Ken Suchoski

Ken Suchoski asked about the ramp-up potential for Supplier Payments Plus (SPP) commitments, specifically if it could reach $5 billion-$10 billion in volume in a couple of years, and inquired about its monetization rate compared to virtual cards and its impact on AP/AR take rate.

Answer

President and COO John Rettig described SPP as an important solution complementing virtual cards and improving on ACH, offering enhanced reconciliation and efficiency for large suppliers. He noted initial traction (contracted $400 million in annual TPV) proves the thesis for large suppliers. Rettig stated that while the enterprise sales motion for SPP has a longer cycle and will take time to move overall metrics, it represents a 'really big opportunity,' with specific multi-year impact numbers to be shared at Investor Day.

Ken Suchoski inquired about the ramp-up potential for Supplier Payments Plus (SPP), specifically asking if the $400 million in annual TPV commitments could scale to $5 billion-$10 billion in a couple of years, and how its monetization rate compares to virtual cards.

Answer

John Rettig, President and COO, described SPP as an important solution that adds breadth to BILL's payment portfolio, complementing virtual cards and offering a better experience than vanilla ACH due to enhanced reconciliation, data, and efficiency, which also lowers payment acceptance costs for suppliers. He expressed optimism about the initial traction but noted that SPP involves an enterprise sales motion, which is new for BILL and has a longer sales cycle. While it will take time to significantly impact overall metrics, he sees a very large opportunity given the existing ACH volume, especially among the largest 10,000 suppliers in BILL's network. He deferred specific multi-year financial impacts to an Investor Day.

Ken Suchoski from Autonomous Research asked for help reconciling the 4% same-store sales growth in Bill APAR with the flat TPV per customer metric. He also questioned the drivers behind the slight sequential decline in subscription ARPU and its expected trend, especially given the company's push into the mid-market.

Answer

President & COO John Rettig explained that the difference between same-store sales and TPV per customer is primarily a customer mix issue, influenced by smaller customers onboarded through the accountant channel. Regarding ARPU, he attributed the slight decline to a lower number of users per customer, which he sees as a reaction to the current economic environment. While he expects the mid-market push to expand ARPU over time, he noted it will take a while for the customer mix to shift. CFO Rohini Jain added that AI agents represent a significant long-term lever for increasing ARPU.

Kenneth Suchoski of Autonomous Research inquired about the potential impact of tariffs on cross-border transaction revenue, asking for details on revenue exposure, currency preferences, and the mix of goods versus services.

Answer

CEO René Lacerte clarified that the vast majority of BILL's cross-border transactions are for services, which mitigates direct tariff risk. He added that while there is some shifting behavior in corridors like China, there has been no significant shift between USD and local currency payments, partly due to product improvements like local transfer. He also noted that FX losses were reduced by approximately 65% in Q3 due to new hedging strategies.

Kenneth Suchoski sought to clarify the math behind the 0.3 basis point FX impact on the take rate and confirm if the correct baseline for Q3 forecasting is a normalized rate higher than the reported Q2 figure.

Answer

CFO John Rettig confirmed the analyst's math was correct. He affirmed that the baseline for future growth is indeed above the reported Q2 overall monetization rate, as the company expects to minimize future FX volatility through product improvements.

Ken Suchoski from Autonomous Research asked about the platform pricing transition, specifically how nCino feels about shifting the Q4 cohort (the largest this year) to the new model, especially given demand for AI solutions. He also inquired if the like-for-like uplift remains around the 10% level. Additionally, Suchoski asked about the organic FX-neutral international subscription growth, noting its current low-to-mid single-digit range and asking about the ability, drivers, and timing for re-accelerating this growth, given new wins and personnel changes in Europe.

Answer

CFO Greg Orenstein expressed confidence in the platform pricing transition, noting the team's effective execution of the playbook and positive customer reception, driven by continuous innovation and value creation. He affirmed that the 10% uplift target remains in sight, pending Q4 results. Regarding international growth, Orenstein highlighted strong performance in Japan (the second-largest banking market) and EMEA, where a GM change last year is expected to yield initial fruits in Q4 and early next year, contributing to the overall growth re-acceleration story. CEO Sean Desmond added that focused efforts on specific geographies (Spain, Nordics) and solutions (client lifecycle management, onboarding, mortgage) are also aiding conversion.

Ken Suchoski asked about the progress of converting ACV to platform pricing, noting 27% converted and Q4 being the biggest cohort. He inquired about nCino's confidence in this shift, especially with AI demand, and if the like-for-like uplift remains around 10%. He also questioned the low to mid-single-digit organic FX-neutral international subscription growth, asking about the ability to re-accelerate growth, its drivers, and timing.

Answer

Greg Orenstein, nCino's Chief Financial Officer, expressed confidence in the platform pricing target and the team's execution, noting that discussions focus on value creation and improved outcomes for customers. He confirmed Q4 is the biggest renewal quarter. Regarding international growth, Greg Orenstein highlighted strong performance in Japan and EMEA, with new leadership in EMEA expected to show initial results in Q4 and early next year, contributing to next year's growth re-acceleration. Sean Desmond, nCino's Chief Executive Officer, added that focused efforts in specific international geographies and solutions are aiding conversion.

Kenneth Suchoski sought clarification on the 6 percentage point headwind to FY26 subscription revenue growth, asking if it was entirely due to international performance, and requested more detail on the issues and leadership changes in Europe.

Answer

CFO Greg Orenstein clarified that the 6% headwind was a combination of four factors: lower bookings in international and mortgage, slightly higher churn, conservative booking linearity for FY26, and the new overall guidance philosophy. CEO Sean Desmond added that the EMEA leadership change is aimed at driving growth in Mainland Europe, building on the company's existing success in the UK and Ireland.

Ken Suchoski inquired about the drivers behind the increase in subscription revenue within 'other revenue,' specifically how much was due to adding five new chains versus other recurring sources. He also asked why transaction revenue ticked down quarter-over-quarter despite strong overall growth metrics, and for clarification on the implied sequential step-down in RLDC margins for Q4 2025.

Answer

CFO Jeremy Fox-Geen explained that subscription and services revenue primarily comes from blockchain network partnerships, with upfront integration fees being the largest, albeit lumpy, component, alongside strong growth in underlying recurring revenues. He attributed the quarter-over-quarter decline in transaction revenue to a spike in USYC redemption fees in Q2 2025 following its repositioning, which masked underlying growth in other products. Regarding RLDC margins, Fox-Geen noted that while pleased with sequential strengthening, there can be lumpiness in economic agreements, and Circle maintains a modestly conservative posture in its guidance.

Ken Suchoski inquired about the drivers behind the increase in 'other revenue,' specifically the subscription revenue step-up (new chains vs. recurring sources). He also asked for details on the sequential decline in transaction revenue despite overall strong growth metrics. Additionally, he sought clarification on the implied sequential step-down in RLDC margins for the full-year guide, given expectations for improvement from on-platform USDC and high-margin other revenue.

Answer

Jeremy Fox-Geen, CFO, explained that subscription and services revenue primarily comes from blockchain network partnerships, with upfront integration fees being the largest but lumpy component, alongside strong growth in underlying recurring revenues. He attributed the sequential decline in transaction revenue to a spike in USYC redemption fees in the prior quarter during its repositioning, noting that USYC has since returned to strong growth. Regarding RLDC margins, Mr. Fox-Geen highlighted the strong sequential performance but noted that network effects and economic agreements can introduce lumpiness, and the company maintains a modestly conservative posture in its guidance.

Ken Suchoski of Autonomous Research sought clarification on the quarterly cadence for non-GAAP revenue growth in the second half of fiscal 2026. He also asked about industry pricing dynamics, specifically where competitors are being most aggressive and what has driven this behavior.

Answer

CFO & Treasurer Mimi Carsley confirmed the non-GAAP revenue growth cadence would see Q1 as the strongest, Q2 weaker, and then increasing through Q3 and Q4. President & CEO Greg Adelson explained that competitors are most aggressive in defending their existing clients against Jack Henry's new core pursuits, but emphasized that Jack Henry continues to command the highest pricing and was not the low-price bidder on any of its 51 core wins.

Kenneth Suchoski from Autonomous Research questioned the drivers behind the strong implied 9% revenue growth for the second half of the fiscal year and asked about the Payments segment's correlation to broader network volume trends.

Answer

CFO Mimi Carsley attributed the strong back-half outlook to favorable comps, continued healthy payment volumes, and the timing of installations for newer, successful products like Financial Crimes Defender and Banno Business. She clarified that the Payments segment's performance is not solely tied to card volumes, as it also includes faster-growing areas like PayCenter (real-time payments) and more mature services like Bill Pay, which influence the overall segment growth rate.

Kenneth Suchoski asked about the long-term runway for the cloud business to continue its double-digit growth, given that 73% of clients are already on the private cloud. He also requested the building blocks for the guided 6% revenue growth in Q2.

Answer

CEO Greg Adelson explained that there is still a multi-year runway for private cloud migration, as remaining clients are often larger, and the public cloud offering will create new migration paths starting in 2026. CFO Mimi Carsley added that client growth also drives cloud revenue. For Q2, she noted that while card revenue should improve slightly, headwinds from hardware comps and slower growth in areas like call center processing lead to the 6% forecast.

Ken Suchoski asked about the sustainability of the U.S. Vehicle segment's recovery to mid-single-digit growth and the key building blocks for that growth. He also revisited the Q3 vs. Q4 growth outlook, noting the significantly harder year-over-year comparison in Q4 and asking for the expected organic growth cadence.

Answer

President, Chairman & CEO Ronald Clarke expressed hope for sustained mid-single-digit growth in U.S. Vehicle, driven by better retention from a better client mix (less micro), new large account wins, and cross-selling corporate payment solutions to the large fleet client base. Regarding the Q4 comp, Clarke clarified that organic growth in Q3 is expected to be slightly better than Q4 (e.g., 10.5-11% vs. 9.5-10%) due to a one-time benefit in the prior year's Q4, making the grow-over tougher.

Ken Suchoski asked about the sustainability of mid-single-digit growth for the U.S. Vehicle segment and the key building blocks for that growth. He also revisited the Q3 versus Q4 growth cadence, noting the significantly harder year-over-year comparison in Q4 and asking for the expected organic growth in each quarter.

Answer

President, Chairman & CEO, Ronald Clarke, expressed hope for sustained mid-single-digit growth in U.S. Vehicle, driven by improved retention from a better client mix (less micro) and cross-selling corporate payment solutions to the large fleet client base. He clarified the second-half cadence, stating that Q3 organic growth will likely be slightly better (10.5-11%) than Q4 (9.5-10%) due to a one-time benefit in the prior year's Q4, smoothing out the tough comparison.

Ken Suchoski asked about the strategy for scaling the Genius platform in international markets, focusing on distribution partnerships and the level of reinvestment required to capture market share.

Answer

President & COO Robert Cortopassi explained that the international rollout of Genius will leverage the company's existing, scaled distribution networks, including direct sales, bank partnerships, and JVs. He emphasized that the platform was designed with international capabilities, minimizing the need for major re-architecture in new markets. CEO Cameron Bready added that Global Payments' established brand recognition in these regions provides a strong foundation for a rapid and effective launch.

Ken Suchoski asked about the strategy for scaling the Genius platform in international markets, including brand introduction, the need for new partnerships, and the level of reinvestment required.

Answer

President & COO Robert Cortopassi explained that the international rollout of Genius will leverage the company's existing distribution, including direct sales teams and joint ventures, and does not require new partnerships. He noted the platform was designed to be international, making localization for currency and fiscal requirements an incremental effort rather than a full re-architecture. CEO Cameron Bready added that Global Payments is already a well-recognized brand in these markets, which should facilitate adoption.

Ken Suchoski of Autonomous Research sought more detail on the Capital Markets growth slowdown and asked for clarification on the prior-year one-time items affecting Banking revenue.

Answer

CEO Stephanie Ferris attributed the Capital Markets recurring revenue slowdown to temporary weakness in loan syndication, while noting the overall growth variance from Q1 was due to the timing of a large license renewal. CFO James Kehoe specified the prior-year Q4 banking items were a $33 million negative impact from a termination fee reversal and a contract adjustment.

Ken Suchoski followed up on the pricing topic, asking if Mastercard will begin lapping the pricing initiatives from 2024, particularly around tokenization, in the second half of the current year.

Answer

CFO Sachin Mehra confirmed that the company will indeed lap the value delivery and associated pricing from the previous year during the second half. However, both he and CEO Michael Miebach stressed that their focus is on a continuous cycle of creating new value for new and existing customers across different markets and buying centers, which provides ongoing growth opportunities beyond any single pricing event.

Kenneth Suchoski from Autonomous Research asked about education market performance outside of Canada and Australia and whether the 2025 revenue growth slowdown is isolated to the education vertical. He also inquired about the drivers of the strong Q4 gross margin and the outlook for 2025.

Answer

CEO Mike Massaro confirmed that the Travel and B2B verticals continue to be high-growth franchises, and within Education, the U.K. and EMEA regions remain strong. The slowdown is concentrated in Canada and Australia. CFO Cosmin Pitigoi attributed the Q4 gross margin beat primarily to a positive FX settlement impact, and guided for margins to see 100-200 bps of pressure going forward due to business mix.

Kenneth Suchoski sought to confirm his calculations for physical retail revenue excluding Iraq and asked about the investment areas and margin trajectory for the fast-growing Consumer Services business.

Answer

CFO Matt Cagwin confirmed the analyst's retail revenue math was 'spot on' and anticipates modest improvement in Q4. For Consumer Services, CEO Devin McGranahan outlined investments across transactional products, bill pay, and new ventures like digital wallets. Cagwin added that while there are upfront costs, the goal is for every new product to achieve margins at or above the company average once it reaches scale, with timelines varying by product.

Asked about the strategy to significantly increase the number of direct deposit users on Cash App and the expected adoption curve.

Answer

Jack Dorsey detailed a three-part strategy: 1) Better packaging of benefits like free overdraft and higher savings yields; 2) Increased marketing investment in the second half of the year; and 3) Product enhancements such as spending insights and an improved web experience. Amrita Ahuja added that key metrics are inflows per active (up 10% YoY) and the number of paycheck deposit actives, which continues to grow organically as part of a long-term strategy.