Global Payments Inc.

to execute on our strategy to expand and diversify our NetSpend business into international markets. We expect both of these transactions to close in the fourth quarter. Second, we are delighted to announce that we have entered into a new collaboration with Amazon Web Services, AWS, for a unique distribution and cutting-edge technologies at NetSpend to substantially increase our target addressable markets and accelerate our strategy across our three pillars of digitization, internationalization, and B2B expansion. Much as we have done with our issuer business, we plan to leverage the AWS partner network and dedicated partner development specialists to bring NetSpend's B2C and B2B digital payment solutions, including program management, to a broader base of neobanks, fintech startups, and other e-commerce players, as well as to new geographies. This partnership will also provide an industry-leading cloud-based processing platform for NetSpend's customers to access cutting-edge technologies with greater speed to market, security, and flexibility. We are thrilled to deepen our go-to-market collaboration with one of the world's largest technology companies to continue our disruption of these markets. Third, we are pleased to have closed our acquisition of Zego in June. further capitalizing on the convergence of software and payments in one of the largest and most attractive vertical markets worldwide. As I highlighted last quarter, real estate is the quintessence of the type of market that we seek, sizable, global in scope, fragmented, and ripe for further software, digital commerce, and payments penetration. And COVID-19 has accelerated the underlying trends that make this $6.5 billion target addressable market so attractive, as we continue to expand our software-driven footprint. It is my great pleasure to welcome Xego team members to Global Payments. In addition to these strategic accomplishments, we produced yet another outstanding quarter of results. Since we began running the company in 2013, our main focus has been on two areas, enabling diverse, distinctive, and defensible distribution, and developing market-leading technologies. We could not be more pleased with the momentum across our businesses, evident in our second quarter results, and reflected in our increased guidance for 2021. It's worth noting that we have delivered the greatest value creation in our history over the last eight years, despite numerous new market entrants during the entirety of that period, public and private. And we have generated consistent financial and operating outperformance through a variety of macroeconomic cycles, including most recently the financial impact of the first worldwide pandemic in over 100 years. The results are self-evident. We have record performance in the second quarter in our merchant segment on several bases, absolute, sequential, and year-over-year, while also producing strong growth versus pre-pandemic levels. Simply put, our payments businesses continue to significantly outperform and gain share fueled by our long-held technology-enabled focus and solid ongoing execution. On a more granular basis, we saw strong double-digit growth in new sales in both global payments integrated and our vertical market businesses in the quarter, and our U.S. relationship-led business again achieved record new sales. This marks the third quarter out of the last four in which we have achieved such a high level of performance. Rather than impede our strategy, that pandemic spurred further share gains and catalyzed the digital strategies we have had in place since 2013. Our omnichannel businesses accelerated yet again in the second quarter with growth in excess of 20% despite lapping the enhanced shift toward e-commerce globally that began with the start of the pandemic in early 2020. New customers signing this quarter include Foot Locker as a key customer in Europe that will leverage our unified commerce platform, or UCP, to modernize its payment acceptance capabilities. We are pleased to have also signed new global UCP partnerships with Hunter Douglas and Euronet Worldwide subsidiary Z.com. Our ability to deliver a single API solution virtually around the world has been a key driver of our success. And our unique multinational footprint in both the virtual and the physical worlds as proven to be a differentiator versus both legacy and new market entrance. Within our vertical market businesses, we had a number of new key customer wins for our quick service restaurant business, including Frisch's Big Boy, Crystal's, and the Fiesa Group, while AMD and TouchNet continue to deliver record revenue performance as they have throughout the pandemic. Notably, TouchNet continues to add new marquee colleges and universities domestically and internationally, including the Arkansas State University System and Sheridan College in Canada this quarter. We are also making great progress in our partnership with Google and remain on track to board Google as an emerging customer this quarter and expect to launch our Run and Grow My Business product that integrates Google solutions in our digital portal environment in the fourth quarter. Our issuer business delivered growth beyond the high end of our targeted long-term range. We are pleased to have signed a new multi-year partnership with Banco Carrefour in Brazil, the financial services arm of the country's leading super-center retail chain, to provide a range of technologies for its credit card and digital accounts, as well as to handle on-us acquiring transactions. Recall that transaction optimization is one of our key post-merger initiatives. More to come on that at our investor conference. We also signed a letter of intent with a large global financial institution and longstanding partner in a new market in LATAM that will mark another significant milestone for us in our continued expansion into the region. Further, we executed a multi-year extension with the UK's largest retailer, Tesco, enabled by our shared digital modernization vision for the future. Finally, we are pleased to have extended our relationship with Mercury Financial for a range of digital technologies. This relationship serves as further proof that our industry-leading platform offers the agility to support leading-edge fintech companies. T-SYS recently launched a strategic go-to-market partnership with PricewaterhouseCoopers, or PWC. As part of the T-SYS partner program, we expected our collaboration with PWC will diversify and expand our distribution and allow us to jointly offer innovative solutions, expertise, and execution capabilities to clients of all sizes across the full spectrum of neobanks, fintechs, startups, and program managers. Again, diversification and distribution has been one of our key objectives since 2013, and we are using the same playbook with TSIS that we have successfully deployed in the past. We continue to capitalize on the broad and deep pipeline we have the good fortune to have in our issuer business. Today, we have 15 letters of intent with institutions worldwide, six of which are competitive takeaways. Turning to our unique collaboration, we now have 20 active prospects in our pipeline with AWS, up from a dozen last quarter and four at the end of 2020. These include a mix of new financial technology entrants and other non-traditional issuers, in addition to large financial institutions. As growth accelerates in this market, we believe that we are the ones doing the disrupting. While buy now, pay later solutions may seem novel to some, we have in fact been providing leading technologies to that segment of the market for decades in both our issuer and merchant segments. And we continue to deliver innovative installment payments products for customers. We are currently enabling our merchant customers in Canada in partnership with Desjardins with the visa installment solution. CIBC will also launch a combined thesis visa installment solution in early 2022. And we signed a global referral agreement with MasterCard supporting installment payments in June. Finally, in our business and consumer segment, we expect a unique co-sale arrangement with AWS to expand our distribution capabilities. Again, much like we've been doing since 2013. And together with our issuer business, we intend to further disrupt the program management segment in the near future. This is yet another example of application of our strategies to legacy thesis businesses. And we expect the same successes here as we have generated in other contexts. Paul?

Thanks, Jeff. Our financial performance in the second quarter of 2021 demonstrated meaningful sequential momentum and exceeded our expectations. These results highlight outstanding execution on our differentiated strategy of technology enablement. Specifically, we delivered adjusted net revenue of $1.94 billion, representing 28% growth compared to the prior year and 10% growth compared to 2019. Adjusted operating margin for the second quarter was 41.8%. a 480 basis point improvement from the prior year, despite the return of certain costs we temporarily reduced at the onset of the pandemic. The net result was adjusted earnings per share of $2.04 for the quarter, an increase of 56% compared to the prior year, and a 35% improvement from the same period in 2019. Taking a closer look at our performance by segment, Merchant Solutions achieved adjusted net revenue of $1.29 billion for the second quarter, a 42% improvement from the prior year. We delivered an adjusted operating margin of 48.5% in this segment, an increase of 750 basis points from the same period in 2020 as we continue to benefit from the recovery and our improving technology-enabled business mix. We are pleased that our acquiring businesses globally generated 46% adjusted net revenue growth compared to the second quarter of 2020 led by strength in the U.S. Notably, our U.S. acquiring business, which includes our integrated and relationship-led channels, grew approximately 25% compared to the same period in 2019. These results were led by our integrated business, which produced a stellar quarter, generating a 53% adjusted net revenue improvement compared to 2020 and 35% growth relative to 2019. As for our own software businesses in the U.S., we are delighted with the overall portfolio delivered growth of roughly 30% compared to the prior year and achieved solid sequential improvement relative to the first quarter. As Jeff mentioned, our vertical markets businesses continue to see positive bookings trends, providing us with a favorable tailwind for the second half of 2021. Additionally, our worldwide e-commerce and omnichannel businesses saw growth in excess of 20% year-on-year, as our value proposition, including our Unified Commerce Platform, or UCP, continues to resonate with customers. Regarding our international businesses, while these markets have been a bit slower to recover compared to the U.S. on an absolute basis, our portfolio of businesses across Europe and Asia contribute favorably to our overall merchant adjusted net revenue as a growth matter compared to 2020. These businesses also returned to growth on a combined basis when compared to 2019. Moving to issuer solutions, we are pleased to have delivered a record $446 million in adjusted net revenue for the second quarter, marking an 8% improvement from the prior year period. This strong performance was driven by the ongoing recovery in transaction volumes across many of our markets, while non-volume-based revenue increased mid-single digits during the period, led by our output service business, which grew at roughly 10% for the quarter. Our issuer business also achieved record second quarter adjusted operating income and adjusted segment operating margin expanded 110 basis points from the prior year, also reaching a new second quarter record of 43.9% as we continue to benefit from our efforts to drive efficiencies in this business. This is an impressive result, particularly given we achieved margin expansion of 640 basis points in the second quarter of 2020. Additionally, our issuer team signed five long-term contract extensions during the quarter, and our strong pipeline bodes well for future continued momentum going forward. Finally, our business and consumer solutions segment delivered adjusted net revenue of $227 million, representing growth of 5%, despite lapping the benefit of the 2020 CARES Act last year. As a reminder, this business delivered double-digit growth in the second quarter of 2020, driven in part by our support of the disbursement of over $1.4 billion in stimulus funds during that period. Adjusted operating margin for this segment was 26.9%, which was also ahead of our expectations. The outstanding performance we delivered across our businesses serves as a further proof point that we continue to gain share as well as the alignment of our strategy with the accelerating digital trends coming out of the pandemic. We are also pleased that our integration continues to progress well, and we have now executed actions allowing for the achievement of annual run rate expense synergies of at least $400 million and annual run rate revenue synergies of at least $150 million that we have been targeting exactly as we said we would do and despite the pandemic. We will continue to deliver additional expense and revenue synergies over the coming periods as our efficiency efforts continue and we leverage the collaborative growth opportunities across our businesses. From a cash flow standpoint, we generated second quarter adjusted free cash flow of roughly $152 million or a little over $1 billion through the first six months and continue to expect adjusted free cash flow in excess of $2 billion for the year. We reinvested approximately $130 million in capital expenditures during the quarter and continue to expect capital expenditures in the $500 to $600 million range for the full year. In June, we successfully closed our acquisition of Zico, consistent with our expectations, and we expect this business will contribute roughly $50 million of adjusted net revenue to our merchant segment in 2021. I would like to echo Jeff's excitement regarding the agreements we announced today to acquire Bankia's payments businesses in Spain, and we expect these transactions to close in the fourth quarter. Further, we remain on track to complete our purchase of Worldline's Payone business in Austria in the second half of this year. We are pleased to have continued to return cash to our shareholders this quarter with the repurchase of 1.5 million of our shares for approximately $290 million. Following our balanced deployment of capital this quarter, we ended the period with roughly $3.3 billion of liquidity and a leveraged position of roughly 2.6 times on a net debt basis, which is flat to last quarter, as expected. And this leaves us with continuing ample capacity going forward. Based on our current expectations for the continued global recovery, we are again increasing our guidance for adjusted net revenue to now be in a range of $7.7 billion to $7.73 billion, reflecting growth of 14% to 15% over 2020. We continue to expect adjusted operating margin expansion of up to 250 basis points compared to 2020 levels on a standalone basis. As a reminder, Zego will be a modest headwind to the upper bound of our margin target now that it is closed, as it does not currently operate at our margin levels despite having already achieved Rule of 40 status. At the segment level, we are increasing our expectations for merchant solutions adjusted net revenue growth to be around 20% from high teens previously, which assumes the current pace of recovery continues worldwide. This marks the second consecutive quarter that we have raised our outlook for our merchant business. We are also increasing our outlook for our issuer business and now expect growth to be in the low to mid single-digit range for 2021, up from our prior outlook for low single-digit growth. We continue to expect our business and consumer segment to achieve mid to high single-digit growth for the full year, consistent with our long-term growth target for net spend. As a reminder, we increased our guidance for this segment on our first quarter earnings call in May, despite lapping the impact of the 2020 CARES Act. Moving to non-operating items, we continue to expect net interest expense to be slightly lower in 2021 relative to 2020, while we anticipate our adjusted tax rate will be relatively consistent with last year. Putting it all together, we are increasing our expected adjusted earnings per share for the full year to a range of $8.07 to $8.20, reflecting growth of 26% to 28% over 2020. Our raised outlook presumes we remain on a path to recovery worldwide over the balance of the year. We look forward to updating you on our longer-term expectations for the business at our upcoming Virtual Investor Conference, which we will host on Wednesday, September 8th. And with that, I'll turn the call back over to Jeff.

Thanks, Paul. As we look ahead to next month, it is worth reflecting on how much we have evolved our business. Throughout much of the last eight years, we have witnessed a multitude of new market entrants, newly public companies, shifting modes of competition, and macroeconomic cycles too numerous to count. Some said a number of times over the near last decade that our best days were behind us. The facts say quite the opposite. In fact, we have delivered the greatest value creation in our history during that period, and we believe we are poised today to continue our track record of outperformance. The second quarter and our raised guidance today are the most recent examples. Our rates of revenue growth and bookings trends underscore sustained share gains despite managing through an unprecedented crisis. One proof point, we now expect our U.S. payments business to roughly reach its original growth target for 2021 based on 2019 goals. In short, we grew right through the pandemic. More to follow in September. The reasons for our success are straightforward. Our distinctive strategies, the technology investments we have made over many years, the support of our market-leading partners and customers, our execution consistency, and the quality of our team members have allowed us to significantly expand our competitive mode. As painful as it has been, COVID-19 has reaffirmed the wisdom of our long-held beliefs in the digitization of our businesses. We believe that the best is yet to come. You can judge that for yourselves next month. Winnie?