Global Payments Inc. (NYSE:GPN) Q3 2024 Earnings Call Transcript

Global Payments Inc. (NYSE:GPN) Q3 2024 Earnings Call Transcript October 30, 2024

Global Payments Inc. misses on earnings expectations. Reported EPS is $3.08 EPS, expectations were $3.12.

Operator: Ladies and gentlemen, thank you for standing by and welcome to Global Payments’ Third Quarter 2024 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 2024 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 things, 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.

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 is our CEO, Cameron Bready and our CFO, Josh Whipple. Now, I’ll turn the call over to Cameron.

Cameron Bready: Thanks, Winnie, and good morning, everyone. We were delighted to host our first investor conference since 2021 last month in New York, where we shared a comprehensive update on our company and the meaningful opportunities we see ahead to create value for our customers, partners, and shareholders. We appreciate those of you who took the time to attend in person, as well as everyone who participated virtually. As we outlined at that time, we are a market leader operating at the intersection of software and payments, delivering innovative commerce solutions worldwide. We are winning today with an enviable portfolio of leading software and payments capabilities and have a strong track record of best-in-class service.

And we are moving aggressively to build on this foundation to position Global Payments for the next phase of its growth journey. We are refocusing our strategy, streamlining and simplifying our business, and unifying our teams and capabilities, allowing us to play to our competitive strengths. We have a rich portfolio of software and payments capabilities with significant untapped chance. Our transformation is unleashing an already successful business to deliver all of our solutions through all of our channels in a more frictionless way and drive higher returns. And we are committed to a shareholder-first capital allocation strategy. As we position the business for the next decade of growth, we strongly believe we are poised to capture and unlock significant value.

While we have an ambitious transformation agenda in front of us, we are already making progress with our announcement today that we reached a definitive agreement to sell our AdvancedMD business to Francisco Partners. This transaction exemplifies our commitment to simplify our business and accelerate our capital returns for shareholders. I’ll discuss this more shortly. Turning to our third quarter results, we delivered 6% adjusted net revenue growth, 40 basis points of adjusted operating margin expansion, and 12% adjusted earnings per share growth, compared to the same period in 2023. Our performance was solid as we continued to execute well against our refocused strategy and operational transformation, particularly in light of the uncertain macro environment.

Our merchant solutions business delivered 7% adjusted net revenue growth, largely driven by our POS and software, and integrated and embedded businesses. We again saw strong new POS account growth this quarter, led by our direct channel in North America, which grew new SMB and mid-market cloud POS sales by 23%. Our feature-rich offering that delivers a world-class front of house experience, payments, reporting, and engagement solutions continues to resonate with customers. And the breadth of our capabilities and configurations allows us to serve customers of all sizes and complexity, including many of the leading QSRs. We are excited to have achieved a new kiosk and menu board agreement this quarter with Whataburger, expanding our longstanding relationship as its primary technology partner.

We are also seeing strong momentum in food service management, with Bookings Growth tracking 25% higher this year, compared to 2023. Additionally, we are further expanding our POS offerings into markets outside of the U.S. and are pleased to have successfully launched in Germany this quarter. We remain on track to bring our POS solutions to key additional international markets, including Mexico, Ireland, Poland, Austria, and Romania in the near future. We also saw a strong performance in our education business this quarter. In higher education, we recently signed a significant expansion with Brown University, launched a new partnership with the University of British Columbia, and signed a new relationship with Swansea University in Wales. Swansea marks our eighth university win in the U.K. and Ireland in the last 12-months, and we continue to have a strong pipeline of new opportunities globally.

In the community verticals, our software solutions powered events with more than 1.3 million registrants and over 8,000 camp programs during the peak summer season. We also signed a new partnership with Bainbridge Island Parks and Rec in Washington State, one of the largest in the country. These achievements reinforce that we are winning in the market today with POS and software that provides our customers with the features and service they demand to run and grow their businesses. As we discussed at our investor conference, we see significant opportunities to drive continued growth and share gains as we execute on our key transformation initiatives for this business. First, we are consolidating our POS assets under the Genius brand and we’ll extend them globally.

By harmonizing our capabilities on a common platform, we will enhance our ability to grow, drive efficiency, and accelerate value delivery for our partners and clients while improving our return on investment capital. Second, we are concentrating our investments in the assets and verticals that will be most impactful to driving growth, and our ability to continue to win share in the market. And third, we are better connecting our leading commerce enablement solutions into our point of sale and software environments and pushing our full suite of capabilities through all of our distribution channels globally. Shifting to the integrated and embedded pillar of our strategy, we continue to see strong growth in new partners to our ecosystem, demonstrating we have the technology, solutions, and features that partners desire to monetize payments within their verticals.

Notable wins in North America this quarter include ClearDent in the dental space, a line-offs in matrix care, both in serving the senior living vertical, and Art Center Canvas, a software solution serving the education vertical. We also successfully signed over 40 international ISV partnerships in the quarter across the United Kingdom, Asia Pacific, Australia, and LatAm. Through our transformation, we were executing on initiatives in this business to further extend our leadership position. We are focused on offering flexible operating models that are not discreet, but allow us to work with a partner along the continuum from peer referral to payments facilitation, both with payments and our commerce enablement products, to arrive at the dynamic solutions our partners are looking for over the long-term.

We’re also taking our successful commercialization playbook from the U.S. to international markets, further accelerating our approach to sourcing and securing new ISV partners in these more nascent integrated payment markets. Further, we are simplifying and accelerating the onboarding process and enhancing the partner and customer experience, while accelerating speed to revenue across the full suite of our commerce enablement solutions. This includes working with our partners to jointly leverage our embedded commerce capabilities, empowering them to provide more features and services to their end customers, driving additional value and revenue opportunities. Moving to core payments, we also saw strong growth in new partner signing this quarter, which will serve to further enhance our distribution in this channel.

We also continue to see a significant improvement in the revenue opportunity with new partners as we bring more products and capabilities to these relationships. Last quarter we highlighted the expansion of our direct distribution capabilities and demand generation solutions in the U.K., as the market continues to evolve beyond traditional bank-based referral channels. And while it remains early days, we are already seeing strong progress adding new merchants as a result of this initiative. We are also making substantial headway in Germany through our new joint venture with Commerce Bank and have successfully added over 1,000 merchants since its inception just last quarter. Across Europe, we signed several marquee wins this quarter, including telecommunications leader Sky TV across multiple geographies and national highways in Poland.

Shifting to the LatAm region, we continue to have good momentum in Mexico as we enhance our value proposition in these markets. In addition to double-digit revenue growth, we also had several notable wins in this market, including Petco, Grand Bodega, and C-Class. In terms of our transformation, our core payments initiatives are focused on expanding wallet share and client engagement through a growing variety of commerce enablement solutions and business value propositions. We’re also pursuing targeted international growth opportunities, prioritizing investments in markets where we have or can attain leadership and scale in the short-term. We’re leveraging our strong financial institution partnerships globally to support our expansion. We’ll also continue to diversify our distribution to ensure we are well positioned for longer term trends.

More broadly, our goal in the core payments channel is to form deeper relationships with commerce enablement and outstanding service. Providing premium experiences as we solve our clients’ evolving and increasingly complex needs will drive higher lifetime customer value. Ultimately, core payments also provide the feeder channel for our POS and integrated businesses, as these customers leverage additional solutions from us as they grow. Finally, it’s important to highlight that across all three of our merchant pillars, our transformation will allow us to better leverage our broad base of distribution, including one of the premier direct sales teams in the industry, as well as a broad base of strategic partners, joint ventures, wholesale, and indirect relationships.

As we highlighted at the investor conference, in connection with our strategic review, we identified certain assets, markets, and minds of businesses that lack alignment with our strategic focus and are looking to divest or exit them as appropriate. As I noted earlier, as part of this work, we reached a definitive agreement to sell our AdvancedMD business. In connection with this transaction, we also executed a multiyear strategic partnership agreement with AdvancedMD to continue to provide integrated payments and commerce enablement solutions to its customers. Under our ownership, AdvancedMD has been a very successful business. However, as we focus on streamlining and simplifying our business, we made the determination that it was not the best strategic fit for several reasons.

First, healthcare is a bespoke market that requires significant investments in capabilities and compliance programs that are difficult to amplify across other businesses and geographies. Second, there are extensive regulatory requirements in health care that add complexity and create limitations on our ability to integrate it fully into our new operating model. Lastly, post the thesis merger, we have strong exposure to health care and our integrated and embedded business, increasing the potential for channel conflict with partners. We want to thank our AdvancedMD team members for all their contributions to Global Payments, and we look forward to continuing to work together through our strategic partnership going forward. Turning to Issuer Solutions, we are pleased with our execution in the areas we can control.

We successfully completed five implementations, including our first cloud conversion for a leading global financial institution in Asia Pacific. We now have two clients in our AWS cloud environment, with many others in the pipeline. We also completed conversion of two new portfolios acquired by large existing FI partners, further supporting our strategy of aligning with market share winners. Today, our implementation pipeline remains at over 65 million accounts after two recent LOIs successfully went to contract during the third quarter. We’re also having ongoing success in cross-selling commerce enablement solutions, having signed over 200 product and servicing agreements this year. Lastly, we recently renewed two of our largest global clients.

It is worth noting that over the last few years, we have renewed 15 of our top 20 clients, reflecting the strength of our partnerships and providing us good visibility and stability going forward. Despite our execution, our results this quarter were impacted by softer-than-expected volumes, largely driven by commercial card transactions, which decelerated further from what we experienced during the second quarter. We also saw some product and project investment delays from FI partners as they take a more cautious approach to spending given ongoing macro uncertainty. And we saw softer trends in our pay card business from incremental sequential weakness and employment trends. We believe we are well positioned to manage these headwinds if they persist as we continue to execute on our transformation and modernization journey.

Our transformation efforts for Issuer are centered on completing our cloud modernization, which will further amplify our right to win and grow share across existing and new addressable markets, enhancing the strong leadership position we command today. We are focused on delivering cloud-native products and services across multiple market segments, use cases, and regions, and serving our clients with greater speed to market and agility in a secure and compliant manner. This investment also extends our opportunity to differentiate through commerce enablement with tailored products and solutions that address the needs of a diverse range of clients. And with API-enabled solutions, we’re able to deliver our platform in individual components or in its entirety, allowing us to support issuers of all sizes, including the community, credit union, fintech, and Neobank segments.

Our cloud-based solutions also allow us to further expand more easily and efficiently in new geographies. We’re pleased with the progress we’re making on modernization and remain on track to complete the development of our client facing applications this year. We have initiated a number of customer pilots and continue to expect commercial launch in 2025. Additionally, we will be exclusively selling cloud solutions next year, paving the way for widespread adoption over time. Before I turn it over to Josh, I want to express my sincere condolences to all those impacted by the devastation and widespread damage resulting from Hurricanes Helene and Milton. The financial impact from these events to our business tells in comparison to the hardship faced by the Southeast region where we have a significant presence in operations.

Global Payment is supporting a number of organizations providing critical relief to those affected. We will continue to do all we can to support our team members, customers, and partners on the road to recovery ahead. Josh?

Josh Whipple: Thanks, Cameron, and good morning, everyone. We delivered adjusted net revenue of $2.36 billion for the third quarter, an increase of 6% from the prior year. Adjusted operating margin increased 40 basis points to 46.1%. And we reported adjusted earnings per share of $3.08, an increase of 12%, compared to the same period in 2023. Taking a closer look at our performance by segment, Merchant Solutions achieved adjusted net revenue of $1.84 billion for the third quarter, reflecting growth of 7%. This includes roughly a point of contribution from the acquisition of Takepayments, which was partially offset by the impact from unfavorable foreign currency exchange rates during the period. As we discussed at our investor conference in September, we are working to unify our global merchant segment around three lines of business: one, is selling a software; integrated embedded, and in core payments.

Our POS and software business delivered low-double-digit growth for the third quarter. We successfully added roughly 3,000 new POS locations during the quarter as Cameron mentioned and we have added nearly 10,000 POS locations year-to-date. Additionally, across our software businesses, we achieved 30% new bookings growth for both the third quarter and year-to-date periods. We also saw strong performance in our education businesses, which delivered double-digit adjusted net revenue growth. Our integrated embedded payments business achieved high-single-digit growth for the third quarter. We continue to win with our differentiated capabilities across our integrated software offerings and added 92 new software partners during the quarter, representing an increase of 60% over the prior year period.

New ISV partner signings also increased 60% on a year-to-date basis, highlighting our consistently strong business development results and further demonstrating the market receptivity to our offerings. Moving to core payments, we delivered mid-single-digit growth in this channel during the quarter. This was driven by solid growth in the U.S., which was partially offset by softer trends in Europe and Asia Pacific. Notably, we added 250 new core payments partners this quarter, a 60% increase over the prior year period. This is consistent with our efforts to amplify our distribution channels to sell our full suite of capabilities across markets to address customer needs. Shifting to merchant volumes, SMB volumes grew 5% for the third quarter, which was a slight moderation from the prior quarter, due to the lower same-store sales, consistent with the trends reported by the banks and our peers.

I would highlight that in September, our volumes were also negatively impacted by the hurricanes in the Southeast region and weather-related events in Central and Eastern Europe. We deliver an adjusted operating margin of 50% in the merchant segment, an increase of 90 basis points, reflecting ongoing sequential improvements since completing the acquisition of EVO Payments last year and strong execution on our strategy. Issuers Solutions produced adjusted net revenue of $529 million, reflecting segment growth of 2% or 3% excluding our pay card business. We processed nearly 10 billion transactions in the quarter, which is an increase of 3%, compared to the prior year period. This marks roughly 1.5% deceleration in transaction growth sequentially.

Consumer transaction volume slowed, consistent with the trends highlighted by several of our large FI partners, while we also saw further slowing in commercial card volumes. Additionally, we have seen certain bank customers delaying product and service investments in the current environment, as Cameron mentioned. And while we’re seeing broader incremental softness, these trends have been more acute with the regional and smaller partners, resulting in an unfavorable revenue mix dynamic. Despite the softer roof macro trends, we continue to deliver strong execution. We added a total of 30 million traditional accounts on file this quarter, largely driven by our five conversions. Year-to-date, we’ve completed 13 implementations and added approximately 55 million traditional accounts on file.

This strong conversion activity, our near record implementation pipeline, and completion of our renewal cycle with many of our large customers gives us confidence in the outlook we have for the business for both the fourth quarter and over the medium term. Moving to our B2B portfolio, the core mid-market segment for AP Automation Solutions continues to generate healthy bookings. Although similar to our commercial card business, we’re also seeing AP customers take a more cautious approach, reducing the number of suppliers and their associated spend. Additionally, our pay card business negatively impacted growth this quarter by roughly a point as we saw incremental headwinds sequentially due to the softer employment trends in the segment of the market we serve.

Issuer Solutions delivered an adjusted operating margin of 45.4%, a decrease of 210 basis points, compared to the prior year. As you may recall, Issuer margins saw a strong expansion last year as we pivoted the business to more technology enablement and away from lower margin managed service offerings. We have now lapped those related margin benefits, while we are also seeing some pressure from the macro trends I just discussed, while continuing to invest in modernization. From a cashflow standpoint, we produce strong adjusted free cashflow for the quarter of approximately $722 million, representing roughly 92% conversion rate of adjusted net income through adjusted free cash flow. It’s worth noting that adjusted free cash flow this quarter included an adjustment to remove the impact of $847 million of cash inflows from settlement timing.

Since the third quarter ended on a weekday, while the prior year quarter ended on a weekend, we saw the reversal of the impact of settlement pre-funding as expected. We invested $166 million in capital expenditures during the quarter and continue to expect capital spending to be around $670 million, or roughly 7% of revenue, in 2024. Our net leverage position decreased to 3.3 times at the end of the third quarter, nearly a quarter term lower sequentially. We remain on track for our leverage level to be in the low-3s by year-end, consistent with our long-term targets. Our balance sheet remains healthy, and we have $4.4 billion of available liquidity. Our total indebtedness is approximately 100% fixed with a weighted average cost of debt of 3.3%.

As Cameron mentioned, we reached a definitive agreement to sell AdvancedMD for a total purchase price of $1.125 billion. We expect the transaction to close by the year-end, subject to regulatory approval. In connection with this transaction, we expect to return up to $700 million to shareholders after addressing taxes and maintaining leverage neutrality. To that end, we have entered into an accelerated share repurchase plan for $600 million and anticipate returning the remainder through open market purchases this quarter. As we discussed at our investor conference, as part of our strategic review, we identified certain markets, assets and lines of business that lack alignment with our refreshed focus, and that we intend to divest or exit. This transaction represents a good first step in that process, while also serving to unwind value for shareholders.

We’re continuing to execute on additional opportunities including exiting certain smaller international geographies beginning this quarter. It’s also worth highlighting that our board of directors approved an increase in the company’s share repurchase authorization capacity to $2.5 billion. As we highlighted at our investor conference, we’re targeting returns of $7.5 billion to shareholders over the next three years before contemplating divestitures. To be clear, the $600 million ASR we announced today is incremental to this. We continue to see buying back our shares as a compelling opportunity given our confidence in our strategy and long-term growth potential. Turning to the outlook, our year-to-date performance highlights the durability of our model and the benefits of our sharpened focus as we execute on our strategic priorities.

We continue to expect reported adjusted net revenue to range from $9.17 billion to $9.30 billion, reflecting growth of 6% to 7% over 2023, excluding the impact of the disposition of AdvancedMD. However, given the software trends we’re seeing in our Issuer business due to the macroeconomic environment, we now expect to be at the lower end of that range. And we still expect annual adjusted operating margin to expand up to 50 basis points for 2024. To provide color at the segment level, we continue to expect our merchant business to report adjusted net revenue growth of 9% plus for the full-year. This remains consistent with our prior outlook and excludes the impact of dispositions. We now expect up to 40 basis points of adjusted operating margin expansion for the merchant business in 2024.

Moving to Issuer Solutions, we anticipate adjusted net revenue growth in the 4% range for the full-year, compared to 2023. This is slightly lower than our prior outlook, given the unfavorable macro trends I highlighted earlier. We now anticipate adjusted operating margin for the Issuer business to expand up to 30 basis points. Moving to a couple of non-operating items, We still expect net interest expense to be approximately $500 million this year and for our adjusted effective tax rate to be approximately 19%, consistent with our prior outlook. Putting it all together, we continue to expect adjusted earnings per share for the full-year to be in the range of $11.54 to $11.70, reflecting growth of 11% to 12% over 2023, albeit likely at the lower end due to the aforementioned macro weakness.

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

Cameron Bready: Thanks, Josh. We’ve accomplished a great deal over the last six months. We’ve re-crushed our strategy, sharpening our focus to emphasize the markets where we are best positioned to compete and win. We completed a comprehensive review of our organizational structure and internal processes across the company. We successfully reoriented our business under a single unified operating model globally, addressing our complexity, enhancing our agility, and positioning our organization to execute against a clear and well-articulated strategy. And we have begun transforming how we operate to unleash our full potential, fuel our growth, elevate our client experiences, and provide market leading solutions that make everyday commerce better.

We are doing all the right things to unify and streamline our business, reimagine our distribution, and consolidate our platforms to position our business for sustainable growth and success. We will execute and complete much of our transformation agenda in 2025, which will allow us to realize additional benefits in 2026 and beyond. This is what we reflected in our medium-term outlook provided at our investor conference last month. And we have a great deal of conviction in our ability to accelerate growth and deliver on our financial targets over the next few years. We’re excited about the opportunities we see ahead to create significant value for our customers, partners, and shareholders. Winnie?

Winnie Smith: Thanks, Cameron. Before we begin our question-and-answer session, I’d 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.

Operator: Ladies and gentlemen, the floor is now open for questions. [Operator Instructions] The first question is coming from Will Nance of Goldman Sachs. Please go ahead.

Q&A Session

Will Nance: Hey guys, I appreciate you taking the question. So I wanted to maybe revisit some of the commentary around 2025 and the restructuring initiatives that you just referenced, Cameron. I think a lot of the questions post Investor Day have focused on the degree of confidence that the deceleration to mid-single-digits next year provides you guys with enough cushion to execute on some of these initiatives? And so if you look at merchant this quarter, I think you were at 7% with a little bit of a tail end from take payments, so call it kind of 6% organic with the guidance kind of implying something in the low-5s for next year? How do you feel about that level of cushion? And then is there anything you could share about sort of the cadence of some of these restructuring initiatives and how should we should expect the deceleration next year to play out? Thanks.

Cameron Bready: Yes. Well, it’s Cameron. I’ll kick it off and I’ll ask Josh maybe the comment on the latter part of your question. So look I would say at a macro level, we’ve got a lot of confidence in the medium term guide that we shared last month. I think, as we look at how we’re positioning the business for ‘25 and perhaps as importantly ‘26 and ‘27. You know, the key initiatives that we have in our transformation pipeline, I think are poised to clearly position us to drive accelerated growth as we work through the ‘25 into the ‘26 and ‘27 timeframe. And I think the way we position ‘25 is a good balanced approach. I think we have enough cushion, I think, in terms of a revenue expectation perspective, I think to allow us the flexibility to do the things we need to do to position the business for long-term sustainable growth, while at the same time we’re returning a significant amount of capital $2 billion next year to shareholders and delivering double-digit growth and earnings per share.

So while we’re still working through the transformation, I think the return of capital to shareholders and obviously the compounded growth in earnings per share we expect to be able to deliver, I think is a good responsible approach to, again, doing what we need to do to position the business while at the same time kind of rewarding our shareholders as we progress through the journey. So short answer is yes, I think we have plenty of flexibility as we think about the 2025 medium term outlook. We’ve got a lot of confidence in what we shared last month. And I think we’re already starting to see at least internally the benefits of a lot of the work we’re doing that will start to materialize more fully in our results as we progress through time.

Certainly as we get into the back half of 2025 and head into 2026 when we call or calling for sort of more revenue acceleration in the business.

Josh Whipple: And then we’ll have the relation to some of the restructuring charges. As we talked about in investor day, we plan to deliver more than $500 million of incremental run rate operating income benefit by the first-half of 2027. You saw some of those restructuring charges here in Q3. As we talked about, we expect one-time cost range and approximately two-thirds of the benefit that we expect to achieve. And we’ll see those over the next, you know, let’s say six to seven quarters. Some of those restructuring charges start to go ahead and flow through.

Will Nance: Got it. Appreciate that color. And just, if I may, a quick follow-up on the sale. So congrats on getting this announced AdvancedMD, I think we had pegged at roughly 20% of the own software portfolio. So I was wondering if you could just confirm roughly $200 million to $250 million of revenues thereabouts and any commentary on the margin profile and the strategic agreement, just how we should think about sort of the payments revenues that may sit with you guys post the sale? Thanks.

Josh Whipple: Yes, good question. So as an aggregate sort of revenue matter, AMD is about, it’s a little north of that 20% number. So for 2024, we forecasted around the $250 million to $260 million range. There is some revenue that will stay with us, obviously by virtue of the commercial relationship that we had. Most of that revenue sits in the payments business today outside of AdvancedMDs. So the revenue going with the AdvancedMDs in that range. And on a cash EBITDA multiple basis, we sort of secured kind of a high-teens multiple, which I think is, you know, a good premium value for this asset in the marketplace. Cash EBITDA multiples for the business are, you know, around 30%. You know, the EBITDA multiple for us, or the EBITDA for us is a little bit higher than that, but it’s around that kind of roughly $70 million range on a cash EBITDA basis.

Will Nance: Awesome appreciate the details thanks guys.

Cameron Bready: Thanks Will.

Operator: Thank you. The next question is coming from Bryan Bergin of TD Cowen. Please go ahead.

Bryan Bergin: Hey, guys. Good morning. Thank you. I wanted to ask on the sales realignment and the point of sale brand consolidation, just early feedback and execution there, and just any friction weighing on the third quarter results, any related client churn from point of sale consolidation thus far? Just give us a sense on how those early initiatives are progressing?

Cameron Bready: No, I would say it’s a great question. I appreciate you asking it. So certainly on the brand side, there’s a lot of positive receptivity to the Genius brand. And there’s a lot of internal excitement, I think, about finally aligning all of our POS capabilities under a common platform and a common brand and unifying our go-to-market approach, I think, with a full suite of capabilities that we can deliver in all the key geographies around the globe in which we want to be able to deliver them. So we’re still in early days, as you can imagine, we probably have a dozen different go to market brands around POS today. There’s a lot of work to do to align those brands over a period of time, but certainly a good deal of enthusiasm around where we see our business going from a point of sale perspective and the impact point of sale and growth and point of sale is going to have on our business over a longer period of time.

So nothing in the quarter I would call out specifically as it relates to POS. It’s actually still a good bookings quarter for our POS business. We will over the course of time, demise probably some legacy point of sale platforms as we look to consolidate our offerings onto a single unified platform going forward. But none of that’s really reflected in any Q3 performance. That’ll be more in the ‘25 range time frame as we work through the POS consolidation efforts internally. And as I said before, look to align all of our offerings around a common platform that we can bring to market under the Genius brand. But we’re certainly very excited about what we’re doing from a point of sale perspective. Obviously in restaurant, it’s an important market for us today.

I would say on balance, we’re probably even more excited about the white space we see in retail. We think there is a huge opportunity for us to further differentiate in retail and some of the subsegments in retail that may be less intensely competitive today than what we see in the restaurant channel. So I think the overall outlook around POS is very exciting and there’s a lot of enthusiasm for the work we’re doing here. And I think when we bring our offerings together under the Genius brand, we’re going to see a great deal of success in our ability to really scale that business much more rapidly.

Bryan Bergin: Okay, I appreciate that. And just on Issuer, understanding some of these factors are not under your control, commercial volumes and some of the delayed investment here. Can you just dig in further on some of the underlying performance drivers for Issuer growth and do you have a line of sight to some of these factors improving?

Cameron Bready: Yes, it’s a good question. I mean, obviously, I think from an execution standpoint, we remain pleased with the work our team is doing. We have a good pipeline of conversion opportunities north of 65 million accounts. We obviously converted a fair amount in Q3 that will slightly positively impact Q4, as Josh highlighted in his comments, which I think positioned us better kind of heading into 2025. The macro environments, you know, to some degree is what it is. We don’t have a lot of control over commercial spend, we are probably on balance more exposed to commercial, just given the lion’s share of the commercial market that we process for today from an Issuer perspective. But I think it relates to the things we can control.

We have a good pipeline of opportunities in our portfolio. We have a good pipeline of conversion accounts that we’ll bring on to our platforms over the next 12 to 18 months. We’ve renegotiated 15 of our 20 top — our top 20 customers over the course of the last few years, which gives us good line of sight into what revenue will be for those important partners over the next few years as well. So I think as we look at the ‘25, ‘26 kind of timeframe, we’ve got good visibility into what the expectations should be for the business. Assuming the macro kind of remains where it is, we obviously see 2025 being in the mid-term guidance that we provided last month for the Issuer business. And as we continue to work through our modernization journey, we expect to be able to accelerate from there as we move forward into ‘27 and beyond.

Bryan Bergin: All right. Thank you.

Operator: Thank you. The next question is coming from Bryan Keane of Deutsche Bank. Please go ahead.

Bryan Keane: Hi, good morning. Just on AdvancedMD, how fast was the revenue growing in that business? And then is there other assets inside of software that could be up for sale as well, or is this more likely to be geography specific in different areas of the merchant business?

Cameron Bready: Yes, Bryan, good question. So, AdvancedMD was kind of growing in that high-single-digit range. Good healthy growth business doesn’t really impact the growth outlook for our business going forward. You know, obviously our mid-term guide is our mid-term guide and it contemplated obviously our friends around AdvancedMD. So it’s a good healthy growing business. And obviously we’re delighted to be able to partner with Francisco Partners kind of going forward to continue to help drive growth in their business through payments and commerce enablement solutions. I think as it relates to what else may be in the mix. As we called out at our investor conference last month, we are planning to divest somewhere in the neighborhood of $500 million to $600 million of revenue.

As we move forward, these are assets and businesses that we’ve called out already that we don’t think strategically align with our refresh strategy and where we want to drive the business over a long period of time. So obviously, AdvancedMD was a first step in that process, but as you can imagine, given the guidance we provided, we have more things that we’re working on. And to preserve the integrity of the processes we’re trying to execute. I don’t want to go any further than that, but obviously, just given what we shared last month, there’s still things that we’re working on that we think have the potential to be value enhancing, and we would look to execute them much the same way we did with AdvancedMD, with proceeds being returned to shareholders in a very efficient manner.

Bryan Keane: Got it. And just as my follow-up, core payments is still hanging in there despite the economic kind of weakness that we’re seeing out there at mid-single-digits. I think for next year, given the guidance, it was probably the core that was going to maybe fall to low-single-digits. Can you just talk about what would be embedded to see core change to low-single-digits from the mid-single-digit where it is today?

Cameron Bready: Yes, I think there’s a few things that I think are kind of worth calling out as it relates to that. One is just the general macro environment. I think your point is fair, where that’s where some of the more macro-oriented risk and softness may hit our portfolio. And that’s some of what we saw in Q3, you know, without a doubt, certainly as it relates to the sequential performance relative to Q2. But I would say that’s also the part of the business where we have the most activities that we’re probably going to stop doing as a business. And where we’re exiting certain activities and lines of businesses, that may not be large divestitures like AdvancedMD, but maybe winddowns or just exits of activities that we’re involved with today.

So that’s a little bit of what drives, I think some of the outlook for a core payments as we look to 2025. I think other things to note is, is we’re working to kind of realign distribution activities. That’s going to have an impact a little bit on our core payments. I’ll give you one very specific example. In the fourth quarter, we’re reorienting our compensation program for our FI partner channel, which sits in that core payments. Obviously, that might create a little bit of just softness in new production as we work to orient those sales professionals to a new compensation program that we think better in lines, incentives, with the outcomes we’re trying to drive for our business. While obviously still creating a good opportunity for our sales professionals to continue to earn good revenue for themselves.

But obviously that’s work that we feel like we need to do around that channel and we’re doing that this quarter. So those are the kind of things that we’re working on as it relates to our transformation that may have an impact on our core payments business. And part of the reason as we look to ‘25, that’s the area that we would expect perhaps to touch a slowdown that gets us to that mid-single-digit growth range as we look to reaccelerate in ‘26 and ‘27.

Bryan Keane: Okay, very helpful. Thanks for taking the questions.

Cameron Bready: Thanks, Bryan.

Operator: Thank you. The next question is coming from Dan Perlin of RBC Capital Markets. Please go ahead.

Dan Perlin: Thanks. Hey, I just have a question, really kind of a point of follow-up here, but the midpoint of the range, the 5% revenue growth that you’re talking about for ‘25, just to be clear, are you like rebasing ‘24 and pulling out the $250 million to $260 million from AdvancedMD and then growing off of that base, or are you keeping the existing base and then telling us 5% growth?

Cameron Bready: Yes, Dan, I think the easiest way to think about it is that 5% is organic. You know, as we called out at the investor conference, we’re looking to exit somewhere in the neighborhood of $500 million to $600 million of revenue. Obviously, AdvancedMD was the first step in that process. So as we think about organic growth, as we head into 2025, we’re targeting that mid-single-digit range as we highlighted at our investor conference last month. So that’s the easiest way to think about it as a revenue matter. Earnings are earnings. We’re going to deliver double-digit growth and earnings next year. Obviously that assumes use of proceeds from any asset, divestitures, et cetera. But as a revenue matter, just think about that as an organic number.

It will be impacted overall. Aggregate revenue will be impacted by whatever divestitures were successful with. Obviously, AdvancedMD being one we have clear line of sight to. So the numbers that we’re providing for our medium term guide, they were all sort of organic numbers.

Dan Perlin: Yes, yes, that’s helpful. And then just to follow-up here on kind of the fourth quarter exit rate implied. I mean, it does seem to imply kind of its holding steady relative to third quarter to get you to that 9%? And I just, I don’t know, I feel like that’s a hard sell given the salesforce pivot, you know, the rebranding, it’s got to have some attrition potentially in it. As you say, there’s the macro headwinds that are, you know, kind of falling heavy on core. So it’s just anything else you could say about why you have such confidence that, that exit rate can actually hold similar to what you’re seeing, despite the fact that you’re doing all these things in the business, obviously, for the better, longer term? But it would just seem like there should be more disruption into the fourth quarter exit things? Thanks.

Josh Whipple: Yes, I don’t know that I would say there’s going to be sort of incrementally more disruption in the fourth quarter. A couple things that I would note in particular, one is we’ve seen October by and large and obviously October looks a little better than September. I think that’s largely due to some of the weather impacts that we saw at the end of September, whether it’s hurricanes, Helene and Milton and the impact that had in the Southeast of the U.S., or Storm Boris, which probably most of you have never heard of, but certainly had a pretty detrimental impact in Central Europe, which is an important market for us also in the September front time frame. So we’re seeing a little bit of just the lack of kind of weather disruption, obviously, in October.

That’s given us a little better trend relative to what we saw in September. And I think we have a good line of sight to, you know, merchant looking, by and large, fairly consistent with what we saw in Q3, perhaps a little bit better. Some of that driven by, again, a lack of storm, some of it driven by a lack of FX headwinds. But by and large as we look to the fourth quarter expectations for the business, we’ve got good confidence in our ability to kind of exit, you know, around the same level, maybe slightly better than, you know, what we saw for Q3. For Issuer, it’s largely the same macro trends, but obviously we are expecting a little bit of a bump up from the late sort of Q3 conversion cycle that we were able to execute successfully. No improvement really in the macro, but just given that, we expect a little better performance on Issuer for Q4, kind of exiting the year heading into 2025.

Dan Perlin: Okay. Thank you very much.

Cameron Bready: Thanks, Dan.

Operator: Thank you. The next question is coming from Darrin Peller of Wolfe Research. Please go ahead.

Darrin Peller: Thanks, guys. Just to follow up on that for a minute, so if we, I mean, that was very helpful for fourth quarter, Cameron. If we exit the year, which sounds like maybe a half a point or a point better than third quarter in terms of total revenue growth. And then I guess organically we’re running somewhere closer to 6% versus the 5% organic this quarter. Just thinking about that set up for 2025, which I know you were trying to incorporate, you know, a little macro conservatism along with the maybe a point or so disruption to the business given the transformation? If you’re exiting the year at that 6% range, maybe just remind us the building blocks that are positives and negatives in ’25? The negatives we know could be the transformation, maybe macro, but starting off at roughly 6%, I guess, are there positives that offset those negatives to give us the conviction?

It’s just sort of revisiting a question from earlier on the ‘25 confidence on mid-single digit 5%.

Cameron Bready: Yes, it’s a fair question, Darrin. I would say a few things, one is we’re already working on our transformation initiative. So as we think about the things we’re executing today, some of those we expect to start to have positive impacts for our business as we head into 2025. Certainly as we get to the back half of 2025, as we continue to execute initiatives in our pipeline, we expect to see the benefits of those starting to flow through performance. So that gives us some confidence, obviously, that as we head into the year, we’re executing on initiatives that are going to be positive to the performance, even while we continue to work on other things, to your point, which may have a little bit of disruption to the business as we continue to work through transformation and position ourselves for kind of a re-acceleration in ‘26 and ‘27.

So, as I look at it, it’s largely, you know, there are probably 600 initiatives that we’re working on in this business today as part of our transformation program. And many of those have short-term kind of life cycles to execute. Many of them have longer-term life cycles to execute. But as you look at the balance of activities that we have planned for our transformation initiatives, many of them are going to start to materialize in the 2025 timeframe and start to provide value for the business as we get certainly to the back half of 2025 and start to head into 2026. So I think we’ve given ourselves, just going back to my response to the earlier question, I think we’ve given ourselves flexibility. There’s enough sort of cushion in terms of how we’re positioning 2025, to be able to execute on the transformation, deliver on the performance I described, return $2 billion of capital to shareholders, and deliver double-digit growth and kind of earnings per share, again, while still positioning the business in the right way to kind of re-accelerate in ‘26 and ‘27.

Darrin Peller: Okay. Actually, on the topic of capital return, I mean, your free cash conversion was clearly better this quarter, and it’s good to see the conversion still continuing as what you’re expecting for fourth quarter? So when we think about the free cash that you have, and if you could just remind us of the timing of what you’re going to be utilizing that for from a buyback standpoint when the accelerated share buyback is helpful, but just maybe even into next year’s $2 billion buyback? And then just revisiting the leverage targets. You’re still planning on being one at three turns by the end of the year?

Josh Whipple: Yes, so Darrin, this is Josh. Yes, so look, for the balance of the year, we obviously have the $600 million accelerated share repurchase, which we announced this morning. And then we have some additional capacity, which will be buying shares in the open market. We expect our leverage point to get back down to the low-3 times leverage point by the end of the year. And then as we go into next year, next year we’ll be buying back approximately 2 billion worth of shares next year and continuing to go ahead and maintain that leverage point right around the 3 times time period. And then what I’d also say, Darren, is you think about the $7.5 billion that we said that we were going to go ahead and return to shareholders over the medium term outlook. Obviously, the closings from an — from AdvancedMD is incremental, you know, to that as well. So again, that’s kind of how we’re thinking about capital allocation over the near-term and longer term.

Cameron Bready: And I would just add Darrin to that as we think about 2025, I mean, obviously, we’ll be at our targeted leverage ratio by the time we exit 2024, which I think is good news. We’re on target to do that. And as we highlighted this morning, we obviously reduce leverage kind of Q2 to Q3 and are at 3.3 times kind of for the end of Q3. So we’re on the trajectory that we called out that we would be to get leverage to where we want it by the end of the year. Our base case for 2025 is that $2 billion in return will kind of be rateable, but we’ll obviously take into consideration market conditions as we get into 2025 and think about the best and most efficient way to return capital to shareholders. As I step back and think about it maybe from a more macro perspective, if you look at the $7.5 billion that we’ve committed to over the next three years plus obviously the $600 million ASR that we announced this morning, we’re somewhere in the neighborhood of 30% of our market cap, 33% of our market cap over the next few years, kind of getting returned to shareholders through capital returns, which I think is a pretty attractive opportunity to create value for shareholders over that timeframe.

Darrin Peller: Great, great. Thanks, Cameron. Thanks, guys.

Cameron Bready: Thanks for the question.

Operator: Thank you. The next question is coming from Tien-tsin Huang of J.P. Morgan. Please Go ahead.

Tien-tsin Huang: Hey, good morning, everyone. I just wanted to ask on the commercial spend. I’m just curious how broad-based some of the softness is? Is this all about just weaker T&E volume? Are you seeing any change in cards and force? Again, just trying to figure out what’s going on with the cycle? Thank you.

Cameron Bready: Yes, Tien-tsin, look I think it’s just businesses being cautious in the macro environment we’re in. I mean, it’s kind of across the board from a commercial perspective. Certainly, T&E, which you see in our commercial card volumes, in our Issuer business. But also, we called out a little bit even in our B2B business, you know, we’re seeing a little bit of just reduced flows, you know, we make money on both software and flows and we’re seeing a little bit of reduced flows just around spanned overall from a business perspective. So I think it’s pretty broad based. You know, we have a significant portion of the commercial market in the U.S. in our Issuer business. And so we are kind of the bellwether for how that market is faring.

And certainly what we’re seeing is, you know, an overarching kind of slowdown, I would say overall in business spending, that’s kind of materializing in our results. We haven’t lost any customers in that space. We continue to have the same book of business we had previously, so there’s no change, I would say, from our perspective, it’s really just the volume of flows that we’re seeing in the overall market.

Tien-tsin Huang: Got it. No, no, I figured that was the case, just trying to understand some of the macro factors here. Always trying to learn, Cameron. On the — my quick follow-up, just on the commercial agreement here with Francisco on AdvancedMD, you’ll still be the payment provider exclusively with AdvancedMD as PayFac and is there still room to drive payments penetration given how long you’ve held it?

Cameron Bready: Yes, absolutely. I think there’s going to be opportunities to drive more payment penetration in the business. We’re not fully penetrated in the portfolio today, so we still have work to do to try to continue to penetrate the existing base of business. We did convert the model over time, to more of an integrated embedded sort of payback offering. And we’ve seen good traction around that in the last, call it year or so, in terms of being able to cross sell on net new wins in the AMD business, you know, and sort of go after the existing back book of business. And obviously, Francisco has its own growth aspirations for the business. So as they’re adding new customers, we have to be able to partner with them with an embedded payment offering that will be relatively seamless as a new sales perspective.

So we still see good runway for growth. I think AdvancedMD, if you recall, was an integrated partner of ours prior to us acquiring it and will remain an integrated partner of ours sort of post the divestiture and will continue to look to grow and scale with them as they move forward and execute on their own initiatives.

Tien-tsin Huang: That’s great. Thank you, Cameron.

Cameron Bready: Thanks, Tien-tsin.

Operator: Thank you. The next question is coming from Trevor Williams of Jefferies. Please go ahead.

Trevor Williams: Great. Thanks a lot. I wanted to go back to the merchant growth in the quarter. It looks like on an organic constant currency basis growth flowed by at least the point and it sounds like weather was probably the biggest impact in there, but if you guys could put some more detail just around the moving pieces, second to third quarter, and then Cameron, based on what you’re saying about October, if Q4 is a little bit better. I mean, anything more specific on order of magnitude there for merchant? Thanks.

Cameron Bready: Yes, it’s a good question. So I think your math is roughly right. I think from Q2 to Q3, it’s about a point. Yes, weather was some of it, but I would say there was even before the weather impacts kind of in September, there was a little bit of macro softness Q2 to Q3 sequentially. And I think you’ve seen that sort of borne out in some of the other commentary by others who have reported this quarter already. So that’s largely the driver as we look at kind of Q2 to Q3, and it’s about in that ballpark. So think 6% kind of organic growth in the quarter versus a little north of 7%, you know, in Q3. As we look at Q4, we’re expecting a little bit better, so I wouldn’t, you know, I wouldn’t get ahead of my skis too far here, but certainly as it relates to what we saw in Q3, we’re expecting, you know, obviously not to see the same weather impacts that we saw in Q3 and Q4, and we expect a little bit less kind of FX headwind in Q4 relative to Q3.

So we are expecting a little bit of sequential improvement there. But, you know, again, it’s not, I wouldn’t say it’s going to be significant.

Trevor Williams: Okay. Got it. Thanks. And then Cameron, any updated view on Cap One Discover, assuming that closes and ultimately how that could impact you guys if there’s even a potential accounts on file tail end for you there over time and then just curious within the medium term outlook, what you guys have assumed for that relationship. Thanks.

Cameron Bready: Yes, it’s a great question. Obviously, Capital One is a longstanding partners of ours, and we just renewed our agreement with them just prior to them announcing their Discover transaction. So look, I can’t get too far into that conversation, but all I can say is they’ve been a long partner, longstanding partner of ours. We have a great relationship with those guys. We’re clearly aware of what it is they’re trying to accomplish, I think, through the merger with Discover, and ultimately expect that they’ll be successful with that endeavor. And the last thing I would just say, they built their entire sort of ecosystem around our capability. So as we think about the future and that combined sort of Capital One Discover World, we think that’s positive news for our business.

But it’s a little premature for us to be sort of forecasting things into our outlook around that, just given that they are obviously still in the regulatory approval process. But longer term, to the extent we’re successful, we think it will be a positive for our ongoing relationship with Capital One.

Trevor Williams: Great. Thank you.

Cameron Bready: Thanks.

Operator: Thank you. The next question is coming from Jason Kupferberg of Bank of America. Please go ahead.

Jason Kupferberg: Good morning, guys. I wanted to ask on the merchant segment margins, it looked like you were up 90 bps in the quarter, which I think was better-than-expected, and you ticked up the full-year guide there by a hair. So, curious just what drove some of the outperformance?

Josh Whipple: Yes, thanks Jason. So, well, look, so what I would say is Q3 performance is slightly better than our initial expectations. We benefited in the quarter from better revenue mix, even though synergies were flowing in, and then we saw some really strong execution. We do expect margin expansion to be more consistent with the overall outlook in Q4, so we do expect that to be in the 50 basis point range, but as you as you rightly pointed out you know we did go ahead and raise our margin expectation for merchant to up to 40 basis points for the full-year. And the only other comment I would say, Jason, if you think about, if you go back to Q2 of 2023, where we saw margin compression of 170 basis points over the last five or six quarters, we’ve done exactly what we said we were going to do.

And we’ve seen continued sequential margin improvement quarter-over-quarter, if you go back. So we’re really pleased with the margin performance in Q3. And as I said, you know, it gave us a lot of confidence in raising the guidance for the full-year of up to 40.

Cameron Bready: The only thing I would add Jason, just obviously execution there remains strong and where we’re seeing growth in our business, or more sort of attractive growth in the business, our area is where we have room to sort of expand margins further as well. So we think the margin tailwinds for merchants, particularly now that we’ve largely worked through kind of the EVO integration. Obviously we’re pleased with the performance in Q3 and very much on track to deliver that slightly higher expectation kind of for the full-year.

Jason Kupferberg: Okay. And then just the point of sale in software bookings, I think I saw that was up 30% in the quarter. I think the number you had given at Investor Day on an LTM basis was that it had been up about 10%. So I’m sure it can be lumpy in a given quarter, but based on the pipeline you’re seeing, I mean what’s kind of a reasonable zip code going forward just you know obviously this is a key growth engine for the overall segment?

Cameron Bready: Yes it’s a fair question we have a strong bookings quarter obviously. And I think what that suggests as much as anything else is we have the right products and capabilities and solutions to win in the marketplace across our point of sale and vertical market software businesses. So we’ve got a lot of confidence in our capabilities and we have a lot of belief, obviously, that we have the right solutions for the marketplace. To your very good point, they can be lumpy, you know, quarter-over-quarter. So I wouldn’t read too much into one quarter performance or another, positively or negatively for that matter as it relates to bookings growth. The overall trend we’re looking to see is obviously strong double-digit bookings growth across that portfolio of businesses.

On an LTM basis, it was 12%. That’s what we called out at the investor conference. We had a very strong Q3, obviously, that we reported this morning from a bookings perspective. But, you know, we want to see that well into the double-digits and I think that reflects kind of good healthy commercial productivity and that we have the right products and solutions to win in the marketplace and if we keep delivering at that level obviously that is what underscores kind of the outlook that we have, and particularly the acceleration in merchant as we get into ‘26 and ‘27 is going to be driven by our ongoing success in that channel.

Jason Kupferberg: Thanks, Cameron.

Cameron Bready: Thanks for the question.

Operator: Thank you. Our last question today is coming from James Faucette of Morgan Stanley. Please go ahead.

James Faucette: Hey, thanks very much. I just want to follow-up on that last question around POS specifically and that re-platforming and that lumpiness. I just wonder if you can help sensitize us to, you know, the rollout of that, what that — what we should think about it, at least anecdotally? What may happen with attrition, any disruption that’s there, and then how we should be thinking about that lumpiness kind of normalizing over time just so we have a good sense of what that sales motion looks like?

Cameron Bready: Yes, look, it’s a fair question. And when I talk about lumpiness, I kind of talk about lumpiness of bookings, you know, that may sort of vary from one quarter to the next. I don’t know that I would say the overall performance of the business, I would expect to be lumpy. You know, there are conversion timeframes to bring new people on, there are implementation timeframes. So as we think about managing the portfolio within POS in particular, I would expect performance to be more consistent even if bookings may vary a little bit from one quarter to the next. I would say as a re-platforming matter, obviously, we’re trying to strike the right balance here. We want to move to a consolidated platform. We want to be able to bring all the best capabilities we have across the variety of point of sale environments that we’re operating today into one common unified platform so we can deliver that in all the different markets around the globe.

We want to deliver it. But at the same time, we want to continue to grow the business and scale the business effectively. So we’re trying to strike that right balance as we move forward in time. We’ll continue to go to market with the capabilities we have as we work to align brands and align platforms. At some point, obviously, we’re going to demise kind of existing legacy platforms and solely focus on selling kind of our net new consolidated platforms as a go to market matter. But that’s largely, again, what’s implied in the ‘25, ‘26, and ‘27 outlook that we shared last month. Some of the impact in ‘25 is from doing the work that I just described. So I don’t know that we would see, you know, the same level of performance in ‘25 that we’d expect to see in ‘26 and ‘27 as we get the realignment done, the re-platforming done, and we go to market with that more unified motion around the common platforming capabilities, I expect to see the benefits of that start to flow through in ‘26 and ‘27.

James Faucette: Got it, appreciate that, that’s great. And then, wanted to ask, and sorry if I kind of missed this, but on the SMB volume growth of 5%, can you remind us what that was last quarter? And then, are you seeing a softening trend there that kind of maybe matches up with some of the commercial activity that you see and you know, just trying to get, I guess, more of a your view on the macro on both sides of what could be happening there?

Cameron Bready: Yes, it’s a good question. I would say, you know, in Q2, excuse me, it was 6%. So it’s about a point, you know, relative to Q2 performance. I think overall, it’s more the broader economy and then to a lesser degree, as we talked about before, some of the specific weather-related impacts we kind of called out in the September timeframe. As I said, already October looks a little better than September, and I think that’s largely the absence of the weather impacts, you know, kind of in the month, and a fairly stable macro environment relative to what we saw, you know, in the broader sort of Q3 timeframe. So I don’t know that I would read too much into it, you know, as it relates to what we’re seeing from a commercial activity and Issuer versus, you know, what we’re seeing in terms of trends and SMB.

If you think about commercial for issuer, that’s going to be largely skewed towards larger businesses that are running commercial card programs and spend programs. Yes, there is some SMB in there, but I think it’s more reflective of just where businesses are today relative to their willingness to spend, just given the overall macro uncertainty that we’re operating in. I think the SMB volume that we’re seeing, you know, largely just reflects kind of the broader trends we’re seeing in the marketplace, both here in the U.S. and to some degree in markets outside the U.S. as well.

James Faucette: That’s awesome. Thanks, Cameron.

Cameron Bready: Appreciate the question. Well, on behalf of Global Payments, thank you very much for joining us this morning. I hope everyone has a great rest of your day.

Operator: Ladies and gentlemen, thank you for your participation. You may disconnect your lines at this time or log off the webcast and enjoy the rest of your day.