Global Payments Inc. (NYSE:GPN) Q3 2023 Earnings Call Transcript

Global Payments Inc. (NYSE:GPN) Q3 2023 Earnings Call Transcript October 31, 2023

Operator: Ladies and gentlemen, thank you for standing by and welcome to Global Payments Third Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will open the lines for questions-and-answers. [Operator Instructions]. 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.

Winnie Smith: Good morning and welcome to Global Payments third quarter 2023 conference call. Our earnings release and the slides that accompany this call can be found on the Investor Relations area of our website at www.globalpayments.com. Before we begin, I’d like to remind you that some of the comments made by management during today’s conference call contain forward-looking statements about, among other matters, expected operating and financial results. These statements are subject to risks, uncertainties, and other factors, including the impact of economic conditions on our future operations, that could cause actual results to differ materially from expectations. Certain risk factors inherent in our business are set forth in filings with the SEC, including our most recent 10-K and subsequent filings.

A customer making a purchase at a modern retail store terminal, showing the ubiquity of the company’s payment solutions.

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-GAAP financial measures which we believe are more reflective of our ongoing performance. For a full reconciliation of the non-GAAP financial measures discussed in this call to the most comparable GAAP measure in accordance with SEC regulations, please see our press release furnished as an exhibit to our Form 8-K filed this morning and our supplemental material available on the Investor Relations section of our website. Joining me on the call are Cameron Bready, President and CEO; and Josh Whipple, Senior Executive Vice President and CFO.

Now I’ll turn the call over to Cameron.

Cameron Bready: Thanks, Winnie and good morning, everyone. Thank you for joining us today. We delivered strong third quarter results that were ahead of our expectation, despite what continues to be an uncertain macroeconomic environment and a much stronger dollar than forecasted when we provided our outlook back in August. I am very proud of this performance and our teams globally for their ongoing consistency of execution. On a consolidated basis, we reported 9% adjusted net revenue growth and adjusted earnings per share growth of 11% for the quarter. This includes a roughly 700 basis point headwind to adjusted earnings per share growth from the divestiture of Netspend consumer assets, which we completed last quarter. We also expanded adjusted operating margins by 50 basis points.

Focusing first on our Merchant Solution segment, we again delivered strong organic growth in the third quarter, consistent with our second quarter performance, driven by ongoing momentum in our technology enabled offerings, which collectively represent roughly 65% of our total merchant adjusted net revenues. Our software centric businesses across our partnered, owned, and POS strategies continue to drive a meaningful share of growth in the business. Starting with our integrated business, we achieved strong growth in record new bookings again this quarter, signing 16 new integrated partners, a 33% increase from the prior year. These booking trends underscore confidence in our ability to maintain consistent growth in this business going forward, as our differentiated capabilities continue to resonate with the ISP market.

Our new Progressive Payment facilitation, or profac model is a prime example of our leadership in this channel. We signed six new profac partners in the third quarter and have more than 20 additional opportunities in the pipeline, reflecting strong demand for this new offering. We also saw a strong double-digit performance in booking trends this quarter across our own vertical market software businesses. Zego, our newest addition to this business continues to see solid demand for its solutions, with bookings growth of 15% in the quarter. Notably, Zego also expanded the scope of existing partnerships to include additional payment solutions with global real estate management firm Harbor Group and multifamily management company, Respond, while furthering its expansion in the student housing vertical by signing an additional partner, Domus Student Living.

An active network had one of its best booking quarters since the pandemic, including new partnerships with YMCA of Vancouver, Alterra Mountain Company, the New York Triathlon, and the Sydney Half Marathon. Additionally, our university business, TouchNet, signed a new partnership with the college in Vancouver and extended the relationship with the Texas State University system. As for our POS software business, we again delivered 20% plus growth in this channel as we continue to see strong demand for our solutions and benefit from releases of new product enhancements. Collectively, adjusted net revenue for our POS business is approaching $400 million annually and is one of the fastest growing channels of our business. Today, we offer complete cloud based POS software in commerce enablement platforms targeting three distinct segments of the market with solutions that are purpose built for key verticals, primarily restaurant and retail.

We focus on these verticals for several reasons. One, they are large addressable markets. Two, they are international in scope. And three, because more and more payment decisions are being made in connection with the point of sale in these markets. Our POS solutions are used by over 80,000 merchant locations globally, enabling businesses of all sizes, from SMBs to enterprise customers, to run and grow more effectively. Our products easily scale from simpler solutions for a single location to complex environments for large merchants with multi-unit and multinational requirements. Across our POS platforms, we seamlessly combined software, hardware, and payments for in-person mobile and online environments, providing for great customer experiences.

And we deliver all this and customized configurations that specifically addressed the unique software and payment requirements of our customers. Our solutions are designed to grow with the customer’s business. We leverage a common technology stack that enable customers to easily add functionality as they expand. This allows us to serve the small end of the SMB market and scale with merchants, increasing software revenue along the way. Importantly, this differentiates us from many of our competitors who attempt to address small and large and general and vertically specific used cases with the same single offering. And we couple our complete commerce enablement solutions with distinctive distribution and full local service and support that is unrivalled in the market.

Our entry level product or general purpose cloud based point of sale solution is branded GP Pause. This offering provides a highly competitive starter solution for SMB customers who want a simple and intuitive system with a robust feature set. GP Pause delivers an expansive set of mobile POS capabilities and commerce enablement tools. These features can be tailored to the specific requirements of the merchant business on the vertical market and geographies they serve. Importantly, GP Pause is essentially self-service from beginning to end. From onboarding to full configuration of the functionality, a merchant can easily enable our software and begin accepting payments in less than 24 hours. We offer GP Pause globally through a variety of regional and wholesale distribution channels.

In the last year, we successfully launched our GP Pause technology in numerous international markets, including Canada, the UK, Spain and Central Europe, and expect to further expand to Poland, Germany and Ireland over the next 12 to 24 months. We couple our innovative GP Pause solution with local presence and support capabilities, as well as our long standing FI partnerships in these markets. A powerful combination our competitors simply cannot replicate. In North America, we have distinct, vertically specific restaurant and retail focused, cloud based POS solutions Heartland Restaurant and Heartland Retail. We leverage our Heartland direct channel to target SMB and mid-market customers with these solutions. Typically, those serving 2 to 20 locations but can scale to customers with significantly more locations.

The vertically fluent capabilities we offer customers include mobile POS and Pin on Glass solutions, guest and table management, ordering kitchen management, pricing matrices, discounting functionality, cash discount programs, predictive analytics, AI driven marketing and loyalty programs and human capital management and payroll solutions. And we deliver this seamlessly as a cohesive commerce enablement platform, all from the point of sale. Our solutions also offer open architecture and have integrations with dozens of software partners, which allows our customers to enable various delivery services, accounting applications, inventory management software, and other disruptive technologies, again, all accessible at the point of sale. We have two primary distribution channels for these solutions in North America.

The first is our local dealer network, representing nearly every major metro market in the U.S. and Canada, where we have over 300 partners who provide sales, support and service. The second is our local sales professionals across the U.S. and Canada, who are solution-oriented domain experts and serve as relationship partners to our customers. We have seen strong growth in our Heartland POS software solutions and expect the momentum to continue on the heels of the launch of our next generation offerings in early 2024, which will deliver an improved user interface and more intuitive experiences across our iOS and Android based solutions. Our Next Gen POS is also designed to be mobile first, allowing for a best in class, omnichannel experiences.

Completing our suite of POS capabilities, we have solutions for specific vertical enterprise customers, which have the most complex requirements in operation and technical environments. At this end of the market, we offer our Xenial Cloud POS enterprise solution, offering scalable, secure and real time services for the world’s largest quick service restaurants, food service management companies, and sports and entertainment venues. The Xenial POS ecosystem provides an API-first approach to in-house and partner integrations for the most sophisticated enterprise customers. Whether supporting a multi-lane drive-through, QSR, or a large sports arena, Xenial provides the complete technology stack required to run these operations all fully integrated at the point of sale.

This includes dynamic digital menu boards, kiosk and mobile ordering solutions, kitchen management solutions, AI based drive-through solutions, and customer engagement to name a few. And we are proud that Xenial is also leading the way in delivering the drive through of the future technology for its enterprise QSR customers. We are proud to serve 26 of the top 50 QSR brands with our technology on a global basis. With respect to entertainment venues, Xenial operates the food and beverage suite and retail environments for some of the most complex stadiums in the world. In these environments, food service management providers rely on our technology to deliver best in class customer and fan experiences. We currently serve almost 100 stadium and event venues with our solutions globally.

We went in the market by solving complexity for our customers, whether that is multi-unit requirements or multinational expansion, or the convergence of physical and virtual environments. From delivering core feature functionality required by small merchants by a mobile solution, providing greater levels of functionality in a simple register to a full featured software platform, we provide our customers with the ideal point of sale technology tailored to their specific needs. And we couple our best in class commerce enablement capabilities with more distinctive and diversified distribution streams and service at scale worldwide that our competitors really can’t match. As a result, we remain very enthusiastic about the growth prospects for our POS business globally moving forward.

Speaking of our global reach, it is worth noting that we achieved strong double-digit growth in Spain and throughout Central Europe in the quarter, while Poland, Greece, and Ireland, which we entered via our acquisition of EVO, were also bright spots in Europe. We’re also excited to announce a new agreement with the International Parking Group to support payments for a Smart Parking Solutions on an omnichannel basis across the UK and Ireland, as well as the U.S. and Canada. In Asia Pacific, we are thrilled to have recently signed a new partnership with Marriott International and will begin offering seamless omnichannel solutions this quarter in select hotel locations across the region. Turning to issuer, we achieved mid single-digit growth consistent with our expectations and longer term targets once again this quarter.

Transaction growth remains strong throughout the quarter, led by our commercial business, highlighting ongoing improvements in cross-quarter corporate travel. Traditional accounts on file increased by approximately 11 million sequentially as we continue to benefit from strong growth with our existing large financial institution clients in the ongoing execution of our conversion pipeline. This quarter, we successfully completed conversions of two new portfolios acquired by large existing FI partners through M&A, further supporting our strategy of aligning with market share winners. Further, we recently completed the migration of the first wave of accounts for a leading U.S. retailer for one of our largest partners as part of a co-branded relationship.

And early this month, we migrated CAD, the credit card joint venture between Scotiabank and Chile’s largest retailer, Cencosud, representing our first issuer customer in the market. We are also pleased to have reached a new issuer processing agreement with a leading U.S. bank during the third quarter. This FI is a long-standing Global Payments merchant partner, and the strength of our relationship provided the foundation for expansion of our partnership to include our leading Issuer Technology Solutions. Notably, this partner will also leverage our next-gen analytics platform via the AWS Cloud, as we continue to see great progress with clients enabling our modernized services. We also signed a multiyear extension with two large-standing FI partners during the third quarter.

Shifting to B2B, we continue to drive strong growth with both corporates and financial institutions as we leverage our capabilities across software-driven workflow automation solutions, money in and money out funds flow capabilities, and our broad suite of employer solutions. Starting with workflow automation, MineralTree subscription bookings for its AP automation software increased an impressive 86% year-over-year this quarter. We are also pleased to have successfully integrated EVO’s PayFabric software into our merchant business, which provides our new and existing U.S. customer greater AR automation capabilities. Regarding B2B funds flows, as we discussed last quarter, virtual card option continues to expand, contributing to the strong growth in commercial transactions.

We’re also seeing an acceleration in virtual cards being tokenized and provisioned in mobile wallets, which is further catalyzing growth. Additionally, our B2B bookings in Merchant Solutions doubled in the third quarter relative to the prior year while new merchant B2B payments volume increased by more than 50% from last year as we continue to progress the EVO integration and harmonize our go-to-market strategy. Moving to Employer Solutions, our PayCard business signed a new partnership with hospitality staffing firm, Exclusive Services, and renewed its existing relationship with Flynn Restaurant Group, the largest restaurant group in the U.S. We also achieved a new EWA partnership with KFC franchisee JRC Restaurants. Lastly, our software-driven human capital management and payroll solutions business delivered growth of more than 20% in the third quarter.

B2B offers an attractive growth opportunity for our business and represents a core element of our strategy going forward. As we continue to unify our offerings in this space and refine our strategy, we expect to continue to capture share and accelerate growth in B2B over the long-term. With that, I’ll turn the call over to Josh.

Josh Whipple: Thanks, Cameron. We are pleased with the continued strong financial performance we delivered in the third quarter and for the year-to-date period, which exceeded our expectations despite absorbing a roughly $10 million adjusted net revenue headwind from foreign currency exchange rates relative to our expectations when we guided in early August. Specifically, we delivered adjusted net revenue of $2.23 billion, an increase of 9% and from the same period in the prior year. Excluding the impact of dispositions, adjusted net revenue increased 17%. Adjusted operating margin for the quarter increased 50 basis points to 45.7%. Excluding the impact of our acquisition of EVO payments and dispositions, adjusted operating margin increased 90 basis points, highlighting ongoing consistent execution across our businesses.

The net result was adjusted earnings per share of $2.75, an increase of 11% compared to the same period in 2022; or 18%, excluding the impact of dispositions. This includes a roughly one point headwind from adverse foreign currency exchange rates relative to when we updated guidance on our second quarter earnings conference call. Taking a closer look at performance by segment. Merchant Solutions reported adjusted net revenue of $1.73 billion for the third quarter, a 19% improvement from the prior year; or 9% growth, excluding the impact of EVO and dispositions. As Cameron highlighted, this performance was led by the ongoing strength of our technology-enabled businesses while we also benefited from double-digit growth in faster growth markets, including Spain and Central Europe.

This was partially offset by ongoing macro softness in limited geographies, including the UK, where the economic environment remains challenging; and in Canada, where GDP growth is hovering around zero. We delivered an adjusted operating margin of 49.1% in this segment consistent with our expectations. This represented a decline of 90 basis points due to the acquisition of EVO. However, excluding the impact of EVO and dispositions, adjusted operating margin increased 40 basis points. Our Issuer Solutions produced adjusted net revenue of $520 million, reflecting 6% growth. The core issuer business also grew mid-single digits this quarter, driven by ongoing strength in volume-based revenue. As Cameron highlighted, we added approximately 11 million traditional accounts on file sequentially.

This equates to an increase of more than 60 million accounts year-over-year as we continue to see healthy account growth with our large FI customers and benefit from the ongoing execution of our conversion pipeline. Transactions grew high single digits compared to the third quarter of 2022, led by commercial card transactions, which increased to mid-teens. This was partially offset by slower growth in managed and output services as we continue to focus our Issuer business on more technology enablement. Our Issuer team executed four conversions since the beginning of the third quarter and have successfully completed 11 conversions since the beginning of the year. We have also signed two new contracts and completed 10 renewals year-to-date, and currently have seven active LOIs in addition to nearly 20 mid to late-stage opportunities in the pipeline.

Shifting to our issuer B2B portfolio. These businesses delivered double-digit growth this quarter, led by MineralTree which achieved 20% growth in its targeted mid-market segment, while PayCard accelerated nicely as the business is beginning to lap more difficult employment comparisons that were a drag on year-over-year performance during the first half of 2023. Finally, Issuer Solutions delivered adjusted operating margin of 47.5%, an increase of 110 basis points from the prior year, fueled by solid top line growth and are continuing to focus on driving efficiencies in the business. From a cash flow standpoint, we produced adjusted free cash flow for the quarter of $733 million, representing 102% conversion rate of adjusted net income to adjusted free cash flow despite a modest increase in capital spending this quarter.

We continue to target converting roughly 100% of adjusted earnings to adjusted free cash flow for the full year, excluding roughly five-point impact of the timing change to recognizing research and development tax credits. We also continue to expect capital investment to be approximately $630 million in 2023, consistent with our prior outlook. Year-to-date, we have reduced outstanding debt by more than $1.1 billion, and our leverage position was 3.5 times at the end of the quarter, consistent with our expectations. We remain on track to return to a leverage level consistent with our long-term targets in the low 3s by year-end. Our balance sheet remains healthy, and we have $3 billion of available liquidity. Further, our total indebtedness is approximately 88% fixed with a weighted average cost of debt of 3.85%.

We are pleased with how our business is positioned following our performance for the first nine months of 2023. We continue to forecast adjusted net revenue for the full year to range from $8.660 billion to $8.735 billion reflecting growth of 7% to 8% over 2022. Given the roughly $40 million headwind to adjusted net revenue we have seen from adverse foreign currency exchange rates relative to our prior guidance, we now expect to be in the lower half of this range, absent an improvement in rates. Moving to margins, we continue to forecast annual adjusted operating margin to expand by up to 120 basis points for 2023. We remain on track to realize approximately $35 million in cost synergies from the EVO acquisition this year. To provide color at the segment level, we continue to anticipate our merchant segment to report adjusted net revenue growth of approximately 16% for the full year, consistent with our prior forecast despite absorbing the aforementioned FX headwinds.

We continue to expect a nominal decline in reported adjusted operating margin for the Merchant business for the full year due to the EVO acquisition. Moving to Issuer Solutions, we continue to expect issuer to grow in the 5% to 6% range on a constant currency basis. However, if the recent U.S. dollar strengthening persists, we would expect to be closer to the low end of that range on a reported basis. We anticipate adjusted operating margin for the issuer business to expand by more than 60 basis points for the year as we benefit from natural operating leverage in the business. Turning to a couple of non-operating items. We expect net interest expense to be roughly $540 million and for our adjusted effective tax rate to be approximately 19%.

For modeling purposes, we continue to assume excess cash is used to pay down indebtedness during the fourth quarter. Putting it all together, we now expect adjusted earnings per share for the full year to be in the range of $10.39 to $10.45, reflecting growth of approximately 11% to 12% over 2022. Excluding dispositions, adjusted earnings per share growth is expected to be roughly 17% for 2023. This guidance includes almost a point of headwind to adjusted earnings per share given the significant strengthening of the U.S. dollar that was not reflected in our prior outlook. Similar to what you’ve heard from others, October trends were consistent with what we saw in the third quarter. While our base case outlook today presumes spending trends and macroeconomic backdrop relatively consistent with what we are seeing currently, our guidance accommodates for a range of scenarios, including a more tempered economic environment given continued uncertainty.

And with that, I’ll turn the call back over to Cameron.

Cameron Bready: Thanks, Josh. We continue to see strong momentum in our business and consumer spending has remained resilient over the course of the year. Although labor trends remain quite strong, we are monitoring the impact of rising rates resulting from monetary policy decisions globally, elevated inflation, and of course geopolitical risk from the ongoing situation in Europe and recent events in the Middle East. We are confident we have built a better and more durable business model, which positions us well to manage through any environment if the current backdrop changes. I am pleased with all that we have accomplished this quarter and for the first nine months of 2023, as we continue to advance our strategy and maintain strong execution throughout the business.

We have the very best team members providing the very best experiences for our customers, with the very best technologies in the most attractive markets globally. Together, we are positioned to deliver strong operating and financial performance while remaining at the forefront of innovation. Winnie?

Winnie Smith: Thanks, Cameron. Before we begin our question-and-answer session I would like to ask everyone to limit their questions to one with one follow-up to accommodate everyone in the queue. Thank you. Operator, we will now go to questions.

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Q&A Session

Operator: Thank you. [Operator Instructions]. Our first question comes from the line of Ramsey El-Assal with Barclays. Please proceed with your questions.

Ramsey El-Assal: Hi, thank you so much for taking my question this morning and thanks for the deeper dive on your POS software solutions, I thought that was very helpful. Could you give us your latest thoughts, kind of with the inclusion of EVO, about the split between discretionary and nondiscretionary volumes in your merchant business, are you seeing any changes there in terms of spending patterns, how should we kind of try to think through that?

Cameron Bready: Yes, Ramsey, it’s Cameron. Good morning and thanks for your comments. I’ll kick it off, and I’ll ask Josh to add any color that he would like to. So if you look across the portfolio today, I would characterize the business mix we have, it’s pretty well diversified across discretionary and non-discretionary verticals. Without putting a specific point estimate on each, it’s roughly split evenly between discretionary and non-discretionary. I think today, we’re probably exposed to over 70 different vertical markets, and we have good diversification again across the overall merchant business domestically here in the U.S. and in our international markets as well. I think if you look at the overall economy today, we are seeing better trends in the non-discretionary categories.

I would say, however, we are seeing vertical markets like restaurants continue to hold up well. And certainly, it’s an experience-driven economy as we sit here today. So certainly, areas that are more focused on providing experience to the consumer are trending better than what you see across broad-based retail. But by and large, I’d say, as we said in our prepared remarks, the overall level of consumer spending, I think, remains pretty resilient across the board.

Ramsey El-Assal: Got it. And a quick follow-up from me. If the Fed ends up lowering debit interchange, would you guys benefit from that a bit, at least in that part of your business where you have a more blended pricing approach rather than a cost-plus model?

Cameron Bready: Yes, I think my perspective on that, Ramsey, is any time the cost of acceptance goes down for our customers, it’s a good thing for our business. So certainly, lowering the cost of interchange for our merchant customers is a positive for the business. Generally, much of our portfolio is passed through pricing, so interchange plus pricing, where those benefits would immediately get passed on to merchant customers. And what we’ve generally seen over time is where it’s not, the market will sort of compete away that benefit over a period of time. So there may be a short-term sort of blip around it. But generally, what we see is that benefit to interchange would ultimately get competed away in the market over some period of time.

Ramsey El-Assal: Got it, thank you very much.

Operator: Thank you. Our next question comes from the line of Darrin Peller with Wolfe Research. Please proceed with your questions.

Darrin Peller: Hey guys, thanks. It’s great to see the consistency on the 9% growth in the Merchant side. If we could just dial into that a little bit more and just give us a sense on what the best drivers of that consistent strength have been? And then, Cameron, just when we think about the spread between volume and revenue growth, once again, it’s still very, very narrow. You guys — I think putting aside the organic, just the reported was only one point apart similar to last quarter’s. And so again, it just reminds us of whether there’s more opportunity to yield on pricing or on — we could expect to see on value-added service or anything else on that front?

Cameron Bready: Yes, Darrin, good questions both. So I would say the drivers continue to be what we’ve talked about throughout the course of the year. Our technology-enabled businesses continue to perform really well. They are the tip of the spear for growth in the business. I’ll highlight our POS, which obviously, we spent a lot of our time in our prepared remarks talking about today. We continue to see very good momentum, 20% plus growth in that channel again this quarter. And again, we’re very enthusiastic about the future of that, particularly as we begin to roll out B2 of our restaurant and retail platform through the Heartland channel as we get into 2024. So we’re very bullish on the outlook for that business over a longer period of time.

Integrated continues to be a very strong performer as well. Consistent growth this quarter as to what we saw in the Q2 time frame. And again, our vertical market businesses continue to grow in the low double-digit pace as we continue to see good strong demand for our software solutions and continue to monetize payment flows around that pretty effectively. So I think if you step back and look at the business, the themes are very consistent kind of Q2 to Q3, and we expect that to be the same as we get into Q4. I think as it relates to the second part of your question, and I think much of what you’re seeing kind of flowing through right now is really the impact of EVO to some degree, because they really just sold payments, so their revenue is more directly tied, obviously, to just the level of payment volumes in the business.

As we bring more value-added services to the business, as we sell more software on our own Global Payments channels, obviously, we think there’s opportunities for more elevated growth in revenue relative to the growth of volume that we see through the business over time. So I think that long-term macro trend remains in effect. But certainly, there are investments that we’re going to need to make in the business to be able to deploy a lot of the value-added services, software capabilities we have through the EVO channels, which will be a tailwind to kind of driving that revenue growth. It may be decoupling slightly from the overall level of volume growth that we see in the business but I’ve said many times, I want those two trends to obviously correlate very highly.

I think they should correlate highly. Our goal with software is to monetize payments. So as we’re doing that, we should see uplift in payment volume even as we’re selling more software in the business. So I wouldn’t expect radical departures but obviously, to your point, there is opportunity, I think, to continue to drive more non-volume-based revenue growth in the business, and you should see that play out over a period of time.

Darrin Peller: That’s really great to hear. And then just very quickly on the win you mentioned on the issuer side. Obviously, that comes on top of a number of the ads you’ve had, which has been great. But any color on what really drove that, I think you talked about a partner and a large partner in the U.S. in the FI channel. But again, what’s adding — what’s really driving that win?

Cameron Bready: Yes. I think — look, I think in the issuer business, it really boils down to the feature-rich capabilities that we bring to bear on that market. That really are distinctive relative to what other competitors can provide. And it also aligns with our strategy of picking market winners and trying to grow with market winners. There’s a lot of business we can do in the issuer space. I would say historically, we’ve really tried to focus our efforts and lean into those relationships with partners that have good strategies in the market where they’re growing and winning. So obviously, as they succeed with their own business strategies, we obviously benefit from that as we look to grow and scale our issuer business as well. So I think it’s just a combination of having fantastic capabilities, feature-rich functionality, and a good strategy of aligning ourselves with market winners that we see continue to play out in that business.

Darrin Peller: And it’s good to see the AWS partnership play out there, too. Guys, thanks a lot and nice quarter.

Cameron Bready: Thank, Darrin.

Operator: Thank you. Our next question comes from the line of Ashwin Shirvaikar with Citi. Please proceed with your questions.

Ashwin Shirvaikar: Hey, congratulations on the quarter and the consistency, appreciate it. I guess I wanted to ask, Cameron, just given your commentary up top with regards to the POS stack and software and such, what is the appetite for tech-heavy solutions across the globe, we kind of know what the appetite is here in North America, but are you finding incremental interest in that higher penetration in parts of Europe, because I think that’s the other part of the European volume comments that you had, so I appreciate any comments you have there?

Cameron Bready: Yes, Ashwin, it’s Cameron. The comment I would make is, as we’ve seen in the U.S. over the course of time, the mode of competition around restaurant and retail for payments is really driven by the point-of-sale technology. And those trends are beginning to play out, they’re certainly in an earlier stage in markets outside of the U.S., but they’re clearly starting to play out outside of the U.S. as well. So as mentioned in my prepared remarks, a big part of our POS strategy is leveraging the capabilities that we have here in the U.S. market and being able to extend those into markets outside of the U.S. We talked about bringing the GP POS Solution to Canada. We brought it to the UK, Spain, Central Europe. We’re going to bring it to Poland, Ireland and Greece over the next 12 to 24 months.