Ladies and gentlemen, thank you for standing by and welcome to Global Payments First Quarter 2022 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] And 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, Winnie Smith. Please go ahead.

Good morning, and welcome to Global Payments First Quarter 2022 Conference Call. Our earnings release and the slides that accompany this call can be found on the Investor Relations area of our website at www.globalpayments.com. 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 expectations. Certain risk factors inherent in our business are set forth in filings with the SEC, including our most recent 10-K and subsequent filings. 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 them. We will also be referring to several non-GAAP financial measures which we believe are more reflective of our ongoing performance. For a full reconciliation of the non-GAAP financial measures discussed in this call to the most comparable GAAP measure in accordance with SEC regulations, please see our press release furnished as an exhibit to our Form 8-K filed this morning and our supplemental materials. 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 are pleased to have delivered yet another quarter of strong results that exceeded our expectations heading into 2022, despite incremental macro headwinds throughout the period. Specifically, we achieved record first quarter revenue, margin and earnings per share with solid free cash flow, and our performance again highlights our business resilience and track record of execution. We are especially delighted with our Merchant Solutions performance, which exhibited ongoing momentum as our strategies for differentiated growth are winning in the marketplace. We continue to see favorable new sales trends across our businesses, providing further evidence that we are gaining share, and our results today reflect those gains. The strong bookings we've been reporting in Global Payments Integrated and US payments and payroll drove attractive growth for both businesses during the quarter. And early this year, we combined these two businesses to unlock additional market opportunities and accelerate growth by creating a more streamlined go-to-market strategy and capitalizing on the best of these two high-performing cultures. We are in the early stages of leveraging our Heartland sales professionals, to increase our penetration with GPI partner customers, as well as harmonizing the cross-selling of our commerce enablement solutions across these channels. We're also excited, we have recently launched the co-selling facet of our Google partnership, and we expect our joint go-to-market efforts will drive significant referral and new customer acquisition opportunities for businesses of all sizes. We also expanded our acquiring relationship with Google, which utilizes our Unified Commerce Platform or UCP, to North America, following the success of our initial launch in Asia Pacific late last year. Further, we remain on track to launch the next phase of Google One and Grow My Business to help our merchants grow faster by connecting additional Google services to our digital platform later…

Thanks, Jeff. We are pleased with our strong financial performance in the first quarter, which exceeded our expectations despite the pandemic, the anniversary-ing of multi-years of stimulus benefits, incremental headwinds from the war in Europe and more recent adverse foreign currency exchange rate. Specifically, we delivered adjusted net revenue of $1.95 billion, an increase of 8% from the prior year and 9% growth on a constant currency basis. Adjusted operating margin for the quarter was 41.1%, a 50 basis point improvement from the first quarter of 2021 or approximately 100 basis points, excluding the impact of acquisitions. The net result was adjusted earnings per share of $2.07, an increase of 14% from the prior year or 15% on a constant currency basis. This performance was ahead of the low double-digit adjusted earnings per share growth we indicated we were expecting for the first quarter on our February call. Taking a closer look at our performance by segment. Merchant Solutions achieved adjusted net revenue of $1.34 billion for the first quarter, a 16.3% improvement from the prior year or over 17.3% on a constant currency basis. Notably, we delivered an adjusted operating margin of 47.3% in this segment, an increase of 100 basis points year-on-year and roughly 150 basis points, excluding the impact of M&A. These results were driven by consistent execution of our technology-enabled strategy. To that end, our Integrated business produced another strong quarter, generating organic growth in the mid-teens compared to 2021, compounding at the longer-term growth rate we target for the business. Notably, in addition to the strength of our POS Software Solutions business that Jeff highlighted, our HCM and Payroll business grew nearly 30%. As for our vertical market solutions, we were pleased that the overall portfolio delivered growth in the high 20% range compared to…

Thanks, Paul. I am pleased with our performance during the quarter, which has us on track to deliver record results for 2022. We raised our cycle guidance in September 2021. And our expectations for the rest of the year remain, despite the unprecedented incremental headwinds we've absorbed in the last couple of months. We enter 2022 with substantial momentum, and our first quarter results and guidance provide further support for sustained share gains. Our targets for this year highlight the wisdom of our strategies, while deepening our competitive moat regardless of the environment. Looking ahead, we are focused on maintaining our momentum by continuing to capitalize on the trends of digitization, commerce enablement, software differentiation and omnichannel prevalence, which we discussed in depth at our Investor Conference in September. Winnie?

Before we begin our question-and-answer session.[Operator Instructions] Thank you. Operator, we will now go to questions.

[Operator Instructions] Your first question comes from the line of Darrin Peller from Wolfe Research. Your line is open.

Hi, thanks, guys. I want to start off with the merchant side just because we're still seeing volume growth obviously rebound very well. And it's outperforming Visa's volume again on the credit card side, which really, I think, does understate the -- underscore the market share positioning. When you think, Jeff, when you think of the assets you have now, first of all, just remind us on the reopening potential of what's still to come? I know there's some verticals, but more importantly, just strategically talk about the position of the assets, where they can be in the next couple of years and if there's any incremental, if you think that makes sense?

Yes. Thanks, Darrin. I think you're spot on in your question. We couldn't be more pleased with the performance overall, but especially in our Merchant business. So let's just start with where you started on the reopening question. As we said, we're very excited this quarter that our vertical markets business has returned to growth relative to 2019, not just relative to 2021. We had, as I think we said in our prepared remarks, high 20s growth in our vertical markets business. Our bookings actually accelerated to mid-30s growth, Darrin, in the first quarter. So actually, our performance has accelerated in a number of the businesses that Cameron can describe within vertical markets. In terms of reopenings, Darrin, there had been more recent laggards, example include active and K-12 have also returned to growth. So we feel really good about kind of where we are there. And as we said in our prepared remarks, we think that's really going to be a tailwind for our business this year and thereafter. Addressing your second question before I turn it over to Cameron to give a little bit more color. Listen, I think as a strategy matter, I think we are very pleased with the resilience of our Merchant business kind of across the board. We've been saying in our Investor Day in September and again reiterated today that a number of elements of our merchant business, including, in particular, our Global Payments Integrated business, which we described the combination of that with our US Payments and Payroll business this morning, that business just reported another double-digit growth quarter in the first quarter of 2022. That business, Darrin, is essentially at the same quantum of revenue as it would have been had there been no pandemic, really, in the first place. So I think as a strategy matter over the next number of years. We have tailwinds from the vertical market segment. As I described a minute ago, and as we said for the last number of quarters, our GPI and our broader Payments and Payroll business here in the United States really haven't lost a step from 2019 despite the pandemic. Cameron, do you want to give a little bit more color?

Sure, I'll be happy to. Good morning, Darrin. I would just start with a couple of things. I'll start with the vertical markets that are obviously continuing to cover. Jeff highlighted those, really, K through 12 and active, both of them were up probably about 10 points sequentially from the fourth quarter relative to growth versus 2019. And obviously, that level of improvement helped to push vertical markets overall to growth relative to 2019, which I think is a hallmark obviously relative to the experience over the last couple of years. And it gives us a lot of confidence that our vertical market business is well positioned to be a tailwind for growth for the Merchant business for the balance of 2022 as those markets continue to recover. On the flip side, I want to highlight TouchNet and AdvancedMD, which continue to produce just absolutely fantastic performance. TouchNet again grew double digits this quarter. It's up nearly 40% versus 2019. Levels and AdvancedMD grew in the high-teens, yet again. It's up over 50% relative to 2019 levels. So the vertical markets has always been kind of a tale of two stories. And we continue to see that play out. But now that, the more heavily impacted verticals are recovering, it sets up well for the balance of the year. And just lastly, on the Merchant business overall, I would just say a couple of things. One is, as an execution matter, new sales and bookings trends remain very positive. In aggregate across the business, it was roughly 20% this quarter, again, continuing with a very strong sort of new sales performance across the business. And the other thing, I would highlight to Jeff's earlier point is part of what we like about our positioning is the diversity of vertical market exposure that we have across both consumer discretionary and consumer non-discretionary. So obviously, as the macro continues to evolve over time, we're very happy with how the business is positioned as a diversification matter across vertical markets.

Okay. That's really helpful. Very quick follow-up for Paul, if you don't mind. Just on the margin side, what gave you the conviction to raise it by this time around? And what's the cadence of it through the year? Thanks again, guys.

Yeah. Darrin, so yeah, I mean, obviously, we've been very focused on margin expansion now really for the last two years. But most recently, some of the actions that we took, as Jeff said in his prepared remarks, to kind of offset some of the incremental adverse kind of foreign exchange as well as Russia from on the cost side allows us to kind of tweak up that margin expectation for the year. And as a cadence matter, it kind of progresses throughout the year, kind of steps up as we move throughout the quarters to kind of get to that overall up to 125 basis points. So you saw us, 50 basis points. We'll have another step up in the second quarter. It will step again in the third and another step in the fourth quarter to kind of get us to that overall up to 125 basis points.

Okay. Thanks, again, guys.

Thanks, Darrin.

Your next question comes from the line of Ramsey El-Assal from Barclays. Your line is open.

Hi. Thanks for taking my question, this morning. Can you comment on, what you're seeing in April in your Merchant portfolio? And sort of specifically, whether you're seeing any signs that inflationary pressures are sort of tipping from tailwind to headwind?

Yeah. Ramsey, it's Cameron. Maybe I'll start and I'll ask Paul and Jeff to chime-in. I would say April trends thus far have been pretty good, and I'd say relatively consistent with what we saw in March. So the short answer to your question is, we're not really seeing, I would say, any inflationary pressure, putting pressure on the consumer to a point that is changing behavior and slowing down the overall level of spend in the market. So as you know, generally, with an inflationary environment, we're going to benefit as volumes continue to tick up, reflecting obviously that price inflation and the overall cost of goods and services that consumers are purchasing to the point, obviously, where there ends up being demand destruction that might offset that. We're not seeing that yet. I think April is trending, I think, consistent with our expectations thus far.

Okay. A follow-up for me, I wanted to ask about debit as an opportunity on the issuer and the issuer business. To what degree does the AWS deal help you move deeper into debit? I think TSYS has been traditionally more of a credit shop. How do you think about debit as we move forward as an opportunity?

Yeah. Ramsey, it's Jeff. It's an terrific question. So let me just start with the wins that we've already announced, because they have a very significant debit elements. So, if you go back to the fall of 2021, the Virgin Money win, we've already converted the credit portfolio. But the piece that's coming in the remainder of this year really is the debit portfolio. So that's a very significant win for us. And as I mentioned in the prepared remarks this morning, we expect to have our relationship along the lines of the digital wallet with Virgin Money, which is going to be very much an environment where we can offer non-bank card rails, I think ACH as well as debit. We expect that to be up and running within the next 12 months, as I said this morning. If you combine that with what we announced with CaixaBank, in February, and now we signed a letter of intent recently, Caixa is one of the largest debit issuers across Europe. We had a bunch of renewals that we also announced this morning, which also are debit-centric, again, in Europe. That all supports the statement we said this morning in our press release and also in our prepared remarks that we do expect to be among the largest debit processors across Europe before you even really get into additional co-sell opportunities with AWS. Let me just start there, Ramsey, because that addresses the first part. On the second part of what you asked about, we announced that we had LOIs and pipelines with a number of FinTech startups and neobanks. With AWS, I think 39 was the number of active prospects that we announced this morning. I think the opportunity there really is in the virtual card side along the lines of debit, particularly with AWS, Ramsey. So in addition to everything I just mentioned with more traditional institutions, which will make us one of the leading debit technology providers anyway. If you think about the virtual cards that we talked about in September, plugged into that what we announced this morning with BACT on the virtual card issuance side, with cryptocurrencies plug into that, the relationship with AWS and the 11 prospects in the pipeline on neobanks, FinTechs, start-ups, those tend to be, Ramsey, virtual card-centric, and those tend to be, in particular, debit-centric as it relates to virtual cards. So I do think over the next 12 months to 36 months, we're going to see a very significant expansion on the issuing side of our debit business. AWS has a really serious role to play there, but so is BACT and really, to be honest, sort of the traditional financial institutions that we've been announcing not just this morning but the last number of months.

Great. Thank you so much.

Thanks,

Your next question comes from the line of Jason Kupferberg from Bank of America. Your line is open.

Thanks, guys. Good morning. I just wanted to start on the merchant side as we think about the cadence of growth in the second quarter, specifically thinking about it quarter-over-quarter. I mean, seasonally, I know you would typically see maybe mid single-digit or so kind of quarter-over-quarter growth. And, I guess, if we think about this year's second quarter, you're going to benefit a little bit, arguably, from the fact that Omicron impacted Q1 to some extent. But then you've got Russia and FX, I guess, that kind of go the other way. So make sure our expectations are calibrated properly in terms of how you're thinking about the quarter-over-quarter growth rate in merchant for Q2, assuming that the macro stays relatively stable.

Yes. Jason, this is Paul. I'll start and Cameron may want to add on top of that. As we talked about even in our last call around kind of the low double-digit kind of growth on a year-over-year basis for the Merchant business, we did have an easier comp in the first quarter i.e., kind of the 16% or over 17% from a constant currency standpoint. And then that kind of low double-digit growth, kind of, continues then for the following, kind of, three quarters. And really, you almost kind of get into just how it compares on a year-over-year basis. Fundamentally, the organic growth is similar. But just on a comparative basis, we, obviously, there's an M&A impact in the first half of the year that's a little bit of a comparative tailwind for us on the merchant side relative to the back half. And so you kind of start at this kind of 16%, north of 16% reported or over 17% constant currency. And then we kind of go down into that low double-digit kind of growth rate for the remaining three quarters. And really, the only kind of noise is just the difference between what we're comparing to from a base matter. Cameron?

I think that covers it pretty well. If you look at the cadence of growth in 2021 versus 2020, obviously, in the first quarter, we grew 4%. In the second, we grew 41%. So naturally, you're going to have a very different comp as Paul highlighted earlier. But to his point, obviously, we expect the Merchant business overall to grow double-digits for the full year. And we expect every quarter to be in the double-digit range, obviously, Q1 being the high watermark because of the easier comp.

Right. Right. Okay. That makes sense. Following up just on issuer, obviously, nice to see the Caixa win. I wanted to see if I caught the comment right that this would be potentially implemented by the end of 2023? And then if you can just talk more generally about quarterly progression of issuer revenue growth for this year just based on how you see the implementation backlog trending? Thanks guys.

Yeah. Jason, thanks. It's Jeff, and I'll start and I'll ask Paul to talk a little bit about the cadence. So we expect the implementation of Caixa to begin at the end of 2023. So it will have some impact in 2023, but that's really the start of it. And obviously, given the size of that, we'll continue into 2024 and beyond. As we said in our prepared remarks, it's the largest single letter of intent sign we've had since 2013 and effectively doubles the size of our implementation pipeline. The other thing I mentioned in our prepared remarks that the 56 million cards and the implementation pipeline does not include other things we hope to announce in the second quarter call. And I referenced one of those in my prepared remarks, which is the acquisition by a North American Bank of a large US bank, which we expect to have as well. Just to be clear, that's not in the 56 million. So we hope we're in a position when we head into the back half of the year that as we burn through the implementation pipeline, which Paul will talk about in a moment. As we burn through that, we're actually replenishing it and keeping it relatively constant at the record level or thereabouts as it is today. Paul, you want to talk about it?

Yeah. So Jason, on the step-up as it relates to the revenue growth and as we said on our last call, we did have in this first quarter comparative kind of from year-over-year. But we step to that mid single-digit in the second quarter and then stepped up to kind of that mid- to kind of higher mid single-digit in the third and the fourth quarter for the business, ultimately kind of landing at that higher mid single-digit rate is our expectation for the year. So we have a progressive step-up throughout the year. And as I said on our last call as well, we kind of exited the year at that higher mid single-digit given the conversion activity we just referenced as well as kind of some of the easier comps that we have with managed services and some of the things that we're doing on the repositioning side there. So it's not only just the step up progressively in the year, but it's also kind of the exit run rate, growth rate that we expect to be at when we end the year.

Yeah. I'd just add, Jason, what Paul just said that commercial card, which Paul called out in his prepared comments, saw improvement in March versus February, February versus January, obviously, as Omicron waned and corporate business travel returned. We expect that to be much like Visa/Mastercard improving as 2022 goes on. So in addition to the record implementation pipeline, we do see tailwinds coming in commercial card, which really for the last two years or so, Jason, up until kind of February and March was like a headwind.

Right, right. Okay. Well, thanks for the remarks.

Thanks very much.

Your next question comes from the line of Dave Koning from Baird. Your line is open.

Yeah. Hey, guys. Nice job. And maybe if I can just start out by just the pricing and yield environment. It seems like maybe we're getting into a little better place just with interchange adjustments, maybe your own ability to price, maybe software growing faster than merchant. Like, could we actually see yield start to tick up in coming quarters?

Yeah, Dave. Look, I think your overall thesis is right. I think we are seeing a relatively constructive yield environment as probably the best way to characterize it. Obviously, vertical markets returning to growth versus 2019 levels is a nice tailwind for yield. You called out the interchange benefits that are kind of flowing through. Most of our pricing, as you know, is interchange plus, but we do have some bundled pricing as well. More importantly, as the overall cost of acceptance goes down for our merchant customers, that's generally a good thing and generally a tailwind for the business overall. So, I would say, we're seeing an environment where a couple of things: one, obviously, given all the discussion of inflation, there is an acceptance the fact that costs are increasing. That's point number one. And point number two, as our business mix continues to shift towards more technology enablement, more software, obviously, we're seeing a positive environment for our own specific businesses as well. So, I think we feel pretty good about how the overall sort of pricing environment is positioned for the balance of the year.

Great, thanks. And maybe just a follow-up, just a really high level. You've talked about high-teens EPS growth over time. It feels to me like, if anything, as the time goes on, you probably feel as good or better about that high-teens growth. I mean is that fair kind of as we kind of reflect on this quarter in April, like things are as good as ever, long term is greatly intact?

Yeah. Dave, I think -- it's Jeff. I think it's exactly right, and I'll ask Paul to comment. We raised the cycle guidance to the high-teens to 20% in September. Here, we are in a much different worse, really, macro environment. We just reaffirmed today that those are our targets for this year. So, I think what we've shown is the business is very resilient. As Cameron described, the vertical markets business, which during the recovery, as Darrin asked about, the vertical markets business during the recovery was a bit of a Headwind. Now it's a tailwind. So I think we're in a very good place, as Cameron mentioned, with a balanced business to feel very confident in the cycle-wide almost somewhat independent of the macro environment you've seen the changes that we've seen over the last couple of months to maintain our targets that we've had over a period of time. Paul, you want to make…?

Yes. I would just say we kind of hit on it in the last couple of questions, is just the improving picture. Certainly, on the merchant side, we've talked for several quarters about the tailwind of vertical markets coming back and being an additive kind of growth dynamic. And then, as I just commented on the issuing side, between what we're seeing this year as a progressively stronger growth picture and this pipeline size, as Jeff commented earlier, is the biggest pipeline we've had in really a long time in that business. And then, you kind of couple that with just even as of this morning raising our margin guidance and the things that we're doing on the cost side gives us that kind of additive confidence that, yeah, that EPS cycle guide is in really good shape, and we've got tailwinds relative to the things we've talked about this morning.

Yeah. Thanks guys, great job.

Thanks, Dave.

Thanks, Dave.

Your next question comes from the line of George Mihalos from Cowen. Your line is open.

Great. Good morning, guys. And thank you for taking my questions. I guess just to kick things off, some clarification on the issuer side of the equation. Paul, how much did MineralTree contribute to Issuer Solutions here in the first quarter? And then maybe to just kind of circle back to Jeff's commentary on commercial. How exactly did that perform in the first quarter relative to kind of a 2019 benchmark, if you happen to have that handy?

Yes. So as it relates to the impact of MineralTree, we were roughly flat on a constant currency basis ex MineralTree. And so obviously, being at the roughly 1.5% growth, that's kind of the right way to think about the MineralTree impact and roughly kind of the right way to think about it for the full year, although we've got some additional adverse FX that comes into play. So that pulls that down. But roughly about 1% or so of benefit as it relates to MineralTree. And then as it relates to commercial card, we still haven't reached back to kind of exceeding the 2019 levels on commercial card. We did, as Jeff said, saw a progressive kind of growth picture and particularly so between March and February kind of the step-up in the growth rate in our commercial card business as it relates to kind of sequential. But as it relates to 2019, we're still not at those 2019 levels. And certainly, as we sit there and look at the overall segment, what we were pleased with is that the overall normalized growth rate of that business from our accounts on file and kind of transactional revenue being solidly in that kind of mid or almost high mid single-digit growth rate. And just putting it all together, when you look at it kind of ex the managed services and some of the non-recurring were kind of solidly in that mid single-digit growth rate for the quarter.

Okay. That's great. I appreciate that color. And then just shifting gears to merchant a little bit. Can you guys talk about what you're seeing on the international side, I mean those I had I think from my last conversation, with Europe was looking a lot better, APAC better, but maybe sort of lagging, just curious if you can give us a sense of is to how those international geographies have been progressive? Thank you.

Yes. George, it's Cameron. I'll jump in there. I think you have that mostly right. Obviously, Europe was a bright spot in the quarter the growth rate was in the high 20% range. Obviously, we've got a little bit of a tailwind from Bankia that we acquired in the latter part of 2021. But overall, organically, it was well into the 20% range from a growth standpoint as the recovery continues to progress kind of across the European footprint. As it relates to 2019 levels, the U.K. is positive, which is good and remains positive, had a very strong quarter. Spain continues to really be the bright spot, along with our joint venture with Erste Bank in Central Europe. Those two businesses are growing at very attractive rates. As we've seen the pandemic accelerate, obviously, the digitization of payments across those two markets to a pretty extensive degree. So those businesses, I think, stand out, again, from a performance standpoint, position in Europe, I think, they have a very strong year overall as the recovery continues to progress. Asia actually went backwards a little bit in the first quarter, and that's completely attributable to the lockdowns in the Greater China markets, in China in particular. So we did see Asia be a headwind to growth. Asia grew overall about 3% in the quarter. Some of that was obviously a negative currency environment. And some of it obviously was attributable to the lockdowns. As that market again hopefully reopens, as we move into the latter part of the second quarter and into Q3, we expect it to get back to more of a double-digit growth rate, which is our anticipation for the region. But obviously, we did have to absorb a little bit of headwind in the first quarter given the continued sort of COVID impacts across the region.

Thank you, Cameron.

Thanks George.

Your next question comes from the line of Timothy Chiodo from Credit Suisse. Your line is open.

Great. Thanks for taking my question. I wanted to dig in a little bit on Global Payments Integrated, so the partner business. I believe in the past and pretty recently, you disclosed roughly 6,000 software partners. Just want to talk a little bit about where that number has come from, where it's grown from, how many partners you've been adding on average per year? And then, the follow-up is more around the mix of those and the types of services they're taking. How many are doing online and in-store? And then, maybe the penetration of additional embedded financial services across those. Thanks a lot.

Yeah. Tim, its Cameron and I'll start. And I'll ask Jeff and Paul to jump in with any other comments they'd like to provide. So obviously, if you just look back in time, the Global Payments Integrated business grew through the combination of our acquisitions of APT and PayPros. And then obviously, since then has been growing at an organic rate generally in that kind of mid-to-high-teens rate. So if you think about the base of partners that exist in that business today, it's come through largely a combination of those, plus organic growth. And then, of course, lastly, when we merged with TSYS about 2.5 years ago now, TSYS had a portion of their Merchant business that was focused on integrated partners as well, and we combine that into GPI. So, I would say, if you look at the mix of partners, that's largely coming from the acquisitions we've done, coupled with very strong organic growth trends over the course of time. As it relates to new partners, it's hard to give you a pinpoint estimate as to how many we add a year because it largely depends on the size of partners we're targeting. I can tell you in the first quarter, we added about a dozen. And I would say there are three larger partners in that portfolio. In aggregate, they bring us an opportunity for about 130,000 additional mid to be able to add to our integrated business. So those are three really sizable wins and ones that were really attractive or excited about given that, that business has about 600,000-mids in it today. So adding a new population of 130,000 we can go and target is obviously a very good result for us. So in any given year, we'll add well into 20 to 30…

Great, Cameron, I really appreciate that the update on GPI. Thanks a lot.

Absolutely.

Thanks, Cameron.

Your next question comes from the line of Trevor Williams from Jefferies. Your line is open.

Great. Thanks. Good morning. I just want to clarify on the full year guide. Paul, you walked through the puts and takes relative to when you first gave it last quarter. Just on the macro assumptions aside from the FX impact, is there any change to what you have built in for consumer spending for the rest of the year? And correct me if I misheard it, it sounds like you're still expecting progressive improvement throughout the year? Can you just remind us there what sort of macro trajectory is built in to track to the low end, the midpoint and the high end of the guidance? Thanks.

Yes. Trevor, I mean, as it relates to macro in each one of our businesses, we kind of build that into the fundamental kind of how we're building up based on what we're seeing and obviously, what -- depending on the segment, what we're kind of forecasting for our customers and so on. So, nothing has changed with that kind of rationale with the way we looked at. And we did, as we said last time, that we do, as you kind of referenced, assume a progressive kind of recovery, and things kind of continuing to get back to a kind of a more normalized state. With that being said, we've always said, we don't kind of build protection into the kind of model. So, we just kind of have based on all of the way we do our forecasting across all of our businesses, that kind of embeds in, what we're expecting from an overall kind of normalized standpoint. So, I wouldn't say, there's anything kind of incremental that we've built in. It's just been that kind of more normalized kind of growth and return to normalcy. And with that being said, we do provide for some kind of non-protection as move along that pendulum there.

Okay. Perfect. No, that's really helpful. And then just as a follow-up, on Issuer, I was just curious on the pricing and competitive environment, particularly in the US, I mean, with where the implementation pipeline is, the Caixa win, and clearly, you guys have a lot of momentum in the business. But in the US, there's been some narrative in the market just around some of your big competitors starting to get a little bit more aggressive on pricing. So I was just curious to get your updated view on the competitive environment in the US and how the repositioning of the business with the AWS partnership, how that fits into kind of how you've seen the market evolve there over the last couple of years. Thanks.

Yes. Trevor, Jeff. I would say that the competitive environment really hasn't changed in issuer. It's always been very competitive. I think the one thing that has changed and we've seen this more recently, is our ability to really lead with technology, particularly in the partnership with AWS, which is really unique to us. So, I don't think a bit of landscape is any different now than it was certainly when we did the merger two or three years ago, to be honest. And that's kind of what we're seeing. But I do think we have unusual things to bring to the table, particularly as it relates to our service, the quality of our technology, our unit collaboration with AWS. If you go back to what I think we said in February, we think we believe that one of the reasons that CaixaBank selected us and they went through a full RFPs is because they looked at our technology, they looked at where we were in the public cloud, they looked at AWS, and they came to the point of view that, this is an important strategic decision for them. And I think that's as good a touchstone as any. I think the 56 million accounts on file as a record implementation pipeline really is another. So, I think if you look at kind of what our guide has been in that business, Paul described progressively increasing throughout the quarter, if you look at where I think we'll be over the next 12 to 24 months in that business, which I think is a pretty good trajectory, I think that kind of tells you what you need to know about the pricing environment as well as the mode of competition, which I think has really shifted toward end-to-end technology leadership. So if anything is new, Trevor, it's being, first and foremost, with technology. And I think what we have is really unmatched at scale in our industry.

That’s great. Thanks, Jeff.

Your final question comes from the line of Ashwin Shirvaikar from Citi. Your line is open.

Hey, Jeff, Cameron, Paul. Thanks for taking the question, good to hear from you. I was wondering if you could talk to what specifically commercial card normalization would add to your expectations through the course of the year, if you could talk about that?

Yes. Well, Ashwin, this is Paul. We have kind of a more normalized or certainly a progressive kind of recovery on the commercial card side kind of built into, obviously, the guide that we talked about of the higher mid-single digit. And so that [Technical Difficulty] if you will, on the commercial card side, is built in. I would call it maybe a kind of point maybe of additional growth. And certainly, as I commented earlier, we still, even with kind of this improving picture, still are not back to the 2019 levels. And so as we move into 2023, obviously, there could be some incremental kind of tailwind into 2023 if we kind of get back to that kind of 2019 level. We'll just have to see how things progress. What I'm particularly pleased about, though, is what we've seen so far this year. Because obviously, in the fourth quarter, we had seen some pullback in the latter part of the fourth quarter relative to commercial card, and we have seen that come back. And as I said, particularly, we saw it in March volumes versus February, but we still offer aggressively kind of core picture. So we are seeing it coming back, albeit not yet to that 2019 level. But that would be roughly the right way to think about it, Ashwin.

Got it. Got it. And then just a clarification with basically unchanged revenues where you're absorbing a lot of different factors, but higher margins. The EPS offset, is that completely on interest expense? I might have missed that. Or if you could walk through some of the below-the-line items.

Yes. So we did kind of tweak up kind of the interest cost. In the prepared remarks, I commented on relative to the environment that we're in with the rate increases. And so that's baked in. So we're absorbing that in what we're doing from a cost standpoint. So yes, I mean, kind of we commented, I think, in the prepared remarks, that's what we're pleased with this we're kind of absorbing the Russian impact, the adverse incremental FX, some higher interest costs and still staying squarely kind of in our EPS guide range.

Okay. Got it. Thank you.

Well, thanks, Ashwin. On behalf of Global Payments, thanks, everyone, for joining us this morning.

This concludes today's conference call. Thank you for your participation. You may now disconnect.