James Friedman

James Friedman from Susquehanna asked about the Financial Solutions segment's negative organic growth, what changes are needed for reacceleration, key indicators to monitor, and the overall opportunity for investors.

Answer

Paul Todd, CFO of Fiserv, highlighted investments in client service and core platforms, with progress monitored through KPIs like client satisfaction and average revenue per client. He noted that underlying volume growth across most of the financial services business remains strong, but comparable periods impact reported revenue. He expects growth across all three Financial Solutions areas in the second half of 2026, aiming for low-single-digit growth long-term. Mike Lyons, CEO of Fiserv, added confidence in addressing the issues within the company's control.

James Friedman asked what needs to change for the Financial Solutions segment to reaccelerate and grow, given its negative organic growth in the quarter, and what indicators investors should monitor.

Answer

CEO Mike Lyons emphasized ongoing investments in client service and core platforms, with progress monitored through KPIs like client satisfaction and average revenue per client. He noted strong underlying volume growth, but reported revenue is impacted by comparable periods. CFO Paul Todd expects growth in all three Financial Solutions areas in the back half of 2026, aiming for low-single-digit growth post-2026.

James Friedman questioned the components of the revised free cash flow outlook, specifically asking if the change from the prior $550 million to $325-$375 million range was primarily due to the Adjusted Pre-Tax Income revision, given the positive working capital in Q3.

Answer

Interim CFO Harsh Chugh confirmed that the free cash flow change is largely driven by two components: approximately $150 million from the Adjusted Pre-Tax Income revision and a projected use of cash for working capital in the fourth quarter, despite it being a source of cash in Q3. He clarified that the remaining difference after accounting for PTI and cash tax is attributable to working capital use.

James Friedman questioned the primary drivers behind the revision in Kyndryl's free cash flow outlook, specifically asking if it was solely due to the pre-tax income revision or also impacted by working capital.

Answer

Interim CFO Harsh Chugh clarified that the free cash flow revision was largely driven by the $150 million change in Adjusted Pre-Tax Income, with working capital expected to be a net use of cash in the fourth quarter, contributing to the overall difference.

James Friedman asked how Kyndryl's fiscal 2025 accomplishments and fiscal 2026 positioning support the mid-term financial targets set at its Analyst Day, and inquired about the progress on remediating 'focus accounts'.

Answer

Chairman and CEO Martin Schroeter stated that fiscal 2025 was another step in executing their long-term strategy, highlighting the strength of the business model and the team's execution, which positions them well to achieve their mid-term goals. Regarding focus accounts, Schroeter noted they are about three-quarters of the way through from a revenue perspective, which proves the value of Kyndryl's services. CFO David Wyshner added that they have already achieved $900 million in annualized benefits from these accounts, surpassing 90% of their updated target.

James Friedman of Susquehanna International Group, LLP asked about the market's perception or 'mind share' of Kyndryl Consult. He also requested an update on the evolution of the IBM relationship, specifically the transition to a price-times-quantity software cost model.

Answer

CEO Martin Schroeter defined Kyndryl Consult's mind share as being centered on 'mission-critical' systems and its unique ability to both 'run and transform' complex IT estates for clients. CFO David Wyshner clarified that the final annual cost increase from the IBM software rebate reduction occurred in January 2025. He views the concurrent shift to a price-times-quantity model as a positive development, creating an opportunity to actively manage and optimize software costs.

James Friedman inquired about the 10 large deals of over $100 million, asking if there were common patterns in customer needs, service lines, verticals, or regions.

Answer

Chairman and CEO Martin Schroeter clarified that these deals are scope expansions, not just renewals, reflecting customer demand for Kyndryl's new capabilities and Kyndryl Bridge. He stated the deals are broad-based, spanning all practices, including both consulting and managed services, and that all geographic segments showed signings growth. CFO David Wyshner added that this growth was achieved while maintaining disciplined, high single-digit pretax margins on new business.

James Friedman from SIG asked for clarification on the components driving the 80 basis point increase in the marketplace take rate. He also sought a simpler explanation of how Kaspi "runs advertising campaigns for merchants on the super app."

Answer

Mikheil Lomtadze (CEO and Co-founder, Kaspi.kz) clarified that the main drivers for the take rate increase are additional value-added services, specifically advertising and delivery revenues, rather than increased seller fees. Regarding advertising, he explained that merchants can easily launch data-driven campaigns from their smartphones by selecting items and target customer types, with Kaspi handling the rest to ensure high prediction accuracy and value at an affordable cost.

James Friedman asked for elaboration on the components driving the 80 basis point increase in marketplace take rate. He also sought a simpler explanation of how Kaspi 'runs' advertising campaigns for merchants on the super app.

Answer

CEO Mikheil Lomtadze clarified that the marketplace take rate increase is primarily driven by additional value-added services, specifically advertising and delivery revenues, rather than increases in seller fees. Regarding advertising, Mikheil Lomtadze explained that Kaspi's service simplifies campaign setup for merchants, allowing them to select items and target customer types from their smartphone, with Kaspi's data-driven technology handling the rest to ensure high accuracy and value at an affordable cost.

James Friedman asked for a comparison of the banking opportunity in Turkey versus Kazakhstan, the strategic approach, and the objectives for the planned $300 million investment. He also inquired about the assumed growth mix of 1P versus 3P in the updated guidance.

Answer

CEO Mikheil Lomtadze explained the $300 million investment in Turkey is for product development, funding, and the bank's required minimum capital, emphasizing a deliberate, quality-focused rollout with no major launches expected this year. Executive David Ferguson clarified that 1P is primarily fast-growing e-grocery and cautioned that the GMV guidance downgrade could be disproportionately affected by high-ticket, low-margin 1P items like cars, which have a negligible bottom-line impact.

James Friedman requested an update on the macroeconomic environment in Kazakhstan and asked about the margin profile of Hepsiburada, questioning who would be responsible for driving potential margin expansion.

Answer

Executive David Ferguson described the Kazakhstan macro environment as largely stable and predictable, with the main change being currency weakness leading to higher interest rates, which is a timing issue for the FinTech segment. CEO Mikheil Lomtadze added that the central bank managed this volatility well. Regarding Hepsiburada, David Ferguson explained that its management reports to its board, which Kaspi now controls, and that strategic updates on margins would be communicated by Hepsiburada itself.

James Friedman of SIG inquired about the outlook for the Marketplace take rate for the remainder of the year, given the mix shift between e-commerce and m-commerce. He also asked about the strategic relevance and potential seasonality of the new gift card initiative.

Answer

CEO Mikheil Lomtadze explained that take rate growth is primarily driven by value-added services like advertising and delivery, not by increasing seller fees, and that the company avoids over-monetizing merchants. Regarding gift cards, he positioned them as a medium-term initiative to drive GMV and engagement, highlighting a key feature: Kaspi's gift cards have no expiration date, which is a consumer-friendly differentiator.

James Friedman asked about Globant's competitive position in application development versus infrastructure and sought context on the factors driving the increase in revenue per head.

Answer

CEO Martín Migoya stated that Globant's strength lies in its balanced approach across digital, enterprise, and creative studios, which is essential for complex AI projects. CFO Juan Urthiague attributed the growth in revenue per head to a mix of higher value-added services, delivery efficiencies, a favorable geographic mix with higher-rate regions, and disciplined pricing to avoid low-margin deals.

James Friedman inquired about how Globant is thinking about the benefits of automation and how it might affect the traditional linear relationship between headcount growth and revenue.

Answer

CEO Martín Migoya explained that as AI tools and agents become more integrated, Globant is moving towards a model that decouples revenue from headcount. He envisions charging for services based on performance and AI agent orchestration rather than just effort. CTO Diego Tartara added that Globant's value lies in transforming powerful but raw AI technology into secure, traceable, and integrated enterprise-ready solutions, which is a complex process that creates significant value.

James Friedman questioned if the lower-than-expected operating expense growth was temporary and asked for context on the 5 basis point take rate impact from a single advertising client, including if it would continue.

Answer

Interim CFO Jeffrey Brown noted that while there was a timing element to OpEx, the company remains focused on responsible spending. CEO Pedro Arnt clarified the take rate impact was a mix-shift issue caused by slower relative growth from a large, high-take-rate advertising client in Egypt, not a decrease in their volume.

James Friedman asked for a quantitative breakdown of the drivers for the guided 2025 take rate deterioration, similar to the analysis provided for Q4. He also inquired about the company's ability to return to past profitability levels, referencing a previous 'Rule of 100' target.

Answer

Executive Pedro Arnt explained that the guided take rate compression is driven by volume growth from large Tier 0 merchants but is partially offset by expansion into higher-rate frontier markets and new products. Regarding profitability, he stated that while dLocal is still in an investment cycle, the business model has inherent operational leverage, and he believes returning to an adjusted EBITDA to gross profit ratio in the mid-70s is achievable in the long term after the current investment phase concludes.

James Friedman, also known as Jamie, asked if the fourth-quarter guidance could be considered a run rate for 2025. He also inquired about the company's competitive advantage in the remittance vertical, particularly in conversations with clients like MoneyGram.

Answer

Executive Pedro Arnt stated it was too soon to use Q4 as a 2025 run rate due to strong seasonality, but emphasized the company is exiting the year with positive momentum. Regarding remittances, he explained dLocal's advantage comes from its unique ability to combine pay-in and payout flows, enabling fast, liquid, and competitively priced FX, all delivered through a single technology integration and supported by local operations.

James Friedman asked for confirmation and rationale for breaking out Insurance as a new reporting segment and for an update on the shift to a SaaS model within that business. He also asked for the CEO's view on DXC's strategic position relative to major technology innovation cycles like AI.

Answer

CFO Rob Del Bene confirmed Insurance will be a separate segment starting in FY26 to reflect how the business is managed internally. He noted the shift to an insurance SaaS model is a long-term strategy that is underway. CEO Raul Fernandez stated he feels 'great' about DXC's position, arguing that the company's deep insight into client infrastructure and data readiness makes it a uniquely valuable partner for the AI transformation, which he believes is the largest opportunity yet.

James Friedman asked which of DXC's segments have the most opportunity for improvement and inquired about the relationship between revenue growth and margin potential for the GBS and GIS segments.

Answer

CEO Raul Fernandez stated that he sees opportunity for improvement across the entire portfolio through better operational execution, rather than singling out one segment. He noted that while the Insurance business is performing very well, his approach is holistic. CFO Rob Del Bene added that margin improvement opportunities exist across the board in both GBS and GIS.

James Friedman inquired about the specific tactics driving growth in the insurance business, particularly in its software and recurring services mix. He also asked for an explanation of the drivers behind the significant margin expansion in the GIS segment, beyond the lower resale mix.

Answer

CEO Raul Fernandez attributed the insurance business success to better execution, portfolio and pricing analysis, and strategic talent acquisition to enhance the product portfolio and shift towards higher-margin recurring revenue. CFO Rob Del Bene explained that the GIS margin improvement was primarily driven by disciplined resource and non-people cost management, with the lower resale mix being a minor factor.

James Friedman asked for help isolating the impact of exchange rates on specific business segments. He also inquired about the backstory for the revenue contraction from the top client and the reason for the decline in the number of clients spending over £1 million annually.

Answer

CFO Mark Thurston explained that the primary FX impact was felt in North America, which affected the Banking & Capital Markets and Healthcare sectors most significantly. He attributed the top client's revenue decline to a combination of FX and a delay in some follow-on work. Regarding the £1 million+ client count, he noted it's a rolling 12-month metric and the decline was concentrated in the TMT and 'Other' segments.

James Friedman requested clarification on the impact of foreign exchange rates on specific business segments, the reason for the revenue contraction from the top client, and the cause for the decline in clients spending over £1 million.

Answer

CFO Mark Thurston explained that FX headwinds significantly impacted the banking, capital markets, and healthcare sectors, which have high U.S. dollar exposure. He attributed the top client's revenue decline to a combination of FX impact and delays in some follow-on work. The drop in clients spending over £1 million was primarily in the TMT segment, reflecting the metric's rolling 12-month nature.

James Friedman from Susquehanna asked about the trend in revenue realization, specifically if revenue per headcount is growing faster than headcount itself. He also requested more elaboration on the macroeconomic concerns in the United Kingdom and their impact on guidance.

Answer

CEO John Cotterell confirmed that revenue per head is expected to improve modestly due to better pricing and utilization, causing revenue to grow slightly faster than headcount in the near term. CFO Mark Thurston added that the UK macro softness materialized in January and February, driven by inflation and growth uncertainty, which has led to increased client caution, project delays, and some ramp-downs that are factored into the guidance.

James Friedman asked about the outlook for revenue realization, specifically revenue per headcount, and whether it would grow faster than headcount. He also requested more detail on the macroeconomic concerns in the U.K.

Answer

CEO John Cotterell stated that revenue per head is expected to improve modestly due to moderate price increases and utilization gains from internal tools. CFO Mark Thurston elaborated on the U.K. macro environment, noting that weakness materialized in January and February due to inflation and economic uncertainty, causing clients to become more cautious, delay projects, and ramp down existing work.

James Friedman asked for elaboration on why the current 'digital shift' towards AI and core modernization is fundamentally different from prior technology cycles.

Answer

CEO John Cotterell explained that unlike past shifts which involved building digital capabilities around a client's core systems, the current AI imperative requires deep integration into the core data and workflows. This results in larger, more complex transformation programs with longer client decision-making and sign-off cycles.

James Friedman of Susquehanna asked for clarification on the newly introduced merchant KPIs, particularly the billable mids and revenue per merchant metrics. He also inquired about any new sales force incentives and the return on investment from the sales team expansion in 2024.

Answer

CFO John Crawford explained that the decline in billable mids reflects higher-than-expected attrition and slower SMB sales, which the company is actively addressing. He noted the revenue per merchant metrics reflect the strategy to move upmarket. CEO Bruce Lowthers added that the investment in the enterprise sales team has 'worked wonderfully,' with expanding ACV per rep. While the in-market SMB group is still a work in progress, he stated the overall return on investment is at or potentially above expectations.

James Friedman asked for a qualitative breakdown of the largest contributors among the new products that now represent a mid-single-digit percentage of revenue. He also inquired about Paysafe's competitive advantage or 'right to win' in the white-labeled wallet space.

Answer

CEO Bruce Lowthers identified the 'account and card' product and the ePIN solution as the two biggest drivers of new product revenue. Regarding white-labeled wallets, he cited Paysafe's regulatory strength and robust AML framework as a key differentiator that provides a strong foundation for launching new affiliate wallets, such as the Pago wallet in Peru.

James Friedman asked for elaboration on why transaction costs grew slower than TPV, which was attributed to 'mix'. He also inquired about the durability of the company's repricing strategy, competitive reactions, and what is embedded in the outlook for the rest of the year.

Answer

Executive Ricardo da Silva addressed repricing durability, stating that as interest rates rise for everyone, competitors focused on profitability will inevitably follow suit. He affirmed the company's full-year guidance as the best indicator of their expectations. Executive Artur Schunck clarified that transaction costs, mainly interchange and scheme fees, grew slower due to a shift in product usage by clients, though he did not specify the exact nature of the mix shift.

Asked for an elaboration on the product mix shift that caused transaction costs to grow slower than TPV. Also questioned the durability of the company's repricing strategy, competitive reactions, and what is embedded in the outlook for the year.

Answer

The company expects its repricing strategy to be durable because rising interest rates are an industry-wide issue, compelling all rational competitors to also increase prices. PagSeguro will manage this to balance growth and profitability, and they are sticking to their full-year guidance. The lower growth in transaction costs is due to a shift in product usage by clients, primarily impacting interchange and scheme fees.

James Friedman of Susquehanna asked for elaboration on the product 'mix' that led to transaction costs growing slower than TPV, and questioned the durability of the company's repricing strategy in the face of competition.

Answer

Executive Artur Schunck attributed the slower growth in transaction costs to a favorable shift in product usage, primarily related to interchange and scheme fees. Executive Ricardo da Silva addressed repricing, stating that as rising interest rates are an industry-wide headwind, he expects competitors focused on profitability to eventually raise their prices as well. He expressed confidence that this dynamic is factored into the company's full-year guidance.

James Friedman asked about the increase in fixed-price contracts and whether the Q1 gross margin dip was due to the annual wage increment.

Answer

CFO Jason Peterson confirmed the Q1 gross margin was impacted by 2024 salary increases and a 50 basis point headwind from recent acquisitions. He noted the rise in fixed-price contracts is partly due to the acquired companies and an evolution in pricing models toward monthly fixed fees, which carry different risk profiles than large, long-term projects.

James Friedman asked for clarification on the dynamic between cost-focus and transformational GenAI journeys, questioning whether the pricing pressure EPAM is experiencing affects new 'change the business' projects, legacy 'run the business' work, or both.

Answer

CEO Arkadiy Dobkin confirmed that EPAM has exposure to both 'run the business' and 'change the business' engagements. He stated that pricing pressure currently exists across both categories due to market inertia and will likely persist until demand for transformational 'change' projects returns to more traditional levels.

James Friedman asked for data on the credit portfolio's 'attach rate' to the marketplace, seeking to understand the accelerator effect that credit origination has on purchasing within the ecosystem.

Answer

Osvaldo Giménez, EVP of Fintech, addressed the question by referencing the 'Blue money' metric, which encompasses all payments from Mercado Pago's own sources, including credit. He stated that this metric accounts for roughly 20% to 30% of GMV in the main countries and that the trend has been positive.

James Friedman asked about the bad debt component in the margin bridge, questioning if it was due to early defaults from new originations or an underlying change in credit quality. He later followed up with a question about the improving market environment in Argentina.

Answer

Executive Marcos Galperin clarified that the 3.4 percentage point margin compression from bad debt was not due to poor credit quality but rather the rapid growth of the portfolio. He explained that as the portfolio grows, provisions for losses are booked upfront, which impacts margins in the short term. For Argentina, executive Ariel Szarfsztejn attributed the improvement to both a better macro environment and company-specific initiatives like experience improvements and promotional measures that have boosted frequency and conversion.

James Friedman asked for more detail on the drivers of the double-digit growth in Latin America, specifically the Getnet Chile relationship and the Brazil reacceleration. He also requested an update on the progress and market dynamics of the Getnet Chile partnership.

Answer

President and Chief Executive Officer Morgan Schuessler confirmed the segment's double-digit organic growth and noted the Getnet Chile capability is fully rolled out, with Santander successfully enrolling over 200,000 merchants. He explained that Santander was a first-mover in leaving the incumbent Transbank, and the resulting market disruption could create more opportunities for EVERTEC to process for other banks in the country.

James Friedman of Susquehanna Financial Group asked a high-level question about the transferability of EVERTEC's skills and technical expertise from Puerto Rico to its growing Latin American operations. He also requested a clarification on the mechanics of the high-margin Getnet Chile revenue.

Answer

CEO Mac Schuessler affirmed that its expertise has been highly transferable, citing a significant new deal with Grupo Aval in Colombia and the deployment of its platforms across multiple countries. He also noted the value of newly acquired skills from companies like Nubity. CFO Joaquin Castrillo explained that the Getnet Chile contract, which involved periodic catch-up payments, concluded in December 2024 and will now shift to a standard price-per-transaction model, eliminating future one-time revenue adjustments.

James Friedman asked a high-level question about the transferability of EVERTEC's skills and technology from Puerto Rico to its expanding Latin American operations. He also requested a reminder on the mechanics of the high-margin Getnet Chile payments.

Answer

CEO Mac Schuessler affirmed that the company's expertise has been highly transferable, citing a significant new deal with Grupo Aval in Colombia and the deployment of various platforms across Mexico, Costa Rica, and other countries. CFO Joaquin Castrillo clarified that the Getnet Chile agreement, which previously included periodic high-margin catch-up payments, concluded in December and has transitioned to a standard price-per-transaction model, eliminating future one-time adjustments.

James Friedman of Susquehanna asked how the large new business funnel contributes to the 3-year guide and requested commentary on the macroeconomic situation in Canada.

Answer

Taylor Lauber, President and incoming CEO, reiterated that the 3-year plan includes a conservative $80 million synergy estimate from Global Blue and advised focusing on the overall strategy's success rather than individual funnels. Regarding Canada, he described it as a solid and accelerating contributor, driven by the company's relatively recent entry and acquisitions, rather than by specific macro trends.

James Friedman asked for an update on the Processing business line within the Merchant segment, inquiring about the reasons for its recent performance and the logic behind expectations for improvement.

Answer

CFO Robert Hau explained that the Q1 decline was primarily due to a difficult comparison against a large, periodic revenue item from Q1 of the previous year. After adjusting for that item, the Processing business actually grew by about 4%. He reiterated the long-term expectation for this line to be roughly flat to slightly positive, noting it is the smallest of the three merchant business lines.

James Friedman of Susquehanna Financial Group, LLLP inquired about the company's view on the macroeconomic supply and demand dynamics in the housing market for the year ahead.

Answer

CEO Vishal Garg acknowledged the difficulty in predicting the macro environment but noted strong demand for HELOC products for home renovations, a segment where Better grew 400% last year. He highlighted that Better has over 2 million pre-approvals from recent years where customers haven't yet purchased, indicating significant pent-up demand. CFO Kevin Ryan added that while the macro is uncertain, the company is confident in the long-term trend of technology disrupting the mortgage process.

James Friedman asked for clarification on the drivers of the software segment's 15% revenue growth and inquired about the company's strategy for leveraging AI to drive efficiencies beyond the initial 'quick wins' already implemented.

Answer

Executive Lia de Matos explained that the software segment's growth was boosted by a non-recurring BRL 8 million revenue item and strong performance from a single portfolio company, Hecla. CEO Pedro Zinner addressed the AI question by stating that while current applications are focused on operational optimization, the long-term goal is to use GenAI to fundamentally disrupt their own business model, particularly in distribution, to create a lasting competitive advantage.

James Friedman asked for the outlook on financial expenses going forward and questioned whether the company's product bundling strategy was potentially impacting merchant client growth.

Answer

Executive Mateus Schwening detailed that while Q3 financial expenses were offset by lower funding spreads, the rising yield curve will be a headwind going forward. Executive Lia de Matos clarified there is no direct negative relationship between bundling and client growth. She explained that recent net-add dynamics were driven by the phasing out of a large marketing campaign and a strategic focus on profitability over raw client numbers.

James Friedman revisited the Investor Day message regarding operating leverage, specifically asking about the progress on the strategy of outsourcing and insourcing operations and how much opportunity remains.

Answer

CFO Joel Wilhite confirmed that the company is on track, if not slightly ahead, with the strategies laid out at Investor Day, which has contributed to being ahead of schedule on OpEx targets. He described it as a continual journey of standardizing, automating, and offshoring operations across the entire invoice-to-pay lifecycle, indicating that this remains a key part of their success and future plans for driving profitability.

James Friedman referenced the Analyst Day presentation and asked for an update on the company's journey with its 'outsourced/in-source' strategy for driving operating leverage, and how much opportunity remains.

Answer

CFO Joel Wilhite confirmed that the company is on track, or even slightly ahead of, the operational efficiency plans laid out at the Investor Day. He described it as a continuous process of standardizing, automating, and offshoring operations across the entire invoice-to-pay workflow, which has been a key contributor to achieving OpEx targets ahead of schedule.

James Friedman asked if management remains comfortable with the long-term financial projections from the June 2023 Investor Day, particularly the Rule of 40/50+ and 30% adjusted EBITDA margin targets.

Answer

CFO Joel Wilhite affirmed belief in the long-term targets of 80% gross margin and 30% EBITDA margin, but cautioned that the 'shape and the timing could play out differently' due to macro uncertainties. CEO Michael Praeger reiterated the three core building blocks of their growth algorithm: returning to positive transaction retention, new logo growth, and yield enhancements from new products.

James Friedman of Susquehanna Financial Group inquired about the company's confidence in its long-term targets, specifically the 20%+ revenue CAGR through 2025 and the Rule of 40/50 objectives from the Analyst Day.

Answer

CFO Joel Wilhite stated that achieving these targets in the short run requires a macro turnaround but affirmed the long-term opportunity remains. CEO Michael Praeger expressed confidence, citing future growth from innovation like Payment Accelerator and spend management, new sales channels from partnerships like AppFolio and Buildium, and continued conversion of paper checks to electronic payments as key drivers.

James Friedman asked for the percentage of GMV from offline transactions and for management's latest observations on market share shifts during the quarter.

Answer

CEO Max Levchin confirmed that Affirm does not break out the percentage of offline GMV. COO Michael Linford addressed market share, stating that while they don't share a quantitative estimate, they believe they are taking share and are the fastest-growing among large competitors. He attributed this traction to strong performance from their key distribution partners during the holiday period.

James Friedman requested commentary on the general health of small businesses and the durability of the observed increase in TPV per business. He also asked for an update on the integrated platform's analytics layer and product roadmap.

Answer

Chairman, CEO and Founder René Lacerte described SMBs as resilient and noted that the economic environment appears to be turning more positive. Regarding the product, he detailed broad investments in go-to-market, supplier experiences (which boosted FX revenue growth), and platform integrations, such as embedding Spend & Expense capabilities within the AP product. He emphasized that BILL is investing to widen its competitive lead, not just to catch up.

James Friedman of Susquehanna asked about Mastercard's performance in China relative to its initial expectations since launching its domestic operations.

Answer

Chief Executive Officer Michael Miebach reported that the company went live in May with a unique single-use card for both domestic and cross-border transactions. He characterized the China entry as a medium-to-long-term secular growth opportunity that will require significant time and investment, particularly in building out merchant acceptance.

James Friedman asked if there was any 'light at the end of the tunnel' for the mortgage refinance business and sought clarification on commentary about insurance spend being concentrated with a limited number of carriers.

Answer

CEO Douglas Lebda explained that mortgage refi will improve as rates fall and more consumers benefit, describing the current market as 'coming-off-the-bottoms'. COO Scott Peyree added that home equity is currently very strong. CFO Jason Bengel noted that a drop in mortgage rates to around 6% could open up the refi market to millions of borrowers. Regarding insurance, Scott Peyree clarified that while their largest historical clients are back, a number of other carriers that were previously large spenders have not yet returned to historical levels.

James Friedman asked about the durability of the recovery in the Health Sciences segment, particularly given end-market pressures, and requested more detail on the payer and life sciences sub-segments.

Answer

CEO Ravi Kumar S explained that the Life Sciences sub-segment is a standout because technology is core to the drug discovery cycle. For the Payer sub-segment, he highlighted a significant cost-takeout opportunity driven by AI and technology, citing a 30% cost reduction for users of the TriZetto platform. He believes the entire healthcare value chain is undergoing a technology-powered transformation that Cognizant is uniquely positioned to capture.

James Friedman asked for more detail on the assumptions for H2 seasonality, particularly the balance between the cost takeout and discretionary spending narratives, and sought color on vertical performance, noting volatility in Retail.

Answer

CEO Salil Parekh explained the outlook was built on current observations without assuming new shifts in discretionary spending. This includes positive discretionary trends in Financial Services, continued weakness in Retail, and new slowness in European automotive. He reiterated that H2 seasonality, including furloughs and calendar effects in Q3 and Q4, is a key factor in the full-year outlook.