Global Payments Inc. (NYSE:GPN) Q1 2023 Earnings Call Transcript

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Cameron Bready: Yes, James. Great question. So, I would say first and foremost, Jeff and I have pretty much been locked at the for the last nine years. So, you shouldn’t expect a radical deviation in strategy. And quite the contrary, you should expect a continued focus on the four-pillar strategy we articulated 18 months ago at our investor conference. I’m very much 100% behind that strategy. Jeff and I worked closely to kind of build that strategy together over many years, and I absolutely think it’s the right strategy for us as a business matter going forward. So, my highest priority will continue to be to execute against that strategy as we move forward. I think from a capital allocation perspective and priority perspective, as Josh highlighted in his prepared remarks, we’re very focused on getting back to our targeted leverage ratio by the end of this year, that is a priority of the capital allocation matter, as well as make sure that we integrate EVO effectively over that same period of time.

We have a saying here that we like to do the things we’ve already committed to well before we try to take on the next thing. So, I think as it relates to the next, call it, nine months, our focus is clearly going to be on getting leverage back to the targeted level, integrating EVO effectively, making sure that that’s off to a good start. And then as a go-forward matter, I think our capital allocation priorities will remain relatively unchanged. We’re going to continue to try to strike the right balance between obviously investing to grow the business. Our priority is finding ways to invest in the business to grow and expand our footprint to support the various pillars of the strategy that we’re pursuing and find ways to augment that through inorganic activities, as well as organic investment in the business.

And absent meaningful opportunities to do that in a way that drives value and returns for our shareholders, we’ll look to return capital as we have over a long period of time. So, I don’t think the overall philosophy or approach to capital allocation is going to change dramatically. I think it’s going to be more of the same, and I think more of the same will be very good for our shareholders over a long period of time.

James Faucette: Got it. Got it. And then just revisiting a little bit the outlook is that when you came into the year, your planning assumption had been really no slowdown or economic recession. We’ve seen a little bit of a slowdown in consumer spending, as you mentioned, in late March and through April. And it seemed like at least some of the qualitative commentary was a little more cautious through the year in-spite of the guidance increase. How are you thinking about the macro conditions now versus three months ago? And has there been much change there? Thanks.

Josh Whipple: Yes. So, I’ll go ahead and take that. So, as we thought about the guide, the outlook assumes the macro backdrop, as I said in my prepared remarks, is consistent with the current environment. And really, there’s really two primary changes to the guide. What I would say is, the first change is the outperformance that we saw in Q1, which was approximately 40 million from a revenue perspective and EPS was about $0.05 or $0.06 better relative to our internal forecast. And then secondly, it’s the $25 million that we expect to or that we received from Netspend in the month of April. Other than that, nothing has really changed relative to our guide that we went through on the February call and laid out specifically – very specifically by quarters.

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