Global Payments (GPN) 7 Aug 242024 Q2 Earnings call transcript

Ladies and gentlemen, thank you for standing by, and welcome to Global Payments Second Quarter 2024 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.

Good morning, and welcome to Global Payments Second 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 be financial more non-GAAP also 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

Joining me on CFO, the call is our our Josh CEO, Cameron Bready; Whipple. and

to over Cameron. call the turn I'll Now

good Thank us everyone. you and morning, Winnie, joining Thanks, for today.

of second for for driven on of performance are consistent the the strategy quarter, being commerce pleased choice our with partner We focused our by solutions. worldwide execution

delivered quarter. of XX% the revenue Netspend's X% share growth the divestiture of impact the X% adjusted achieved Specifically, per adjusted excluding net or earnings we consumer assets and in of growth

points market organic from we single-digit number margins solutions delivered in drive our and differentiated demand embedded and by with markets continues expanded XX acquisition. There commerce growth, continue position business, morning. integrated benefit for our our Merchant this core are as the as also of high to cover We Solutions, capabilities realized enjoy Starting noteworthy leveraging to the and EVO across businesses, scale largely a payments highlights software we operating accelerate. we adjusted our driven in to synergy point-of-sale enablement efficiency basis

business growth continued by integrated strong quarter saw partner trends results, ISV the business in up development new Our double-digit XX% with aided and booking signings year-to-date.

this ongoing this channel partly have attributable success merchants new solution facilitation in our mid or Active remain XX% this position. XX% year. leadership Our in to launched progressive identifying since and in which ProFac, and our confident improved we on ensure XXXX. We ISVs competitive signing in of solution, the we capabilities payment last increased is positioning are average volumes investing our merchant end preserve have our in market to and

commerce enablement software. of annual merchants the relationship. With opportunity the cross-selling well the expansive embedded needs This human and We solutions to to engagement we attach continue and improvement solutions. one, differentiating our payments existing we payroll, are as loyalty the we our ability breadth both can ourselves to meet of by; additional depth solutions; commerce new the partners our specific by and leveraging underlying on focus and an two, as integrated revenue focus analytics seeing management with and and in includes BXB capital new as marketing, average customer on partners, capabilities

platform EVO. as increased the noting for PayFabric demand we Speaking see with acquired we of we to leverage worth BXB BXB, it further is continue solutions our that acceptance

shifts as saw to in businesses, our improve automation some capabilities in necessary double-digit bookings market environments more the to suite largest with quarter widely of estate strength School integrations process embedded frictionless critical in U.S., will the real our the used are proprietary spend customers. the new Los Angeles with well our increase leveraging second partnerships a We this wins in Our a for now partnerships ISV Unified more school the With we software with BXB the solutions. growth point partnership vertical District, new as this cafeteria X districts the XX% with quarter our health in particular channels. In PayFabric digital our as second capabilities sale, efficiencies to most United saw we delivering full ERP addition, than the in management Notable care. MySchoolBucks, in back-of-house and across include education, of largest markets have which of States. leverage the

signed launched estate Asset secure a Associated real communities the leading automate of a deposits, business of Our association to Also Tobin commercial Communities, Group. real solutions product which with YES! United community provider cross-selling across manufactured payouts with existing Management, residential Capital successfully and relationships new and residential a housing estate States, company, service partnership to and already are the we return we provider, new and this quarter, customers. expanded streamline

embedded in point-of-sale retail strong X,XXX our We the and growth adding software business new of we commerce our segments the strong remained restaurant also solutions for saw across point-of-sale this target. locations. Demand and verticals quarter, roughly

while sports solutions This franchises service Our partner with as are the easily scale to baseball designed enables common serve new Baseball merchants with entertainment United small the end the and excited market, restaurants league serve add allows that addressing commerce stack to more the leveraging us Canada. business, that its with quick technology Diamond in as SMB customers' functionality of a grow we to for partnership they are also and and to the venues. To Holdings complex States customers as the they minor grow a to needs official announce of end, and expand. technology

we these of solutions portfolio before XX additional club roll our Diamond's in across expect opens. the to XXXX season installed currently stadiums, ballparks at fully out and are We

and including point-of-sale the payment our summer. stadiums, supported and a are this football tournament Slam Birmingham signed partnerships championship multiple football across a and Forest Newcastle, have with professional solutions we Grand new stadium multiple also U.K. clubs, golf major We And during tennis proud to a City Europe in Nottingham major quarter. with tournament

and a see where to beverage We great also and now we quarter its are providing to leading XX% SMB in in parks and theme momentum in restaurant Florida. in are And partner company food largest in locations solutions bookings the America, retail service verticals mid-market a point-of-sale food management, park customers. our improvement quarter. In POS went continue and space, players and live we at this the and related entertainment retail where X choice is the towards North the drove which this of targeted software with the

growth, marketing addition customer solutions over of for demand are with software our In increasing example, a engagement the leveraging one ] we than seeing greater compared It's embedded with customers. significant locations this rate year. XX% quarter root we commerce [ our just XXX% strong achieved attach to top tools prior loyalty to and new

point-of-sale Additionally, drives experiences we experience our software, of the merchants interface, design are best-in-class our our intuitive for and released including and recently reception pleased iOS with next-generation improved omnichannel their across mobile-first and consumers. that Android-based user the market the devices

these as still early meaningful gain offerings more While we in scale. contribution expect revenue benefiting are our days, new XXXX performance, to we and a

begun We U.S. to see good point-of-sale momentum our It's full have commercial next month. Germany continue offering of launch markets in a that also expanding we and anticipate the highlighting into our point-of-sale worth piloting offerings outside

Ireland, Austria quarter, joint and a venture, point-of-sale our live to our bring Mexico, next to software to Globalpay, are this over the including XX fantastic months. In Romania to Commerz went international and Commerzbank track we on remain XX also Poland, key off markets, start. additional We Germany,

build opportunities are lead private further we and roughly a also beginning to digitize relationships to generation scaled seeing just million we attractive Commerzbank's substantial us While to clients its in XX,XXX small business and almost with strong customers, leverage corporate business payment XX while this already market. the experience, and are allowing

Central Lastly, and continuing we a recently realizing the growth major signed solutions. see sector energy public Europe. solutions to are charging the our are EV attractive expansion charging a partnership demand Notably, strong European to provider in pan-European of support for we with throughout

in also continue Europe made tuck-in acquisitions positioning. quarter X to We our strategic this improve to small

first also This solutions into some U.K. signs distribution base. the Takepayments as with diversify market SMB in payment bank-based to of a and to the U.K. cross-sell direct approach of continues merchants expand the market represents opportunities It provides to to enablement referral U.K. provider in distribution The attractive serves us payment evolve our in for reorient acquisition opportune beyond channels. see customer capability U.K. of commerce capabilities our demand-gen solutions us the to starting our leading and to was the allows and investment Takepayments, are traditional broadly. meaningfully timing its stability more demand we generation solutions as of market small

We have a our business pipeline verticals unattended hotel business notable win hospitality Virgin's bright the and here of in of U.K. including new spots, the recent with strong

with partnering of was development offerings. at our were of technology the previously drive in we end quarter The company second Europe acquisition an terminal-on-mobile that early-stage to the

terminal-on-mobile have it offerings and plans, long-term they enabling to offerings strong our and the unify our point-of-sale was for to to in-house important the seen solutions. our value this us Given technology the strategically our control we demand play stack globally expected entire importance bring to for will

Issuer to Solutions. Moving

accounts X see increase drove on We our conversions sequentially. strong to growth, business. continue which, in existing combination file this in healthy execution across a large completed We quarter, with customer

near-record to value-added in opportunities most We issuer recently largest portfolios, to activity. future. position for card align our having this commercial the what completed platforms. From its them which spanning multi-decade in active highlighting X with in product Sainsbury and our implementation We look Further, implementations a pipeline market heard volumes card virtual service continue than quarter across success its renewed of strategy partnership our and quarter, this we commercial clients to the similar and you LOIs. and have with one by also both NatWest Bank, the share largely a in our forward in solutions fraud, more active clients with the transaction are further from with We and of cross-selling our million a to driven ourselves our consumer of networks, partners NatWest of and recently to macro announced saw accounts perspective we ongoing importance winners. XX our acquisition cementing modest deceleration XX FI communications Europe. relationship existing was expand

platforms Additionally, our continue also operating company many applications to we track issuer now a year. complete first solutions our we fintech modernization pipeline. Most technology development to with clients program is AWS owned the have Outpayce customer remain its issuer providing our make global launched this Europe, for in environment importantly, with Europe. our across travel leading technology on of in and Amadeus, our Outpayce, cloud by the on progress in client-facing other partnership

expect have pilots addition in banks launch to set initiated year. our We modernization, continue to we our and broadening geographies. and addressable market new meaningfully next smaller already increased opportunity commercial by to mid-market customer Through include

more segment, be software Our consumable and allow cases easily our to for new clients leading investments also trends to AP developing are our who and drive greater cards. Shifting applications use in while for our good core continues new enablement around mid-market to spend BXB, capabilities in ramp. by card fintechs automation virtual we our seeing solutions bookings are

relationships signed Pizza, Rainbow employer and Group several we for which operates throughout Domino's Additionally, new our with locations solutions, Texas. Staffing TERRA XX notable customers including nearly

renewed partnerships and also Cracker Theatres AMC with We Barrel.

I turn trusted the call as managing organization as Cortopassi colleague Chief and I track over businesses key to an of role a the and across would our as play Bob, of Merchant Officer Josh, Before his President a company. record highlight well in and to during business to partnering XX-year exceptional for leader the with like Payments. as a served and future proven with tenure our continued Operating Bob forward our Bob President Bob look Senior the growth-oriented is of and I'm Global success. previously integrated President led International with of operator he business Markets confident Executive our decade. and nearly for recently, I Solutions Vice will the Vertical company's our in Most appointment

Josh?

Thanks, Cameron.

the the performance second Netspend billion uncertainty. the strong increase X% impact was expectations our with an year We revenue X% Our $X.XX the the or from solid reflects quarter business for ongoing and execution despite of for delivered continued across our net prior excluding of divestiture. quarter, macroeconomic of consistent finance adjusted

increase XX foreign XX billion basis currency from same XX% period headwind $X.X currency of offset at quarter, to point Our basis closer earnings exchange XX reported Solutions the contribution unfavorable XXXX. Taking includes by Takepayments, from net look a rates for share of an includes period. adjusted points relative X%. Merchant which of segment, roughly per reported less a we X foreign the second the point roughly quarter adjusted impact achieved performance than $X.XX, This increased revenue point reflecting the second exchange the of XXXX. rates and in the acquisition net growth of to of basis margin compared from during to XX.X% Adjusted adjusted revenue of adverse operating

business our from U.S. businesses high Our and strategy, double-digit benefit we software-centric delivered integrated to quarter the our period. payments point-of-sale the in growth growth for single-digit as continue delivering with both

Merchant real United organic We Poland strength solutions we also LatAm business Kingdom. Separately, notable our faster-growth saw with start growth portfolio adjusted in stabilize ongoing Mexico. the markets year the education to in sequential margin of payment spots. points, also pleased reflecting being we the weakness strong notable estate, the strength bright geographies, of an care as EVO in the trends to growth of higher expected. Asia achieved completing We We mid-single-digit basis XX.X% our offset in delivered our and double-digit of by performance trends in across secular segment, our U.S., in including health environment acquisition XX to Outside continue in the partially benefit macroeconomic with Europe since and ongoing see last increase were Greece. realized improvement from Payments operating vertical This as was Pacific.

rates quarters. Issuer currency over on includes plans our net produced lower period. years, basis we Solutions last impact have several roughly the reflecting synergy $XXX to are over foreign we continuing growth X%. revenue EVO unfavorable the and run XX of in of rate seen achieve remain $XXX point are expense million, synergies trend a This million to exchange the from to during adjusted related X expenses track executing We within against integration as and transaction

team pipeline on This accounts quarter, as quality. sequentially over especially customers. We've addition have client with I'm with to account proud year-over-year, or has had conversion file time million we and in implementations accounts. benefit on million year completed accounts continue to our delivered with X million we implementations. an especially outstanding who these nearly ongoing from traditional added of Year-to-date, X existing new busy XX X growth FI of we execution with our our

more driven year. Issuer modest the macroeconomic as level have We uncertainty. the This by mid-single to of quarter prior spending transactions remainder complete of to the was given the which was implementations XXXX, the volumes cautious to take softer a businesses compared approach deceleration of largely quarter. increased X second from a for more digits overall commercial

and in acceleration by reported We to growth also saw our transaction was partners. FI sequentially, slight similar a consumer what the networks

prior points active Solutions efficiencies achieved of the the XX.X% the a margin was comparison. the we basis business. we AP on an pipeline our from and software sales while difficult the to employment macro compared automation due in by to in And This issuer the continued our of despite business. Issuer operating drive encouraged adjusted mid-market have healthy second segment to Focusing is portfolio, growth our to trends we Paycard XX core see BXB basis environment, headwinds seeing the in on new are increase a facing year continue solution some quarter. normalized as softer delivered in

income of lapped we period. related benefits. From free a strong standpoint, managed XX% flow year now is cash million, We've quarters. prior expanded more adjusted Issuer for and it a points technology ended as the flow second approximately during adjustment represents XX% quarter XXX related a As you also produced enablement as offerings. weekend, to as for adjusted the that a second has business quarter the the those we free which relatively $XXX last on roughly period settlement for year. services pivoted It included the positive higher -- to cash flow, XXXX prior this basis conversion recall, from quarter noting timing away may began the up adjusted worth to of margin lower-margin rate quarter X again, the net than of margins flow cash XX% small from approximately is This adjusted free cash

in prefunding consistent revenue the expect million during in With invested in X% the Further, $XXX million our last on million and expect capital we the approximately $XXX the reverse. We roughly spending we of third ending around to we million saw repurchased roughly in long-term shares quarter or XXXX, $XXX the larger capital continue settlement of for with from impact to weekday, X be to quarter a back year expenditures quarter. targets. half the

second was end targets. X.Xx just the for our and we leverage low track Our consistent position under year-end, of to quarter with the by be remain at long-term on in leverage level the our Xs

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

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

outlook. Turning to the

business positioned the pleased is of are year. how the We half as second we begin our with

$X.XX currency prior year. our the the percent ongoing our business the the will towards enablement, synergy adjusted foreign $X.XX for half growth XX up in to offset expect adjusted profile headwind remains be by reported basis partially our back revenue of basis at X% growth exchange be expectation report XXXX. We our This prior business EVO annual lower We over a rates expect rates continue to to with benefits segment exchange we expectation to for full of the mix realization. To headwind to still adjusted by from up to This year. expand the an reflecting net margin to technology a of consistent to to of to billion, for includes X% driven range unfavorable outlook from year. to of of provide continue points billion currency second X-plus points color to now revenue half despite net in the our Merchant expect the XXXX, operating XX level, foreign now margin that shift full

for of of contribute Cameron year. expect a headwinds discussed, we to roughly growth the the be these second acquisition half the Takepayments inclusion that point offset of of which the to expect We by

to points to expect first Merchant performance continue adjusted also improving X half margin as the expansion half expansion to back compared operating for XXXX, ramps. realization in the up with the We of synergy business basis in EVO

Moving Solutions. to Issuer

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

points. low we operating from at to However, foreign the we the basis rates business to this Issuer seeing given by range. now anticipate expect headwind commercial now the still of transactions, in currency adjusted exchange the for we're expect be card margin up and deceleration We modest expand XX to end

a to of Moving items. nonoperating couple

interest the net be full tax our slightly is all to we XX%, with XX% half expense to Putting $XXX share expect to adjusted year rate adjusted it a We continues $XX.XX, prior to our together, approximately which for environment the consistent to economic growth earnings and this in for million to range more $XX.XX over finally, the second year effective XXXX. of expect XX% be continue the our per reflecting be to XXXX. potential And tempered in of for of outlook reflect outlook.

Now back I'll over turn the to call Cameron.

Thank you, Josh.

position choice in potential. we our to focus the commerce as remain highest Moving markets solutions for have forward, we believe the Payments committed our simplifying partner strategic and that the sharpening Global of business to

business finalizing which and drive began meaningful has the this growth. earlier a to of review that has are of align us We assets, our better our to thoughtful year. our sustainable opportunities helped organization to involved That assessment identify methodical work

decades, built one X we companies. last have leading of the global payments the technology Over

operations through differentiator key Tuesday, changes providing investor New deliver initiatives our the deliver invest solutions, free phase innovation while portfolio our more will product-led and be on September are our on are to continuing capital as As our look growth, to for cycle. these a we Ultimately, we streamlining us on at up York customer-centric with to making we performance business. expect the service we forward to share, to and simplifying move in of emphasize City. Winnie? into gain allow executing you conference XX the to held sustainable We in details next

Thanks, Cameron.

thank Before [Operator we begin Instructions] our question-and-answer session, you.

Operator, questions. we'll to now go

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

split environment, us portfolio How and and discretionary between your give about EVO inclusion Given is and got volumes on the credit of much you debit with of exposed else versus thoughts of that? unstable like business, going macro could you've the the Merchant. your nondiscretionary sort things in everything the latest to in

Ramsey, discretionary, that. own my it's Cameron. is, on the bit split a I'll nondiscretionary maybe perspective it's days. arbitrary Look, these comment on

to think another discretionary person, I nondiscretionary and to what's vice one maybe versa.

mix vertical of the globe. at verticals. I what been I well have streams think I well diversified think we're still portfolio very EVO I traditionally We're we're the and diversified. I markets. position business always We're in well revenue have kind We're very as think nondiscretionary across considered a our very well geographically, where of even think at we've looked very discretionary diversified diversified And well. today, well as being post diversified across around very we as across look

different of overall business, we've in with the So of built, pretty different particularly types very cetera. durability model and businesses of, that's I I largely on the payments as the well back the remain of backdrop somewhat mix mix of different against a that a verticals, macro across again, as as et resilience think about well the confident again, environment, Issuer uncertain our the diversified, geographies, and business Merchant

So well forward. face the us good, move we of for and I think environment we it have we may positions macro business to continue whatever as is mix

a me. for And follow-up

as ProFac the of out on how ISV TAM of types you important sort you Can driver signings. new ProFac for more an being a ISV called guys? What You little increases comment client you is Or just signing of that of size? you other -- some ProFac Is clients merchant axis now on? at to it sort it with are there look before? weren't

risk facility, to on funding able being comes facilitation capabilities. scaled all payment through take around be But the good that, delivers responsibilities and largely to to the enough to merchants way et payment the question, ProFac are I need a fills think in it not need about underwriting, largely onboarding Ramsey. The the payment management, relates for that flexibility facilitation a of that the market experience some is clients some they a as particularly capabilities, business cetera. of who it it's Yes,

that for, some the fills in a market a on sort on take to smaller And say, need position in think capabilities, that but nice really middle-of-the-ground that niche would ISVs of of been able think probably themselves. I I that's facilitation the has I open burdens average, aren't a payment ISV it So does been very well And partners. up we've we the by before successful solution it new not as in been signing where had of kind market. received all offer kind to area of

pleased So that sure the of I the to that continued it position and needs think our of make the I'm our that ability in capabilities leadership integrated meet providers. other sort very growth ISV our what and but sustain obviously, marketplace of consistent specific we as most is, investment ongoing in solution about to against business customers market sort to relates effectively to in in compete that offerings to we're channel, the tailor seeing --

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

I growth to ask wanted merchant about start. to volume

in at it came X%. So

a the bit tick a down if a couple also that but what a of not mistaken. leap you I'm that maybe little maybe time. been decel? points, of of bit guessing year talk probably was I'm revenue each organically, was was about of Can of think a I kind of other they drove little the there worth for like growth, versus on top a had point, decoupling period looked volume of

that mix thoughts any on So I know that. don't related. if Appreciate was

point. about a sequentially Yes. I of say I'll declined make a it couple comments. would

our ex and Last X.X% year-over-year, of think, quarter, was X%. kind revenue of Takepayments, volumes up organically, roughly it If at up X% you it was, look X%. sort I

QX. So that pretty trend generally, say, QX and sequentially, would I consistent we've a seen

an competitors reported same as relates think leap macro to your to environment the and macro, overall a it environment the The bit obviously, generally had I broadly. and and seeing networks probably point, year have impact. volume trends of other little more

unique more I delivers does think balance on don't contribution. the Takepayments slightly than revenue So us. volume -- it to that's really

the within of saw growth we point of that So net-net, to I organic business. relates it in think we're and a still each as other sort volume revenue

margins, then XX And was Merchant up on the That's a Okay. bps in bit helpful. that quarter, better.

you drove in full the so guide kind the think just of was guide if flat, way still bps. in probability confidence of year on and up that? what your all the we like I I incremental of XX what see maybe from are synergies we EVO? the do for in guide? in cost the in -- the the XX can where terms of to you And you talking higher to about to But speak getting level feel know we're based is year front wondering

our we in Jason, Maybe at Yes. question. the good of would ask Merchant in. to roughly just margin pleased I'll very Josh a it's we're with that absorbing And would overall, despite just jump start Takepayments, and comes I say, I'll expansion note half today. saw the margin business. it I in

a So a yes, the we did perspective from quarter second than perform business. little Merchant in bit better margin expansion we expected in the

some kind in of seeing reflects the obviously, strong business profiles that the execution and of margin trends largely it of growth think for continued aspects attractive us. we're I have

half it points So I of last XX said, is for I as I that absorbing think about we're make pleased points would the there, comes basis at, despite that XX Takepayments with targeting The really grew outcome point overall, the margin. again, and we year. in basis still

XX. just the in Josh see Our let for language the be is we're little up to clear, we a I'll targeting maybe what year. And half. back bit about comment But to very XX

Yes, Jason.

in. think flow would I we continue So to integration, margins, see as the about we is say EVO what synergies with that merchant

to realized and think the 'XX, gives it the year, we the go for million. we $XXX points, and basis that this year, be half as XX% And margins the And Merchant full mentioned, expect expand we of I last expect the back of As year. ahead to quarter I points XX and relates XX XX%. to up kind basis approximately you realize of

how merchant healthy overall business. like margin pleased expansion pretty the the for with So we're looks

I And QX a cadence. synergies assume Okay. bit fair about just would little towards that as think Is skew just we build? that QX versus as

fair. Yes, that's fair. That's

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

seemed a bit And It growth should you in you dynamics progress how the than channel. and wanted we the you that thinking I'm made Merchant can if there? business what different wondering rest of I thing. segment ISV potential generally? your talk in to like what may kind about that of about the little see touch some good on be be

Yes.

SMB we're it's kind of clients, is that's well, a that And to for largely from where the is years market market of acceptance is point-of-sale excuse integrated obviously, for vertical at course we've they're because the restaurant point-of-sale I'll into worked of payments. particularly also technology payments and see into out. leaning competition been the underlying now a our in strategy of investing software leaned just decisions over going. sort that the to serve, consumer other struggled the get of is position to in saying, markets spend it markets standpoint fair start those But across retail me, business And -- payment vertical I many over as market more mode years. in and which hard we that's key based we And capabilities software we question. that because vertical our is many run and where the in look, our business. And the obviously, we've obviously, about where We've going. more course their why, years. talked strategy making think very space intersection that software of true by We've the I that obviously, many merchant using more, on intersection see

our are geared within about of as around day and we payment day kind run either partners ISV trends, core from through software business positioned trends continue using before, mentioned these own or as well our all out the in SMB, a I part we Merchant particularly of we're software that think about obviously, through made those the decisions to being long-term sure with making forward. their to our benefit So strategy and businesses business how in going to think it's

contribute then and any that's to looking that, for that incremental you efficiencies about to we targets this in. the looking year? are And you you margin that. the into Appreciate much if about like. always in press it. how But should you're all, in margin And year? talked And at anything 'XX? the -- the Got there thinking clearly, is you're and something the how second for think have spillover at targets about And release, improvement half probably of

about obviously, let might just question, it, in time. looking this out, our and conference at that forward we I excruciating investor which what September, lay well opportunities And some redeploy think to point going in by we're meaningful as invested initiatives be business our capital back pretty able to amount But streamline a growth-oriented all detail returns in in those in to think business we're to our opportunities going in me really think, describe that in coming that as as It's up to simplify saying, are we our of business our on start we unlock step have improve Yes. going good to very see as and much internally. And and invest continue to I we're to fair a value business. to. continue and returns certainly

are you opportunities for that we lay we they're meaningful of conference. the that these intend all in pursuing, So out certainly and to September enough worth think investor

expect as of unlock of sort more investor would able we'll see to streamline, realize. the and half to simplify of kind as relates I would details in outlook. happening conference. reflected relates again, largely in we opportunities expectations, it none and 'XX to our sort As the targets it benefits back And towards 'XX, to the of share today. the of year, the margin we we value, most to those beyond are our geared business those get expansion to is 'XX be of are say that of what's the And that really

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

the in that's outperform margins. quarter. side the and that on verticals, the if the and Merchant Takepayments [ Nice what by to job on businesses and terms break quarter, have the in Cameron, margin margins so underlying were the of even Merchant despite said, you diluted obviously offset to ] on as I that able profile in coming you noticing which margin, outperformed think business, contributing? Just software want I different business and revisit you the because obviously, growth is the then the -- it the just ISV down you touch maybe just the business on maybe could of driver

So side strength those of I guess you profile the we'd business be? driving that's on the margin sustain what's love to of to allowing each hear Merchant the the to more of and about businesses

our you lot start I'll morning. out comments we this it September, and Maybe matter. hedge a get conversation Yes. by this few of Darrin, the frame the business perspectives to sort for of about a and as on are probably sort I'll things share my worth key bit, go-forward into little fodder clearly, But just little a ask way few Josh laid we as that a is good we as And saying up of maybe well. spending a time think a I'll

very we, relates think Merchant So as and the business software today, as on I of to about we before, the focused positioning payments. intersection business it are as obviously, the mentioned

the of markets that We the us time. of is the today, U.S. continue trend most in outside longer the are continue period the be that's SMB core of markets specifically to going future over that a think the to U.S., of space evolution to and to and

contributing continuing grow, expansion overall are drive They and of the are the scale, Those to seeing technology-led our of ISV to contribute given strategy to healthy maybe period a the software retail longer to and So consumer business. businesses. from perspective really margin -- restaurant we business want own strategies to software particularly, just they're the core our to a our to most they're and spend strategy, are business, over relevance and continuing we're point-of-sale our in where time.

it's that's our about as going, So we step those driven largely and of I we where think sort in areas. back investments think by are

Our ability businesses scale technology business. overall differentiate margin margins and in that and those generate to the for obviously expansion to contribute to continue way our rate of through a

elements scale in about scale to benefit costs don't the of we just the businesses, ensuring as are they our that on sort sort have scaled becoming business this internationally Merchant margin to leaning invest a time. that expanding stable kind about our As well, have margin markets generally we're have contribute focused that to player and so that of then of and to of the orienting then, but targeting not we're may is merchant line business. And about we the overall traditional we're of mix Obviously, same they markets We're we lastly, I large allows global more are of expansion continuing sight talked sort our but before, margins of of margin spread the over player get that and have businesses is I grow that the that we would to that a business of that where fixed growth growth becoming -- or of for to not in rates, a markets, player from large-scale in as obviously able of targeting as for and we growing clear scale well. we contributing may we're and clear overall, more can at margin oriented overall acquiring going pace sight we're they software-oriented or cash margins being we're player a very sort to think player. they markets forward, say, scale a those into we us nicely business course, a there scale and our expansion not payments same drive business. line across technology-enabled lot today businesses. And think a And as higher expansion Those today, margins.

and should of a I what big we've strategic think looking about hard been been as we review. of our need whether we in part to think markets, those that's be at part

hopefully, at perspective. we you But gives I sense to a how more So come as think it about some on macro that that to think, September. in

helpful. for really That's a hoped. follow-up quick one did had ask I minute. better Can strong -- The free just financials come cash in we on as

had I it I of you dynamics to capital. think conversion XX% timing know adjusted of like percent it And XX% is on versus GAAP working about or XX-plus a looks lot conversion. XX%

keep minute a good if maybe feel improve the helping So year timing, just going about you as reiterate the that we revisit through just better and and levels? for working capital these from even dynamics still

operating we go confident in of year-over-year go continue that big for we the convert guide on year, fully expense manage XXX% X I less change our and growth expect credit, change regard that a obviously something excluding working But is and to ahead R&D of closely, the you think and this Darrin, out is to Yes, basis with which full capital. But XXX% points. the credit the and very, feel the the tax the about and initial ahead conversion, saw year. tax in this to a we very that lower again, income, interest is R&D business

the more around out quality deposits, helpful broken in that and we of play we adjusted we taxes helpful. historical to bit customer relates paid of of quality is provided of think of gains think our the Cameron. gaming business, rates really will granularity things. highly result. earnings provided cash and just Darrin, our that it reporting obviously, a flow be about we're cash it's think pleased adjusted start free improving for add business of little forward, and And flow. we we our focused free think context. But in as I'll I out you couple and on I that historical And free as go QX, We've were little sort which to conversion and a the overall flow, from of just a our cash our Netspend see We around data with and the dispositions

Schmidt line the Andrew next of Your Citi. from from question comes

here. results good Josh, Cameron,

of direct business, the sales the could targeted parts sales channel, of just talk in where efficiency the the the there direct that's today, speaking terms sales strategy just Just about you legacy efforts? and of

term up saying a We neck don't makes stand about of my hairs that bit. Yes. the legacy And start in just little the sort on back context. of by business maybe I'll the the think

think possible distribution we're the we I what technology-enabled start working for as investments in much would sort out our our go-to-market distribution accelerating really have been specifically We and more towards solutions. and and some as in time, business, called strategies reorient plans here U.S. to characterize we've as market, more of our that to you selling traditional direct

begin opened and sell into our that. to allowed and So we're integrated we distribution to have channels integrated business up our more leaning direct

We They more time are software complexity effective and software associated our best channel. growth a our market, to the with reorient today was productive as we obviously, where continue strategies, to the very on is selling directly be ISV terms distribution developing can They are distribution them solutions point-of-sale see technology-enabled of a distribution today, but point-of-sale of teams to a around building drive late in market. But opportunities progresses, bricks capabilities the in selling very focused on remains where direct software growth bookings. team they're where by payment a to around that. solutions of it omnichannel what more it and in direct year-over-year we the continuing that new continue portion our traditional channel focused into the mid- think distribution clearly that's traditional channel, around kind business, and build capabilities have selling the into we on sales in really back relates the channel direct overall reorienting which very as are some of counter, versus directly to the teens. But business selling we is to selling

distribution continue that's manner the to over a longer time. we'll invest against period really business, and of in the future of So that reorienting

word legacy. I hear makes on the That you sense. of lot a

the layering on outlook? else? moderated in there are macro segment, of a to it consider Just puts macro? other sounds little and there the any the a anything Merchant moderate takes outlook Or it Is obviously, in assumption there. just more Is Takepayments, like for bit

to rates are kind to FX. Takepayments. doing more as FX obviously in we to the I've of I'd It's very is in back volatile. year in I'd And we're as expecting main it be year sitting be offset currently just the We predict times, the FX be, forecasting. year went little the take of back things. this that currently many expect largely the better But of be seat, from leisurely a wouldn't the I FX what be say going I bit half said could may, if probably into than contribution half the

baked So wrong we I that's but the time the into outlook. hopefully, being, on prudent of we're that's a for think what assumption kind and assumption, that

beyond small that, So rest the on puts relatively and are the think and the of I margin. takes

provide So bit I'll let obviously, confident the And little reiterating and in more context just a as reaffirming Josh guide today. well.

Yes.

So X% for we expect to still roughly he mentioned which Takepayments, a FX. be think of I then point think of growth margin still contribution the revenue the Merchant as the in second as full from in includes expect half And year, will range. range. you year, the offset about this the X-plus X% Cameron, And we largely percent

So we that. feel pretty good about

line from KBW. Your Vasu Govil next of comes from question the

new good in that new they over if was you in talked ISV momentum be evolved have channel. I share those related economics the curious just revenue the I guess, historical signings any partners, helpful. Cameron, seeing to how color trends? Just on you were agreements would about partner or

XX constructive months. we've we've in more of Yes. seen we've say But I over integrated drift in over as last a obviously rev seen over space. environment share seen than to years, previous the to more up the mean, time probably the of course competitive the seen I'd had of couple sort competition months, I've XX year the XX said we last

the their to Just perspective with be from capital been has more need how up and as approach these little sort cost environment competitive I fairly has rev economics competitors think share rational of own relationships, and a the they of bit And way. a in come will the experience solutions, constructive a over time. In expectation can for fairly you is have remain certainly last right so. capabilities, ISVs is, constructive, partner it if or right our our the right period with you year of the

differentiate in fairly necessarily see And have they don't a to breadth some to typically circumstances, the offering the a we also ISV, share aggressive capabilities payment integrated commerce we revenue that of breadth traditional solutions ProFac to for of can for but embedded relationship. And broadens and on across high don't relationship the the at we're and partnership depth watermark be and the and of rev that base constructive lot able of fairly to able basis, and overall that rev us. And out one perspective pure obviously part the ISV, high think I that we've of rev road share having big ways ourselves the been we still from of have facilitation need pure been of sort payments outside around that's model shares be I watermark and alone. experience remain, more the us we've them a competitive share you which obviously we the shares. without share but of meet competitors to makes where middle and perspective, You for rev that's to a depth but of of think enablement, competitively deliver, that commerce enriches payments have that able may more from is bring on be offer the positioned rev again, think, rev share constructive why a the always, a well we there the sort to

Investor what we're, of at looking type additional KPIs preview That's sort all into the obviously, new any Investor forward to expect we or of that disclosure And Day perhaps very Day? the helpful. could

a -- transparent. fair I've been and It's it's Yes. question, been pretty pretty

obviously a we're focused going update quarter, the sort strategic quarter, reiterate, last a we're on very Where also going full I think, business strategy of to this any do. you're is going just on we think our in not manner our and I providing mean efforts forward. where see of part, I'll that our And to big what attention, going investments. and a focus does obviously,

against forward pretty pursuing look business that to important around KPIs the we to course, to the are And to judge kind key strategy that giving the how are initiatives the how looking so we then, going strategy that the of as forward, have. and achieving we critical continue going update we're and up we where we around initiatives and business to think own advance execute the against a to at are metrics see our it. frame of And performance we that we're that fulsome strategy to our gaining ground strategy, that

continue So efforts and business business our our the you conversation around have to to our up investor all coupled simplify the approach. will that some streamline and to that to able a frame remain to can, we conference, with in nimble, organizing be for would at internally, and are then expect most we our making of we that product how ensure customer-centric are ourselves we we very agile we moves be

market. We continue then that the And able then differentiation favorably from couple service we around experience with and to in to build to that that clients think enjoy differentiated we're products further us. the able our are compete capabilities

will also through simplify business as unlock how And in that on areas and that returns forward. but we to a being on will as the streamlining against able want focused forward driving again, then flow we we how to, in look generation standpoint, drive and think, so that effort we flow all forward our around better will what very to and to redeploy creation in backdrop to and share simplifying of better business, improve free business, quality more that look capital think be cash I time, efforts we our of from our some our value in invest return the earnings, that move we

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

new on the out XX% calling strategy plus just of that's drivers more bit the embedded on ask Are specifically success? drive those to have solutions aspects commerce evolved wanted tier, that there you clicked a attach sounds selling that It really customers. like in the this? Can the of I of with to really success. dig

a good question. really it's Yes,

our job with we've experience ways to better value-added done a think seen I opportunity services we've the of what our professionals generally payment other and encouraging finding to clients. attach sales is to find pure

marketplace. really in makes resonate lot to deliver A As It I question, and solutions that And think, opportunity our them. their It enablement more the or own channel, the of embedded can the competitive another gives integrated we attractive integrated help improves they rev their us. has kind with to I my of commerce commerce through been software clearly, them solutions. response the revenue the to partners. shares with that mentioned in partnership obviously, see it differentiate

in those strong into continuing we're the on of commerce side, are on lot to our embedded solutions again, specifically also card-linked loyalty ISV what attach of lean and attach human out we're around to finding a around loyalty, direct our again, sale, businesses. distribute our seeing, and partnership for seeing I we're their very rates rates seeing, good So around partners much the cross-selling channels payroll. for capital our customer through point point-of-sale called strong solutions, efforts very But with focused us. And management ways same. the particularly for

from differentiated enriching wrap where focus marketplace. And around to time. big a in capabilities payment offering our clients. it's more enablement So to And to around It's experience, which are think, or again, further for more pure to It's few embedded relevant richer commerce to a delivering us about to we in relationships part our making of a really to to and better forward continued driving the I us pursue has as solutions we're continue I have board, clients our across commerce where allowing set core commerce us attach evolve the to in this we I more would value the and how a that think of competitors strategy ability drive and the areas to just invest where embedded strategy is around solution our started, say experience more obviously, that are. relative want strategy commerce the we to finding that be them. we we that a it with enablement we differentiate is years will really move out payment think, ago ways more

the that on might maintain quarter. kind what I to half? be And debt attractive? level helpful. else? Near-term good do guess improvement in following the repo balancing you've against uses then free the cash, here pipeline the as M&A consider of flow Are That's for expect this you reduction, of cash second that you Okay. earmarked anything in of you

expect our we're flow. down No. the of pay and getting to Look, in back to close point to focused half debt just on very ahead targeted Xx year, free from we leverage $X cash in billion the go back

go talked previously. we back continue to on that we the to we'll low-X and to ahead about So delever year, of get balance that mark the to expect right and

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

into to many for way XX% until on incremental like and way other One and one the to margin to sense. longer the to XXs, this ask growth it EVO, now range, And that -- ask XX% generating term? the way it of stepped in margin of about to made you revenue of XX% to which right quarter, kind quarters quarters. one the XX% question it back the best then many down Is stepped kind incrementals were think

Yes.

lower, expansion that and as quarters would particularly I still We EVO up last We're basis fair of of representative, some think margins points business at were over business XX as move and that about XX I benefits think was had environment make having around points is EVO, of do. the to markets were the by we to was with that's But rely probably our we overlap rebased that QX the to operating acquisition more think and of just in second have amount that it. where we're and We for the we a course kind fair quarter. still continue the of large, the we shore over we move margin in year. see work way period pleased a realizing basis synergy offsetting I forward. as obviously, to to EVO as where obviously, that few forward, of talked their well. But somewhat that that we standards, targeting to the synergies it the technology. investing, think with didn't in well. full the to on around we're sure EVO, And realize we really

As kind the really we've little just overall in I to had uptick get I full of then points Josh the gives off and the reflects good XX the a bit we reflects talked half, a to as is of Dave, think about XXXX business into year. back mentioned, of that before, basis for And that heading conversation this, directly. you and us note, know that where jumping point kind going. I'd appreciate also

Our to is close Merchant. in now XX% margin profile

you're low you're a it XX year basis XXs. little than So when to the it is a easier is, points on to high the margins average, in when in XX expand XXs

to I the and said what synergies we've getting of drive technology is margin over math to expansion we that QX I to sequentially post continually sort up do to several segment. our we And make positioned continue business outcome. focused the back about to need well expansion. we're to that. But against as of know. we're obviously, ability environments, we're do just more we're continuing was it's seeing as you the that pleased demonstration investments to EVO in happen reflecting a going last quarters of the execute now with the So shore think to as you, very, par made very we we're And lost And think gives we not But Merchant on that. on think sort I importantly, business,

costs go several are And the continue of X that you quarter. Great. Merger be when Does earnings down? around add-backs? maybe no lowest just times. to just to years at we Yes. and maybe And integration more a in highlighted going of Quality this one follow-up. point

Yes. shown Look, real think over and integration trend Dave, lower. it ahead a go they've relates so X positive to quarters, expenses to to trend continued and as I X last we've the

of we X synergies. We now $XXX about we'd achieve said and you said integration. be rate to would into EVO complete that And the years about ahead go we they and years as in time of would run X.X it, in March the where would. So expect we million we're if think that which XXXX said that out, frame

So XX% transaction. relative higher. you improve. trend say, out again, look that expect to continue of you called and get is I have And again, time announced at would we -- we to year the would I ahead to as we this integration when in continue to also our and initially the accrete that that continued I they fully period the go would if closer through think to quarter, expect gap of to ahead we lower And the and to go expenses balance our over quality earnings, can adjusted

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

see encouraging Merchant the really to It's spread positive. stay volume here

couple I of a -- think points.

favorable software unusual like expect you digits. integrated to double sounds has grown anything It in side continue second -- the do So looks that side and spread the half? there? And

So hear but from my guess is to yes, wanted you. I

question. of side we've a the talked drives pure Yes, just Tien-Tsin, good what I the on point we're momentum different what for versus did, think on contributing in somewhat stream point-of-sale, for We're payment we a thanks we're us sale. to and revenue of the versus revenue kind volume experience. point-of-sale lot Obviously, side. obviously, seeing And about seeing seeing that's the

continue further in want to pure we in point to volume. payment commerce X we we solutions, as goal to be to areas revenue continue sale, our continue those invest streams many purely aren't of move is to economics, correlated. things differentiate But think invest forward to ourselves I always embedded invest in beyond to as time those of the we obviously, tied in continue

that sort growth but driving become generally that forward those we So point of volume, we're over when I to those see hopeful outpace to from and see because to revenue it's experience to continue capabilities, hope continued continue also. drive may as X selling want time well, a we volume we're don't in uncorrelated payment trends

to de on Issuer, activity? with the announced demand with if the lot you're or novo on Credentials. I'm a activity just the a front. Flex curious pipeline like curious conversions litigation I'm going Cameron, seeing know then just respect few And on Visa side, or just Perfect. And new things change issuing There's either out. pushed being any I

things on X contracts million got right say, about we business Yes. that our can in with are in positioned in the We've term, how got to that accounts LOIs good we're We've to Tien-Tsin, to generally very that really pipeline. XX full now. conversion progressing business. certainly control we I executing medium short working feel convert nicely. we're file of kind the well. would We're

as are in or cloud-based AWS being Europe, We relates customer customer out in the -- kind first our seeing Amadeus capabilities. new called this of fintech to leveraging opportunities it emerge. We quarter,

we So about expansion as well. move we the feel product set that further as forward good of

grow are business of very business. that got at stable a sales side to I to demonstrate would continue and And well positioned good metrics in level. term, we've say, we momentum that good the short-to-medium the the seeing, on So commercial we're to

and bit customer-facing that what in doing modernization. And as I tracking we I script largely in it's we're grow to around the term, only are the importantly, very think ability growth that is think accelerate we cards consumed differently the out to long much our our can in of towards support solutions be by in We're globe that of I of a seeing tied with sort we're require called our business those I today, than modernization channel development important geographies my is deliver to obviously, customers think capabilities use of of that's through end And XXXX. unlocking market historically can different in applications pilot with attack. able that us in of segments kind be positions a that And clearly that to already. year. around this that they've that completing to I investment. the to think number of the cases not able the more some going new of opportunities we're I something developing more across be sort around been FI consumed we to But business, little for think to be

sort for consumability So better more market-leading capabilities our I think, our, of, enablement solutions. of clients,

I that we're really I the cases long into about be will to kind to bringing that beyond. think some of alluding to and as a your think go way in and you 'XX to excited, start we obviously, use question, able that unlocking were of get

good see update, a it. you Got in It's September.

much thank Payments, appreciate Tien-Tsin. your us this Thanks, for joining great of you behalf morning. I our interest Well, in I everyone hope on day. very a Global company. has

for today. you conference for participating. That our Thank does conclude