Global Payments Inc. (NYSE:GPN) Q2 2023 Earnings Call Transcript

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Darrin Peller: Guys, thanks. First of all, it’s nice to see the volume growth very similar to the revenue growth rate, which I guess does, to your point, give opportunity. I guess on that note, just that volume growth rate, 9% organic or even pro forma–or, I’m sorry, reported 20%, clearly the 9% is better than we’re seeing across the industry right now, so Cameron, maybe just re-highlight what the strengths are you’re seeing that’s providing that stability. I think you’re the about the only company we’ve seen stable volume transact quarter versus last quarter on a year-over-year basis, so what you think is the driving force of that relative to the industry, and it sounds like you’re seeing sustainability into July, so maybe just reiterate the points of strength that you’re seeing that’s driving that versus the market overall.

Cameron Bready: Yes Darrin, it’s Cameron. I’ll go ahead and start. Look, I think the biggest strength we have in our portfolio is diversity of vertical market exposure. I think that has benefited us pretty meaningfully as we think about how we’re positioned from a volume perspective and why we’ve seen the strength in performance that we’ve seen for the business overall. That’s the first one I would make. The second point is we did decel a little bit relative to Q1, not dramatic and probably not as much as we saw with the networks and others, and I think part of the reason for that is we’re not that exposed to travel. I think the travel comps are difficult comps, and I think having to grow over those for others has been a bit of a headwind, and since we didn’t really benefit on the upside, which quite frankly we were asked why we weren’t quite growing at the same rate as Visa and MasterCard in these periods, now we’re not having that same headwind, although travel remains strong.

The comps are tough, and obviously I think that’s putting a little bit of pressure on growth rates as well for those guys. I think it’s a little bit of mix, it’s diversity of distribution, and I think it’s ongoing consistent execution in our portfolios. Again, that gives me confidence that not only–you know, obviously that we produced strong results for the quarter, I think we’re well poised to continue to deliver on the expectations we have for the business for the balance of the year.

Darrin Peller: Yes, that’s great. Cameron, your comments on the partner channel that you provided during the beginning of the call was pretty helpful, and obviously I think it was intentional, just to get the message out about the [indiscernible]. When you think about the strategy on partners versus owned software going forward and assuming you had an incremental dollar to spend on something, what would you prefer, or is it really a balanced approach? I guess it sounds like the ISV channel is sustainable and doing well, so I’m curious to hear what you–if you have a strategic preference.

Cameron Bready: Yes, I really think it depends on the vertical, Darrin, to be honest. I’m somewhat ambivalent, quite frankly, as to whether we partner or whether we own. I think it largely boils down to the fundamentals of the vertical markets that we’re trying to target and which model do we think best positions us for success and growth and expansion in that market, and what are the opportunities available to us to either own or partner. It really is something that needs to be focused vertical by vertical and opportunity by opportunity. But as an overall strategic matter, I am somewhat ambivalent. We like owning software in certain vertical markets, but obviously the partner model has been a fantastic growth engine for this business and, I think, continues to have a lot of runway.

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