Global Payments Inc.

Ladies and gentlemen, thank you for standing by and welcome to Global Payments' second quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. Later we will open the lines for questions and answers. If you should require assistance during this call, please press star then zero. 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 2025 conference call. Our earnings release and the slides that accompany this call can be found on the investor relations area of our website at .globalpayments.com. Before we begin, I'd like to remind you that some of the comments made by management during contain forward-looking statements about, among other matters, expected operating and financial results. These statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. For additional information on these factors, please refer to our press release and filings with the FDC. We caution you not to place undue reliance on these statements. Forward-looking statements during this call speak only as of the date of this call, and we undertake no obligation to update them. We will also be referring to several non-GAP financial measures, which we believe are more reflective of our ongoing performance. For a full reconciliation of the non-GAP financial measures discussed on this call to the most comparable GAP measure in accordance with SEC regulations, please see our press release furnished as an exhibit to our Form 8K file this morning and our supplemental material available on the investor relations section of our website. Joining me on the call is our CEO Cameron Brady, our President and COO Bob Kortopassi, and our CFO Josh Whipple. Now I'll turn the call over to Cameron.

Thanks, Winnie. Good morning and thank you for joining us today. I'm excited to have the opportunity to share with you the progress we have made across the business over the last few months. Not only did we deliver solid results that were modestly better than our expectations, but we did so in a quarter when we announced a significant step to reposition our business with the acquisition of WorldPay and the vestiture of Visual Resolutions, transactions that represent a unique opportunity to catalyze our transformation in a more significant way and streamline our business to accelerate longer-term growth and value creation. We also did continue to make substantial progress against our operational transformation program that is focused on streamlining and unifying our business globally while creating meaningful benefits that provide us with incremental capacity for reinvestment to drive growth and run a better business. This quarter we successfully launched our Genius platform and completed the rollout of our revamped sales compensation plan across our U.S. sales teams as part of our Sales Force of the Future initiative. Our transformation initiatives are enhancing the commercial effectiveness of the business and enabling us to unlock greater operating income benefits than originally forecasted. Further, in our ongoing commitment to simplifying the business, we recently announced the sale of our payroll business for a total consideration of $1.1 billion, allowing for $500 million of additional shareholder returns through the Accelerated Share Repurchase program we announced today. And lastly, we are already planning ahead for the close of the WorldPay transaction next year and have initiated our integration planning and established critical work streams that will support a successful integration and allow us to begin unlocking the tremendous value embedded in the transaction. Turning to our second quarter results, we are very pleased with our performance, particularly in light of the significant positive change we are currently driving in our organization through our transformation. And while the macro environment continues to be fluid and consumer sentiment remains somewhat muted, spending has been relatively resilient with trends fairly stable through the period. For the quarter, we reported 5% constant currency adjusted net revenue growth, excluding dispositions, 130 basis points of margin expansion, and 11% constant currency adjusted EPS growth compared to the same period in 2024. These results highlight not only the resilience of our business model, but also our team's ability to execute at scale and advance a significant number of key initiatives while remaining focused on delivering business outcomes. In our merchant business, we achieved a number of notable wins and delivered healthy and consistent growth across the three pillars of our strategy in line with our expectations and outlook. Beginning with POS and software, we successfully launched Genius for Restaurants and Genius for Retail this quarter, delivering on the timeline we committed to at the beginning of the year. The launch of Genius marks an important milestone in our journey to streamline our solutions, unifying all the global payments point of sale products into an intuitive and highly configurable new platform while establishing a stronger and more recognizable brand in the market. Our Genius product family is more than simply a marketplace of point solutions. It's a fully integrated and seamless set of capabilities that can be deployed to clients of varying sizes through our modern, scalable, cloud-based software. Our solutions are designed with a clean interface, fast checkouts, and native workflows without the need and reliance on third-party systems. Genius meets the needs of small businesses while also delivering enterprise-grade reliability for large chains and complex environments. And we couple our complete commerce enablement solutions with distinctive distribution and full local service and support that is unrivaled in the market. While early days, we are delighted with the initial momentum we are seeing with Genius. Feedback has been overwhelmingly positive with customers highlighting Genius for its ease of use, intuitive design, convenience, and enhanced customer experience. And sellers and dealers are excited about Genius's easy setup, speed, flexible and competitive pricing, and increased functionality, allowing them to target a more diverse set of merchants to accelerate sales. Our Genius for Restaurants platform launched in late May at the National Restaurant Association Show in Chicago. In the month of June post the rollout, new restaurant growth accelerated in the mid-teen sequentially compared to April and May, with that momentum continuing in July. We've also seen early success in our wholesale channel, where monthly net new additions have already doubled since launch as we leverage the full power of our distribution platform to bring our best capabilities to market. Our Genius for Retail platform, which officially launched in June, has seen strong early demand as well, with record sales in our U.S. Direct channel, which delivered 37 percent growth from the prior year period. This momentum from retail customers also continued through July. Additionally, we have now integrated our market-leading soft pause solution with Genius to provide a holistic -to-end offering under the Genius family, including -to-pay functionality. And we have launched this solution into 13 EU markets, including our most recent iOS launch in Spain, which makes us the first acquirer in the market to enable merchants to accept payments directly through their Apple devices. Unlike many of our competitors, we have a significant opportunity to continue expanding Genius in international geographies and to capitalize on the strong secular growth trends and POS demands in regions like Europe, given our established local presence and significant distribution capabilities in these markets today. This is one of the most exciting aspects of the Genius growth story. Looking ahead, we will officially introduce the Genius Enterprise Restaurant Solution next month. But in the interim, we continue to see momentum with both Enterprise Restaurant chains and sports and entertainment venues. This quarter, we successfully completed the rollout of our POS and kitchen management solutions to deliver over 1,000 A&W restaurant locations in Canada and achieved a new partnership with one of the fastest growing coffee franchises in the U.S., which will also leverage our -of-sale and kitchen management offerings in addition to payments across locations beginning this quarter. And we were recently selected as a payments technology provider for food and beverage as part of a multiyear partnership with the Minnesota Twins and Target Field and extended our relationship for the multiyear period with the Dallas Cowboys and AT&T Stadium. During the period, we also achieved stadium and venue partnerships with the Tampa Bay Lightning and two Premier League football clubs in the U.K. Our proven ability to deliver innovative solutions and enhanced speed, efficiency, and the overall fan experience in large-scale, high-traffic environments has positioned us as the partner of choice for approximately 160 stadiums and venues around the world. Moving to our education business, we signed a number of key wins this quarter, including new partnerships in the U.S. with Memphis University and the University of Science and Arts of Oklahoma, and a new agreement with Technological University in Dublin. I would note that we have now signed 16 partnerships with universities across the U.K. and Ireland since expanding into this market a little over a year ago. Our education business continues to be an area of innovation for us as well. This fall, we are introducing a new AI tool in support of cafeteria programs for school customers. The solution builds and optimizes menus, factoring in complex requirements such as nutrition guidelines, labor availability, food costs, and inventory. With this tool, our customers will be able to unlock significant efficiency benefits while improving food quality and offerings. In the real estate vertical, we signed a multi-year extension with our largest partner and are excited about the opportunity to expand our relationship to include additional products. And both our communities and real estate vertical market software solutions delivered impressive bookings for the second quarter, with expected annual revenue from new sales increasing 30 percent and 20 percent, respectively, compared to the prior year period. Turning to our integrated embedded business, I am pleased to highlight that software partner signings remain strong, in particular in our international markets around the world. In fact, international signings are up more than 30 percent over the last six months compared to the prior year period, and we continue to have a strong pipeline across the United Kingdom, Asia, Australia, and Latam as we benefit from rather aligning our activities and capabilities globally. After our core payments business, our focus on forming deeper relationships with commerce enablement and outstanding services is driving significant opportunities with both new and existing partners globally. I am pleased to note that we recently renewed our strategic partnership with Banamex to bring leading software and payment solutions to the full spectrum of merchants in Mexico for a multi-year period. Mexico has strong secular trends, and Banamex is the right partner given its reach and scale. We look forward to continuing to deliver -in-class commerce solutions together in Mexico. We achieved a number of notable wins in several key fast-growth geographies in Europe this quarter, including Care4, IKEA, Intermarche, and Brio Comarche in Poland, as well as with appliance leader Expert Hillis and Bizarre Supermarkets in Greece. We also acquired two small product companies at the end of the quarter. These buy versus build opportunities allow us to quickly improve our offerings, bring innovative technology to market more rapidly, control the development roadmap, reduce costs, and streamline our infrastructure while also enhancing subject matter expertise and talent. The first is a Hong Kong-based software partner that meaningfully enhances our QR code and digital wallet capabilities. This technology allows us to expand our current capabilities, providing for a more seamless integration with partners like Alipay, WeChat Pay, Octopus, and PayMe, and greater control over the client experience and development roadmap in support of a full spectrum of merchants, including enterprise clients and APAC and beyond. The second is a small fraud technology partner that bolsters our existing capabilities across the dispute management lifecycle. This acquisition allows us to provide a more complete -to-end support to our customers during the chargeback process on a global basis with a better interface and client experience while demising legacy technology supporting these solutions today. Turning to issuer solutions, we delivered solid financial performance consistent with our expectations for the quarter. This was largely driven by continued growth in accounts on file as well as stable underlying transaction volume trends. Here today, we have successfully converted over 15 million accounts, allowing us to end the second quarter with traditional accounts on file of more than 900 million. We continue to have a strong pipeline of new business that extends into 2027, as well as four letters of intent with institutions worldwide. Further, we recently renewed several customer agreements, including our consumer partnership with President's Joint Bank and commercial relationships with U.S. Bank, HSBC, and another leading multinational financial institution based in continental Europe. We also continue to make steady progress on our modernization program with multiple pilots in validation and approaching completion. Importantly, we achieved general availability for our first fully modernized cloud application during the second quarter, and we remain on track for full commercial launch of all customer-facing applications by the end of the year. As I noted while producing these results, we are also making significant progress on our transformation agenda. We continue to expect a meaningful amount of our transformation work to be complete by the end of this year and are actually accelerating roughly 10% of our initiatives initially planned for 2026 to better position us to quickly and efficiently integrate world pay at close. Jocko will provide more detail, but as a result of the milestones we have achieved to date, we are raising the value of the operating income benefit we expect from our transformation initiatives in our current business and support functions by nearly 20%. As part of our transformation journey, we are also continuing to focus on streamlining and simplifying the business. As I noted, in late May, we announced a definitive agreement to divest our payroll business to Acresure. This transaction further sharpens our strategic focus and allows us to accelerate capital returns to shareholders. We expect the sale to close in the third quarter. As part of the transaction, we have entered into a mutual referral agreement and commercial partnership with Acresure, supporting our ability to continue delivering integrated human capital management and payroll offerings to our merchant customers as part of our suite of commerce enablement solutions. With the payroll divestiture, we have now announced transactions to divest over $550 million of revenue, which is consistent with what we outlined at the time of our investor conference. That said, the plans we communicated in September were established well before the opportunity to acquire WorldPay materialized. As a result, we are reevaluating portfolio composition decisions we made at that time in light of the WorldPay acquisition and our expected strategic focus and vertical exposure post-closing. Consistent with our approach thus far, net proceeds from any further divestitures will be returned to shareholders after ensuring leverage neutrality. We also continue our work to unlock the growth potential of our best capabilities and harmonize our -to-market strategy across the globe. I already highlighted the successful launch of our Genius restaurant and retail solutions during the quarter in the U.S. and that we remain on track to launch our Genius Enterprise restaurant solution next month. We have also begun rolling out Genius to international markets, including Canada and Mexico, and will launch in the U.K. this month. Before the end of the year, we also expect to introduce Genius in Germany and Austria. And in early 2026, we will bring Genius to Ireland, Spain, the Czech Republic, followed by Romania, Poland, and Australia shortly thereafter. In addition to the progress we have made consolidating our 16 POS systems to the unified Genius platform, we are also executing on a number of other initiatives to improve every interaction we have with our customers. Starting with how we go to market, we are making strides in transforming our sales and marketing organizations with targeted initiatives focused on each component critical to building high-performance sales teams. We are upskilling our talent across all channels and regions to better leverage modern sales methodologies and technology. We have successfully rolled out a revamped sales incentive plan across all of our U.S. sales teams. And we are seeing positive results, which includes increases in sales production and sales capacity, lower seller attrition rates, and an improved ability to attract incremental high-quality sales talent. Notably, we successfully converted over 90% of core payment sellers to the new plan, while a significant portion of those that did not convert have transitioned to our agent model or wholesale program. Importantly, the sales professionals that have moved to the new structure have already increased their productivity high single digits with improvements in every month. And the cohort of new sales professionals hired since January under this model have already been 10% more productive than those under the previous plan. We are also enhancing the integrated digital technologies that support our sales and marketing operations to improve efficiency, effectiveness, and customer engagement. As one example, we have invested in increased marketing automation technology to drive higher conversion rates. These investments are delivering strong returns with qualified leads of 13% -over-quarter, driven by improved targeting and engagement. As an example, our real-time messaging platform is now the top-performing channel for sales-qualified leads. Additionally, we have made significant progress in consolidation of our over 20 CRM instances, leveraging modern infrastructure and common data platform. We're also simplifying the way we onboard merchants by establishing a single provisioning and activating process versus leveraging multiple channels across our business and geographies as we have in the past. As part of this program, we have more than doubled our automated approval rate as we now can support a wider range of customers and partner channels while also effectively managing risk and product. We are also making investments to build a single entry point for our customers to access the full suite of our technology capabilities through one marketplace, enhancing our ability to cross-sell our commerce-enablement solutions, including loyalty, embedded finance, data analytics, and Git. To do so, we will leverage our modern real-time processing and orchestration platform we acquired last year to distribute products across channels and geographies seamlessly. To date, we have connected multiple products and are now successfully leveraging this platform across our European operations. And in our integrated and embedded business, we are transforming our integration experience into an AI-led developer-first platform, consolidating all developer documentation, code samples, and tools into a single global platform that spans geographies, verticals, and partners. This provides developers with access to a unified suite of APIs and a powerful orchestration layer capable of shifting transactions between gateways and dynamically activating value-added services, all without rewriting code. This means faster access to innovation for new and existing partners. We are helping developers to do more with less, which will unlock speed, scale, and simplicity across global commerce. This builds on the work we are already doing to integrate AI across our organization to drive innovation, enhance efficiency, and unlock new opportunities. This includes investments in AI applications in areas such as marketing optimization, contract intelligence, customer engagement, and software development, each offering promising potential to accelerate product delivery, streamline operations, and elevate the way we serve our customers. We continue to see AI as a key enabler of long-term customer and shareholder value. I'm proud of what our team has accomplished across all of our transformation initiatives, which will position us to successfully integrate WorldPay in 2026. To that end, we are making solid progress on closing both the acquisition of WorldPay and the vestiture of our insurance solutions business. This includes significant strides towards receiving the regulatory approvals required for the transactions. We have initiated the approval process with regulators in all required jurisdictions. We are particularly pleased that the transaction cleared antitrust review in the U.S. upon expiry of the HSR waiting period in July. Overall, the regulatory approval process is proceeding as expected, and we remain on track to close in the first half of 2026. Additionally, we are preparing to execute on the WorldPay integration and have identified and established all necessary work streams to ensure a seamless process. We have a proven track record of integrating large acquisitions, delivering on our timelines, and exceeding our synergy goals. And we will approach the integration with WorldPay with an uncompromising plan for aligning our operating model and fully unifying our businesses for value creation. Our integration strategy will emphasize accelerating growth, enhancing our competitiveness, synergy realization, and investing in innovation, while also unifying the combined company under a single brand and leveraging the best talent from both organizations to build the industry's strongest team. We recently held our first integration planning kickoff, bringing together over 100 leaders from both global payments and WorldPay to begin developing our integration roadmap. The team left energized about the future, and we are more excited today than we were at the time of the announcement about the opportunities to accelerate our transformation and long-term strategy. We are positioning the business for a seamless close, and our work to date has further increased our WorldPay positions our company with unmasked global scale, processing nearly $4 trillion in annual volume across 100 billion transactions and serving millions of merchants and thousands of platform and software partners globally. Importantly, the acquisition combines complementary capabilities that will make our -to-market business stronger, more scalable, more competitive, and more valuable to our clients. We are highly focused on the opportunities to accelerate growth as a combined business through a combination of expanded distribution, a more complete suite of products and solutions to serve merchants and partners of all types and sizes globally, and an ability to invest in innovation at scale. For example, we already discussed our ability to immediately sell genius, other software and commerce enablement solutions into WorldPay's existing SMB merchant base and leverage WorldPay's existing distribution channels to bring these capabilities to market. We will also be able to further strengthen the commerce enablement solutions integrated into genius to support the growth of our restaurants and retailers, including enhancing our merchant-invented finance offerings through existing WorldPay solutions. WorldPay's pay rate platform and full payback capabilities augment our ability to serve software partners, marketplaces, and platforms across more regions and operating models. Many of the WorldPay solutions for platforms can enhance our offerings and the experience we deliver for our software partners. WorldPay also brings world-class enterprise and e-commerce capabilities that enhance our payment acceptance solutions and enable us to deliver a seamless and robust omnichannel experience across our combined footprint and a full spectrum of merchant customers. We have identified opportunities to cross-sell existing WorldPay solutions, including fraud and prime marketing, digital payment routing, as well as our global payments, loyalty data analytics, and other commerce enablement solutions across our combined 5 million merchant customer base. In addition to serving the digital needs of enterprise customers, including -in-class authorization capabilities, a premier FX platform, credential management solutions, fraud offerings, and leading payout solutions supporting over 100 currencies, stable coins, and a robust and rapidly growing list of alternative payment methods, we intend to bring WorldPay's e-com capabilities down market to further differentiate our offerings for SMB clients. We also see tremendous potential for geographic expansion as a combined company, targeting new secular growth markets. In particular, we could not be more excited to bring robust local distribution functionality and service to complement WorldPay's leading digital offerings across the 40 markets where we have a physical presence today. We are also focused on innovation in new businesses we can grow as a combined company. One such example is in B2B, where both companies possess a variety of assets and capabilities we feel we can better harness and invest in to accelerate our growth in a market where we have been historically under-penetrated. And we will enable all of this by accelerating investment more broadly across the business to further differentiate and compete, putting more than $1 billion annually in high priority areas supporting our growth. Together, we will be better positioned than ever to deliver the next generation of capabilities from point of sale and software and integrated and embedded payments to advanced commerce enablement and omni-channel solutions for merchants of all sizes globally. Lastly, we will ensure that collectively we continue to meet the highest compliance and regulatory standards for our customers globally, which we will believe will increasingly be a point of differentiation in the future. Josh?