Global Payments (GPN) 1 May 242024 Q1 Earnings call transcript

Ladies and gentlemen, thank you for standing by, and welcome to Global Payments First Quarter 2024 Earnings Conference Call. [Operator Instructions] And as a reminder, today's call is being 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.

Good morning, and welcome to Global Payments First Quarter 2024 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

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

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

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

the turn I'll call Now over Cameron. to

Thanks, and Winnie, morning, everyone. good

and which consumer our results, strong expectations first were with uncertain across we We quarter the macroeconomic trends execution resilient of pleased businesses ahead saw are as despite our environment. our

per growth, the per share revenue growth mid-teens excluding net the Netspend's delivered growth adjusted assets. divestiture X% Consumer of earnings or of achieved adjusted we adjusted Specifically, impact of $X share earnings and

basis We points. margins also XX expanded

for capabilities Our Merchant demand solid markets businesses to and our Solutions point-of-sale again growth, our as differentiated organic market payment accelerate. delivered embedded solutions ISV, by partnered across vertical continues driven business

channel. Starting partner ISV with our

including year. strong we doubling development see quarter prior strategic trends the number in this booking new results, integrated partners business of the signed continued We to to compared

X since we launched progressive We several facilitation merchants solution. integrated now added last new hybrid have or nearly thousand payment our have dozen boarded this mid and to year model ProFac partners

for solutions are are our human and capital also engagement commerce solutions merchant as and enablement and and we demand base, cross-selling partners' marketing, value-added customer strong seeing management into payroll, others. loyalty amongst We analytics including

a the us to products needs our ability service partners sustain unrivaled meet confidence Our gives business the and and models, expand and with marketplace our specific comprehensive and of ability and forward. in in going us distribution, differentiates tailored in of best-in-class to capabilities suite operating this support margins growth

of proposition to time for over has focused led environment, cost have maintain And benefit. is while balance also historically stable our in revenue capital strong. the unique partners Our on current retention this who striking relatively competitors and which shares profitability, price to with allowed increasingly in remained are between rates growth value us channel a

our achieved point-of-sale first X,XXX to focus customers locations our POS point-of-sale on growth new our the to We And adding additional quarter, solutions. to across again platforms. momentum. software Turning solutions delivering commerce-enablement XX% gain in continues

loyalty example, the Heartland period. our year in quarter increase new POS one prior a solutions As the customers engagement of nearly to saw number customer we leveraging compared and XX% this

restaurant on we days, point-of-sale early the next-generation of in retail overwhelmingly positive. while software, which by feedback are and encouraged has Heartland And our the been launch initial

experience. our Android-based also more delivered reminder, a iOS- best-in-class improved experiences a As next-gen allowing for be are across They these intuitive designed an to offerings. interface and mobile user omnichannel solutions and first,

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

year this to new our will in We and offerings contribute to later XXXX. performance these more begin expect meaningfully

also is software, point-of-sale seeing. cloud-based purpose general the contributing our growth we are to POS, GP Additionally,

launched Canada, Republic. including the the We U.K., Czech Spain solution a have and markets, now in international of number this

we're having these the POS in by and other merchant encouraged are in We value-added bundling success our solutions geographies. for customers

bring the Poland, on Austria additional U.S., We markets POS track Ireland, GP XX over Mexico, of Germany, outside to including to and next the also remain months. Romania

food the as to property payment quick-service advantageous our to needs software of revenue, percent adjusted it enterprise Today, vertically $X verticals, business. us commerce we market. care; and In necessary X and ed; owning management; across develop both Moving the software, own annually. sports management; market higher roughly these vertical restaurants K-XX allows highly than and billion education, integrated, collectively generate of other entertainment and to XX-plus include software markets, solutions meet better which communities technology These vertical of service net solutions more events; health is fluent and entirety stack venues. the and the growing

the markets, focus these underlying We foremost, the on of size vertical and because first of TAMs.

component For globally. target our activity represent of meaningful own overall addressable business, software economic we that spend a large markets specifically

software owning embedding thesis to vertical by with drive a payments, Second, software and to nexus ability the differentiation. and of further growth we our payments to software, core enhance solutions strong us target and between markets providing incremental

of are delivering significant our software assets transaction to prior our volumes acquisition. not exist all that Today, did

leading a with where a to runway Third, acquire software and like highly and player significant under-penetrated we we fragmented perspective ideally technology a share. from gain markets can

the software market us outside prefer allowing is generally U.S. our markets we the time. where applicability, over vertical to export opportunity to there of international Lastly, solutions

Payments much deliver payments geographies development we competition. of where offerings differentiates and are ability embedded support in to in and faster-growth have more local sales payments Our integrated earlier stages Global to relative further

of Critical development, capital that our Payment basis invest and and Global so in compete onshore can to of of growth. product functionality on priority software this and in extensive success efficient innovation. we great focus with delivering on we offshore own building our and to the maintaining sources supports experience is software provide portfolio the

business software overall scale. businesses, services allowing them while our our their Further, technology to to leverage on we efforts their and their are able scale to enhancing deliver to focus differentiation in global administrative

And able unique a our by of portfolio proposition global infrastructure, customers. of reach, for software our efficiency the deliver extensibility with the to and innovation we our payments combining are

vertical Apartment We saw portfolio. including and to the in strong solutions delivering continued our strong first ] across its new for Homepage in markets also solutions software successfully cross-selling Consultants. consistent the management quarter from partners, newest several double-digit businesses and quarter, addition, demand existing property in [ platform residential customers business see products execution communities, Endeavor bookings Zego, management-focused additional large MHC the while growth My to our and Management property including

ACTIVE in and Idaho, customers Ski City Group. Milestone Bogus Resort [indiscernible] Basin event XXX Waterloo, In vertical, this Events includes the and Australia the signed nearly communities quarter. of This

our the locations with to with Bolingbrook, CosMc's QSR new our in ecosystem following technology pilot launch December. this Turning the with as X business. in Illinois CosMc year. additional We Texas in future-proof forward locations concept they initial McDonald's open look to cloud-based Xenial to live went continuing in

also success our locations event We cross-selling relationship Atlanta. retail we and venue extended with the and pleased in technology to continued at Park have the the have to our into in Braves environment, Xenial are rollout of technology here XX Truist completing stadium by

marks University including several Brighton, Additionally, university first with partnerships University new the U.K. recent agreement Middlesex in and X notable the last U.K. fifth international the Canada Cardiff partnership our TouchNet, the and in Sussex in education achieved higher University King's which Metropolitan April, in the quarter, in And new achieved University months. in business, the TouchNet's in

The of great geographies ability U.K. bring example to States. to a software United serves outside as the our solutions our of

for which for payment a our in higher in had strong decades, payments U.K. embedded is have proposition education we as technology the leveraging demand growing sell the to solutions region. and We now successfully are in software

trends quarter. secular to We with good the continued international see markets in in also our momentum stronger growth

double-digit and Poland in well as Central achieved growth we Spain Specifically, as and Greece. Europe in

be LatAm trends our spot bright the business in and from strong payment And benefited continues Mexico Chile. to as we a secular

of number Gameplanet, customers capabilities retailer, in Mexico with new we game our leading insurance leverage as retailer, partnership a signed during we quarter, including home goods Citibanamex. company, the and and video Specifically, Qualitas; omnichannel RECUBRE; large

to partnership to solutions seamless and with Pacific, Marriott expanded International locations Asia in pleased additional we geographies. And omnichannel were our offer have to

Germany. we January, with a partnership In Commerzbank in announced new

and venture, joint have are regulatory pleased approval a We launching to recently Globalpay, month. new this are Commerz EU received

laying scale, businesses providing at including of innovative POS deliver omnichannel to offerings, capabilities GP the tom groundwork the Europe. suite more GP economy payments our and already need software the technology a grow our merchants in are to their comprehensive software and We large they in solutions and run efficiently

during to executed debit expands existing have Europe Issuer new new contracts processing quarter. a are X a large Shifting agreement This Solutions, our that significantly with in FI includes the customer delighted relationship. to we

its RFP operating technology our cloud platform the company live, be Europe. We with extensive Once a after this also its as leading reached first us for in agreement contract issuer and in selected an U.K. solutions customer environment fintech who our global partner travel a across will AWS process. EU

Additionally, a for X with includes multiyear renewals we long-standing support This portfolios Money quarter. successfully relationship period. during extending card Virgin executed our its the of credit customer in

other that of both and of engagement its successfully also fraud, multiyear relationship consumer range globally. with we with premier commercial a and Scotiabank, royalty spans including renewal amongst portfolios services, solutions. one multi-decade We value-added renewed digital our Citizens and a clients executed our Further, includes wide

X have first in accounts our the pipeline quarter, Issuer million currently X addition over to team implementation file active LOIs. and completed the in we also In conversions, on XX

Further, the multiple American additional portfolios consumer Issuer over piloting this have progress we months. clients quarter and cloud North support made services on now modernized modernization to and of our both X several commercial next expect in

launch cloud development additional products expect execute track in unique dozens the and applications our client-facing of commercial We prepare geographies to issuer we year. remain across XXXX for to as on platform of and pilots services, next complete

BXB. to Moving

continued within money-out we flows as and and market: money-in leverage overarching X We areas BXB the our strong capabilities across software-driven focus employer workflow to funds solutions. automation, drive growth

bookings accelerate. Our improvement XX% increase includes to as XX% a achieved adoption the business in which in quarter, first new virtual continues during nearly bookings card new a MineralTree

and to this we EVO's and more channels. merchants PayFabric this prior year shifts to of Additionally, as platform benefit the from spend towards beginning quarter XXX% compared increased of integration the digital our BXB bookings are

Restaurant are operates signing XXX relationship with Wendy's Taco employer trends restaurants the employees. favorable within including in seeing over Our solutions Group, restaurant new a Delight which vertical, Bell X,XXX and EWA

largest in Sunshine IHOP a with achieved XXX with Southeast. PayCard partnership the Partners, locations also the We franchisee, Restaurant over tip

We to our are as offerings this in accelerate our are we to refine progress strategy making BXB space. and we growth delighted with the unify continue

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

Thanks, Cameron.

the with XX We the basis of same the revenue period X% Adjusted points the achieved the $X.XX billion, pleased for from year. are increased financial net in quarter first adjusted of in to quarter, operating delivering we prior an performance increase margin XX.X%.

highlighting the points, XXXX our Excluding the acquisition was mid-teens consistent Payments and net our EVO execution per of period X% The of $X.XX, adjusted basis across operating of earnings the impact or result same growth, compared increase margin excluding adjusted share XX ongoing dispositions. dispositions, in of of impact an increased to businesses.

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

ahead for business, normalized quarter Our high of performance which driven we delivered the as was U.S. single-digit of our to our by software-led EVO expectations the benefit from strategy. contribution our continued growth in

to portfolio notable also TouchNet saw in being bright software vertical AdvancedMD and XX%-plus our we the in spots. the In growth highlighted markets our business, addition Cameron Zego, POS with strength

differentiation continue seeing the and in we double-digit as We of Outside Central strong well bookings our growth ISV are as we Spain our long the Greece. of history as Europe, U.S., also partner business achieved Poland and in in in marketplace.

in benefit trends macroeconomic as also in the United and in business parts quarter we partially well Chile. the ongoing payment from the LatAm Kingdom secular Asia offset in of Pacific. the Our by This and strong performance Mexico weakness was environment performed

execute Merchant the of targets are of margin our we margin against on the segment, points a continued as transaction. acquisition decline continue expectations, operating we synergy adjusted our XX improvement and basis This consistent are EVO the an delivered our was pleased sequential due We in performance the to to from of with with delivering EVO. we XX%

we've progress enthusiastic EVO substantial integration, made remain available. the the Regarding about synergy and opportunities

in an Specifically, run well expect additional realizing achieve of to the $XXX XXXX. to million targeted in cost achieve expense us XX% our synergies within to we This X puts realizing years. year, synergies after last our XX% way on annual rate we expect

eye an the As expense momentum always, we sizing towards focused combined with remain we that maintain business. expectations on synergy ensuring in

customer about EVO's we more existing today our when And we base. excited have the into capabilities we to remain than solutions announced and the transaction cross-sell opportunities

we forward commerce materialize, certain are take And In as and fact, and to having synergies longer markets LatAm already in and while notably, look early including also these to GP well. tokenization bringing bringing micro as Europe, tom to enablement as generally in services, products e-commerce, revenue our solutions. solutions well to success we products fraud EVO's

these are EVO's more scale to We to them markets XXXX. across continuing in opportunities expect invest in fully and XXXX in

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

with to consumer growth accounts large or benefit million customers. traditional continued from sequentially on file our conversion execution in healthy million our addition We to XX ongoing of commercial FI added and nearly we of account as XX existing year-over-year pipeline

completed conversions X and we achieved quarter, the renewals. X During

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

Focusing portfolio, on BXB business difficult bookings our laps comparisons. MineralTree quarter to as Issuer segment in while continues trends targeted more PayCard its improving the this see mid-market record employment achieved

year an the an growth Solutions adjusted to business. revenue our efficiencies compared operating basis prior XXX on margin volume-based focus increase Issuer of points driving in of fueled XX.X%, and by Finally, the delivered period,

income From cash quarter the the adjusted adjusted roughly flow strong we adjusted quarter consistent XXXX. represents conversion of million. XX% approximately cash with of $XXX free produced This cash flow flow, a for first rate net a of standpoint, free to

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

higher flow we our for year XXXX similar year conversion the from adjusted the as a progresses. conversion seasonality as cash and the benefit rate We to trajectory expect the free follow as

of to during consistent capital and long-term XXXX, roughly in targets. the million our with We million invested revenue quarter $XXX capital or $XXX to X% expenditures around spending continue expect be in

Further, we the first of million million shares are X in pleased to repurchased have $XXX roughly quarter.

This lowered opportunistically issued of paper the notes we of with took billion repay overall the proceeds commercial February, cost used facility. In was our market advantage and capital. in majority essentially to and dynamics our $X convertible of leverage-neutral

with with we replaced debt over a rate of fixed rate of a basis Specifically, variable coupon an portion of a at XXX X% our interest points. convertible rate

the to significant dilution a effective price providing $XXX into per call entered also We share, spread transaction protection. increasing strike

leverage remain at the quarter. Our was of year-end. position leverage to end return targets by long-term the low our X.Xx a consistent first the We on track in Xs with to level

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

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

our the Turning how in to this outlook. business is remain We positioned year. confident

revenue X% to to reflecting $X.XX to billion continue growth X% net reported We expect to range of adjusted XXXX. $X.XX from billion, over

the It's worth the prior we dollar relative exposure. which have against outlook, has to currencies our foreign to noting, strengthened

in roughly $XX anticipate currently we volatile, our versus neutral. million quite the of a prior foreign quarter expectation remain roughly currencies second Although currency headwind

monitor impact half the on back potential of to any year. continue will the We

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

adjusted business Gaming disposition of outlook and to net to This percent X% business. at in color continue of acquisition the growth provide X-plus full for year. level, impact X% revenue the the EVO the of Solutions report our we range, Merchant expect our the to To of the excluding segment growth includes

adjusted extension Merchant the is expansion in up with realization the our synergy outlook. as the for to to with first ramps EVO relative business half basis We second the points which slower consistent XXXX expect margin also a half operating in as year of XX still prior progresses,

Issuer to Moving Solutions.

We for growth compared revenue X% anticipate to range X% net continue full in to to adjusted the the XXXX. year

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

nonoperating couple Moving items. to of a

interest outlook. rate which adjusted be $XXX approximately net expect for to be is year with to our We XX%, million and our tax prior effective this expense consistent about

our Putting year consistent $XX.XX be to we guidance. per $XX.XX, adjusted XX-plus all reflecting growth XXXX, share the range in it together, percent continue prior to XX% for translates dispositions, with for earnings full share expect earnings the XX% to This of to XXXX. of of to adjusted over growth excluding per

As the we to of uncertainty. continues the continued commented stable relatively macroeconomic environment, at tempered a the reflect Cameron? somewhat year, outset albeit given outlook our

am delivered first proud I team our the the Josh. of Thanks, quarter. results in

closely environment, see to continue continues to While we what trends to were stable in macroeconomic are monitoring uncertain be we an April. pleased

transactions lapped the completed transformational Importantly, we in XXXX. also have X of all now we

we on business focus continuing support to strategic progress long-term and sustainable success. and make are growth And to sharpening our simplifying our

As year. forward, customers I we possible as we advance I software-centric key continuing vision. we This on the priorities stepped the operational the culture our CEO maintaining committed move right for do last and includes making ensuring to as achieve into our to our since role highlighted to easy remain it our with business focus to have excellence us, strategy,

we began optimized of and structure our processes for that organizational operating review a are year, model, are to internal holistic we the this ensure Earlier company they today.

by the effectiveness these Ultimately, activities. growth. commercial enhance invest increase with organization us capital to and with our customers on drive against delivery in times, while go-to-market early we already product to the are potential will we and are efficiencies provide our our opportunities our business. we the greater accelerate to the for align strategy identified we expect activities partnerships This business development includes and encouraged our have process, While initiatives additional better in productivity, executing streamlining simplify

and We forward. our plans execution our and and anticipate against us completing our we specific as KPIs our metrics going the over we clearer to months. also model, will articulation next go-to-market structure, performance review activities developing of strategy few harmonize execution operating allowing this realign and provide Further, a against

initiatives the grown conference providing successfully against us to an and right have at key will on of doing update the growth. and our this forward company We we operating investor for look decade decade, are to over create for with the position environment last you progress work We the strategy fall. Winnie? this these our next

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

first from comes of Instructions] Bryan question with Our line the [Operator Keane Bank. Deutsche

on could guess, I execution congratulations thinking And on Large? potentially about the of What here. solid simplifying the accretive that about know what the a be proceeds, organization, ask versus with buyback they is -- divest? lot just stock you some of do I Just to really here thinking And assets then there wanted would M&A. you Are small? Cameron. that. would I

Yes, a it's fair Bryan, question.

have I'm Or to geographic from we over scale they're have period that think in I across operating we have my the today market that that to scale path player be really don't making a and all standpoint, a time. we the we're extent would a the the like, market sure business right a of in way vertical or looking whether scale. the a today, that markets, we

dedicate of expect I faster-growth pursue of the and the some obviously we focus elements which margin forward, being portfolio think obviously, software-centric key about of that we're to I our with we exposure are about sure we around going things versus talking the business, I against here the assets, resources, the time, coupled strategies. All we're and our investments the think really think the sort to as said, our the want secular our world, to opportunities of perhaps to strategy So elements that today. business our sit our markets probably simplify bigger of around more on orientation able our to sharpen as make around those

over think certainly always to where around own that really someone certainly, really and in are And a time. to refocus be open-minded a scale to a in then it our that about we're to that we're good period we of I a are more create a we're where more value driving more as I areas player. we I I the assets reorient for distracted strategy of think that markets else have shareholders. elements sharpening and valuable But the today the around that. as to path we the focus opportunities scale And we're it's relates player want think don't think, to desire if potential it's impactful the are the there think longer it going strategy, be around business not open-minded to core drive to perhaps,

But point to it we're proceeds, we'll as we in to we to think most value of those is think of that any naturally, think manner long about deploy I I use proceeds sit Obviously, about value-oriented I come the won't hypotheticals fair. sort shareholders might your here proceeds a relates and the from to comment as as activities drive going continue our look term. that's today. for

follow-up, Josh, it. contribution to thinking Got And then as numbers. organic, as a it. just the just and about revenue the breakout volume of EVO maybe Got

XX% organic I total I reported if number was number, but pure don't know there's think there. a the

over -- would year Yes. into integration. a is into a about Bryan, the what we're I a say year little

business and the X% with we're that operating that growing to right if for I the growth about one. what X% to think But you X% think in year Merchant kind the range, it's to range. really in we're EVO core expecting us full So grow Merchant for -- as of business, line gets the the the X% in

as kind kind thinking contribution it and it the of the that's overall that's of EVO relates to So we're how in business. about

same volume of the be to And it's comment, revenue the EVO, business. strip out core the Bryan, overall line growth you in Yes. on And if on sort with growth. the the just would was I volume add going

growth X% X%, that percent in to relative X-ish So we EVO. highlighted the range that ex

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

And on giving more in the you're of -- Merchant confidence color seeing growthiest Merchant business. think POS what help us the is X% us about the of underlying good year. that, conviction parts we XX% sign. partners that terms could understand what Maybe or increase give Obviously, just these you you seeing start up and increases the maybe just sustainable we that little throughout a when X%, being bit a to you're Cameron, giving in you in holds partners growth the XX%. with

And and then, for the impacts full put your to I'll together, Josh, each maybe the dynamics year just XX how to questions sub-pieces on or would that, bps an add of up XX to it of to the my be the understanding for those margin company X of abilities segment. on the for

Darrin. a of already us the in today, prepared those continue today investment strategically for for to is we going the deploy times highlighted as and the comments Thanks against around business. particularly forward we've assets, us couple of Yes. And we strategies. growth more that focus more confidence the we're that question, out aspects in software-oriented think the Look, gives metrics I seeing, called several our resources,

we Payments. from the In partners Merchant opportunities prepared from highlighted to those relates development as continuing new continue space, our flow-through to continue generate for our lot see a leads activities customers convert to partnership to on good we remarks business as new it and a into Global ISV to partner ability of good see leads growth, The We're perspective. today. earlier

and is sign perspective lead So into from partnership I customers for and resonating in look the very a think our channel, as merchants. our outlook the think proposition obviously new I turn and ability pleased the to how new integrated market conversion good flow we at that good into we with remain

we're market. remain very would So as the I in attractive, all it those to trends positioned say, how relates

I the on And able anyone landscape I and over constructive this some think rev space activity, been time. The marketing in other it's and we've my through to would been it partners, is more we the model continue seen in say, surprise than competitive been on shares have partner several and has to some I of no a attracted prepared the lot in grow thing been have the there's call, to remarks, commented the of years. that. ISV some that to aggressive last Obviously,

environment rational, time. for rev and it's to in in terms that think balanced business terms clients payment of over creates sort partners. I more grow us think, a good a the shares think more I little offering providers to scale in a and seeing today, continue little backdrop we're of that of and And are to I what

GP POS last we've over the several also bit. and investing the for about in where well retail POS channel our talked it of in is our we're it's us. an as software as U.S. around Heartland heavily quite an business, area a something is area our Obviously, here particularly as quarters, the entry outside which in our environments our wholesale markets well deploying channel taking POS, It's restaurant of the to U.S. really through point-of-sale capability as market. fairly emphasis

X really kind you it channel that of we're Gen context, extensive the our commercial locations, Restaurant of in call, Heartland rooftops and kind can before launch Retail that of pleased think very new, X,XXX-plus first Heartland quarter. the We're about of seeing in with environment. So added or in full about we that's the momentum that we obviously and

again, business that and our admittedly the good us from I gives So our of think move that continue to we to relative backdrop base, grow momentum aspect smaller scale see in continues confidence a ISV business and a obviously forward, to to channel. ability around as lot of our

ability see the pace continue in flows our with lastly, our good number in out with to to again, good for relationships. And the software those trends. in different of healthy trends demand as double-digit those businesses see solutions software growing the called quarter, as We market well continued then a booking to we as across monetize vertical connection payment vertical markets

have we're lot So of that through elements across invest for growth more And to to business look making drive the of objective we that underpins overall, continue in is frankly, part areas work our trends sure Darrin, that us the and on forward part a longer-term those future. best for to the of the amplifying ways I a the as the those we core we we're would X seeing business, balance of say, as again find strategy expectation the in make the outcomes the investments we're to basis. of and XXXX,

I'll dynamics get the those. of around And of each kind some of into let Josh margin

what Darrin, platforms with first run ahead and that as our EVO's consistent to on to it just weren't go new our is, executing So we general to would were expectations investing markets technology continue relates Merchant in. sequential in the synergies, that And in these improvement I margins, and continuing quarter. previously in we and see while the the say business

XX Merchant our we back XXXX down down in beginning go look XXX QX. overall Darrin, and you at were to were margins if QX, you But in XX% And basis basis points. points our in margins QX,

We XX points in to basis improve continued QX. in XX then basis QX points and down

continuing we the we're again, performance, Merchant around and of that through So the that go balance expect to see continue sequentially to ahead trend and positive year.

through comment at businesses, other faster-growth parts enablement, shift as we businesses, went a Merchant and the Cameron it only The higher piece business, in more to technology they a to as come just overall is I the see would started say margin. towards relates these that

to confidence up year. of XX of of us full it our in points So expansion gives lot the margin for basis a guide

add but just growing, just the a demand would to conversation. I in not for Darrin, U.S. embedded see globally. is, And One maybe wrap that here we points obviously, overall payments two up

business, It's about emphasize number towards our want and it's go-to-market the want capitalize on to to how investment think business be strategies that be geared we're the longer-term we marketplace. to we really in point going to our clearly, how one. to positioning orient how continuing we to So trend as and able drive in

we around certain manage Merchant think back point on kind an Merchant think to relates that of we're specifically, to the time, look and margins, the of And managing invest the of to There's make then kind really of about may overall basis. the pull to as in decisions as it two, "harvesting" more trying channel. but across areas time. we other manage want margins business to we to And from number areas outcome. business of to about we holistically kind investments really we margins overall time where the overall time we're cases where for that There's going from margin business

be certainly deliver And very good with for to the what moving obviously right we're commitment expectations in would sequentially, of the the outlook we've and post-EVO, provided point, our we good year. and how is we margins, consistent made about poised Josh's the to feel direction full trajectory the on

Our Tien-Tsin question of comes line Huang from JPMorgan. next with the

that's going ] if I results change. general clean and impact course, for side, in you surcharging you but of your direct the environment you, sort mind asking the helping might and this in thought the what group? and Good, I that there's settlement Cam, no thoughts could for on don't mean. know [ to on me here. maybe, credit pricing general, see we And the of

lowers the which Yes, that anything the many, I at remains obviously, I by would Tien-Tsin, been for good of perspective -- us. is mean, years, and for and I mind in all. really it industry, cost many say large, don't our asking acceptance you what has

the and -- good more So industry for broadly.

that the think for came I kind recently, generally more of the news relates it as out good to long term overall. industry settlement So that's

as today, you surcharging you're going cash are to U.S. of to here overwhelming margin, that I of we really going is certainly across marketplace. But to it areas the more the broad-based I there to sort on see than going the think wouldn't discounting, time. an kind others, it's it not over common think of we're sitting trend. that or mean, that's are surcharging market country but where be say, still trend going be than in see think cash lot relates impactful terribly a think discounting I I a more the I to

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been the there's are respect to on on you any bit have one but you side. AWS, the on bank time? a spending there? side I with pricing? renewals really the of Issuing call-outs quickly, I seeing happening in still you're know then know And in IT And slowdown on implementations seeing Great. little a anything

ask may be as that it, well One-Discover Capital thing the I And for you? might any learnings new on you share that impactful could

to good our Issuer there. exactly of questions is I sort All Yes. side the everything plans. according say tracking on would

well for execute of activity a have a to pipeline a we implementations implementation the that expect We XXXX track. of number and quarter implementations successful around year. have of we year the full course on as had first Our is over busy

good well. today. really in called pipeline are also our pipeline LOIs out The X looks We that as

X I have our not-too-distant convert We modernized sort late-stage would many opportunities, LOIs which say platform. into is we future. And last cloud-based in of thing expect another to the of the

to reality, that lot in the capabilities the technology perspective bring with doing to to feature around we from interest a fairly we and and drive As functionality of our market-leading what that We're potential it's able new potential and hearing is really resonating going to what we're And closer move cloud-native from about differentiation robust, clients. be the we're we're excited clients seeing environments. of in we're clients a sort as demand that. for into continue

over an resonating as existing that as them configuration really that's the from we're We're from to be to a cloud-native solutions time well. of we're that also current as additional existing going platform, conversion to capabilities what excited through environment by able about environment ease some enablement some with provide additional on-premise hearing clients, clients delivering of we're well their

we overall. where that to roll term. the do and tailwinds have bright those that we business, we near the future commercially. So activities of feel I Issuer we modernization in arguably about with headwinds sort to Issuer Obviously, out are I execution business medium have space complete the work to do think lot of a good for our as more we begin in than But and is

we work as we for that course that on And business. a allow seeing say, to On continue the environment renewals can renewal constructive time, would and over front. of stable sit we're the more in differentiation we through But that here will remains provide business. we the those today, obviously, fairly think ordinary everything sales, for I

Terrific.

on... your to last question then And

Capital One-Discover.

We say, what One, make One-Discover. multiyear long almost Capital we with more a agreement with renewed record not can only sit Yes, we said Yes, obviously, I which X would track as we decades largely lot have is our is previously, a with I them a The here basis. Capital just comment now. today. consistent on

Capital that's been has And historically, generally thing when good One M&A, us. engaged a in for

the working relates how for Discover time is out obviously, got front engaged it them. of So works them whole a with the through of approval history I here today, process. sitting them But in they've road in transaction tell activity They've that M&A will positive terms in. think quite to as regulatory our

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

on kind for a some the of to in been like one that of around specific guys just around the the sounded quarter, wondering was key guard drivers than U.S. stuff wanted were going the the there what's I you digits. highlighting the off the commentary and that more just high particular that feels bit you side, in It on little like the what I'm positive saw international more we've U.S. to maybe while. growing of what happening single elaborate in surprise because was in caught it areas get you on a upside

would -- anticipated much on constructive into more sorry, macro that of Cameron. have surprise little the a would sense that say call wouldn't Yes, so I don't Dan, year. the it's in kind driven a the coming I is macro -- it Darrin more know out it's I as as balance probably than we

Certainly, consumer. fairly of the And quarter. pretty we quarter remained remain The as the were resilient focused in relative in on well. remarks, the very first stable saw my through consumer what out I as prepared called course first has trends we the April to

it's So perspective, our the I from really think macro. about

our delivered, in and we're our strategies expectations that continues with And line think execution I work again, businesses. pursuing had to the we around well. we those business for the

into than what obviously, better the very quarter monitor little as the a before, was in continue anticipated closely. going the I we that's year to something, we And probably What's macro. said

And the that we're tailwinds I obviously, think some what we're our and has wage seeing consumer face inflation, allowed et trends headwinds, have around confidence labor continues also the to to seeing continue flow spend. there's around but business. consumer to that some cetera, through to

That's great.

really I cost follow-up quick synergies guess, necessary. balancing then on, and that the are a investments Just

you in around in the achieve be guys true make for to also and but period, kind kind So a those have particular, questions seems of revenue is this 'XX, investments current much just to -- of lot you've Merchant. overall set targets in some the that to there in growth of out, how of EVO,

what how XX% got rates? that to what and required really then are then will And maybe into buckets. to balance big kind to much of between today So of growth be it's flow work that ultimately you've the through put the buckets,

be little specifics it some call, but would alluded the a to kind around bit on anything helpful. You of

flow ahead I of margin the sort get top overall. overall of for XX% business the the don't level always to business' level, business. to to margin But the relates in mean, XXXX operating it the by kind I in we're the line recognize But I would start in desire we and a the of is margins I see, growth Yes. which of -- quantum to margin want of benefits fairly can't Merchant through expansion margin attractive high and too kind and wanting beyond. our saying obviously, of far -- balancing as business invest to myself

is going I So same. philosophy to continue that the remain to the think around

I benefit over continue that time, also the flow to at up while same investment drive discussing, through we've we talked have to we've that in of sufficient been creep to as and growth range in continue allowing some allowing to the think capacity business about. time margins the

capacity allowing investment higher internally, more growth again, to continue that are structure allow I time as that about the invest while think to in at free simplify the remarks business to us said margins a to we in drift fashion, our ways model and our And continue in to at operating looking in to up the the going is over business prepared to I at my to different both, end, business organize will think initiatives time. further same

move So I And into poised the pursuing are really of forward. and internally XXXX the to we're allow lot well balance for of think support we're to continue initiatives as a us that XXXX. heading we to of balance kind designed

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

the first question, Merchant, can Great I guess high products? single to kind of revenue between there you products digits, as you new grow job growing pricing, expect similar. and single within discuss pretty you new high takes so quarter. of over Maybe And would this of digits, you my about above kind kind kind revenues mix, like And time? organic just puts volumes organic software and talked of volumes proliferate

of number the Dan in, the hard It's business [ ]. to Yes, I say in, it's Dave within cetera. lines really number of Merchants a into we're (sic) different just good question. et all drivers of given would get the we're business geographies

services, obviously incremental obviously, to do at growth. But we're well obviously to software volume when see software, we those value-added at we're drives continue want you and generated on to a as business. the volume as payment as pace that, to I do from vertical degree, some some over put grow revenue. macro we to think is it, the want enablement to trying time, do revenue yes, point-of-sale revenue of at software, to expect there's as flows that step recognize trending kind in commerce a that, volume see do outstrips but push also We But level, it selling selling which into direction more we look interactions, ability whatever we software, we're more when label same back monetize solutions, more market

volume. underlying our to decouple time. more do some revenue time. over wildly And those have the to correlated philosophy remain correlated always growth remain to as from continue say some I software for degree, should see it's two opportunity towards wouldn't those to we see but in the So more we pivot But certainly, and over to trends commerce we expect enablement, business

But there's a that. drivers of lot behind

given better the perspective. volume we're maybe of of less have better mix the and have businesses seeing growth and worse underlying dynamic revenue Some and revenue growth what businesses, markets given growth and a pricing slightly slightly and from growth some markets slightly mix volume obviously market

So philosophy, what there's into a think, I overarching overall, is lot goes I that it but described. the

quarter quick year-over-year you. I that. Got gotten QX now And And since a then each going just EVO, that Yes. will EVO better. investor to be anniversaried? follow-up. it's margins, around Merchant Is up questions decline of gotten tons better the know has year-over-year be

kind would would I again, that the of What QX. us say of I is, same saw follow out you the No. year. coming improvement of saw coming of trajectory basis out We XX points

in be So shape QX. I expect them would to flat you it. That's how approximately

Got it.

would year, getting course, of the points up for to in get that of and for they period. year to overall overall basis kind up XX full the the then, up to QX, guide in be QX And

EVO been my the deliberate certainly, on and been And business in you transaction. appreciate synergies commentary terms Merchant around the I calling of executing I out, think we've in very we've how that, it

down highlighted we As we started and down earlier, to XXX went XX. XX, down then Josh down XX, now

about what of execute trajectory the year it's to against hard think can you synergies. quarters clearly record margin given execute the the like margin not track against as last we from we over continue of the as we So the very see improvement synergies balance several improvement of have And looks look, to transaction. the

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

process the that follow the through reinvestment? wanted I then technology you profile. on at quantify U.S. in give an Anything for Clearly, the what realization? could of you're impact had sense outside And and work as margins to of impact realization been there's see a up just a from should the impact year synergy the just we margins? And lower the us a in ramps, that synergy as you Merchant from has terms we reinvestment of at where in well you on terms of EVO higher flow-through on Yes, EVO. coming EVO's margin and Josh, some referenced Great. of just Can

Yes.

So a into of balance in business a relates it's to about think as markets the that of what it is that pieces we're technology I reinvestment the would we bit not are as technology those the say currently in. platform and

bit So really, a a Trevor, there. balance it's of

And there's about. year basis ahead would to of a you basis. profile what to get I QX see -- become see, higher say talked the and ahead expect up can flow-through can We said QX, QX margins be see favorable then overall that'd margin we which and to and trending, in approximately the given half on is a to back in year-over-year just XX expect and flat, to that's going you the in how points just the you're go but go

to transaction start flow-through you'll the in as the balance from more see So of we EVO better realize synergies XXXX.

operated of thing The we And Trevor, when how we that I think, would of And only a have that are to environments year. it's deliberate terms not did I and them add that in technology Cameron. the stability in about very, is, reliability availability, acquired markets markets. we these obviously, operate that think in there we certain we approach EVO last

provided stability that our for in the XXXX. that investments been reliability synergy investment for was needed reflected Josh's of, sort against technology. And them to to EVO's plans and that level there Those guide all bring realization, availability, that been quite we've the of point, balancing and in making, we good and very up clearly, our platforms a and we've to again, we expect

seeing doing We're of I And half what investments job executing move from and And a exactly perspective. technology our synergies metrics done a what all better the where are getting I and doing, those are towards further we expand back performance we'll investments the and them year. of absorbing look of from described. So targets. kind on reliability we exactly again, to think started nice there think the margin the standards those expect. sort while We're also we've we pre-EVO to back seeing in

you if only would think margins Yes. mid-XXs. over about other business generally, it's $X the comment in make billion is I the revenue, And

a is So year-over-year, I basis points think, on XX margins very expanding respectable.

is the comment geographies profile And points, and with do margins just this again, our I'd growth, a also XX basis in. and overall margin given size XX% approximately I this that of expanding Merchant in currently margins think, of healthy and that business we business

kind then revenue, Maybe in X% X of Merchant of of point sounds we the Great. And X% so interpret of as go-forward or April on mean, organic? benefit there's relatively looking consistent QX. been I normalized been rate so trends at from Cameron, should with? growth year, has growth that's with QX consistent leap kind like kind and what kind have rate QX April of the the core it about as

remain year think exclude of I it on think I for impact that's Obviously, but Merchant there the grand the things, Yes, would slight you from way for EVO, portion benefit we the that. I a in EVO, track we in as range scheme X%, position we're do there balance X%, year. to That's kind not X% mean, think, a the year today. squarely the still to I and that in of of the sit nonanniversary was grow QX we're X% we of fair if is overly the going that interpretation. leap in impactful of

Goldman Will this Our will Sachs. from morning come with final of the Nance question line

that been partners Cameron, expand and just that little Merchant to little think mine a in slides lot a about ask U.S. XX% the of maybe you context. a already, asked I number provide can but today. Maybe wanted in had increase have I more the you on bit

been focus ISV the rate of obviously integrated a think that in the business. I business of there's additions lot and around

So of Just ISV number the like kind that is contribution quarters? you've of EVO? additions from Is prior number would on in that just How different trended? any any than be clarity helpful. that sort how referenced has that there

Yes, happy to.

in business the new we of variety partners have are with I Merchant talk lead about going and these that business generate incremental overarching incremental partners the opportunity different context. we When new have think of incremental that a relationships it's business, in kind flow business forward. for start volume, our that in we important look, our and to So

grow resources as So equal. is feet-on-the-street obviously, about the think distribution important are to our to as the not partner with strategy an all that obviously utilize say we we have the our business, direct grow well. I business how distribution coupled the assets part that strategy we of partners would and created

our are integrated think As partners to relationships. time. about saw element we call we're which space, over saw marketplace. and truly expansion particular X what launched ProFac able payments to a those And our where nice channel collectively, to of operated into their integrate now that Obviously, environments. we remarks, our would go we've called the deeply merchant partners. months good sell well model, the a to into form dozen-ish Payments, I I out in really long We very X more those that that as, period of utilizing deep for partner able strategic integrated Global of last We're of to my we X have over we're model ISV payment integrated obviously, new obviously, the technology business able partners sort nice think growth customers of in that we've since prepared growth the software in market new integrated we as strong growth sort traditional to is

business, U.S. in We're across all growth in kind partners like channel. XXX-ish the contributes first for growth the in neighborhood new But Merchant of, kind we're across partners quarter. call Merchant good the the that of of growth payroll overall XX%-ish to market U.S. into of translates of our of And aspects in the partners kind it, that good also partner which adds. new seeing seeing something the business

that starting mentioned Got of then EVO the some revenue the progress in to it. footprint. helpful. you think you're synergies And also see rollout I Super the on

areas around I the are just of on more the the kind revenue that that I you've on just excited talked are are are POS most maybe know some of platform the and around kind dovetailing what stability, at biggest of guess resilience about? And required of the you that? that in And front investments kind like on you're investments past. system I what asked the where EVO kind and of about was question in guess, the

Yes.

analytics as we've opportunity we largely in around And opportunity see solutions I some think capabilities, bringing already demand well to tremendous seeing engagement consistent with in our customer tom to customer operating markets. the POS, bear solutions around One we historically. EVO bring other of is areas highlighted our things and were as engagement platform of our markets we're not GP the that. continue historically. to and GP we the can suite, be the on uptake good And value-added those that

be we in required that in those markets, cases those from to able came capability and which many them investments deliver that new The to new obviously EVO, handle the product operate the equipping are that environment. and to integrating platforms equipping products into

that have obviously market, customers And obviously Poland. the capability. monetize bill integrated sell for the sort training fully of Polish and that be a have all example. We the and tackling in language, accordingly. native Poland deliver GP customer actually it able technology that in, I new to able the nativized in then, to of you for place stack we're it to solutions, need to sales capabilities sell to into can obviously platform course, the streams blocking payment those that product new and right utilizing professionals We be So POS, can one to language creating around for our is say, on the if

talking bring more about the business of investments make obviously revenue the be new we're capability and is the And to synergies bring what are new some So market. we to in product to the we EVO to types we're those from about need that investing say to when of able that transaction.

today. The area to we our of called EVO's that larger second is they're what out in a support they market before discrete doing beyond support some markets additional leverage able global to customers may being capabilities in multinational

Mexico, certainly, they EVO of where partners, that front. coming number a out existing particularly feel relationships good of kind expanded Mexico, We've seeing of on we're that the momentum markets through with And we about already positive. larger of have are which expand probably that a to customers stronger relationship of We've companies Citibanamex. has who concentration been outside multinational with into the able been

integrate to into BXB in bookings lastly, to we the seen continue I look was acceptance capabilities EVO's by then which our space, U.S. called out BXB And EVO BXB Merchant broadly PayFabric, deliver BXB for we've virtue platform XXX% ability capabilities. our And our of to we increase more acceptance. call into Merchant think for on now in our base PayFabric

And than things against the more So are those long announced from last we see that think revenue think called and around I EVO invest synergy I out from we term, we're tailwinds we probably continue August this opportunities. XXXX. transaction of revenue the deal good to perspective, the EVO I to the potential enthusiastic time were on the about call, at going synergy we back our because

Payments. I for thank moment day. for to also has attending. of and want everyone your thank call concludes I that a take you interest everyone I to hope to great this And morning. And Global want for support a our

This Thank concludes today's conference you. call.

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