Earnings call transcript Q2 2023

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to Global Payments second quarter 2023 earnings conference call.

At this time, all participants are in a listen-only mode. Later, we will open the lines for questions and answers.

If you should require assistance during this call, please press star then zero.

As a reminder, today’s conference will be recorded.

would Senior turn Winnie Vice I to conference Smith. time, host, your President, this like the to over At Investor Relations, Please go ahead.

Winnie Smith

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

the that Our release call found of www.globalpayments.com. and website slides Investor earnings accompany area Relations the can today’s be at our on

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

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

We more will ongoing of referring also financial performance. reflective our we believe several measures non-GAAP which be are to

available of X-K to filed the please this morning measure Form full the measures a our this press Relations financial on release material call Investor our our see website. For reconciliation accordance with in exhibit an the our to discussed GAAP comparable section regulations, most non-GAAP in SEC furnished of supplemental as and

and Vice and Whipple, Executive on the President CEO, Bready, call and me are Josh President Joining Cameron CFO. Senior

to over call turn Now I’ll the Cameron.

Cameron Bready

tenure first have as you as begun. is this The has months seamless, expected. morning for been today roughly am how Global a transition Payments’ Thanks for privilege to everyone. I my good with be delighted It Winnie and two has role been in CEO. addressing time the and

reported this members level, the second morning. high we team as execute at organization outstanding Our quarter continue by evidenced results and to a very

performance what by ahead uncertain of our on and Our despite globally, was driven effectiveness for the our focus expectations an strategy been execution. environment relentless has of quarter the macroeconomic ongoing

net adjusted XX% a we operating delivering the a Netspend’s share On basis, growth growth earnings and margins share X% point while the adjusted per per basis roughly from XXX revenue quarter. This of points growth headwind of reported adjusted expanding basis for XXX to divestiture consumer assets. includes earnings consolidated adjusted

growth momentum technology-enabled on by Focusing merchant again in solutions led our our delivered organic second in business, ongoing quarter we strong the businesses.

and commerce-enablement leading geographic ecomm of continues further Our software-centric to solutions overlay and diverse value-added drive our differentiates these worldwide markets in omni across our to an strategy deliver set of capabilities attractive with solutions performance, our a business. ability

heart integrated spanning the by partner in share software, businesses growth Collectively, our a vertical business. strategy contributing revenue comprise these approximately of are market point and is at ISV, sits three-legged payment merchant of business the of Software and solutions adjusted meaningful supported go-to-market and our sale merchant the a net solutions of our businesses. XX% software

refer to the more often we achieved performance. consistent integrated quarter’s In We XXXX. again growth our teams it, period quarter, strong and last XX% than this we merchants quarter integrated sales business, to or partnered this continue channel, surpassing as in of signed ISV deliver record second

share win grow our this it we market backdrop, that We and several years. ISV over continue continue despite crowded of becoming last partnered business in important to the success have more and long in gain to space. a a highlight this history is to why Against

allowing the where First, them to ISV changed has be us developed in want years. met. and we and options they streamlined the they merchants how both The a their with significantly simplified have more to partners landscape for and desire, meet last offering five

closer benefits and payments the a with the bring require and responsibility to depths of feature-rich options the of a business carry their depth them, clear of those Software on providers understanding solution. integration, to desire

Our ISV simple SDKs our and APIs allow us to expectations these deliver partners. on for

payments meet ISV three for customized partners, the and most customers. base. Second, integrated of allowing to distinctive of its models provide support and specific we ISV an both to services This a demands us more integrated unique our for the market suite where vertical products, includes model comprehensive traditional we and direct offer merchant its the

partners also offer including payments the We complexity, payfac the with payment although technologies, much requirements, leading have access full our the or model reside ISV. to operating compliance a facilitation, where of regulatory and

payment benefits of progressive burden our hybrid minimizing many payfac. we facilitation the while a option model, new a that which Additionally, as provides launched comes payment facilitation, or profac the recently of heavy

Our profac example our Payments, serving is payments. leadership of as integrated in model to Global unique another

We have a coming the quarters. in to interest have and proposition partners seen pipeline of great this in board strong seeking

based of partners. our spectrum specific full levels on Our support to our of integrated offerings us different needs solutions of customize and the provide allows

models, each service marketing offer these which higher base, growth. level center support, sell than of the all meet again management solutions, others, across breadth partner. all provide BNPL, into their partners payroll, value-added and capital profac our increases we our a payfac with commerce and revenue to software, to we merchant includes loyalty, solutions meaningfully of of our accelerates for the including and also amongst Third, and peers, customers, This opportunity a needs and human unique customized tailored call enablement

us distribution, which and marketplace products unrivalled service leadership, and needs comprehensive of rates our and sustainable to we model, at allowing in meet and capabilities, operating us achieve technology high win. suite best-in-class tailored growth the specific is margins. of why attractive We the is support partners, our differentiates Overall, of

student in education with strength business, momentum well channel our TouchNet, by housing Zego portion solutions as it its partnering relationships the this double digit being value has us the school seen technology quarter business recently we card our higher business, stack our approach space. largely and entirety about ISV how control our expanded the also Zego, exception This vertical markets monetize Scion, to is greater consistent this of with our is Turning the campus partner again that another student we and accordingly. to the think vertical and Xenial, the growth with businesses. of help led Zego with one capture management and through as a solutions. chain payments in player large great in delivered

point one partnership companies now now choice State solutions the and Focusing its Xenial on recently with Xenial the kiosk service food three for largest Atlanta Farm sale this is partner win, with service be our at players Sodexo, agreement year With Arena. management of of management our preferred signed Xenial the sale officially announced Xenial, and food we of the earlier Hawks globally this are to cloud leading with the also point live partner. in space. an of

Baltimore partnership several Our school expanding with more with school solutions business Oklahoma its a achieving a partnership district with and a had City, schools relationship large new strong years. existing extending County, quarter, for public Chicago

Additionally, Toronto, Active XX vertical new its ever the the signed space largest in the community in win and quarter. partnerships this during of City recently achieved one of

platforms, designed, restaurants look competition on built environment modern POS for solutions distinct a for to point market of the where a single vertical branded markets of software mode one owned In of and operating sale, through These operate ecosystem one custom retail. and one go is hardware feel. the and with cloud-based we with at solutions primary two software

mobile-first on Our again latest email solutions see engagement, of of continue our quarter strong POS and online expect and customer launch this this as heels product releases our the to demand generation later the including this business continue our benefit grew next POS year. of platform platform, we XX%-plus marketing, we for momentum from to and enhancements, ordering

service to these best-in-class local verticals. delight our support offerings the and solution latest capabilities in merchant with Our provides full coupled customers

the offers Importantly, horizontal in geared which with platforms specific businesses software capabilities are come More serve this. we our unlike fluid, capabilities to vertically that requirements seamlessly. of market solutions feature-rich the integrate on towards more

Our ecommerce. globally our in in revenues ecommerce, further of all ecommerce businesses, is retail omnichannel related our is in we above across by net verticals mid-teens growth overlay We to sales again Today, quarter. capabilities volume and the which the percentage our geographies. well ecommerce of overall and XX% saw business of channels, tied technology-enabled roughly second the adjusted strategy differentiated enhanced

physical growth trends strong Canada Group, the to end, our we have across to across worlds provider continue from benefit the new global parking a services our ecommerce with our that and a signed U.S, EasyPark have in ability blend virtual in and seen more of seamlessly We we supporting partnership markets are to U.K. the peers, recently To digital businesses. pleased than

providing and to terms markets the exposure of multinational our to globally complex most to strategy, corporations we our rates growth overall need some an secular attractive scale of remains footprint of global part important EasyPark. in growth Our like contributing of both the and support us

in markets Locker, as geographies, multiple quarter double [indiscernible]. Europe retailers Pacific. growth with A.S. large signed again across In our faster APAC merchant several Our central and Asia contributed saw strong digit Group, and we the specifically, Spain, growth including new in performance relationships to Watson Foot we

EVO rate and see about We opportunities expectations remain for track quarter. performance the the at expense, strategy, run aligns consistent excited and synergy revenue very million the deliver and least well its remain transaction. from as with on both combined we of our company, $XXX to a overarching much was our with synergies

our with strong file we digit large million and existing in of the trends commercial achieved mid cross-border expectations corporate highlighting travel. Traditional pipeline. accounts term from remained we $XX growth institution recovery ongoing clients benefit ongoing the targets. by issuer, sequentially quarter business, our within consistent longer conversion approximately and led increased strong the throughout growth growth our financial the as to execution Turning quarter on Transaction by our single in

have another in Lufthansa financial preferred our [indiscernible] of institutions all Miles new Deutsche our of of to RFP our with We in technology worldwide, card were institution We in solutions our and through Germany Europe. issuing with partner recently yet process, Money one XXX As in AWS, U.S. nearly largest and LOIs and the the issuer direct More example with region, leading share of winners, its Bank, achieved partnership client portfolios several assign a cloud for multi-year the delighted collaboration extensions also large with another XXX strategy will the longstanding with MasterCard, credit aligning announced which by & quarter. were this competitive to successful here U.K. go market partner. currently a eight

relationship many decade merger speaks this complex issuer Our our well the the institutions competitiveness at post trajectory to sophisticated remainder our pipeline our the providing in record of levels, most remains into confidence further globally and well into near growth future. and beyond, of with and conversion

at our scale platforms positioning have to modernize native markets remains strategy for The multi-year channels our than us more technology on we ever technologies environments, and through very market our to provide execute we more cloud business future in bright distinctive leading as distribution defensible in previously.

and unique throughout cloud with production We is in year. our join first together gen well. solution we number a to journey have AWS AWS native capabilities by with of launching next customers tracking now additional cloud leveraging our analytics Our have preparing collaboration our are client with the

Moving overarching workflow BXB market: corporates to capabilities financial to as employer BXB, and flows, funds continue our growth segments in strong across three software with leverage solutions. driven and money both the drive we automation, focus money we out and institutions within

in growth on with include integrations as the environments quarter we achieved acquisition, MineralTree ERP automating strong automation primary great attention AR their processes. seeing leading that underpinning the to and continue Starting bookings AP focus AP the see businesses are since software, solutions midmarket best segment our their its momentum. our workflow with

excited provide and a EVO create data to analytics AP/AR combine opportunity and to solution single rich also will midmarket we a have MineralTree to the We unique about proposition value software remain that now with customers.

of BXB of we achieved virtual and funds growth our have in businesses. in XX% rails making capabilities to money the expand, nearly flows, all contributing scale the business. Virtual to the and in for support one the as payments to their customers cards issuers necessary card commercial largest use out significant in payment As world, continues

enabling cards, we spend. last nearly virtual XX months, the in XX $XX billion Over roughly issued million

we payment BXB solutions our spend this seeing Additionally, shifts in more as with growth of the side are strong digital money towards on channels. and acceptance more

EVO BXB doubled than we Our quarter strategy. more as our further XXXX capabilities of align continue this with to we the our momentum and pursue go-to-market and BXB bookings existing have fourth in software-centric merchant solutions expect since

management expense provide solutions, pay we business. including employer offerings earned and and Finally, capital human our payroll in card, solutions, management solutions access, our and issuer in merchant wage our

cities This the significant quarter, signed a the living large in provider vertical. our with top Acara pay partnerships Technologies, Solutions, staffing Creative a senior company presence card the in business solutions taxi metropolitan new in with U.S., a with Mobile and

in achieved large business a States. QSR with the a Bravo Foods, Our franchisee United new partnership EWA

revenue Our software-driven mid teens and and human quarter. growth delivered teens solutions business capital net the high payroll sales growth adjusted management for second new

into software payment very as and to enrich average pursuing are with differentiate we provide clients our the in increasing we the in similar solutions We have deliver their services efficiencies in our demand. relationships value-added several years. monetize We merchant while past flows, driving integrate payment over our with our a vertical customer. and strategy our software fluency to clients, our further BXB businesses revenue We capabilities per solutions lead that

BXB in could the have be of breadth and the With strategy, capabilities term. better we we long not to capture share growth a focused positioned accelerate over technology-enabled and

call over Josh. turn With to that, the will I

Josh Whipple

Cameron. Thanks

in pleased be macroeconomic are an expectations what continues exceeded which second our our the performance environment. We uncertain quarter, financial to outstanding despite with

Specifically, we period of of year. billion, delivered from $X.X the net X% the in adjusted revenue prior increase an same

of Excluding increased adjusted impact the dispositions, net XX%. revenue

The Adjusted result to dispositions. XX.X%, of an for share same was strong XX% of per operating adjusted to increased our execution XXXX, in of businesses. points the net XX% the increase basis compared the or and $X.XX, excluding highlighting period XXX margin consistent impact across earnings quarter

by of quarter, $X.XX over the solutions achieved a the net prior or dispositions. Taking performance growth revenue the year improvement second a from look of X% merchant and segment, billion XX% impact closer excluding EVO at adjusted for

Asia consumer macro limited and to from was ongoing technology-enabled which our businesses, high in strength of performance where geographies, slowed in this the growth by benefited low month while impacting this digits inflation U.K. our markets, Canada in was GDP June. Europe, of the Spain, including offset highlighted, quarter, grew negative and has also double spending, are led partially double negatively is levels Pacific. by growth consistent Cameron factor where digit and we rates including This the the and have interest As turned growth softness in expected rising central

adjusted however, EVO points EVO; an XX.X% the operating excluding operating was of represented dispositions, delivered increased ahead segment, XXX XX basis expectations. adjusted of our of due We points. This of the of margin a to which margin acquisition decline and in the basis impact

with currency mid reflecting issuer business basis long driven X% Our $XXX constant term issuer solutions produced constant The business a adjusted currency growth of consistent this on targets. net revenue digits core in by million, quarter, grew volume-based single our also strength revenue.

approximately As our healthy sequentially Cameron continue see highlighted, traditional accounts on from file our million increased customers $XX growth with of ongoing execution pipeline. larger portfolio conversion by as benefit the account to consumer we and

managed by XXXX, center increased our enablement again which in XX%. business lower compared technology the outsourced we by to was call double Transactions This margin slower growth commercial led more offset, second and digits business. quarter pivot of card to transactions as expected, grew services less partially continued as to issuer

the continuing increase of on XX.X%, of margin operating focus our by our XXX adjusted the prior efficiencies growth an top basis fueled business. in line delivered and we year, Finally, driving points from

cash flow approximately net standpoint, the free cash flow free income cash which XX% a quarter million, is for adjusted of flow. rate From adjusted produced of $XXX an conversion we to

recognizing continue to roughly of impact of We timing research a full roughly to tax credits. change year, five to converting development cash earnings flow the target for free adjusted excluding point the adjusted XXX% and

cash flow half as a the follow from in For to the the rate conversion we trajectory of and expect to year, our free benefit seasonality we XXXX higher year. similar a second

in investment capital in capital million be XXXX, to during continue prior and $XXX with outlook. $XXX consistent quarter the invested our million expenditures to We approximately expect

shares million million. of $XXX our we for roughly also quarter, repurchased X This approximately

debt we approximately During $XXX the million. reduced outstanding by quarter,

Our balance sheet remains healthy.

realized billion the with available the $X.X term our from a peak to over to XXXX end maintaining by liquidity the position have ratings. currently, upon leverage roughly We and Xs of longer on we We closing of in transaction. level consistent the EVO leverage our is remain return while of reduction targets times investment-grade track a low existing X.X levels

commercial end which the of As paper capital a overall supported outstanding, and optimize revolving quarter, up program of January commercial credit last our further allows in by cost us March, of of structure billion our is quarter, we and $X.X established agreement the highlighting $X to billion of paper we $X highlighted our the billion we At the credit quality second attractiveness borrowing. had end Payments. at from and reduce Global

X.X%. with debt fixed XX% approximately is of indebtedness of cost average total Our weighted a

We business we of are range billion reflecting growth of end our net our to $XX following to reported adjusted billion, X% the from X% pleased low performance, XXXX. outlook of financial for the represents half the now is are over how revenue $X.XXX at million our We positioned increase with year. expect This an raising to $X.XXX range. first and

to expect rates foreign be the to for continue We currency neutral roughly full year.

expand forecast we to Moving adjusted margins, for continue margin to operating by to XXX points annual XXXX. basis up to

XX this by a expansion of towards the enablement points from benefits prior our shift and the mix full ongoing to realization. XX partially by As our synergy driven margin lower business above EVO for is cycle of offset our guidance technology of basis divestiture reminder, annually, profile to margin NetSpend, to

To XX%. This merchant of segment net level, growth report adjusted of is anticipate for approximately full at XX% segment outlook an now provide we from XX% color year. to increase revenue our our the to the prior

this our We lower Payments in by EVO for consistent adjusted absorption modest its with with prior expect driven guidance. reported of decline year margin operating merchant business a the the profile, margin

ramp. contraction are that we by fourth expansion in margin followed the quarter will slight forecasting the margin be synergies quarter third Specifically, as in

completion first synergy plan about have and we the enthusiastic available. the substantial our made of XXX successful integration, day remain opportunities EVO the Regarding including progress

year the contracts. track cost outlined this public of elimination and previously, we Further, plans in of costs, harmonization approximately company that million the target to of we I that to to we Specifically, rationalization, years committed also driven vendor realize achieve have the primarily announcement. report $XX time expense synergies executable are by to within the duplicative on we that synergy of at least am two pleased run facility million $XXX rate the at the

with expense momentum towards it’s focused we the to combined ensuring to sizing expand the in and that business future. As an expectations positioned and well remain continue we that maintain synergy always, in on grow eye

have discussed least of to we quarter, synergies million or we revenue existing growth as $XX million revenue Additionally, add of business. or to although point two on a $XX the we last longer at approximately can believe a rate continue run EVO’s tail, top of synergies from revenue base,

to compared to to Moving margin NetSpend’s expand This in to the double for while as X% year reflects benefit we net We MineralTree BXB low expect by businesses growth leverage operating our deliver anticipate business grow of to issuer XX outlook natural X% growth roughly the up operating X% basis in points, business. the consistent revenue we for the to issuer core issuer full continue adjusted and we solutions, range the expect adjusted to digits. with outlook, to from prior XXXX.

to to tax to to our our expect guidance. in be Turning for roughly range non-operating XX% XX.X%, adjusted we the prior rate effective expense $XXX interest million of be a items, couple consistent with of net and

half For down the assume of continue indebtedness modeling excess used purposes, we second is in to cash to XXXX. pay

for to $XX.XX adjusted we in now reflecting earnings to per XXXX. year full $XX.XX, XX% expect of of over the it XX% growth to a range together, share all Putting be

growth XXXX. earnings Excluding is XX% to XX% dispositions, per to expected be for share adjusted

earnings forecast. our share Our a results internal second per roughly adjusted beat $X.XX to relative represent quarter

the for ongoing low the rolls globally. Our the for in guidance at year, the environment the essentially beat end macroeconomic calendar of uncertainties given raised guidance XXXX the range

stability others, you’ve Similar second in July in results. our quarter saw heard performance to our what we compared to from

in macroeconomic environment, year. over for spending our and the a While current environment accommodates macroeconomic overall of spending range the remainder resumes base our potential today trends relatively backdrop case outlook and a with consistent the guidance moderation the

call turn I’ll back to the over With Cameron. that,

Cameron Bready

Thanks Josh.

than front Global and for ever of am nearly have us. been enthusiastic the I more a about now been opportunities in at I’ve Payments I decade,

strategy, a distribution great have capabilities. presence world-class compelling team, We and and a clients, a technology-enabled with diverse global partners

As for I focused highly I step and several priorities business into our the on customers. am CEO role,

areas the on value continuing First at to us and is of opportunities our initiatives. forth and investment these the we on we impactful set for in for attractive detail in our strategy most our most these growth XXXX, the key pursue positions right investor continued September This strategy of and see business is while the in our that pillars creation. conference sharpening amplifying the one focus well

couple This innovative clients our we want to exceptional we service where is possible commerce-enablement to more as of solutions make on and seamlessly, as our every interaction, our continuing customers simply solutions our to providing met Second match. how competitors with ongoing our delight distinctive deepen do Payments be focus with to leveraging and with with with customers. need they integrate that relationships course this easy Global meeting that it cannot business that to scale with and customers while that continue our ensure starts many to and

is to our Global our relentless of on has through been of Payments results Third one maintain consistent key the market cycles. produce execution, hallmarks component a of ability which and focus to

of the markets, Global our set space. from Payments in standard competitors good separates execution in for have and our consistency I another. will the believe strongly execution We one

Last Payments’ second and Global on certainly is least, I focused culture am ensuring not none. to

an accomplish connective goals Our organization. as makes operate and culture competitors, creation the is a It us culture our and drive we further differentiate from dictates Having value will that achieve effectively. our benefit results of organization tissue world-class constituents. our all how the

at simplified our focus, have sustainable sharpened Global team journey. With forward our and our continue disciplined taking sharing going am our growth on look very exceptional bright that Payments I as business and to a delighted more am we drive Payments. execution performance. to relentless confident future We indeed The will is strategy Global now I and be forward. over clarified we investment,

Winnie?

Winnie Smith

Thanks Cameron.

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

will Operator, we go questions. to now

Operator

At you. be [Operator will instructions] time, conducting our answer we Thank session. this question and

is the question James with proceed with Please your line Our coming first of Morgan question. from Faucette Stanley.

James Faucette

very details describing just Are you in are at commentary, first incremental assuming Great, anything the more you particular thank understand macro bit all impact the little wanted the today. a that outlook or little just you can thanks much, you you’re to your through around your guidance, to why way cautious, or change environment. you and for talk or any I a and the in there seeing bit causes be you temper least macro decided commentary? to

Cameron Bready

Yes is in things, covered prepared I this Cameron. James, some and a think morning. this Good was remarks. of would say I Josh’s couple

and we me, case so here outlook what July balance are of in in--or excuse today. that’s consistent we’re environment the trends saw, think sitting a our what the our - foremost, base year very relatively tracking with QX, for macro First stable seeing I reflects

would we today, and in year, increase back propose soften based the the some commentary case. trying softening revenue our end to do with the on things reflecting today, the the we is even environment range think half of see not we’re the the end quite will of some macro consumer the EPS, that of on case back guide we’re to think of still where accommodate are and point and heard base we activity QX, year but in emphasize, today, but low both our half on some relative the softening of of not the of economic in the lower outcomes That’s that base should range spend, if guidance is heels some we slowdown modest at that. I this, frankly, our accommodate at I the that’s in

we and in similar what what I from of expecting, stable have We’re obviously reported year, think themes a back the backdrop saw in well. you’ve relatively the July we macro and consistent in as half who QX saw already, heard others with

Josh Whipple

that you and trending revenue on to those full we’re that of you ahead X% I go in was kind and EPS year cadence growth think to QX I’d James, and back range, margin from as and expansion a expansion deliver gave guide just up to that, to growth Cameron basis earnings of X% it X% our the to you track, to if which our estimates February I X% then which the points add and still color XX% XX%. growth basis mentioned, still QX, say to quarterly growth would of margin think if on call, half second perspective remember, gets we points, you to of and revenue EPS in XX%, of of X% XXX to XXX we’re

James Faucette

Thanks for that - sure. pretty compelling algorithm, for

wanted ask to a around pricing. I follow-up

on and your a Where reflect if stable? moved we especially basis, macro have about how pricing delivering. of the think Some relatively of you’re see peers value they’re remains the basically to that do your that go-forward providing, pricing you recently, more opportunities around should and the value

Cameron Bready

Yes James, it’s Cameron.

really relatively think customers. way our my time the delivering that our on solutions think tried and in we’re value is that consistent we a to perspective over reflects be pricing long period a we’ve of in I to services that

around some to longer philosophy more of large has Our peers. been by our than relative consistent of period I perhaps, think over a and pricing, time,

I certainly to on some aggressive think is six what taking in seeing the obviously we market are more competitors months last of little XX price. being a our the over environment certainly

a which few action, we With and the in, years. fintech philosophies large, pricing about players, think operating, us a pricing as more of a That probably over utilize think, than the more and more creates, served continued and I seen of think a inflationary long we’re some lot well in with terms our proceed by more industry, on forward profitability that and continue paid fairly for the we period I me to across time. I pressure just gives going and we have optimism constructive it operating it’s business, the a I of we’ve environment me, where revenue constructive we’re smaller has obviously I think as ensuring producing time of confidence delivering have and and move think, to clients, that which been we’re to in expect competitive we’re in to getting for environment to in we’re what

for but material expect the optimize our--more our business that, continuing relates from in a any in of bit to to arrows in it obviously macro little Wouldn’t provide well. a price if as probably as do quiver deviation softens, way tailwind that have would we levers the

James Faucette

that, you thank for Cameron. much Great, very

Cameron Bready

Thanks James.

Operator

Thank you.

Our Ramsey proceed the from question. Please line of question Barclays. with next your coming with is El-Assal

Ramsey El-Assal

the the in taking of comment for deeper much [indiscernible]? issuers? [indiscernible]. a think my you’re you this of how very you really thanks terms I Hi, healthy on mentioned drivers getting questions drill little Could margin morning. in you Could expansion

Cameron Bready

were to the you drivers issuer little I are associated a your relates what but Ramsey, that? margin think up expansion and bit, breaking with question

Ramsey El-Assal

right, that. sorry about exactly Yes. That’s

Cameron Bready

Yes, I’ll worries. Josh that. let in on chime no

Josh Whipple

back - our really think in issuer technology-enablement great really margin the business, more here of look expansion points XXX saw that’s basis and in QX to Ramsey, Yes, QX, strong driven if business. management. and really margin our you expense QX, We from and we shift expansion saw in

as tougher realized XXXX. high reported XX% as we the year, and the I the gets of we lap second we to expect expansion expect we that growth margins the in think QX range for the that strong the would rest be we the of comparison in half to in moderate

Ramsey El-Assal

discretionary of I’m your about business, you’re you’re [indiscernible]. some [indiscernible] you some Got non-discretionary after [indiscernible]. versus size it, customers were could wanted basically of is going talking [indiscernible] ask you signing just if markets you size [indiscernible]. resiliency thinking [indiscernible] me curious question around okay. you vertical the terms to mix merchants A versus of topics about in you’re non-discretionary [indiscernible] servicing Discretionary from follow-up how were describing

Cameron Bready

I’m in, because queue out we that you’re you hear sorry back the pick of Ramsey, we I you. that really and maybe but suggest can’t hop hop up unfortunately can’t saying. anything

Operator

you. Please question, Thank our Kupferberg question. which of Jason onto the We’ll move of is Bank with coming proceed your line with next from America.

Jason Kupferberg

you you. to Do merchant merchant. guys, QX you or will it and comment just just Thank merchant the your morning here. nice it results Can start organic growth for volume on think second revenue wanted organic then Good tell closer and up tick to XX? quarter, again, be I growth expectations what could QX? in X on was in to us

Cameron Bready

we Yes the XX% revenue, and roughly headwind includes was it’s Jason, XX%, that, did roughly a top organic in contributed aggregate not heard XX.X% the so metrics for X%, of just portfolio, contributed on the portion the volume dramatic of EVO it’s Cameron. - headwind they fuel see from so a our in volume, you’ve they It’s roughly that. good a That on a other volume, little people X%. little around but from our quarter growth to I about bit a talk in portion a contribute roughly bit but was of volume. morning, of Organic line second quarter, XX-ish, think

organic what with consistent and again, obviously pace, volume in revenue volume--organic generally business. growth is the which tracking growth like So I striving for at is generally see, similar which to something a we’re

X% XX% would to outlook in remain range. the in organic that say I half back merchant will the around

to outlook, we in our our to - on of to specific, changing confidence ability X% very quarter X% I and that were of not be were XX%. We X.XX%. have a deliver north around We this are lot

certainly I initiatives, in think end of few drift the and expectation have that we’re but our the me of low the the the the is be we be it some confidence of to there time give back would kind what for year, that for XX%, around up half to may sticking XX% to closer merchant a X% with being. business, potential X% the

Jason Kupferberg

and time you list some moving re-engage just as as to high into be on success potential the to priority Okay, that it de-levering seems activity? again understood. I opportunity BXB think M&A M&A on you well, quarter, seeing mean, to you’ve XXXX, to hear do been that on here and we would just know expect with BXB thoughts further good like spent the think about topic. MineralTree relates said I love I there there your in forward-looking with were record bookings it - so you as

Cameron Bready

I the use the in relates mix want is M&A BXB it how of strategy. to the as M&A we absolutely say to obviously a as in to about would philosophically, think I future. Jason. Generally, lever our pillars support just thanks Yes, all

what an the is is of we of pillars that. accomplish is across course opportunities we’re of really strategy, trying BXB I think important finding primary focus think the our different to it that element and augment

in help a where more to diverse attention some play different important ourselves I we perspective, to from to opportunities. in BXB is I of and quite things to to of win BXB I success, my what and do in a have us we M&A provided a build a to what market how we position different efforts as about where we’re the tool the clarity in approach successful be make to feel we’re where segment we prepared so. our provide today, going segment I our our certainly broader like want to think across three where a want think position as able BXB out to to we refined, sitting and and cut more segments and, people, bets remarks us large, means here how frankly, expect can clear getting place for to to the today BXB opportunity. market, kit thought BXB, pursue those commentary BXB it’s focus we

is and augment also, my the tailwinds so to we’re But scale merchant it’s I at find some as help markets scale continue a software mentioned it opportunities strategy in is we our continue growth that secular exposure in lever business, we our a look which utilize continuing I trying to comments, to as is to for creates, good accomplish and business, compelling think business, to obviously pursue to what well. can M&A as obviously faster

to that we’re we a leverage something us, to the year from ratio, M&A half say M&A for weighed focus alternative our to that perspective all forward. capital. to But expect we uses from attractive is, back the going return make close in obviously the it’s to an into standpoint comment and to against and of disciplined could with to comes are we and what the a get our fashion certainly do else investments of we As making be that capital sure that’s need pursue got back we back get relative to just targeted I’ll what

Jason Kupferberg

Good Cameron. Thanks stuff.

Cameron Bready

Thanks Jason.

Operator

you. Thank

the coming question question. with proceed with next of Our Wolfe Please your line Research. is Darrin Peller from

Darrin Peller

Guys, thanks.

better sorry, rate, strengths First your even similar re-highlight the which note, very now, is opportunity. of are pro volume the so give reported what I that the I on does, X% stability. XX%, point, growth across that’s that just growth to guess I’m rate, nice all, Cameron, guess providing you’re it’s that or the to see to revenue volume the seeing just clearly forma--or, industry right seeing than we’re maybe organic X% growth

so I it seeing the overall. about a seen points quarter and versus on of you’re the that versus to is think stable driving reiterate force think the the quarter like that sustainability just we’ve only year-over-year the into driving the you’re seeing you’re what July, market last industry, company you basis, volume strength that’s transact sounds of that so relative maybe

Cameron Bready

Darrin, Yes start. ahead I’ll it’s and go Cameron.

have Look, I think our market exposure. vertical the is biggest strength diversity in we portfolio of

would why the performance I volume we’re overall. that the we’ve think has that us pretty strength one a meaningfully business seen benefited from and seen That’s how I we for perspective about the make. positioned in think we’ve first as

little did travel. as bit part I The is saw exposed and with a the that for not we’re networks is of we QX, we dramatic and point to as probably not relative reason the think to much and that second others, decel not

not having for we that’s upside, didn’t remains difficult comps, The we which and headwind, little well and guys. quite has on grow really periods, the bit a now weren’t growth a at pressure we are been for asked were of and and think the same travel comps quite MasterCard same the think in to others tough, frankly of are benefit think since having comps I bit as that over those putting headwind, those Visa a I growing although these on rates rate we’re as travel strong. obviously I why

I mix, we me obviously of for diversity ongoing the the that I the think confidence business think expectations our to bit consistent to strong of the we’re in produced well have results for that it’s Again, think execution poised it’s a the we balance it’s for not on quarter, distribution, only--you little portfolios. deliver that year. know, continue I gives and of

Darrin Peller

Cameron, channel the think get message versus that When great. comments it just and channel on provided obviously about you out was the software helpful, strategy to the of your I’m it you incremental an the I a doing that’s on about Yes, to spend had intentional, curious guess is you was pretty call something, is would the during the hear you sounds think the really beginning [indiscernible]. balanced what partners partner on owned preference. assuming have strategic so it sustainable or what approach? to you and dollar a I ISV well, and forward like going prefer, you--if

Cameron Bready

to whether Darrin, Yes, I ambivalent, we I’m own. on somewhat we the to or really think it honest. as be partner quite vertical, depends frankly, whether

I to target to which think success think we needs the that us opportunity opportunity. it to us the by focused of and vertical and are expansion we’re own trying best vertical be largely that in available vertical boils It positions opportunities down model to and fundamentals and do market, what and something either is or for markets by really to partner. growth the that

owning obviously model have but continues ambivalent. like markets, runway. to an lot certain am software partner as business growth a this strategic been engine But I has think, somewhat overall vertical fantastic for We matter, of a and, in the I

You’re continue why try to and may period high rates we to choosing high to line about of our that of integrated the how and business theirs. right over in sustainable long because clear time, in very be we’re the why how - draw to important running was confident today to going I rates business than market of distinction growth that between growth why see think go of others on a a my in focus and operate integrated we’ve in we’re market, business to intentional, it’s different other seen players we’re recognize sustainable

long the bullish term model. very partner I’m on

and success at do growth the in the ambivalent best market said verticals and we to partner vertical what the to in to I a or opportunities that down own to us gives largely outset, think somewhat whether are we’re going available targeting. as we path what - As boil again, it’s I’m

Darrin Peller

Yes, guys. Thanks helpful. that’s really

Cameron Bready

Thanks Darrin.

Operator

Thank you.

Markets. Please Our next from with is Dan line proceed question Perlin of with coming your the question. Capital RBC

Dan Perlin

be moment, just I from morning. this XX% merchant’s embedded I staying are so you [indiscernible] just called It that good to on going decouple you software volume about point, obviously know, If is growth said out case, of for now which to my better just revenues how little think though hat from the to--not get than think do visibility, stability a you’d the continues growth, able that bit extent which different would was is your not services, Cameron, component, as that--you to seem the merchant wanted but forward? business over the asking, to you shouldn’t worse. Darrin faster? time includes Thanks, revenue a the belabor you of question grow that’s

Cameron Bready

Yes, I will some question. the sake think remember decoupling fair but be selling think there over a for time, I selling do just we’re slight it’s software. software of not

on growth notwithstanding which think, as software execute as that’s flows right going software. emphasis selling we’re of to drive there for payment that monetizing is and payments is in the software an heavy we business, selling the strategy. on why We’re element That’s obviously I volume our software, the strategy

my but and three portfolio, we other linked time. as should revenue to continue growth to the selling and environment the services aren’t mentioned to long it’s and, software I growth as you that. volume, directly a be it we’re flavors, volume, where to business software, selling can the that consistent more around in and trends decoupling things before, relatively going period that linked to by to large as of volume From we’re and add value-added see but vantage obviously, you software as an now over point, some relates it’s rare into payment we’re not takes see selling yes, Software monetizing flows

a it of think can confidence us, certainly of over of do performance predictability to point, me period the visibility, in gives it lot time. we and better achieve I better long the business, that around gives But sustainability a the your

Dan Perlin

if it the like compliance unique highlighted my of It little profac incremental underwriting Yes, hybrid, associated with just on are sort taking relative some model? Payments, flesh you. great. bit, out to that sure, would It you this said out, and wasn’t that you sounds you be Thank just model a that’s wouldn’t you was have, this follow-up--you you is that Can as so payfac? to you that fleshing great. risk know, Global like--I mind sounded

Cameron Bready

Yes, and question, as the being support lot cute, management and good software audits, model it’s come support seeing in profac of the kind the funding everything we’re gain the and market. they software the of options accounts of ISV that for they’re all on a sure. none experience, looking boarding pain to partner. model, a comes the the that the to capabilities pain a a a management we’re It’s about of and payment PCI, a of traction it relates model, facilitation they too of It’s none activities context facilitation business. it that have, virtual that as AML, have in of and but of back some risk on payment get really end, and risk think proud control think to with They as Not the the all relates that spend for be benefits those to that to the compliance along in company, payment of the activities. so about types with the back

support for software invest buying our leveraging They’re and on-boarding reporting, accounts underwriting own the have essentially these capability. manage cash from they etc. then we’re to doing utilizing to our their and Then have that and We’re teams, don’t us, capabilities. that charge-backs to to liabilities, customers, in that charge-back they of and don’t course provide

our as because said, of all as best model, a set infrastructure the really it’s companies as simply come a businesses, being terms to economic experience, they ISVs don’t etc., to and quite payment both also facilitation and perceive build be the end because to them, popularity required from resonating for capability, really really facilitators more it, actually advantageous we desire is payments become a them beneficial on really of a without to continue and really out think being something they said, to all company, settlement company. model on-boarding from so of Mot the that that they want are is different to achieve so think payment in gain it’s market. payment worlds. They capabilities Think it’s that pain going allows want payments I the control, the us I in that I want that for back different that grow

Dan Perlin

be going very to is Thank that you. suspect I popular. great. That’s

Operator

Thank you.

JP your Tien-tsin is Our next with coming Morgan. with of proceed question. from Huang the question Please line

Tien-tsin Huang

much. Good to so morning of all you. Thanks

that, I and models what those and said. How models side, Darrin a went just across record mentioned margin you any you On owned. that you well, how call-outs can are partner The on the the comment then liked, from integrated Cameron, standpoint, verticals as three sales, about across ambivalence between pricing through three specifically and there? you discussed, selling Thanks.

Cameron Bready

both Tien-tsin. Yes, questions, good

would of I side, vertical say the kind across On it’s the board.

I so and skewed was we’re seeing new non-discretionary we’re right overall towards is well. would our overall I portfolio account partners, seeing great non-discretionary, consumer versus verticals engagement seeing mid and rates mid think conversion lead we’re new very strength strength the I spend, spend much I we’re seeing in flow XX% our think lead good something as and so that accounts very conversion I merchant to seeing obviously of probably but skewed year-over-year just flow where of business business, strong that’s discretionary commented quarter, performance, now say the us, think up skewed we’re just in great integrated second for and into strong with towards the slightly the

it ambivalent. relates we somewhat the different that operate, models partner to probably As again we’re

go-to-market partner for accomplish their to facilitation. when times plenty what is There’s trying it they’re is etc. what is strategies, what’s of and the is in ISV they’re again, where the a the payment of want to on, requirements there situations really We’re to how of terms model demands depending accomplish, direct focused the it meet model the the on really partner to right they to and ISV right more for model objectives, market partner, of and their are plenty trying integration, go right

past result that I before, of we’ve those work models we given blends support neutral so to us, way that structure net partner rolled those works quarter model think profac where for the a this not the mentioned terms to three the each out that think across in I but somewhat tried As level overall of for in economically we’re some we we’re a merchants all, doing models. of

work, work more a we payment the of obviously, as a we to in margins the much we’re have partner, for don’t in Obviously that not business, achieve. much nearly obviously cost direct facilitation integration model the doing trying that can that reflect so so model, economics doing the need certainly and as we’re supporting business maintain, to we’re part the lot a and in

itself the accomplish As right partner. the as want to We the to appropriate long sure right as we’re partner, the structured with said I for way ambivalent. somewhat ISV it’s before, make that objectives the model is

Tien-tsin Huang

covered, all your you. so. bases have you and it about thoughtful Thank you’re sure I’m Yes,

Cameron Bready

Thanks Tien-tsin.

Operator

you. Thank

Our question Please from with next Sachs. coming is Will Goldman question. your proceed Nance with

Will Nance

about payfac versus I’d the that you appreciate taking the off I talk wondering between on was guys, on the traditional trends figure maybe the the I if the question mix business. question. integrated Hey pile talked could last model you the you in about. integrated

I and actual is like? years couple what of the concerns from one channels talk past so of is you has payfacs, towards delta longer and that trend has the maybe can the trended investors about how is that those growth large the looked the between yield term over think two

pricing Then expect models? maybe those you profac model the when to you think about relative the land the new product, two where on do to

Cameron Bready

either consistent for Yes, and to our say. good number integrated back payments question. the of model the ISVs to abandoning last would some it’s even our build term, that growth a one, seen incredibly back in theory business, integrated route, have across profac entirely. in a don’t model, I, the the Quite payfacs. portfolio difficult to to in direct and couple payfac all ISVs just our subscribe the over infrastructure generally a have of say years, a it’s went frankly, or necessarily we long are towards we’ve approach now cases portfolio, going direct to come that, become support determined payfac I payfac

term long three across balanced have we’ll those is relatively view My channels. a portfolio

the model is appropriate the I’m not payment that Tien-tsin’s some As growth not suggest work when I we to but I ISV, to and continue across to within trying that’s expect it’s not integrated a three ISVs, an not going operating said it’s there’s in have bullet plenty silver models different to good question, channel. - facilitation every for response see our so for model the right of times good to solution

I for for in think the payfac and merit that have direct we mentioned be and model around I of have we have between somewhat the that profac to market, support in because somewhat are the I said costs and between is what integrated model, nicely as economics in before, the going a before, to what a also partner. lot we partner worlds, think of best it has resonating is I very both the the delivers as and

point, vantage the from in my those where again From coming ambivalent is channels. I’m somewhat across growth

longer of no still and relationships able a continuing our at good across time. growth for as see profac on attractive so the grow side are been we’ve period think business, business. of over that to payfac to think the integration well you’ll have margins I I I direct But execute payfac qualms in

Will Nance

another it, Got this number maybe out me XX% in stuck growth quarter. really the helpful. to that Then that’s POS was

as another how investors XX%, of competitive do past cite coming ISVs. over and couple Where maybe growth I the maybe driving at area what the commonly from years? from, think vertical-specific that trended think being being is that’s very you that and that risk is

Cameron Bready

retail with a me platform you fluency, that let need market environment that we competition of in vertical all of restaurant is moat so run POS platform software have have and a space. that at start well to business, are we Yes, the or with go retail vertical specific by a run we a to point in so our we ISV with, the a our restaurant saying sale,

are we that across point owns own not provider vertically We’re a sale restaurant through against competing horizontal a software deliver we our of system ISV that ISVs, and solution vertically specific the retail. specific

that seeing business. I seeing that’s really the why in think we’re that we’re growth

have fluent. We that is cloud-based software vertically

I are they’re is rolling this to our sale we later to platforms and our run smaller feature grow that environments that think remarks, prepared going an be sleek, we catalyst to the time. mentioned forward operations, we’re we I functionality incremental need modern, of version out of retail well our in next bring think all my in they’re that to and designed, business and year, as restaurants generation continue as scale point move their

multiple our point sale of channels thing nice is sale selling The about business now our have distribution point platforms. we of

know, We’re and been consistent number that pretty has XX% plus, over probably you good eight seeing the - growth last quarters.

to think that continue merchant will a a dollar growth able continues time. to business, period million we’re for achieve business do of that in I’ll a growth we overall the or to business, be relates catalyst revenue relatively hundred base be, but the readily longer it off couple admit it As it’s small to is - over business today a in

Will Nance

today. Yes, it. appreciate I Got looks questions the you taking it trends. very strong

Cameron Bready

Absolutely, thank you.

Operator

you. Thank

final Please Bank. question. Deutsche will come question the proceed Keane with line from Bryan of your Our with

Bryan Keane

Hi guys, good solid on morning, congratulations and the results.

I today. it’s excited Maybe several EVO to and about you under the even can wanted you close, suggesting start; anticipated? off be for you’ve it about comments what more to you exciting about might at company the a acquisition quarter that belt even had your your ask talk more first Cameron, are than you’re it’s now months, full good but

Cameron Bready

opportunity, in his with been we’ve about to ask businesses that with and the well as not and time leverage am excited better with to think solutions. markets, amplify that perspectives in, I in at markets Payments’ really to opportunity of I’ll Yes, able operates transaction, EVO and in has markets more largely spend some businesses, accelerate those to capabilities those growth done incremental bring what capability, I’m doing be to just the spend Global those more the more maybe the we’re bullish the but I to overlapping drive more individual time much well. the because Josh been able start, where things to chime to product, we’ve better better I’ll time where as of Bryan, the they’re able in EVO and

examples - market that A not EVO’s think of stretch are were and ecomm of few really large, the I imagination. by ecomm capabilities leading any by

augment for is a to excellent other catalyst markets. capabilities merchants, lot sale solutions software have bring attractive didn’t the product bringing their are point think to bear provided our loyalty just data so like and are they these other growth, to Greece, and these markets, opportunities bringing they into our more growth I to individual growth. analytic Poland and of strong some in into I capabilities those markets going opportunity platforms these an solutions bringing is some our of markets, that sale think a on of of opportunities into markets and could markets, within ecomm very portfolio. be large really immense payment EVO Point and by particularly for of

announced on bring Global than year capability I think that by markets transaction, I the ago to envisioned to greater we opportunity the the today. and a product time at large, is Payments going and EVO

platform I’m and some markets, customers to larger EVO historically. into excited to other expand us some do and for the say customers to tailwind obviously, leveraging think for nice is acquiring embedded and been able these has in as them around the to relationships EVO in of capabilities ability markets particularly would of of that about ability our than a the well, UCP deliver again able discrete multinational tap to to has I some the secondly, markets, more opportunity those win I ubiquitous in been processing opportunities, growth

as I think again, the EVO to relationships aligning business, side Global and the of AR that into BXB in the bullish side Payments. EVO software of scale that BXB brings I to solutions dug and inside opportunities the the lastly, we acceptance the with of further offering opportunity more by, we capabilities bear, more on we’re the have that Then BXB think and the they’ve again had, grow

streamlining monetizing business think payments we anticipated and of with day, those than BXB sale, a and side solutions when the the leading obviously end grow greater as think announced opportunities to that the the BXB, transaction. of there’s I go-to-market around scale I again part software I of probably

on the Josh revenue side. really well. on and expense chime let his give perspectives Maybe the in side I’ll as That’s just

Josh Whipple

very, Yes, in days, I after first trending prepared thanks say think what it Cameron. said as I to Look relates is my - very remarks, as and synergies. the would I we’re XXX well

We very expect at that million to ahead plans achieve XXXX, go place outset say end of and say basis. transaction, to said have the synergies cost and executed the defined in that and realize we by $XX I synergies of go XXXX, executable in annualized an in to the million have would would XX% $XXX of about the and we’ll those I ahead on probably two-thirds

so we we days. I in speaks first would more where Global the expect the the point to couldn’t volumes have be it in to time. right here It and we’ve integration XXX delighted trending what Payments, with overall that to achieved team this line regard at with in just at be

Cameron Bready

would Bryan, the saying still I just early by transaction. it’s in and Yes, conclude,

of our we got these another do got we’re over this to opportunity a our here a us that. but a for don’t I confidence have in that We’re pretty good expectations expectations won’t be but quarter transactions, with exceeding we’ve period. reason around and now, any I’ve in, sitting today, lot really synergies outperform set results--our track only to record longer a Obviously our believe sticking and ability to for of team for

Bryan Keane

great. That’s

everybody that Just GPN same and compete competitive profac of there or will follow-upon versus the kind model, as model? this the market’s is moving the quick market, the is this advantage has advantage a where an or profac in

Cameron Bready

scale. is mean, can revenue not that many of bring side we regulatory people the software out are to provide to dollars to partner bring scale players have going there distinct future. I compliance and of of sort hand operating similar I’m players billion in to that we that can integrated Yes, of that advantages over think equation. hold. a one bear that across many integrations, we think a the do I type model other a have the through look the and and I look - not certain there’s have management There’s of that

bring I bring differentiating think one certainly the capability scale and that factor. we is the we clearly

is I other can number that second of differentiating on think and factor we solutions commerce enablement relationships. the breadth and bear bring the to the those

really differently. allows us about to share splits and revenue that think think I revenue

to think think and offerings our as they’re partners with partners, it well. attractive in that better serve it allows us economic working to more to I to I allows for markets them the outcomes trying drive have compete

of ISV I the well to relative can as the we support on support are we capabilities obviously merchant integrated would white us say glove other bear and to while as period differentiators bring again competitors, lastly, support achieve we’ve business channel I a to - not think that Then support certainly longer those offer, sustain growth have for able marketplace levels that clearly the rates same over been able the to all of time. quite those been are others reasons in in

Bryan Keane

Thanks for taking the questions.

Cameron Bready

Bryan. Thanks

earnings that, following all moment great the appreciate your you Have look and interest morning. our Global call. after us. QX of thank a day, in this we With that for with We to everyone. you joining take forward I call Payments, up a to to concludes want

Operator

may today’s participation disconnect conclude thank and does We teleconference your time. you this lines gentlemen, and this Ladies and at for you webcast. your

Global Payments (GPN) 1 Aug 232023 Q2 Earnings call transcript