Trevor Williams

Trevor Williams asked Jagtar Narula about quarter-to-date mobility trends, specifically how same-store sales are performing relative to Q4, considering comps and recent weather impacts. He also sought clarification on the ex-fuel growth cadence for mobility, confirming if Q1 is expected to be the low point due to comps, with similar growth thereafter.

Answer

Jagtar Narula (CFO, WEX) confirmed that Q1 is expected to be slightly lower for mobility due to a pull-forward of gallons in the OTR business last year, with growth looking similar for the balance of 2026, balancing BP coming online with interest rate drags. He stated that current KPIs and weather impacts are embedded in the guidance, and trends are on track.

Trevor Williams asked for a broader perspective on WEX's mobility segment, specifically the market opportunity at the lower end given the sales focus, and how WEX frames competitive dynamics with open-loop providers.

Answer

Melissa Smith, Chair and CEO, WEX, explained the dual focus on building market leadership in mid-to-large accounts and penetrating the largely unpenetrated small account arena, including owner-operators via the 10-4 offering. She emphasized refining credit/fraud tools and digital customer acquisition for profitability, saving owner-operators meaningful money on fuel, and building relationships for future product maturation.

Trevor Williams of Jefferies LLC asked for the latest thinking on the company's portfolio of assets and any appetite for strategic actions. He also inquired about the drivers of improved total volume growth in Corporate Payments and wallet share trends with large customers.

Answer

Chair, CEO & President Melissa Smith reiterated that the board conducts regular, objective reviews of the business portfolio to maximize shareholder returns. CFO Jagtar Narula attributed the slight improvement in Corporate Payments volume to the strong summer travel season. Ms. Smith clarified that trends with large OTA customers are about normalizing spend patterns for predictability, not changing wallet share.

Trevor Williams asked for the latest thinking on the company's portfolio of assets and any appetite for strategic actions. He also requested an update on Corporate Payments volume growth drivers and wallet share trends with major customers.

Answer

CEO Melissa Smith reiterated that the board conducts regular, objective reviews of the business portfolio with external advisors to maximize shareholder returns. CFO Jagtar Narula attributed the improvement in Corporate Payments total volume growth to the strong summer travel season. CEO Melissa Smith clarified that recent changes with a large OTA customer were not about wallet share but about normalizing spend patterns for better future predictability.

Trevor Williams requested quantification of the impact of shifting customers to annual contracts on software growth for the quarter and whether this dynamic will become more pronounced in future quarters.

Answer

CFO Asha Bakshani did not quantify the exact impact but expects similar levels of annual contracts going forward, noting that 50% of North America Retail contracts are now annual (up from 25% a few quarters ago). This shift is beneficial for cash flow, churn, and lifetime value. She anticipates software revenue growth to accelerate as the growth portfolio becomes a larger portion of total revenue.

Trevor Williams asked for details on where Lightspeed is most heavily discounting hardware, which led to negative gross margins, and whether this headwind is expected to intensify as outbound sales representatives ramp up. He also requested quantification of the impact of shifting customers to annual contracts on software growth for the quarter and whether this dynamic will become more pronounced in future quarters.

Answer

CFO Asha Bakshani explained that negative hardware margins are due to discounts and incentives for new business, particularly free payment terminals for Lightspeed Payments adoption. She expects hardware margins to range from -50% to -60%, depending on new business volume, with the focus on overall gross margin growth. Ms. Bakshani did not quantify the exact impact of annual contracts on software growth but noted that 50% of North America retail contracts were annual this quarter (up from 25% a few quarters ago), expecting similar levels going forward, which is beneficial for cash flow and churn. She anticipates software revenue growth to accelerate as the growth portfolio expands.

Trevor Williams of Jefferies LLC asked about the specific drivers behind the Q1 revenue and gross profit outperformance. He also questioned the full-year guidance, which implies a deceleration after a strong Q1, and inquired about business trends quarter-to-date in July.

Answer

CFO Asha Bakshani attributed the Q1 beat to strong execution of their strategy. She explained that the full-year guidance was maintained because the company is still in the early stages of its transformation, with less than half of its new sales reps fully ramped. She confirmed there were no one-time benefits in Q1 and stated that business trends in July remained stable and consistent with the first quarter.

Trevor Williams inquired about the drivers behind the forecasted revenue acceleration in the full-year fiscal 2026 guidance and the underlying macroeconomic assumptions. He also asked for more specific details on the expected trajectory of the payments penetration rate throughout the year.

Answer

CFO Asha Bakshani explained that the guided acceleration is driven by investments in the go-to-market strategy, specifically the ramping of 150 new outbound sales reps, and a 35% increase in R&D spending to fuel product innovation and upsell opportunities. She noted the guidance conservatively assumes the macro softness seen in Q4 will persist, despite recent stabilization. Regarding payments, she confirmed penetration reached 40% in April and is expected to trend upward but declined to provide a specific target due to macro uncertainty.

Trevor Williams asked for details on the current size of the outbound sales force and the timeline to reach its optimal size, and also requested an explanation for the slight uptick in GTV growth and how location growth will translate to GTV.

Answer

President JD Saint-Martin noted that outbound-focused reps constitute 19% of the quota-carrying team, with plans to increase this to 25% by year-end, citing strong unit economics. CFO Asha Bakshani explained that the GTV growth was driven by easing declines in retail same-store sales and over 20% GTV growth from flagship products, which are becoming a larger portion of the customer base.

Trevor Williams sought clarity on the software growth outlook and the relative contribution from key levers in the second half, and if this would be enough to reaccelerate GTV.

Answer

CFO Asha Bakshani confirmed a back-half acceleration in software revenue, with contributions from account manager pivots and pricing initiatives being 'pretty similar.' President JD Saint-Martin added that the focus on outbound sales for flagship products, which are growing GTV at 24%, gives them confidence in accelerating high-GTV location growth and overall GTV.

Trevor Williams inquired about the cadence of Corpay's organic growth guide, specifically the 9% in Q1 versus 11% in Q4 and 10% for the full year, considering float headwinds and lodging improvements. He also asked for Q1 corporate payments growth (with and without float) and the sustainability of Brazil's high teens growth from non-toll revenue.

Answer

Peter Walker, CFO, confirmed that Q1's lower organic growth is primarily due to float headwinds, particularly from the Alpha business with sharp rate drops for the pound and euro, and lodging being a drag. He expects a return to 10% organic growth for Q2 and the rest of the year, with Q1 corporate payments growth expected to be mid-teens with float drag. Ron Clarke, Chairman and CEO, added that the float compression is more acute in Q1 (70-75 bps) compared to year-end (25-30 bps), and the gift business is also normalizing. Ron Clarke stated that Brazil is planning another high teens year, driven by the success of non-toll revenue streams like fuel, parking, insurance, vehicle debts, and the Semper Credit Card, which is also helping to differentiate and sell the core toll product.

Trevor Williams inquired about the cadence of Corpay's organic growth guide, specifically the Q1 projection of 9% compared to Q4's 11% and the full-year 10%, attributing it to float headwinds and lodging improvement. He also asked for Q1 corporate payments growth with and without float, and the sustainability of Brazil's high teens/20% growth from its extended network without further acquisitions.

Answer

CFO Peter Walker confirmed Q1's lower organic growth is due to float headwinds (especially from Alpha's euro/pound rates) and lodging drag, with corporate payments growth expected to be mid-teens with float drag. CEO Ronald Clarke added that Q1 float compression is more acute. Ronald Clarke also stated plans for another high teens year in Brazil, driven by non-toll revenue from millions of customers buying various vehicle-related services, which also aids core toll product sales.

Trevor Williams asked for a breakdown of the monthly performance of the Corporate Payments segment during Q2, following comments about a strong April. He also requested a more precise quantification of the moving parts in the updated full-year revenue guidance, specifically the impact of lodging weakness versus FX benefits.

Answer

CFO Peter Walker and CEO Ronald Clarke noted that Corporate Payments performance was steady, with cross-border having a stronger April and slightly softer June, while payables were consistent. Clarke clarified the guidance change: for the second half, a 1% positive impact from macro/FX is offset by a 1% negative impact from lodging weakness. He stressed that the core Vehicle and Corporate Payments businesses, representing 85% of the company, are tracking to plan.

Trevor Williams asked for details on the monthly sequencing of Corporate Payments' 18% growth during Q2 (April, May, June). He also requested a more precise breakdown of the moving parts in the full-year revenue guidance update, specifically the relative size of the lodging weakness versus the FX benefit.

Answer

CFO Peter Walker and CEO Ronald Clarke indicated that Corporate Payments performance was broadly consistent, with payables being steady and cross-border having a stronger April and slightly softer June. For the guidance change, Clarke provided a simple framework: for the second half, think of a 1% positive impact from macro/FX and a 1% negative impact from lodging, with the net result being a modest print revenue increase but little earnings change due to the cost side of FX.

Trevor Williams from Jefferies inquired about the durability of pricing as a revenue driver across all line items, particularly for cross-border, which saw a significant tailwind. He also asked about the magnitude of pricing built into the 2026 guidance relative to 2025.

Answer

Sachin Mehra, CFO of Mastercard, explained that pricing is a function of delivering new products, solutions, and services, as well as modifications that provide incremental value to customers. He noted the lapping effect of prior year initiatives and the pipeline of new capabilities. He did not provide specific magnitude for 2026 pricing but linked it to Mastercard's ability to deliver new value.

Trevor Williams inquired about the durability of pricing as a revenue driver across all line items, particularly for cross-border assessments, and the magnitude of pricing built into the 2026 guidance compared to 2025.

Answer

Sachin Mehra (CFO) explained that pricing is a function of delivering new or improved products and services, including the lapping effect of prior year initiatives and new capabilities in the pipeline. He refrained from providing specific magnitude for 2026 pricing, linking it to Mastercard's ability to deliver incremental value through its pipeline of new capabilities.

Trevor Williams asked about the trend of slowing cross-border volume growth and what Mastercard considers a normalized growth level for this segment, given its current mix of travel and e-commerce.

Answer

CFO Sachin Mehra declined to provide long-term guidance but emphasized the high diversification of the cross-border portfolio, with no single corridor representing more than 3% of volume. He noted the mix is roughly 60% travel and 40% non-travel, with the latter growing strongly. He stressed that the business continues to perform well and grow faster than overall GDV, supported by its diversified nature.

Trevor Williams from Jefferies asked for the directional assumptions built into the full-year guide for switched volume and cross-border, particularly given the lapping of the Citizens portfolio win, and about assumptions for FX volatility.

Answer

CFO Sachin Mehra responded that the base case assumes consumer spending remains strong. Key factors factored into the guidance include the lapping of significant 2024 client wins and pricing actions, as well as the normalization of rebates and incentives after a low Q1. He noted that while FX volatility is hard to predict, their best estimate is incorporated into the guidance range.

Trevor Williams asked about the consistent gap between domestic assessments growth and GDV growth, seeking clarification on the 'cross-border mix' driver mentioned by management.

Answer

CFO Sachin Mehra clarified that the gap is partly due to rounding but is primarily driven by mix. He explained that domestic assessments revenue, by definition, excludes cross-border activity. In contrast, the overall GDV metric includes fast-growing cross-border volumes. When cross-border outgrows domestic, it lifts the total GDV growth rate relative to the domestic assessments growth rate.

Trevor Williams of Jefferies LLC asked if the Q4 revenue growth outlook of low-teens is a reasonable baseline for 2025 and what factors might affect that comparison.

Answer

Chief Financial Officer Sachin Mehra advised that while the outlook is strong, several factors will create difficult comparisons for 2025. These include the lapping of the 2024 leap year, the full-year impact of major portfolio wins from 2024 (like Citizens and Wells Fargo), and the anniversary of certain pricing actions.

Trevor Williams asked about the competitive dynamics in core processing, specifically if a major competitor's consolidation of cores could act as a catalyst for banks to issue RFPs and present an opportunity for FIS to win new business. He also inquired about FIS's EBT exposure within banking, asking for a rough sense of the revenue pool size, the impact of potential shutdowns in Q4, and the downstream effects of federal eligibility requirement changes in 2026 and beyond.

Answer

CEO Stephanie Ferris acknowledged the industry-wide bank modernization trend, driven by demand for digital capabilities and real-time transactions. She noted that while competitor actions create opportunities, core transitioning is generally small with high stickiness, and FIS is happy with its renewal rates. She confirmed that FIS's EBT revenue is not material to the company and that they do not expect a shutdown to impact the EBT business in Q4. For 2026, she stated that changes in eligibility criteria are a 'wait and see' situation, but they do not anticipate a material impact, as revenue is based on the number of active cards.

Trevor Williams asked about competitive dynamics in core processing, specifically if a major competitor's consolidation of cores presents a catalyst for banks to open up RFPs and an opportunity for FIS to win new business. He also inquired about FIS's EBT exposure within banking, its revenue pool size, any impact from shutdowns in Q4, and the potential downstream impact of eligibility changes in 2026 and beyond.

Answer

CEO Stephanie Ferris acknowledged the industry-wide bank modernization trend and that competitor actions can create opportunities, but noted that core transitions are generally small due to market stickiness and high renewal rates. She stated that FIS's EBT revenue is not material and its size is not disclosed. She does not expect the shutdown to impact the EBT business in Q4, as payment is based on the number of active cards. For 2026, eligibility changes are a 'wait and see,' but no material impact is expected as revenue is based on card count.

Trevor Williams of Jefferies LLC requested quantification of a bad debt charge in the Banking segment and an explanation for the significant implied margin expansion in the Q4 outlook.

Answer

CFO James Kehoe quantified the bad debt charge at approximately $8 million. He explained that the implied Q4 margin expansion of nearly 200 basis points is highly achievable because FIS is lapping a $33 million charge from the prior year, which accounts for 100 bps of the improvement, with the remainder driven by executed cost-saving initiatives.

Trevor Williams from Jefferies asked for details on the drivers behind the expected second-half acceleration in organic growth and margin expansion, as well as the level of visibility into this forecast. He also inquired about growth drivers in the e-commerce business outside of iGaming.

Answer

CEO Bruce Lowthers stated that the majority of the back-half revenue is already sold and in implementation, providing high visibility. He cited improving attrition, a strong pipeline, and new product rollouts as key drivers. CFO John Crawford added this would also drive margin expansion. Regarding e-commerce, Lowthers confirmed strong growth exceeding 30%, with non-iGaming verticals showing mid-teen growth in Q2.

Trevor Williams of Jefferies asked for an update on the e-commerce revenue mix within the Merchant Solutions segment and inquired about Paysafe's go-to-market strategy and key differentiators in the iGaming vertical. He also sought to understand the significance of new partnerships with companies like Clover and Tilled.

Answer

CFO John Crawford and Executive Kirsten Nielsen clarified that e-commerce represents about a quarter of the Merchant segment's revenue, with iGaming constituting about half of that. CEO Bruce Lowthers explained that new partnerships, like the one with Tilled, open up new total addressable markets (TAM) such as the PayFac space. He emphasized that these partnerships are a critical component of the growth strategy, aiming to drive over 10% of revenue from products released in the last three years.

Trevor Williams from Jefferies LLC inquired about ACI's recent discussions with bank customers regarding stablecoins and where ACI's solutions fit within a bank's technology stack. He also asked for an analysis of the Biller segment's revenue acceleration and the outlook for the second half of the year.

Answer

CEO Thomas Warsop explained that ACI is well-prepared for digital currencies, sitting in the middle of the payments infrastructure for banks and merchants, and noted that stablecoins could simplify cross-border real-time payments. CFO Robert Leibrock attributed the Biller segment's strong 16% Q2 growth to success in government and consumer finance markets. He indicated that while that specific growth rate may not be sustained, the segment will remain strong, contributing to the raised full-year guidance.

Trevor Williams inquired about the current customer environment, asking if ACI is seeing any changes in decision-making timelines due to macro uncertainty, and questioned the role of stablecoins in cross-border payments and ACI's potential involvement.

Answer

CEO Thomas Warsop stated that customer conversations show no negative impact from macro uncertainty and may even create positive momentum for modernization projects like Connetic. He added that ACI's software already facilitates trillions in cross-border payments (e.g., SWIFT) and is ready for cross-border real-time payments, pending regulatory approvals. While ACI can handle crypto and stablecoins, he noted current volumes are very small and it remains a future opportunity.

Trevor Williams of Jefferies asked for the rationale behind reorganizing the Bank and Merchant segments into 'Payment Software' under a GM model and what tangible benefits to expect. He also questioned the growth expectations for the new segments and the cadence of renewal versus new sales in 2025.

Answer

CEO Thomas Warsop explained the reorganization aims to increase accountability, simplify operations, and improve customer experience, citing the success of this model in the Biller segment. He anticipates efficiency gains from eliminating duplicative efforts. CFO Scott Behrens stated that long-term growth targets remain in the high single-digits and that a conscious effort to sign deals earlier will shift more revenue into the first half of 2025, targeting approximately 45% versus 43% in 2024.

Trevor Williams inquired about the structural drivers behind the medium-term growth outlook for the Bank segment and the strategic benefits of accelerating contract renewals.

Answer

President and CEO Thomas Warsop explained that growth is driven by customers investing heavily and viewing ACI as a strategic partner for technology and efficiency, a shift from purely renewal-focused talks. He noted that accelerating renewals frees up the sales team to focus entirely on new business for 2025 and beyond. CFO Scott Behrens added that this strategy helps pull next year's pipeline forward, de-risking future quarters and supporting long-term growth goals.

Trevor Williams of Jefferies LLC inquired about how Chinese merchants have responded to tariffs, particularly regarding diversification to non-US markets, and asked for details on the drivers of Ideal Customer Profile (ICP) growth.

Answer

CEO John Caplan stated that while the revenue mix from China has not significantly shifted yet, Payoneer is actively helping sellers globalize. He noted that the strategic shift towards larger, multi-entity B2B customers with higher retention is driving ICP quality, with volume from 10k+ ICPs growing 20%. He characterized quarterly ICP growth as potentially 'lumpy' based on portfolio mix.

Trevor Williams of Jefferies requested more detail on the underlying merchant mix—by size, type, and category—within the 20% of revenue derived from the China-to-U.S. trade corridor. He also asked about the potential for Payoneer to accelerate market share gains as merchants are forced to diversify their sales channels globally due to tariffs.

Answer

CFO Bea Ordonez stated that while the China seller base is diverse, larger sellers with branded goods and pricing power are expected to be more resilient to tariffs. CEO John Caplan added that these larger sellers are actively working with Payoneer to expand into new markets like Europe and Latin America. He emphasized that the new payment license in China positions Payoneer to capture this long-term diversification trend and help Chinese merchants sell to the rest of the world.

Trevor Williams requested a breakdown of ARPU growth drivers, an update on monetizing intra-network flows, and more specific guidance on 2025 float income and EBITDA margins.

Answer

CEO John Caplan attributed ARPU growth to acquiring higher-value customers, pricing, and cross-selling. CFO Bea Ordonez noted the intra-network pricing pilot is ongoing. For 2025, she expects float income to decline due to lower rates but expressed confidence in achieving the mid-20s EBITDA margin target through core growth and cost discipline, supported by hedging strategies.

Trevor Williams of Jefferies LLC asked about the narrow spread between international transaction revenue growth and nominal cross-border volume growth, questioning the offsetting impacts of hedging and mix, especially from slowing U.S. inbound travel.

Answer

CFO Chris Suh attributed the dynamic to three factors: high currency volatility, a hedging loss that partially offset favorable FX movements, and corridor mix. He confirmed that the Canada-to-U.S. corridor, which is a higher-yielding one, was a key variable impacting the overall mix.

Trevor Williams of Jefferies LLC asked about the narrowing spread between international transaction revenue growth and cross-border volume growth, citing currency volatility, hedging, and mix as potential factors.

Answer

CFO Chris Suh confirmed the key drivers were higher currency volatility, which was partially offset by hedging losses and an unfavorable geographic mix. He specifically noted that slowing volume in the high-yielding Canada-to-U.S. corridor impacted the overall yield. However, he emphasized that revenue growth still outpaced volume growth across all major categories.

Trevor Williams of Jefferies LLC asked about the narrowing spread between international transaction revenue growth and nominal cross-border volume growth, questioning the impact of hedging, mix, and specifically the slowdown in U.S. inbound travel.

Answer

CFO Chris Suh acknowledged the factors, explaining that while higher currency volatility was a tailwind, it was offset by hedging losses (part of a strategy to mitigate cash flow impacts) and a negative mix shift. He specified that the U.S. inbound corridor, which is higher-yielding, was impacted by lower volume from Canada, affecting the overall revenue mix.

Trevor Williams asked for clarity on Value-Added Services, specifically what portion of transaction-linked VAS must run over VisaNet and how the mix of on-network versus off-network revenue might evolve.

Answer

CEO Ryan McInerney confirmed the largest VAS component is for on-network Visa transactions, which drives yield. However, he emphasized the significant progress and large addressable market for services on non-Visa transactions via platforms like CyberSource and Pismo, signaling it as a key growth area.

Trevor Williams from Jefferies LLC asked about the potential impact from recent news of banks charging for consumer data access and where PayPal might be exposed through data aggregators.

Answer

President, CEO & Director Alex Chriss provided a direct response, stating that PayPal is a strong supporter of Open Banking and has analyzed the situation thoroughly. He concluded that the changes are 'immaterial' to the business and that PayPal will not be impacted.

Trevor Williams asked for an updated transaction margin dollar figure for Venmo, the current revenue mix within Venmo, and its expected contribution to transaction margin dollar growth in 2025.

Answer

CFO Jamie Miller confirmed that Venmo was a growing contributor to transaction margin dollar growth in 2024 and will continue to increase its impact in 2025. She highlighted strong TPV growth in monetized areas like debit card (up 40%) and Pay with Venmo (up 50%), but deferred providing a specific TM dollar figure, stating more details would be shared at the upcoming Investor Day.

Trevor Williams asked for the reasons behind the larger decline in transaction take rate this quarter and its future trajectory, as well as the growth spread between large enterprise and SMBs within branded checkout.

Answer

CFO Jamie Miller explained that the take rate was impacted by several factors. While improved Braintree margins had a positive effect, this was offset by faster growth from large enterprises, which have inherently lower take rates than SMBs, as well as some impact from FX and the payouts business. CEO Alex Chriss added that while he is pleased with the innovation in the SMB product (PayPal Complete Payments), penetrating the long tail of millions of merchants takes time compared to a handful of large enterprise deals.

Asked for more details on the 'Afterpay on Cash App Card' launch, including the timing for a broader rollout and any early learnings about its impact on debit spend and user uplift.

Answer

Jack Dorsey said there is no specific date yet as they want to perfect the experience, but early results are very encouraging. Amrita Ahuja added that the rollout will be careful and methodical, starting with millions of eligible actives next year. They will begin with a retroactive offer before expanding to a pre-purchase option, ramping eligibility and conversion over time.

Trevor Williams asked for details on the merchant growth slowdown between Q2 and Q3 and the potential for improvement in Q4. He also inquired about the potential impact of the Capital One-Discover merger on Global Payments.

Answer

CEO Cameron Bready attributed the one-point sequential slowdown in merchant growth to macro softness and weather events in September. He expects Q4 to be 'a little bit better' but not significantly so. On the Capital One-Discover merger, Bready highlighted the long-standing partnership and noted that while it's premature to include in the outlook, he views the potential combination as a long-term positive for their relationship.