GPN - Earnings call 3 2023 | Global Payments Inc.

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to Global Payments' Third Quarter 2023 Earnings Conference Call. [Operator Instructions] And 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. Please go ahead.

Winnie Smith

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

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

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

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

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

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

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

to turn call over I'll the Now Cameron.

Cameron Bready

our stronger our results when an August. globally our dollar execution. We morning, teams much back and for that of you continues to proud macroeconomic we a delivered in quarter be third us expectation good provided this ongoing joining their of forecasted what performance Thank and consistency today. environment, Thanks, I'm and very everyone. outlook than despite Wendy, were ahead of uncertain strong for

and to point we the Netspend's the last adjusted revenue reported share includes basis of from per X% consumer earnings per earnings adjusted This consolidated growth growth which headwind XX% for adjusted net of share quarter. assets, XXX we completed quarter. a basis, divestiture growth On roughly a

We operating XX basis adjusted points. also margins by expanded

Merchant Focusing in strong quarter, quarter Solutions performance, delivered total collectively represent organic of with our by in offerings, our revenues. net We growth our Merchant on consistent the our which segment. again driven third ongoing XX% momentum roughly first adjusted technology-enabled second

and Our the of software-centric meaningful POS owned share businesses in across drive our growth to partnered, a continued strategies business.

achieved integrated in bookings growth Starting resonate signing to trends again XX% XX in ISV These new booking this maintain forward to continue confidence our the going increase business consistent differentiated quarter, growth prior integrated capabilities strong as with in We the market. year. record underscore business. ability this new our with partners, our a from

offering. new progressive quarter the new additional in facilitation, leadership ProFac this this is third channel. have XX payment the X demand example pipeline, model, new our signed for opportunities strong partners Our in or of than ProFac reflecting in a We more and prime

Living. company, expansion its firm, businesses. the payment performance solid growth the to Domus market management its solutions for real solutions ResProp, newest double-digit scope quarter furthering demand to while business, in signing strong booking Student saw bookings this by our XX% own see vertical Notably, in also continues with vertical additional Zego, We include software partner, trends management of existing multifamily with across this Zego in to Harbor Group; an partnerships additional student housing the and addition expanded also global our of estate quarter.

Half the its the partnerships Sydney Mountain Marathon. New Alterra York and booking quarters Company, of And pandemic, ACTIVE Triathlon new since Network the Vancouver, including with best one had YMCA

with Langara partnership Additionally, relationship a our university the Vancouver State College business, and system. extended with University the in new Texas signed TouchNet,

as and the this and new business our in Today, product verticals, our software adjusted to platforms we for net retail. percent $XXX revenue enhancements. our we Collectively, the is market fastest-growing distinct with million XX-plus demand one solutions approaching of POS for solutions are for X that targeting key delivered annually growth of cloud-based again complete and business, restaurant As of see primarily POS is offer continued POS channels benefit releases our strong of and we software purpose-built channel from business. commerce-enabled for segments

scope; more they these on connection two, three, of focus decisions several large, the markets. and international with because being for in and more these verticals in point are one, sale are payments reasons: addressable markets; We in they are made

over merchant XX,XXX sizes, to Our of POS SMBs customers, to globally, grow by more are and from enabling all effectively. run businesses locations used solutions enterprise

software, great of easily customers. products location environments, with this we a that our for hardware merchants deliver payments large for experiences. multinational simpler mobile customer and multiunit Across and Our our complex configurations environments scale solutions combine the requirements in-person, providing all payment address we customized POS platforms, software for for online from unique and single in to specifically requirements. seamlessly and And

and easily Our are designed revenue expand. This along market of end to stack add increasing us scale serve functionality way. enable technology business. solutions We small that software with grow a customers to leverage customer's allows as a with merchants, SMB the common the the to they

of offering. Importantly, with general and competitors specific and this cases vertically who to use small large single differentiates us same and from address the attempt our many

couple complete market. unrivaled commerce service distinctive And local solutions that full the is enablement we support our distribution with and in and

purpose, Our branded solution robust a system a for entry-level offering starter simple and intuitive point-of-sale This set. competitive with highly cloud-based, SMB customers provides GP POS. a or want who feature solution is general product

features merchant specific capabilities the commerce POS be the geographies of an of GP tailored serve. to market These and on set expansive the can delivers mobile POS enablement requirements business tools. vertical and they

onboarding software begin enable payments accepting From beginning end. than to less POS in GP full of merchant XX easily is a Importantly, functionality, to configuration and our from hours. the essentially can self-service

successfully offer XX GP our Spain launched to regional expect POS and Central through and in variety to POS international months. XX year, and U.K., Europe, We technology further Ireland channels. and including over the last GP Poland, of the next globally distribution markets, expand we In wholesale Canada, a to Germany numerous the

We simply innovative partnerships competitors as presence a couple our GP replicate. powerful long-standing with these our combination solution and capabilities, FI support markets, local POS as our well cannot in

target specific to can XX with vertically In with and we to but We customers Heartland scale serving distinct, and solutions, our these to retail-focused solutions, America, and mid-market locations, more Heartland X locations. leverage North have Restaurant customers channel significantly those POS cloud-based SMB typically direct Heartland Retail. restaurant-

management, capabilities all order management kitchen the vertically mobile payroll sale. functionality, include fluent solutions. offer management, and human discount this enablement guest programs a and from And The cohesive we cash solutions, seamlessly and matrices, programs, PIN-on-glass point discounting loyalty analytics, of we as capital and and deliver customers predictive AI-driven and POS pricing platform, marketing table commerce

and solutions technologies. at offer applications, which allows and software integrations with of the accounting disruptive all architecture various Our management inventory to sale. point open have accessible our enable dozens also services, customers of other delivery Again, software partners,

distribution channels primary these North for We have solutions X in America.

second U.S. metro partners sales the representing service. in who serve Canada network, is our where domain dealer provide is across market major our solution-oriented customers. every who partners U.S. local sales and the as nearly first our This support professionals are Canada experts over we relationship and The and local and XXX to have

which on solutions continue expect heels the more experiences We POS launch Heartland the deliver will the user momentum have intuitive to next-generation early software iOS- improved seen and solutions. XXXX, strong interface and across growth of our an our in Android-based in our of and offerings

best-in-class experience. to is for allowing a POS be omnichannel Our mobile-first, next-gen also designed

this we suite restaurants, and foodservice companies our most Xenial POS our end real-time requirements the of for largest POS specific have solution, customers, quick-service services management and enterprise scalable, entertainment have vertical environments. which solutions technical of the market, world's offering Cloud venues. and secure Completing operation for capabilities, and offer complex enterprise in we sports the At

or integrated an provides the and to provides approach integrations the supporting enterprise for API-first Xenial complete QSR run of menu at dynamic in-house mobile kitchen the sophisticated solutions, stack large arena, customers. customer The POS drive-through, boards, ordering management partner a a all fully engagement, technology to point name digital sale. kiosks solutions, these Xenial Whether few. and a required solutions multilane This includes ecosystem and operations to most drive-thru sports AI-based

future And leading Xenial QSR we is drive-thru delivering for way proud the technology of enterprise its customers. in are also the the that

We the our technology with top are a to of XX serve basis. QSR on brands global proud XX

providers complex with We world. rely respect venues some the our best-in-class suite stadiums beverage, of customer In currently the environments, entertainment our foodservice serve these globally. stadium fan management and most almost experiences. in to operates venues, and event technology and With and XXX Xenial solutions food retail deliver for on environments to the

technology to functionality with provide ideal We win in market complexity needs. full-featured X-feature [ our for software or by functionality that their our tailored by we mobile expansion a merchants is of requirements simple customers small platform, multinational in greater point-of-sale a providing physical From multiunit or via delivering convergence solution whether levels the register a virtual the of ] to the to customers, environments. and specific solving required

match. distinctive and scale and worldwide our And best-in-class streams we really with our can't at that capabilities couple more competitors commerce enablement diversified service distribution

we As about a our forward. very business POS remain enthusiastic for result, moving prospects growth the globally

strong reach, of also our Poland, EVO, Central in that acquisition Europe Spain worth and quarter entered Ireland, Speaking Europe. in achieved global we double-digit via noting the which is we while throughout in bright Greece spots and it our growth of were

an with parking the to announce well omnichannel across excited also Ireland its and are to solutions on Group as We and as agreement Canada. support the Parking payments U.S. for International basis U.K. new smart a

quarter are select partnership to omnichannel Asia Marriott locations across region. new In seamless begin and with International Pacific, sign solutions we this will recently in hotel the a offering thrilled

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

FI we X our portfolios of of conversion migration completed wave recently new for with market supporting as And M&A, successfully of share winners. our leading representing Cencosud, co-branded between first of early migrated CAD our this relationship. Scotiabank market. the joint one ], largest customer card part issuer the a month, retailer, we completed [ of strategy a venture existing of acquired large credit we aligning largest Chile's retailer through by the partners for partners first quarter, This and the U.S. accounts further Further, in

We of via of the merchant leading platform our long-standing leading partner services. third and new expansion pleased issuer issuer to is a have are with Global with processing also leverage our to progress quarter. AWS see Cloud partner, enabling continue will Notably, our during the also our This Payments strength to agreement analytics the our great for reached this bank a partnership a provided relationship we the foundation clients technology U.S. modernized next-gen include solutions. as FI

We X a partners extension multiyear the also quarter. signed third during FI large-standing with

of BXB, across money suite automation financial institutions we both out our strong growth employer and capabilities, to solutions. continued and Shifting we funds capabilities solutions, in money leverage flow corporates drive our to with workflow and broad software-driven as

bookings subscription MineralTree automation, an year-over-year AP XX% software impressive workflow with quarter. its increased for this automation Starting

to are business, software which customer PayFabric AR also have Merchant U.S. existing automation successfully integrated and greater into provides capabilities. our pleased EVO's new our We

card in to contributing flows, further growth. adoption in funds mobile continues virtual transactions. in to growth also virtual BXB which discussed cards tokenized commercial the expand is and as an wallets, acceleration We're being Regarding last we seeing strong provisioned catalyzing quarter,

BXB doubled bookings third the in Merchant Solutions in quarter prior the relative our Additionally, to year.

from strategy. and volume new go-to-market to integration than by year harmonize While the last BXB merchant payments as more progress EVO increased our continue XX% we

relationship Services, signed and with solutions, Moving Xclusive group its U.S. employer staffing existing partnership our largest with in Paycard the renewed restaurant Flynn new hospitality Restaurant Group, business to a the firm,

We KFC franchisee, also new partnership achieved JRC Restaurants. a EWA with

more of our Lastly, the delivered XX% quarter. third capital human management payroll in growth software-driven and solutions business than

strategy attractive of our an core a our offers represents opportunity forward. BXB element growth business and going for

BXB refine we As and expect to and space long continue our term. this share in in unify to capture growth we strategy, continue to offerings the our accelerate over

call turn over With that, I'll to Josh. the

Joshua Whipple

Thanks, Cameron.

adjusted despite delivered net our We expectations revenue $XX expectations strong performance rates guided the pleased the absorbing when are early quarter with exceeded which in and foreign third continued we financial year-to-date August. currency period, in roughly we to headwind a million exchange for the our relative from

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

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

for margin basis operating points Adjusted XX the XX.X%. quarter to increased

impact across our EVO dispositions, and of the acquisition margin execution businesses. ongoing our adjusted increased Excluding consistent basis points, XX Payments of operating highlighting

The the $X.XX, on from XX% net includes roughly of X impact share an currency result This excluding was increase foreign adverse adjusted in a the quarter point earnings same earnings call. updated compared rates to relative per to XX%, XXXX; we dispositions. headwind or period conference of exchange guidance second when our of

impact a improvement revenue EVO the billion by of from $X.XX net performance quarter, X% excluding dispositions. prior reported or the Taking and adjusted at segment. the year; closer look Solutions XX% a Merchant of for third growth,

led while Spain strength by from faster-growth growth markets, Europe. benefited Central and ongoing performance also double-digit As the technology-enabled Cameron was we our this including businesses of in highlighted,

This geographies, X. softness was macro in environment challenging; in the U.K., Canada, is the ongoing including offset growth partially by economic and limited hovering where around remains GDP where

delivered acquisition of margin This represented expectations. basis in of XX consistent adjusted the a points with our to operating EVO. We due decline the an of segment. XX.X%

margin excluding increased EVO the impact operating and However, of basis adjusted points. dispositions, XX

Our million, this business core also The volume-based $XXX strength adjusted Solutions reflecting growth. produced revenue revenue. X% Issuer grew of digits quarter, ongoing mid-single by driven in Issuer net

as and of increase we equates Cameron more pipeline. see execution million accounts the approximately healthy our customers XX traditional FI year-over-year with we from large XX ongoing to added conversion to million accounts benefit As an growth file continue on sequentially. than highlighted, account This of our

by as focus XXXX, more output to single to transactions, on which grew technology business card led This our of continue partially was digits slower and Transactions managed services high by increased the in compared growth quarter to third offset enablement. we commercial Issuer mid-teens.

the Issuer completed and team the conversions executed beginning Our third successfully X quarter the year. beginning since of since of conversions have the XX

X also mid- have have and XX new late-stage addition currently We active opportunities renewals signed pipeline. the X LOIs in completed XX nearly in contracts to year-to-date, and to

which targeted our MineralTree, is a of issuer delivered comparisons employment while quarter, more led on portfolio. growth that by to achieved businesses this its during difficult the nicely growth the segment, business beginning double-digit BXB Shifting were year-over-year drag Paycard mid-market XX% XXXX. lap as These half accelerated in to performance first

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

quarter. adjusted produced From adjusted rate $XXX for cash a a modest million, income in standpoint, of to spending cash flow flow the quarter cash despite XXX% of increase representing we free capital net flow conversion this adjusted free

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

capital investment consistent expect outlook. prior be with our in continue XXXX, to million We to also approximately $XXX

position on return by quarter, outstanding our $X.X consistent X.Xx our billion. more long-term we targets the to have level with to our of leverage consistent end And at track the in with the was year-end. than low reduced a by We Xs expectations. Year-to-date, remain leverage debt

Our we and billion remains sheet dollars have of liquidity. healthy, available balance $X

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

first are We positioned months business pleased our XXXX. for with following X performance is the our how of

range to revenue XXXX. to $X.XXX forecast year billion, $X.XXX the to billion X% over full continue reflecting We X% growth net of adjusted for to from

relative in seen lower headwind the exchange the expect in foreign have to range, adverse half rates. this rates we improvement net from prior an absent be now revenue our to million to guidance, of currency roughly adjusted Given $XX we

to Moving margins.

operating XXX track to continue to this margin on EVO for basis forecast We points million XXXX. expand annual from $XX approximately cost in adjusted realize to by acquisition synergies remain up the year. to We

Merchant continue with aforementioned growth the To net full year, segment approximately our despite anticipate for provide to level, at we headwinds. XX% segment the our report adjusted forecast the prior to FX of absorbing color consistent revenue

in adjusted margin the EVO nominal a We continue reported the operating expect for due acquisition. for full Merchant business to to year the decline

Moving Solutions. to Issuer

expect on to range to X% Issuer X% basis. continue a We the constant in to currency grow

persists, a be the However, than expect low strengthening would recent on natural dollar benefit operating to that reported the if for leverage basis basis. end year by from to we U.S. operating Issuer the as points anticipate expand we business. the business to the in range adjusted closer XX of We more margin for

couple Turning items. to a nonoperating of

roughly million to interest net $XXX rate to be adjusted expect XX%. tax We approximately for effective and our be expense

is purposes, indebtedness fourth modeling during cash we continue down For the excess pay quarter. to to assume used

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

earnings per share was the This almost of of prior point that strengthening includes roughly be share the earnings headwind given to X not XX% Excluding significant U.S. dispositions, our to per adjusted for growth adjusted guidance in expected XXXX. is outlook. reflected dollar

October you've what saw were with third to heard the Similar trends quarter. others, consistent what from in we

are consistent presumes environment macroeconomic While a trends tempered case scenarios, range today outlook of our spending economic what backdrop guidance for including more currently, accommodates a base relatively a seeing given with we continued our uncertainty. and

And the I'll over with that, back turn to call Cameron.

Cameron Bready

Josh. Thanks,

momentum has our the continue spending of business, over in We to see year. and remained resilient course strong consumer the

rising from inflation, policy are in course, situation resulting remain strong, the Europe recent impact risk trends of elevated monetary decisions we and geopolitical events quite monitoring ongoing rates Although Middle of the and from labor the East. globally, in

which built if environment the to a business manage current through well better and backdrop positions have model, we new changes. us confident We are any durable more

for months we the X this first maintain we that pleased business. execution XXXX with and throughout I all advance our of quarter accomplished strategy and the continue to have am strong as

the We very to performance customers the experiences and financial attractive operating strong with forefront markets have best the the deliver very our at technologies providing for very globally. best innovation. remaining team best the Together, we most while positioned are members in of

Winnie?

Winnie Smith

Thanks, now to Cameron. you. [Operator go questions. will Thank Instructions] Operator, we

Operator

[Operator Instructions] Barclays. question El-Assal comes of with from line Ramsey the Our first

Ramsey El-Assal

your kind the you deeper thoughts latest helpful. solutions, software the dive on for was EVO about thought of I Could very Thanks and give your nondiscretionary us inclusion with that and of of patterns? Are terms the volumes try there split kind should we How of Merchant changes business? think in your seeing in that? discretionary to between any spending you through POS

Cameron Bready

Cameron. for Yes, off Ramsey, I'll it like Thanks to. it's color I'll Josh to your add that he and comments. kick ask would any

today, So we would it's pretty and mix well Without look split point nondiscretionary if estimate discretionary you I have, a on each, and characterize roughly the across between the specific verticals. evenly portfolio across business it's diversified putting nondiscretionary. discretionary

and I across have to we our markets XX exposed think the probably U.S. different diversification, today, we're business overall markets domestically here in international well. good vertical Merchant over the in again, as and

you trends economy I well. certainly, would categories. overall think say, today. seeing And the economy we we the we in if seeing nondiscretionary like sit are it's look here today, however, are to at restaurants experience-driven continue I up better as an vertical hold markets

pretty better what of to the more said you the providing are resilient I'd the see our that board. think, spending, focused as say, overall remains in areas prepared level by we certainly, experiences remarks, large, consumer retail. across and So But than are across broad-based I consumer on trending

Ramsey El-Assal

that a rather least approach And a a from where of part you a Fed interchange, that you the debit pricing have blended benefit guys cost-plus follow-up lowering than ends quick more it. me. business would in from up at bit, your Got model? If

Cameron Bready

Yes.

our goes it's perspective the acceptance for for my that, time good is any on our down cost customers, a of I Ramsey, business. think thing

certainly, business. the the for of merchant a customers lowering our is So cost interchange positive for

market time. where And seen much over time portfolio is the away so merchant what passed that period immediately pricing, of plus-plus generally is, pass-through Generally, on will of over a our would customers. we've ] compete pricing, benefits interchange it's sort [ get to where not, of those benefit

generally, what would to benefit get may interchange we some So competed see of the blip away that short-term sort over time. a there market is it, be around in but period ultimately of

Operator

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

Darrin Peller

us see the bit just It's consistency just what the a been. the that If X% to on great could growth drivers dial consistent sense little Merchant side. strength the into we best more in a that of on have and give

still And then, when the think growth, just narrow. Cameron, spread volume and between revenue very, we it's about very again, once

aside X to organic, I -- guys You similar quarter's. think the reported last just point only was apart the putting

so on on value-added pricing whether reminds more of to we anything see if expect it on there's just opportunity front. again, on or or else And more you -- us service if needed could that

Cameron Bready

Yes, questions Darrin, good both.

about we've the the So say talked I to the would drivers continue what be course year. throughout of

I'll technology-enabled prepared for really Our POS spent channel, the continue tip time in of in the today. are lot a perform to our our of our growth They well. spear highlight we business. remarks businesses talking the obviously about which

in continue get retail that XX-plus as percent very of growth restaurant future good to we momentum, to roll platform quarter. And this begin again, XXXX. particularly about we're VX into that, We through channel our the of as and we out Heartland again the very channel enthusiastic see

time. business a bullish over for of So that the we're longer period on outlook very

as be saw continue the see what continue growth time QX quarter payment market this a solutions we frame. again, to our Integrated we in to to strong well. the pretty to software low monetize very our continues Consistent that effectively. good double-digit as demand as And continue for flows strong pace businesses performer vertical grow in around to and

and QX you get we So be step expect and consistent as think if very the of look are themes same QX into QX. back kind the to we that business, at I to the

more I degree so to you're they really is volume to business. just much level question of your tied, payment directly right some is of because payments, now EVO I seeing to it just of the flowing relates sold think through in part the think their kind impact what as obviously, and really the revenue the of second of

the on opportunities Global we in the value-added obviously, more services as sell of we see to growth own we bring through elevated channels, over business we more the As time. to volume growth more relative our Payments for business, software revenue think that there's

macro think trend remains in I effect. So that long-term

from need business be But deploy make the able the to a we of the certainly, may kind in those to to software are of growth. X will going correlate to driving lot a revenue the there But growth level obviously to trends investments be business. that through volume be very the overall that value-added decoupling want It I've of slightly channels, times, services, that in I we see many have EVO which highly. to tailwind we're said capabilities

they think correlate highly. I should

monetize software with Our goal is to payments.

as doing in volume should the we more that, software as payment So see business. even in selling we're uplift we're

I of But out a So there that business to should nonvolume-based the continue departures. expect opportunity, to revenue point, play I radical see wouldn't to over you your think, period is obviously, time. and in growth more drive

Darrin Peller

other on to really has That's quickly drove that. that of on on the you any of you've number comes color side. top the had, just win mentioned great on a hear. what great. then which really Obviously, been more very adds But And Issuer

really talked adding again, in think FI a You U.S. you what's But that about said what's -- the a large -- win? in and partner I the partner driving channel.

Cameron Bready

Yes.

relative bring can what bear the that competitors market to -- really that are it on think I distinctive really provide. capabilities other look, that Issuer think to boils business, to the we I in down feature-rich

the with focus strategy business partners our and have picking to really into tried lot market of to they're with would the those in growing efforts aligns space. a and say, and in strategies of also winners. it with There's we've market issuer where historically, lean good do relationships And our that we can grow market winners winning. trying I

So look obviously, well. we scale they that business benefit Issuer from succeed own grow we to obviously as our as business and with strategies, their as

play in a just market aligning of combination continue it's we out good feature-rich strategy a with see having that that winners functionality business. think to ourselves I fantastic So capabilities, and of

Darrin Peller

to And Nice partnership play out it's good there, see AWS the quarter. too.

Cameron Bready

Thank, Darrin.

Operator

Citi. of Our Ashwin next from line comes question with the Shirvaikar

Ashwin Shirvaikar

the regards on solutions your consistency, I with appetite the the such. to appreciate What the for just Cameron, I stack wanted globe? it. ask, the guess and POS up tech-heavy to given Congratulations software quarter is and top and across commentary

Europe kind We that in of in of that's America, interest because I finding part know the what that are penetration but you of you the in is comments the other European North appetite had. higher think volume here incremental parts

So appreciate any you have comments there.

Cameron Bready

Yes, would Ashwin, is, the U.S. around we've seen is really and in it's as the time, restaurant comment course retail Cameron. competition of The of driven I the payments for make by mode the over of those point-of-sale they're markets play trends clearly technology. the to outside And to they're of U.S., as in are well. an play earlier outside out beginning stage out -- certainly the starting U.S. in but

bring next XX, well. XX to here and well. We those to as leveraging We want the Mexico, of outside our solution months. recent Canada. POS to as U.S. mentioned acquisition We're that into to EVO's So Europe. POS over to about the markets Poland, Greece think as we into bring our to the market and Through U.S. being GP markets strategy extend talked part business EVO in Obviously, the of it to obviously, have the my our, and there Central there's scale capabilities business prepared the in Ireland in bringing grow Spain, POS big going great of we it U.K., remarks, it a We is able brought opportunities Mexico.

competitive in local where POS continue but the opportunities And different. the the time. see there's businesses of obviously, long great combination better, we of for presence pace fantastic the able grow period be business, pretty the outside we obviously, of through healthy as there's to distribution, landscape for at we're a a is to think positioned and a U.S. well support So to to even more grow, strategy here U.S. attractive kind opportunities

Ashwin Shirvaikar

very I high And I question stock sort at your interesting because of imagine sort return acquisition have M&A Understood. go you'll does to capital or on bar Xx buying then need of back an that levels prefer a to of kind these to a would to back become stock. Use of own do have to the earnings.

just and thinking, of kind leverage capital you are you return about use targets How and hit such, capital? heading XXXX of when into your

Cameron Bready

Yes.

Ashwin, it's as Cameron. I'll with start chime well. Josh and perspective I'll ask in his to

no the than more with So one is multiple am. obviously, I frustrated

dislocation around rather the unwarranted the payment the stocks uncertainty think environment. is in we've as particularly that of macroeconomic notwithstanding seen, exists overall I late,

our more That ratio our value-oriented. XXXX, And our said, normal point focused year, for given exactly right, very to going at think we kind M&A, these of driving of is at from be to able allocation going this return compelling into compete obviously, back be is we're multiples. leverage I at the think back to getting the target it's have the we're about risk-adjusted stock I to being buying your as of obviously, very our think by end to shareholders. perspective multiple, with And a capital returns on to value be heading

of criteria our think would very strategically, presupposes for time. fit certainly, obviously, can of returns over really of course the I I the that we M&A we're we've kind job returns that now amount I those the to balanced changes But multiple XXXX. be there's shareholders shareholders, a get back forward, driving obviously better And the certainly with So still going landscape done a stock. over find we outset, as as of to our into And that good opportunities allocation are period the competitive at that culturally on good going focused time to have of a we fit we but capital and and and for hope and between said think our that time with buying that drive expect, continue strategy. like

anything. you So I don't Josh, to want add know if

Joshua Whipple

Yes.

So Ashwin, question. great

the here, I paying as of balance about think That's, think focused down mentioned. as you on year the debt. we're Cameron

I think reinvestment capital as on returning and capital strategy go allocation back on XXXX, we'll a focus we into get in shareholders. business to where the we'll balancing normal

balance build to an our that it and would very, overall from perspective, between pipeline. to We're M&A stock. ahead is is say say and a as relates I continuing What full. would back a pipeline balance buying M&A go very that But there returns, is own our I

something monitor. that that And these we'll it's So focus we'll something at closely that's on. levels,

Operator

from of comes Bank Jason question with of line next Kupferberg Our the America.

Jason Kupferberg

to us revenue on side And a things. Merchant tell there? organic volume what as thinking QX, organic similar QX? you saw Can in the you Wanted revenue relative the start are the the was quarter X% growth growth of rate you for the in X% to growth

Cameron Bready

questions. great Both Yes.

organic dispositions. same business the saw the the of Payments number. as kind that's revenue with growth" of Global we X% rate digit, "volume Again, aligning EVO, in ex high single last quarter, ex growth overall So

better when And execution, talk you, give can't about QX. what between what are expectations I QX, tell seen you consistency probably example and of our would for any in QX I we we've

kind dispositions is that X% QX. for of EVO, thought QX, we growth forecast our ex ex in QX; So in thing same

contributes FX QX it The the tailwinds in difference we Merchant is, between EVO just well. and Payments in as seasonally, a than back August, business though Even is Global tracking less we little saw profile about obviously, obviously, fact consistent business, their QX, overall we quarter. the bit really more the tailwinds. And QX have of which more was that did with are FX in seasonal anticipated revenue

QX, EVO little talk a consistency are current tailwind, as seasonal when now contributes less and QX we're business. seen the in given FX which trends of is consistency exactly in execution, bit obviously I at, a we've our for expectations that's QX slight QX And of little very It's about I'm less based sort well. expecting that from just expectations. driving But QX, So what of slight, what on bit tailwind. a the

Jason Kupferberg

you side, mentioned the won when was give with of accounts the can And you already business. of color mover Merchant to that you on that working new having convert a needle this on Issuer side Any I just And that that back client the U.S. file? to come wanted to us terms you? new win? you in Is expect do for on Okay.

Cameron Bready

instances accounts but U.S., attractive a it leverage We've Issuer et certainly It's that. Payments as good of a good been demonstrate example into top But is customers into domestically FI where Global in on seen when an is Global been at issuer because It's opportunity example not instances nice now to example Issuer win that. good we've good Global the I Money strength I on the customers. able we've obviously, under it X the side here roof. leverage to have seen of capabilities an a and Obviously, good into, acquiring many us it's of we've well. think a having more can't able a internationally Payments account. account. Caixa relationships It's we've for is number to relationship. leverage a been where a specifics the cetera. relationship this of new Payments able give point around you Virgin file, to X Issuer does

mover be one needle nice of longer bit customer support that to a time. and business of a Issuer It's a really in obviously add the of. great we're great is win. it it opportunities to partner, strong, So and over It's to but -- a period growth new proud a pipeline is may continues

Operator

of RBC Markets. Our next question comes from Perlin the with Dan line Capital

Daniel Perlin

that comment just what the to what in that you tempered you and of that eye are of U.K. about? in I'm base have know that touch wanted you focused But economic on areas be your need other particular had wondering kind there Canada. turn concerned kind out and to wondering, called environment. we on -- just could quickly? you're most on I'm I areas around I

Cameron Bready

well. ask in as and question, Dan. Good Yes. start to chime Josh I'll

what that October. of accommodate seen in less QX comments me, were and over than to being think is probably those to, what guide I respect obviously, we've our the macro environment, with So a we've really excuse able course constructive seen

the that macroeconomic in as monitor closely. prepared things a something how in manifests operate decision, the increases around to on and called we're rates relates the globally environment. I economies the my globe that we Clearly, through that obviously is monetary in out it very various impact to continue on remarks policy the focused itself we

had of to is kind monetary still morning. globe. trending over Inflation this Overall, inflation print be decent we And decisions the obviously, made the what closely continue around may that federal something that's obviously, to remains coming tied in banks monitor, and policy stubborn, Europe pretty although months. a we above expectations most for

on to year. extended watch it the and is which that very, monitor Europe are that war geopolitical in continue as very East, the relates in resulting And things we're the region. closely. terrorist obviously, to that obviously front, certainly, developing events now are horrific a recent has Those we attacks, Israel monitoring that and then then the the over situation And now the Middle in well

comments, Obviously, perspective. is job I October QX, we're positive, which as his like in see that monitor sure of business looked Josh in from perspective. our to there, that? macroeconomic trends you'd we just of certainty know said is think, don't uncertainty there out light from a But and our make I to positioning what appropriately and if add anything is Josh, the a part

Joshua Whipple

that would in I very No, reiterate just QX similar we we're October saw QX. and what to what seeing is in

then credit impacting So And seeing we repayment, that's obviously the feel policy there's and out pretty are geopolitical consumer there, risks there loan well. Cameron good currently. about things. what the as we're But highlighted, stress, as tighter inflation

that macro with. tempered So given the currently backdrop faced outlook, appropriate is just I think, some again, our we're it's of

Daniel Perlin

Yes. No, helpful. that's

case and POS or just a but think to to ability new about kind rollout gauge don't balance also I do so trying follow-up. things for like to to be be noncyclical in gains to the share about able kind quick could your ability ability I'm question, you a where it's speak, it? just that that environment think maybe consumer bigger nature. of that. the you or of of growth, you picture to manage in know, manage the Noncyclical this weaken, when your Just may of how an drive like

Cameron Bready

period and able that I for time, a we to I resilient model throughout Look, Yes. think built is durable different fairly think as macroeconomic and we of environments. a grow long about talked

even XXXX growth ourselves I of GDP about the large, or and if recession/depression, to bring seen is lower built but saw GDP than in business of can between and spending over of tailwinds But cycles. as normal severe the the are in business markets we of to we see The through and for levels we're think kind may a we a think to be tied in to that that a sector able the think think drivers course what by environment, may have consumer attractive growth, most payment the obviously, growth hold, trends lot levels growth share adoptions growth this there I capability to pandemic-like So growth future macro confidence situation market, what over XXXX. Unless find we of gains, are different those underlying this we've sustain I product grow. we rates digital to evolve new tied overall. in not continue macroeconomic model software, that

a will we're sure very got the backdrop, cycles model resilient confident that's to got macro through longer that, we've we've But work a we that ride grow make obviously, with notwithstanding think different that at I So over hard rates what a that can attractive business period be. pretty time. obviously model something may of

Joshua Whipple

from incredibly add if business, about that our And perspective, I you is the think diversified. it's would a macro only other thing

business verticals. As across different Cameron do XX mentioned earlier, we

and in We in globe XX have markets. XXX presence different countries business a physical do around the

stability business current of and think that the we're in So run that our really diversification a durability [ ]. seeing I creates

Operator

next of from the Williams with Our question line comes Jefferies. Trevor

Trevor Williams

sensitivity Yes, the visibility It's just some durable a I that growth on how the growth does in there. helpful. be out, revenue that are there wanted of you Cameron, up see to of segment how being some the if Issuer. to good would the at Just core acceleration point? the the some pipeline, onboardings expecting be segment refresh the view end volume-based follow of macro up more you you to on with called conversion into in softening

Cameron Bready

Yes, it's a Trevor. good question,

kind by given is a the of macro sensitive and revenue think, standpoint. that business definition the construct the we commercial as go how sensitivity from less and market Issuer a matter, business to business obviously, I merchant than of

that macro of So mid-single-digit target would business. I durability. think business we've through Issuer downside say, Obviously, greater arguably more level business. that in with through more we Issuer upside, where growth look, I course, do given cycles are different there's durability as softer But the environments in the currently. less seen we protection,

we're continuing to the medium a making in think the in of of term. growth in level designed the of good longer time. about short to that investments deliver to higher we growth the I business over on business business the of feel Naturally, drive are period prospects that over levels

our in continue obviously So continue we program, modernization improve over outlook on environment, a obviously the business time. sell in existing execute our capability issuer from to that more that a environment to and and customers perspective and the bring of our growth core that into is as long functionality we cloud period can nativize to feature AWS we continue we hope

we execution But we've the the sitting into have, the underlying seeing mid-single-digit business to growth level the of around that ability in today, I the kind heading pipeline that of we're years. us seen, think sustain next couple here confidence trends the gives that

Trevor Williams

be been expectations by for should half. saying And year-over-year the slightly segment? help you put XX% had just great. reported That's guys range point Josh, alluded think to then, the for a I high fourth back the Issuer, on margin you above previously, could on quarter, you've up basis. you Merchant were finer a

for should QX would about helpful. margins how the segment we specifically more level anything for at be be So thinking

Joshua Whipple

Yes.

then QX [ we where and me down points And saw points. so with as in saw go Let we Merchant, ramp about out you go back Merchant we if obviously, continue some ] in going XX start it's down basis basis into QX, improvement, margins -- were XXX to synergies.

we be And in expect as we the QX, a flat full it modest decline year Merchant. for expect to for margins roughly said Merchant. And we before, for

XXX Issuer, trajectory. we've great a really expand year-to-date, margins points, basis seen

back of points of points and expansion go basis XXX expansion then QX. basis you basis XX in QX XXX points If QX, of expansion, to in

in business and QX we XX.X% on in recall expect call, delivered would be Issuer that said range QX. I be and margins if XX% margins the high to of the you Issuer in And those similar the we

Issuer would so the be more And say will points for full XX year. basis overall I margins than

of remarks, And to how business. said the company total year. profile for margins So margin the I points in XXX as about overall my as -- full thinking prepared we're the we up of we that's reiterated basis

Operator

Bank. Our next question line from Bryan Deutsche comes of Keane the with

Bryan Keane

Merchant, if get bookings inside weakness versus there? trending? you to if the Wanted any decline? the we any -- thinking is there's economic about a retention outlook think then there's to think into potential retention, of Or of I'm Do ask economy? what how's of just issue more bookings, kind trying And an separate

Cameron Bready

it's creation would on a it would say, the more by generally where less Cameron. relates from that's macro mid-market opportunities, we're impacted little S Bryan, be that large, think in it kick and overall would I are Largely by to going I as business not I'll just to small by of the a overall of the be end off. is going Yes, development. do new businesses, the market point to kind formation because macro those about say separate I latter standpoint. bookings first, say, small speak, your maybe focused business from to environment, more upper macro to environment. We're I so on, and impacted, bit the focused the

as strong trends pleased remain it POS level seen. morning out the of of as very trends we think Zego of I bookings booking kind overall a remain the to seeing called across business, the with the performance. very that around we've our So we're booking We on relates this the call couple highlights Obviously, well.

as the be Merchant install course or visibility software customers months to those the business, in new that's merchants we us of coming our bookings digits, around double are which environments install So into, those gives going coming business. the good obviously, overall, into business across over the the

I as new today. sit it obviously, think here as relates business the we to, very outlook, So strong remains

very kind of And retention seen trends course levels We've remain very of the stable around XXXX. consistent. through retention

why to able of to retention performance consistent the over sets inflationary the businesses think have been their levels for revenue with able cost level I of course the obviously year as business, see well. attuned such sustain as up business Even consistent become been whatnot, which pressures more and of in to we've we've a side of the

Bryan Keane

the but EVO for That's due And that thinking revenue maybe the year. know FX Congrats. some $XXX to we it. contribution thinking Got million change number that about just there's quarter the and for maybe the get Josh, FX? to for does there, some full I trying of about, helpful. were

Joshua Whipple

Yes.

we million. Bryan, the quarter, that's So that that adjusted Merchant EVO obviously quarter million for higher -- revenue the still around trending a of we're was seasonally, for net the business call. prior approximately for talked $XXX right about on and There's EVO $XXX

Cameron Bready

Yes.

for on end a year. from just little million had we the out that million from finer QX. Obviously, put from QX point $XX to through EVO revenue called $XXX of QX quarter this slightly it's QX closing in in we had before we Just that,

of QX business So headwinds, little better the QX, We've in $XXX been with performance. business obviously, offset to a some for bit EVO's able FX million. it's still to

So we're forecasting of contribution million. year overall $XXX this still

Operator

Our next Goldman question from Will Nance with Sachs. comes the line of

William Nance

And I the Wonder some of And switch. customers about that wanted I to if guess any what motivations product? types for about mentioned of monetizing a make could been you their making are you ProFac the to about payments statements maybe high-level ISVs of attracted way? in profile thinking about the ask you're they the of kind some talk seeing? new you clients pipeline. for the currently can have

Cameron Bready

time, they really that pain, to that made in think payment ISVs I a types a company. payments I boarding over comments the sort have of And benefits more reflects customer specific funding say, this I It's And some some ISVs Cameron. to of QX on I the in a Will, specific control it's target back see experience our would monetized a I of that the some I it's, marketplace. attracts need course. But others, as most question, good boarding of in ISVs and requirements have attracted that payments without have to Yes, than this being the support partners ISVs this or itself and this and fashion, is of the the all lot model. that much again, particular number call the as of it's vertical different facilitation particular what of of as markets, to spanning and very better described at of form think base we typically and well think model, requirements kind today some

but kind so otherwise might there expertise the payment ISVs for be to of cases to payment lack facilitation, payments become entity. many registered able And be true scale, are in lack candidates that facilitation the a good

registered think talked we the the for hits around, become there's really to the time model time, market obviously, capability about of successfully of a over of as that high So demand ISVs ProFac this that we sweet spot and payment very think monetize facilitation and only a and payment payments But at in kind I scale a and capabilities level. at facilitation, very have obviously, do a period to entities subset tools.

different now sizes, all the vertical attractive that I remarks, called all the commonality think wins model may different well. obviously, we specific The for that opportunities that out that very looking payments are boarding got become prepared funding X as solution. So an tries they ProFac the software is on and does and new XX us, around have in markets. We've that solve requirements of understanding to companies. as for quarter experience they're over to as for it difficult the obviously, for in it's for very ISVs companies pipeline it really And that well

William Nance

of consumer then Appreciate it. to like And pointing consistent are October maybe follow-up trends. relatively trends, Got you just the guys question a sounds spending on it that. some

still there around companies deceleration some X similar X I October, numbers networks And we're September payments think for I comments. calling and to abstracts out a have of making from the large-cap think happening. think are put that's why I particularly out

But think or what down you do disconnect? be kind that best of talk year? commentary heading the kind should ] into more slight causing is the your perspective maybe And consistent remainder tick you [ of the could of relatively of the focused on to just the

Cameron Bready

sort of they at and acquirer call to correlation long any of The Yes. represent tried and what as a It's more represent. to in of it over market relates particular out Will, be mix we've the period business marketplace. a the the time, of networks least there's between that to good brands the exact going networks serve broadly, sort never question,

always going what performance their be and to between our there's in So we're business. differences fundamental seeing

kind seen I think relates October. we've of as trends through it to QX consistent volume, our

more be their called have got out saying may that business today, our our we prepared fuel in business. we in than have reasons business. our we exposure than comps And may the networks there's they As different something their may in travel generally, remarks have in They've business. in

they that So called out reason slightly ticking I QX underlying thing businesses. performance a down volume to think in in as that's October for one relative their

degree there's some trends So networks to be of may the seeing be in going seeing difference between always and underlying as well. we're what what

Operator

morning Our with final JPMorgan. the this line comes Huang of question from Tien-Tsin

Tien-Tsin Huang

I'll quick. the it keep Appreciate time.

sale it's remind network. Do complementary is? disclosures Can dealer have front, us point I know the you just coverage Just a you your on the you big software want? sales geographic all of how the appreciate force to there. that

all these is sell they're I'm trained productive at in also compensated that good I point, assuming like had. then sales the just payroll And a to value-added force and place. this services That's

Cameron Bready

Tien-Tsin. question, good Really Yes.

call is called a directly who professionals in neighborhood can X,XXX that. of sell markets across major can the it, Canada we remarks through we and earlier, the in have cover market, we which of, as dealers out sales our the market U.S. the U.S. sales And POS prepared refer or channel, specialist somewhere about dealer then a who sell into XXX either to as well. most So in POS that go

have a to tried somewhat we and where software. model, sales we've would able to those into typically those of certified as RMs have well around combinations marketplace. be professionals and We go-to-market allow of But a compensate hybrid specialists POS into distribution certify from more gone our different sell matter as capabilities. I sales certain to sell well. to course, what be we They call So do refer to the to business as them, all we selling

push generally, whether we it's has America. of to payroll it's leverage we in relationship, move for distribution, sale, whether I as well. to to lots think, that of be So think to model And us product distribution continue point obviously, able which it's have a that or North think forward, through us means good served model I I

talked U.S., the In markets simpler a would point-of-sale system outside It's POS, complex. sell. of is the about, little we solution. It's that I GP easier say to less

distribution as that well in markets which that So as FI well the as through can we have various operate. partner generally, distribution through we we channels international in push

there's solution. specific smaller POS to to being us require exclusively to at think, good professionals the to our be sales. So going time. able a Obviously, really of on our Where focuses a sophisticated distribution, market, are I more capability specialist sell end our of for most sell going capabilities is sale GP more POS able who the sales point-of-sale over

has thank concludes that our care. morning. and want Halloween. moment everyone call for you this for to just thank a I hope happy for today. a And take to joining you I your Take Payments, in us interest Global

Operator

concludes This conference you. Thank today's call.

wonderful time, this have a at lines day. your disconnect now may and You

Global Payments (GPN) 31 Oct 232023 Q3 Earnings call transcript