Ladies and gentlemen, thank you for standing by, and welcome to the Global Payments Second Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will open the lines for questions and answers. [Operator instructions] At this time, I would like to turn the conference over to your host, Senior Vice President, Investor Relations, Winnie Smith. Please go ahead.

Good morning and welcome to Global Payments ' Second Quarter 2021 conference call. Before we begin, I'd like to remind you that some of the comments made by management during today's conference call contain forward-looking statements about expected operating and financial results. These statements are subject to risks, uncertainties, and other factors, including the impact of COVID-19 and economic conditions on our future operations, that could cause actual results to differ materially from our expectation. Certain risk factors inherent in our business are set forth in filings with the SEC, including our most recent 10-K and subsequent filing. We caution you not to place undue reliance on these statements. Forward-looking statements during this call speak only as of the date of this call, and we undertake no obligation to update that. Some of the comments made refer to non - GAAP financial measures, such as adjusted net revenue, adjusted operating margin, and adjusted earnings per share, which we believe are more reflective of our ongoing performance. For a full reconciliation of these and other non-GAAP financial measures to the most comparable GAAP measure in accordance with SEC regulations, please see our press release furnished as an exhibit to our 8-K filed this morning. And our trended financial highlights, both of which are available in the Investor Relations area of our website at www.globalpayments.com. Joining me on the call are Jeff Sloan, CEO, Cameron Bready, President and COO, and Paul Todd, Senior Executive Vice President and CFO. Now, I'll turn the call over to Jeff.

Thanks, Winnie. We delivered a terrific second quarter with each of adjusted net revenue, adjusted operating margin, and adjusted earnings per share outperforming our targets. We are most pleased by the compounded rates of growth that we realized in the quarter and are now forecasting for the full year compared to pre-pandemic 2019 levels. While we've not clawed back all of the impact of COVID-19 relative to our pre-pandemic expectations, we have made substantial progress and are far down that path. As we have throughout the pandemic, we continue to expand our competitive mode through leading strategic partnerships. First, we are excited to have agreed with our partners at Caixa Bank to acquire Bankia's payments businesses in Spain. Specifically, we will enhance our position in one of the most attractive acquiring markets in Europe, with the addition of Bankia's merchant business, consisting of roughly 100,000 customers in the region. This pending acquisition further enhances our distinctive distribution and will allow us to delight Bankia's customers with our market-leading technologies, providing us with significant cross-selling opportunities, and deepening our presence with one of the leading institutions in Europe. This agreement follows our purchase of an additional 29 % stake in our commercial joint venture last October which increased Global Payments' ownership to 80%. Additionally, our MoneyToPay joint venture has agreed to purchase Bankia's prepaid business as we continue to execute on our strategy to expand and diversify our NetSpend business into international markets. We expect both of these transactions to close in the fourth quarter. Second, we are delighted to announce that we have entered into a new collaboration with Amazon Web Services, AWS, for unique distribution and cutting-edge technologies at Netspend to substantially increase our [Indiscernible] markets and accelerate our strategy across our three pillars of digitization, internationalization, and B2B…

Thanks Jeff. Our financial performance in the second quarter of 2021 demonstrated meaningful sequential momentum and exceeded our expectations. These results highlight outstanding execution on our differentiated strategy of technology-enabled. Specifically, we delivered adjusted net revenue of 1.94 billion representing 28% growth compared to the prior year, and 10% growth compared to 2019. Adjusted operating margin for the second quarter was 41.8%, a 480 basis point improvement from the prior year, despite the return of certain costs we temporarily reduced at the onset of the pandemic. The net result was adjusted earnings per share of $2.04 for the quarter, an increase of 56% compared to the prior year, and a 35% improvement from the same period in 2019. Taking a closer look at our performance by segment, Merchant Solutions achieved adjusted net revenue of 1.29 billion for the second quarter, a 42% improvement from the prior year. We delivered an adjusted operating margin of 48.5% in this segment, an increase of 750 basis points from the same period in 2020, as we continue to benefit from the recovery and our improving technology-enabled business mix. We're pleased that our Acquiring businesses globally, generated 46% adjusted net revenue growth compared to the second quarter of 2020, led by strength in the U.S. Notably, our U.S. Acquiring business, which includes our integrated and relationship led channels, grew approximately 25% compared to the same period in 2019. These results were led by our Integrated business, which produced a stellar quarter, generating a 53% adjusted net revenue improvement compared to 2020, and 35% growth relative to 2019. As for our own software businesses in the U.S., we are delighted with the overall portfolio delivered growth of roughly 30% compared to the prior year, and achieved solid sequential improvement relative to the first quarter. As Jeff…

Thanks, Paul. As we look ahead to next month, it is worth reflecting on how much we've evolved our business. Throughout much of the last eight years, we have witnessed a multitude of new market entrants, newbie public companies, shifting modes of competition, and macroeconomic cycles too numerous to count. Some said a number of times over the near last decade that our best days were behind us. The fact say quite the opposite. In fact, we have delivered the greatest value creation in our history during that period, and we believe we are placed today to continue our track record of our performance. The second quarter in our raised guidance today, are the most recent examples. Our rates of revenue growth and bookings trends underscore sustained share gains despite managing through an unprecedented crisis. One proof-point, we now expect our U.S. payments business to roughly reach its original growth target for 2021 based on 2019 goals. In short, we grew right through the pandemic. More to follow in September. The reasons for our success are straightforward. Our distinctive strategies, the technology investments we have made over many years, the support of our market-leading partners and customers, our execution consistency, and the quality of our team members have allowed us to significantly expand our competitive [Indiscernible]. As painful as it has been, COVID-19 has reaffirmed the digitization of our businesses. We believe that the best is yet to come. You can judge that for yourselves next month. Winnie?

Before we begin our question and answer session, I'd like to ask everyone to limit their questions to 1 with 1 follow-up to accommodate everyone in the queue. Thank you. Operator, we will now go to question.

If you would like to ask a question, please [Operator instructions]. And your first question is from Vasu Govil with KBW.

Hi, thanks for taking my question. Great results here across the board. So maybe to start off, just looking at the merchant segment, revenues relative to [Indiscernible] 2019, I think they're roughly 12% higher. Could you talk about what's driving that? Are you seeing a lot of pent-up demand among consumers that's driving that type of growth? I'm just trying to gauge whether, as we go forward, this type of growth rate could accelerate going forward if there's a lot of pent-up demand?

Hey, good morning, Vasu. Thanks for the comments. It's Cameron. I'll kick it off and maybe ask Paul to provide a little bit of color as well. I would say it's a few things. And I would start with the efficacy of our strategy. Obviously, the technology-enabled businesses that we've been investing in for the last 7, 8 plus years now, really continue to lead the way for growth across the business, including our integrated business which grew 53% in the quarter, and up 35% versus 2019 levels. In addition, our e-comm and Omni business grew well over 20% this quarter, again, topping performance from last year where it also grew in the high teens level. So again, relative to 2019, continuing to see very strong growth across the e-com and omnichannel s of the business. For me, it's really the strategy that we've been deploying that's driving growth. And I think we continue to see a lot of tailwinds in those businesses looking forward through the balance of 2021, and heading into 2022, and then beyond. Paul I don't know if you want to have any more specific comments on that.

Yeah, I would just say, as we said in the press release, we're pleased so far with what we've seen in July as well as it relates to continuing improvement relative to 2019 across the merchant segment. The only other thing would be, we worked see the growth in vertical markets when you're talking about just the segment, the 30% improvement year-over-year in the vertical markets business. So yes, I think that covers it.

Got it. And just for my follow-up, I wanted to ask the capital allocation question. I saw that you guys raised the share buybacks. Any color on whether you're expecting to do more buybacks versus M&A? And on the M&A front, I know, historically, you've been focused on doing accretive deals. But given where evaluation for FinTech's are, that seems to be becoming harder and harder. So just curious on your thoughts. Would you be open to doing something that's revenue growth accretive, but perhaps earnings dilutive at this point, if it makes them for the long term. And if yes, what are some of the areas that, possibly, it might make sense for you to do?

This is Paul and I'll cover the share repurchase, and then, maybe, turn it over to Jeff on the M&A side. Yes, we did resize the share repurchase authorization due to the fact that we had made significant purchases since our last authorization and we've said all along, our preference is to allocate capital to M&A. When an M&A opportunity is not in front of us, we will deploy capital on share repurchasing. We were very pleased to do so this quarter, much like we did last quarter. We do not have share repurchases in the guide as a go-forward matter for the back half of the year. But we are always opportunistic as it relates to share repurchases. We want to make sure we have the capacity to execute if we choose to do that. Jeff, you want to talk about the M&A side?

Yeah. Thanks, Paul. About the second part of your second question, we actually have been very active on the M&A front in the last six months, I think with today's announcements with Bankia, we committed about 1.3 billion, U.S. to M&A in the last 6 months while committing to about 1.5 billion on the buybacks. As we said in the press release, I think we've been very balanced between the two. As we also said, in the last quarter, Zego is a technology and software-driven business, very consistent with our strategy, particularly given the size of the real estate target addressable market. Yet notwithstanding that, going back to the premise of your question, no, that deal was not [Indiscernible] and I think we announced it was immediately [Indiscernible] though there was really no discernible impact on earnings. But nonetheless, it was not [Indiscernible]. We look at many things, so it's hard to say what we would or wouldn't do in the abstract, but I would say is, since we've been running the Company in the last eight years, we've not done a dilutive deal. I don't expect us to. That's not the mindset we have as shareholders, and owners, and managers of the business, so I really don't expect our strategy to change.

Got it. Thank you very much for the color.

Thank you.

Your next question is from Ashwin Shirvaikar with Citi.

Hey, Jeff, Cameron, and Paul. Congratulations on the good results. I was, kind of hoping, coming out with the pandemic or at least, sort of lapping pandemic impact, if you can provide a breakdown of the expectations of tech-enabled businesses, 3Q versus 4Q, what do you see? What part of the recovery is volume [Indiscernible] that's yet to come that benefits forward numbers? Education, events, things like that. Some quantification would be great on 3Q versus 4Q.

Yeah, Ashwin. I'll start off, and maybe Cameron might want to add something as it relates to the merchant. But largely speaking, we're expecting roughly 3Q and 4Q to be largely similar across our businesses. As we had said at the beginning of the year, we had expected the back half of the year to return to a much more normal kind of state. And so, clearly, there are some re-openings that will continue to benefit, kind of re-fueling the 4Q as countries around the world re-open from some of the closures. You're exactly right, Ashwin, as it relates to some of our vertical markets businesses. As I've just commented, we're very pleased with the growth we saw in 2Q, but we would see more meaningful growth on those businesses in the back half of the year as we have more reopening and more tailwind impacts as it relates to those businesses. Yeah, those would be the dynamics between Q2, Q3 to Q4 certainly in merchants, and there wouldn't be anything I would necessarily call out across the other 2 businesses. Actually, very pleased to raise the revenue guide on our issuer business; low single digits to low to mid-single-digit as it talks about kind of improving fundamentals in the back half of the year there, and pretty static stages as it relates to our business and consumer once kind of stimulus impact has been netted out of the first half and going into the back half. Cameron, do you have anything to add?

No, I think that covers it pretty well, actually. I would only add just a couple of points. One is, across the technology-enabled businesses, as I mentioned previously, going to the first part of your question, we're continuing to see very strong momentum in those businesses. As Paul highlighted, July, sequentially, is better than June, as a trend matter, so I think we feel good about how things are continuing to progress, and those businesses are poised to continue to see strength in the back half of the year. If you just look at the overall guide for the Merchant segment, that roughly 20% growth in 2021 versus 2020, that back couple of quarters going to have to be around that same level to make the averages work for the whole year. So that gives you a sense as to how the business is performing, again, against tougher comps in Q3 and Q4 than we certainly faced in the second quarter. So I think that should give you a little bit of a sense as to the momentum that we have in those businesses. To Paul's point around the vertical market businesses in particular, obviously, schools. Once we get back into obviously a normal school environment, or hopefully quasi-normal school environment. Here in August and September, that businesses, in particular, is poised to see a rebound in the back half of the year, as well as Active. Active has seen very strong booking trends. Many of those events are occurring in the back half of 2021. I think we feel very good about how that business is poised to recover. And again, AdvancedMD and TouchNet have continued to grow right through the pandemic. Obviously, a double-digit pace throughout 2020 and 2021. Those businesses are obviously in a very healthy position overall, but getting a nice tailwind from ACTIVE and schools, in particular in the back half of the year, will help the vertical market business continue to recover as an overall matter.

That's all great to hear. The second thing I had was with regards to AWS, obviously great to see the expansion of what you're doing with AWS. On the Asia business, any update and any metrics you can provide that can be useful for investors and markers of the progress you are making on that?

Yeah, Ashwin, it's Jeff. I'll go ahead and answer that. Let me first start with Netspend [Indiscernible] our new announcement today. It follows a very similar format the issuer announcement almost exactly a year ago today, but the one thing I will point out is that -- and that's been that there's primarily a focus on our part and Amazon's part on B2B distribution. And I'd say in particular on program management with the scale that we have directed at Neobanks, FinTech and Start-ups. While it is a similar template, it's a very targeted initiative, very much focused on B2B. And obviously, that's something, on September 8th at our Virtual Investor Day, that we'll be talking a lot about. In terms of your question on how we're doing on the issuer side. Look, we're really pleased. We disclosed again yesterday, as we have for, really, the last year-plus, what our LOI pipeline looks like outside of Amazon, then with Amazon. I think what we said today is, we have sent 20 about letters of intent with our colleagues over at AWS, and that's for the whole spectrum about potential issuers. Again, including neobanks, fintechs, and start-ups, as well as traditional financial institutions. And to give an update there, 1 we've singled out in Asia is in testing already and is live on a beta basis, and we expect to be fully live by the end of this calendar year. And that, to give you a sense of progress, Ashwin, that 20 is up from 4 at the end of calendar 2020. So we've quintupled the number of LOIs that we have with neobanks, fintechs, start-ups, and financial institutions AWS really at a 6 through the second quarter, so kind of on a 6-month basis. We couldn't be more pleased and decisive doing more business with AWS. now in the form of Netspend. Should be a recognition, not just internally, but externally, of how happy we are with how things are progressing.

Thanks. We'll look for the update at the Investor Day.

Thank you.

Your next question is from David Togut with Evercore ISI.

Thank you. Good morning, Jeff, Cameron, and Paul. Your merchant results really underscore the strength in the credit card business, with credit really roaring back in Q2, closing the gap with debit, and debit strength fairly was kind of hallmark of COVID. As you look forward, do you think strengthened credit is really here to stay for the next year-plus?

Yeah, David, good morning. It's Cameron. I'll kick-off, and I'll ask Jeff and Paul to the chime in if they have anything they'd like to add. I think the short answer to your question is yes. I think credit card account growth is as high as it's been since 2010. And obviously, on the heels of the pandemic in a more normal operating environment, we clearly see credit outperforming, to your point, debit clearly outperformed in the midst of the pandemic and by the way, a lot of that was prepaid debit, as stimulus was funded on those types of accounts. So a lot of the debit growth was prepaid. But certainly coming out of the pandemic, getting back to a normal operating environment, we would expect credit to drive growth and really outperform. And I think we see a lot of tailwinds, particularly for our merchant business, as a result of that, heading in the back half of 2021 into 2022, as a result of that. And then of course we see those same trends in our issuer business. I'll let Paul maybe talk a little bit on the metrics that we're seeing there. But I'll tell you overall, we feel good about the growth in credit. And obviously as we've talked about throughout the pandemic, our book in the merchant side is more skewed towards credit. So that obviously provides a nice tailwind for the merchant business through the coming years. Paul, you want to touch on the issuer business?

Yeah. As Cameron said, we did have good metrics as it relates to account growth on our issuing business. We also saw very strong transactional growth in the issuing business as well, commensurate with the [Indiscernible] -- some of the numbers that you saw on a credit there. So yeah, we're seeing very strong credit dynamics in that issuing business, which I think underscores your question and also Cameron's commentary on it.

Yeah. I would just add if you look at our merchant -- our pure merchant businesses globally, as Paul highlighted in his script, they grew 46% in the second quarter. And I think that's versus worldwide credit growth, and Visa of roughly 35%. So we're seeing, again, really nice tailwinds. I think it really is a result of our differentiated technology-enabled strategy, outsized growth relative to where we see the market overall. So those trends are very positive and obviously it's something that gives us a lot of confidence in the updated guide that we provided this morning.

I appreciate that. Just as a follow-up, Jeff, you really underscored GPM's differentiation in your opening remarks. I'm curious what you think about PayPal's new pricing model at physical point-of-sale credit and debit card transactions with the rollout of Zettle pay. Do you see that being a significant competitive threat to GPN, or is PayPal too small at the physical POS?

Yes, David, great question. Let me just start by saying PayPal is a good partner of ours. As we've said before, on both the TSYS side and the Global side, really around the world. So we've got a lot of respect for PayPal. We think they are a terrific Company. As it relates specifically the i Zettle and their physical point of sale. i Zettle 's been in Europe for quite some time, David. In fact when PayPal was the deal, I think it was mostly all European now they've announced as you're implying some migration in the U.S.. Our business is in Europe, let's just use the U.K. and London as one specific example. iZettle's been here for some time. Our business has outperformed for many years throughout that period, both pre-Paypal acquiring, i Zettle and POS. As it relates to the U.S. market, look that market's today, it was competitive today, it was competitive yesterday. It's going to be even more competitive tomorrow and it is ratherly pointed out our growth in our U.S. business, just around the same growth as our worldwide acquiring business around 46%. And it compares to Visa's and MasterCard's worldwide growth of 35% for Visa and 33% for MasterCard. Whether iZettle was in Europe or iZettle was in North America over the last number of years, certainly hasn't put anything like a dent in terms of our growth. And I think we will be talking about it next month at our Virtual Investor Conference, is the resilience of our business, our market share gains, some of that as you rightly pointed out is in our prepared remarks. But notwithstanding the coming and going of many new smart competitors, our business has been resilient, pre-pandemic, and post, and will take you through the math and why we think that's going to [Indiscernible]. Listen, great Company, but at the end of the day, I don't think that [Indiscernible] our vision of our strategy one iota.

And David, it's Cameron, just another point to add on top of that, if you look at growth in accounts, and our point-of-sale business in North America in the second quarter, it was up a 100%. So not withstanding a competitive market across the point-of-sale distribution landscape, we continue to see great traction with our point-of-sale solutions, particularly in restaurant, retail, and obviously across the vital platform. So again, I think we feel very good about how our point-of-sale system is stacked up to compete in the market today, and the growth we're seeing.

Understood. Congrats on the strong results.

Thanks, David.

Your next question is from David Koning with Baird.

Yeah. Hey, guys. Congrats. I guess my first question -- when we think about normalizing over time, we would normally think 2022 merchant would be a 130% to 135% of '19. And I guess I'm wondering A, is that still possible? You had a nice trajectory and maybe if you could bucket, what are the parts of the business that still have a lot of room to come back? What have some room to come back and what are already on -- what percent are already on good traction? Because I guess, if we know there's a lot to still come back, we could get to that 130 to 135. So I guess all those are the question [Indiscernible] recovered.

Yeah, David, it's Cameron. Maybe I'll kick off and ask Paul to fill in some of the more explicit details. But if I step back and think about where we are today. If you look at our pure acquiring businesses globally, they were up roughly 19% in the second quarter versus 2019 levels. In the U.S., that number was 25%. So again, I think we feel from a pure acquiring standpoint, we're on a pretty good trajectory. Now, what still needs to come back, to get to '22, a more normalized rate of growth relative to 2019, or, to say it differently, where we would have been, absent the pandemic. Well, Europe is growing relative to 2019, but it's certainly growing at a pace lower than that which we've seen in the U.S. market. So Europe grew somewhere in the high single-digits, versus 2019 for the second quarter. So we still need a little more tailwinds from Europe fully recovering. As you know, the U.K. didn't open up until mid-July, so as we get to the back half of the year, we're expecting to see a little more tailwind in Europe, as it relates to growth, and particularly relative to 2019 trends. And then, of course, Asia, which is a small part of the business. But it's still lagging relative to 2019 level, largely because many markets continue to struggle with the pandemic, remain closed, and of course, cross-border activity in Asia is very depressed and continues to be depressed because of the pandemic. As we think about 2022, the U.S. is on a pretty good trajectory to get back to something reasonably close to what we would have been absent of pandemic, given the outsized growth and the momentum we have in that business. We need Europe to continue to improve as the lockdowns and then markets begin to reopen, and you see more cross-border travel pick up. And then I'd say the same thing's true for Asia, just given where it's relative to the pandemic. I think the vertical markets are well-poised to get back to reasonable levels compared to 2019. As we continue to see, again a recovery in schools and a recovery in Active in the back half of the year as those markets in particular reopen. Paul, I don't know if you'd add anything more to that, but I think that gives a pretty good overview in the market and business.

Yeah, I think it sums it up. Good.

I think I'll also just add on to issuer -- and Paul can comment here too, Dave. But we produced a fantastic quarte r -- this quarter in issuer, but I would say in particular the non-U.S. businesses echo a lot of what Cameron said. We only recently, which is to say really the second quarter heading into July and continuing in July. We've only recently seen a re-opening for issuer purposes of a lot of markets outside the U.S., that will be a favorable comparison Dave, to answer your questions for the first half of next year. And I'll add to that commercial part. While commercial part, not surprisingly, is up versus '20, it's really not up versus '19. I think it's a pretty good picture, Dave. Adding it to '22 on the issuer side as well, because if you have those two elements of border re-opening outside the U.S. and commercial card relative to '19 starting normalized, that should be favorable elements for the Issuer business. And lastly, I will say, in Issuer, we described against [Indiscernible] Ashwin, but those yellow eyes start to kick in, we start getting into the back half of 2022. We obviously also had announced [Indiscernible] probably about a year and a half ago. Now, I think we set the time at the back half of the 2022 exam which we continue to believe. I think you're going to get similar comments that Cameron made on Merchant. You are going to get a nice tailwind heading into 2022 on Issuer as well.

Thanks. Yeah. Great momentum with a lot of rooms to [Indiscernible] though, which is great to hear it. I guess my follow-up, Zego, it looks like you paid almost a billion dollars for acquisitions in Q2. I know you said 50 million [Indiscernible] in the back half, which a 100 million, I guess, from run rate, so 10 times revenue. Is that just growing at an astronomical pace?

Yeah. Hey, Dave, it's Jeff, so I think you're missing one of our assets in there. [Indiscernible] also announced the acquisition of PayOne's [Indiscernible] business in Worldline in the second quarter. And then obviously today we announced Bankia as well. So I think what we said was that the purchase price for Zego, just to get the math right, was about 930 million. There's also about a 100 million to tax asset. So that nets you down about 825 million, Dave. So relative to the 100 million we do a year is about 8 times revenue. Now, having said that, at the end of the day, we do think it's a great business. I mean, Paul alluded to this in his commentary. So if you think about a surrogate rule of 40, growth goes really beyond that. If you think about what we guided to you, when we did the deal at the time, kind of a double-digit organic revenue growth rate with margins into the 20s. That's how you get to the rule of 40 number. So we think very attractive [Indiscernible] basis. We view a date closer to eight times rather than the notional 10 you mentioned.

Got you. Great. Well hey, thanks guys, nice job.

Thanks, Dave.

Thanks, Dave.

Your next question is from James Faucette with Global Payments.

I'm actually with Morgan Stanley.

[Indiscernible] congratulate you on your respective business.

Yeah. Just so everybody's clear. I wanted to just follow up on the acquisition commentary and there has been obviously inflation and valuations and as Jeff said, is still looking for things to be accretive, etc. At least in a reasonable timeframe. Is that causing you to look further afield or look for acquisitions that are maybe more tangential to what you have done historically? And if so, where are you seeing opportunities through today? I think the ones that you've announced thus far, Zego and PayOne as well as Bankia today are quite interesting, but just want to understand more of the mindset.

Yeah, James, it's Jeff. No, we're not -- the answer to your question. No, we're not looking further afield. We've got plenty of BlueSky in front of us and our existing M&A, strategy. We expand that these records set a billion three including today's Bankia announcements on M&A in the last 6 months. We certainly do look at -- and the economics, obviously, worked out just fine in response to Dave 's question too, just a second ago. I think we've got a plenty deep pipeline and certainly more for us to do. We do balance, though, our view of M&A with where the capital markets are, and what our view of intrinsic value, and our share price, and everything else. So we have bought back about 1.5 billion stock, obviously not mutually exclusive. We get both. At the same time the 1.5 billion and 1.3 billion. And we just re-up the authorization back to 1.5 billion. That's not in our guidance. Obviously, we balance our view as to where we would like to be in terms of growth and everything else. But I think it's important that we consider that we think we're in a pretty healthy position heading into 2022 and the rest of '21 without more deals, so we think we're where we want to be. As a strategy matter, I think we feel really much the same because there's plenty of stuff that we look at. But I can't think of the deal that we didn't do, changed because we said, "Gee, it's too expensive," or, "it's not accretive enough," or those other things. If we can't add more value with the strategic buyer, the thing that we're doing in terms of [Indiscernible] earnings, then we're just not going to do it. I don't think it's a function of valuation it's much the function of our view of where we are in strategy and our view where the market is.

That's a great color. I appreciate it, Jeff. And going back to current market conditions. Cameron gave really good color on -- in terms of the different geographies, et cetera. I am just wondering if you're seeing any fluctuations in activity related to the Delta variant, and how much you can isolate, maybe to whether those variances, if there are any, are coming from regulation and policy versus just underlying consumer behavior. Hopefully, that makes sense, but I'm trying to figure out where, how much policy may be impacting spending trends versus just the Delta variant itself?

Yeah, Dave, it's Cameron, and I'll comment on that. As you think about the comments we made earlier as it relates to July, we did see sequential improvement in July, relative to June, so I think we still feel very good about the momentum of the recovery overall. To be very clear, I don't think we've seen any real impact yet from the Delta variant. Obviously, we're monitoring it very closely and it's a fluid environment, but I would say sitting here today, based on data that we have through the end of last week, the volume trends, again for July, were an improvement over what we saw in June sequentially. Most of the markets around the globe in which we operate, and particularly now in markets where we're seeing a reopening that's more recent. The U.K., Canada, for example. Obviously, I think they are poised to see stronger volume recoveries as we enter the back half of the year. Look, I don't think there's a lot of appetite for more widespread lockdowns, particularly here in the U.S. as it relates to the Delta variant. Markets outside of the U.S. may react differently, but again, for our business, those are going to be relatively small impacts, we're most focused on the U.S. as the 75% of our business, and I'd say, thus far, we haven't really seen any discernible impact, but it is something that we continue to monitor very closely through the balance of the year.

And as to what Cameron said, James, it's Jeff, is that if you, at the end of the day said that the non-U.S. markets, which as Cameron alluded to, about 25% of the Company. And then also the response to David Koning's question. If those reached the level of recovery that the U.S. market saw, that's probably a couple of hundred basis points of incremental revenue growth over time that you could see. And those, as Cameron described, were not there, really, in the second quarter. I mentioned the same thing, really, on the issuer side. We'll see how that plays out over time.

Thank you very much.

Thank you.

Thanks, James.

Your next question is from Tien-Tsin Huang with JP Morgan.

Just a quick clarification. Just the 2 point of revenue raise. Can you break that up between obviously, the quarter outside, the deals, even just a cyclical piece. I just want to make sure I covered that. And then on Bankia, just I'm guessing this is the same playbook as Taisha (ph), and I know that did very, very well for you. Just curious if there's any difference philosophically there. Thanks.

Yeah. Maybe I'll take the first one, and then turn it over to Jeff for the second one. If you think about the -- Cameron for the second one. If you think about the guidance raise, obviously, we commented on to close of Zego. We said that's roughly $50 million as it relates to the back half of the year, so that's the first section of the guidance raise. And then, the second section would be both the overperformance in Q2, as well as continued better performance in the back half which underpinned the guidance raise as it relates to the segments on the issuing side, as well as merchant. So those would be the two components. There's a little bit of FX headwind relative to the back half versus the first half on a realized basis. We also don't have the same kind of stimulus impact in the first half versus the second half. But those would be the two components. the Zego of roughly 50 million and then the remaining piece of that is the performance.

And Tien-Tsin, it's Cameron, good morning. As it relates to Bankia, I think the short answer to your question is yeah. It's the exact same playbook that we've executed with Taisha (ph) and our Filmortia (ph) joint venture over the last decade-plus now. Obviously, we continue to be very excited about the Spanish market. It is one of the most attractive markets in Europe. Frankly, it's one of the most attractive markets globally. Just to give you a little bit of color, that market grew the domestic volume in Spain -- as a volume matter grew 30% in the second quarter and 15% over 2019. Again, despite continued restrictions throughout the country as a result of the pandemic. The underlying secular trends in Spain remain incredibly attractive, which makes the timing for the Bankia acquisition particularly attractive for us as well. Bankia consists of about 100,000 predominantly small and medium-size merchants, although they do venture more into the large category as well. But I think the interesting thing about the Bankia portfolio is it is more skewed towards domestic volume. So again, I think it's a really attractive addition to our [Indiscernible] and joint venture that's going to allow us again to further expand distribution in this very attractive market and gives great cross-sell opportunities for the differentiated technology solutions we have in the [Indiscernible] joint venture today. We're delighted to be able to announce that this morning and a nice addition to our European business.

Agreed. Thanks.

Thanks, Tien.

Your last question is from Ramsey El-Assal with Barclays.

Hi guys. This is Ben on for Ramsey. Thanks so much for taking the question. I wanted to follow up on something you mentioned at the beginning of the call on the Issuer business. I think you mentioned some of the newer potential deals are with some kind of newer entrant FinTechs. I'm just wondering, are those the kind of deals that, as you've discussed before, you perhaps might not have gotten without the AWS partnership, and what sort of capabilities do they require, that maybe different from your traditional issuing business?

Yeah, it's Jeff. So the answer is, yes. I think the key thesis behind the partnership [Indiscernible], just almost a year ago to the day now, was first, really just to modernize the architecture and technology. And as we've said in response to Ashwin's question, that's actually gone very well. And the second piece was the distribution. Of those 20 LOI's that we have pending with AWS, a number of those are with Neobanks, FinTech, Start-ups, and you're right, I don't think we would have been -- we would not be in a position we are today I think, without that. And I'd also say more broadly if you back up. Just our general shift from Cloud-enabled technologies initially into Cloud-native technologies, it's just selling very well. One of the institutions of all sizes, including Neobanks, FinTech and Startups, and the like. Secondly, I'd say, and you saw our announcement on the expansion of our AWS relationship today into Netspend. But whether it's at the issuing business or at the Netspend business, we're very focused on program management. To answer your 2nd question, I think we need to be more vocal on program management. I think historically, most of the revenue, the growth of debt in the issuing business is really with financial institutions and generally, inside of the U.S. and North America and which Europe with larger financial institution. Key focal point of ours pre and now of course post AWS, both with Netspend as well as Issuer is on program management. That's a key part of our relationship with Evercore ISI going forward on the new partnership we announced today. I'd look for us to do more there and we'll share more details with you next month on 09/08.

Great. And if I could ask just one quick follow-up on a Netspend as we're discussing it. Any update on the MoneyToPay business and any potential synergies between that Netspend or how that fits under the AWS partnership?

Yes. It's Jeff. I'll go ahead and start and Cameron can now join, too. We work at [Indiscernible] our strategy is in Netspend versus ongoing digitalization. And I think Netspend had pre-pandemic and pretty good digital footprint and not surprisen many one this phone, the pandemic has really accelerated that. And I would say in a high 20s, 30% of interactions today with consumers with Netspend are done online, meaning [Indiscernible] spending with the card online. And we certainly expect AWS, of course, to continue to accelerate, that given their footprint. The second is why, as described in response to your first question, which is really a B2B and program management, but I'd be remiss if I didn't mention it all. This includes earn way gash to access pay cards in our tech solutions. Those are all obviously also in play on B2B. And a third leg of the stool is really what you get [Indiscernible] which is internationalization. So a piece of that is MoneyToPay. The second piece we announced today with Bankia because it also includes a prepaid business, a debit business as well. And the short answer to your question is, it's gone really well. Our thesis on internationalization is given that who Global Payments is, the three countries we operate in, particularly on the acquiring side, as well as the relationships we have in those markets, a great example is continental Europe with Spain, it allows us uniquely to expand what was really a U.S. only business which it is today for Netspend and for some of the competitors and really bringing it overseas. And now we're approaching 9 or 10 months to post the initial closing of the MoneyToPay JV with Caixa, I can tell you that we're running ahead of what we expected. I think our thesis that we can bring our management, our products, our technologies to those markets has rung true. The thesis of those markets are under-penetrated relative to U.S. is also true. We have seen some benefit there on government spending too, as we all emerge from the pandemic, not just here in the U.S., but overseas. It's really working out better than we hoped and really pleased to be where we are especially with the partners that we have.

The one thing I would add to that the AWS partnership on the Netspend side, makes it easier for us to obviously bring our technology capabilities to markets like Spain, where we've been delighted to Jeff's point with the performance of MoneyToPay thus far. And obviously we look forward to adding the Bankia prepaid business into that business for us as well. As we move forward in time, with AWS it makes it easier to bring technology product capability to markets outside of the U.S. as we continue the internationalization strategy for the Netspend business.

Okay. Great. Well, thank so much for taking the questions and looking forward to seeing you next month.

Thanks, [Indiscernible] (ph). On behalf of Global Payments. Thank you for joining us on the call this morning.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.