the growth to to at rate we you deal get with of organic time, If XX That's when what how about a guided you, the revenue kind you rule number. of we the double-digit the

to a notional XX So date basis. We mentioned. the we [Indiscernible] view closer attractive think than eight very you times rather

David Koning

hey, Well Great. nice job. you. thanks Got guys,

Jeff Sloan

Thanks, Dave.

Cameron Bready

Thanks, Dave.

Operator

with Global question next from Your Payments. Faucette is James

James Faucette

Stanley. Morgan with actually I'm

Jeff Sloan

[Indiscernible] business. respective congratulate your you on

James Faucette

Yeah.

ones for I Just that looking for follow timeframe. wanted and to least been accretive, to afield and and valuations still etc. look Is Jeff to more At quite Bankia have more acquisitions through seeing are mindset. interesting, to today? there so that you are the as of you clear. well and the be obviously where inflation just reasonable or but things just want opportunities far, has And that today understand acquisition what on is maybe up tangential in you done the are commentary historically? said, I think Zego as announced a if so, causing you've thus PayOne further everybody's to as look

Jeff Sloan

We've Yeah, further on a James, We existing just out No, We look of do our it's in not too, obviously, Jeff. 's to plenty and question that answer question. M&A M&A, in fine billion strategy. the Bankia ago. announcements just economics, X certainly in three -- response Dave worked a today's BlueSky at expand we're us last the and front months. including second your No, of we're got the looking set these afield. -- records not to

else. price, are, us the intrinsic and our markets I value, and M&A share a for our more got and capital certainly plenty think we've We though, pipeline view and of what of do. deep with balance, to where our do everything view

of we I of and to it's that where like terms X.X be. would We back our important and the get billion. balance So Obviously, we same position so exclusive. billion. deals, think billion else. stock, more in consider be to have we just At obviously as think our 'XX about X.X to to the rest XXXX pretty we guidance. not and growth heading we're where in that think mutually a authorization in time not we we view we billion re-up want But X.X everything into That's healthy back And bought without the we the both. X.X we're

more the the just we're that of where earnings, much do, view it. those strategy market said, think with it's I thing changed can't then other because doing function add not "Gee, much think that terms strategy are a If value of really where we do function it's plenty same we stuff don't and things. of at. too think the didn't or, of going the enough," in [Indiscernible] our I feel our to there's is. we a deal we As strategic valuation buyer, the matter, "it's the view of we not that it's in can't I expensive," But because or we're we accretive of look

James Faucette

that to I the if terms you much cetera. itself? conditions. variant, color. market going whether much on but am variant gave in and variances, seeing can from And That's may Delta where, policy you're color trends those coming just et versus any, I'm Jeff. good if different to Cameron in a just Hopefully, -- I to isolate, underlying appreciate great it, just regulation policy behavior. of there spending impacting be figure makes maybe current are Delta are wondering really and sense, versus how activity out related how back consumer to the fluctuations the any trying geographies,

Cameron Bready

Cameron, that. on I'll it's Yeah, Dave, and comment

very half see environment, where week, think last momentum there's on an you it's more U.S. of particularly XX% to it far, that the I the appetite a U.K., to have the now still as enter Canada, relates improvement over earlier yet July, stronger it recovery from end June markets about the through clear, seen of a think as year. today, of and did impact lockdowns, be recent. U.S. reopening The real about comments we as the any and our were variant. of Most to I relative in are Obviously, any fluid very which we are year. see lot widespread that's it closely we business, we're in sequential the for feel more here don't good Delta be sitting in for Delta the think As for something of variant. say globe we're markets I to seeing I particularly don't they July, the but again most I'd around saw impact, and recoveries Look, our on we've example. the Markets Obviously, the closely poised is improvement of we that the the a again, may it To back operate, the think in here outside we volume those U.S. through differently, based the relatively I we the very we of for monitor to react data business, monitoring relates of going so we're say, in haven't we to July, thus small impacts, as balance we really but the continue but focused very volume would what overall. discernible the June, made think seen trends, sequentially.

Jeff Sloan

Cameron as alluded over U.S. Cameron XX% described, that to, that that which level at the of saw, mentioned thing, those those, see And the reached issuer Cameron hundred said the end the also revenue day what out the response time basis question. David to plays really, that see. about not if really, you in Jeff, could how couple incremental as quarter. We'll a over the Company. that's time. same it's of recovery points of the side. the as on probably And If said, you, were And second growth Koning's James, that there, I of is markets, market non-U.S. the then of the to

James Faucette

very you Thank much.

Jeff Sloan

Thank you.

Cameron Bready

Thanks, James.

Operator

Huang Morgan. from is Your next question JP with Tien-Tsin

Tien-Tsin Huang

quick a Just clarification.

make that. up I'm Just piece. I quarter even on Bankia, break the for playbook obviously, Taisha guessing that a you deals, (ph), just outside, X very that point the of I same the revenue just just very, to know want raise. as is covered cyclical and well this Can I And the sure then you. did between

Thanks. there's Just there. any curious if difference philosophically

Paul Todd

first take over I'll Yeah. for second it the Jeff to and Maybe turn the one. then one,

think one. Cameron you -- about for If second the the

second million raise, the the relates would continued roughly of first year, back the in the in be the so merchant. both well the segments section better about as commented to to side, think as it And as raise. underpinned of close as well the guidance back the then, the half you $XX on obviously, of we half as guidance the We to that's Zego. guidance raise that's said as overperformance it QX, issuing the If relates performance section on which

FX components. on half versus So basis. bit There's the those would two first the a be little to realized back half of the headwind relative a

first half XX be have the We piece kind impact versus half. stimulus then remaining components. performance. would million that is Zego those roughly the the of also two of the don't second the and same in But of the the

Cameron Bready

And Tien-Tsin, it's Cameron, good morning.

of As it markets with relates your joint the market. to (ph) Obviously, question short I to be markets that attractive It most to now. we've answer the of yeah. playbook think over exact very (ph) Taisha the and in executed the Spanish is continue It's Europe. venture most decade-plus attractive Filmortia same it's excited one globally. the one our we Frankly, Bankia, last about the is

and although portfolio the do think thing merchants, -- domestic interesting well. But in and volume. bit skewed restrictions which Bankia about underlying XXX,XXX attractive makes second The the remain Spain country timing of pandemic. the a Again, over predominantly continued you consists volume color, give market trends more a is volume Spain into the the large Bankia acquisition they for it result small grew more the I XXXX. as venture grew in about little throughout of attractive, matter as as to medium-size incredibly in the is XX% for despite that category XX% secular us as quarter Just particularly the the towards Bankia domestic well. a of

in think this We're joint [Indiscernible] a morning cross-sell European that's and us able technology that very addition to going attractive addition venture opportunities really the to and business. gives our delighted have our [Indiscernible] expand in be solutions and it's I differentiated for great announce again, attractive to this venture to nice a we the to today. allow again market to distribution further So joint

Tien-Tsin Huang

Thanks. Agreed.

Jeff Sloan

Tien. Thanks,

Operator

from is with El-Assal Barclays. question last Your Ramsey

Benjamin Theurer

mentioned Hi for guys. up This call the of Issuer Thanks follow beginning on is you the question. Ben on the at so Ramsey. the I to much taking for on business. wanted something

wondering, issuing are think without AWS that, newer mentioned that the those deals kind just of maybe of you you with from as you've I'm newer require, perhaps the your might business? kind partnership, of entrant deals potential have not sort and they are I the gotten discussed traditional of before, capabilities different some some FinTechs. do what

Jeff Sloan

Jeff. it's Yeah,

yes. is, So the answer

not Start-ups, pending you're we FinTech, AWS, right, LOI's if don't that. in be have you have think, I that we we a almost the I piece say those gone And broadly of in question, just really the modernize the to and would we distribution. with a just as been was behind XX said thesis are partnership year a position we've think are was those with the second number And technology. think more key I day the ago today architecture very response that's [Indiscernible], Ashwin's would back without to now, the actually And to up. Neobanks, Of well. -- I'd first, also and

Cloud-enabled from shift Cloud-native general our it's just selling Just well. into technologies technologies, initially very

institutions including the and and of One like. sizes, all FinTech Startups, Neobanks, of the

Secondly, of saw program it's announcement or on at AWS relationship I'd you Xnd management. question, our to at on Netspend program our and be I To issuing Netspend. your need into But more focused answer think today the the business business, very vocal expansion whether the on say, we're management. we

today. North the and now financial of larger the really and inside new key ours post Evercore business AWS, do of a U.S. on Europe debt institution. part with generally, the Key look for of more I program and announced on well with Issuer in the course That's and our issuing historically, forward management. on Netspend and going us ISI point XX/XX. share there the you of as to financial pre revenue, is with as which of we'll both most institutions partnership month relationship is I'd we next of more with with America details focal think growth

Benjamin Theurer

discussing ask under and or how business between could a one fits it. the any I as follow-up AWS we're potential on Netspend synergies Netspend partnership? if on Any that And Great. that just MoneyToPay update the quick

Jeff Sloan

digitalization. has pandemic Yes. many Netspend Netspend phone, Cameron had and It's of ongoing interactions the really Netspend high our a And and certainly We Jeff. accelerated we too. strategy work say And and done start online. meaning today AWS, digital now given is [Indiscernible] one that. I spending accelerate, continue I I'll in expect versus course, of are to with would pretty think go ahead can in this their online, XXs, to surprisen XX% with card the join, at pre-pandemic consumers with that good footprint not footprint. And and [Indiscernible]

in tech solutions. on cards play obviously pay And stool as really I'd also get first to management, what remiss way access is is described all our why, in to but question, a third really response is a BXB. mention of all. and gash The didn't your This second it internationalization. are the earn I is program if Those leg in be you which includes BXB which [Indiscernible]

MoneyToPay. piece is a that of So

short we with And a well. answer debit because question business also well. a business, really as includes your The today to is, second the Bankia it's it announced gone piece prepaid

three post uniquely for and the markets, the Netspend ahead acquiring the great tell particularly overseas. the thesis Caixa, with we're of only really can those expand And the expected. today a who have well and JV it Europe Payments as we of example bringing what was with MoneyToPay countries Spain, on competitors initial approaching is of some I it we're Our Global XX business to closing in we now that which a in, months continental to running as the for is we or you X U.S. us relationships what operate side, it allows on internationalization that is, really given is

that are thesis also of markets management, bring thesis is has those rung our true. can our think our our true. we The U.S. to I products, under-penetrated technologies to those relative markets

It's just where we spending especially hoped the that partners have. some seen have are pandemic, overseas. really than here to from government all and pleased but too, We not the we benefit emerge with the in we there be as out working we U.S., on really better

Cameron Bready

partnership business And to to to prepaid makes one bring I that side, adding us forward easier us into obviously as on add that delighted to the well. Netspend for thing would Jeff's been Bankia to the thus we've of capabilities where our AWS far. with look performance for the The obviously technology point we like the Spain, it business MoneyToPay markets

the technology As U.S. it with in continue product business. we easier move of as for to AWS the capability markets internationalization it the forward outside Netspend makes we time, bring to strategy

Benjamin Theurer

Great. Okay. looking taking and to forward the you next questions so thank seeing Well, month. much for

Jeff Sloan

Global Thank joining morning. call [Indiscernible] for (ph). on us the Payments. On of this behalf you Thanks,

Operator

today's you conference and concludes this call. gentlemen, participating. Ladies Thank for

disconnect. now may You

Global Payments (GPN) 2 Aug 212021 Q2 Earnings call transcript