Ladies and gentlemen, thank you for standing by and welcome to Global Payments Fourth Quarter and Full Year 2022 Earnings Conference Call. [Operator Instructions] And as a reminder, today’s conference will be recorded. At this time, I would like to turn the call over to your host, Senior Vice President, Investor Relations, Winnie Smith. Please go ahead.

Good morning and welcome to Global Payments fourth quarter and full year 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, among other matters, expected operating and financial results and the proposed transaction between Global Payments and EVO Payments. These statements are subject to risks, uncertainties and other factors, including the impact of economic conditions on our future operations that could cause actual results to differ materially from 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 available on the Investor Relations section of our website. Joining me on the call are Jeff Sloan, CEO; Cameron Bready, President and COO; and Josh Whipple, Senior Executive Vice President and CFO. Now I will turn the call over to Jeff.

Thanks, Winnie. We delivered strong results for the fourth quarter and calendar 2022 in what was an unprecedented year by nearly any measure with heightened worldwide macroeconomic uncertainties caused by persistent inflation, dramatically rising interest rates, significant foreign exchange volatility, a war in Europe and lingering impacts from the pandemic early in the period. Yet the consumer remained resilient throughout the year and we enabled a record over 64 billion transactions, culminating in a successful holiday season with multiple all-time high peak days. We delivered record results for 2022. While it’s certainly in the New Year, internal metrics indicate more of the same. Where we have seen any discernible change, it is in some macro weakness in limited geographies like the United Kingdom and parts of Asia-Pacific. Having said that, those items already are reflected in our fourth quarter results and our guidance assumes no meaningful change in operating environments for 2023. We are pleased with our preliminary January results. For the fourth quarter, our Merchant business delivered 9% adjusted net revenue growth excluding dispositions and our Issuer segment achieved 5% adjusted net revenue growth, each on a foreign exchange neutral basis. Importantly, our core Issuer business again generated sequential financial and operating improvement, consistent with our expectations and the best performance since our merger with TSYS in 2019. For the full year, our performance was consistent with our September 2021 cycle guidance despite multiple black swan disruptions that emerged in 2022. Our Merchant business delivered 13% adjusted net revenue growth, excluding dispositions and our Issuer business generated 5% growth, each on a constant currency basis. For calendar 2022, we produced 10% total adjusted net revenue growth, again excluding dispositions, expanded margins by 200 basis points and generated 17% adjusted earnings per share growth on an FX-neutral basis, all right…

Thanks, Jeff. We are pleased with our strong financial performance in the fourth quarter and for the full year, which highlights the durability of our business model. Starting with the results for the full year 2022, we delivered adjusted net revenue of $8.09 billion, an increase of 7% from the prior year on a constant currency basis. Excluding the impact of dispositions, adjusted net revenue increased 10% on a constant currency basis. Adjusted operating margin for the full year improved 190 basis points to 43.7%. The net result was adjusted earnings per share of $9.32, an increase of 17% on a constant currency basis compared to the full year 2021, which includes the impact of the exit of our Russia business during the second quarter. These results were consistent with our guidance expectations and with our September 2021 cycle guidance from our investor conference despite all the challenges Jeff highlighted earlier. Moving to the fourth quarter results, we delivered adjusted net revenue of $2.02 billion, an increase of 4.4% from the same period in the prior year on a constant currency basis. Excluding the impact of dispositions, adjusted net revenue increased 7% on a constant currency basis. Adjusted operating margin for the quarter increased 240 basis points to 44.4%. The net result was adjusted earnings per share of $2.42, an increase of 17% on a constant currency basis compared to the same period in 2021. Taking a closer look at performance by segment, Merchant Solutions achieved adjusted net revenue of $1.41 billion for the fourth quarter, reflecting constant currency growth of 9% excluding dispositions. This performance was led by the ongoing strength of our U.S. and technology-enabled businesses. We delivered an adjusted operating margin of 48.4% in the segment, an increase of 20 basis points year-on-year as we continue to…

Thanks, Josh. I could not be more proud of all that we accomplished in 2022 despite the incremental challenges we faced throughout the year. These achievements have given us increased confidence in the accelerated growth trajectory we outlined at our investor conference. Simply put, we built a better, a more durable business model. Our expectations for 2023 are for a return to normalcy with businesses across our markets delivering a typical financial and operating levels. The consumer remains resilient with anticipated spending patterns reflected in our recent results and our guidance. The imminent closing of the acquisition of EVO and the sales of Netspend B2C and Gaming mean that three quarters of calendar 2023 will reflect results of the businesses that we intend to manage well into the future. We’ve completed the strategic pivot set forth in September 2021, and we are very much the better for it. Winnie?

Thanks, Jeff. [Operator Instructions] Thank you. We will now go to questions.

Thank you. [Operator Instructions] Our first question comes from the line of Darrin Peller with Wolfe Research. Please proceed with your question.

Guys, thanks. Nice results. But look, just still a lot of moving parts. So Jeff, my first question would just be if you can help us understand, when you look past all these – the Gaming divestiture, the EVO deal, in the Merchant business, number one, I guess, if you can give us a sense of what the – some of the main moving parts were in the quarter again in terms of the – some of the verticals you’re operating in, in the software-centric businesses, the tech-enabled areas, a little bit more granularity. But more importantly, when you look beyond this, what is this growth profile of this business, again, including EVO, including the divestiture of Gaming? And how do we think about Merchant going forward for the next year or 2?

Darrin, it’s Jeff. I’ll start, and I’ll ask Cameron to jump in, too. So I think we’ve described that over the last number of calls. We’re going to end up with – in the aggregate, if you step back, a Merchant business is three quarters of the revenue of the company and an Issuer in B2B business that’s 25% of the revenue of the company. That’s reflected in our September ‘21 cycle guidance expectations, and if anything, makes us feel better about achieving those expectations. That was covered in our press release in our prepared remarks this morning where, excluding dispositions on an FX-neutral basis, we actually hit those targets despite all the incremental challenges and uncertainties in a lot of the markets that we’re in. I’d also say that we expect all the transactions that we’ve announced previously and now Gaming today that closed by the end of this quarter, So three quarters of 2023, as I said in my prepared remarks, I expect to reflect the businesses that we will have for many years in the future and the future to come. I also touched on – I’ll turn to Cameron in a second, but I also touched on some of the pieces that have generated fantastic growth, the 9% that we announced this morning in Merchant, the 13% for the year, 9% for the quarter, the 9% volume growth I announced in my prepared remarks. Some of the pieces that added into that namely our integrated business, which again grew into the mid-teens, our e-comm and omni businesses. which again grew into the mid-teens meaningfully in excess of the Visa, Mastercard kind of e-com reporting, and of course, meaningfully in excess of what PayPal announced last night in terms of their volumes and the like. So I think those growth drivers that we’ve described historically at our last investor conference in probably the last 4 or 5 years of calls in our Merchant business, I expect to continue to drive the business forward. Cameron, do you want to provide more detail on merchant to take it?

Yes, Darrin, I’m happy to. Maybe I’ll start with the quarter and then I’ll spend a little bit of time on the outlook as well. So for the quarter, as Jeff highlighted, I think we’re pretty pleased with the overall growth we saw in the business. Obviously, that was led by the U.S. business, which again produced double-digit growth in the quarter. Jeff highlighted a couple of, I think, the outstanding businesses from a performance perspective. But I’d also note, our point-of-sale, ATM and payroll businesses also grew in the double digits. Our vertical market business grew in the double digits. So our U.S. business overall was double digits for the quarter. North America in total, including Canada, was right at 10%, exactly what we did in Q3. So again, I think good strength across kind of the U.S. and North American businesses. Where we saw a little bit of headwind was from our Asian and European businesses. We do see some macro headwinds in the UK. I think we talked about that in our prepared remarks. And Asia continues to be impacted by COVID-related restrictions, although as we get early into 2023, we’re starting to see those lift, and January results obviously reflect a lifting of those restrictions, which is encouraging to see heading into the year. So really, our performance in Q4 was largely the same as Q3, but for international businesses. They were a point of tailwind in Q3, and there were a point of headwind in Q4. I think when you look at the business overall, fundamentally, 9% constant currency volume growth, I think, compares very favorably against what you saw from Visa, Mastercard, PayPal, Fiserv. So I think we feel very good about the momentum and the underlying fundamental performance of the Merchant business as we head into 2023. As we talked about this morning, our highlights for 2023 from a growth perspective start with Global Payments sort of core business at 9% to 10%, again, relatively consistent with the cycle guidance that we provided for that business reflecting a macro environment that we expect to be largely consistent with kind of what we’ve seen exiting 2022. So fundamentally, I think we feel really good about how the business is performing and the component parts in the technology-enabled aspects of the business that we expect to drive growth are continuing to do just that.

Yes. And we see that trend, as I said, just to finish off on that point from Cameron, Darrin. As I said in the prepared remarks, we saw the same trends continue into January. So really with the preliminary results that we have for January, we are pleased with the metrics that we have into January and into February. So we really haven’t seen – as Cameron just alluded to, really haven’t seen much of a change. Bank of America came out this morning with some comments about a healthy consumer. So we continue to be pleased with where we are.

That’s great, that’s great. One quick follow-up on the Issuer side. You obviously have – you showed the acceleration we hoped for, for the fourth quarter, which is great. Think you have 75 million accounts on file that are scheduled to be able to come on over the course of the year and more maybe in ‘24 with Caixa, if I remember correctly. And so just thinking about the guidance for Issuer, it seems like it’s roughly – I think it was 4.5% to 5.5%, if I’m not mistaken. Between all the tailwinds, could it have been a little higher? Is that conservative? Can you just touch on that? Thanks, guys.

Thanks, Darrin. Yes. So look, I think we’re really pleased with where the Issuer business is, and it’s really issuer and B2B now. So look, I would tell you that in the back half of calendar 2022, for Issuer in particular, we exceeded our expectations almost every month and certainly for the two quarters. So we’ve got our fingers crossed that we will do better and what that it will accelerate further. As I mentioned a minute ago, the metrics to January – preliminary results in January and metrics and issuance of February also look very healthy. So look, we’re hopeful we can do better than that. I would say though that the fourth quarter of ‘22 itself represented 80 basis points of sequential acceleration in core Issuer just from Q3, Darrin, into Q4 sequentially in terms of revenue. So look, I’m hopeful we can all look back and say that was a low bar, but you’re talking about a business that had its best performance in the month of December that adds since the merger expect performance in the quarter that it had since the merger, Darrin, be delighted to talk to you in May about how good the performance is in the first quarter if that will continue. But I think we’ve got multiple tailwinds in that business. We’re really excited about where it is. Obviously, part of our goal is to get B2B larger. So as Josh said in his prepared remarks, B2BX Paycard added about 60, 70 basis points to the growth rate. We’d obviously like to get that bigger and that’s part of our plan to get to mid to high over time single-digits in that business, but that’s reflected in our guide today, up to 5.5% growth. So I think we’ve got every avenue of opportunity available to continue to build on the sequential acceleration that we saw in calendar 2022. And hopefully, Darrin, can look back later in the year and laugh about how easy it was.

Alright. It’s great to hear. Thanks, guys.

Thanks, Darrin.

Thank you. Our next question comes from the line of James Faucette with Morgan Stanley. Please proceed with your question.

Great. Thanks. I wanted to touch quickly on the expense side and expectations for margin expansion. I wonder if you can just give a little more detail there, particularly around like labor. And just wondering if wage pressures have largely subsided at this point? And is that part of what you’re expecting to help contribute to margin expansion?

Yes, James, it’s Jeff. I’ll start and I’ll ask Josh to jump in too kind of at a macro level. I wanted to give you a little bit more of the micro detail. So look, our job is to manage the business. Wage inflation, rent inflation, that’s part of the operating company. Our job is not to blame that for misses. Our job is to absorb that and move on. And I think that’s what we’ve been able to do, not just in the fourth quarter or the guide but over the last number of years. I certainly would say, just speaking for us, that the employment market has changed. I would say, as you’ve seen the tech layoffs come from other folks around the country and around the world, there is no doubt there is been a change in perspective. I wouldn’t say though that’s changed the wage inflation expectations of people in our company or in the market, more broadly valued team members our value team members. And we need to be and we are market competitive. The last time I looked, which admittedly, James was probably a little bit ago, I think headcount and tech in our company was up 10% versus ‘19, and comp was up similarly or even a little bit more. As I mentioned a minute ago, our job is to manage those numbers, absorb them and still move on, which is kind of what we’ve done. So, ongoing wage inflation is reflected in our expectations for margin expansion this year. It was reflected in our actual results for margin expansion last year. And obviously, we offset that with good growth, we offset it with leverage and everything else. Josh, you want to be more specific on some of the margin stuff?

Yes, absolutely. So James, as I said in my prepared remarks that we expect margins to expand approximately 120 basis points in 2023, which is if you think about our cycle guide at 50 to 75 basis points, that is ahead of our cycle guide. And we expect to see outsized margin expansion in Q1 of approximately 200 basis points, which is similar to the levels that we saw in Q4, and then we expect to see more normalized expansion of 100 basis points to the balance of the year. And I would say that the primary driver of the benefits of this margin expansion is really a business mix shift towards technology enablement and the divestiture of Netspend, which we had talked about, which we expect to be partially offset by the lower margin profile of EVO before we start to go ahead and realize synergies. So that’s a little bit more color as it relates to margin outlook for 2023.

Really appreciate that. And then you guys are obviously basing your outlook on kind of relatively stable macro environment. I guess I wouldn’t be doing my job if I didn’t try to pressure test that a little bit. If we look at some of the segments, whether – in your exposure, whether it be the SMB and e-commerce, I’ve heard kind of mixed feedback recently from other companies in the space. Can you just give a little bit of insight into what you’re seeing in SMB? Are you seeing points of weakness, etcetera, similarly on e-commerce? Thanks.

Yes. I’ll start, James, and then I’ll ask Cameron to give more detail. So I would just say, as we said in our prepared remarks, look, the fourth quarter and Cameron said this, in certain of our markets, United Kingdom, Asia Pacific, they moved from a tailwind to a headwind. And I think a lot of that is macroeconomic-related. Some of that obviously is COVID, as Cameron alluded to, kind of coming in and out. I mentioned before that January preliminary results are favorable and that we see those metrics kind of trending and continuing, so that doesn’t appear shifted from the fourth quarter. But the point I was trying to make in my prepared remarks, James, is whatever macro disruption we’ve kind of seen from higher rates, FX, COVID, whatever you want to call it, UK, already in our results from the fourth quarter and certainly our annual results from January and guide our expectations. So I would say that’s kind of early in the cake, so to speak, as we think about kind of where we are. Cameron, you want to be a little bit more detailed on SMB and mix?

Yes, I’m happy to. I mean I think what we’re seeing right now is relative stability across the SMB markets that we target in our vertical market businesses and our Merchant business overall. And the best example I can probably provide is just where we stand as it relates to booking and new sales trends kind of exiting 2022, heading into 2023 because I think that’s a good barometer as to where we see the health of that overall market. Believe it or not, we had our best sales month of the year in our U.S. Merchant business in December. And it was our second best all time. So I think from that perspective, we’re seeing very good momentum across new sales, which I think is a good – obviously, a good canary in the coal mine for what we anticipate in 2023. We had a record payroll sales month in December, and we continue to see near 20% bookings growth in our vertical market businesses, again, all targeted largely towards the SMB segments of the market here in the U.S., by and large. E-comm and omni continues to produce really good results. As we highlighted on the call, mid-teens growth again yet this quarter, we continue to benefit, I think from digitization trends that obviously help blend the physical and virtual world. But I think again, we are uniquely positioned to solve this complexity for our merchant customers, and we see great adoption of those capabilities from our merchants in virtually all markets around the globe in which we are operating today. So, look, I think we are fairly confident as we head into 2023 to the guide that we provided today. Obviously, macro can evolve over the course of the year. I don’t think we are assuming perfect macro. We didn’t see perfect macro in Q4, as Jeff highlighted. So, I think some of that is obviously reflected in the guide today. I think the guide doesn’t assume it gets meaningfully worse nor does it assume it gets meaningfully better from where we are. And I think again, we feel confident in our ability to deliver on the results that we forecasted in our call earlier this morning.

Thanks everybody.

Thanks James.

Thank you. Our next question comes from the line of Jason Kupferberg with Bank of America. Please proceed with your question.

Good morning guys. Thanks. So, we are talking about 9% to 10% organic growth in merchant, 4.5% to 5.5% in issuer. I just wonder if I try to understand Slide 10, where you pulled together some of the pieces here. I see the divestiture adjustment there, but I don’t see anything explicitly talking about the EVO acquisition. So, you showed 8% to 9% here. So, that, I guess is essentially the organic overall? I don’t know, I am still confused that we don’t see the adjustment for EVO?

Yes. Jason, it’s Jeff. So, I will start. So, we will start with our GAAP guide, which is the first row, and then we have got our normal GAAP adjustments, which is the second row, the home adjustments to get adjusted net revenue. That’s what we report, the 6% to 7%. We said currency was roughly neutral. The truth is it’s a 20 basis point headwind. We are just going to absorb that. We didn’t think calling that out and trying to back out 20 basis points based on what we know is really worth anyone’s time. Our job is to manage those things. The reason we call it net divestiture, if that’s net of EVO. So, as I mentioned a minute ago, Netspend B2C and EVO are roughly similar in size. They are going to close, our expectation, is on around the same day. So, there is no timing discontinuity of those things. Those offset more or less, I would say there is a little bit of leakage. So, there might be something like 50 basis points, 60 basis points of leakage on the sale of Netspend Consumer relative to the acquisition of EVO. But then remember, we were forced to exit the Russia business April 29th, Jason, of last year, so we have overlap there for a period. And then we obviously also announced today from a revenue point the sale of gaming, which is earnings-neutral, but obviously revenue-dilutive. So, the net effect of that is minus 1.7%. If you get the lot together, the acquisition of EVO, the sale of Netspend Consumer, the forced divestiture of Russia, the sale of gaming does net to minus 1.7%. So, if you add back currency and get back the net effect, which is why it says net there on Slide…

Okay. Understood. And then just as a follow-up, I know the primary use of balance sheet this year is to pay down debt, but do you potentially see room to do deals if something particularly interesting pops up? And then just a quick housekeeping thing, can you just clarify how much interest income benefit you expect this year from the solid financing on the Netspend side? Thanks guys.

Yes, absolutely. So, our primary focus this year is to go ahead and pay down debt. And so we are currently 3.25x levered. Today, with the – once we close, EVO will be about 3.75x levered. And then we will focus on paying down debt for the balance of the year, and we expect to get back to our current leverage levels at the end of the year. If you think about interest income, it’s approximately $75 million for the year.

Thanks.

Thank you.

Thank you. Our next question comes from the line of Bryan Keane with Deutsche Bank. Please proceed with your question.

Hi guys. Good morning and congrats on the solid results. Jeff, I wanted to ask about yields. A lot of chatter on looking at the merchant side. If you look at your volumes, they look very favorably versus peers. On yields, you guys are about flat. Others are showing large increases. Can you just give some comments on how you think about yields and yields going forward in the merchant business?

Yes. Bryan, it’s Cameron. Maybe I will jump in, and I will ask Jeff to add any other additional comments if he would like to. So, look, I would just say our philosophy around pricing really hasn’t changed very much. We do want to ensure we are getting paid fairly and appropriately for the level of service and capabilities we are providing to our customers and our pricing strategies, I will say, are generally aligned with this. We are not really positioning ourselves to be the low-cost provider in the market. I think we are price competitive. But obviously, we strive to differentiate ourselves based on our capabilities and the service that we deliver to the customers that we have the benefit of serving in the marketplace. So, like everybody else, as we talked about earlier on this call, I mean we have inflationary pressures that we have to absorb around wage, goods, services, etcetera. Obviously, we have reflected that in pricing plans kind of accordingly. But I would say, to your point, our volume growth continues to track relatively consistently with our overall revenue growth. And our spreads have remained relatively consistent. I would say, over time, we continue to expect to see spreads overall increase as we continue to pivot towards more technology enablement in the business, as we continue to scale our point-of-sale business, our vertical market businesses continue to grow, e-comm and omni continues to be a tailwind for the growth. All those businesses generally have higher spreads because we are selling more technology, obviously, than sort of traditional merchant acquiring in general. So, I think there is a lot of tailwinds around our spreads as we move forward in time. But we have been fairly I would say, sanguine as it relates to our pricing strategies as we have been able to generate good revenue growth in the business on the back of really solid fundamental volume growth across the globe.

Got it. Great. And just on some of the renewals, the larger renewals. I guess the worry always is on a renewal basis, you will have to take significant kind of discounts to renew those businesses in a competitive environment. Jeff or Cameron, obviously, could you just talk a little bit about the renewal cycle because it sounded like with BofA and others, you have signed quite a bit of business, just thinking about pricing there. Thanks.

Yes. Thanks Bryan. I think what you said is accurate. So, look, BofA is one of our largest customers. They just renewed for a multiyear period. That renewal started January 1st, this year and it’s in our guidance, right. So, our 5% at the midpoint, 4.5% to 5.5% on the page reflects all that. So, we are growing, and I would say generally growing right through those things. So, I think that really hasn’t changed. What has changed in the issuer business, right, somewhat Cameron described, I think in response to Jason’s comment is we are leading with technology, right. So, if it’s not – most of the RFPs we get now are cloud centric. And I think if you don’t have a cloud-centric cloud-native solution, then I don’t think all the pricing in the world is not really going to move the needle there. So, we think that’s what we announced today with BofA, Deutsche Bank, Deutsche Post. Deutsche Post, that was a takeaway in Europe, double the size – it doubles the size of our business in Germany. Well timed with EVO, which obviously that closing is imminent, but they are in Germany on the acquiring side. And of course, we announced I think TSYS is already in Mexico, but probably our biggest new customer in Mexico and LOI. That was the competitive takeaway from one of our peers. We are very excited about that too. Those are RFPs, those are all competitive takeaways. So, you have to be competitive on price. But I would say leading technology in the issuer business has become table stakes. So, if you are not cloud-centric, you have a partner like we do in AWS, I think it’s very difficult to compete. So, I think the answer to your question at the end of the day, Bryan, is, yes, BofA, P&C, all these other things is Citi renewal from a year ago on the commercial side, the recent win in Mexico and everything else we are seeing is in the fact that we accelerated 80 basis points sequentially in the fourth quarter versus the third quarter. And our expectation is for more growth and more acceleration in 2023. And the way our math works and issuer is the way it’s worked forever. In the merchant business, if you give an x percent discount over a 5-year term, you are pretty much with volume growth surpassed that within the first 18 months of doing it in the first place. And that’s been our experience in merchant, predates me and can go back 30 years. So, maybe it’s – I can’t speak in the 70s and 80s that predates me and merchant. And certainly, that’s been my experience on the issuer side. Cameron, do you want to comment on merchant?

No, the only thing I was going to add to that, Bryan, as it relates to renewals and issuer. It’s a little bit like the merchant business and that we are not trying to be all things to all people. We target very specific segments of the market, and we are really targeting winners in the market. Those issuers who are growing, they are acquiring more portfolios, they see good organic growth from a card deployment perspective in their business today. So, you can afford to give, to some degree, those discounts on renewals because you are going to grow through them over a short period of time, to Jeff’s point. So, it speaks to a little bit around how we position the issuer business in the marketplace, the target market for us from a growth perspective. And again, the organizations we like to partner with, those that are winning in the marketplace and give us the opportunity to grow through any sort of discount we may have to provide on a renewal over time.

Look, it sounds like the Braves, the Hawks, the Falcons, stuff we announced today, with the states, like those are all RFPs, too. Those are RFPs with the existing providers. Those are RFPs with new fintech entrants. We are winning those too. Some of those guys know how to run RFPs at the NFL, the NBA, MLS right, etcetera. So, I would say what we are leading with is technology and that’s not cells. If you don’t care about the quality of tech and the quality of the service that quality support, as Cameron said, you would probably go look elsewhere.

Got it. Very helpful. Thanks guys.

Thanks Bryan.

Thanks Bryan.

Thank you. Our next question comes from the line of Vasu Govil with KBW. Please proceed with your question.

Hi. Thanks for taking my question. My first question is just on the macro and the EVO business. I guess could you talk a little bit about the defensiveness of the book of business that you are acquiring with EVO? And to the extent macro does slowdown, how would your outlook on the accretion change there, if at all?

Vasu, it’s Cameron. I will start and I will ask Jeff to jump in. I think what we like about the EVO portfolio overall is their exposure to faster growth markets around the globe. So, obviously, I think EVO, part of the strategy that they have pursued and it’s one that’s consistent with us is to have those exposures to geographies with strong secular growth trends. Obviously, where we see good favorable macro environment as it relates to card adoption, in digitization of payments over time, notwithstanding what the underlying macro environment in those markets may be. So, I think we feel, obviously, that our guide for EVO today – that we provided today, which is around $475 million for 2023 for three quarters of the year, which run rates to about 630, 635, something like that. Obviously, I think it reflects a pretty consistent view of the macro environment globally that we have here at Global Payments, but obviously does, to some degree, benefit from the fact that they are in secular growth markets. That obviously create tailwinds and good opportunities for us to continue to grow over longer periods of time. So, yes, you may see a little bit of macro softness in some of these markets. But again, the strong underlying secular growth trends more than offset that and I think as leave us well positioned to see good growth in EVO business year-over-year, apples-to-apples for 2023 as well as kind of the years beyond.

Yes. I mean at that point, Vasu, as Josh in his prepared remarks, that 430ish, 435 number, which is like 630, whatever the math is, for the full year reflects double-digit growth over EVO period-over-period. So, that’s the number ready. Then on your earnings question, what we showed today was consistent with what we said on August 1st is really no change. That 1% to 2% of accretion for nine-twelfth of the year for EVO, if you fully phased in, as I said, as a response I think to James’ question, you fully phased in the synergies for EVO. You would get to 4% to 5%, which basically offsets completely the Netspend B2C Consumer disposition. That’s what we guided to in August 1st of ‘22. Vasu, we said, nothing has changed.

Thank you very much. And just my quick follow-up was on issuer. I know you got a lot of questions on that already. But just high level, if you think about what’s your medium-term guide or cycle guide for that business was sort of in the mid-single digits. And it seems we are trending towards the low end now for a couple of years. Can you help us think visit the commercial portfolio that’s still weighing on it or something beyond that? And is this sort of a more sustainable growth rate going forward?

Yes. I will take that Vasu and Josh can jump in. So, look, our cycle guide for that business has been, I think TSYS was 2%, 4% to 6%. The good news is in our guide, we go up to 5.5%, right, today. So, we have 4.5% to 5.5%. Obviously, 5% in the midpoint, 5% is the midpoint of 4% to 6% also. But notice the 4.5% to 5.5% relative to the 4% to 6% historical cycle guide. So, I think that’s good news. I think the difference in that business is really twofold. One, as I mentioned in response to Bryan’s question, I think the cloud-centricity and the advent of new technology business, look, we wouldn’t have won the deal in Mexico. I don’t think we would have won – I know we would have won CaixaBank and the other things we described, if we weren’t cloud-centric and cloud native in that business, which is obviously what we have been working on since our announcement in August of 2020 with AWS. So, the first thing I think it’s changed is what people are buying, which is really technology and look, price is always an issue, but I think as I mentioned a minute ago and Cameron too, I think we are always price competitive. That’s kind of point number one. Point number two, obviously, is the mix with B2B assets that we made the pivot on with MineralTree in September of 2021 and now with elements of Netspend B2B. And I think what we said in the back half of last year, Vasu, is that should over time, and now I am talking about including B2B, right, that’s kind of a new item. That takes you from the 4% to 6% and it’s going to take you higher to this x as B2B becomes a bigger point. As I think Josh said in his prepared remarks today, excluding Paycard, which is more macro sensitive and had lot of COVID subsidies in it. For employment, if you back that out, B2B added 60 bps to the core. So, if the quarter is growing 5%, I think we just said it was growing 5% in the fourth quarter. If the quarter is growing 5% and you are adding 60 bps, now you are close to 6%. And as those mixes change and as we burn through the pipeline, you are going to get to that mid to mid to high, which obviously is an enhancement with B2B over the traditional 4% to 6%. So, the high end of our guide right now is 5.5%. That’s higher than 5%. We hope, obviously, that continues over time. But the business is in a very healthy place. As I said in my prepared remarks, we had record after record during the peak in particular, in our issuer business. And I don’t see any signs currently of our expectations changing.

Great. Thank you for the color. That was very helpful.

Thank you. Ladies and gentlemen, our last question this morning will come from the line of Will Nance with Goldman Sachs. Please proceed with your question.

Hey guys. I appreciate you taking the question. Jeff, I just wanted to ask a follow-up on the earlier question on kind of the run rate growth as you guys are exiting in the year. I mean, I am kind of looking at Slide 9 at the 7% to 8% growth or on a segment basis kind of 9% to 10% standalone GPN and/or standalone merchant and mid-single digits on issuer. I guess just how do you kind of bridge what the sum product of those two growth rates gets you towards sort of the low-double digit cycle guide on top line? And kind of what needs to improve from here to kind of get to those numbers? Thanks.

Yes. So, what I would say is our cycle guide, I would like to start with that Will and just work in reverse. So, our cycle guide of low-double digits includes M&A in it. For example, on the revenue side as well as the expense side, capital deployment has always been a part. And what we have said historically, Will, even before ‘21, probably going back to ‘15, ‘18, is that M&A, for example, can add up to a couple of hundred basis points of revenue in any given period. And capital deployment generally gets 2 to 3 points kind of earnings growth and has historically for a company, whether it’s buybacks or M&A or anything else. So, that’s the overall generality. Then if you go to your question, on Pages 9 and 10. So, what we are trying to get at is we only have three quarters of EVO in 2023. Obviously, we have a disposition coming in 2023, where our cycle guide doesn’t assume we are selling 10% of the revenue of the company, which is what’s in the disposition. So, we tried to back that out to give you a better sense of the 8% to 9%. And then obviously, the exit period also has a currency assumption, as I mentioned a minute ago, and there is a bit of a currency headwind over the year. So, I think the answer to your question is as we accelerate merger integration with EVO, we expect to see revenue acceleration, 125, Will, is just an expense number. So, as we integrate EVO towards the end of the year, as we look at revenue opportunities when it closes beyond expense opportunities, if you add those 1 to 2 points, which is back to our cycle guide over the last number…

Got it. Appreciate all the detail there. So, I guess that’s M&A mix shift towards B2B and maybe some core acceleration in the issuer business, that’s very helpful. I appreciate all the details on the slide deck, by the way, very clear. I have a very quick follow-up. On the gaming business, could you just provide any details on the contribution of that business to 2022 results, just so we have a clean number there?

Yes. I can give you a little bit of color there, Will. It’s Cameron. The gaming business got about $100 million a year or so. And I think we sold that business at around kind of an 8x multiple level, 7.5x, 8x. Can give you a sense of sort of the EBITDA contribution that it would deliver. So, as we look at 2023, we will have one-quarter of the business, so about $25 million of revenue. You can see that highlighted on Page 9 of our disclosures today. And then we will lose about $75-ish million plus of revenue kind of relative to what we had in 2022 from that business.

Got it. Very helpful. Appreciate you taking the questions guys.

Thanks Will.

Thanks will.

Well, on behalf of Global Payments, thank you very much for joining us this morning. Have a great day.

Thank you. This concludes today’s conference. You may disconnect your lines at this time. Thank you for your participation.