GPN - Earnings call transcript Q3 2021

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to Global Payments Third 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] As a reminder, today’s conference will be recorded. At this time, I would like to turn the conference over to your host, Senior Vice President, Investor Relations, Winnie Smith. ahead. go Please

Winnie Smith

welcome Call. and Payments Quarter Third Good to Conference XXXX morning, Global

Before actual you other conditions call in to our the like to Certain results and financial we I’d begin, economic are statements business remind that the about future cause to expectations. 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 filings. and factors, made operations filings you of some reliance caution our of

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

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

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

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

to the turn over call I’ll Now, Jeff.

Jeff Sloan

COVID-XX, model of our across emerged challenges results, quarter of ongoing track our delivered cycles. during business Thanks, despite and record third resiliency Winnie. the market from period the incremental that highlighting execution record the We

earnings our $X surpassed asset cash share revenue time billion high flow. margins adjusted first produced all-time the in with also record and of quarterly per net history, and adjusted We for free quarterly

Xth, reinforcing mode of September further four of just accelerated to the coming a growth the this has by provided investor And out our the digitization on competition. short pandemic we of time of strategy. that pillars ago at conference of our across differentiated points wisdom drive business the approach our trend detailed proof As quarter toward our benefited

we with CIBC prowess payments worldwide of Software-as-a-Service as both, relationships extended unmatched First, a with or long-standing reflection and top technology as CITI a company our SaaS quartile expertise.

This at our for card key partnerships More eight furthered one with decade. largest of into the durable well successful this pillar new in most customers another institutions of to moment. a is our and with speak of the are strategy of with some our sophisticated years. scale. CITI, relationship complex Starting this globally commercial BXB our to remainder a today have business element to agreement we Our what delighted on highlights already competitiveness a

We’re renewed an consumer also North in issuer America with for to term. that its portfolios pleased top relationship customer both, and have debit our credit XX CIBC, spans extended a

spanning multiple the at with fintechs, to players quarter We end have of prospects XX from and As to geographies. we September, in we last our our XXXX. continue and discussed AWS embedded with also active include AWS, issuer build now X XX additional neobanks pipeline pipelines up finance in

contract. our with We letters have are recent institutions of takeaways. also competitive intent XX X have currently LOIs X which of worldwide, to of gone

traditional service us financial capabilities, collaborate excited an agreement integrate also allowing that, customers. to London-based neobank we as platform modern solutions core a as institution with AWS, XXx core cloud native together signed banking with to pieces payments announce with We’re for on to and its banking issuing and

worth offer partner Simply our selling are winning now noting to transaction previously. businesses case SaaS that have and funnel, than acquiring Issuer for combining solutions. markets we technologies at were Money issuing investor first we’re our at where our our we because the to in announced vertical In business our Stadium with September. and to also of us. conference, markets It’s lead in more for a ever use more Mercedes-Benz Virgin channels market-leading takeaway in significant Solutions we the we distinctive have competitive announce we in defensible Virgin more a put, capabilities As new terrific partnership with stream is Money delighted distribution top we optimization

successful to in-person, were combine across ability seamlessly we uniquely channels. we because and of and and payments believe highlighted, As that software, we hardware mobile our online

fan solutions. experience commerce through expect market-leading facilitate best-in-class We enablement a to

be Stadium, Mercedes-Benz with pilot to early in in and expect live we now fully We’re XXXX.

compared landscape Further, market. merchant We’re our software sophisticated relationships of this our well payments XX% and And our existing XXXX, entrants, that of including quarter. gratified with market the RFP technologies this our versus extensive that half the business and in spectrum institution with after Australia lockdowns decade. solutions to in of central in for their growth XXXX an grew software across XX% commitment us technology-enabled new nearly back chose into businesses, full education terminated payment despite revenue over in third a the canvassing a generated POS

addition spanning and In quarter business data at RBI highlight payments the had Bojangles, markets. successes results software These benefits Whataburger, also our we’re Mercedes-Benz digitization in from Wendy’s, analytics. with hardware to and and our key delivered third bookings the Stadium, accelerated and record in Subway, seeing win the Zego notable the

on as merchant grow in faster Google our of as already with in than is next examples retail omnichannel Pacific track growth XX% the and here live alongside an pandemic-induced our digitization success relationship beyond quarter, remain in-store A drive we of again merchants in of our We’ve Pacific said this one-third current This e-commerce by this notable the platform. working to growth excess levels. with business quarter. solutions and to would. accelerated we to this leading to technology of benefiting now expand digital businesses us with We quarter. of America exactly over Eats our worldwide. We Uber Asia the Our Swatch broadened drove Grow Pacific. launch another My on into few across include example including in and our And Google more relationship Asia Run Taiwan. Google additional These Asia help consumers and a launch faster dramatically and pre-COVID markets went rates additional services expanded today inventory proposition time, one long-standing to merchants Uber we multiple the with provide phase online we’re market reservations we and will, our Group solutions ordering, with value The players connecting and North e-commerce Business

over time, Virgin will target addressable markets together sophisticated companies new very the that our pleased testament globally. and term. and Mercedes-Benz additional Asia what leverages the with competitiveness. scope expand also announce America, multiyear e-commerce Pacific, CITI, partnership support future our dramatically added PayPal, of footprint extended This and Money payments We’re current to our Europe relationship have to we and technology geographies, across North today CIBC, and Stadium, one of unparalleled the it and better most its verticals cross-border for We’ve expanded first cryptocurrencies with our

later ongoing innovation As September, to benefit pay or our in BNPL buy in now, we said continue technologies. from including ecosystem, we

a billion globally. know than $XX with XX billion serving because to we It’s more that expect year million than market more it’s BNPL and than X.X issuing more for transactions virtual volume. in market this a we’ve enable anticipate decades cards We been well alone, we

mode card of scale large exposure BNPL globally enemy As issuers, unique BNPL including BNPL continues to and with fintech, is is new program card looking and and to Google, day, competition. players our offerings given from services benefit. At existing private to the and of into of of well charge grow, physical unmatched and including cash nontraditional worldwide include AWS and digitization, neobanks, our sale positioned BNPL, Examples the unique the many initiatives, enablement the the with is footprint added we’re issuers, at network functionality our further and in start-ups believe just we the of and the traditional virtual of one our virtual end our ecosystem. collaborations issuance, markets point or course, management, commerce presence and label check, acceptance with through expand

ability the rates been of markets technology our sustainably leadership. indicative pandemic growth expand has of relative to to our our Our throughout

of This exception with no relative card the quarter to points global by credit reported was outperformance the our trends week. basis merchant businesses delivering last XXX acquiring networks

report share we September. announced that record we Our investor our to successfully market consistent of I’m October MineralTree something the BXB acquisition closed our having formal is in at conference. gains entry of during our delighted into in also track after have the pandemic highlighted

MineralTree’s of most our our business underpenetrated in suite and post elements As payments. intend digitized the TSYS to then, scale our to in in serves XXXX. have of solutions of expands offering we one rapidly. the highlighted BXB and the opportunity And largest addition software We the of we further merger with set our payable product and markets enhance many BXB

third our addition payroll in MineralTree a in the segment locations BXC disbursement a for in included using notable WeatherTech of we quarter. pandemic. new well since in acceptance. Business growth increase tip Consumer the business XXXX BXB solution compared other of as the and achievements XX% third a BXB number In several extension with had from and quarter partnership with ten-fold solutions our our to to customer Near as of for the commercial and our These CITI, the relationship beginning Heartland

continue with strategic of billions available to tremendous capacity. transactions have We to conduct firepower

of the with this consistent course, faster during have $X.X the invested already year, Of strategic focus, last emphasis is on growth in geographies. billion including we a pandemic, acquisitions our our over on top

the distribution one closed scale our very addition Bankia’s POS to get Erste software are the technologies nearly Europe. pleased thesis. in with recently another our majority of to acquiring investments our and our we last business our also has venture, to the PayOne have enabling long-standing XX of And over market. through of over market-leading that full our been despite remains furtherance Paul? acquisition the billion already in of last technology months, to most made together returned attractive bring which acquiring of now our to assets we’ve distinctive enablement and pipeline joint year. us partners last assets, CaixaBank at Worldline’s markets closed in end, month, our $X the presence we’ve To And attractive at deepening merchant we In acquisition shareholders Austrian

Paul Todd

Thanks, Jeff.

expectations, from performance COVID-XX of during variant the XXXX headwinds Our financial period. incremental Delta third the the exceeded quarter in our and despite

net The prior we was basis-point revenue a improvement Specifically, third XX% earnings record record adjusted basis-point to prior from margin net our operating improvement the delivered segment. XX% XX% a from representing the quarter, just an for was quarter growth for Adjusted Merchant of of adjusted XXX compared of and the quarterly look to Solutions XXX XXXX. achieved by to improvement adjusted a year the the and relative improvement the year prior compared to result per record XXXX. a billion, to growth quarterly net the XX.X%, over XX% revenue XXXX. Taking $X compared period a and year same both third a XX% increase at XXXX. share $X.XX, for and compared billion prior $X.XX of closer performance year

that continued we international XX% businesses led U.S. including net strength This and pleased our XXXX trends growth improving while by and and quarter XX% also Spain, China. revenue markets, are We Central third Greater benefited the adjusted the XXXX, Europe in compared generated globally respectively. from of in to also acquiring was

consistent technology-enabled enablement growth suite Payments vertically our see of our portfolio, fluent solutions to vertical commerce business, on dozens Integrated of deliver markets. across we Focusing a in we continue as Global

through at including now and integrated at businesses, our conference, As have COVID-XX absent we have number otherwise a levels them the right business grown to our that achieve, the would downturn. we are of highlighted investor expected

we and e-commerce this solutions Our seamlessly unique year-on-year, in basis. omnichannel our for from our physical global virtual and customers XX% worlds on growth blend again as excess continue a create to once frictionless worldwide the of ability benefit to and delivered quarter, experiences

take more as the markets. software that the overall in impacted delivered own begins strong we U.S., in to sequential vertical businesses our of some root recovery for improvement portfolio pleased are the As the

by Given margin adjusted we the the impacted seen XX.X% underlying points We throughout most delivered in period the trends remain in we including operating confident portfolio to XXXX related our COVID-XX positive a basis the this quarter, in realization business and this of of we from XXX Solutions increase continue cost to the on the from of booking to have Merchant synergies are of the recovery. and the an pandemic, as merger. path an that same benefit segment, strength mix businesses

Solutions. Issuer to Moving

million double-digit file, non-volume-based was our Output on $XXX slightly accounts recovery of delivered have as well by operating to the third in in as while adjusted up pleased year. again during adjusted period transaction in growth single quarter are net XXXX. digits margins driven were improvement performance increased low We X% volumes quarter. continued the the mid from business of revenue, This a growth including revenue from prior this Issuer Services the XX.X% in

recall, of focus basis of points third over As XXX Issuer the on by achieved XXXX, you quarter margin our driving in may XXXX efficiencies the business. expansion Solutions fueled in

We are pleased performance. growing to opportunities that collaboration pipeline, with AWS during extensions strong including also long-term well signed our the team in continues list our for quarter five issuer future and our we contract bode of the have

at during of we strategic operational adjusted third on our benefits growth to and Business Solutions business, of the and higher efforts more year after this Finally, adjusted quarter. and with stimulus greater net selling streamline drive at We the and quarter basis a representing million, track are with the third target adjusted Adjusting quarter revenue our of Consumer we and with XX.X% delivered earned pleased clients wage and roughly segment the in costs continue outstanding XXXX efficiencies new XXX reported proof we a point for cash launched early that our generated flow. began for earnings the the net the during than PayOne third of closed and approximately The vertical on as we we also million into that quarter access further last across Services MineralTree, X% points $XXX Merchant adjusted consistent with result our with the as period. we delivered operating to our are $XXX accelerating solution during announced Consumer on direct expenditures our in existing in markets progress a out growth strategy now invested our acquisitions From basis a for of share growth businesses unemployment flow the prior Further, Adjusted we assets We’ve XXX% to our line trends our to Business BXB our of last and margin coming million to digital and spend. making quarter, during pandemic. performance this $XXX Austrian the roughly year, Bankia’s to our positions four-pillared volumes AWS convert well range expectations. Worldline’s remain while successfully partnership with quarter, line capital expanding with cash consistent our quarter. for Solutions capitalize was on standpoint, Business of in free gain was serves net us targeted expectations. the revenue

to these immaterial from to be in contribution the expect acquisitions We fourth net adjusted quarter. the revenue

cash our and million. ended through repurchase pleased of with this of after Bankia to quarter are $XXX approximately million roughly returned of activity We funding acquisition. have We the to $X.X of our billion X.X also for the approximately period the shareholders liquidity repurchase shares

with basis, in we lower over Our X.X we for prior and raising by XX% to was reflecting roughly XX% trends in now the times the debt $X.XX guidance growth revenue are net remain quarter. to leverage the XXXX. billion the of be of net seeing end to encouraged $X.XX a adjusted business, of consistent range We a on billion, our position are

of rates incremental anticipating bottom impact the and since variant adding $XX an to the Delta the We report from of headwind absorbing COVID-XX. foreign million of the exchange are range last despite our

basis points our up of closed levels, announced continue also XXXX expansion to of adjusted acquisitions. operating compared the excluding and already expect We margin to to XXX impact

net performance, we around now of headwind the expect operating be for the for XXXX. and adjusted to to expansion year. we Merchant XX% points to to basis a those continue discussed, margin in result previously adjusted expect transactions growth As margin we At segment XXX our expect around level, revenue Solutions

our range Business the We mid also to our deliver range and to full the to segment continue expect in high for single-digit to to in mid-single-digit low the business year. Issuer and be for Consumer growth

XXXX, XXXX items. relatively relative it lower adjusted year. Putting we to Moving all will last still interest tax rate slightly anticipate consistent be to expense We to in with while non-operating be net expect together, our the to adjusted $X.XX, $X.XX for from up XX% growth per we year share to earnings $X.XX XXXX, now of to reflecting is previously. the be range XX% full which to $X.XX expect of in over

headwind outlook year Our the environment from worldwide balance macro remains assumes the includes an over incremental stable the now and of currency.

at capitalize exposure on acceleration TAMs, in record X our raise including over In next M&A, our share I’ll XX% And in with disruptive investor our over expect track we per shift, to cycle guidance pleased unique of to mix to now five conference. digitizing Finally, adjusted Jeff. a that strategies payments, back that the turn expanding three particular, of years our provided ongoing to BXB basis. we our our to confidence range us to XX% on earnings the that, technology-enabled September call and the the the continue growth are compounded with

Jeff Sloan

Paul. Thanks,

has said Our of over little from reaffirmed pandemic the these By our the strategy and underlying quarters wisdom been Company in on we three our started we now of next eight business a digitization years September. running target channels the ago. our since enablement, the approach, over accelerating cycle, has trends centered as technology we to the

the and software substantial Our interrelated of worldwide. e-commerce of are third growth markets in legs leading reinforces The most success. delivered for and to of are the opportunities the and of of into our franchise a best cycle the formal examples attractive that presence for BXB their best and us entry evidence our years with our including expressions in stool, in We and incremental many just most market are confidence and record of a once-in-a-century pandemic. our provide number a in strategies in we strategies and September unmatched quarter These existing primacy, during the quarter raised an results the any midst on reported complementary record guidance recent year bases history the come. our today

we see view why Judge exit can Winnie? off you the think full. we for I it. than as glass better yourself. entered We pandemic the

Winnie Smith

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

Operator

Morgan. from comes JP question first Your Instructions] Tien-Tsin Huang of [Operator

Tien-Tsin Huang

Good Hey. with to all. on I ask side. morning, the first Good wanted everyone. issuing to connect you

a did side it I’m announce just picking they and is more bunch issuers? on AWS it any of front? you. you also issuers, So, in like up new traditional AWS renewal modern look like? Are renewals novo? here. prospects pricing the on the de change looks do pipeline the Thank what And curious, Is

Jeff Sloan

Jeff, Tien-Tsin, to I’ll it’s comment. ask Hey and Paul

progress So, performance the we’re AWS two in in technology we the first, in make good and very side; and second, side. year really continue business on with this pleased particular, the on on the fronts: to issuing distribution

As of existing that the to we we competitive would XX% really win landscape. any come that been up. it relates kind not change believe to of in customers, the jump has I continue say, balls there the

LOIs signed. takeaways think folks in got XX recently that six announced which are the that we’ve competitive on I side, hopper the as issuing today of we’ve before we the

our I’d in don’t that say in the view AWS with also the we before really of So, I’d collaboration second does your that question, changing. partnership that part -- as really say marketplace. also it’s sell

and certainly, we number first from last with dramatically financial said would Tien-Tsin taken met starting We of customer AWS our we’ve as large sells across we’ve FIs time, ahead a really quarter market, But based cloud quarter, the and and the was a a institution base. think resonate. public approach last our think the that And large resonates. with does expands target said, our with the ago, I year say, centric think there customers. I August. addressable feedback really in it spectrum Xx we’re we I So, on

The you and neobanks, majority vast prospects, in of investor part what of those prospects this second and fintechs conference. I was vast the said, of our page a would start-ups. the in On those on are there say majority engine

vast really prospects to a side with AWS side, looking what with Amazon particularly have certainly number XX light And we’re XXx at relationship. you FI traditional and on we around there So, say, that? and add the anything vast the the majority co-sale of of of that in I do to them. want represents now PwC the of on majority neobanks, Paul, and and start-ups, center also number the fintechs would

Paul Todd

Yes. kind I were Tien-Tsin, say, The reiterate in had the quarter. only just of the I transactional on happy how growth, We would file with account thing third strong strong is we growth growth.

of of our growing kind that was So, volume-based revenue long-term growth single digits. mid in that rate right

kind very environment And as operating Jeff how that to been expect of And we’re we’ve said, so, that we years. continue. business this similar growth the fundamental with operating to has certainly for is

Tien-Tsin Huang

next ‘XX? the Just COVID incremental a in XX% headwinds, on for given follow-up see quick do just EPS the growth year, -- the still you FX and

Paul Todd

cycle formal of from the of to Yes. targeting next target EPS still We’ll targeting year. that environment the next kind with give all And got consistent was kind we’re how XX% higher Tien-Tsin, of Day start into it come of long-term that Obviously, we time. guide range. the guidance plans. relates that at back and But end that do the range our we’ve to of year be as that target. to at finalizing we’ll XX% work matter, this at for Investor is assess XX% a that to higher talked XX% our to of about obviously, the growth at that

Operator

next Deutsche Keane Bank. from Bryan of Your question comes

Bryan Keane

or -- some that of did And talk Asia, Jeff, Is -- incremental when the is mostly up? show challenges that that in in continue COVID-XX, that sorry? you in October? I’m where from about Europe did

Unidentified Company Representative

in that. it’s I’ll mind, Kevin. on don’t Bryan, Hey you [Ph] jump If

in think shows business. up, I of obviously surprisingly, merchant it not most the

it in think I few we saw places. So, a

First, a little bit in the U.S.

the impacted did quarter. trends out verticals, to would with Asia trend variant financial the quarter. some in better and which what like good that had from of And They’ve not grapple see obviously, as the gotten standpoint, to specifically, say month third say, the of in Pacific, more seeing with Pacific COVID, saw we’ve than Europe Asia but we in a more. during I kind the had in shutdowns third we a UK, slightly from think, in in third and revenue a Australia it quarter September, to better a I the more most from number we standpoint. we the a struggling was we’re saw Asia predominantly little But, we overall, that saw in bit certainly very absorbed In U.S., of than Delta we October, in I started a October Pacific. coming August. certain quarter back the we’re now and of saw probably come even Markets was Delta withstanding would variant.

behind the trends October quarter. Delta look and is much third the the impact of being to largely third quarter. the than really So, I favorable, isolated continue And slightly what saw in think to better us we

Bryan Keane

slower, Got And about in how thinking ACTIVE, bit then, in rebound helpful. it, a look gaming, the of trends businesses like that the those businesses? been what education, does little the about had and some

Paul Todd

Yes.

did recovery because that overall, XXXX relative business vertical to to we before in market the down they’re you that K-X direction. QX, say is the saw if QX XXXX both, to road I the vertical go, at of levels to ACTIVE to that But, think, fair a see relative we basis for markets still of pre-pandemic. results saw XXX be the in some there’s improvement get sequential continue it and points we’re that markets you the highlighted. to improvement largely strong to performance still on trending But overall, think certainly, look market back from time I in right the those levels. business. vertical sequential and to about We

at enterprise of the grown to giving look food from results was are But, market very throughout turn of we highlight, fourth which to the business our the all all recovery of us XXXX education in course you revenue it good the quarter, quarter expecting we overall. XXXX to as overall, slightly the and versus strong across into XXXX and the positive again still with nicely in continue beverage kind continue see vertical a the course, If our we standpoint relative heading business of third down of third recurring which it momentum quarter. path in would well. of QSR, as business, produced AdvancedMD, I higher have strong trends the business very and down pandemic

Operator

Barclays. Your from next question Ramsey comes El-Assal,

Ramsey El-Assal

wanted where be stock strategy? and deals, is kind pivoting I that those share is past, large it potentially part the you type helpful. and repurchases. at M&A is is guess, would second to of between allocation of color around transformative ask, it the of to about trading if I topics or this Any M&A maybe capital dialing to sort many point balance deals smaller up given the Jeff, a is from valuation perspective, the

Jeff Sloan

Thanks, Yes. Ramsey.

capital what of as on should being XX months we’re a the So, at of indicator where allocation, focused. you last we’ve look think done I good in really kind

remarks, invested I we’ve $X we did $X.X XX% the shareholders also billion think primarily XX the is prepared technologies. our said to which in of last billion last M&A, months. in while around we in So, SaaS-based in that during as But, returning XX months, capital nearly cloud our

Paul, view, the allocation really that’s and a don’t think, the described So, I think I’d of -- repurchases. say, don’t point changed. think I that’s I on from really capital math

would continue. and two been essentially what doing we’ve the expect balance think I between to that So, is I

On most last the been we consistent the M&A think I that’s year. look, over thesis things at look side, that strategic fit our

BXB that at that announcement. look look at in now we We things the obviously things are So, MineralTree post space. in space the software are the

well that, our certainly e-com the time As we’re first at our dilutive XX we’re in of both looking one what September, That said, new and annual was to as we in our in geographies, as month, guide. at, it and deals, absorbing looking numbers expanded like. MineralTree, we’re probably cycle last actually has as

changed, don’t I Ramsey. think So, that’s

And a of opportunities. pipeline the said remarks, today, of our think our full to that in closure announced we I fact suite of we’ve I notwithstanding deals pipeline the remain full. bunch got my prepared the continues

Ramsey El-Assal

two-year for if about another sort relationship, the evolved little it piece. Could PayPal bit follow-up maybe the elaborate A crypto Okay. on bolt I one how just over on a you me. of And talk also can correctly. there. U.S. And understanding global and time? call stack want of a your you sequential two-year acceleration kind the business? I to that make in there of Could sure just kind out just I’m the merchant of CAGR

Jeff Sloan

Yes.

ask to take I’ll Paul on your last Well, comment and or piece. Cameron PayPal Okay.

we’re the is PayPal extension expansion pleased This as really for announcement multiyear with term. well a So, today. as

pleased with get comment. before the that. differences crypto say, would I So, really there’s to I a we’re few

adding relationship. The first thing as I’d additional of part say is, we’re geographies the

we’re the where together to adding with which asked is vertical market jointly markets, go an PayPal, around about additional you expansion. crypto. also third, is second, And we can The obviously, what

crypto pieces, is really Now, two Ramsey.

crypto at the digital And also purchase especially crypto like in. coin and and have purposes, a first is The you’re you’re on related but for America use card button at acceptance hand pay anywhere buying those is the to a us a something Europe, illustrative wallet base stuff PayPal the expect if will procure second things the piece these to that PayPal that helping it’s and in base buying purchases the online, is the that be at using particularly a facilitate to to we extent like as sources, you’re part PayPal. behalf card of extent of going in an something that bank that needs North crypto PayPal Bank coin that wallet world, to

especially those acceptance are hard worldwide to Those So, for a on the new on basis. side, us. do are things things

to do talk PayPal Paul, we’re doubles the that. further up extension I back it guys to pleased position a we’re say, And expansion PayPal say, be our addressable of would to in market question? that really with and very and what view you size Cameron the mean? So, you of. the about if does obviously to Our pleased part piece of our be do is and with relationship okay, this who of last want

Cameron Bready

there. in jump Ramsey, Hey Yes. Cameron. it’s I’ll

question the for well versus growth your business. what U.S. the were merchant business was, for as as XXXX globally think merchant rates I the

‘XX, we quarter, pretty was globally, merchant U.S. with second was, in something third the XXXX in the vertical the what saw think, for levels market XX% the in versus again, quarter. and excluding So that channel our I consistent range number up ‘XX, quarter

Operator

Bank Your comes from of Kupferberg question Jason next of America.

Jason Kupferberg

what I build, a saw want terms to were some in there drill to cetera? with versus in business. color just and new sales just verticals year-over-year and respect there any XXXX? software, growth bit rates wanted markets the What the and of own vertical the you’d to more little on et you of pipeline And offer specific the

Cameron Bready

to. Yes. and in Jason, I’ll things. baseline they to like that color it’s Cameron. any of just would Paul add I’ll I’ll Maybe and and with Jeff jump ask start sort

the was overall mentioned XX% levels, I versus it, up business, vertical XXXX. earlier, mid XXXX As it of down market call slightly versus QX single It’s roughly XX%, still digits.

the to as versus XXXX expect As earlier, to it we I we turn get mentioned fourth quarter. positive do

we’ve they the the quarter. AdvancedMD, So, I’ll business mid-teens that consistently and AdvancedMD, reported as more all positive vertical the of TouchNet, throughout some pandemic very trends again, start maybe the strong in growth with have third quarter. in our QSR up TouchNet, both seen.

mid-XXs versus XXXX, up business that up And was a levels. QSR X% almost Our seen then, in QSR XX%, AdvancedMD it, up relative probably is is nice that we’ve our Again, versus in XX%; almost XX%, up somewhere ballpark XXXX and rebound business. call to TouchNet’s XXXX to business levels. XX-plus-percent;

markets obviously, how are trending, where throughout those, pleased with the So, pandemic. they I’m are vertical performed

have XXXX. continue momentum to we We excellent as those to head in

Now, pandemic. continue and more K-XX course of gaming our earlier School to about be in school XXXX our and levels. talked business over the in have in obviously, the ACTIVE as below business, ACTIVE impact we we seen

We are versus more long seeing sequentially, Gaming seeing improvement for in other is to but tailed obviously was the what than businesses recovery in this going vertical flat we’re quarter markets. little XXXX. a to be road those

in it in and And meaningfully the flat quarter. to So, quite it got the was has quarter, almost again, It turn to XX% that up come levels, expect positive fourth over we versus XXXX. back well. XXXX

the and a would The XXXX. direction. into trends heavily recovery. good, the we longer continuing, in I that have are to sequential little heading overall, to verticals road say, going been impacted So, are is to that business expect more right see The have

a pause the just continues bookings recorded story in be good new very nearly I’ll AdvancedMD our for Bookings maybe my booking market booking the recurring because turn excellent saw quarter, that So, there up year-over-year. record, business. year-over-year. XX% trends and to attention trends businesses. vertical a to We that in revenues up were XX%

trends XX% on year-over-year. almost quarter bookings booking businesses. the up solutions mid-teens year-over-year despite continue SaaS were booking well. macro our up the Xenial weigh and schools up as overall And TouchNet and those to the almost positive trends business was in were had ACTIVE school year-over-year. in continuing good obviously see to ACTIVE XX% And Our

market business us overall, confidence in what bookings we from impacted for the the trends have of building a momentum a of seen obviously vertical course the more seen XXXX. the business. And lot and we’ve a improves, as of XXXX we’ve nice think we’re throughout the verticals that a in obviously this and the backlog give heading quarter, heavily perspective, tailwinds lot XXXX channel frankly, So, as macro into about of we

Jason Kupferberg

Paul, brief the On compare comp, I stimulus deceleration your how quarter, but how comment did I -- And the growth some that. growth we know see that about to X% that off under segment, a there easier made curious expectations? an I off. run in did it just you was the to know, consumer start reflected

single normalized you’re intact the So, growth the kind bit of left there, I can little how one year QX of the target today. effects stimulus hear high based a talked full on little if digits. know bit wanted the expiring. more you we about about in where But, And more quarter with on being in a year, may everything to hone you think mid land, sort about wondering thinking of you to

Paul Todd

Yes.

XQ a you’re piece exactly up. really So, were was picking us question, additional impacted unemployment What of we good yes, right. that that and insurance kind in it’s

to in the said, that high And we for to longer quarter, target single business out, for grew this to the as of mid we we’re year. that we’ve third as digits term kind in took be look you high next to If quarter. that this the expecting mid of third quarter single-digit at kind

to We’re that expecting roughly generate term in fourth that quarter that roughly kind business at to target. of level longer the

period that X% relates we that growth as past, get quarter, through in benefits yes, related some obviously the was comparison time of So dynamic rate. it resulted was and the playing unemployment, biggest that to ran that for to but roughly the stimulus third

Operator

of comes Opennheimer. Your Gabriele from next question Dominick

Dominick Gabriele

if ‘XX? your I guidance, the the you And already, you a just follow-up. the for wondering either into then, talk how I thank revenue recovery was that? assuming ‘XX levels in could -- I in that markets EPS or all XXXX of color kind that plays and actually of recovery about vertical you how versus just what have Are but

Paul Todd

Yes.

planning to talk Obviously, next kind just And is I XXXX get XXX I guide. exactly components the now as the in turn tailwind, we’ve because us. to start business as this sequential into this But, the revenue of turning point segment basis-point success we’re Cameron what on the kind starting better of a discrete again of quarters. Cameron talked the this of the XXXX. commensurate fourth we’ll kind we’re the cycle go to now the kind said even those guess, kind levels by matter. we we’re turns guide in what growth kind to with turns at and levels look growth of the several had, a slightly a I would a to to think, of kind move Cameron of And that being move about guidance quarter XXX of market we’re the kind into targeting with tailwind into of about we process quarter, fourth headwind So, to we we that bookings adding of a basis-point quarter for margin that there to as all year right And And what kind somewhere headwind of in XXX Day you we the around are of growth, headwind that it expecting of of quarters of that said in key tailwind a last more our revenue is at our into general, kind insight levels is kind off our that as as said kind starting into of seeing, as year. or for tailwind. several XXX once said, we’ve over we’re relates next targeting and at at as for Investor growth vertical essentially XXXX back the

Dominick Gabriele

the focused very given guys. margin great of Solutions distribution look margin on the fourth as Thank expansion about the across color the in much, Really we we how is kind you’re of all Excellent. that you opportunities if should what you segments, about of quarter, all in on? see implied And the ahead then, your think this. your growth distribution Merchant segment path think and the for expansion you

Paul Todd

Yes.

I talk is off big quarter, what saw you as with very the is as in kind us year year of it’s the So, which company kind kind issuing that biggest margin distribution, mean margin Solutions about we business gains our in this this merchant margin saw specifically that of third year. year, driver consistent of a our a last and Consumer the Business and for we coming and

we the of so, margin into next a of And things balanced at as regard. It’s the of that move of become more more year, Day, kind into kind in range. segments normalized across gets And obviously, Investor deliverance kind kind year our merchant for the we kind biggest guidance margin of talked the margin obviously, of and about driver. what expect is for kind on remaining this kind expansion of ex-synergy, cycle the be. fourth expansion quarter, to of we But

Operator

of of Dave question Your comes Baird. line Koning from the next

David Koning

about -- being global disclosure good had at decent XXX%. about revenue percent XX and MasterCard We XXX Visa gave XXX. You think of at MasterCard the processing I volumes,

close a to it’s below. So, issue for bit share. really little why it’s hot it’s that. know button losing a I you’re don’t think I

up back relative to I catch big that. can patterns that share maybe, going SMB just you do playing think verticals and the of confirm And those B, to just is A, as it’s Like of keeps some like you out? SMB kind gaining But box? the how see exposure.

Jeff Sloan

numbers. Yes. wrong are Dave, those

up XX%, the week just they or that up numbers worldwide XX%, So, respectively. last we reported X% credit Dave, XX% it’s and average and and about The Visa, were two, is XX% volume those XX%. MasterCard reported of

So, XXXX. prepared look this we what you Visa conference as again in I our how basis shows back, and have to if my which MasterCard quarter XXX investor it compare we remarks, relative the this calculation to. Dave by at a on points and actually do average we Dave, the go we said of chart in September, exceeded And

So, point right view. the comparison from our that’s

David Koning

just Got credit you. at looking looking combined. the instead I at of… and just I was market debit was Okay. total

Jeff Sloan

Yes.

You business got because to mostly we a credit look at is primarily worldwide business. -- our look credit at

favorably very the it. and number XXX today the pandemic. on And start clear So highest again, September, on at the calculation, conference page, the relative of basis think left-hand do back that we Dave, how we’re if the about from side look do of second our see investor we to it’s you points the you pretty page how I and will compares that

comparison. our So, really point debit-centric business. don’t the view, We have very that’s a of from

David Koning

And how constant we currency? you. second No, really helpful. can was I that’s just guess, one, big just the Zego organic in Got QX Thanks. so get

Paul Todd

Yes.

impact. time the $XXX basis of million at annualized talked had we Dave, revenue on being Zego an of So, about

in at a it’s quarterly And roughly $XX million basis, or the half $XX about so, year, million. it’s on

Operator

comes Williams from question next Your Trevor of Jefferies.

Trevor Williams

just was I merchant issuer? XQ, in what’s parts two from improvement in least just look there’s year. be XX% I’ll at embedded Would any parse upfront. merchant you and It and the to like real wondering trying then, both, ask this into the for the quarter FX from in full to And for impact levels, out QX. able back implied versus to get just doesn’t XXXX to me

the and markets the vertical like the trends better flat rest a sounds year. maybe It puts through of better there. to understand and October bit tougher, of holding So, little takes kind bit a sequentially, of kind then FX just trying just

merchant? So, on just XQ, takes for puts the embedded what and to help there have any you of Thanks. relative kind

Paul Todd

Yes.

of to issuer that’s about at commentary level, benefit the basis look is relative the dramatic And about the to kind anything XXX of out if FX about impact XQ. on of on half more you to And to XQ, I XQ, relates roughly as think total to XQ company rough points and So, is if the merchant a the us wouldn’t our it we’re before in well. you kind as zone call at kind expecting currency side. kind that that our expectations, at much which of look in way relative

quarter, relative and where in where of end in given of since last see are kind where quarter of to kind to in third kind saw what’s and fourth happened quarter versus And in last the of rates the now. are, headwind expecting kind pound our fourth there. euro incremental the quarter to of what and of expecting So, expectations what which the quarter is see we’re we of the we driven kind were the by right primarily

Jeff Sloan

‘XX. the growth guide And I of merchant on second it’s the ‘XX, terms fourth acceleration actually the versus revenue for in versus quarter your say, implied then, would question part in of

say it’s to do improving. to comment? actually stable. It’s you Paul, correct not So, want

Paul Todd

Yes.

‘XX, firstly the yes, we of is over So, XXX we’re versus kind what quarter. of in ‘XX saw acceleration expecting in than fourth basis quarter points the third

the be kind seeing points where fourth basis merchant expect on expecting that land for we as we’re third quarter, XXX of to quarter to But, the an compared of -- for quarter we’re kind if the to of for we’re So, at to acceleration of year ‘XX actually segment. merchant. to north said, fourth overall you we ‘XX, compare roughly

Trevor Williams

Thank And would how relative a to looked Any comment Just if you. in I into quick follow-up. there just on any October trends could just great. September? in color sneak merchant be

Paul Todd

trends Yes. And I is October little a we’re seeing just improving bit think, Cameron September. slightly referenced versus maybe in earlier

pleased starting with very dynamic, what environment very obviously, so we’re far, seen seen so remains what we’ve we’ve the this pleased we’re with And far. but quarter. So,

Cameron Bready

sequential saw consistent improvement QX versus reported September just it’s October what in the week networks what Trevor, as It’s I would far and particular. with And that a Yes. add. pretty from in we last as our Cameron. you in saw

Operator

Vasu Your of Govil next from KBW. question comes

Vasu Govil

I to Just I issuer this year. the the ask business headwind business. know commercial a the was about wanted piece of

about next you’re recovery And the of to Sort in thinking of a leading indicators point business? are any support you this year? recovery at that piece seeing for how the case into

Paul Todd

Yes.

So, side begun commercial on to year. the we this have see recovery

into those kind better And of commercial are given than we kind next And been acceleration to further year. trends, slightly expecting. of expecting of see so, have things we were

announced As commercial on earlier, obviously which a Jeff renewal pleased we’re for have to renewal, us the important side. commented very the was CITI very

be saw kind as get both, trending growth the a quarter there, still we’re of we yes, business, the would looking that that we’re and obviously, where in to pre-COVID to So third direction. levels in matter, that back

And yes, that tailwind for a so, us turn will on continued a go-forward basis. into

Vasu Govil

quickly, into some for completely if may, quantify quarter? Got you up us also timing MineralTree know it. Thank the to the guys round wins you. year? sort said And have expecting And upfront. it is impact, if you of is numbers immaterial dilution, I ascend it the the you fourth in could or dilutive of could Does I of you’re remind the next new if coming that

Paul Todd

Yes.

to in dilutive. acquisitions. because, of it, it fourth said, basis-point to kind XX all of as the call a the impactful in to was impact acquisitions. Obviously, the commented quarter the prepared we’ve as of So, relates And a of all those overall the margin on I’ll couple the of of MineralTree Maybe things. is the we take Jeff most the is got, there roughly kind headwind related and really kind MineralTree margin it remarks the

to see first in fourth way as back of that’s And So, side. to the relates part kind the about to the to we’re expecting dilution that question. on margin it the particularly go of quarter, the of think kind the

Jeff Sloan

think… I

Paul Todd

side, that’s our beyond. about that next later the XXXX for talking more of XXXX, we’re of the at comes the there. and late that On given -- than yes, primarily XXXX bit kind looking little most a we’re a issuer conversion primarily impact but early year, wins pipeline, of in There’s

Operator

Shirvaikar Citi. at Ashwin comes question next from Your

Ashwin Shirvaikar

had business the I’m that I between as just quarters? of So, you you piece over the steadily next years. tech-enabled XX of seasonality made kind thinking changed year. of was higher months the you in your acquisitions the Are to one into various head we in that you’ve as last questions beginning setup think of see the seen

Paul Todd

No.

as business obviously, then quarter, certain now that’s And now way kind in fourth we the there’s I quarter as has with the holiday has specifically of on and call standpoint quarter. is the been anything merchant of kind different just that a and of first quarter obviously go of typically, way plays Ashwin, that of lesser an in there. dramatically that relates with segment, from call that I of a is typically seasonality all stronger is it and if kind by a of the kind our of kind quarter the to From where outlier a second bundled it of tax the parts changed is in stimulus issuer that impact kind business would typically, depending the consumer, out general, business have season on moving to third out and mean, out that spend kind that kind you that constructed, wouldn’t our pricing nothing comparisons, seasonal unique our the typically of become business. quarter quarter strongest relates fourth into business, segment, has there. our and and I how say perspective, and lesser that. seasonal from

the a changed segment think that’s wouldn’t ways but on call So, of the I level, at it yes, those kind the side, level. at consolidated out about to anything seasonality unique are

Ashwin Shirvaikar

value-add up. of rates be software as some and the attach time the to of HR, various cross-sold rates whether do. you examples add-on of that of think sort incremental about guys and again, services, types you software progress? different it maybe and of attach Can talk the as partners work, payments things sort you both owned the or then, about attendance, And we for percent tech-enabled goes of, maybe side, Could sticking talk

Paul Todd

Yes.

of about very I’ll just remind Cameron. this you, I the spent this on on in topic. conference it’s jump lot I’ll a on investor speaking that. Ashwin, time

to or the their And about more we into really If you provide our a obviously to with finding verticals from merchants them around partner more we’re our our our it’s them go working, obviously, think business. whether own centered And where we’re ecosystem, businesses our effectively software with bring them help technology capabilities, objective commerce leveraging software a working and strategy, enablement. help stack ways own market to is with more continue to run technology. to to of their opportunities drive ecosystem, obviously, top in new once you’re for solutions funnel standpoint and

at customers our acquiring clearly merchant how course, software both Google value-added partnership is well. as -- owned the services more more and partnered again, across, of then, own terms So, portfolio, businesses our in center software of our with we of capabilities to our strategy, that portfolio traditional our and our deliver

execute lot there’s continue of against in front that we opportunities obviously, to us So, a strategy. as of

quarter. business launching My and this Run Grow We are

as into we of into inventory we’re reservations expect -- market of that, the X attendance, that and to ramp year take and next part we a solution hopefully, raised and of it’s ecosystem. one From that example next online great We a in bring you from as ordering Phase Jeff a another. year, where launching can middle time highlighted,

market number attach our a as our more partnership looking now selling can, to well out as integrated payroll came relationships. and of we and that solutions, a those businesses attendance to opportunities We’re bring which to to our of of time partners a vertical few way across that again,

partners It existing more to focused to revenue how makes versus ultimately grow front, also be more ISVs divide standpoint to It more -- not I’d ourselves growing. say, from a able the the gives us larger ISV we’re winning scale integrated a because more share an we of differentiate I the one pie with the pie because larger table. splitting revenue to like those offer ISV. up solutions note new that offering as pie to to with that finally can bring that On rather on And ways opportunity always ISVs we a key also attractive. is strategy versus we’d and end offering that’s the up just slicing

which it enablement more more to merchant relations offerings our as relates merchant overall attaching think we’re that channel commerce what’s highlighted by into the to strategy So, selling through I really through is the whatever key, market. distribution driving of come

Jeff Sloan

talked over Cameron in that essentially that we what add which a data to that also $XXX about investor the through years our ability talked too, we number X in conference, ago business for add, Ashwin, business I would revenues Yes, this to we and said just a to took analytics million. is supply

So results all XX% versus is that’s that working. up And think you part in about. the I stuff you of mid-cam up that XX% at third you. it was think then the if in asked And to our Cameron And third value-added services tied volumes the I quarter, look [ph] XXXX. were quarter,

software question, of to the in virtuous above-market the at clearly we your is data top the put it’s the stats the gave say I is growth circle just release. that resulting the what on partnerships, So, the stuff in the which is Cameron in that describing to enablement commerce cross-sells, the all and of response new analytics, press funnel,

Ashwin Shirvaikar

Got again. it. Thanks

Jeff Sloan

Thank thank you morning. of us this very you for Global much. Well, Payments, behalf on all joining

Operator

this Ladies and you for today’s concludes gentlemen, event. participation. Thank your

may disconnect. now You

Global Payments (GPN) 2 Nov 212021 Q3 Earnings call transcript