GPN - Earnings call 4 2023 | Global Payments Inc.

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to Global Payments Fourth Quarter and Full Year 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

Good morning, and welcome to Global Payments Fourth Quarter and Full Year 2023 Conference Call.

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

we and call results to impact uncertainties including business that actual contain and that the filings economic statements about, could risk to remind made Before including risks, Certain matters, and management XX-K our These forward-looking like expected statements other the subject conditions operating are by conference SEC, filings. most our in our materially factors, operations future of results. differ factors of comments you on today's forth with in during among expectations. the I'd subsequent recent from begin, financial cause inherent set other some to are

to We on undue place caution reliance you these not statements.

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

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

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

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

to over Now Cameron. I'll call the turn

Cameron Bready

everyone. morning, good and Winnie, Thanks,

in world last outstanding which of I Together, proud pleased for our are am We our outlined the great accomplished and a execution. teams XXXX fourth with February. an around deal we our exceeded year XXXX. quarter initial expectations full results, extremely

performance. financial our with Starting

basis revenue increased the we we Consumer headwind early share single-digit point business, Netspend second adjusted earnings growth XXX which from a includes For the per achieved more divestiture the quarter. our high than full of and year, XX%. This completed adjusted net in

of acquisition. EVO the Payments, XX than margins at the lower margin points, profile Payments which adjusted expanded Global also a basis of We had impact including operating time the

performance this volatility ongoing delivered geopolitical durability macroeconomic our despite we throughout FX the unrest, inflation, of uncertainty, highlighting consistently model. year and the including Importantly, headwinds, persistent

Strategically, also a of executing number initiatives. key the during on progress year made we significant

successfully EVO which our exposure our stronger strategy of Payments into closed growth BXB expanding the penetration we and providing secular payments, First, further acquisition March, enhancing complements markets in by integrated globally. capabilities our to

Our deliver in years. integration well, rate $XXX X to revised quite within million on synergies has target we annual progressed remain and of track on run our expense

longer and when existing we more revenue cross-sell into materialize, while the synergies to our transaction today are capabilities take to excited we than customer base. EVO's opportunities generally And we products announced have about

these We XXXX. in XXXX are continuing fully opportunities to invest them more and in scale to in expect

Solutions Netspend of in Consumer the our April. completed we and our divestitures Further, business Gaming assets

These X customer our a important operate as simpler seek institution business represent financial on our we and centered corporate transactions and milestones strategy core to model base. advance

And we that those leveraging vertical secular strengths businesses. our to benefit distinction trends. from offerings solutions enablement integrated In by seek our that by strategy across providing software-centric stronger spearheaded digitization markets, Merchant our and and is our across value-added omnichannel and a drive payment including in our markets, capabilities approach, commerce point-of-sale business, growth

we We against execute strategies. momentum our Solutions continue see good as to Merchant in these

stadium Atlanta businesses, Atlanta and vertical. as XXXX Braves to across markets achievements partnerships notable venue portfolio. in both we a and the provider further commerce official event had include be These in Starting with Xenial's Hawks technology presence number for the look market our to expand we of new vertical our the the

London. we Principality and services football, Wembley rugby and expanded Stadium home renewed Kingdom, in relationship Stadium, with In our Welsh with the United our of

be to We food service and preferred now the X were also in point-of-sale Sodexo, the players partner management its management company, the choice kiosk selected largest of by leading for and space. food are partner service

continued solutions with our achieving Solutions Australia, new to education and and business wins United international expand Our and Kingdom. new delivered many in to School Canada, marquee our launching across MySchoolBucks additions markets and the Australia businesses university customer TouchNet in K-XX

Network a the ACTIVE largest our City the And Toronto. XXX record business win bookings vertical including signing year, logos, with of in ever its had new community

midyear. XX% year. while hybrid partner minimizing by the ProFac We model was the a we burden XXXX it. the achieved in of record many This new benefits or provides part momentum from that to of partners and with solutions. This strong being that we heavy facilitation payment seen option prior progressive facilitator with software in launched increasing our Moving with bookings new driven the payment have comes

is ProFac to of have already thousands Payments, to Global delighted are using we ProFac to signed payment our XX unique solutions. and who date have partners customers merchant

XXX heavy AutoSoft, leading auction a a vertical. the provider analytics data ISV platform Ventures, in Inovalon, Some management health of dealerships; and a auto provides our software Knight, notable include business of Black leading loan mortgages machinery and and equipment in leading software; software a partners for in new provider vertical; the care which integrated origination

growth underscore the consistent to resonate confidence capabilities differentiated These seeing trends, forward we including maintain with our ProFac, in ability momentum the market. are going our to as ISV continue with our

merchants to we of unit course, we growth the next-generation platforms, of software third see up solid of our launch strong full capabilities for for platform. year-over-year POS our the new and strategy, is this releases and evolving add-on solutions restaurant our from this expand as benefit year payments our quarter. demand for As our of more And as our point-of-sale software retail expect complete revenue Notably, point-of-sale leg continue in delivered product are to continue enhancements. other software the prior per full the continues business to to and X% using which average

of secular attractive our the corporations. contributing and providing markets our most growth support we of core the us to to need globally of some overall rates terms to remains both exposure element global complex footprint of in a our Lastly, multinational strategy,

Central trends our high in including achieved businesses of Europe, good key Greece, and Spain delivered continue to new Poland double-digit And EVO, growth. which with across and see entered teens growth. also We markets European each

Citibanamex. favorable as customers Further, secular Lat implementations trends we in have new This Petro our where and increased X dLocal, we Am, partnership Mexico seen we meaningfully large DHL EVO. with footprint with includes our leverage with in like

Issuer some Solutions, the to relationships long-standing where sophisticated complex and have of Turning most institutions globally. we with

and with on record to XX In file more XXXX. customer than We traditional the in are XXX we XX our added ended of completed year accounts business to total, over conversions proud million have million. accounts

well pipeline to a as continue extends We strong institutions X have new letters with into intent of XXXX business as worldwide. that of

long-standing In bank XXXX, a a achieved that issuer with partnership is the contract partner, that leading of XX Payments technology we for a renewals a includes solutions. growth and multiyear U.S. foundation include provided relationship to new merchant customer new agreements. Global our This the

largest Chile's cloud Cencosud. The platform to have financial also institutions joint a confidence than substantial previously. in into clients production, including we We credit modernization more real-time by that native, of by clients our and X our made the leveraging retailer, in at now positions in us progress We've markets with issuer enhanced our solutions solution. cloud which us complex to had with Scotiabank expand between through continued ever new card and efforts, Lat modernization and largest partnership scale is faster venture provide markets, Am with market-leading, many products CAT, sophisticated, most with our growth our

our as client-facing native the are pilots spanning Further, launch and we planning commercial prepare of for of expect issuer unique applications geographies and of development cloud multiple products this additional the execute we cloud to dozens to services, capabilities. complete year platform

Moving to BXB.

money-in focus to continue capabilities workflow solid solutions. and our software-driven our X employer and across We money-out for flow leading see areas: funds automation, demand

well XXXX. integrated bookings We business into have software into Further, MineralTree business the in heading a EVO's software-led our market mid-market, to subscription successfully approach. to Merchant doubled our allowing nearly positioning business us core acceptance its with in go BXB PayFabric

virtual one transactions this of virtual growth in in are strong largest accelerated the to from As world, globally, contributed adoption issuers year. commercial cards the we of card benefiting which

Solutions Additionally, in spend increased of channels. over shifts in Merchant XX% the XXXX towards our as more digital bookings BXB

for employer also seeing are full achieving solutions solutions year growth trends, EWA our and Our last the and favorable Paycard new mid-teens year. including partnerships payroll business X,XXX delivering our nearly

our the to part early businesses Commerz including touch-on-mobile venture After efficiently is that This in the new In with the scale, an software January, the expected into to business announced in GP successful launch of will software of XXXX, capabilities and innovative half in and carrying suite XXXX and merchants eventful deliver more this our of a technology payments I'm Globalpay, XXXX. economy new entity, offerings omnichannel to and our and momentum comprehensive largest Europe. are run solutions Merchant we a Germany. at joint grow their first pleased providing needed in Commerzbank GP report point-of-sale

are presence digitize a Payment's institution with to existing extensive where markets distribution solutions substantial portfolio delighted further Commerzbank, unmatched to foundation be acquisition the are of in enhance European a commerce experience in We small- and there to payments medium-sized opportunities relationships and Germany Global partnering experience. while partnership our merchant with in with was in This payment financial this leadership Germany. provide premier achieved with merchants, helped JV physical across technology and EVO with significantly

best-in-class on point-of-sale our next-generation offerings this software. provide will and we further success Heartland commercial has omnichannel enhanced mobile to online quarter, next-generation our our grade simplified America, on restaurant in track updated remain on catalyze feedback interface which ordering, experiences and new North Retail including user and a launch hardware. Restaurant In Heartland overwhelmingly and been point-of-sale like loyalty, our point-of-sale positive, features solution Early

expansion, a a retail also us and new our solution growth at strategy to supply broader expansion with of thrive that the our retail is verticals, we modern e-commerce, our objectives, bring aligns environment our evolving complex clients ensures rapidly us allow increase stay customer tools into wallet functionality in of they but ERP market. meeting while and a into only technology, which engagement forefront ecosystem. providing This simplified of the single the with chain, share also need retail retail sub-vertical not additional And POS to the to allowing extend of cornerstone demands will

menu supports to inventory, also that reporting and real-time using of scheduling. drive-through and lanes Xenial's and dynamic labor, provide management restaurant multiple windows CosMc's suite a CosMc's way. system flexible projections in be Our POS speed-of-service enterprise power point-of-sale, drive-through delighted space. digital Xenial's McDonald's an to We new concept drive-through innovative solutions universe. selected cloud from QSR Vision's the the enabling CosMc's, a to new continues and also are and boards were in management optimizing traffic momentum operations is pickup back-office sales,

We have XXXX. ecosystem to open are at helping in Illinois December and new concept markets additional they locations in pilot restaurant initial as with CosMc's forward already Bolingbrook, cloud-based in all excited look with launched to the technology future-proof our

Our started Union, Credit flagship both Issuer relationships year business has having and One agreements also multiyear executed with Federal renewal clients, X decades. Capital of Navy our long-standing spanning well, the

fraud Capital aligning consumer portfolio the solutions. market families, clear military veterans strategy value-added services, loyalty, commercial Our partnerships of Navy portfolios One array North renewal its our with for its includes supports The credit as further and Federal, these validates business extension as of of consumer digital a and well And their credit winners. relationship and engagement an serving our including both America. our not-for-profit with in union

encouraged consumer in XXXX. remain expect have the similar we trends fairly ahead, resiliency Looking and in by seen spending we

remain expectations. However, our in we the risks of are consumer economy a global reflecting appropriately recognize there and to this number and

the exiting we what incorporate heard the macro line networks fairly outlook consistent environment a roughly but in and relative XXXX, with the Our what expectation year. January is broadly experienced to you trends slightly expectations. we with saw aligned with our for more does what in were from tempered

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

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

Joshua Whipple

Cameron. Thanks,

serve full the business We model. are performance proud fourth our outstanding of these for our strategy. while that financial the accelerate I'm multiple completing in continued pleased which which simultaneously results resiliency quarter execution reflects year, particularly and we the delivered transactions, with to our and

increase billion, with from year of of Starting revenue XXXX, the adjusted delivered X% net year. prior an full $X.XX the we

equates the XX was an net revenue result of compared margin The compared XXXX. adjusted year Excluding adjusted the per to $XX.XX, XX% improved the to dispositions, increased excluding to which operating earnings impact impact growth, XX.X%. XX% increase Adjusted full for XXXX, points to over of XX% of the share full basis year of net dispositions.

period points EVO share delivered of earnings period $X.XX of X% the margin expansion, quarter, the to an This The from equates operating same adjusted in XX.X%. net of $X.XX, basis basis the per XX was for year. of points increase XXXX. increased dispositions. of excluding For Adjusted the the adjusted quarter prior margin fourth we in same increase result revenue to an to XXX Payments net XX% and billion, compared

look $X.XX fourth revenue adjusted EVO quarter, of impact closer performance Solutions X%, for or approximately achieved net a at the Taking of the segment. by reflecting of billion growth XX% excluding and dispositions. Merchant

led software-centered double-digit delivered the again growth our by quarter. which Our businesses, performance was in

our strong businesses for AdvancedMD, Specifically, again we and saw point-of-sale fourth double-digit XX%. Solutions Zego, which delivered School roughly strength quarter. in grew growth And the

and Central as in Spain growth Poland Focusing well on faster-growth in double-digit geographies, Greece. we and as achieved Europe

business for payments Mexico strong we in and quarter Am Chile. was spot the benefit from bright trends the as Lat Our another secular

was ongoing performance macro environment by offset the partially Canada. in the and weakness U.K. This in

adjusted of segment, an in of the delivered EVO. operating Merchant a margin XX.X% acquisition of to basis due We points the XX decline

and grew dispositions, points operating EVO XX Excluding year-on-year. basis margins

of we year, synergies synergies of approximately within expense we expectation mentioned, And our from deliver run full annual rate $XXX EVO. XX% on our realized expect to expense Cameron as in years. X the million targeted For raised

partially continue business growth. slower revenue. ongoing reflecting adjusted grew offset business core our on driven million, produced output constant business volume-based in Our This digits revenue Issuer mid-single focus Solutions by Issuer X% X% of and by or Issuer we to as was managed services growth technology in net growth quarter, $XXX also this strength of more The currency enablement.

approximately customers. our addition of commercial execution in the benefit increase and we consumer account This added to our accounts to large We pipeline XX with traditional to XX equates sequentially. of than an million year-over-year from FI file more million on continue accounts growth conversion as healthy ongoing existing

in to compared Issuer of high led digits, grew strength XXXX, low single increased corporate transactions travel. cross-border by double transactions, quarter commercial card digits the ongoing fourth which highlighting

portfolio, record a this Focusing trends and while achieved comparisons improving Paycard in difficult the the quarter mid-market last year. delivered employment in its on teens segment lapped Issuer high from bookings BXB targeted our saw more growth MineralTree as business

Finally, XX.X%. Issuer Solutions an delivered adjusted of operating margin

in but decline the comparison represented consistent compared due our vendor relatively third to reflected As year expected, that from this quarter with was difficult performance, resulting period. to a prior a benefits

For our Issuer which the full XXX year, of basis expanded XX XXXX. margins to our points improvement points, basis exceeded initial guidance compared for margin

for excluding cash adjusted of flow conversion standpoint, From research quarter billion and flow with of a for the strong approximately cash purposes. produced adjusted This year, XXX% impact the to requirement free the represents flow the net $X.X free full expectations, development year. cash of our $XXX capitalize we and costs income consistent tax to for reporting income rate adjusted an million for the

$XXX million million the year. full roughly the for approximately was $XXX in and investment Capital fourth quarter

billion, have the March, the debt end our than by reduced closing EVO of X.Xx $X.X was more leverage position at and outstanding in quarter. fourth Since we

we healthy $X.X remains sheet of liquidity. is a fixed billion debt X.XX%. balance weighted total approximately available average XX% and Further, cost our indebtedness of of Our with approximately have

roughly for repayment closing we million debt capital to XXXX, also for allocation pleased EVO. have our $XXX shares repurchased X While to in prior are was priority top million

Turning to the outlook.

of dispositions. business X-plus We reflecting we X% over enter X% excluding EVO net to reported XXXX billion, $X.XX with from pleased or our to as approximately how $X.XX range percent, We and revenue billion to are expect is adjusted currently XXXX. positioned growth

XXXX, technology by forecasting to realization. XX mix margin lower from to driven up EVO are prior benefits of business profile points by offset basis shift for our partially synergy to expand ongoing our adjusted enablement, to towards operating annual We margin full the

To growth year. end the segment This the provide EVO Gaming these net acquisition the expect transactions full of growth We to Solutions. the the by for fully of report includes X% annualize at of X% XXXX. level, excluding Merchant business impact color of to quarter percent disposition the our of the of range, the adjusted X-plus first and revenue in we

Merchant of margin up first a to with the operating as XXXX to expansion in XX basis as half half realization slower relative business year We ramps expect the the expansion the points adjusted EVO in for second progresses. synergy

Moving to Issuer Solutions.

account from anticipating are compared We X% continued to pipeline our the and in our growth range adjusted partners. net the with revenue we as growth conversion for benefit large year X% existing FI XXXX to full strong

We to mid-single-digit and businesses in MineralTree Netspend's double Issuer the low grow for core digits. to expect range and BXB grow

operating expand businesses. which to points margin as adjusted will to in drive BXB business up growth our the the basis efficiencies anticipate in by we lower-margin for We be somewhat offset XX continue faster Issuer to by business,

as In EVO disposition anniversary of first the terms of will mentioned, of quarter. Gaming phasing, we end I quarterly the acquisition by and of the the

also will consumer the April. end assets at anniversary of divestiture Netspend's impact of the the of We

we the result, these year. continue some in half impacts have to will the a transactions As from of first

to Moving our couple nonoperating million We be expense items. approximately for slightly be net above adjusted tax to this currently to interest of year rate and expect XX%. effective a $XXX

again for and impact planning tax excluding We XXXX, be the research expenditures be which X% $XXX to comparable development free of are roughly in change a around remains roughly timing the anticipate our of revenue. million cash also We in adjusted from X-point range capital flow to credits. XXX%, to recognizing

buyback share capital that increase and billion our share priorities. plan Directors an to repurchase our of delighted our to more $X one authorization XXXX, of return a allocation, has remains to Board as capital in approved allocation we balanced I'm Regarding approach in

roughly during year. net to We we levered Xx until debt our the on further indebtedness reduce a also return to plan basis

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

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

Our the business the resiliency environment. Cameron? of reflects economic economic more outlook the while uncertainty. year environment in tempered adapt our for confident We positive to continued shifts our the given in our the in momentum model to potential for accommodating ongoing a and ability remain

Cameron Bready

Thanks, Josh.

I proud I and Global more be was May, it's we in said time year. an when last Payments As for CEO I not could accomplished what exciting of named

about us. enthusiastic the XXXX, of As I we remain opportunities front in begin

We have world-class on year, distribution clients highly business great priorities outlined global I partners and diverse a presence capabilities. This a role. compelling remain at and technology-enabled with strategy, time customers the into this a I our team, I for the focused and stepped

continue First, will for our to execute well us our growth positions against across and success markets. strategies, which we

sharpen attractive amplify We the in impact will, while seeking further most of however, the see we investments. business our to opportunities focus simplify our and on areas these our

drive can Specifically, we impactful where of solutions. these in our and are partnered focusing the we differentiation software-centric including business, further channels our across on with initiatives our POS own, most and

Additionally, that improving less characteristics. to we are margin business will towards an with the further differentiated harmonize and enhancing scale of eye continue areas

markets limited prospects in certain better and investments, may we to our growth potential to can focus with business. are that subscale order businesses business intention better in activities and management impact meaningfully Further, with exit build more on long-term resources to opportunity and choose scale, of our lines we

while our more deepen do customers. with it solutions business with possible Payments, easy Second, on as Global that relationships providing I'm to focused as making our

best-in-class to consume with cardholders. speed how that and need services while and want our clients meeting them clients will they our provide to capabilities our allow enablement This capabilities and program greater and and to modernization and issuer will which to experiences for distinctive continue they market flexibility seamlessly. includes cloud their innovative providing where met We with integrate the be customers prioritize greater with investments,

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

operating greater further placing and the across globe effective, with our to undertaking environments on technology and business We outcomes. are, more aligning to however, simplify become focus initiative an efficient

our and increasing business. a We with of and improvement redefining the are committed delivery continuous to mindset speed nimbleness success of

Fourth, generative and our workforce and AI improve productivity efficiency environments and that we customers of increase around harnessing and to committed the remain products the and power the our innovate to new of deliver value globe. solutions experiences both to operating

in ecosystem. our into in progress to meaningful of made in generative AI our power already our leverage have business We richness the journey data embed to its

We of that generative center foundational of coordinate a being to framework, and have areas in of cases generative AI of technology throughout and excellence organization, models our established utilized a number adoption AI numerous governance a provide business. our use implemented our technologies and evaluated deploy tools are

our AI XX% next-generation development our reduction a solution data. in we detect time, risks example, in business, a fraud Clients a and that Foresight AI number evaluating to that losses. Issuer are Featurespace, as utilizing opportunities combat solution across and issuing provides strategies have applications nearly portfolios. For of in our identity Solutions fraud to in of our realized across generative generative market-leading this further solution, key our with And component a use uses proprietary acquiring our using businesses partnership fraud real fraud

ensuring Finally, I'm culture to none. focused Global is second Payments' on

value achieve differentiate marketplace creation all dictates Our driving and the how culture goals and world-class while accomplish of will culture Having for Winnie? us our further benefits as an organization. in results a we our constituents.

Winnie Smith

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

Operator

comes Our Instructions] [Operator of of Jason Bank with line from Kupferberg question the America. first

Jason Kupferberg

start for to with XXXX guidance wanted the top I the line. on

about at X% your organic. least piece Merchant like sound talking last did being the versus little know year. remarks more we're this conservative maybe specifically, bit It you're time at in I a Looking prepared

looking we guide. and be of part some So in what Just on more can doesn't assumptions elaborate calibrate sense. that trying consumer at if the if to all, of the give slow just X%? us like underlying at I the you that a are mean, might

Cameron Bready

question, it's Cameron. good it's question. the Thanks for a Jason,

in And as the is of obviously about kind pickup expectation for it way from the that we excluding X% EVO we at prepared to for remarks, I the XXXX X% our basically we said "organic," quarter our think exited get we So Merchant is anniversary before deal. the the first X%. in year

that the we as XXXX. really see reflects, environment, that as to risk me, we macroeconomic the do into slightly to tempered view some more So consumer of said, we head given a

to towards end hangs anticipate us we think, in that might would said, higher I Obviously, lower being being as would the allows weaker, at point, if contemplates of end that the consumer your at better our is That little of or than low I end, consumer the range. sort the we if guide of least for, expect, a range. be towards the

think the thinking put year. We're consumer a consumer is So heading it. will us into into continued you're about about around we way our think we'd be end the weaken all how of to little expectations year. at around if with little see resilient lower it prudent we're with bit Obviously, consistent I doesn't again, a who end. a the the softness, right, do of and consumer be the it's towards thinking heading being wanted towards that And higher the bit the But we range. we cautious

Jason Kupferberg

And like if a I XXXX portfolio might business, around on your that the could some just to the on comments possible Understood. up table. Wondering event. simplifying pick pruning be be it wanted sounds

know There list M&A of where you guys a or sitting is media the you reports just buybacks denied, bit in little which then versus if sense I could to about obviously out just not get but cards. A the now. be acquisitions on before large-scale a some Christmas on front And can comment that, right in your priority are whether

Cameron Bready

address and Yes, Maybe latter happy in back then second. a the part to. of that I'll to first question I'll the circle front

to prepared in we're the comments, into mindset mentioned capital as to M&A business-as-usual year as Josh of allocation. the I back on relates think heading front, his kind it a

and expect level be for And said, perspective, it matter targeted to the we use our strategically, culturally alternative an I is it or has the uses financially alternative As our now buying fit M&A to right has pretty attractive of to of it as right to we obviously, that be and relative our given back to is do returns it fit consistently, the stock. whatever capital from consider around leverage XXXX, capital. needs

we're anything from back from the to that relative be present that. standpoint needs we remain that a deals smaller well. that think return view And our and of from I scale we do competitive more for ability strategy regardless generate deals that think M&A we the the to that's opportunities returns So or nice buy capability to of obviously we and an stock enhanced or perspective of true as whether tuck-in about advance thinking larger provide opportunity increased can

from M&A always, perspective, as open-minded. an So we're

very think, view and need with we're clear, we that's expectations the that think think everything going we strategy through be return our pursue lens. be to we'll I'll from I I and we M&A in of to and continue deliberate, terms competitive in how to we that about mindset that how that's fit M&A things forward want the as But move time.

continuing for I portfolio it will XXXX. think that, that some not question contemplated as potential be our first currently relates chance pruning, the business we don't in a differentiation greater line cards on the we're may or think scale, and see meaningfully that's differentiation, and minimize around And evaluate. your there in in we to is areas business, as that is it's investing really to outlook context Yes, today of making the the investing that but that we're sure the in in particular something those it's we to and prospects don't have it to have be at grow attention to investment, to subscale resources able business prospects to we attractive where have management going of be that minimize rates focused we continue trying have business markets we impact where moving forward forward. about

that it. something that's we the way we my if we'll decisions contemplating provide around certainly remarks. year, it Obviously, noted in So but the is work updates thinking we're about I that, through as we're as make

Operator

Our next James line Faucette the from question Stanley. of Morgan comes with

James Faucette

generally Wanted assess you But of now? to working opportunities you're think, versus challenges in lot the the that environment, of you ask where do market intensity competitive I in terms of in things highlighted generally? your And right strength. you how on different current see areas Cameron, would a competitive

Cameron Bready

quarter obviously, are which with which And would growth there, capabilities allowed give we I growth that of excited or think across most that to for the the the about, merchants Retail success. And whether this enterprise in POS our for that rollout we in a and next-generation obviously, capabilities small- again, QSR with is I think quite will question. CosMc's U.S., space business competitive we feature-rich in targeting to bring integrated how the partners have Heartwood about, and it's and retail distinction a with feel through around software we relative what differentiation, obviously, think think we're it's restaurants market and the a positioned we're fairly the distinctive Restaurant how U.S. runway good we positioning, good ISV continued good markets long of feel has in about talked we're obviously more service to, platforms. we and the of certainly, say we're that the we still can Heartland POS, medium-sized strategically that doing the I obviously, business, here, we're here our very see us competitors our to across Certainly, about coming, marketplace. position in the we solutions us point-of-sale today.

about good So I we think that. feel very

nicely do those the specific own where we course, businesses gain they're targeting. businesses to that continue entirety positioned well continue those of verticals stack, and of again, think those in the software we're the software we market grow and to to verticals share across then, with the vertical And verticals and

think strategies our I that's to the growth and U.S. we're here that in pursuing focus market. the and continuing So invest here are in, to think, strategy market. the that's us U.S. on those areas continuing do of best software-centric I the the competitively, in really we're that business in for

But U.S. sanguine landscape overall pretty I feeling the think in we're the competitive about

competitors I on overall obviously backdrop free think from pricing more has become focusing rising and flow, cash just creates competitive with a constructive think sort more rates a rationalized standpoint. profitability I and which of

a capability the competitively standpoint bullish positioned on not bring pretty how and market. we sophisticated are I'd largely say quite to that probably can of from as the U.S. as bear outside U.S., the markets product we're solutioning that because we're

Asia our to Lat intense degree, our markets say our touch-on-mobile and than Pacific, solutions, markets the really particularly point-of-sale commerce I market. us to ability our probably competitive here competitively U.S., positions enablement is think it outside Run and Grow Europe, the in less in well Business capabilities, some So solutions, to dynamic, in bring Google where platform the Am, cases, our U.S. many in My I'd is

aside putting these relatively So of perspective, and positioning we outside markets bullish from U.S., in just capabilities. that what bringing the can competitive do terms distinctive in macro I'm differentiated

James Faucette

rates, cycle EPS et targeted be trajectory Appreciate kind about that. then your of vis-à-vis related And as of and established the targets, be the to that standpoint especially cetera. outlook, and this thinking we follow-up and few how thinking guide about ago was growth how a should that of year's we years a from medium-term wondering profitability a should kind

Cameron Bready

ahead I've a an intend and my the Yes, Investor end. James, be give get communicated today new as That one at will I'm provide then a of not Day we'll cover thinking business going and question, that we fair this the about to "cycle how color about to we're and that time we look, little year. more a topics guide". Obviously, it's previously, host sort of skis of

if step you anniversary-ing share from top of targeting as perspective. per revenue an on would I basis, back a But just percent into and think X-plus the said, thinking on excluding year, deals, of growth earnings the look kind we're of percent heading XX-plus how and the we say normalized we're at if about line the business kind the about you business

kind about a the year. it high heading of the kind think tempered growth single-digit into line and top mid-teens in of again, per share of reflecting environment of more a macro little bit So the earnings growth, view

sustainably can how continue think business against a execute that kind can generally those that's achieve we we of something about to think time. are business. period of I the fairly targets And expectations that we reflective I of is and think think one we over that

characterize XXXX. obviously, overlay a macroeconomic kind as for of a wouldn't think how expectation of tempered I the of little reflective the with about business, So bit of broadly outlook the we

Operator

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

Darrin Peller

type are at incorporating of revenue terms being all in any the conservative guidance, the medium-term more to But is which think on the guide, the helpful. on said helpful, should you the touch in a a to that going of but material you actually quick was outlook consumer, was we or kind follow-up inputs, I growth tuck-ins when about that as again, just of M&A that rates? consider we

that a be It's back And points. than used lower I is then coming walk level on perhaps? versus synergies outlook maybe Any more much just that that's of conservatism terms from guide higher, to that mix? XX if inputs. And that saying to think basis does of little much we allocation more to a up in How just that margin leverage Can expansion. inform capital your and through bit? is the of as then EVO? margins, view it operating also, a you're to are and in buybacks on well margins just just How your going

Cameron Bready

buried lot We in A no I'll Josh there, did ask M&A in as is would XX to it's the of chime on of first a buy but small XXXX. an then couple terms start from just to QX, the less answer mean, question, minimis perspective. I the points. I de than basis contribution well portfolio comments. in Yes. a Maybe Darrin. in on say and

contribution M&A, as we an our M&A whatever at expectation do We of a historically time in M&A do have update we'll we not as if guide. other So for impact. and that's particular any large Obviously, we head XXXX. don't included we into provide the have

the margin a kind is the the to a a and let things I as we're Josh relates maybe think give little taking couple of On opening just guide, heading provide I then the prudent question, of fairly I'll second color. comments into X year. one outlook of really, view I'll think, say it I'd more

areas to growth in sustain lot a invest over EVO drive we trying in to that are have time. and integration going business, as a the we're of longer accomplish things of well We business particularly think to to periods as as that growth continuing help as relates it

rollout new to life, EVO of business balanced the benefit of to a to integration the ensure is that of bit while we in view underlying continue stability we're So POS in our we reliability. the line reinvesting execute the effectively, seamlessly, invest support to platform, margins a much obviously, platforms how and everything their to ensure of I how around it's think flowing bottom much versus in like through

continue we term, product to which bringing invest and et in to We drive revenue, capability new their think will longer markets, cetera. obviously,

So the the think through to again, invest the allowing I some earnings. line growth business as of flow well to as view pretty wanting in to to around, is bottom to impact that around drive margins balanced

to basis to closer sort point Merchant I make, EVO, last he XX The would I and would in still the margins I'll exclude any color be points would add is you and ask at up to XX%. like year be is for obviously Josh overall lower impact the margin coming which of of if a think closer profile, would

XX%. to So move of for base I'll off Merchant you kind of of a going remind just that's

focused for find to the margins find on in continuing the opportunities market fairly to opportunities again, We're grow overall. business continuing to healthy expansion, business. So also invest while to are

know anything to don't that? if to want I Josh, add you'd

Joshua Whipple

and continue we you were year, may by to I margins QX, the ramp. expect improve XX. segment, you is back last synergies were Look, they QX recall, And to Darrin, only if No. add think down to about go think margins XX; if XXX that thing basis Merchant down as QX points; we margins I would

consistent seeing positive into coming trend we're continued, year. So the a

specifically, in balancing Issuer Cameron to expansion ongoing company to the of see pretty expect low the expense as basis to relates on it But the 'XX than In figures. overall business. consistent trends need management. quarters. the QX margin our margins, margin And benefit be given also I'd continue said, to volume-based be slightly we just otherwise, reecho focus the the absolute of we'll what XX QX each revenue margins higher we across expansion points strong for will and reinvestment with margin

Darrin Peller

this is I like That's I'm question. looks raised really buyback helpful. not mistaken. just the mean, it on authorization, And -- your quickly you if

is of return this an going capital so expectations indication And forward? more

Joshua Whipple

target we until So a say net roughly I year. more one basis on of remains reduce but to look, capital Darrin, debt debt can we levered plan during return Buybacks allocation priorities, XXXX. approach that plan we to our a in return to balanced further would that to the Xx

Cameron Bready

in was be I us allocation to plans it the to add, I'd what share capacity do -- mean, repurchases able important thing for. have to it that's going only to was us important capital the year Darrin, if to call the

to capital that I we're repurchases if the signal, obviously, the that's very it obviously, a pleased sends Board that for So supports and year. think best open-minded we're allocation this share alternative

Operator

from comes of the Barclays. Ramsey question line next Our El-Assal with

Ramsey El-Assal

from help the it Will that ramp much into this guidance contribution us think year? -- the and you the Commerzbank quickly? baked Could from basically it magnitude JV Does is of through timing deal? how

Cameron Bready

They'll Yes, not What business joint an that venture We're is itself. whereby that doesn't doing existing Commerzbank joint but have of distribution it's XX% obviously us. entering a has. good an a will business, channel to question. buying today. Ramsey, we're Commerzbank as the bringing largely the own venture And into effectively let into be venture we're joint them. establishing they're it me just acquiring a portfolio distribution distribution be party partnership, the clear, the for Commerzbank relates with the through to

meaningful and essentially a we but it's to it a over a and to greenfield time. scale of as business acquired year, more a the in business very So Germany, period last opportunity grow that through think of starting opportunity EVO Germany acquisition base scale in long grow an really small with a

of Commerzbank strongest in merchants, medium-sized markets domestic and small- banks market across largest target serve is more is positions, our market globe. one the one particularly around the we the in Germany. of They obviously have the of which that

fantastic the time a we going it's meaningful -- a us to more but to of in Germany a build to over it's end obviously So think going that's new business allow to there. our take scale while day, in partner

Ramsey El-Assal

Got it. Great.

to U.K. the know being in us stabilization follow-up on new you compete business? effectively just spending Could you're that capabilities A the you update me. from the let there And front? great context of or you And seeing I the if a at there chatter, takepayments the consumer of channel. on this do sort like guess over kind of point? have macro us need Sounds product

Cameron Bready

latter it's good Yes, comment Ramsey. the to going comment part I'm that a question, nature. don't on not on that. surprisingly, of market Naturally, we not rumors of

starting expectations sort we it to I which a in generally their I of this are as relates with where One is reported morning. would were They see U.S. stabilization they is things. U.K. unlike think was numbers Obviously, line inflation the yesterday. couple I of positive. think of signs market, to the there, But say some

forward So I think that's well. a constructive as step

a us course things So optimism are stabilize relates point I as can in to a don't seeing more the U.K. market, the much -- term the the absolute over about U.K. we last highlighted year macro know longer that seeing bit getting obviously, where which that we're think we've we in where to gives in go we've little and just of the obviously, beyond. of over seen it bottom pressure, But do that I the

GP we relates and POS here to enablement short worked as We say highly it answer differentiated point-of-sale as market. hard mean, bring give our U.K. we've market, from the the new in market. would bringing like solution to to a product that's us not brought will again, very product is to the yes. and to talked solutions it to that We market solutions is capability, I new competitive I perspective commerce think the market. U.S. a which And well. U.K. other about

standpoint, a capability market. successful we in I from to need that be everything certainly, product think, have So that we

there. that's see macro-driven And the over longer think been I obviously has a U.K. think stabilization said the before, starting of time. that with challenge really something we're I've signs period of I to

Operator

comes Baird. with Koning Dave the line question of Our next from

David Koning

is those of of significantly with one XXX% so just are little XXXX? to well? And you that down they've discuss Can you've that question, really down your thought as around I had in going -- encouraging pairing quarters. flow about the in company of to guidance although bit then why of the many companies cash conversion. come quarter parts add-backs, last and guiding free a what Not kind converts go few the a merger conversion. Are pretty kind the semi-high

Joshua Whipple

and take that. go Yes, ahead I'll

generally were, say, pleased for we would very conversion, the So XXX%. our quarter, look, free especially over were cash we I with flow

the second as conversion the the with For I follows XXX%, was little last half in bit in would our expectations over in full line last of trajectory we've this And been year. saw and a this and quarters and in guiding that year, weaker first half we say XXXX, that were stronger the of several year. the we year the the

change -- and -- convert continue we and timing the we the ahead the XXXX, what in tax expect XXX% of to credit. of say trajectory So and 'XX, to the I impact excluding we in recognizing and go that would pattern general R&D go roughly ahead target same

to So and ahead to we add-backs, come say the down. as go relates add-backs expect continue I to would it

and expect Schedule of be to you'll continue we ahead think the earnings our XX relative GAAP on. improvement we that and That's last time to as earnings. year XX% approximately that significant a press in to go I note release, of adjusted goes expect

David Koning

And maybe just a quick follow-up.

profiles? given once and just On year the earnings, Netspend can the anniversary sounds mean, through a both bit I you EVO, pace anniversary of accelerate like little it EPS and revenue the

Joshua Whipple

Yes.

Netspend QX, would anniversary-ing as look, what out, growth. we're expecting So rightly XX%, say Gaming. EPS we're XX% and I point you is

So to the QX, to full of range. kind XX% and XX% the QX range then be the below But in will will in slightly XX% the XX% be to that and range XX% for say, XX% that gets be QX year. I will the you to would

Operator

question comes the Cowen. Bergin TD Bryan next of Our from line with

Bryan Bergin

Just expecting that you any Merchant from line additional on dig guidance volumes in to the view. growth Wanted you with on comments potential generally in pricing first. forecast Are have? lift the in be to

EVO the balance Gaming that level? the And are you sales and to level growth after generally year in the forecasting be of Merchant

Cameron Bready

the would year. quarter address and yes. expect relatively for answer is Good our to we to in the QX would questions. the full outlook on through EVO first say, based current just I the I maybe Yes. last be Once short anniversary QX one Gaming, consistent quickly,

going Just generally to first the expect been with to volumes would yes, back That's trend. line seeing business. question, revenue growth relatively we would the say, the a in we're your part in of track that I consistent

that and pleased schedule pretty If that our long provide you see you which something of trend earnings is being a consistent, look period quite we're go the at we can back in about. presentation, time

the I of to expectations say, and yes, year. XXXX, work our ourselves by track So generally for volumes as large, we the outlook the we expect revenue through balance would

bring want giving strive service about and our don't we think commentary, pretty to in And then not be. customers. our market to We've provider proposition clients we're only execution well, our that pricing clearly our appropriately I differentiated low-cost actual consistent towards been for it on of not to for the and we really would And level price we services to say and the we value on as the and we haven't is getting value our customers We're that geared reflect we in as how the of commentary think changed to -- front. we that paid pricing, philosophy that. but think making and our sure fairly we're the

of executing of little unusual, that over It's would a time. of So continuation XXXX more say, perspective. bit a from of long there's a philosophy we've I period against in nothing that had pricing a

Bryan Bergin

And follow-up Okay. solutions then that. a on business. the Appreciate vertical

may about currently where interest aren't you you lean further potential where in As exposed? think you to have investments,

Cameron Bready

we to Yes, do have own a care software obviously of take versus fantastic it's lot where to very be partner. business. to assets think want integrated a good question. where we want a terms We of we And in deliberate we

We payments, whatever think, benefit integrated to That a that business put have continue opportunity to to embedded around great from a is term us, payments, a it. want I gives partnership model. of lot you

we can So better can growth that payment software. monetization, because drive we better assets growth our think as vertical as wanting a in and in think differentiation owning we by obviously, own is we focus our solutions software well better of markets drive certain to

software. strong own spend to we've monetize with target said, software period where and to time as of markets out to the good large want not we to So a verticals, strong business we're for vertical be just There to a that. tend owning of consumer spend payments. needs in Obviously, own that long addressable We are a nexus opportunity flows coming of software in there's payment markets.

in finding we thing would is in businesses say we to broader those third of be we're invest take ways I us or the investment find we to want A traditional impact that software our more the across big to can the it's ways Payments software The broader to our and across payments vertical investments making. in businesses able in them we're amplify want focus where our for Global the Global businesses portfolio. is investments amplify Payments. to Whether leverage businesses, market making

that on focused very before, vertical those we're And markets as then applicability. lastly, international talked some I have about

in using One in of outside software to Canada, and by we've a Australia, the doing, U.S. markets those, growth serve U.K., my things et outside the drive today. differentiation I is in today, been and of this highlighted we cetera, to script which successful our means U.S., taking that as some obviously, and solutions of markets the

element important as think another we that's expansion. about So vertical

how would we specific thought time say, consistent world. But of period that it's think in as had software. the into a we a getting about over long pretty verticals, that's about without mindset, investing So I we've

Operator

from Our the Andrew of Jeffrey next with line comes question Truist Securities.

Andrew Jeffrey

trying the aside, growth line that just technology again, the about, top Can is to from of couple software about it? growth? up it do think on versus longer Just might Merchant nice there and and levers away term, you of how bit very what of do you want a organic little rate that broadly. compounding revenue macro accelerate much theoretically, conceptually, Cameron, how build just talk capacity stay a I the I again, guide, Or Merchant love a in And to urgency term. and longer accelerate cycle rates maybe but today? the the a to focus is and sense the is to

Cameron Bready

-- our today good fact billion. it's Yes, would I to north drive certainly, of are higher is be there well that higher. over I north say, would to time I -- revenue $X the slightly questions. that of I just balance that think able Merchant Andrew, sort opportunities mean against

So we're big talking about. range you're moving when growth the rates that in a number talking we're about

that to about our event own But drive of the we think spent enterprise our areas call overall point-of-sale are better there those to across et area. and I wholesale business, We're where strategy, of software. trying on how a making stadium and around about sort different talking probably in point-of-sale across venues, assets markets, prospects QSR that across meaningful our over the where today, we we're international think bullish is business, leverage direct our lot and time time cetera. We really across I'm our rates investments QX

that to So with on, markets touched as the what time, to expectations we it I next POS and point-of-sale think we're the of scaling XXXX growing I capabilities we're solutions several able outside have generation U.S. and rolling and out I'm in for over of as business do -- high do pretty bringing years. our about next over

is the business. for augment try rate So strong a of continued that growth I think on lean obviously in growth obviously can overall that rates that we want of and to drive, channel the certainly that lever to

And as those I'd the the dynamic I market. as markets, are a thing international do second say I the U.S. less highlighted. just markets think perspective intense competitive than is really

markets And market I and capability differentiation, think can those time. partners. rates business more to to lead think therefore, and have that I we positions, of we're for great more over product drive bringing have we growth more better the great and

business area the us to another and to see I for in that's where scale. opportunities continue certainly, So grow good

have the trends the embedded I third, more business drive sort take we're then the tailwinds a provide over to time. would in that growth, to of hopefully rates obviously, of become clearly some think I and omnichannel those those longer of continues would for we period And the think advantage that over growth to poised overall, say, time. I payment the tailwind in more the business, support meaningful trends of business And obviously, that

Andrew Jeffrey

or just there? wonder pricing yields And stable that. Issuer pretty a on you Can quick I comment looks been That's what couple renewal helpful. a Okay. as a are follow-up. is customer renewals. the just within if It of You trends business just big I one have appreciate called the out like stable. terms?

Cameron Bready

good around conversations a for surprisingly, not it's And Yes, get we question. any obviously, don't into particular pricing specific customer.

time, delighted out I would of we're say us is things. customers flagship that customers, business. obviously a for as of think, renewals important. obviously, are done, remarks. long reflected couple in Those with in It's was the those have the called relationships And also prepared renew with. a I very have very to getting we X period One guide my strong I been for

context still of see, growth businesses rate So into our growing of the kind as you XXXX. Issuer targeted at can of obviously, we're manage able the heading to in those

consume open to helps think and to business. to going for prospects which we continue for capability that Issuer enablement more we for up easily, out clients solutions new in I cloud modernization, new capabilities the business, better to to allow drive our say building continue and would clients that's channels native broadly, term Solutions microservices more I think be in more more we avenues able growth that invest obviously as more invest long our growth for to and

begin term. positions amount a into and sell the bundles across talked So in pilots the obviously we've that market and modernization we geographies, as plan in number made our that We of we're what's start near a efforts. on products XXXX to us those services the of for progress solutions commercializing substantial different about business, to running

is -- the new But So goal revenue project markets positioned business, kind how progress over rates opening and to obviously, I we're with accelerate pleased to channels and progressing. by to opening And the growth able growth. new how the business. of how Issuer be for is that those up rates we've of objective sustain time pleased that of current we're with that obviously think,

a this like Payments And everyone Have everyone call of our your for support. day. Global with Happy that, thank Valentine's and great morning. to joining And in We I'd wish your a Day. appreciate interest all I

Operator

concludes This today's conference Thank call. you.

You may disconnect your lines at this time. Thank you for participation. your

Global Payments (GPN) 14 Feb 242023 Q4 Earnings call transcript