Global Payments Inc.

Ladies and gentlemen, thank you for standing by and welcome to Global Payments Second Quarter 2026 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will open the lines for questions and answers. 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, Nate Rozof. Please go ahead.

Good morning. Welcome to Global Payments' second quarter 2026 conference call. Joining us today is our CEO Cameron Bready, CFO Josh Whipple, and COO Bob Cortopassi. Some of the comments made during today's call will contain forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied, and we caution you not to place undue reliance upon them. They speak only as of the date of this call and we undertake no obligation to update them Cameron Bready,

Thanks, Nate, and good morning, everyone. We are pleased with our second quarter performance, which reflects the continued disciplined execution of our team members worldwide. Our integration of WorldPay is progressing rapidly, and we are progressing well against the roadmap we established to unlock the value creation opportunities from the transaction. At the same time, we continue to enhance our competitive position through strong commercial execution, ongoing innovation, and the accelerated adoption of AI across our products and operations, while also establishing a strong foundation to lead in the emerging era of agenda commerce. Our second quarter results underscored the durability of our business model. Adjusted net revenue grew 4% on a normalized basis, which includes an approximately 100 basis point headwind from the impact of the Middle East conflict on our travel portfolio. Adjusted operating margins expanded 70 basis points on a normalized basis, and adjusted earnings per share increased 12%. Our ability to generate durable mid-single-digit growth in the face of transient external headwinds demonstrates the benefits of our enhanced scale and the resilience of our diversified revenue streams. Capital allocation remains a central pillar of our investment thesis. During the quarter, we returned approximately $550 million through our previously announced accelerated share repurchase program, as well as additional open market repurchases. Combined with our dividend payments, we are now more than halfway to our over $2 billion capital return commitment for the year. Turning to the integration of WorldPay, we achieved a number of key milestones this quarter. First, we completed our operating model design and have now established our entire leadership structure, creating a more streamlined organization with clearer accountability, greater agility, and faster decision-making. Second, we defined our target architecture model for our combined technology environment, providing the blueprint to consolidate platforms, reduce infrastructure complexity, and improve operating leverage over time while accelerating product innovation. Third, we finalized alignment of our commercial organization around three operating segments, SMB, enterprise, and platforms, simplifying execution while positioning us to better serve customers across each market segment. With these foundational elements now in place, we are well positioned to advance integration execution, unlock further synergies, and strengthen our competitive position across the markets we serve. In our SMB business, our investments in go-to-market transformation are yielding improvements in sales effectiveness. Since the beginning of the year, we have seen a 30% increase in new merchant locations per quota-carrying sales professional. This contributed to a greater than 25% sequential increase in Genius bookings in the second quarter. New customer yields also increased 75% year-over-year, demonstrating that our clients are willing to pay for the value Genius delivers. Genius adoption is accelerating as we expand across geographies and sales channels. In Canada, our longstanding bank partner, Desjardins, is now selling Genius and experiencing strong momentum. In the U.S., we are on track to enable WorldPay's financial institution partners to begin selling Genius during the fourth quarter, starting with 30 of our largest bank partners. Further, our pipeline remains strong, and we continue to win new marquee clients. For example, Long John Silver has recently completed its rollout of Genius digital menu solutions across 100 locations, and Polo Tropical selected Genius for its 135 stores. Jeremiah's Italian Ice chose Genius to replace its legacy point of sale solution and to unify its software and payments together with a single provider. In response to this strong demand, we are further investing in new features and functionality for Genius. We recently introduced our sleek new Genius handheld. It is designed for edge AI, meaning that it eliminates latency by running an AI model locally on the device. Its AI-powered voice ordering technology allows servers to have natural conversations with customers while the point-of-sale system quietly builds a ticket in the background, even in high-noise environments. We also introduced our Genius AI reporting tool. This agentic assistant allows users to ask natural language questions across their own operational data and reports. It surfaces trends, patterns, and insights from a business's reporting and operational dataset to proactively support decision-making. These innovations demonstrate the power of Genius as a modern, scalable platform that combines ease of use, robust functionality, and AI-enabled capability. We recently celebrated the one-year anniversary of Genius' launch at the National Restaurant Association Conference in May. While its revenue contribution is relatively modest today, our sales momentum, product enhancements, and geographic expansion in such a short period of time is impressive and a testament to the strength of our team and the scale of our business. Genius remains central to our long-term strategy, and we are investing meaningfully in the product to enhance capabilities and open new markets, as well as in marketing to build brand awareness and mindshare. You may have seen our newest commercial that features Genius in the fast-paced, high-pressure environments restaurant operators navigate every day. It helped to drive a nearly 60% uplift in Genius in Google-branded search, which ultimately helps to lower our cost of acquisition over time. Looking ahead, we are making additional targeted investments to accelerate Genius adoption and deepen partner engagement. Later this month, we will host Genius World in Las Vegas, bringing together clients and partners to showcase our full suite of capabilities and innovation roadmap. We are also launching a nationwide roadshow to expose Genius directly to partner bank branches, increasing awareness, education, and momentum across our expanding financial institution network. Turning to our enterprise segment, our strategy to sell our advanced payments capabilities and value-added services in a modularized, configurable way continues to pay dividends. Bookings are up 10% year-to-date, including notable new wins with Shangri-La Hotels, online derivatives platform IG Group, Australian crypto trading platform BingX, and a multinational home furnishing brand. We also expanded our relationship with Domino's Pizza to be their exclusive provider for card-present and card-not-present payments in the U.S., alongside our existing relationship in Canada. Further, we extended our relationship with a leading global retailer to support their Canadian locations, and we renewed key municipality partners, including the state of Ohio and the cities of Chicago and San Antonio. We also continue to make strong progress integrating and ramping our recently signed clients, with approximately one-third of these going live during the second quarter, including our recent wins with Aldi, Morsons, and ride-sharing and delivery platform Careem in the UAE. Within our platform segment, our growth strategy is centered around expanding our leadership position in embedded payments. We are investing to extend our reach with fast-growing payfax, marketplaces, and software platforms, while leveraging our global footprint and broad portfolio of value-added services to drive expansion across both new and existing partners. Within this segment, we signed 48 new partners during the second quarter, with more than half of these wins being international. These partners are well diversified across verticals, including B2B, healthcare, hospitality, personal and professional services, and retail. On the renewal front, we were pleased to extend and expand our relationship with Explorer, a leading provider of software and integrated payment solutions across several verticals. They selected Global Payments for Platforms because of our scale, service excellence, reliability, and importantly, for our ability to enable their international expansion. Several of our other value-added services, including embedded finance, dynamic payouts, and terminal modernization, also form a core part of the value proposition we deliver to Explorer and their clients. Platform's VAS revenue grew 25% in the second quarter, driven by fraud-side payouts, prime routing, and merchant working capital, and we saw continued double-digit volume growth in our embedded payments platform, highlighting the strength of our capabilities. Across our business, we continue to deploy AI as an accelerator in our products and internal workflows, allowing us to innovate at a faster pace, reduce development cycle times, enrich merchant experiences, and provide distinctive customer service. Thanks to the scale of our combined company, the volume of data we process gives us a competitive advantage in value-added services like fraud and authorization optimization. And we're magnifying that advantage by deploying AI. Payment performance is not based on guesswork. It is based on frameworks and identifying patterns in data. For example, our AI-native optimization services continue to drive payment performance and risk mitigation across multiple products, delivering higher approval rates with minimal risk. Our revenue boost solution, which was already generating $2 billion in annual approval uplift, is now delivering an additional 50 basis point increase in approval rates through AI-powered intelligent decisioning. Our patent-pending authentication optimization solution is also utilizing agentic capabilities to deliver significant improvements in authorization performance for 3D secure transactions. Further, agentic commerce is an emerging growth opportunity, and we continue to invest in platform-agnostic modular set of capabilities designed to help merchants participate in new commerce models, regardless of channel, agent, or payment method. We now have multiple agentic commerce pilots in flight with leading AI platforms and some of the world's largest global retailers. We are co-creating new commerce experiences, bringing to bear our deep expertise in payments fraud and authentication to allow advancement to happen at pace in a secure, reliable, and scalable way. Our continued innovation and disciplined execution reinforce our confidence in the durability of our business model and our ability to consistently generate sustainable top-line growth, strong cash flow, and attractive long-term shareholder returns. With that, I'll turn it over to Josh.

Thanks, Cameron. In the second quarter, we generated adjusted net revenue of $3.16 billion, representing normalized growth of 4%, excluding dispositions. Our results reflect resilient consumer spending trends across our business through the quarter, partially offset by an approximately 100 basis point headwind primarily related to reduced volumes in our travel sector business from the conflict in the Middle East. This is in line with what we discussed on our first quarter call. Adjusted operating margin for the quarter expanded 70 basis points on a normalized basis, excluding dispositions, and the net result was adjusted earnings per share of $3.46, representing an increase of 12%. Turning to our segment results, we are pleased to introduce our three new operating segments, SMB, Enterprise, and Platforms, which reflect our go-forward business. These segments align to the go-to-market structure we implemented at the closing of the WorldPay transaction. In addition to our operating segments, we also have other revenue that includes non-core portfolios and certain relationships that don't align with our segments go-to-market strategies. We will report each of our operating segments on a contribution margin basis, and we'll also have a corporate category that contains all overhead costs. Our largest operating segment is SMB, which provides payment, software, and related commerce solutions to help small and medium-sized businesses with less than $50 million in annualized volume. In the second quarter, SMB generated adjusted net revenue of $1.51 billion, representing normalized growth of 4% excluding dispositions, underpinned by 4% volume growth. We saw solid growth in North America in the second quarter, and our enlarged and transformed Salesforce continued to deliver strong results as we accelerated the rollout of Genius, our new flagship point-of-sale technology platform. New Genius locations grew more than 50% year-over-year and nearly 25% sequentially compared to the first quarter. We delivered $891 million of adjusted operating income in the SMB segment, representing a contribution margin of 59%. Our enterprise segment serves large enterprises and multinational clients with more than $50 million in annualized volume. It provides card-present and card-not-present payment processing and other value-added software and services offerings to support complex payment environments. In the second quarter, enterprise generated adjusted net revenue of $838 million, representing normalized growth of 7%, despite an approximately 400 basis point headwind attributable to the Middle East conflict. Enterprise volumes grew 4%, highlighting our ability to expand yields based on the strength of our solutions. In addition, card-not-present revenue, which primarily represents global e-commerce, grew low double digits. We delivered $653 million of adjusted operating income in the enterprise segment, representing a contribution margin of 78%. Our final operating segment is platforms, which offers payment and commerce solutions through software partners, Payfax, marketplaces, and other technology-enabled platforms across numerous vertical markets. In the second quarter, platforms generated adjusted net revenue of $628 million, representing normalized growth of 7%, led by strength in embedded payments, which includes our PayFact and managed PayFact offerings. Platform segment volume grew 10% in the second quarter, reflecting the growing mix of embedded payments within the segment. We have delivered $284 million of adjusted operating income in the platform segment, representing a contribution margin of 45%. We generated adjusted free cash flow of $687 million in the second quarter, representing a conversion rate of adjusted net income to adjusted free cash flow of approximately 75%. This represents sequential improvement as expected, and our free cash flow adjustments declined by more than 70% compared to the first quarter. As a reminder, our free cash flow conversion follows a seasonal pattern and is typically materially higher in the back half of the year relative to the first half. Additionally, we invested $236 million in capital expenditures in the quarter, representing approximately 7% of revenue. In the second quarter, we repurchased approximately 8 million shares for $550 million through our previously announced accelerated share repurchases, as well as open market repurchases. Our balance sheet remains healthy. We ended the second quarter just below 3.5 times net leverage, and our indebtedness is more than 90% fixed rate with a weighted average cost of approximately 4%. Turning now to our full year outlook. As we discussed on our first quarter earnings call, our prior outlook assumed a normalization of travel activity by the end of the second quarter. However, we continue to see impacts on our travel portfolio, particularly in the Middle East, and the associated revenue headwind has persisted longer than anticipated. Accordingly, we are updating our outlook to reflect the assumption that the impact of the conflict will continue through the remainder of 2026. While the duration and ultimate outcome remain uncertain, this represents the most prudent planning assumption at this time. Thank you very much. We now anticipate adjusted earnings per share of $13.60 to $13.80, representing 11% to 13% growth for the full year, which reflects the flow-through of the travel portfolio impacts to earnings, as well as less FX impact. Given the recent strengthening in the U.S. dollar, we now expect currency exchange rates to have roughly no impact on reported growth for the full year. We continue to expect to realize benefits from our Salesforce expansion, ramping of genius sales, and enterprise clients coming live during the second and third quarters, and also for adjusted operating margins to expand more meaningfully in the second half of the year as we realize additional integration cost savings. We continue to expect the conversion rate of adjusted net income to adjusted free cash flow to exceed 90% for the full year 2026. Our capital allocation plans for 2026 and beyond remain unchanged. We continue to expect to return more than $2 billion to shareholders in 2026 while investing approximately $1 billion in the business, or 8% of adjusted net revenue. Furthermore, we remain committed to preserving our investment-grade credit ratings and achieving our three times net leverage target by the end of 2027. In summary, the underlying trends across the business demonstrate the durability of our model. The team's focus continues to be on commercial excellence in all our go-to-market channels and disciplined execution of our integration with WorldPay. We remain confident in our prospects for sustainable growth, cash flow generation, and return of capital to shareholders. And with that, I'll turn the call back over to Cameron.

Thanks, Josh. As you have heard throughout the call, we are executing well and delivering on the initiatives within our control, exactly as planned. We are continuing to monitor the conflict in the Middle East, but expect its impact to be modest and transitory, underscoring the diversity of our revenue streams and the power of our scale. We continue to differentiate through feature-rich products, distinctive service and support, and a reputation for delivering outcomes that exceed client expectations. From industry-leading enterprise payment solutions to innovative platforms like Genius, Global Payments is at the forefront of commerce technology. And with approximately $1 billion in annual investment, we are among the few companies in our industry with the resources to innovate at this scale, anticipating and delivering solutions ahead of demand. Our global distribution network is another powerful differentiator. The breadth of our reach, combined with deep local expertise, positions us uniquely to help customers expand into new markets and capture growth opportunities around the world. At the same time, we remain focused on disciplined capital deployment and maximizing total shareholder return. We are a proven compounder with durable and diversified revenue streams and substantial free cash flow generation. We are more than halfway to our $2 billion plus 2026 return to capital commitment and remain on track to return $7.5 billion cumulatively by the end of 2027. Overall, the integration, execution, operational simplification, innovation investments, and disciplined capital deployment are strengthening the foundation of the company and positioning global payments to deliver sustainable growth, expanding margins, and compelling long-term shareholder value. Operator, please open the line for questions.

Thank you. At this time, if you would like to ask a question, please click on the raise hand button, which can be found on the black bar at the bottom of your screen. When it is your turn, you will receive a message on your screen from the host allowing you to talk and then you will hear your name called. Please accept, unmute your audio and ask your question. As a reminder, we are allowing analysts one question and one related follow up today. We will wait one moment to allow the queue to form. Our first question will come from Dan Dolev with Mizuho. You may now unmute your audio and ask your question.

Hey, guys. Can you hear me?

Yes, we can. Good morning, Dan.

Hey, good morning, Cameron. Good morning, team. Really nice results. Really great to see all the progress on Genius. Looks like you're off to a great start there. Just had a question, Cameron. I think a lot of people are asking, can you maybe help us unpack some of the assumptions underpinning the new guide? I think a lot of investors want to get some more detail into that. But overall, great job here and congrats again.

Thanks, Dan. We certainly saw a pretty meaningful impact from the conflict. We called out 100 basis point. It was probably a little bit higher than that. We were able to offset some of that impact in Q2. But look, the situation obviously remains volatile and uncertain. And right now, our assumption is that it will persist through the balance of the year and will continue to negatively impact the travel portfolio. The environment is slightly better than it was clearly in the middle of Q2, but certainly capacity and forward bookings within our travel portfolio remain significantly below pre-conflict levels. And the capacity that kind of has come back tends to be more short haul where we're yielding domestic sort of routes versus the higher yielding long haul routes that drive greater levels of revenue for us. So, look, I think our guide for the back, you know, for the year now is four to five percent, you know, on a constant currency exposition basis. I think that allows for a range of outcomes in the Middle East. Thank you for joining us. But certainly end of day, we still feel good about kind of how the business is positioned for the balance of the year. And I think most importantly, it doesn't impact our capital return plans for the year because the impact overall, given the size and scale of the business, is relatively modest. Josh, I don't know if you'd add any more details around that.

Yeah, just a couple other things that I would add, but a finer point on some of the other pieces of it. We do continue to expect margins to expand 150 basis points for the full year, and that's primarily driven from the realized role-pay integration synergies and operating leverage from the model. And as Cameron mentioned, we now expect to report EPS growth in that 11% to 13% range, which also takes into consideration updated FX assumptions, just given the recent strengthening of the dollar. And then as it relates, you know, Dan, you know, more specifically, you know, to the second half, you know, we would expect, you know, revenue growth to be in that approximately four and a half percent range. And we expect, you know, 200 base points of margin expansion with margins right around that 43 percent range. And then as it relates to this general macro, you know, we factored in just, you know, continuation of the spending trends that we saw in Q2 and a generally stable macro environment.

Great. Well, thanks again and congrats on a really, really good quarter. Thank you.

Thanks, Sam.

That's great. Thanks, Sam.

Our next question comes from Brian Keane with Citigroup. Please go ahead and ask your question.

Hi, good morning. Solid results here. Wanted to ask about yields. You know, I noticed that the normalized revenue is running above volume for enterprise. and a little bit below for platforms. Just wanted to understand that and maybe what the kind of go forward outlook looks like for those segments. And then in SMB, we're kind of running volume and revenue are at the same levels. I'm just wondering with Genius coming into the mix, does that maybe drive a yield higher for that segment? Thanks.

Yeah, really great questions, Dan. Why don't I start and I'll ask Bob maybe to chime in if he had some additional color he'd like to add. But look, as it relates to the enterprise business, as a reminder, it's a mix of card present, card not present volume. So I think we called out in our script card not present volumes are kind of growing in that double digit range. Card Present, given the type of merchants we serve in that space, is generally going to be more GDP type levels. So you blend that together and you get a growth rate that is on a volume basis fairly consistent with the overall revenue growth of the business. We do obviously get a little bit of a tailwind from value added services within the enterprise channel as well. So, again, blend it all together, probably revenue growth a little bit higher than overall volume growth when you mix the card present, card not present portions of the portfolio together, with VAS kind of being a tailwind that drives revenue growth a little bit higher. I think in the platforms business, it's really a mixed question. So where we're seeing volume growth – and this is a secular trend, not just a unique trend to global payments – Thank you for joining us. Revenue growth being a little bit lower than that, largely because the yield, the revenue yield that we see in the managed PayFac and PayFac channels is a little bit less than what we see in the more traditional integrator referrals. So that's a little bit of a mix story in platforms. And certainly we're pleased with the strength and volume we're seeing. And obviously the revenue growth will continue to drift up as we move more and more volume to our managed PayFac solutions over time. And then lastly, within the S&B channel, you're exactly right. I think the challenge with Genius is just size relative to the size of the channel. So Genius is a relatively modest contributor today. Over time, we would expect Genius to be able to drive better yields, and we actually see that in the data, and some of that we called out on the call this morning. Thank you for taking the questions.

Yeah, real quick, one additional item, Brian. I think Cameron already highlighted that our expectation is for revenue growth and volume to decouple in a favorable way over a period of time. Okay, that's helpful. Thanks, Cameron. Thanks, Bob. Thanks, Ryan.

Our next question comes from Andrew Schmidt with KeyBank. Please go ahead with your question.

Hey, Cameron, Bob, Josh. Thanks for taking the question this morning. Appreciate all the work on the segment detail here. Really helpful. Two related questions. I'll ask them up front. When we think about segment growth rates, we just maybe talk about expectations for intermediate term. I know we just walked through some of the yield dynamics, some of the drivers there, but just intermediate term sort of view on those segments would be helpful. And then specifically within SMB, obviously Genius, a big driver, value-add services, distribution. Maybe we could just drill into that a little bit in terms of the key components in terms of driving growth. Revenue growth improvement there. Thanks so much.

Yeah, hey, Andrew, it's Josh. So, you know, good question. As we think about just the segments more generally, if we start with enterprise, we called out, you know, 7%, you know, normalized growth in Q2. And that obviously reflects, you know, some impact, you know, from the Middle East, which was about, you know, 400 basis points of, you know, growth headwinds. So, you know, that business on a normalized basis, you can, you know, call it like low double digits, right? I think as you think about the back half of the year, we would see some modest improvement there as we continue to see some of the strong underlying trends around card not present. We called out the bookings growth of 10% in the first half of the year, and we start to see those conversions of those bookings go live in the back half. So we're You know, we continue to see really, you know, strong trends there. You know, platforms, you know, we called out that, you know, normalized, you know, growth rate in that 7% range. And, you know, we expect to see some slight acceleration there. Embedded payments, which includes our PayFact and managed PayFact business, you know, that's about, you know, 23, 20, you know, a little over 20% of the overall composition there. And that's growing in that 20%, you know, range. and so we expect to see you know some acceleration there in the back half and then you know S&B we we called out as about four percent you know normalized growth and and and again we've seen really strong trends through Genius we talked about the bookings and the new locations that we added In our prepared remarks, and we continue to see really, really strong underlying trends with Genius. It's a modest piece of the overall SMB composition, but generally speaking, we're seeing really strong trends with Genius as we continue to see improved adoption. And we also really only launched this a little over a year ago, so we're still kind of in the early innings here. But again, as I mentioned, seeing really strong contribution from that.

Maybe I'll just add a couple points on that. Thank you so much for joining us. S&B, Mid-Single-Digit Range Thank you for joining us. We'll be right back. Thank you, Cameron. Thank you, Josh. Appreciate it. Thanks.

Our next question comes from Jason Cooperberg with Wells Fargo. Please go ahead with your question.

Good morning, guys. Thanks. So I know you said four and a half percent growth for this half of the year. I'm just curious on cadence there between Q3 and Q4. And then just to get a little nerdy on the numbers, maybe for a second, I want to talk about the Middle East. Just going back to last quarter, I thought we were talking about like a 70 basis point headwind in Q2 and then another 30 basis points from the IRS contract. It sounds like the airlines alone were a little over 100 bips of headwind in Q2. So just wanted to make sure we have the facts right there. And then should we assume that the four and a half percent outlook for the second half Assumes that that current run rate of airline headwind stays unchanged.

Yeah, Jason, Cameron, maybe I'll start and I'll ask Josh to chime in with some more color as well. So to your first question, I wouldn't parse too specifically Q3 and Q4 at this point in time. Obviously, given the drivers of better growth in the back half of the year, I think it's fair to assume that on the margin, Q4 would be a little better than Q3, but I don't think we're talking huge material differences here relative to the back half outlook in totality. And as a reminder, those drivers are really a few things. One is just the continued ramping of our sales force from a productivity perspective as well as our new sellers. Two, it's a continued progress that we're seeing with Genius. And obviously, the trends that we've seen in the first half of the year start to contribute more as a revenue matter into the back half of the year on the margin, which is helpful. And then third, it's really the boarding and go live and ramping of the enterprise book of business that is what we call signed but not live. We call that on the call that about a third of those went live in the second quarter, so they'll now start to ramp in the back half of the year. Examples are Aldi, Morrison's, Careem, which is a ride-hailing service in the UAE. All those are going to help to drive slightly better outcomes in the back half of the year as those revenues ramp for the business. So hopefully that gives you a little bit of color around the drivers for the back half. I think to your second question, first of all, your memory is very good. We did call out 70 basis points and roughly 30. I think the 70 basis points, as we said in our Q1 call, really sort of presuppose that the Middle East conflict kind of ended more quickly than certainly it hasn't ended yet. Thank you so much for joining us. For the balance of the year, look, as I said earlier, things are getting slightly better, but we still expect a headwind from the Middle East conflict on the travel portfolio. If things get worse, it could drift up to that kind of 100 basis point impact we saw in the second quarter. If not, it will probably slightly less than that. And I think that's what our guide largely reflects. But I think we've given room in the guide for a variety of outcomes around that. The Middle East conflict, and given the uncertainty and, again, the current instability in the environment, we think that's the proven approach to take.

I totally agree, and that's helpful, Collar. I'm just going to pivot to free cash flow for a second. I mean, it's good to see some of those adjustments coming down. And I know we've been talking about an adjusted free cash flow number for next year of $4 billion. Just as we think about trying to translate that to more of a gap free cash flow number, based on your sense of how much more the adjustments may come down next year, what might be a reasonable range of To think about for a clean gap-free cash flow number in 2027?

Yeah, look, you know, Jason, we talked about... When we announced the transaction that we expected $600 million of one-time costs to match our overall synergies, and this year we're trending, I think in the first half of integration, we're right around that $300 million mark. We expect about another $100 million. That does include some separation costs in it, so you back that out. We would expect to go ahead and see the integration costs come down slowly over time with primarily Thank you for joining us. You know, 2027, we'll be able to give a better steer with regards to what the outlook looks like for 27. But I'd say right now, we feel very good about getting back to that three times leverage point and returning with the capital that we committed to returning, you know, when we announced at our investor day in September of 2024.

Jason, it's Cameron. Let me just add a couple of comments to that. First of all, we are trying to pull forward some of our integration work, but more importantly, our separation work. We spend a lot of time talking about integration. We haven't spent so much time talking about separation, but we are trying to pull forward as much as we can our separation from FIS for WorldPay, in particular their technology environments. Thank you for joining us. Josh's earlier point around separation. So those costs will likely be a little bit higher this year. As Josh said, over time, naturally those costs will drift down as we continue to execute on both of those initiatives as we get into 27 and more so in 28. But I think the most important point is we remain confident in our ability to generate the free cash flow next year that supports the capital return plans that we've articulated and view ourselves very much on track to hit those objectives.

Thank you. Appreciate it.

Our next question comes from Darren Peller with Wolf Research. Please go ahead with your question.

Hey, thanks, guys. Cameron, I want to ask first a question on Genius, and then Josh, I will have a quick follow-up on the free cash, so just more in this year versus going forward. But Cameron, first, just on the Genius rollout, obviously the checks continue to be very strong, that the demand is there. So what expectations do you actually have for it to permeate specifically the S&P segment? and to see success with CrossOn to the WorldPay side over the next 12 months. I guess we're looking for a little bit more color on milestones you're looking to achieve that we can watch and see success in.

Yeah, I think it's a good question, Darren. Thanks. And thanks for the commentary as well. We see the same thing in the marketplace, which is why we continue to invest behind the product, the capability, the marketing, the brand, the distribution, et cetera, because we have big ambitions for genius. And certainly all of the early results a year in from launch remain very, very positive, particularly as it relates to the sequential growth and new sales and just the receptivity in the market for the product we're able to deliver. Thank you so much for joining us. It's such a modest contributor today. We haven't really broken out a lot of specificity around genius in particular, but other than kind of what we're seeing from a front book perspective. But as we continue to scale it for the back half of the year and head into 2027, we'll be able to provide you a little bit more color around size contribution and where we see it going from a growth rate perspective over time. Thank you for joining us. This is largely U.S. commentary, but that's the vast majority of our SMB business. Ultimately, the SMB channel is going to be selling Genius largely in restaurant and retail verticals and some adjacencies where, again, Genius can be relevant. Thank you for joining us. and Brian Bozeman. Ultimately, whether it's next year or the following, I think effectively 100% of front book sales in our SMB channel will be genius in the U.S., and the rest of the world will evolve towards that same model over a period of time.

Okay, that's really helpful. Josh, just my follow-up was on free cash again. I mean, I know you did about $1.2 billion in adjusted free cash, and you need to do about $2 billion in the second half. But in terms of also real free cash, I mean, we calculate you would need a step function of around $1.7 billion in the second half just to achieve what we think is the conversion. I know you said there's seasonality that drives second half higher, but if you could just walk us through some of the key specifics to drive that materially higher free cash, both on an adjusted and gap basis, I think it'd be really helpful, just given the strong capital return program we're looking for.

Yeah, look, so Darren, a good question. And what I would do is I would point you actually back to kind of the historical trends that we've seen around free cash flow conversion. And, you know, historically, it's lower in the first half relative to the second half. I think if you go back and Thank you so much for joining us. We've already returned more than half of the capital that we targeted to return in 2026, so we're well on our way there. We feel very confident with regard to between dividends and buybacks that will be over that $2 billion mark for the full year.

Got it.

Thanks, Alex.

Thanks, Darren.

Our next question comes from Adam Frisch with Evercore ISI. Please go ahead with your question.

Thanks, guys. Good morning. I just want to do a little bit of housekeeping on revenue. Since FX was neutral, was the delta between nominal and adjusted the $60 million of divestitures? And then along those lines on other revenues was down year over year on a normalized basis, which in our math takes the growth rate down, obviously, across the three segments. So can you just help us understand what sits in the other revenue bucket and when it stops being a drag? Thanks.

Yeah, sure. So, Adam, as it relates to the other revenue, we call this out in our prepared remarks. You know, this represents, you know, non-core portfolios and certain relationships that don't, you know, align to our segments or go-to-market strategies. And, you know, what that really is comprised of, it's, you know, portfolio partners that are no longer referring us, you know, front book relationships and that are no longer, you know, actively providing us with new merchant referrals. So that's one piece of it. Another piece of it is there are a couple of non-core processing businesses that we acquired through the WorldPay acquisition. That's included in there. And then there's a portfolio where we provided managed services where the partner has built its own acquiring platform, and they're slowly migrating off of us. If you think about just the other revenue, and that's in our disclosure, about 8% in 2025 of that revenue is And we expect that to be in the 6% range in 2026. But the reason, Adam, we broke that out is we wanted to go ahead and give a better line of sight of what the core business looks like going forward. So those are some of the components that make up the other revenue.

Q2 Dispositions And then to just put a finer point on Josh's comment, as we think about the aggregate growth rate, it's the aggregate growth rate. What we're trying to demonstrate, I think, in the disclosures and the way that we've segmented the business is the future of the business really now sits in enterprise platforms and SMB. There are elements of the business that we are winding down and exiting over a period of time that'll be a drag until they're gone. But we did want to at least highlight across the three segments what the ongoing sort of growth rate for the business is, in particular, you know, how we're sort of competing and winning in the market and what the three segments look like, excluding kind of the drag, you know, from this other portfolio of activities that were, in some cases, purposely, you know, sort of looking to exit and wind down over a period of time because they don't align with Our next question comes from Dave Koning with Baird. Please go ahead with your question.

Yeah, hey guys, thank you. I guess I'm kind of wondering, you know, how we see the acceleration picture going forward. You know, you're talking about second half, four and a half percent. As we look forward, it seemed the Middle East one percent dissipates. You get world pay revenue synergies probably incremental kind of going into next year and then genius ramps. I mean, do you feel pretty good today that 2027 will be an accelerating growth year?

Yeah, absolutely, Dave. I think for the reasons you described, obviously, once we lap the headwinds from the Middle East as we get into Q2 of next year with the acceleration we're seeing around Genius, the front book kind of bookings numbers that we've been able to generate this year all gives us confidence kind of going into next year that we should see an acceleration off of Our current expected 4% to 5% constant currency ex-disposition guide for 2026, without a doubt. You know, it's a big ship. So obviously, you know, moving revenue a point on a business of this size is a pretty meaningful increment, kind of year over year. But we feel good, certainly, about the momentum that we'll have kind of exiting the year, given everything that we're executing on heading into 2027.

Thank you. And just a quick follow-up, S&B 4%, was that pretty equal between world pay and global payments?

Yeah, it's really hard now that we've segmented the business and combined the portfolios to really disaggregate between the two portfolios. I would say, you know, and we haven't really talked about it, one of the bright spots in S&B is one of the less bright spots in S&B is the U.K., The UK market, I think, overall, just as a GDP matter, is kind of struggling from a macro standpoint. And certainly, we're seeing a little bit of softness in the UK market. That's more coming from WorldPay, just given their presence, particularly in the SMB space there. So, look, if I had to sort of try to pinpoint it, it's probably slightly more weighted to global than WorldPay on the SMB side. But Thanks, guys. Our final question comes.

Our final question comes from Ramsey L. Assel with Cantor Fitzgerald. Please go ahead with your question.

Hi there. I wanted to ask in the context of the higher customer yields you're seeing on Genius, is there a back book of existing customers on the SMB side that you can convert to Genius? Could that become an important kind of accelerant or growth driver for, I guess, Genius and the SMB segment growth rate?

Hi, Ramsey. Thanks for the question. It's Bob. The answer is yes. As we've mentioned a couple of times when this topic has come up, our focus has largely been on converting front book opportunities into genius, attaching more product, adding more value around each of those engagements with prospects and clients. Thank you for joining us. The sleek hardware profile that we've built around the countertop experience, kiosk, digital menu boards, and the new handhelds, that's really attractive. The incremental functionality that Genius brings to bear, given where they were coming from, is very attractive. And so we do see a degree of kind of opt-in upgrades as customers are looking for increased functionality and a better experience overall. But there's not a mass campaign around back book conversion. We haven't put a gun to anybody's head to force them with platform retirements or deprecation sort of expectations. So we continue to upgrade the back book at a measured pace, really on a voluntary basis as customers want to opt in to those new solutions. But 100% truly of our focus around genius adoption is around horizontal vertical expansion, geographies, making it available in more of our distribution channels. Thank you so much for joining us today.

Yeah, I'll touch on that, Rand. Thanks for the question. It's really a commentary around our VAS portfolio. Bob touched on VAS and the importance of VAS as a driver of growth across all three segments. It's particularly important in our enterprise channel. And we've seen really good progress this year, largely through a concerted effort to drive more cross-selling of our value-added services into existing client relationships that we have. So we have teams very much focused on Net new payment opportunities, but we also have teams now very dedicated to cross-selling value-added services, whether it's revenue boost, fraud site, authentication optimization solutions, et cetera, across our FX capabilities, across our portfolio of clients. We're seeing very good traction there, which is partially driving, obviously, the strong bookings growth that we've been able to articulate for the enterprise business on a year-to-date basis.

Fantastic. Thank you. Thanks, Randy.

We have no further questions at this time. This concludes our call. Thank you and have a good day.