Rayna Kumar

Rayna Kumar from Oppenheimer asked for WEX's expectations regarding adjusted operating margin for the remainder of the year and whether margin expansion is anticipated for 2026, assuming a stable macro environment.

Answer

Jagtar Narula, CFO of WEX Inc., explained that Q3's year-over-year operating margin decline was partly due to a challenging credit loss comparison, which is expected to improve in Q4. He noted that Q4 typically sees lower operating income margins due to the travel business. For 2026, while it's too early for a definitive guide, he anticipates operating income margins to trend similarly to the current year, supported by revenue growth and the lapping of strategic investments.

Rayna Kumar asked for expectations regarding adjusted operating margin for the remainder of the year (Q4) and whether margins are anticipated to expand in 2026, assuming a stable macro environment.

Answer

Jagtar Narula, CFO, WEX Inc, explained that Q3 year-over-year operating margins were down approximately 400 basis points, with about 200 basis points attributed to a tough credit loss comparison and the remainder to sales, marketing, and product investments. He expects the credit loss impact to improve in Q4, though Q4 typically sees lower operating income margins due to the Corporate Payments travel business. For 2026, he stated it's too early for a specific guide but expects operating income margins to trend similarly to the current year, with revenue looking positive.

Rayna Kumar of Oppenheimer & Co. Inc. inquired about current travel trends within the Corporate Payments business and expectations for Q3. She also asked for the outlook on adjusted operating margin for the remainder of the year.

Answer

Chair, CEO & President Melissa Smith described the travel environment as stable and consistent with expectations, a trend projected to continue. CFO Jagtar Narula anticipates adjusted operating margins will be in line with Q2, but cautioned that Q2 costs were unusually low due to the timing of efficiency gains and investment spending, which is expected to catch up in the second half.

Rayna Kumar asked about the current travel trends observed in the Corporate Payments business and the expectations for Q3. She also requested color on the outlook for adjusted operating margin for the remainder of the year.

Answer

CEO Melissa Smith described travel trends as stable and consistent with projections, with continued volume growth. CFO Jagtar Narula stated that adjusted operating margins are expected to be in line with Q2. He cautioned that Q2 benefited from accelerated efficiency gains and slower-than-planned hiring for investments, and that spending is expected to catch up in the second half of the year.

Reyna Kumar observed a slight deceleration in Latin America's payments volume compared to the previous quarter and asked for the contributing factors.

Answer

Chris Suh, Visa's Chief Financial Officer, attributed the slowdown in Latin America primarily to moderating inflation in Argentina. He noted that despite this, Latin America remains a high-growth region for Visa.

Rayna Kumar asked about the slight deceleration in Visa's payment volume in Latin America compared to the previous quarter, seeking specific reasons for this trend.

Answer

CFO Chris Suh attributed the deceleration in Latin America primarily to moderating inflation in Argentina, while noting that the region still remains a high-growth area for Visa.

Rayna Kumar inquired about the opportunities and potential headwinds for Visa resulting from the CFPB's final open banking rule in the U.S., particularly from the perspective of its Tink acquisition.

Answer

CEO Ryan McInerney stated that Visa supports secure consumer data access and sees the new rule as an opportunity. He believes the Visa brand and capabilities like Visa A2A can build confidence and resolve complexity in the U.S. open banking ecosystem, similar to its strategy in Europe.

Rayna Kumar inquired about North America trends, asking if they have worsened compared to Q2 and if the market has reached a bottom.

Answer

Devin McGranahan (CEO) described the quarter as 'lumpy,' with a better July, a tough August, and improving trends in late September and early October. He indicated that directional improvement suggests stability, but linear improvement is not yet present.

Rayna Kumar inquired about the trends in North America, noting that they appeared to have worsened compared to the second quarter, and asked if the company expects improvement from here, specifically if the region has reached its bottom.

Answer

CEO Devin McGranahan described the quarter as 'lumpy,' with some improvement in July, a tough August, and then some positive trends in late September and early October. He indicated that while linear improvement isn't present, directional improvement suggests potential stability relative to the lows seen in June or August.

Rayna Kumar asked if the Evolve 2025 strategy needs to be tweaked due to tightening U.S. immigration policy and questioned why a customer with a debit card would use it at a retail location instead of a digital channel.

Answer

CEO Devin McGranahan affirmed their commitment to the Evolve 2025 strategy, stating that while U.S. growth may slow, the core opportunity remains. He noted an increased focus on non-remittance services like the digital wallet. McGranahan explained that the retail value proposition extends beyond cash to include convenience, familiarity, language support, and the certainty of a paper receipt, with a recent survey indicating over two-thirds of retail customers would opt to use a debit card in-store.

Rayna Kumar asked about current hiring trends, particularly in white-collar segments, and the expected impact on Talent Solutions in the fourth quarter.

Answer

CEO Mark Begor noted a sluggish hiring market, especially for white-collar jobs, with overall employment remaining high but new job creation being low. He attributed this to continued cautiousness among HR managers due to broader economic uncertainty, including tariffs.

Rayna Kumar inquired about the continued stress in white-collar hiring, seeking details from customer and background screener conversations, and the expected impact on the Talent Solutions segment in the fourth quarter.

Answer

Mark Begor, Chief Executive Officer, described the market as sluggish with high employment but low new job creation. He noted that background screening customers report corporate cautiousness around hiring due to broader economic uncertainties, particularly regarding tariffs, which needs to be resolved.

Rayna Kumar inquired about the impact of current travel trends on Global Blue's performance and asked if Shift4 is actively investing in or exploring opportunities related to agentic commerce.

Answer

CEO Taylor Lauber noted that while Global Blue's growth had moderated, trends improved during the summer travel season, though currency fluctuations remain a key factor. Regarding agentic commerce, he stated that Shift4 is monitoring the technology and will apply its 'build, buy, or partner' framework, but believes the established nature of the travel industry makes Shift4 a natural beneficiary regardless of technological shifts.

Rayna Kumar of JPMorgan Chase & Co. inquired about the competitive landscape in international markets and Shift4's specific competitive advantages.

Answer

Taylor Lauber, President and incoming CEO, explained that international markets resemble the U.S. market from 15-20 years ago, with fragmented software, hardware, and payment providers. He stated that Shift4's edge comes from its proven strategy of bundling these services into a single, cohesive solution for merchants, noting that one in four new merchants now comes from outside the U.S.

Rayna Kumar of Oppenheimer & Co. Inc. requested an update on the gateway conversion process, including the size of the remaining opportunity and whether softening consumer spending was impacting the pace of conversions.

Answer

President Taylor Lauber confirmed that over $100 billion in annualized volume remains in the gateway conversion funnel. He described the conversion process as programmatic, involving both large enterprise dialogues and smaller merchant conversions over time. He noted the gateway's direct revenue is minimal, but the conversion opportunity is a primary strategic focus, with acquisitions like Givex intended to continuously replenish this funnel.

Rayna Kumar requested an update on Shift4's gateway conversion process, including the size of the remaining opportunity and whether softening consumer spending has impacted the pace of conversions.

Answer

President Taylor Lauber confirmed that a substantial opportunity of over $100 billion in annualized volume remains on the gateway. He characterized the conversion pace as 'programmatic,' involving planned enterprise migrations and ongoing conversions of smaller merchants. Lauber emphasized that the strategic focus is on continually refilling the cross-sell funnel through acquisitions like Givex, ensuring the gateway remains a long-term value driver.

Rayna Kumar asked for an update on Mastercard's progress in gaining share in markets with strong account-to-account (A2A) players, such as Pix in Brazil and UPI in India, and the strategies being employed.

Answer

CEO Michael Miebach explained that the strategy centers on product differentiation. In Brazil, for example, Mastercard revamped its debit platform to better compete online. He emphasized that their existing solutions for installments and recurring payments remain highly competitive against A2A offerings. The overall approach is to provide choice, partner where possible, and compete effectively, noting that their Brazil business continues to show healthy growth.

Rayna Kumar requested an update on Mastercard's progress in gaining market share in Europe and asked which countries were demonstrating particularly strong performance.

Answer

CEO Michael Miebach described Europe as a significant success story, noting market share leadership in the U.K. and strong momentum on the continent. He highlighted a strategic partnership with UniCredit across 13 markets and a major win with Banco Popolare in Italy as key examples. He also emphasized the ongoing opportunity to displace cash in developed economies like Italy.

Rayna Kumar of Oppenheimer & Co. Inc. asked about the drivers behind volume acceleration in Europe, the macroeconomic outlook for the region, and the potential for further market share gains.

Answer

Chief Financial Officer Sachin Mehra attributed the strong European performance to positive macro trends, improving consumer confidence, and a significant secular shift to digital payments. He also highlighted that recent market share wins, such as the UniCredit and Deutsche Bank portfolios, and the ongoing Maestro to Debit Mastercard migration are key contributors to growth.

Rayna Kumar asked how Toast would balance cost management with strategic investments in a potential recession and followed up on whether the Applebee's win opens doors to service similar large brands.

Answer

CFO Elena Gomez responded that the company has a history of being decisive in dynamic environments and would pull back on non-revenue-generating spending while balancing long-term goals. CEO Aman Narang added that the enterprise sales pipeline has never been stronger and that they see a significant opportunity with many other large brands.

Rayna Kumar inquired about the timeline for the project delays experienced in the quarter and questioned if the medium-term margin expansion target of 25-40 basis points is too low given recent strength and cost management.

Answer

CEO Greg Adelson confirmed that some projects are being pushed from the current fiscal year into the next. CFO Mimi Carsley stated that while the company is always mindful of cost management, the 25-40 bps target represents a 'floor' for annual improvement and it is too early to provide specific guidance for fiscal 2026. Greg Adelson added that disciplined headcount management is a key factor in their cost control.

Rayna Kumar of J.P. Morgan Chase & Co. inquired about potential increased competition and pricing pressure at the lower end of the market from a specific large competitor.

Answer

President and CEO Greg Adelson responded that Jack Henry has not observed a significant change in the competitive landscape or new pricing pressures. He noted that the competitor's approach seems more focused on retaining existing clients rather than winning new ones from Jack Henry. Adelson also highlighted that some of Jack Henry's recent 'merger of equals' wins have come from that same competitor, suggesting the competitive dynamic is not one-sided.

Rayna Kumar asked if Jack Henry is facing increased competition in core processing for larger banks, referencing a recent competitor win. She also inquired if a resilient macro environment could lead to upside in the company's fiscal 2025 margin expansion target.

Answer

CEO Greg Adelson stated there is no new competitive pressure, noting that while they don't win every deal, their success rate with large institutions remains very high, evidenced by a recent $7 billion win and strong renewal rates. CFO Mimi Carsley acknowledged that while it's early, a stronger economy and consumer spending could present potential upside to margin targets, particularly through higher transaction and card volumes in the spring.

Jay Coyman, on for Rayna Kumar, asked about the key business drivers for the personal loan, auto, and POS markets, and also inquired about current trends and pricing in the capital markets.

Answer

CEO Gal Krubiner detailed the value proposition for each vertical: helping personal loan partners acquire and engage customers, enabling auto lenders to win dealership business with high approval rates, and allowing POS lenders to win more merchants. CFO Evangelos Perros added that these verticals grew 25% YoY. Regarding capital markets, Krubiner acknowledged short-term spread widening after macro news but explained Pagaya prices this into new loans, neutralizing the effect on profitability.

Rayna Kumar asked about any potential revenue or cost dis-synergies that might result from the sale of the Worldpay business.

Answer

CEO Stephanie Ferris stated definitively that there are no dis-synergies from the Worldpay sale. She explained that any such impacts were already accounted for during the initial separation when FIS sold its 55% majority stake.

Rayna Kumar requested a breakdown of the tourist mix at European ATMs, particularly the percentage of U.S. tourists, and asked about the impact of FX volatility on Money Transfer and the target for new ATM deployments this year.

Answer

CEO Michael Brown and CFO Rick Weller estimated that U.S. tourists constitute roughly 5-10% of total European ATM customers. Weller stated that FX volatility had minimal impact in Q1 but increased in April. He also mentioned that while they are moving away from specific targets, new ATM deployments would be consistent with prior years.

Rayna Kumar of Evercore ISI asked for the key drivers behind the confident 2025 adjusted EPS growth guidance of 12% to 16% and requested clarification on the expected growth contributions from each business segment.

Answer

CEO Michael Brown attributed the confidence to strong momentum across all three business segments, highlighting growth in EFT's merchant services, epay's expansion with major brands, and a 33% increase in Money Transfer's digital transactions. CFO Rick Weller added that the company's geographic and product diversity provides consistency, and he expects similar continuity and operating income growth in 2025. Management declined to provide specific growth forecasts by segment.

Rayna Kumar requested a detailed breakdown of the unit economics for digital versus retail transfers and asked about Q4 trends and the potential business impact of a future Trump administration.

Answer

CEO Robert Lisy and Head of Digital Marcelo Theodoro provided a comparative breakdown, noting a retail wire to Mexico yields a gross margin of just over $5, while a digital transaction yields a superior margin of $6 to $6.50. Lisy stated that while not providing guidance, he expects the market to remain soft in Q4, with digital growing rapidly. Regarding politics, Lisy noted the business experienced its strongest growth during the previous Trump administration, attributing it to a strong U.S. economy.