Global Payments Inc. (GPN) Q3 2026 Earnings Call Transcript

Operator: Ladies and gentlemen, thank you for standing by, and welcome to Global Payments Third Quarter 2026 Earnings Conference Call. Answers. As a reminder, today's conference call will be recorded. At this time, I would like to turn the conference over to your host, Senior Vice President, Investor Relations, Mr. Nathan A. Rozof. Please go ahead.

Nathan A. Rozof: Good morning. Welcome to Global Payments Third Quarter 2026 Conference Call. Joining us today is our CEO, Cameron Bready; CFO, Joshua J. Whipple; and COO, Robert Cortopassi. Some of the comments made during today's conference call will contain forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied, and we caution you not to place undue reliance upon them. They speak only as of the date of this call, and we undertake no obligation to update them. In addition, we will be referring to several non GAAP financial measures. For a full reconciliation of the non GAAP financial measures, to the most comparable GAAP measure, please see our press release furnished as an exhibit to our form 8 k filed this morning and the supplemental material available on our Investor Relations website. Finally, the slide presentation that accompanies our prepared remarks is also available on our Investor Relations website. With that, I will turn the call over to our CEO. Cameron?

Cameron Bready: Thank you, Nate, and good morning, everyone. We are pleased with our third quarter performance, which was consistent with our expectation and reflects the continued disciplined execution of our team members worldwide. Adjusted net revenue accelerated sequentially to more than 4% on a constant currency basis excluding dispositions. Adjusted operating margins expanded 22 basis points excluding dispositions, reflecting ongoing integration execution and synergy realization. And adjusted earnings per share increased 10%. Capital allocation remains a central pillar of our investment thesis. We returned over $200 million to shareholders through buybacks and dividends during the quarter, and continue to expect to return more than $2 billion to shareholders in 2026, keeping us on track to return approximately $7.1 billion cumulatively over the 2025 to 2027 time frame. Our integration of Worldpay continues to track ahead of our plans, and given the strong progress we have made, we are raising our run rate expense synergy target from $600 million to $650 million by the end of 2028. With the foundational elements of the combined company now firmly in place, we are focused on the strategy that will shape the next chapter of global payments. I will use my time this morning to outline that strategy and highlight the execution already underway across our business. Global Payments is fundamentally a different company than it was a year ago. With our combination with Worldpay and the exit of our issuer business, we are now solely focused on providing commerce solutions around the world. That gives us much greater clarity of focus, and it brings together tremendous scale, reach, and capabilities that create significant potential for our company. Our opportunity is to mobilize our scale and capabilities in ways that create greater value for our clients and partners. And position us to compete and win in a rapidly changing market. Our ambition is clear, to become the worldwide partner of choice for commerce solutions. Our strategy provides the path to get there and it is anchored in 3 pillars. The first is delivering differentiated products and solutions. We will compete on the value and capabilities we bring to the market, not simply on price, through software, embedded financial services, data and insights, fraud and optimization capabilities, and AI enabled solutions and experiences that help our clients run and grow their businesses more effectively. Second is providing a distinctive client and partner experience. We are making Global Payments simpler and easier to buy from, integrate with, grow with, and stay with. Combining strong digital capabilities with expertise and high touch engagement where it matters most. And third is harnessing our immense scale and reach. We are making better use of our global distribution, relationships, data, and investment capacity to accelerate innovation, expanded option, and bring our best capabilities to more clients and partners worldwide. These pillars reinforce each other. Better products create better outcomes for our clients, better experiences deepen our relationships, and our scale and distribution allow us to extend those advantages more broadly. Many of the investments that underpin this strategy are already well underway. What the strategy provides is greater clarity and alignment where we will focus our resources and how we will win in the marketplace. Importantly, we have already established the foundation needed to deliver this strategy. Our new organizational structure is now in place across our entire team. We employed a best of both approach to select the strongest leaders and team members from heritage organizations. Providing us with a wealth of expertise that is unmatched in the industry. We are also now fully organized around our 3 go to market segments. SMB, enterprise and platforms. Supported by shared capabilities across product, technology and operations. With clear accountability for faster decision making. In addition, building on the target technology architectural model we defined last quarter, we are rapidly advancing our plans to move to our future state architecture. This work will make it easier to integrate with us allow us to expose existing and new products to market faster, and scale them across our segments and geographies while reducing cost over time. Our strategy also reflects a deliberate choice about how we serve our clients. Some providers in our industry have built single stack models in which clients realize the full value of their tools only when they consolidate all of their processing onto 1 platform. In effect, they have walled garden. We are taking a different approach. We are designing our products and value added services to be modular in many cases, acquirer agnostic. So clients can use them regardless of who processes their payments. Through our curated open ecosystem, we combine our own differentiated capabilities with best of breed partner solutions to build tailored offerings that meet each client's specific needs, rather than asking clients to adapt to a 1-size-fits-all model. Although we have an overarching company strategy, each of our lines of business has a distinct role in bringing it to life to their customer segments with the key priorities they are pursuing. In SMB, our priorities are to grow beyond payments, with Genius as our platform to deliver software payments and value added services. To accelerate our distribution advantage, and to excel at customer experience. In August, we hosted our inaugural Genius World Conference, bringing together approximately 1 thousand attendees. The agenda showcased our full suite of Genius capabilities, our innovation roadmap, and our vision for the future of Genius. Genius is no longer a new initiative for us. Rather, it is now the flagship offering for our SMB business. Genius World was a great opportunity to demonstrate to clients, partners, and prospects how far Genius has come since its launch in May of last year. Genius now serves clients across restaurants, retail, campuses, age restricted verticals, professional services and field services. In a growing number of markets across North America and Europe. Genius bookings more than doubled year over year during the quarter. Along the way, Genius has won marquee brands such as Subway, Carl's Jr, Hardee's, and the New Jersey Devils. As well as iconic venues and university campuses like the Prudential Center and the University of Illinois. We also recently secured new payments appointments with Compass Group in the Simmons Bank Liberty Stadium at the University of Memphis. Genius continues to win across the spectrum from SMBs to large multiunit operators as well. During the quarter, Genius expanded to more than 100 additional 7 brew locations. Pollo Tropical deployed Genius Kiosk for all of its locations, and Jeremiah's Italian Ice rolled Genius out across 90 additional locations. We also completed the Genius deployment across CKE's approximately 300 corporate locations, and its franchisee rollout will begin in the first quarter of 2027. And our distribution advantage continues to expand. Following a successful pilot with 3 Worldpay's financial institution partners, we began rolling out Genius across Worldpay's financial institution channel in October. Extending Genius to more than 30 strategic bank partners. During the quarter, we also entered the convenience store market, enhanced our appointments and vendor management modules, introduced a new loyalty solution for restaurants, and expanded our dual pricing, surcharging, and cash discounting capabilities. Further, we completed integration of Genius with our TouchNet higher education commerce platform. Opening meaningful new opportunities in this vertical. Dalhousie University is an early win that is using Genius to create a more connected campus commerce experience. Internationally, we recently launched Genius in the Czech Republic to help clients prepare for new tech reporting requirements. We are launching Genius Mobile Pay in the Philippines and across several European markets over the next few quarters. In Mexico, we are expanding Genius with the launch of our small business offering this quarter through both our direct sales force and our financial institution partners. Turning to our enterprise segment, our strategic priorities are to deliver superior core payment performance, expand acquire agnostic value added services, and enable emerging verticals, business models, and technologies. Our modular approach resonates with both existing and new clients. We recently signed AirServia for all of its international traffic. Leveraging our configurable offering, including payments and a suite of value added services. We also recently went live with our credential management solution for 1 of the world's largest consumer technology companies on a standalone basis. Expanded our payments relationship with another hyperscaler client to include additional value added services, and deepen our relationship with Athletics. By cross selling additional solutions. This quarter, NASCAR named us its official merchant services provider, supporting ticketing and merchant services as its 12 owned and operated race tracks across the United States. Including the Daytona International Speedway, Phoenix Raceway, and Talladega Superspeedway. As a leading payments infrastructure provider, we also won several emerging payments platforms including CACTO in Brazil, South Korean cross border payment service provider, ExemPay, UK and Australia-based omnichannel payments provider, LAP Pay, U.S.-based international money transfer provider, Shaka Express, Asia-based global payment and monetization platform, Wafo and Norway-based B2B payments provider ZTL payment solution. We are continuing to enable new business models and markets in this segment. We went live with Aani, the UAE's account to account payments method, and completed our first point of sale pilot of Alipay Plus at the Laver Cup in London. In Asia Pacific, we received regulatory approval from the Bank of Thailand clearing our way for new client go lives in the Thai market. Including Centara Hotels and Resorts. And our Payouts platform is now ready to pilot payments to PayPal, and USDC stablecoin wallets. At the same time we are extending our lead in payment performance. The AI powered intelligent decisioning within our revenue boost solution, is now delivering a significant incremental uplift in approval rates. And it is ready for broader deployment across Europe and Asia Pacific following a North American pilot that began in October. Within platforms, our priorities are to aggressively pursue high potential software partners with our embedded solutions. To drive adoption of new products and value added services and to accelerate our growth in international markets. During the third quarter, we signed 52 new software partners ahead of our plan, including strong momentum in the UK, Australia and New Zealand. We are also expanding the value added services we deliver through our partners. Real time payments is now generally available on dynamic payouts, enabling our partners to offer instant funding to their customers, and we are extending capabilities such as fraud prevention, debit routing, and account updater across more of our partner base. And we are making it easier for partners to work with us. We have reduced average time to revenue for new partners by about 1-third compared to 2025. And AI automation has cut the setup time for a new partner from weeks to minutes. Zero touch underwriting is also now generally available for our Payrix partners. Simplifying onboarding and accelerating activation for their customers. Across our business, AI is not a corporate strategy. It is an enabler of everything that we do. From how we differentiate our products and improve the experiences we deliver to how we operate and prepare for emerging areas of commerce. We continue to enhance our platform agnostic modular set of capabilities that allow our clients to participate in new agentic commerce models, regardless of channel, agent, or payment method, and we are helping to shape the standards for this channel. As an inaugural member of the Payments Tech Council for Google's Universal Commerce Protocol or UCP, we are helping to define the payments roadmap across authentication, fraud, authorization, and disputes. Our clients are also beginning to move from pilots into production. Transactions through ChatGPT are now live on our platform in the U.S. from 1 of our largest clients, with more on the way. With Ingenico, AI is at the center of our product innovation. Genius AI is an agentic assistant that allows clients to ask questions in their own words, get instant answers from their own business data, In May, we unveiled our AI first Genius handheld designed to run AI directly on the device so servers can have natural conversations with their customers while the order is built in the background. We are now piloting AI powered drive through vision and order routing with several large QSR restaurant clients to increase the throughput and improve the visibility across multilane drive throughs. And, we are adding additional capabilities to GeniusAI with upcoming releases moving beyond insights to help clients run their businesses from smart menu and pricing updates to simplified AI powered configuration and setup for large multi unit operators. We are also increasingly leveraging AI to improve how we operate. Making our business more efficient and effective while enabling our teams to execute with greater speed and precision. In treasury, AI is helping us improve cash forecast anticipate currency exposures, and identify interchange savings opportunities. Across our commercial organization, AI models are identifying cross sell predicting churn risk, and prioritizing the highest potential leads for our sales teams. We are also automating the ingestion and processing of chargeback information in disputes. While in underwriting, we have deployed an AI enabled solution designed to reduce review times from roughly an hour to just 10 minutes. Allowing us to significantly increase capacity without adding headcount. As we scale these capabilities across the organization, we expect AI to become an increasingly important driver of productivity, allowing us to operate with greater agility, scale more efficiently, and create additional structural opportunity for margin expansion over time. Overall, our results this quarter and the progress each of our business is making against our strategy reinforce our confidence in the long term opportunity ahead of us. With that, I will turn the call over to Joshua to discuss our financial performance and outlook.

Joshua J. Whipple: Thanks, Cameron. In the third quarter, we generated adjusted net revenue of $3.18 billion, representing growth of over 4% excluding dispositions. This performance reflects resilient consumer spending trends across our business. Partially offset by the ongoing headwind to our travel customers from the conflict in the Middle East. Currency exchange rates had no impact on growth in the quarter. Adjusted operating margin was 42.5% in the third quarter, representing an expansion of 22 basis points excluding dispositions. As we anticipated, margin expansion accelerated in the third quarter as we realized additional Worldpay integration cost synergies. The net result was adjusted earnings per share of $3.58, Representing an increase of 10%. In the third quarter, we continued to make substantial progress on the Worldpay integration. Among other accomplishments, we consolidated corporate applications and standardized our HR, finance, procurement, and expense management processes across the combined company. Additionally, we further reduced management layers, renegotiated major technology and marketing vendor contracts to leverage our combined purchasing scale and continue to consolidate overlapping facilities. As a result of this progress, we are increasing our total cost synergy expectation from $600 million to $650 million on an annualized run rate basis by the end of 2028. Turning to our segment results. We saw solid performance across each in the quarter, which reflects our execution against the priorities Cameron outlined. As a reminder, we report SMB, enterprise, and platforms on a contribution margin basis. With overhead costs reported in corporate and other. In the third quarter, SMB accelerated sequentially, generating adjusted net revenue of $1.55 billion representing normalized growth of 5% excluding dispositions. We delivered $928 million of adjusted operating income in the SMB segment, representing a contribution margin of 60%. Genius continued to build momentum during the quarter. The number of locations sold increased approximately 65% year over year, Among our larger multiunit restaurant clients, Total Genius locations grew more than 10% sequentially. Yields on new Genius bookings expanded nearly 60% year over year. Again, demonstrating that our clients recognize the value of the solution. Enterprise generated adjusted net revenue of $836 million, representing normalized growth of 8%. Enterprise volumes grew 10%, which included an approximately 200 basis point short term benefit associated with load testing for 1 of our largest clients. While the revenue impact was immaterial, we do not expect this to reoccur in the fourth quarter. Card not present revenue which primarily represents global e commerce, grew 8% on a normalized basis. We delivered $658 million of adjusted operating income in the enterprise segment. Representing a contribution margin of 79%. Commercial momentum in enterprise remains strong. Bookings increased 23% year over year through the third quarter, with cross sells to existing clients a key driver. Up 29% year to date. Led by our modular value added services particularly in the EMEA region. Our pipelines are robust. And we continue to convert signed, not live business into revenue. Platforms generated adjusted net revenue of $625 million, representing normalized growth of 8%. And segment volume grew 11%. We delivered $279 million of adjusted operating income in the platform segment, representing a contribution margin of 45%. As Cameron noted, we saw strong new partner signings in the quarter. Including in our international markets, Value added services revenue and platforms grew 22% on a normalized basis. And volume in our embedded payments business, which includes our PayFac and Payrix managed PayFac offerings, grew 16%. We generated adjusted free cash flow of $870 million in the third quarter, representing a conversion rate of adjusted net income to adjusted free cash flow of approximately 92% We invested $232 million in capital expenditures in the quarter. Representing approximately 7% of adjusted net revenue. In addition, we returned more than $200 million to shareholders during the quarter, including buybacks and dividends. Bringing our year to date capital returns to more than $1.4 billion. Our balance sheet remains healthy. We ended the third quarter with approximately $6.3 billion of available liquidity and 3.4x net leverage. Our indebtedness is more than 90% fixed rate, with a weighted average cost of approximately 4%. With our third quarter results in line with our expectations, we are reaffirming our full year outlook. We continue to expect normalized constant currency adjusted net revenue growth of approximately 4% to 5%, and normalized adjusted operating margin expansion of approximately 150 basis points, for full year 2026. We also continue to expect adjusted earnings per share of $13.60 to $13.80, representing 11% to 13% growth. And we continue to expect currency exchange rates to have roughly no impact on reported growth for the full year. Our outlook assumes a stable macro environment and a continuation of resilient consumer spending trends. As we discussed on our second quarter call, our outlook further assumes that the impact of the conflict in the Middle East on our enterprise segment's travel portfolio continues through the remainder of 2026. Travel in the region remains below preconflict levels. And we continue to believe this is the most prudent planning assumption. Regarding cash flow, we expect the conversion rate of adjusted net income to adjusted free cash flow to be 90% for the full year 2026. Our capital allocation plans for 2026 and beyond remain unchanged. We continue to expect to return more than $2 billion to shareholders in 2026 through share repurchases and dividends, while investing approximately $1 billion in the business or approximately 8% of adjusted net revenue. Furthermore, we remain committed to preserving our investment grade credit ratings. And achieving our 3x net leverage target by the end of 2027. To conclude, our third quarter results demonstrate the durability of our business model, and the progress we are making as we execute our strategy. The team's focus continues to be on commercial excellence across all our go to market channels and disciplined execution of our integration with Worldpay. We remain confident in our prospects for sustainable growth cash flow generation and return of capital to shareholders. And with that, I will turn the call back over to Cameron.

Cameron Bready: Thanks, Joshua. As you heard this morning, we have taken important steps over the past year to strengthen and reposition Global Payments. And we have established a clear strategy to fully leverage the scale and capabilities of the combined company. Our ambition is to become the worldwide partner of choice for commerce solutions, and we will achieve that by delivering differentiated products and solutions creating a distinctive experience for our clients and partners, and leveraging our immense scale and distribution. We are already seeing our strategy come to life across our businesses. Genius is growing rapidly and reaching more clients through new channels, markets, and verticals. Our enterprise business is winning with modular capabilities tailored to each client's needs. And our platforms business is making it easier for software partners to launch, grow and monetize payments and other value added services. And with approximately $1 billion in annual investment, we are among the few companies in our industry with the resources to innovate at this scale. Anticipating and delivering solutions ahead of demand. At the same time, we remain focused on disciplined capital deployment and maximizing total shareholder return. We are a proven earnings compounder with durable and diversified revenue streams and substantial free cash flow generation. Overall, our clear strategy, integration execution, innovation investments and disciplined capital deployment position Global Payments to deliver compelling long term shareholder value. Operator, please open the line for questions.

Operator: Thank you. At this time, if you would like to ask a question, please click on the raise hand which can be found on the black bar at the bottom of your screen. When it is your turn, you will receive a message on your screen from the host allowing you to talk. And then you will hear your name called. Please accept, unmute your audio, and ask your question. As a reminder, we are allowing analysts 1 question and 1 related follow-up today. We will wait a moment to allow the queue to form. Our first question comes from the line of Dan Dolev from Mizuho. Please go ahead with your question.

Dan Dolev: Hey, guys. Can you hear me?

Cameron Bready: Yes. Good morning, Dan. How are you?

Dan Dolev: Hey. Good morning. Good morning. Congratulations on fantastic Q3 results. And, Cameron, I just had 2 question and 1 question and 1 follow-up, please. So obviously, there was some news on Friday regarding the potential taking private What can you tell investors today, where we are? And then I have a very quick follow-up. Thank you so much.

Cameron Bready: Yeah. Sure. Thanks, Dan. Look. I appreciate the question. Certainly understand the need to ask it. But as you can imagine, we do not comment on market rumors or speculation, so I am not really gonna be able to get into the reporting or any of the specifics around it. What I can tell you is the board, the management team, everyone at Global Payments is keenly focused on and committed to creating long term value for our shareholders. And with that in mind, we are very much focused on executing the strategy we laid out, integrating Worldpay, serving clients and partners very effectively and delivering against the financial and operating commitments that we have made publicly. So we feel really good about the business. We feel great about the progress we are making and the long term value creation opportunity in front of us, and that is what we are focused on executing against.

Dan Dolev: Great. Fair enough. And then and then I had a quick follow-up. Very exciting topic, which is the synergy. Right? Target raised from $600 million to $650 million. I believe you talked about the target technology architecture model. And how quickly you are moving to make it easier for clients to integrate for existing and new products, reaching markets faster and reducing cost. Can you elaborate on that a little bit more? Thank you.

Cameron Bready: Yeah. I will be happy to, Dan, and I will ask Bob maybe to chime in a little bit as well. I think you outlined in your question, you know, a lot of the core underpinnings of our technology, our architecture model and what we expect it to deliver from us for us as a strategic matter. But if I step back and look at it at a macro level, I think the TAM and executing against the TAM is 1 of the single largest priorities we have that is a core underpinning of our strategy. You know, ultimately, we have really designed our TAM with the simple idea to make it easier for our clients and partners to be able to integrate with us and making the full breadth and depth of capabilities that we have more ubiquitously available to clients and partners around the globe. At the front end, really, means creating a simple, easy orchestration layer the unified API environment so clients and partners can integrate once and access the full breadth of capabilities that we can bring to bear. And then behind that, obviously, we are working very hard to simplify kind of the underlying technology estate really wanting to focus investments on the platforms that we see having the greatest strategic value for the business long term and ultimately positioning us to be able to retire sort of redundant capabilities that sit within the architecture estate that we are running today. So as you, I think, highlighted, strategically, that really does a few things for us. First, I think it increases our speed to market. Because it allows us to develop capabilities once and then distribute them more broadly across the entire state. And then 2, it certainly makes cross selling easier. As you have heard in my prepared remarks, value added services cross selling value added services into our existing base is a core underpinning of our strategy across each of our lines of business. So making it easier to do that through a single integration point is a core underpinning of delivering the TAM And then third, you know, certainly consolidating the underlying estate of assets that we are managing reduces complexity, should allow us to drive better efficiency in our business and create certainly operating leverage as we move forward. So if you look at the TAM, our ability to deliver the TAM, it is clearly connected to the 3 key pillars of the strategy that I laid out in my commentary. You know, certainly, it allows us to harness the scale and capabilities of global payments, It allows us to deliver a differentiated experience to our clients. And it allows us to deliver new innovation and product capability to the market more quickly you know, ultimately, again, supporting what we are trying to accomplish across each of our lines of business. And as we think about the synergy raise, you know, certainly, our ability to deliver the TAM and the opportunity that we see financially in delivering the TAM is part of where we see the incremental value coming from. It will be more back end loaded. Obviously, as a TAM execution will take a period of time, but certainly, as we looked at the raise of synergy targets from an expense perspective from $600 million to $650 million, the opportunity that we think we can unlock through the TAM is a core driver of that incremental value that we think we can bring about through integration.

Dan Dolev: Great. Congrats again on fantastic results. Thanks, Dan.

Operator: Thank you very much. Our next question comes through from the line of Bryan Keane from Citigroup. Please go ahead and ask your question.

Bryan Keane: Yes. Hi, guys. Good morning, and congratulations on the solid execution.

Cameron Bready: Thanks, Bryan.

Joshua J. Whipple: Thanks, Bryan.

Bryan Keane: Just had 1 question on the quarter. And then 1 question on the guide. I guess my first question you know, revenue in SMB normalized upticked a little bit and accelerated to 5%, but volumes slowed a touch to 3%. So that dynamic change and the yield increase Just curious on the drivers there. Then I have a follow-up on the gun.

Joshua J. Whipple: Yeah. Thanks, Bryan. This is Joshua. So look, as you as you think about, you know, SMB, you are right. You know, revenue growth is 5%. Volumes were 3%. And what you are seeing there is, you know, the difference between, you know, just greater adoption of value added services. And we called this out in our prepared remark. We saw 60% year over year increase with Genius Yield. So that is really driving the difference. The other thing I would say as you think about just SMB, you know, volumes more generally, in the D cell that we saw from Q2 to Q3, these were right in line with what the networks reported last week. You know, Visa, I think, saw a step down of about 140 basis points in Mastercard, you know, 50 basis points on a sequential basis. So, again, generally right in line with where the network were, but the step function was, you know, primarily value added services. Again, 60% year-over-year increase from Genius Yields.

Cameron Bready: And, Bryan, it is Cameron. The only the only thing I would add to that, just a bit more color, I would say as a volume matter, it is really on the margin. there is probably a little bit of rounding last quarter up, a little bit rounding down this quarter. So I would say it is probably marginal at best. I would say where we did see a little bit of volume sort of softness sequentially, kind of Q2 to Q3 was more in the international markets. And those yields tend to be a little bit lower than they are here in The US market. So as you look at the revenue composition versus the volume growth composition, some of it is due to just mix And ultimately, where we did see a little bit of volume softness, you know, Europe and touch more in Asia Pacific as well. You know, those are slightly lower yielding markets for us. That contributes to the kind of dynamic that you have called out.

Bryan Keane: Awesome. And then just as a follow-up, thinking about the guidance and the acceleration of revenue growth, or of the organic revenue growth in the fourth quarter. Just curious on some of the drivers of that acceleration. And then hoping you can just quantify the impact of the Middle East and then when we anniversary the official headwind as we get into next year? Thanks so much, and congrats.

Joshua J. Whipple: Yeah. Thanks, Bryan. that is a loaded question. So just a couple just a couple of points on know, on Q4 and the exit rate. Look. So, you know, we continue to expect the second half revenue growth to be in that approximately, you know, 4.5 percent range. Overall for the year where we expect FX to be broadly you know, neutral. And, you know, some of the key drivers are, you know, what we have been talking it is it is, you know, the expansion and transformation of the Salesforce you know, a lot of the commercial go-to-market tools that we put in place around, you know, tooling, training, and compensation. it is a continued Genius adoption and rollout and ramp. You know, we continue to see very strong you know, sequential trends there. And in enterprise, we have clients that went live in Q3 that are now generating, you know, revenue. We have all these now live across both Europe and US, you know, point of sale rollout for Dominic's and Canada is now fully complete. And then, moving to platforms, we continue to go ahead and see really, you know, strong expansion in. Into international markets and continue to see really strong trends with embedded payments which is growing double digits.

Cameron Bready: So overall, you know, we are really. You know, we are seeing strong trends in those pieces of the business around bookings, cross sell, and value added services. So those have been, you know, really you know, really, really strong and pleased with those.

Joshua J. Whipple: For your third question, as it relates to the Middle East, in the third quarter, I would say the Middle East was generally in line with our expectations. The impact was less than 100 basis points. Travel in the Middle East obviously continues to be impacted by the conflict, and volumes are still very much below the pre-conflict levels. And, you know, I would say the recovery has been you know, very uneven and inconsistent. However, we have seen a modest improvement, you know, from Q2, but we continue to see really weakness in forward bookings. Airline ticket sales remain depressed. there is fewer long haul flights. Commercial flights, you know, being purchased. And 1 metric that we look at, you know, Bryan, is paying passengers and miles traveled in the region, and those continue to be down significantly relative to preconflict levels, and the capacity that has come back has been more of the shorter haul, you know, lower yielding, you know, routes So, again, I think, you know, based on the latest developments, the uncertainty that we continue to see in the region, you know, we think that the revision that we provided last quarter was the prudent thing to do.

Operator: And, obviously, Bryan, just made it to the very last part of your question, that all anniversary in the first quarter of next year, And, obviously, we remain hopeful that the in the Middle East kind of resolves itself sooner than that.

Cameron Bready: But certainly, as a as a financial matter, we will we will lap it as we get into get towards the end of the first quarter.

Bryan Keane: Great. Thanks so much.

Operator: Thank you. Thank you. Our next question comes from the line of Darrin Peller from Wolfe.

Darrin Peller: Thanks for the time and Andy, are you still there? Yeah. You hear me now?

Joshua J. Whipple: Yeah. We can.

Darrin Peller: I am sorry. We lost you for a second. Okay. You hear me now? Yeah?

Joshua J. Whipple: Okay.

Darrin Peller: Yeah. It was good to see it was good to see the $7.5 billion capital return expected reiterated through the end of 2027. Maybe we could just touch a little bit and dive in a little more on the free cash levels and the expectation there. I know you guys have the gain on sale tax payments being made. But those really are onetime in nature through the, I guess, this quarter and a couple of more. I think we have around almost $4 billion of adjusted free cash. And if our math is right, you are expecting to return buy back about $4 billion in 2027. So can you just, first, walk us through the bridge on free cash, make sure we are on the same page? And then, second, just make sure we understand, you know, the reiteration of the numbers that we had right on the buyback.

Joshua J. Whipple: Yeah. Sure, Darrin. This is Joshua. Let me go ahead and take that. So look, if you think about. If you go back to, you know, September 2024, Investor Day, we said we were gonna return, you know, approximately $7.5 billion of capital, you know, to shareholders over a 3 year period and look. By the end of 26, we will have you know, returned approximately, you know, $3 billion of capital, leaving approximately you know, you know, $4 billion for next year. And keep in mind that, you know, in 2026, as you rightly pointed out, you know, we had elevated onetime costs. We had cash taxes on the gain on sale of issuer, and those are not going to repeat next year and so. And simultaneously, we were able to go ahead and return $2 billion of capital, or we will return a total of 2 billion of capital this year. So, you know, additionally, we expect, you know, the onetime expenses to trend down as the integration progresses. So, you know, based on this, you know, we have, you know, a lot of confidence you know, in. That we are on track to go ahead and return approximately, you know, $7.5 billion of capital next year and be able to get our leverage point, you know, back down to that 3 times by 2027. So that. that is how you get there.

Darrin Peller: Alright. Joshua, thanks for that. Cameron, can I just follow-up quickly on Genius? Obviously, really good numbers, although still a pretty small base. But the distribution channel, continues to look like it is primed and getting ready to sell more into 2027. Specifically the FI channel, which I think was not really yet onboarded with Genius up until probably very recently. So you just touch for a minute? I am sure you will get other questions on Genius. But for right now, at least just the go to market how the channel's prepared, sales, direct sales, what it is ISO, direct sales, now the FI channel, where you stand on that and, you know, if that could be pretty incremental going to next year. Thank you.

Cameron Bready: Yeah. it is a really good question, Darrin, and thanks for asking. Naturally, we are very proud of the progress that we have made with Genius. You know, just reflecting back that we just launched the capability in the platform a little over a--not even a year and a half ago. In May 2025, and sort of where we have come over that period of time. Again, I think our team deserves enormous amount of credit for the effort, energy and vision behind bringing Genius to life. So with that preamble, our goal now is to really find more ways to get better penetration and saturation of Genius into market, and that comes down to lighting up you know, the breadth and depth of distribution capabilities that we have here in The US market, but also in markets outside of The US around the globe. Here in The US, our priority from day 1, post closing of the merger was really to light up the Worldpay direct sales force, which is relatively small. To be able to sell Genius, you know, almost immediately in the market. And we did that within weeks, I would say, of closing the merger with World pay. Our second focus then was really turning on the FI channel within Worldpay, roughly 6 thousand branches across dozens of FI partners And we really started that in earnest in Q3. We did a pilot with 3 FI partners. And then recently in October, we have opened it up to 30 FI partners in The US market. So to your point, as we get into 2027, opening up that new distribution channel, we expect to drive incremental momentum behind Genius in our ability to continue to grow and scale Genius. From there, once we are successful and we, you know, demonstrate we can scale within the FIG channel, we are going to focus more deliberately on other wholesale partners. So ISOs, agents, you know, other indirect partners, who want to be able to sell Genius into the marketplace either as dealer or ultimately have some sort of referral agreement with us to sell Genius. that is kind of the next opportunity from a distribution perspective. While in parallel, as I said before, we look to continue to bring it to new markets around the globe. And we are really trying to sequence those largely dependent upon where we see, you know, good, strong product market fit where we see an opportunity to drive scale in a market we see maybe other externalities that are giving an opportunity for us to get better penetration, I would say that fiscalization program in The Czech Republic is a good example of that. So ultimately, it is a. I would say a dual pronged strategy of tapping into all the distribution channels we have in The US and targeted deployment to new markets outside The U. S, again, looking to continue to drive momentum around Genius more broadly.

Darrin Peller: that is great. Thanks, Karen. Thanks, guys.

Operator: Thanks, Darrin. Our next question comes through from the line of Andrew Schmidt from KeyBanc.

Andrew Schmidt: Hey, Cameron and Joshua. Good to see the steady progress here. Thanks for taking the question. Maybe just a question on the synergies. Just as you continue to realize these additional synergies, including the increase, how should we think about the balance between reinvestment and market flow through And I know we have talked about, you know, reinvestment over time. You have that $1 billion marker out there. But maybe just talk about know, as you sort of realize the additional synergies, just the biggest opportunities kind of redeploy those savings as to support longer term growth. Thanks so much.

Cameron Bready: Yeah. it is a great question, Andrew. Maybe I will start. I might ask Bob to chime in on this as well. Look, I think we are always focused on striking the right balance. In terms of making sure that the value we are able to generate through operating leverage in the business, obviously, through the realization of synergies, from the Worldpay integration. You know, the benefits that we have been able to derive through our transfer program over the last couple of years, you know, we are trying to strike the right balance between making sure that we are deploying the right amount of capital and investment in the business to drive sustainable, durable growth while also meeting our capital return commitments that we have made and obviously getting our leverage back to our targeted leverage ratio as Joshua called out earlier. So I do not think that changes as we continue to move forward in time. We will continue to make sure that we are putting capital and putting investment behind bringing our strategy to life. I think we outlined that pretty clearly today. What our priorities are, how we think about delivering them across each of our lines of business. That will be a key driver of capital investment. Need to continue to prioritize investing against our TAM, because, as I said earlier, that is a core underpinning of our strategy and our ability to deliver on that strategy. And ultimately, again, we want to make sure we are using our capital efficiently in terms of returns for shareholders and meeting commitments that we have already established. So we work hard to strike that right I think we have a very prudent disciplined approach to capital allocation in the business. And whether we are generating incremental synergies or not, I think that does not really change how we think about, you know, again, making sure we are we are balanced balancing investing in the business, but also returning capitals and driving a total shareholder return that we believe our shareholders will find attractive. I do not know if there is anything you would add just on the investment front.

Robert Cortopassi: Only 1. Maybe I would double down on the point we have already made about target architecture model. This is not really just about integration or a technology modernization journey. This is ultimately business-led, an enabler for growth. So to the extent that we can accelerate progress, against the TAM initiatives, that drives incremental performance and opportunities for our 3 lines of business. So I think, you know, to Cameron's point about balanced capital allocation, that is certainly true. But in a world where we have the opportunity to accelerate our performance and deliver for our clients more quickly, would certainly look to do that.

Andrew Schmidt: I appreciate that. Thank you, Cameron and Bob. that is a great segue into the next question. I wanted to ask about sort of transformation milestones over the next 12 months. Made a lot of progress. Integrating the organizations, advancing the product road map, Maybe just talk about you talked about sort of accelerating the progress here. But maybe talk about what we should expect from milestones in the next 12 months particularly around the technology platform accelerator consolidation and then just looking externally you know, growth is obviously the north star, but what should we look for externally to gauge progress? Thanks so much.

Cameron Bready: Yes. Another good question, Andrew, and I appreciate you borrowing language I have used in the past around growth being the north star for our integration efforts with Worldpay. I am gonna actually just maybe use your question as an opportunity to reflect on progress we made, and I am gonna ask Bob maybe to get to the heart of your question about what to expect as a go forward matter, particularly around technology modernization as we execute against our TAM strategy. But we are 10, 11 months into--10 months--yeah, into our merger with Worldpay, and I am enormously proud of the progress that our organization has been able to make. And I really want to sort of anchor that commentary around the work we have done to ensure that we are building the right foundation for the future of global payments. You know, like you only get 1 opportunity I think to build a strong foundation that we feel we need for the future, and trying to build the foundation after the fact is always hard. So we put a lot of emphasis in our highest priority. Think it is been built it is been focused on building the right foundation for the business. In this short period of time, we realigned all of our go to market activities around 3 customer segment led channels, SMB platforms and enterprise. We have established a combined leadership structure for the entire organization and aligned our entire company and all of our team members against that leadership structure And as part of that, we placed 2.4 thousand leaders as part of a very deliberate best of both approach to how we establish the combined team for the new Global Payments. And, you know, we have defined the TAM, which is critical to, I think, delivering on the opportunities that exist for our business in the future. For all the reasons we have talked about today. And we have actually started to lay the groundwork for delivering on that TAM as well. And also, you know, we have clear line of sight to every single dollar of synergies that we have targeted as part of this merger and very rigorous plans to make sure that we deliver on those and we have been able to obviously increase our target around expense synergies over that period of time. So I think that speaks to the amount of effort and focus and execution discipline that is gone into getting us to today.

Robert Cortopassi: And with that, I will maybe transition over to Bob to let him talk about what to expect as we look towards 2027 and beyond. Yeah. Thanks, Cameron. Andrew, great question. We could probably talk for the remainder of our time just about this 1 topic, but I will try to be brief. I think if you distill what Cameron just said about the target architecture model, the integration approach with Worldpay, and then think about the comments in Cameron's prepared remarks about our modular, kind of open ecosystem approach, curated open ecosystem approach to capabilities. that is where you are gonna see the milestones over the next, kind of, 12 to 24 months continuing to expand our single end capabilities to more customer demographics, whether those are geographies, or customer archetypes, partners of various flavors, well as our enterprise and SMB clients. Delivering all of those through a single experience, 1 portal where you can not only consume value added services, but you can also get AI driven insights about your business, support the decision making that needs to happen. And then continuing to make available the value added services whether those are payments specific or part of our embedded finance engine or things like that, across the entire estate. So you know, a couple of early proof points, I think we already talked about in prior quarters, how quickly we were able to make Genius available through the world pay sales channels that also meant genius on kinda heritage Worldpay processing platforms. We have done the same in reverse in bringing tools like FraudSite and Revenue Boost to merchants in the global payments ecosystem. We will continue to do that over the coming years so that more and more of what clients experience from Global Payments is 1 entry into the ecosystem, the flexibility to construct a modular set of solutions that is tailor made for their use cases, and 1 experience dealing with a company, its products and platforms, and the service experiences that matter to them.

Andrew Schmidt: Very helpful. I appreciate all the work. Thank you very much.

Operator: Thanks, Andrew. Thanks. Thank you. Our next question comes to you from David Koning from Baird and Co.

David Koning: Yeah. Thanks, guys. I just wanted to ask about Agentyx. It gets brought up on a lot of calls. And, you know, for you, it is 1 thing if a human transaction is just replaced by an agentic transaction. But it is another thing if you get more transactions, maybe better yields, maybe more new, BaaS services. So just wondering what the economic impact and how you think that is gonna play out.

Cameron Bready: Yeah, David. Great question and obviously very topical given everything we see happening in the market around this exciting new I would say, channel for commerce as we go forward. Maybe I will just start, and I will ask Bob to get into a little more of the specifics as it relates to your question. I think it is helpful maybe to frame up how we think about agentic commerce and how we are trying to position ourselves around agentic commerce. And I would say the positioning really starts with 2 things from our vantage point. 1 is, you know, our approach really is centered around being a merchant advocate to ensure that the agentic protocols that develop in the marketplace are really developed in a way that aligns with the best interest of our clients. that is sort of anchor point number 1 for us. Anchor point number 2 is for agentic commerce to really be able to scale and become a more meaningful driver of retail commerce going forward, there has to be trust in the ecosystem in terms of how these transactions are getting effectuated and how consumers are going to be protected and to that extent merchants are protected around this type of commerce activity. So I would say at a very high level, our strategy is really anchored around building a platform agnostic modular set of capabilities that allow our clients to participate in agentic commerce models, regardless of the channel or agent or payment method And, you know, we are very focused on making sure we are helping to develop the right standards in a way that, again, are really aligned with the best interest of our clients. The other thing we are focused on doing at the SMB level is providing them the on ramps to be able to access this new emerging channels. They actually, you know, not surprisingly, they do not have the technology resources, the investment capacity to build their own infrastructure to be able to participate in agentic commerce. And I think part of our role is to help them to be able to access that opportunity without having to make a significant amount of investment on their part.

Robert Cortopassi: But as it relates to more specifically what it means, I will ask Bob to maybe chime in on what exactly we are doing and how we see the economics and flows, you know, kinda working as we go forward. Yeah. David, I think the way that we think about it today is a lot like ecommerce when it emerged There were questions about is this incremental capacity in the economy, or is this a displacement of physical in person face to face commerce? And I think the answer to both of those questions was yes. it is both of those things. And AgenTic looks a lot like that. there is a need for discovery there is a need for acceptance, tokens, fraud screening, authentication. Dispute evidence. Certainly the agentic Commerce report that we released recently, people are more open to transacting with agents. But, you know, 60%, give or take, still wanna approve every purchase So we see trust really as the gating factor. So to the extent that transaction volume is incremental, that would be a tailwind for us and a benefit. But I also think to your point, there is opportunity to add value added services into this stack, and this trust component is 1 that continues to be at the center of scale and adoption for AgenTic, verifying the intent of the consumer verifying the credentials used to complete the transaction, and then ensuring that all of the sort of consumer protections and merchant protections continue to be built into the ecosystem that already exists for card rails today. that is what we are focused on in adding value is not only just benefiting from these transactions crossing our rails like they do today, but also those incremental value added services around identity, intent, fraud, and optimizing authentication performance for our particularly enterprise clients, but increasingly mid market and SMB as well.

David Koning: Yeah. Thanks, guys.

Operator: Thank you. Our next question comes through from the line of Jason Kupferberg from Wells Fargo. Please go ahead. And ask your question.

Jason Kupferberg: Great to hear the reaffirmation of the capital return targets for this year And I was hoping we could maybe talk early thoughts on the P&L for 2027, as well. It would seem like you are lapping Middle East, March, probably some incremental contribution from Genius. Productivity from the newer Salesforce ads this year. So would that all add up to a little bit of top line acceleration next year? Is that a reasonable thought process? And then just as we try and think about margin expansion in light of the upsized Worldpay synergies, any rough views there, would be greatly appreciated too.

Cameron Bready: Yeah, Jason. it is Cameron. You know, look. I will. I appreciate the question. it is a little premature for us to kinda start providing an outlook for 2027. We are still in our planning process. And all. Ultimately, you know, we will provide a full outlook as we get to our Q4 call. You know, that said, I think as it relates to the things we can control, you know, nothing we see today really changes the confidence that we have in the trajectory of the business. And certainly, some of the things you called out would provide us a little bit of momentum we think as we get into 2027. I think we continue to expect to enter 2027 with good commercial momentum. We kinda talked about that on today's call where we are seeing progress across each of our lines of business as a commercial whether it is Genius bookings, Genius yields, new partner signings for platforms and the volume growth we continue to see across that segment. And certainly the enterprise business has had a very strong commercial productivity year. Think their year-to-date bookings are up 23%. So very strong performance So from a commercial perspective, I think we have a lot of confidence sort of in the momentum that we are building heading into 2027. And to your point, the ongoing integration of Worldpay and the incremental synergies we would expect to realize next year should provide some tailwind to margin as well. So as we look at the business heading into 2027., I think we feel good about, you know, how we are trying to position this business. Which is, you know, we wanna drive durable, sustainable mid single digit growth in the business. We want to continue to deliver margin expansion, which will be a little bit upsized for the next couple of years as we continue to deliver on Worldpay integration and we want to drive substantial free cash flow generation, which supports both our investment back into the business, our capital return plans to shareholders and our ability to get back to our targeted leverage ratio of roughly 3 times by the end of 2027.

Jason Kupferberg: And just for a quick follow-up, I mean, you come up on this 1-year anniversary of Worldpay, we have talked a lot about the integration success to date. But just the stand alone top line performance of Worldpay, how would you assess that so far versus your initial expectations? Obviously, putting aside the Middle East airline headwinds? Yeah.

Cameron Bready: I would say, by and large, it is very consistent with what we would have expected. We have resegmented the business, so there is not a line of business that we have now that is a pure sort of standalone Heritage Global or standalone Worldpay. So it is a little hard to parse kind of exactly what is 1 or the other since we have done the resegmentation of the business. But certainly, there is nothing I would see in the data outside of kind of the impacts of the Middle East crisis that would cause me to think that Worldpay standalone performance to the extent there is such thing, you know, is any different than what we would have anticipated going into the year.

Jason Kupferberg: Thank you.

Operator: Jason. Thank you. The last question we currently have time for is from the line of James Faucette from Morgan Stanley. Please go ahead and unmute your line.

Analyst: Hi. This is James. Can you hear me okay this morning?

Cameron Bready: Yes. Yeah. Morning, James.

Analyst: Morning. Morning. Appreciate all the color today. I wanted to follow-up on a comment that was made volumes on the enterprise side and you know, some testing that was going on there. Can you help us think through know, not necessarily just that work, but just where you are finding real traction with Worldpay and where you get the most benefit versus maybe things that you feel like you should be improving on?

Joshua J. Whipple: You want me to handle the first part of the question, or maybe I will jump in on a second. Yeah. Sure, James. So as we think about just the enterprise, so that volume that we saw that was just a, you know, temporarily shift in volume that, you know, we do not expect to see, you know, reoccur in Q4. It was about 200 basis points from an overall volume perspective. So if you, if you adjust for that, we are--you know, volume and revenue were pretty much right on top of each other you know, for the quarter, within enterprise.

Cameron Bready: Yeah. And James, as it relates to the enterprise business, more broadly, I would say we are we are enormously proud of that business. It is a world class team that is a world class set of capabilities, and we are very bullish on, obviously, what we can do with the business as we move forward in time. I think the big areas of focus for us are largely aligned with the strategic priorities that I outlined earlier for enterprise. You know, the battleground around enterprise is really around core performance. Whether it is winning existing wallet share with clients or it is winning net new logos, payment performance really sits at the heart of our ability to drive growth in the business. As we move forward in time and we are investing heavily behind that to ensure we can deliver market leading authorization rates market leading fraud protection for our clients, etcetera, That core payment performance is critical and that is a big area of focus for us. I would say second is continuing to drive penetration and value added services. Roughly 50% of our revenue in our enterprise business today is driven by value added services. So our opportunity to get better penetration across our existing base and to tap into new opportunities as we are selling the market attaching more VAS to sort of core payment and acceptance services is a real critical focus for us. And then the work we are doing to kinda open up new geographies, new markets, new verticals within the enterprise channel is also key. Of that comes from the ability to combine capabilities of global payments with Worldpay. Particularly as it relates to delivering omnichannel solutions across more physical markets around the globe and certainly tapping into some Global Payments physical presence in markets where Worldpay historically has not had an opportunity to participate on a face to face basis, I think creates a lot of new incremental opportunity for the enterprise business. So again, proud of that business, a lot of confidence and faith in the team and the execution that they are delivering and think there is an enormous amount of potential for it as we go forward. that is great. Appreciate the color, everybody. Good luck. Thank you, James.

Operator: Thank you. Unfortunately, we do not have any time for further questions this morning. This concludes our call. Thank you, and have a good day.