Global Payments Q2 2026 Earnings Report

Global Payments EPS Results

• Actual EPS: $3.46
• Consensus EPS: $3.44
• Beat/Miss: Beat by +$0.02
• One Year Ago EPS: $3.10

Global Payments Revenue Results

• Actual Revenue: $3.16 billion
• Expected Revenue: $3.16 billion
• Beat/Miss: Missed by -$4.58 million
• YoY Revenue Growth: +68.60%

Global Payments Announcement Details

• Quarter: Q2 2026
• Date: 8/5/2026
• Time: Before Market Opens
• Conference Call Date: Wednesday, August 5, 2026
• Conference Call Time: 8:00AM ET

Global Payments (NYSE:GPN) (NYSE: GPN) is a worldwide provider of payment technology and software solutions that enables commerce for merchants, issuers and enterprises. The company develops and operates payment processing networks, point-of-sale systems and cloud-based software that facilitate electronic transactions across in-store, online and mobile channels. Its services span merchant acquiring, payment gateway services, omnichannel commerce platforms, and solutions for recurring and subscription billing.

Global Payments offers a range of products and services including integrated payment terminals and point-of-sale software, e-commerce and gateway technologies, fraud prevention and tokenization tools, and business analytics and reporting. The company also provides issuer processing and card services that support banks and financial institutions. Its customer base includes merchants of all sizes, independent software vendors, partners and financial institutions, and it serves customers across North America, Europe, Latin America and the Asia-Pacific region.

Headquartered in Atlanta, Georgia, Global Payments has grown through both organic development and strategic acquisitions to broaden its product set and geographic footprint. In 2019 the company completed a significant acquisition of Total System Services (TSYS), which expanded its issuer processing capabilities. The organization is led by a senior management team that focuses on integrating payments, software and data analytics to support digital commerce. Global Payments positions itself as a technology-driven partner for businesses and financial institutions adapting to changing payment methods and regulatory environments.

Global Payments Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Q2 adjusted EPS rose 12% to $3.46, with normalized revenue growth of 4% and adjusted operating-margin expansion of 70 basis points despite travel-related headwinds.
• Negative Sentiment: Global Payments lowered its 2026 outlook to approximately 4%-5% normalized constant-currency revenue growth and adjusted EPS of $13.60-$13.80, reflecting the expectation that the Middle East conflict will continue affecting its travel portfolio through year-end.
• Positive Sentiment: Worldpay integration is advancing, with the leadership structure, target technology architecture, and three-segment commercial model finalized; management expects additional synergies and stronger margin expansion in the second half.
• Positive Sentiment: Genius momentum accelerated, with new locations up more than 50% year over year, bookings up more than 25% sequentially, and new customer yields up 75%; Worldpay bank partners are expected to begin selling Genius in the fourth quarter.
• Positive Sentiment: The company returned approximately $550 million through share repurchases in Q2 and remains on track to return more than $2 billion to shareholders in 2026, while targeting adjusted free-cash-flow conversion above 90% for the full year.

Presentation

[Operator]

Ladies and gentlemen, thank you for standing by, and welcome to Global Payments' second quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode. Later, we will open the lines for questions and answers. 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, Nate Rozof. Please go ahead.

[Nate Rozof, SVP of Investor Relations at Global Payments]

Good morning. 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.

[Nate Rozof, SVP of Investor Relations at Global Payments]

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?

[Cameron Bready, CEO at Global Payments]

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.

[Cameron Bready, CEO at Global Payments]

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.

[Cameron Bready, CEO at Global Payments]

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.

[Cameron Bready, CEO at Global Payments]

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.

[Cameron Bready, CEO at Global Payments]

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.

[Cameron Bready, CEO at Global Payments]

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.

[Cameron Bready, CEO at Global Payments]

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.

[Cameron Bready, CEO at Global Payments]

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.

[Cameron Bready, CEO at Global Payments]

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.

[Cameron Bready, CEO at Global Payments]

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.

[Cameron Bready, CEO at Global Payments]

Our patent-pending authentication optimization solution is also utilizing agentic capabilities to deliver significant improvements in authorization performance for 3D Secure transactions. Further, agentic commerce is an emerging growth opportunity, and we continue to invest in platform-agnostic modular set of capabilities designed to help merchants participate in new commerce models, regardless of channel, agent, or payment method. We now have multiple agentic commerce pilots in flight with leading AI platforms and some of the world's largest global retailers. We are co-creating new commerce experiences, bringing to bear our deep expertise in payments, fraud, and authentication to allow advancement to happen at pace in a secure, reliable, and scalable way. Our continued innovation and disciplined execution reinforce our confidence in the durability of our business model and our ability to consistently generate sustainable top-line growth, strong cash flow, and attractive long-term shareholder returns. With that, I'll turn it over to Josh.

[Josh Whipple, CFO at Global Payments]

Thanks, Cameron. In the second quarter, we generated adjusted net revenue of $3.16 billion, representing normalized growth of 4%, excluding dispositions. Our results reflect resilient consumer spending trends across our business through the quarter, partially offset by an approximately 100 basis point headwind, primarily related to reduced volumes in our travel sector business from the conflict in the Middle East. This is in line with what we discussed on our first quarter call. Adjusted operating margin for the quarter expanded 70 basis points on a normalized basis, excluding dispositions. The net result was adjusted earnings per share of $3.46, representing an increase of 12%. Turning to our segment results, we are pleased to introduce our three new operating segments, SMB, Enterprise, and Platforms, which reflect our go-forward business. These segments align to the go-to-market structure we implemented at the closing of the Worldpay transaction.

[Josh Whipple, CFO at Global Payments]

In addition to our operating segments, we also have other revenue that includes non-core portfolios and certain relationships that don't align with our segments' go-to-market strategies. We will report each of our operating segments on a contribution margin basis, and we'll also have a corporate category that contains all overhead costs. Our largest operating segment is SMB, which provides payment, software, and related commerce solutions to help small and medium-sized businesses with less than $50 million in annualized volume. In the second quarter, SMB generated adjusted net revenue of $1.51 billion, representing normalized growth of 4%, excluding dispositions, underpinned by 4% volume growth. We saw solid growth in North America in the second quarter, and our enlarged and transformed sales force continued to deliver strong results as we accelerated the rollout of Genius, our new flagship point-of-sale technology platform.

[Josh Whipple, CFO at Global Payments]

New Genius locations grew more than 50% year-over-year, and nearly 25% sequentially compared to the first quarter. We delivered $891 million of adjusted operating income in the SMB segment, representing a contribution margin of 59%. Our Enterprise segment serves large enterprises and multinational clients with more than $50 million in annualized volume. It provides card-present and card-not-present payment processing, and other value-added software and services offerings to support complex payment environments. In the second quarter, Enterprise generated adjusted net revenue of $838 million, representing normalized growth of 7%, despite an approximately 400 basis point headwind attributable to the Middle East conflict. Enterprise volumes grew 4%, highlighting our ability to expand yields based on the strength of our solutions. In addition, card-not-present revenue, which primarily represents global e-commerce, grew low double digits.

[Josh Whipple, CFO at Global Payments]

We delivered $653 million of adjusted operating income in the Enterprise segment, representing a contribution margin of 78%. Our final operating segment is Platforms, which offers payment and commerce solutions through software partners, PayFacs, marketplaces, and other technology-enabled platforms across numerous vertical markets. In the second quarter, Platforms generated adjusted net revenue of $628 million, representing normalized growth of 7%, led by strength in embedded payments, which includes our PayFac and managed PayFac offerings. Platform segment volume grew 10% in the second quarter, reflecting the growing mix of embedded payments within the segment. We delivered $284 million of adjusted operating income in the Platform segment, representing a contribution margin of 45%. We generated adjusted free cash flow of $687 million in the second quarter, representing a conversion rate of adjusted net income to adjusted free cash flow of approximately 75%.

[Josh Whipple, CFO at Global Payments]

This represents sequential improvement as expected. Our free cash flow adjustments declined by more than 70% compared to the first quarter. As a reminder, our free cash flow conversion follows a seasonal pattern and is typically materially higher in the back half of the year relative to the first half. Additionally, we invested $236 million in capital expenditures in the quarter, representing approximately 7% of revenue. In the second quarter, we repurchased approximately 8 million shares for $550 million through our previously announced accelerated share repurchases, as well as open market repurchases. Our balance sheet remains healthy. We ended the second quarter just below 3.5 times net leverage, and our indebtedness is more than 90% fixed rate with a weighted average cost of approximately 4%. Turning now to our full-year outlook.

[Josh Whipple, CFO at Global Payments]

As we discussed on our first quarter earnings call, our prior outlook assumed a normalization of travel activity by the end of the second quarter. However, we continue to see impacts on our travel portfolio, particularly in the Middle East, and the associated revenue headwind has persisted longer than anticipated. Accordingly, we are updating our outlook to reflect the assumption that the impact of the conflict will continue through the remainder of 2026. While the duration and ultimate outcome remain uncertain, this represents the most prudent planning assumption at this time. As a result, we now expect normalized constant currency adjusted net revenue growth of approximately 4% to 5% for the full-year 2026.

[Josh Whipple, CFO at Global Payments]

We continue to expect normalized adjusted operating margin expansion of approximately 150 basis points. We now anticipate adjusted earnings per share of $13.60 to $13.80, representing 11% to 13% growth for the full year, which reflects the flow-through of the travel portfolio impacts to earnings, as well as less FX impact. Given the recent strengthening in the U.S. dollar, we now expect currency exchange rates to have roughly no impact on reported growth for the full year. We continue to expect to realize benefits from our salesforce expansion, ramping of Genius sales, and enterprise clients coming live during the second and third quarters. Also, for adjusted operating margins to expand more meaningfully in the second half of the year as we realize additional integration cost savings.

[Josh Whipple, CFO at Global Payments]

Regarding cash flow, we continue to expect the conversion rate of adjusted net income to adjusted free cash flow to exceed 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, while investing approximately $1 billion in the business, or 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. In summary, the underlying trends across the business demonstrate the durability of our model. The team's focus continues to be on commercial excellence in 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.

[Josh Whipple, CFO at Global Payments]

With that, I'll turn the call back over to Cameron.

[Cameron Bready, CEO at Global Payments]

Thanks, Josh. As you have heard throughout the call, we are executing well and delivering on the initiatives within our control exactly as planned. We're continuing to monitor the conflict in the Middle East, but expect its impact to be modest and transitory, underscoring the diversity of our revenue streams and the power of our scale. We continue to differentiate through feature-rich products, distinctive service and support, and a reputation for delivering outcomes that exceed client expectations. From industry-leading enterprise payment solutions to innovative platforms like Genius, Global Payments is at the forefront of commerce technology. 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. Our global distribution network is another powerful differentiator.

[Cameron Bready, CEO at Global Payments]

The breadth of our reach, combined with deep local expertise, positions us uniquely to help customers expand into new markets and capture growth opportunities around the world. At the same time, we remain focused on disciplined capital deployment and maximizing total shareholder return. We're a proven compounder with durable and diversified revenue streams and substantial free cash flow generation. We're more than halfway to our $2 billion+ 2026 return of capital commitment and remain on track to return $7.5 billion cumulatively by the end of 2027. Overall, the integration execution, operational simplification, innovation investments, and disciplined capital deployment are strengthening the foundation of the company and positioning Global Payments to deliver sustainable growth, expanding margins, and 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 button, 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 one question and one related follow-up today. We will wait one moment to allow the queue to form. Our first question will come from Dan Dolev with Mizuho. You may now unmute your audio and ask your question.

[Dan Dolev, Analyst at Mizuho]

Hey, guys. Can you hear me?

[Cameron Bready, CEO at Global Payments]

Yes, we can. Good morning, Dan.

[Josh Whipple, CFO at Global Payments]

Morning, Dan.

[Dan Dolev, Analyst at Mizuho]

Hey, good morning, Cameron. Good morning, team. Really nice results. Really great to see all the progress on Genius. Looks like you're off to a great start there. Just had a question, Cameron, I think a lot of people are asking. Can you maybe help us unpack some of the assumptions underpinning the new guide? I think a lot of investors want to get some more detail into that. Overall, great job here, and congrats again.

[Cameron Bready, CEO at Global Payments]

Yeah. Thanks, Dan. Maybe I'll start with a high-level sort of overview, and I'll turn it over to Josh to get into a little bit of the detail. Look, I think the right way to think about the guide is we're trying to de-risk the back half for whatever the Middle East conflict may entail in terms of ongoing impact to our travel portfolio. As we said in our Q2 results, we certainly saw a pretty meaningful impact from the conflict. We called out 100 basis point. It was probably a little bit higher than that. We were able to offset some of that impact in Q2. Look, the situation obviously remains volatile and uncertain, and right now our assumption is that it will persist through the balance of the year and will continue to negatively impact the travel portfolio.

[Cameron Bready, CEO at Global Payments]

Look, the environment is slightly better than it was, clearly in the sort of middle of Q2. Certainly, capacity and forward bookings within our travel portfolio, sorry, remain significantly below pre-conflict levels. The capacity that has come back tends to be more short-haul, lower-yielding domestic sort of routes versus the higher-yielding long-haul routes that drive greater levels of revenue for us. Look, I think our guide for the year now is 4% to 5% on a constant currency ex disposition basis. I think that allows for a range of outcomes in the Middle East I think previously we said the back half would be slightly above 5%, now it's probably going to be closer to that 4.5% range. Not to put too fine a point on it. Again, trying to allow for a variety of outcomes as it relates to the conflict.

[Cameron Bready, CEO at Global Payments]

Look, I think this is the prudent approach to take given the uncertainty that exists and the impacts that we continue to see on the travel portfolio versus taking a kind of a quarter-by-quarter view. Certainly, end of day, we still feel good about how the business is positioned for the balance of the year. I think most importantly it doesn't impact our capital return plans for the year because the impact overall, given the size and scale of the business, is relatively modest. Josh, I don't know if you'd add any more details around that.

[Josh Whipple, CFO at Global Payments]

Just a couple other things that I would add, put a finer point on some of the other pieces of it. We do continue to expect margins to expand 150 basis points for the full year, that's primarily driven from the realized Worldpay integration synergies and operating leverage from the model. As Cameron mentioned, we now expect to report EPS growth in that 11% to 13% range, which also takes into consideration updated FX assumptions, just given the recent strengthening of the dollar. As it relates, Dan, more specifically to the second half, we would expect revenue growth to be in that approximately 4.5% range, and we expect 200 basis points of margin expansion with margins right around that 43% range.

[Josh Whipple, CFO at Global Payments]

As it relates to general macro, we've factored in just continuation of the spending trends that we saw in Q2 and a generally stable macro environment.

[Dan Dolev, Analyst at Mizuho]

Great. Well, thanks again, and congrats on a really, really good quarter. Thank you.

[Cameron Bready, CEO at Global Payments]

Thanks, Dan.

[Josh Whipple, CFO at Global Payments]

That's great. Thanks, Dan.

[Operator]

Our next question comes from Bryan Keane with Citigroup. Please go ahead and ask your question.

[Bryan Keane, Analyst at Citigroup]

Hi, good morning. Solid results here. Wanted to ask about yields. I noticed that the normalized revenue is running above volume for Enterprise and a little bit below for Platforms. Just wanted to understand that and maybe what the go forward outlook looks like for those segments. Then in SMB, we're kind of running volume and revenue are at the same levels. I'm just wondering with Genius coming into the mix, does that maybe drive yield higher for that segment? Thanks.

[Cameron Bready, CEO at Global Payments]

Really great questions, Bryan. Why don't I start, and I'll ask Bob maybe to chime in if he had some additional color he'd like to add. Look, as it relates to the enterprise business, as a reminder, it's a mix of card-present, card-not-present volume. I think we called out in our script, card-not-present volumes are kind of growing in that double-digit range. Card-present, given the type of merchants we serve in that space, is generally going to be more GDP-type levels. You blend that together and you get a growth rate that is, on a volume basis, fairly consistent with the overall revenue growth of the business. We do obviously get a little bit of a tailwind from value-added services within the enterprise channel as well.

[Cameron Bready, CEO at Global Payments]

Again, blend it all together, probably revenue growth a little bit higher than overall volume growth when you mix the card-present, card-not-present portions of the portfolio together, with VAS kind of being a tailwind that drives revenue growth a little bit higher. I think in the Platforms business, it's really a mix question. Where we're seeing volume growth, and this is a secular trend, not just a unique trend to Global Payments, is really around the PayFac and managed PayFacs segments of the market, what we characterize as our embedded solution. Volume growth there is strong, around 15%. Volume growth in the more traditional integrated referral channels is going to be less than that. You get a blended volume growth in the business that's in the roughly 10% level.

[Cameron Bready, CEO at Global Payments]

Revenue growth being a little bit lower than that, largely because the yield, the revenue yield that we see in the managed PayFac and PayFac channels is a little bit less than what we see in the more traditional integrated referrals. That's a little bit of a mix story in Platforms, and certainly we're pleased with the strength in volume we're seeing, and obviously the revenue growth will continue to drift up as we move more and more volume to our managed PayFacs solutions over time. Lastly, within the SMB channel, you're exactly right. I think the challenge with Genius is just size relative to the size of the channel. Genius is a relatively modest contributor today.

[Cameron Bready, CEO at Global Payments]

Over time, we would expect Genius to be able to drive better yields, and we actually see that in the data, and some of that we called out on the call this morning. It's just a modest contributor given the scale and size of the total SMB business today. I would continue to expect to see revenue growth in SMB fairly consistent with volume growth in the short term, but over time, obviously, revenue growth will drift up as Genius becomes a more meaningful contributor to revenue over a longer period of time. Bob, I don't know if there's anything you would add.

[Bryan Keane, Analyst at Citigroup]

Great. Thanks for taking the questions.

[Bob Cortopassi, President and COO at Global Payments]

Yeah, real quick, one additional item, Bryan. I think Cameron already highlighted that our expectation is for revenue growth and volume to decouple in a favorable way over a period of time. That's not just anchored to Genius, although certainly we have aspirations for Genius that we think are going to drive material improvements in the growth of the business. It's really about the value-added service portfolio across all three of the segments. Over a period of time, accounting for mix shift and some of the trends that Cameron already highlighted, we would expect to be driving higher front book yields, and over time, higher back book yields by attaching more products and services to our relationships with clients across the size spectrum, whether they're SMB, Platforms, or Enterprise.

[Bryan Keane, Analyst at Citigroup]

Okay, that's helpful. Thanks, Cameron. Thanks, Bob.

[Bob Cortopassi, President and COO at Global Payments]

Thanks, Bryan.

[Cameron Bready, CEO at Global Payments]

Thanks, Bryan.

[Operator]

Our next question comes from Andrew Schmidt with KeyBanc. Please go ahead with your question.

[Andrew Schmidt, Analyst at KeyBanc Capital Markets]

Hi, Cameron, Bob, Josh. Thanks for taking the question this morning. Appreciate all the work on the segment detail here. Really helpful. Two related questions, I'll ask them upfront. Just when we think about segment growth rates, if we just maybe talk about expectations for intermediate term. I know we just walked through some of the yield dynamics, some of the drivers there, but just intermediate term sort of view on those segments would be helpful. Then, specifically within SMB, obviously Genius, a big driver, value-add services, distribution. Maybe we could just drill into that a little bit in terms of the key components in terms of driving revenue growth improvement there. Thanks so much.

[Josh Whipple, CFO at Global Payments]

Yeah. Hey, Andrew. It's Josh. Good question as we think about just the segments more generally. If we start with enterprise, we called out 7% normalized growth in Q2, that obviously reflects some impact from the Middle East, which was about 400 basis points of growth headwind. That business on a normalized basis, you can call it low double digits. I think as you think about the back half of the year, we would see some modest improvement there as we continue to see some of the strong underlying trends around card-not-present. We called out the bookings growth of 10% in the first half of the year, we start to see those conversions of those bookings go live in the back half. We're continuing to see really strong trends there. Platforms, we called out that's normalized growth rate in that 7% range.

[Josh Whipple, CFO at Global Payments]

We expect to see some slight acceleration there. Embedded payments, which includes our PayFac and managed PayFac business, that's about a little over 20% of the overall composition there, and that's growing kind of in that 20% range. We expect to see some acceleration there in the back half. Then SMB, we called out, is about 4% normalized growth. We've seen really strong trends through Genius. We talked about the bookings and the new locations that we added in our prepared remarks, and we continue to see really strong underlying trends with Genius. It's a modest piece of the overall SMB composition. Generally speaking, we're seeing really strong trends with Genius as we continue to see improved adoption. We also really only launched this a little over a year ago, so we're still kind of in the early innings here.

[Josh Whipple, CFO at Global Payments]

Again, as I mentioned, seeing really strong contribution from that.

[Cameron Bready, CEO at Global Payments]

Maybe I'll just add a couple points on that. If I take a bigger step back and kind of look at the three segments sort of specifically, I would say enterprise we would target to be kind of a high single digit, low double-digit grower depending on the quarter and some of the underlying trends, particularly around eCom volumes, et cetera. Seeing really good front book productivity, 10% sales growth kind of in the quarter as we called out. That's generally the target that we would have for that business, X the kind of Middle East headwinds that we're experiencing currently. Platforms, again, to Josh's point, a high single digit grower really led by the embedded solutions, managed PayFac and PayFac capabilities. Obviously, with BaaS become an increasingly important component of revenue growth over time. Then SMB, we'd still target in that mid-single digit range.

[Cameron Bready, CEO at Global Payments]

That's a little bit of a more secular story than anything else. I think as probably everyone on the audience is aware, more and more SMBs are procuring their payment solutions from their software provider. Over time, that's why Genius is such a critical component of our growth story for SMB, is getting good penetration with our own software solutions in restaurant and retail and adjacencies where we think Genius can be relevant. Whereas over time, other verticals will continue to shift towards our platforms business, again, as more and more SMBs look to procure their solutions integrated with their software provider. That's more of a secular trend broadly in the market and why we expect to see kind of SMB at those types of growth rates, again, with Genius becoming a more meaningful contributor over time and ultimately able to drive the growth rate higher.

[Cameron Bready, CEO at Global Payments]

That's going to take some time just given the relative size of Genius today.

[Andrew Schmidt, Analyst at KeyBanc Capital Markets]

Very helpful. Thank you, Cameron. Thank you, Josh. Appreciate it.

[Josh Whipple, CFO at Global Payments]

Thanks.

[Operator]

Our next question comes from Jason Kupferberg with Wells Fargo. Please go ahead with your question.

[Jason Kupferberg, Analyst at Wells Fargo]

Morning, guys. Thanks.

[Cameron Bready, CEO at Global Payments]

Morning

[Jason Kupferberg, Analyst at Wells Fargo]

2.5% growth for the second half of the year. Just curious on cadence there between Q3 and Q4. Just to get a little nerdy on the numbers maybe for a second, I want to talk about the Middle East. Just going back to last quarter, I thought we were talking about a 70-basis point headwind in Q2 and then another 30 basis points from the IRS contract. It sounds like the airlines alone were a little over 100 basis points of headwind in Q2. Just wanted to make sure we have the facts right there. Then should we assume that the 4.5% outlook for the second half assumes that that current run rate of airline headwind stays unchanged?

[Cameron Bready, CEO at Global Payments]

Yeah. Jason, it's Cameron. Maybe I'll start and ask Josh to chime in with some more color as well. To your first question, I wouldn't parse too specifically Q3 and Q4 at this point in time. Obviously, given the drivers of better growth in the back half of the year, I think it's fair to assume that on the margin, Q4 would be a little better than Q3, but I don't think we're talking huge material differences here relative to the back half outlook in totality. As a reminder, those drivers are really a few things. One is just the continued ramping of our sales force from a productivity perspective as well as our new sellers. Two, it's the continued progress that we're seeing with Genius.

[Cameron Bready, CEO at Global Payments]

Obviously, the trends that we've seen in the first half of the year start to contribute more as a revenue matter into the back half of the year on the margin, which is helpful. Third, it's really the boarding and go live and ramping of the enterprise book of business that is what we call signed but not live. We called out on the call that about a third of those went live in the second quarter, so they'll now start to ramp in the back half of the year. Examples are Aldi, Morrisons, Careem, which is a ride-hailing service in the UAE. All those are going to help to drive slightly better outcomes in the back half of the year as those revenues ramp for the business. Hopefully that gives you a little bit of color around the drivers for the back half.

[Cameron Bready, CEO at Global Payments]

I think to your second question, first of all, your memory's very good. We did call out 70 basis points and roughly 30. I think the 70 basis points, as we said in our Q1 call, really sort of presupposed that the Middle East conflict kind of ended more quickly than certainly it hasn't ended yet. It ended up persisting for the entirety of the second quarter, and the impact ended up being slightly more than we anticipated. Closer to that 100 basis points, versus the 70 that we called out in the first quarter. We were largely able to absorb the other things, largely because of better volume. Some of that was driven by the World Cup, that we don't necessarily expect to persist in the back half of the year. We were able to offset some of the impact around that for the second quarter.

[Cameron Bready, CEO at Global Payments]

For the balance of the year, look, as I said earlier, things are getting slightly better, but we still expect a headwind from the Middle East conflict on the travel portfolio. If things get worse, it could drift up to that kind of 100 basis point impact we saw in the second quarter. If not, it'll probably slightly less than that, and I think that's what our guide largely reflects. I think we've given room in the guide for a variety of outcomes around the Middle East conflict. Given the uncertainty, and again, the current instability in the environment, we think that's the prudent approach to take.

[Jason Kupferberg, Analyst at Wells Fargo]

Yep. I totally agree, and that's helpful color. I just wanted to pivot to free cash flow for a second. It's good to see some of those adjustments coming down, and I know we've been talking about an adjusted free cash flow number for next year of $4 billion. Just as we think about trying to translate that to more of a GAAP free cash flow number, based on your sense of how much more the adjustments may come down next year, what might be a reasonable range to think about for a clean GAAP free cash flow number in 2027?

[Josh Whipple, CFO at Global Payments]

Yeah. Look, Jason, we talked about when we announced the transaction that we expected $600 million of one-time cost to match our overall synergies. This year, we're trending, I think, in the first half of integration, we're right around that $300 million mark. We expect about another $100 million. That does include some separation costs in it. You back that out. We would expect to go ahead and see the integration costs come down slowly over time with them primarily front-loaded in the first half of the integration and then tailing off into 2028. Again, we feel comfortable with our free cash flow that we've called out in 2028, our capital returns and deleveraging back down to that three times leverage point.

[Josh Whipple, CFO at Global Payments]

Then as obviously we get closer to 2027, we'll be able to give a better steer with regard to what the outlook looks like for 2027. I'd say right now, we feel very good about getting back to that three times leverage point and returning the capital that we committed to returning when we announced at our Investor Day in September of 2024.

[Cameron Bready, CEO at Global Payments]

Jason, it's Cameron. Let me just add a couple of comments to that. First of all, we are trying to pull forward some of our integration work, but more importantly, our separation work. We spend a lot of time talking about integration. We haven't spent so much time talking about separation, but we are trying to pull forward as much as we can our separation from FIS for Worldpay, in particular, their technology environments. The sooner that we can do that, the sooner we can execute on our own plans without reliance upon coordination through FIS, et cetera. That's not a knock on FIS, by the way. It's just that's what's in the best interest for the business for the long term is trying to move off as quickly as we can. We are accelerating some of that work into 2026, to Josh's earlier point around separation.

[Cameron Bready, CEO at Global Payments]

Those costs will likely be a little bit higher this year. The benefit of that also is it helps to offset the tax gain on the issuer sale. There is some benefit of pulling forward planned one-time expenses associated with integration and separation into this year. As Josh said, over time, naturally, those costs will drift down as we continue to execute on both of those initiatives as we get into 2027 and more so in 2028. I think the most important point is we remain confident in our ability to generate the free cash flow next year that supports the capital return plans that we've articulated and view ourselves very much on track to hit those objectives.

[Jason Kupferberg, Analyst at Wells Fargo]

Thank you. Appreciate it.

[Operator]

Our next question comes from Darrin Peller with Wolfe Research. Please go ahead with your question.

[Darrin Peller, Analyst at Wolfe Research]

Hey. Thanks, guys. Cameron, I want to ask first a question on Genius, and then Josh, I will have a quick follow-up on the free cash. Just more on this year versus going forward. Cameron first, just on the Genius rollout, obviously the checks continue to be very strong, that the demand is there. What expectations do you actually have for it to permeate specifically the SMB segment and to see success with cross-sell into the Worldpay side over the next 12 months. I guess we're looking for a little bit more color on milestones you're looking to achieve that we can watch and see success in.

[Cameron Bready, CEO at Global Payments]

Yeah, I think it's a good question, Darrin. Thanks, and thanks for the commentary as well. We see the same thing in the marketplace, which is why we continue to invest behind the product, the capability, the marketing, the brand, the distribution, et cetera, because we have big ambitions for Genius. Certainly, all of the early results a year in from launch remain very, very positive, particularly as it relates to the sequential growth in new sales and just the receptivity in the market for the product, we're able to deliver. Look, I think as we get through the back half of the year heading into 2027, we owe you more key KPIs around Genius itself.

[Cameron Bready, CEO at Global Payments]

Just where have we gotten to in terms of size, what do we expect the Genius specific growth rates to be as we continue to move forward and invest against the product and solution? It's such a modest contributor today. We haven't really broken out a lot of specificity around Genius in particular, but other than what we're seeing from a front book perspective. As we continue to scale it for the back half of the year and head into 2027, we'll be able to provide you a little bit more color around size, contribution, and where we see it going from a growth rate perspective over time, that I think will help inform the overall expectations around growth for the SMB channel. I would just reflect back on the comment I made earlier.

[Cameron Bready, CEO at Global Payments]

I think it's important to recognize, as this business evolves over the course of the next few years, and this is largely a U.S. commentary, but that's the vast majority of our SMB business. Ultimately, the SMB channel is going to be selling Genius largely in restaurant and retail verticals and some adjacencies where, again, Genius can be relevant. Most everything else we're doing from a vertical perspective will be through our platforms business, again, as more and more SMBs are procuring their payment solutions through their software provider. That's a natural kind of secular trend in the industry, but certainly something we expect to continue to play out in our SMB portfolio and our platforms portfolio over a period of time.

[Cameron Bready, CEO at Global Payments]

As payment and software continue to merge, buying behaviors of SMBs continue to drift towards procuring it through software vendors, ultimately, that's the expectation that you should see in the SMB channel and the platforms business. Continued strong growth. SMB is transitioning from having historically sold standalone payment solutions to selling Genius. Ultimately, whether it's next year or the following, I think effectively 100% of front book sales in our SMB channel will be Genius in the U.S., and the rest of the world will evolve towards that same model over a period of time.

[Darrin Peller, Analyst at Wolfe Research]

Okay. That's really helpful. Josh, just my follow-up was on free cash again. I know you did about $1.2 billion in adjusted free cash, and you need to do about $2 billion in the second half. In terms of also real free cash, we calculate you would need a step function of around $1.7 billion in the second half just to achieve what we think is the conversion. I know you said there's seasonality that drives second half higher, but if you could just walk us through some of the key specifics to drive that materially higher free cash, both on an adjusted and GAAP basis, I think it'd be really helpful just given the strong capital return program we're looking for.

[Josh Whipple, CFO at Global Payments]

Yeah. Look, Darrin, a good question. What I would do is I would point you actually back to the historical trends that we've seen around free cash flow conversion. Historically, it's lower in the first half relative to the second half. I think if you go back and if you look at our free cash flow conversion last year, it was over 100% in the second half of the year. We would expect those trends to go ahead and continue for the second half where we see that acceleration. Look, we've already returned more than half of the capital that we targeted to return in 2026. We're well on our way there. We feel very confident with regard to between dividends and buybacks, that we'll be over that $2 billion mark for the full year.

[Darrin Peller, Analyst at Wolfe Research]

Got it. Thanks, Josh.

[Josh Whipple, CFO at Global Payments]

Thanks, Darrin.

[Operator]

Our next question comes from Adam Frisch with Evercore ISI. Please go ahead with your question.

[Adam Frisch, Analyst at Evercore ISI]

Thanks, guys. Good morning. I just want to do a little bit of housekeeping on revenue. Since FX was neutral, was the delta between nominal and adjusted the $60 million of divestitures? Along those lines, on other revenues was down year-over-year on a normalized basis, which in our math takes the growth rate down obviously across the three segments. Can you just help us understand what sits in the other revenue bucket and when it stops being a drag? Thanks.

[Josh Whipple, CFO at Global Payments]

Yeah, sure. Adam, as it relates to the other revenue, we called this out in our prepared remarks. This represents non-core portfolios and certain relationships that don't align to our segments or go-to-market strategies. What that really is comprised of, it's portfolio partners that are no longer referring us front book relationships and that are no longer actively providing us with new merchant referrals. That's one piece of it. Another piece of it is there are a couple of non-core processing businesses that we acquired through the Worldpay acquisition. That's included in there. Then there's a portfolio where we provided managed services, where the partner has built its own acquiring platform, and they're solely migrating off of us.

[Josh Whipple, CFO at Global Payments]

If you think about just the other revenue, and that's in our disclosure, about 8% in 2025 of our total revenue was other, and we expect that to be in the 6% range in 2026. The reason, Adam, we broke that out is we wanted to go ahead and give better line of sight of what the core business looks like going forward. Those are some of the components that make up the other revenue.

[Cameron Bready, CEO at Global Payments]

Hey, Adam, just to your first question, you're right. The difference year-over-year for Q2 is just going to be dispositions. There's really no meaningful FX to call out. The ex-dispositions number, I think it's a little north of $60 million, $63 million or $65 million in the second quarter is the difference. To just put a finer point on Josh's comment, as we think about the aggregate growth rate's the aggregate growth rate. What we're trying to demonstrate, I think, in the disclosures and the way that we've segmented the business is the future of the business really now sits in enterprise platforms and SMB. There are elements of the business that we are winding down and exiting over a period of time that'll be a drag until they're gone.

[Cameron Bready, CEO at Global Payments]

We did want to at least highlight across the three segments what the ongoing growth rate for the business is, in particular, how we're competing and winning in the market and what the three segments look like, excluding the drag from this other portfolio of activities that we're, in some cases, purposely looking to exit and wind down over a period of time because they don't align with the go-forward strategy for the business. We think the disclosures that we provided help to provide a lot more transparency around that. Obviously, the other revenue will continue to decline as that revenue attrites, and we exit certain relationships over the coming years.

[Adam Frisch, Analyst at Evercore ISI]

Great color. Thank you.

[Cameron Bready, CEO at Global Payments]

Thanks, Adam.

[Operator]

Our next question comes from David Koning with Baird. Please go ahead with your question.

[David Koning, Analyst at Baird]

Yeah. Hey, guys. Thank you. I guess I'm kind of wondering how we see the acceleration picture going forward. You're talking about second half, 4.5%. As we look forward, it would seem the Middle East 1% dissipates. You get Worldpay revenue synergies probably incremental going into next year, and then Genius ramps. Do you feel pretty good today that 2027 will be an accelerating growth year?

[Cameron Bready, CEO at Global Payments]

Yeah, absolutely, David. I think for the reasons you described. Obviously, once we lap the headwinds from the Middle East as we get into Q2 of next year with the acceleration we're seeing around Genius, the front book bookings numbers that we've been able to generate this year all gives us confidence going into next year that we should see an acceleration off of our current expected 4% to 5% constant currency ex disposition guide for 2026, without a doubt. It's a big ship, so obviously, moving revenue a point on a business of this size is a pretty meaningful increment year-over-year. We feel good certainly about the momentum that we'll have exiting the year, given everything that we're executing on heading into 2027.

[David Koning, Analyst at Baird]

Thank you. Just quick follow-up. SMB 4%, was that pretty equal between Worldpay and Global Payments?

[Cameron Bready, CEO at Global Payments]

Yeah, it's really hard now that we've segmented the business and combined the portfolios to really disaggregate between the two portfolios. I would say, and we haven't really talked about it, one of the bright spots in SMB is one of the less bright spots in SMB is the U.K. The U.K. market, I think overall just as a GDP matter, is kind of struggling from a macro standpoint, and certainly we're seeing a little bit of softness in the U.K. market that's more coming from Worldpay just given their presence, particularly in the SMB space there. Look, if I had to try to pinpoint it's probably slightly more weighted to Global than Worldpay on the SMB side.

[Cameron Bready, CEO at Global Payments]

At this stage, given the work we've done to integrate the business, in particular how we've aligned the segments, which has really been on an account-by-account, relationship-by-relationship basis, it's kind of hard now to disaggregate it back to what was pre-merger Heritage Worldpay versus pre-merger Heritage Global Payments.

[David Koning, Analyst at Baird]

Yeah. Thank you.

[Cameron Bready, CEO at Global Payments]

Thanks, David.

[Operator]

Our final question comes from Ramsey El-Assal with Cantor Fitzgerald. Please go ahead with your question.

[Ramsey El-Assal, Analyst at Cantor Fitzgerald]

Hi there. I wanted to ask in the context of the higher customer yields you're seeing on Genius, is there a back book of existing customers on the SMB side that you can convert to Genius? Could that become an important accelerant or growth driver for, I guess, Genius and the SMB segment growth rate?

[Bob Cortopassi, President and COO at Global Payments]

Hi, Ramsey. Thanks for the question. It's Bob. The answer is yes. As we've mentioned a couple of times when this topic has come up, our focus has largely been on converting front-book opportunities into Genius, attaching more product, adding more value around each of those engagements with prospects and clients. There is a back book. The back book of point of sale is largely serviced by our dealer network today. As they're having conversations with their clients, there's opportunistic upgrades that are happening. I think the attractiveness of the new Genius technology that spans both the sleek hardware profile that we've built around the countertop experience, kiosks, digital menu boards, and the new Handhelds, that's really attractive. The incremental functionality that Genius brings to bear, given where they were coming from, is very attractive.

[Bob Cortopassi, President and COO at Global Payments]

We do see a degree of opt-in upgrades as customers are looking for increased functionality and a better experience overall. There's not a mass campaign around backbook conversion, and we haven't put a gun to anybody's head to force them with platform retirements or deprecation sort of expectations. We continue to upgrade the backbook at a measured pace, really on a voluntary basis as customers want to opt in to those new solutions. 100% truly of our focus around Genius adoption is around horizontal, vertical expansion, geographies, making it available in more of our distribution channels, and increasing our sales footprint and sales effectiveness, both in terms of the digital client journey as well as our traditional sales.

[Ramsey El-Assal, Analyst at Cantor Fitzgerald]

Okay. A quick follow-up from me. In enterprise, in the slide presentation, I think you called out 30% growth in cross-sell bookings. I'm just wondering if you could comment a little further on where you're seeing success there, what that means.

[Cameron Bready, CEO at Global Payments]

Yeah. I'll touch on that, Ramsey. Thanks for the question. It's really a commentary around our VAS portfolio. Bob touched on VAS and the importance of VAS as a driver of growth across all three segments. It's particularly important in our enterprise channel, and we've seen really good progress this year, largely through a concerted effort to drive more cross-selling of our value-added services into existing client relationships that we have. We have teams very much focused on net new payment opportunities, but we also have teams now very dedicated to cross-selling value-added services, whether it's Revenue Boost, FraudSight, excuse me, our authentication optimization solutions, et cetera, across our FX capabilities, across our portfolio of clients. We're seeing very good traction there, which is partially driving, obviously, the strong bookings growth that we've been able to articulate for the enterprise business on a year-to-date basis.

[Ramsey El-Assal, Analyst at Cantor Fitzgerald]

Fantastic. Thank you.

[Cameron Bready, CEO at Global Payments]

Thanks, Ramsey.

[Operator]

We have no further questions at this time. This concludes our call. Thank you and have a good day.

Participants

Executives

• Nate Rozof, SVP of Investor Relations
• Cameron Bready, CEO
• Josh Whipple, CFO
• Bob Cortopassi, President and COO

Analysts

• Dan Dolev, Analyst at Mizuho
• Bryan Keane, Analyst at Citigroup
• Andrew Schmidt, Analyst at KeyBanc Capital Markets
• Jason Kupferberg, Analyst at Wells Fargo
• Darrin Peller, Analyst at Wolfe Research
• Adam Frisch, Analyst at Evercore ISI
• David Koning, Analyst at Baird
• Ramsey El-Assal, Analyst at Cantor Fitzgerald