Jennifer Como: Next question, Jordan.
Operator: Our next question comes from Bryan Keane with Deutsche Bank. Your line is open.
Bryan Keane: Hi, guys. Just wanted to get a couple of clarifications. I think last quarter, Chris, you talked about growth would be at a low point in the first quarter, and then you would see that trough accelerate going forward. Just a nuance of the guide is mid to high single digits, so just trying to make sure if there was anything else new to report on Q2 versus Q1 being the trough. And then secondly, just a slightly higher operating expense in constant currency from, I think, it was high single to low double, just the low double now. Was there anything to factor in for that?
Chris Suh: Yes. Thanks, Bryan. Yes, so just backing up to your point, going into Q1, you outlined the guidance that I gave. We set an expectation at that time, similar language, high to mid-single digits to high — sorry, mid- to high single digits, and we did come in at the high end of that range, which was, again, largely benefiting from timing of incentive performance. We have a similar expectation in terms of the range of growth in Q2, but many of the variables that I talked about in terms of the half one versus half two a quarter ago, which was lapping high volatility, lapping high cross-border performance from a year ago and lapping lower incentive growth from a year ago, those, we continue to believe, hold true. And we do anticipate that growth will accelerate into the second half of the year.
In terms of your question on OpEx, yes, the changes that you picked up in terms of the full year guide primarily have to do with two things. One is we’re now including the impact of the acquisition of Pismo into the guide for OpEx, and there’s been some slight updates based on FX, the current FX rates.
Jennifer Como: Next question, Jordan.
Operator: Our next question comes from Andrew Jeffrey with Truist Securities. Your line is open.
Andrew Jeffrey: Thanks. I appreciate you taking the question. Ryan, I wanted to dig in a little bit on the impressive 17% merchant acceptance growth. It sounds like that really highlights the possibility or the opportunity for continued volume growth even in markets maybe where the secular growth rate is slowing a little bit. Is that sustainable? Should we continue to think about that kind of mid-teens acceptance growth as being a key driver of overall volume expansion?
Ryan McInerney: Listen, when I’m talking to our sales teams around the world, I’m pushing them for as much as possible and more. I mean, if you travel around the world, there are still hundreds of millions of small businesses that aren’t on our network. And then you add to that, Andrew, you add to that kind of the creator economy and what’s happening there. You literally can think about the acceptance opportunity in billions. So our sales teams around the world are out there working hard, getting creative, figuring out different ways around the world that we can serve those 100-plus million small and micro businesses and ultimately, 1 billion, 2 billion, 3-plus billion individuals around the world that all ultimately could become acceptors of our products as you think about things like Tap to Phone rolling out at scale.
I mean, you can imagine a world where every handheld device becomes a tap acceptor, and every device is a tap to pay opportunity where we can not only penetrate further into the C2B space but the P2P space and others. So we felt really good, as you were alluding to, for the last — I think the last several quarters, we’ve been 17%, 18%, 19% growth in acceptance locations. I tried, in my prepared remarks, just to give you a little bit of color of the type of things that we’re out there doing with players like bKash and Caixa. And we’ll be pushing hard to continue to light up all those other opportunities in emerging markets and developed markets around the world.
Jennifer Como: Next question, Jordan.
Operator: Our next question comes from James Faucette with Morgan Stanley. Your line is open.
James Faucette: Thank you. I wanted to touch on the cross-border travel volume growth. It looks like it slowed from roughly 25% to maybe 16% to 17% in January. And back when you’re kind of outlining your assumptions for fiscal ’24, you thought it would be in the low-20%, and we see a 4 to 5 percentage point improvement compared to 2019. Just wondering how we should think about that as an assumption going forward. Do you think we’ll bounce back to that low 20s? Or do you think something closer to where you’ve seen in January makes more sense? Now this is an area that sometimes you have at least some forward visibility, so trying to get a sense of where we should be thinking about that component?
Chris Suh: Yes. Great. Thanks, James. We had a really good quarter in Q1 to start the year on our cross-border business. Cross-border volumes, as you said, was up 16%. We feel great about that; and as you click into those, e-com growth in the low teens and 19% growth in travel, with the index going from 139% to 142%. And I’ll just clarify one thing you said in terms of the guidance that we had provided into the low 20s, that was related to the travel portion of that, which came in at 19% or almost 20%. I do think when understanding the composition by region of our performance, and some of this is a little repetitious but I think important to go through, looking at it region by region is helpful. In LAC, CEMEA, Europe and U.S. outbound, strong results, indexing between 145% to 170% relative to the 2019 levels; second, U.S. inbound, which up until Q4 had lagged 2019, also continued to improve in Q1 and in line with our expectations; in AP, we did see continued expansion in and out of AP but a little bit slower than we saw in Q4, and that was specific to Australia and Japan.
And it’s probably also worth mentioning, well, not necessarily a large number, the war in the Middle East did have some impact on the cross-border numbers as well. But again, stepping back, we feel really good about our cross-border business in total. The Q1 results were strong, 16% growth; healthy growth for both travel and e-com. And we feel good about the outlook for the rest of the year.
Jennifer Como: Next question, Jordan.
Operator: Our next question comes from Ashwin Shirvaikar with Citi. Your line is open.
Ashwin Shirvaikar: Hey, Ryan. Chris, Jen, how are you? I just want to drill down into sort of expectations or implied expectations for second half of fiscal ’24 given Q1 results, upper single digits; Q2 expectations around growth, mid- to high single digits, so there’s an acceleration that’s implied. And the question is, what drives it?
Chris Suh: Yes. Thanks. I’m going to break that down into two questions because, one, you said how do we feel about the revenue guide and then I think the second question implied there was on drivers. And so let me talk to those because they are a little bit different. And maybe I’ll even start with the second part first, which is with drivers. We’re 1 quarter into the fiscal year. It was a solid quarter, stable trends from Q4. And importantly, the consumer has remained resilient. As we look into the rest of the year, we do anticipate drivers to continue to tick up slightly in the second half of the year for two reasons: one, average ticket sizes should improve, in particular, as we lap lower ticket sizes in the second half of last year in the U.S. and we see continued inflation in certain international regions; and second, we’re continuing to execute against our growth initiatives in our global markets, for example, the processing wins that we’ve seen in LAC that we’ve shared progress about previously.
