Global Payments, Inc. 2026 Q2 Earnings Call

Welcome to Global Payments' second quarter 2026 conference call. Joining us today is our CEO, Cameron Bready, CFO, Josh Whipple, and COO, Bob Cortopassi. Some of the comments made during today's 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 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'll turn the call over to our CEO, Cameron Bready.

Cameron? Thanks, Nate, and good morning, everyone.

We are pleased with our second quarter performance, which reflects the continued disciplined execution of our team members worldwide. Our integration of Worldpay is progressing rapidly, and we are progressing well against the roadmap we established to unlock the value creation opportunities from the transaction. At the same time, we continue to enhance our competitive position through strong commercial execution, ongoing innovation, and the accelerated option of AI across our products and operations, while also establishing a strong foundation to lead in the emerging era of agentic commerce. Our second quarter results underscore the durability of our business model. Adjusted net revenue grew 4% on a normalized basis, which includes an approximately 100 basis point headwind from the impact of the Middle East conflict on our travel portfolio.

Adjusted operating margins expanded 70 basis points on a normalized basis, and adjusted earnings per share increased 12%. Our ability to generate durable mid-single-digit growth in the face of transient external headwinds demonstrates the benefits of our enhanced scale and the resilience of our diversified revenue streams. Capital allocation remains a central pillar of our investment thesis. During the quarter, we returned approximately $550 million through our previously announced accelerated share repurchase program, as well as additional open market repurchases. Combined with our dividend payments, we are now more than halfway to our over $2 billion capital return commitment for the year. Turning to the integration of Worldpay, we achieved a number of key milestones this quarter. First, we completed our operating model design and have now established our entire leadership structure, creating a more streamlined organization with clearer accountability, greater agility, and faster decision-making.

Second, we defined our target architecture model for our combined technology environment, providing the blueprint to consolidate platforms, reduce infrastructure complexity, and improve operating leverage over time while accelerating product innovation. Third, we finalized alignment of our commercial organization around three operating segments, SMB, enterprise, and platforms, simplifying execution while positioning us to better serve customers across each market segment. With these foundational elements now in place, we are well-positioned to advance integration execution, unlock further synergies, and strengthen our competitive position across the markets we serve. In our SMB business, our investments in go-to-market transformation are yielding improvements in sales effectiveness. Since the beginning of the year, we have seen a 30% increase in new merchant locations per quota-carrying sales professional. This contributed to a greater than 25% sequential increase in Genius bookings in the second quarter.

New customer yields also increased 75% year-over-year, demonstrating that our clients are willing to pay for the value Genius delivers. Genius adoption is accelerating as we expand across geographies and sales channels. In Canada, our longstanding bank partner, Desjardins, is now selling Genius and experiencing strong momentum. In the U.S., we are on track to enable Worldpay's financial institution partners to begin selling Genius during the fourth quarter, starting with 30 of our largest bank partners. Further, our pipeline remains strong, and we continue to win new marquee clients. For example, Long John Silver's recently completed its rollout of Genius digital menu solutions across 100 locations, and Pollo Tropical selected Genius for its 135 stores. Jeremiah's Italian Ice chose Genius to replace its legacy point-of-sale solution and to unify its software and payments together with a single provider.

In response to this strong demand, we are further investing in new features and functionality for Genius. We recently introduced our sleek new Genius handheld. It is designed for edge AI, meaning that it eliminates latency by running an AI model locally on the device. Its AI-powered voice ordering technology allows servers to have natural conversations with customers while the point-of-sale system quietly builds a ticket in the background, even in high-noise environments. We also introduced our Genius AI reporting tool. This agentic assistant allows users to ask natural language questions across their own operational data and reports. It surfaces trends, patterns, and insights from a business's reporting and operational data set to proactively support decision-making. These innovations demonstrate the power of Genius as a modern, scalable platform that combines ease of use, robust functionality, and AI-enabled capability.

We recently celebrated the one-year anniversary of Genius's launch at the National Restaurant Association Show in May. While its revenue contribution is relatively modest today, our sales momentum, product enhancements, and geographic expansion in such a short period of time is impressive and a testament to the strength of our team and the scale of our business. Genius remains central to our long-term strategy, and we are investing meaningfully in the product to enhance capabilities and open new markets, as well as in marketing to build brand awareness and mind share. You may have seen our newest commercial that features Genius in the fast-paced, high-pressure environments restaurant operators navigate every day. It helped to drive a nearly 60% uplift in Genius in Google-branded search, which ultimately helps to lower our cost of acquisition over time.

Looking ahead, we are making additional targeted investments to accelerate Genius adoption and deepen partner engagement. Later this month, we will host Genius World in Las Vegas, bringing together clients and partners to showcase our full suite of capabilities and innovation roadmap. We're also launching a nationwide roadshow to expose Genius directly to partner bank branches, increasing awareness, education, and momentum across our expanding financial institution network. Turning to our enterprise segment, our strategy to sell our advanced payments capabilities and value-added services in a modularized, configurable way continues to pay dividends. Bookings are up 10% year-to-date, including notable new wins with Shangri-La Hotels, online derivatives platform IG Group, Australian crypto trading platform BingX, and a multinational home furnishing brand. We also expanded our relationship with Domino's Pizza to be their exclusive provider for card-present and card-not-present payments in the U.S., alongside our existing relationship in Canada.

Further, we extended our relationship with a leading global retailer to support their Canadian locations, and we renewed key municipality partners, including the State of Ohio and the cities of Chicago and San Antonio. We also continue to make strong progress integrating and ramping our recently signed clients, with approximately one-third of these going live during the second quarter, including our recent wins with Aldi, Morrisons, and ride-sharing and delivery platform Careem in the UAE. Within our platform segment, our growth strategy is centered around expanding our leadership position in embedded payments. We are investing to extend our reach with fast-growing PayFacs, marketplaces, and software platforms while leveraging our global footprint and broad portfolio of value-added services to drive expansion across both new and existing partners. Within this segment, we signed 48 new partners during the second quarter, with more than half of these wins being international.

These partners are well diversified across verticals, including B2B, healthcare, hospitality, personal and professional services, and retail. On the renewal front, we were pleased to extend and expand our relationship with Explorer, a leading provider of software and integrated payment solutions across several verticals. They selected Global Payments for platforms because of our scale, service excellence, reliability, and importantly, for our ability to enable their international expansion. Several of our other value-added services, including embedded finance, dynamic payouts, and terminal modernization, also form a core part of the value proposition we deliver to Explorer and their clients. Platforms VAS revenue grew 25% in the second quarter, driven by FraudSight payouts, prime routing, and merchant working capital. We saw continued double-digit volume growth in our embedded payments platform, highlighting the strength of our capabilities.

Across our business, we continue to deploy AI as an accelerator in our products and internal workflows, allowing us to innovate at a faster pace, reduce development cycle times, enrich merchant experiences, and provide distinctive customer service. Thanks to the scale of our combined company, the volume of data we process gives us a competitive advantage in value-added services like fraud and authorization optimization, and we're magnifying that advantage by deploying AI. Payment performance is not based on guesswork. It is based on frameworks and identifying patterns in data. For example, our AI-native optimization services continue to drive payment performance and risk mitigation across multiple products, delivering higher approval rates with minimal risk. Our Revenue Boost solution, which was already generating $2 billion in annual approval uplift, is now delivering an additional 50-basis-point increase in approval rates through AI-powered intelligent decisioning.