Q2 2024 ACI Worldwide Inc Earnings Call

[inaudible]

Operator: Ladies and gentlemen, thank you for standing by. At this time, I would like to welcome everyone to ACI Worldwide Inc. 2nd Quarter 2020-24 financial results.

Speaker Change: Ladies and gentlemen, thank you for standing by. At this time, I would like to welcome everyone to ACI Worldwide Inc. Second Quarter 2024 Financial Results.

Operator: All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during that time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press the star one. Thank you.

Operator: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press the star button followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press the star button.

Speaker Change: All lines have been placed on mute to prevent any background noise.

Speaker Change: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, again press the star 1.

John Kraft: I would not like to turn the conference over to John Kraft. Please go ahead. Thank you and good morning, everyone. On today's call, we will discuss the company's 2nd quarter 2020-24 results and financial outlook for the rest of the year. We will take your questions at the end. The slides accompanying this call and webcasts can be found at ACI Worldwide.com under the Investor Relations tab and will remain available after the call. Today's call is subject to safe harbor and forward-looking statements, like all of our events. You can find the full text of both statements in our presentation deck and earnings release, both of which are available on our website and with the SEC.

Speaker Change: Thank you. I would now like to turn the conference over to John Kraft.

John Kraft: Please go ahead.

Unknown Executive: Thank you and good morning everyone. On today's call, we will discuss the company's second quarter 2024 results and financial outlook for the rest of the year. We will take your questions at the end. The slides accompanying this call and webcast can be found at aciworldwide.com under the investor relations tab and will remain available after the call. You can find the full text of both statements in our presentation deck and earnings release, both of which are available on our website and with the SEC.

John Kraft: Thank you and good morning everyone. On today's call, we will discuss the company's second quarter 2024 results and financial outlook for the rest of the year.

Speaker Change: We will take your questions at the end. The slides accompanying this call and webcast can be found at aciworldwide.com under the Investor Relations tab and will remain available after the call.

John Kraft: Today's call is subject to safe harbor and forward-looking statements like all of our events. You can find the full text of both statements in our presentation deck and earnings release, both of which are available on our website and with the SEC.

Unknown Executive: On this morning's call are Tom Worsop, our president and CEO, and Scott Barons, our CFO.

Speaker Change: On this morning's call is Tom Warsop, our president and CEO, and Scott Behrens, our CFO.

Unknown Executive: Before I turn it over, I did want to mention that we will be participating in a few upcoming conferences. Can't accord genuities 44th Annual Growth Conference in Boston on August 13th, the C-Port Financials and Fintech Virtual Conference on August 14th, and the 9th Annual Wells Fargo Fintech Information and Business Services Forum in Newport, Rhode Island on August 21th.

Unknown Executive: Before I turn it over, I did want to mention that we will be participating in a few upcoming conferences, the Seaport Financials and Fintech Virtual Conference on August 14, and the 9th Annual Wells Fargo Fintech Information and Business Services Forum in Newport, Rhode Island, on August 21.

Speaker Change: Before I turn it over, I did want to mention that we will be participating in a few upcoming conferences.

John Kraft: Canaccord Genuity's 44th annual growth conference in Boston on August 13

Tom Worsop: With that, I'll turn the call over to Tom. Thanks, John, and good morning, everyone. I appreciate you joining our second quarter 2024 earnings conference call. I'll start this morning with some brief comments on the quarter and then hand over to Scott to discuss the detailed financial results and our increased expectations for the remainder of 2024. As always, we'll then open the line for your questions. Second quarter results were ahead of expectations and of the guidance we provided earlier, with total revenue up 16 percent year over year. This outperformance came from higher volumes in our billar segment as well as increased deal activity within the bank segment.

Unknown Executive: Thanks, John. And good morning, everyone.

Tom Warsop: I'll start this morning with some brief comments on the quarter and then hand it over to Scott to discuss the detailed financial results and our increased expectations for the remainder of 2024.

Unknown Executive: I appreciate you joining our second quarter 2024 earnings conference call. Second quarter results were ahead of expectations and of the guidance we provided earlier, with total revenue up 16% year over year. This outperformance came from higher volumes in our billers segment, as well as increased deal activity within the banks segment. And let me give you a little more color on each of those.

Tom Worsop: Now let me give you a little more color on each of those segments. In billar, Gross revenue was up by a record 13 percent and evit. increased 20 percent from Q2 of last year. Our billar team was able to onboard new customer transaction volumes ahead of expectations, in particular with an additional phase of one of our largest new customers in the utility space. We also benefited from very strong tax-related volumes in our government vertical. As you know, many state and federal tax payments are made during the second quarter. This is one of the seasonal areas of our business.

Tom Warsop: And let me give you a little more color on each of those segments.

Speaker Change: In Biller, gross revenue was up by a record 13%.

Unknown Executive: We also benefited from very strong tax-related volumes in our government verticals. And as you know, many state and federal tax payments are made during the second quarter. So this is one of the seasonal areas of our business, and while we're very happy with this outperformance, both of those drivers were largely a second quarter phenomenon. We don't expect that level of outperformance to continue in Q3 or Q4. Overall, the biller segment is performing very well, and our high retention rates and growing qualified new bookings pipeline keep our optimism high.

Tom Worsop: While we're very happy with this outperformance, both of those drivers were largely a second-quarter phenomenon. We don't expect that level of outperformance to continue in Q3 or Q4. Over all, the billers segment is performing very well, and our high retention rates and growing qualified new bookings pipeline keep our optimism high.

Unknown Executive: In the bank segment, revenue was up 22% and EBITDA was up 53% compared to the second quarter of last year. As we mentioned to you at Analyst Day, the team had a very targeted program to sign second half renewal contracts earlier in the year. However, as you know, we generally cannot recognize revenue from renewals until the contract start date.

Speaker Change: Keep our optimism high.

Scott Behrens: In the bank segment, revenue was up 22% and EBITDA was up 53% compared to second quarter of last year.

Tom Worsop: We do a multi-year full card modernization and real-time transformation program. In total, our issuing and acquiring solutions grew 38%, and that's a testament to the continuing value and importance of our proven mission-critical solutions. As we mentioned to you at Analyst Day, the team had a very targeted program to sign second half renewal contracts earlier in the year. As you know, we generally cannot recognize the revenue from renewals until the contract start date, but getting them completed early helps de-risk our full-year forecasts and allows the team more time to focus on new deals in the second half.

Unknown Executive: But getting them completed early helps de-risk our full year forecasts and allows the team more time to focus on new deals in the second half. We're having great conversations already, as we actively meet with customers to discuss our respective technology programs. This will give customers a two-fold advantage, and many of those are not fully satisfied with the current competitive situation. Let me give you a quick overview of one such conversation I personally had with a top Asia-Pacific financial institution. He literally jumped out of his seat and said, "That's exactly what I need." Of course, this is a project.

Tom Worsop: To this end, we had a very productive first half, signing more than $100 million in renewal contracts that will be recognized in Q3 and Q4 of this year. This included the very strategic and expanded Worldpay partnership we announced last week. By move to our next generation payment hub program, investments are continuing, development is on track, and we're extremely focused. By year end, we'll have a solution which customers can begin to evaluate. We're having great conversation already as we actively meet with customers to discuss our respective technology improvements. I would characterize interest level as high. Our customers are sharing their excitement about the functionality and AI capabilities, as well as the flexibility of the cloud native architecture itself, which will allow customers to migrate volumes onto the platform at their own pace.

Scott Behrens: If I move to our next generation payment hub program, investments are continuing, development is on track, and we're extremely focused.

Tom Worsop: This will give customers a two-fold advantage to consume new services as they become available and to move current services off of existing platforms and onto the new in a measured way, as opposed to a high-risk big bang transition. I'm especially excited about the potential for new logos, as many of the discussions I'm having are with non-customers. Many of those are not fully satisfied with a current competitive solution, a solution from one of our competitors.

Scott Behrens: This will give customers a two-fold advantage.

Scott Behrens: To consume new services as they become available, and to move current services off of existing platforms and onto the new in a measured way, as opposed to a high-risk, big-bang transition.

Scott Behrens: and many of those are not fully satisfied with a current competitive solution, a solution from one of our competitors.

Tom Worsop: Let me give you a quick overview of one such conversation I personally had where the top Asia-Pacific financial institution was linked. The bank has a solution from one of our competitors, which is moving out of support in the next 18 months or so. The chief information officer was very clear that the bank has no interest in getting themselves into a position where they have to change platforms again in a few years, but he definitely wants a path to newer technology. When I describe the payments of strategy, which allows the bank to install our proven, scalable, highly reliable solution today.

Speaker Change: The Chief Information Officer was very clear.

Speaker Change: that the bank has no interest in getting themselves into a position where they have to change platforms again in a few years, but he definitely wants a path to newer technology.

Speaker Change: which allows the bank to install our proven, scalable, highly reliable solution today.

Tom Worsop: and to move to the newer cloud-native payment-hump solutions when they're ready, he literally jumped out of his seat and said, "that's exactly what I need." Of course, this is a prospect. We have to get it closed over the coming months, but it was one of the most positive reactions I have ever had to assail this discussion. Please keep your fingers crossed for us. I have a very good feeling about this one. Moving on to our merchant segment, revenue grew 4% and EBITDA grew 55% compared to the second quarter last year. Obviously, the segment's revenue is not growing as fast as we would like, but we're excited about the sales pipeline, and we continue to see the segment improving sequentially throughout this year and into 2025, as we have previously discussed.

Speaker Change: and to move to the newer cloud-native Payments Hub solutions when they're ready.

Speaker Change: He literally jumped out of his seat and said.

Unknown Executive: Please keep your fingers crossed. Revenue grew 4% and EBITDA grew 55% compared to the second quarter last year. Obviously, the segment's revenue is not running as fast as we would like, but we're excited about the sales pipeline. And we continue to see the segment improving sequentially throughout this year and into 2025 as we have previously. Overall, we are focused on the. We're delivering on our promises to the investment community.

Speaker Change: Please keep your fingers crossed for us. I have a very good feeling about this one.

Speaker Change: Moving on to our merchant segment.

Speaker Change: Revenue grew 4% and EBITDA grew 55% compared to second quarter last year.

Speaker Change: Obviously, the segment's revenue is not growing as fast as we would like.

Tom Worsop: I'm very pleased with the continuing profitability improvement the team is delivering. Overall, we are focused; we're executing well; we're delivering on our promises to the investment community. I'm happy to report that our outperformance year-to-date allows us to, again, raise our guidance range for both revenue and adjusted EBITDA. I remain confident in the team and in our plans to create significant shareholder value.

Speaker Change: I'm very pleased with the continuing profitability improvement the team is delivering.

Scott Barons: I'll turn it over to Scott to discuss the details of our results and our guidance.

Scott Barons: Scott? Thanks, Tom, and good morning, everyone. I first plan to review our financial results for Q2 and then provide our new outlook for 2024. We'll then open the line for questions. We are pleased with our strong financial performance in the second quarter. Revenue in the quarter was 373 million, up 16% compared to Q2 2023, and adjusted EBITDA was 93 million, up 62% from Q2 2023. As Tom mentioned, we had particular strength in the bill or in bank segments. In the bank segment, revenue of 144 million was up 22% compared to Q2 last year. Bank segment adjusted EBITDA 79 million was up 53% compared to Q2 last year.

Unknown Executive: Thanks, Tom, and good morning, everyone. I first plan to review our financial results for Q2 and then provide our new outlook for 2024. We are pleased with our strong financial performance in the second quarter. Revenue in the quarter was $373 million, up 16% compared to Q2 2023, and adjusted EBITDA was $93 million, up 62% from Q2 2023. Lastly, our biller segment revenue was $192 million, up 13% compared to Q2 last year, and adjusted EBITDA was $37 million, up 20% compared to Q2 last year.

Scott Barons: Our merchant segment revenue was 38 million, up 4% compared to Q2 last year, and adjusted EBITDA was 15 million, up 55% compared to Q2 last year. We continue to see the merchant segment improving sequentially throughout this year and into 2025. Lastly, our bill or segment revenue was 192 million, up 13% compared to Q2 last year, and adjusted EBITDA was 37 million, up 20% compared to Q2 last year. As Tom mentioned, we benefited from faster-than-expected ramping of one of our large new customers, as well as better-than-expected tax-related volumes. Moving to cash flow and our balance sheet, we generated strong cash flow from operations of 55 million in a quarter, an increase of 215% versus Q2 last year.

Speaker Change: Our merchant segment revenue was $38 million, up 4% compared to Q2 last year, and adjusted EBITDA was $15 million, up 55% compared to Q2 last year.

Speaker Change: We continue to see the merchant segment improving sequentially throughout this year and into 2025.

Speaker Change: And as Tom mentioned, we benefited from faster-than-expected ramping of one of our large new customers as well as better-than-expected tax-related volumes.

Speaker Change: Moving to cash flow and our balance sheet, we generated strong cash flow from operations of $55 million a quarter, an increase of 215% versus Q2 last year.

Scott Barons: We ended the quarter with 157 million in cash on hand, a debt balance of 1 billion, and a net debt leverage ratio of 1.9 times, which is down from 2.3 times at year end and below our long-term stated target of 2.5. times. During the quarter, our Board of Directors increased our share repurchase authorization to 400 million. In Q2, we continued executing our capital allocation strategy, repurchasing 1.7 million shares for approximately 57 million in capital, and 3.7 million shares for 120 million in capital over the last six months. At the end of the quarter, we had approximately 2,380 million remaining available on the share repurchase authorization.

Unknown Executive: We ended the quarter with $157 million in cash on hand, a debt balance of $1 billion, and a net debt leverage ratio of 1.9 times, which is down from 2.3 times at year end and below our long-term stated target of 2.5 times. And for Q3 2024, we expect revenue to be between $400 million and $410 million, and adjusted EBITDA of $110,000,000 to $120,000,000. So overall, we saw a strong first half of the year, and we are confident in our increased 2024 outlook. So with that, I'll pass it back to Tom for some closing remarks. Tom said,

Speaker Change: We ended the quarter with $157 million in cash on hand, a debt balance of $1 billion, and a net debt leverage ratio of 1.9 times, which is down from 2.3 times at year-end and below our long-term stated target of 2.5 times.

Speaker Change: During the quarter, our Board of Directors increased our share repurchase authorization to $400 million.

Speaker Change: In Q2, we continued executing our capital allocation strategy, repurchasing 1.7 million shares for approximately $57 million in capital and 3.7 million shares for $120 million in capital over the last six months.

Speaker Change: At the end of the quarter, we had approximately $380 million remaining available on the Share Repurchase Authorization.

Scott Barons: Turning next to our outlook for 2024, given the strength of our results following the second quarter, we are raising our revenue and adjusted EBITDA guidance for the year. We now expect revenue to be in the range of 1.557 billion to 1.591 billion, and we expect adjusted EBITDA to be in the range of 423 million to 438 billion. In Q3, 2024, we expect revenue to be between 400 million and 410 million, and adjusted EBITDA of 110 million to 120 million. So overall, we saw a strong first half of the year, and we are confident in our increased 2024 outlook.

Speaker Change: Turning next to our outlook for 2024, given the strength of our results following the second quarter, we are raising our revenue and adjusted EBITDA guidance for the year.

Speaker Change: And for Q3 2024, we expect revenue to be between $400 million and $410 million, and adjusted EBITDA of $110 million to $120 million.

Tom Worsop: So, with that, I'll pass it back to Tom for some closing remarks. Tom? Thanks, Scott. So, to summarize, we're pleased to continue delivering results in line or above expectations. Looking forward, our pipeline is strong; we're focused and optimistic regarding both our growth and our ability to deliver significant shareholder value.

Speaker Change: So with that, I'll pass it back to Tom for some closing remarks. Tom?

Tom Worsop: One last, but certainly important comment. I'd like to reinforce some exciting ACI team news. CNBC named ACI as one of the world's top fintech companies for 2024. A recognition that highlights our position as a fintech industry leader and innovator and our dedication to delivering payment solutions that keeps the global economy moving. Additionally, we were named as one of the best companies to work for a U.S. News and World Report and one of America's greatest workplaces by Newsweek, including multiple special designations for diversity and employee experience. These are industry survey-driven awards. They are not paid-of-play opportunities where you buy advertising and get an award.

Tom Warsop: One last, but certainly important comment. I'd like to reinforce some exciting ACI team news.

Unknown Executive: CNBC named ACI as one of the world's top fintech companies for 20 These awards underscore our commitment to fostering a collaborative, innovative, and rewarding professional environment where ACIers can do their best work.

Speaker Change: CNBC named ACI as one of the world's top fintech companies for 2024.

Tom Warsop: A recognition that highlights our position as a fintech industry leader and innovator and our dedication to delivering payment solutions to keep the global economy moving.

Speaker Change: by U.S. News & World Report, and one of America's greatest workplaces by Newsweek.

Speaker Change: including multiple special designations for diversity and employee experience.

Speaker Change: These are industry survey driven awards. They are not pay-to-play opportunities where you buy advertising and get an award.

Tom Worsop: These awards underscore our commitment to fostering a collaborative, innovative, and rewarding professional environment where ACIers can do their best work.

Speaker Change: These awards underscore our commitment to fostering a collaborative, innovative, and rewarding professional environment where ACIers can do their best work.

Tom Worsop: Thank you to the entire ACI team.

Operator: Operator, we can now take questions. Thank you. The floor is now open for questions. If you have dialed in and would like to ask a question, please press *1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press tar 1 again. If you are called upon to ask your question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. We do request for today's session that you please limit to one question and one follow-up.

Speaker Change: Operator, we can now take questions.

Operator: Thank you. The floor is now open for questions. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the call.

Operator: Thank you. The floor is now open for questions.

Speaker Change: If you would like to withdraw your question, simply press star 1 again.

Speaker Change: If you are called upon to ask your question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question.

Operator: Again, press TAR 1 to join the queue.

Pallav Saini: Your first question comes from the line of Joe Vassi with Conecougenity. Your line is open. Good morning. This is Pallav Saini on for Joe. Thanks for taking our questions. It's good to see them lent them in the business and the guidance raised. First of all, Tom, it is good to hear the increase you are seeing from potential customers in the payments hub.

Speaker Change: Your first question comes from the line of Joe Vasi with ConocoGenity. Your line is open.

Pallav Saini: Good morning. This is Pallav Saini on for Joe.

Unknown Attendee: Thanks for taking our questions. It's good to see the momentum in the business and the guidance raised. First of all, Tom, it was good to hear the interest you're seeing from potential customers in the payments hub. How would you characterize your opportunity here internationally relative to the U.S. market and time to market here? Also, how are you prioritizing your investments in this regard?

Tom Worsop: How would you characterize your opportunity here in a nationally relative to the US market and maybe the time to market here, also, how are you prioritizing your investments in this regard? Sure. Thanks. So, we see opportunity around the world, and I think that's probably no surprise. Where we're seeing the most interest right at the moment is, I would say, it's Asia-Pacific one. I gave a specific example there, and one of the reasons for that is some of our competitors are removing competitive products from support, and that's always a good opportunity for us, but especially right now.

Speaker Change: Sure, thanks. So we see opportunity around the world, and I think that's probably no surprise.

Unknown Executive: Where we're seeing the most interest right now is, I would say it's the Asia-Pacific one. I gave a specific example there. And one of the reasons for that is some of our competitors are removing competitive products from support. And that's always a good opportunity for us, but especially right now. So that's the driver there.

Speaker Change: where we're seeing the most interest right at the moment.

Speaker Change: is, I would I would say it's Asia Pacific one, I gave a specific example there. And one of the reasons for that is some of our competitors are removing

Speaker Change: competitive products from from support. And that's always a good opportunity for us, but especially right now, that's the driver there. But the biggest, probably the largest source of interest is coming from Europe .

Tom Worsop: That's the driver there, but the biggest, probably the largest source of interest is coming from Europe, and I may have said this on an earlier call, I don't remember, but the big driver there, one of the big drivers, is that the European Central Bank has mandated faster payments, instant payments. It's called different things in different countries, but real-time payments. And what's happening is these cheap information officers are realizing that they have some concerns about their overall payment infrastructure being able to keep up with the expected pretty dramatic increases in volumes because a lot of that instant payments is candleizing cash transactions.

Unknown Executive: But the biggest, probably the largest source of interest is coming from Europe. And I may have said this on an earlier call; I don't remember, but the big driver there, one of the big drivers is that the European Central Bank has mandated faster payments, instant payments, it's called different things in different countries, but real-time payments. And what's happening is these chief information officers are realizing that they have some concerns about their overall payment infrastructure being able to keep up with the expected pretty dramatic increases in volumes because a lot of instant payments are cannibalizing cash transactions.

Speaker Change: that they have some concerns about their overall payment infrastructure being able to keep up.

Speaker Change: with the

Speaker Change: expected

Speaker Change: Pretty dramatic increases in volumes, because...

Unknown Executive: Cash transactions have a very small impact on financial institutions and the technical infrastructure, but they're moving to digital payments, and that obviously does have an impact. So there's a lot of interest in figuring out what they need to do. What are the opportunities for their payments infrastructure generally? And when we talk about the payments hub,

Tom Worsop: Cash transactions have a very small impact on financial institutions, technical infrastructure, but they're moving to digital payments, and that obviously does have an impact. So there's a lot of interest in figuring out what do they need to do, what are the opportunities for their payments infrastructure generally, and when we talk about the payments hub that gets them very excited. So I gave you an example where somebody literally jumped out of their chair. That was an Asia-Pacific example, but I've had similar conversations in Europe. So just to sum that up, the interest around the world in particular, we're having lots of conversations in Europe and Asia-Pacific right now.

Speaker Change: A lot of that instant payments is.

Speaker Change: Cannibalizing Cash Transactions

Speaker Change: Cash transactions have a very small impact.

Speaker Change: on financial institutions.

Speaker Change: Technical Infrastructure, but they're moving to digital payments and that obviously does have an impact. So there's a lot of interest in figuring out what do they need to do? What are the opportunities for their payments infrastructure generally? And when we talk about the Payments Hub,

Speaker Change: That gets them very excited, so I gave you an example where somebody literally jumped out of their chair. That was an Asia-Pacific example, but I've had similar conversations in Europe . So, just to sum that up, interest around the world...

Speaker Change: In particular, we're having lots of conversations in Europe and Asia-Pacific right now.

Pallav Saini: God, that's great color. Thank you.

Pallav Saini: And a relative to maybe three months ago, and we had the Q1 call, can you speak to your pipeline across the three segments as we look to the second half and 2025, both from a renewal and a new business perspective? Thanks. Thank you. Sure, I'll make a comment, and I know Scott's raring to go on answering this question as well. So our tightlines continue to grow, and you ask about the rule and net new. So the net new pipeline continues to grow. Obviously, we understand the renewal pipeline extremely well, because we've known for five years what was going to remain this year.

Speaker Change: Look to the second half and 2025 both from a renewal and new business perspective. Thank you.

Unknown Executive: Sure. I'll make a comment, and I know Scott's raring to go on answering these questions well.

Speaker Change: Sure, I'll make a comment and I know Scott's raring to go on answering these questions well.

Unknown Executive: So our pipelines continue to grow, and you asked about renewal and net new. So the net new pipeline continues to grow. Obviously, we understand the renewal pipeline extremely well. We've known for five years what was going to renew this year, so there are no surprises there. I think the good news, I'm sure everybody was excited about what I said a moment ago with having, I'm going to call it pre-sold, that's not quite the right term, but we signed early $100 million plus of renewals, we signed them in the first half of the year, but they won't be recognized until the second half.

Scott Behrens: So our pipelines continue to grow, and you asked about Renewal and NetNew. So the NetNew pipeline continues to grow. Obviously, we understand the Renewal pipeline extremely well.

Tom Worsop: So no, no surprises there. I think the good news, I'm sure that I'm sure everybody was excited about what I said a moment ago with, I'm going to call it pre sold. It's not really, that's not quite the right term, but you know, we signed early $100 million-plus renewals. If we signed them in the first half of the year, but they won't be recognized in a little second half. So, as I said, that significantly discs what we're expecting in the second half that makes us even more confident. And it's again a reason that we were comfortable increasing our guidance range.

Speaker Change: We've known for five years what was going to renew this year so no no surprises there. I think the good news I'm sure that I'm sure everybody was excited about what I said a moment ago with

Speaker Change: I'm going to call it pre-sold, it's not really, that's not quite the right term, but you know, we signed early a hundred million dollars plus

Speaker Change: of Renewals. We signed them in the first half of the year, but they won't be recognized until the second half. So, as I said, that significantly de-risks.

Unknown Executive: So, as I said, that's significantly decreased. Well, what we're expecting in the second half, it makes us even more confident. And it's, again, a reason that we're comfortable increasing our guidance range. But the pipeline, so the renewal pipeline is what it is. We do sometimes get a little more than we expect from a renewal or than we build into the plan, I guess I should probably say.

Tom Worsop: But the pipeline, so so renewal pipeline, is what it is. We do we do sometimes get a little more than we expect from a renewal or than we go into the plan I guess I suppose. Because we sell additional service or we sell additional capacity, there are various reasons for that, but we understand that pipeline very well. In that new, that pipeline is growing very nicely, and we we expect we expected to continue to grow. And that's two reasons for that. One is just our position in the market and the reliability scale of Go and the ability of our solutions.

Speaker Change: But the pipelines, so renewal pipeline is what it is. We do sometimes get a little more than we expect from a renewal or when we build into the plan, I guess I should probably say.

Speaker Change: Because we sell an additional service or we sell additional capacity. There are various reasons for that.

Scott Barons: And number two is this all of the dialogue we're having around payments help.

Unknown Executive: Yeah, and the only other thing I'd add to that is I think it goes back to what Tom said about our focus in the first half on getting renewals done. So what I'm excited about in terms of our pipeline progression is that we're getting the renewals out of the way now. So in the first half of the year, the focus is now turning now to closing out the key licenses, especially pipeline deals that we want to get done this year.

Scott Barons: Yeah, the only other thing I'd add to that is I think it goes back to what Tom said about our focus in the first half on getting a renewal done. So what I'm excited about in terms of our pipeline progression is we're getting the renewals out of the way now. So in the first half of the year, focus is turning now to closing out the key license, especially pipeline deals that we want to get done this year. We want to get those done here before they indicate three, and then we can really start progressing further the 2025 pipeline.

Speaker Change: Closing out the key license, especially pipeline deals that we want to get done this year. We want to get those done here before the end of K-3, and then we can really start progressing further the 2025 pipeline. So I think...

Unknown Executive: We want to get those done here before the end of Q3. And then we can really start progressing the 2025 pipeline further. So I think everything is lining up so that we are not only, you know, tracking to deliver on what we're expecting this year and actually raising the guidance to deliver a bit more, but allowing us to progress the 2025 pipeline as well.

Pallav Saini: So I think everything is lining up so that we are not only tracking to deliver on what we're expecting this year and actually raising the guidance to deliver a bit more, but allow us to progress the 2025 pipeline as well. That's a great color. Thank you.

Speaker Change: That's a great color. Thank you.

Peter Heckmann: Next question comes from the line of Peter Heckman with the David Sun. Your line is open. Thank you. Maybe I need. Sure enough, can you hear me now? Yes, I think it's sorry about that. Hey, good morning. Thanks for taking the questions.

Unknown Attendee: AP, you might be on mute.

AP: AP, you might be on mute.

Unknown Attendee: Sure enough. Can you hear me now?

AP: Sure enough, can you hear me now?

Unknown Attendee: Sorry about that. Hey, good morning. Thanks for taking the questions. In terms of, could you give a little bit of your thoughts or your outlook based on, you know, I'm sure you have very good insight into this, but over the next two years, you know, how you see real-time payments evolving, any major countries or regions planning major upgrades or adoption, and then as well, in terms of your comment on the European Union or European Commission mandating some real-time payments. I don' Is that, are they mandating intra, or the like, mandating all banks within a country to connect, or is it actually cross-border within the whole EU that covers that mandate?

AP: Yeah, yes, hi Pete. Sorry about that. Hey, good morning. Thanks for taking the questions In terms of could you give a little bit of your thoughts or your outlook based on?

Peter Heckmann: In terms of, could you give a little bit of your thoughts or your outlook based on, you know, I'm sure you have very good insight into this, but over the next two years, you know, how you see real-time payments evolving. Any major countries or regions are planning major upgrades or adoption, and then as well. In terms of the your comment on the one of his European Union or European Commission mandating some real time payment. Is that are they mandating in truck or the like mandating all banks within a country connect, or is it actually cross order within the whole EU that covers that mandate.

Speaker Change: On, you know, I'm sure you have very good insight into this, but over the next two years, you know, how you see real time payments evolving, you know, any, any major.

Speaker Change: Major upgrades or adoption and then as well in terms of the

Speaker Change: Some real-time payment. Are they mandating all banks within a country to connect, or is it actually cross-border within the whole EU that covers that mandate?

Tom Worsop: Yeah, so let me take that first one first, see. That's a mandate to accept real-time payments. And that's different, called different things in different countries. I mean, that is clearly progressing toward cross-order, but honestly, it's not very well developed at the moment, anywhere across corners, because there's a lot of implications on the regulatory environment. So it'll happen. I think that's going to be much slower than the initial acceptance, but the specifically European Central Bank has said every financial institution must be able to accept and process real-time payments across the EU. So we're obviously, we've been prepared to support financial institutions doing that for some time, but it's creating that that's interesting, but actually that's not why it gets me excited, because why it gets me excited is what I mentioned a minute ago, which is that is driving an entirely different conversation about the overall payment infrastructure and the need to upgrade, because our solutions, our customers don't worry about being able to support these very high volumes.

Unknown Executive: Yeah, so let me take that first one first. That that's a mandate to accept real-time payments, and that's different, called different things in different countries, and that that is clearly progressing toward cross-border. But honestly, it's not, it's not very well developed at the moment, anywhere in the world, cross-border. Because there are a lot of implications on the regulatory environment. So it'll happen.

Speaker Change: Yeah, so let me take that first one first. That's a mandate to accept...

Speaker Change: Real-time payments and that's different called different things in different countries and that that is clearly progressing toward cross-border but Honestly, it's not it's not very well developed at the moment anywhere in the world cross-border

Speaker Change: because there's a lot of implications on the regulatory environment so it'll happen I think that's going to be much slower than the initial acceptance but the specifically the European Central Bank has said

Unknown Executive: I think that's going to be much slower than the initial acceptance. But specifically, the European Central Bank has said that every financial institution must be able to accept and process real-time payments across the EU. So we're obviously, we've been prepared to support financial institutions doing that for some time, but it's creating, that's interesting, but actually, that's not why it gets me excited. Because what gets me excited is what I mentioned a minute ago, which is that it is driving an entirely different conversation about the overall payments infrastructure and the need to upgrade. Because of our solutions, our customers don't worry about being able to support these very high volumes.

Speaker Change: Thank you.

Speaker Change: Across the EU. So we're obviously we've been prepared to support financial institutions doing that for some time

Speaker Change: That is driving an entirely different conversation about the overall payments infrastructure and the need to upgrade because our solutions You know, our customers don't worry about being able to support these very high volumes They know that our solutions can, but some of the other pieces of their infrastructure, they're not so sure

Tom Worsop: They know that our solutions can, but some of the other pieces of their infrastructure, they're not social. So that creates a really interesting dialogue, and that's where the payments come in.

Unknown Executive: They know that our solutions can, but some of the other pieces of their infrastructure, So that creates a really interesting dialogue, and that's where the payments come in. Then you asked me about any countries where we expect to see major, I guess, pushes, maybe for real-time payments? And there are a couple.

Tom Worsop: So you asked also about, are there any countries where we expect to see major, I guess, pushes maybe for real-time payments? And there are a couple; there are some countries that have no infrastructure. They tend to be a little bit smaller, but the larger countries now typically have a real-time payment scheme or maybe even more than one, like the United States has two now. We support both, but just one example, and we did a press release, I think, on this in a while ago, the Columbia. The Columbia is a very important market for us. It's one of the largest economies in South America, and we support that real-time payment scheme as it's maturing.

Speaker Change: Unknown Speaker Then you asked also about, are there any countries where we expect to see major, I guess, pushes maybe?

Unknown Executive: There are some countries that have no infrastructure. They tend to be a little bit smaller, but the larger countries now typically have a real-time payment scheme, or maybe even more than one, like the United States has two now. We support both.

Speaker Change: For real-time payments and that there are a couple there are some countries that have no Infrastructure they tend to be a little bit smaller, but you know the larger countries they now typically have a real-time payment scheme or maybe even more than one like the United States has as to

Unknown Executive: But just one example, and we did a press release on this a while ago, that Colombia is a very important market for us. It's one of the largest economies in South America.

Unknown Executive: And we support that real-time payment scheme as it's maturing. And so I expect to see increased volumes over the next couple of years from that program and others. But I think what we're mostly going to see is just the maturing of the real-time payment ecosystem. We'll see increased volumes everywhere. That will be my expectation. And then we will see cross-border cooperation become a bigger thing. And that's when some of the use cases become super important once that starts to happen. But that's dependent on regulation. And I, I don't need to try to predict that.

Tom Worsop: And so I expect to see increased volumes over the next couple of years from that from that program and others, but I think what we're going to see mostly is just the maturing of the real-time payment ecosystem. We'll see increased volumes everywhere. That will be my expectation, and then we will see a bigger thing, and that's when some of the use cases become super interesting. Once that starts happening. But that's dependent on regulation, and I don't need to try to predict that.

Speaker Change: a couple of years from that, from that program and others.

Speaker Change: But, you know, I think what we're going to see mostly is just the maturing.

Speaker Change: Once that starts to happen. But that's dependent on regulation and I don't even try to predict that.

Unknown Attendee: Got it. That's really helpful. And then your third quarter guidance is so very, very strong for revenue and EBITDA guidance. And I infer that that suggests that you have insight into another strong license fee rev rec quarter. Just, in turn, if that's correct, I guess, would you see it weighted approximately the same way, primarily towards banks?

Peter Heckmann: That's really helpful.

Peter Heckmann: And then you're your third quarter guidance, so very, very strong revenue and even dog guidance, and I infer that suggested you have insight into another strong licensee reveret quarter. Just in turn, if that's correct, I guess would you see it weighted approximately the same way, primarily towards banks, or do you expect some shift over to the merchant side? We all know that people in merchant will accelerate as we get the second half here. But it's a small piece of the business, but you're right in terms of the license timing. It's really more of a function of the banks than this merchant merchant side of the business.

Speaker Change: Got it. That's really helpful. And then your third quarter guidance, so very, very strong.

Speaker Change: revenue and EBITDA guidance. And I infer that that suggests that you have insight into another strong

Speaker Change: Licensee RevRec quarter just in turn if that's correct I guess would you see it weighted approximately the same way primarily towards banks or do you expect some shift over to the merchant side?

Unknown Executive: Or do you expect some shift over to the merchant side? Merchant will accelerate as we get into the second half of the year, but it's a small piece of the business, but you're right in terms of the license timing, and it's really more of a function of the banks than it is the merchant side of the business. Our focus here is, as we try to get a lot of the renewal book done and signed here in the first half, we're focused on getting some of that new logo, new application sale done by the end of Q3, and reduce our reliance on fourth-quarter license deals that we need to get done. And so you're going to see pretty strong bank license fee growth year over year. Okay, and then just to be clear that world pay: was that a second quarter item or a third quarter?

Speaker Change: Well, merchant will accelerate as we get into the second half of the year, but it's a small piece of the business. But you're right in terms of the license timing, and it's really more a function of the banks than it is the merchant side of the business.

Scott Barons: Our focus here is, as we try to get a lot of the renewal book done and signed here in the first half, we're focused on getting some of that new logo, new application sale done by the indication. You can reduce our reliance on, you know, fourth quarter license deals that we need to get on. And so you're going to see pretty strong bank license the growth year over year.

Speaker Change: Our focus here is, as we try to get a lot of the renewal book done and signed here in the first half, we're focused on getting some of that new logo, new application sale done by the end of Q3.

Speaker Change: and reduce our reliance on, you know, fourth quarter license deals that we need to get done. And so, so you're going to see pretty strong bank licensee growth year over year.

Peter Heckmann: Okay, and then just to be clear that the world pay was that a second quarter item or a third quarter? That is the second half item. It's already signed; we've announced it, but because of the accounting rules, that shows up. I think it's key three, right, Scott? Yeah, it'll start with the new arms. Got it.

Speaker Change: Okay, and then just to be clear that the Worldpay, was that a second quarter item or a third quarter item?

Unknown Executive: Yeah, it'll start when the new term starts.

Peter Heckmann: Okay, thank you very much.

Charles Nabhan: Thank you. Next question comes from the line of Charles Nabhan with defense. Your line is open. Hi, good morning, and thank you for taking my question. I wanted to ask about the contribution from value-ad solutions, such as fraud. I'm hoping you could speak to how, you know, changes in your constructure that you talked about at the analyst day are driving more uptake of value-ad solutions, as well as the degree to which they might have contributed to the outperformance of the quarter. Yeah, I wouldn't chuck this guy. I really wouldn't look at it as a function of our cost structure.

Charles Joseph Nabhan: The next question comes from the line of Charles Nabhan with Stephens. Your line is open.

Speaker Change: Thank you.

Speaker Change: More uptake of value-add solutions as well as the degree to which that might have contributed to the outperformance this quarter

Unknown Executive: Yeah, I wouldn't, Chuck and Scott, I really wouldn't look at it as a function of our cost structure. I mean, fraud detection in real time has been our two fastest growing kind of cross cells to our, you know, long-standing bank switching business. And so, you know, that has continued. So I don't I don't really look at the cost structure issue as much as that has been and continues to be one of our better cross-cell opportunities in the banks. But that has continued here in Q3. And so, nothing's really changed in terms of the dynamics there. Got it. Okay.

Speaker Change: Yeah, I wouldn't check with Scott. I really wouldn't look at it as a function of our, our cost structure. I mean, fraud detection in real time have been.

Charles Nabhan: I mean, fraud detection in real time have been our two fastest growing kind of cross cells to our, you know, longstanding banks switching business. And so, you know, that has continued. So I don't really look at as much as the cost structure issue, as much as that has been and continues to be one of our better cross-sell opportunities in the banks. But that has continued here in Q3, and so nothing's really changed in terms of dynamics there. Got it. Okay. My apologies. I make comp structure, not cost structure. I'll share if I misspoke.

Speaker Change: to our longstanding bank switching business.

Speaker Change: got it okay my apologies I meant comp structure not cost structure not sure if I misspoke but as a follow-up I was hoping you could double-click on the world pay renewal and maybe if you could talk about the types of products they're they're renewing on and whether the deal exceeded your expectations in terms of in terms of uptake

Charles Nabhan: But as a follow-up, I was hoping you could double-click on the Worldpay renewal, and maybe if you could talk about the types of products that were renewing on and whether the deal exceeded your expectations in terms of uptake. I don't want to say too much about an individual customer's deal, but no, I mean, it was, we've been working with them for a long time on that, on that renewal and expansion. So it was quite, quite in line with what we expected; absolutely in line with what they expected. It's a good relationship both ways. We do a lot of things with Worldpay, and they use many of our products.

Speaker Change: I don't want to say too much about an individual customer's deal, but no, I mean, it was, we've been working with them for a long time on that.

Speaker Change: quite in line with what we expected.

Speaker Change: Absolutely in line with what they expected. It's a good relationship both ways.

Charles Nabhan: They have for a long time. As I'm sure you know, they're splitting out, or they have split out of FIS. So we spend a lot of time thinking about what we can do for each other, and we continue to do that. So, no, nothing, nothing unusual. Got it. Thank you. Appreciate it.

Speaker Change: We do a lot of things with WorldPay.

Speaker Change: And they use many of our products. They have for a long time. As I'm sure you know, they're splitting out, or they have split out of FIS. So, we spend a lot of time.

Speaker Change: thinking about what we can do for each other and we continue to do that.

Unknown Attendee: So, uh, no, nothing, nothing.

Unknown Attendee: Got it. Thank you. I appreciate it.

Speaker Change: So, no, nothing, nothing unusual.

George Sutton: Thanks. Next question comes from the line of George Sutton with Greg Halyung, Capital Group. Your line is open. Hey guys, wonderful quarter. So, Tom, I wanted to make sure we understand this and sending sales to get renewed. We've long lived through the white-knuckle year-end. Let's get these deals signed scenario. Can you just explain how it's different now? And just to be clear, we're talking within the year 24 versus pulling things from 25 further in. Is that correct? That's correct.

Speaker Change: Got it. Thank you. Appreciate it.

George Frederick Sutton: The next question comes from the line of George Sutton with Craig Hallium Capital Group. Your line is open.

Speaker Change: Next question comes from the line of George Sutton with Craig Hallium Capital Group. Your line is open.

George Sutton: Tom, I wanted to make sure we understand this, incenting sales to get renewals done earlier. You know, we've long lived through the white-knuckle year-end.

Unknown Executive: That's correct. On renewals, George, there is no pulling forward possible because of the accounting rules. We sign them early, but we don't recognize them early. But I think the beginning of your question, and I think I talked about this at Analyst Day a bit, about the way we're trying to tweak our incentive programs to encourage those early deals to get done. Actually, we kind of did it the other way around.

Tom Worsop: On renewals, George, there is no pulling forward possible because of the accounting rules. We sign them early, but we don't recognize them early. But, you know, I think you're the beginning of your question. And I think I talked about this at Analyst Day a bit about the way we're trying to tweak our incentive programs to encourage those early deals to get done. Actually, we kind of did it the other way around. So, we didn't incent people to do them early. We just incentive them to do them later. And that was true of our sales force and our customers.

Tom Warsop: That's correct, on renewals.

Speaker Change: George says there there is no pulling forward possible because of the accounting rules. We sign them early but we don't recognize them early.

Unknown Executive: So we didn't incent people to do them early. We disincented them to do them later. And that was true of our sales force and our customers. So let's, you know, just do it.

Tom Worsop: So, you know, just basically the way it worked was if you didn't get these things done in the first half, and we had a very targeted list. We were super successful at it. But we told the sales guy here your commissioner goes down a little bit, not not dramatic, but it goes down a little bit. If you don't get it done in the first half, and that that inspired them to do to work even harder. And then the second thing was with the customers. We, of course, have price increases every year. And I'm sure we've all gotten those emails from Netflix or whatever. I'm not comparing us to Netflix.

Unknown Executive: Basically, the way it worked was, if you didn't get these things done in the first half, and we had a very targeted list, and we were super successful at it, but we told the sales guys, your commission rate went down a little bit. Not dramatically, but it went down a little bit if you didn't get it done in the first half. And then the second thing was, with customers. We, of course, have price increases every year.

Speaker Change: So, uh, but, you know, just.

Speaker Change: If you don't get it done in the first half and that that inspired them to do To do to work even harder. And then the second thing was with the customers

Unknown Executive: And I'm sure we've all gotten those emails from Netflix or whatever, I'm not comparing us to Netflix, but this strategy is a pretty good one, where you say, hey, there's a price increase that's going into effect on July 1. If you do this, if you do this renewal, commit to it now, you're not going to get that price increase. If you wait until later in the year, it's going to cost you more.

Tom Worsop: But, you know, this strategy is a pretty good one where you say, hey, there's a price increase. It's going into effect on July 1. If you do this, if you do this renewal, commit to it now; you're not going to get that price increase. If you wait until later in the year, it's going to cost you more. And that we did do that. I think we, I don't think we left any money on the table before you ask me. But I think it was a very effective program. And we have what a price increase into effect.

Unknown Executive: And we did do that. I don't think we left any money on the table before you asked me, but I think it was a very effective program. And we have put a price increase into effect, and we'll see the benefit of that next year.

Speaker Change: And that, we did do that. I think we, I don't think we left any money on the table, before you asked me. We, but I think it was a very effective...

Tom Worsop: And we'll see the benefit of that next year.

Tom Worsop: On the, on the billers side, I want to make sure I understand the growth opportunity. And we are hearing good things about new leadership there. We know there's been a struggle to add new logos over time, but you were referring to a growing, qualified pipeline. I just wondered if you can give us a little bit more detail there. Yeah, I mean, it's a pretty broad-based improvement. I'm going to call it in the pipeline. So you're right. I think for two or three years, we struggled to get new logos interested. We were focused very much on transitioning out of the Western Union.

Speaker Change: Greg Keller on the on the biller side.

Speaker Change: I want to make sure I understand the growth opportunity. We are hearing good things about new leadership there. We know there's been a struggle to add new logos over time, but you were referring to a growing qualified pipeline. I just wondered if you can give us a little bit more detail there.

Unknown Executive: Yeah, I mean, it's a pretty broad base of new logos interested. We were focused very much on transitioning out of the Western Union.

Tom Worsop: Data Centers. We did that. We've been focused on improving the performance of the applications, getting the right sales people. There's a lot of things we worked on for quite a while. But we're through most of those now, very focused on generating pipeline for new logos, and it's really working. So we're seeing the pipeline growing in all of our verticals, and very pleased with how that's going.

Speaker Change: Data Centers. We did that. We've been focused on improving the performance of the applications, getting the right sales people. There's a lot of things we've worked on for quite a while, but we're through.

Speaker Change: Most of those now very focused on generating pipeline for new logos, and it's really working. So we're seeing the pipeline grow in all of our verticals.

Tom Worsop: And I think hopefully, I don't know if it'll be the next call or later, but I am highly caught that we'll be able to report some very interesting new logos over the next couple of hours. Great. Well, here's hope, and you get a Netflix multiple. I would love that.

Speaker Change: I don't know if it will be the next call or later, but I am highly confident that we'll be able to report some very interesting new logos over the next couple of quarters.

Unknown Attendee: Great. Well, here's hoping you get a Netflix multiple. I would love that!

Unknown Attendee: I would love that!

Speaker Change: Great, well here's hoping you get a Netflix multiple.

Trevor Williams: Next question comes from the line of Trevor Williams with Jeffries. Your line is open. Great. Thanks. Good morning, guys. Yeah, if we think about kind of the underlying drivers here behind the faster revenue growth outlook, it sounds like there's nothing that's being pulled forward from 25.

Trevor Ellis Williams: The next question comes from the line of Trevor Williams with Jeffreys. Your line is open.

Unknown Attendee: Great, thanks. Good morning, guys. Yeah, as we think about kind of the underlying drivers here behind the faster revenue growth outlook, I mean, it sounds like there's nothing that's being pulled forward from 2025, so maybe just talk about the sustainability of some of these underlying drivers just as we think about 2025 and beyond, the ability to sustain these growth rates. Thanks so much.

Scott Barons: So maybe just talk to the sustainability of somebody's underlying driver, just as we think about 2025 and beyond the ability to sustain these growth rates. Thanks so much.

Scott Barons: Yeah, I'll take that. This is said in maybe Tom from Add Some Color. Well, certainly I go back to what I previously said on the bank side and our focus on the first step getting this year's renewal done. We'll focus now on Q3 to get those deals that we expect to get done in 24k doses of Finish Line. Then you can really start progressing the 2025 pipeline even later this year. So, so that's both well for the bank side in 2025. Merchant is albeit small. Their growth is accelerating in the last year. They were negative in the first half.

Speaker Change: Yeah, I'll take that. Maybe Tom can add some color. Certainly, I go back to what I previously said on the bank side and our focus on the first half, getting this year's renewals done. We'll focus now on Q3 to get those deals that we expect to get done in 2024, get those to the finish line.

Scott Barons: Exit positive. They'll be building stronger here in a second half this year as we exit 2024. So that sets up 2025 nicely. And then Bill Erick has been strong; you know, really delivered strong results. The Q2 results really functioned two things. We talked about the new logos in dollars. That's part of that growth here in the second quarter; 13% growth was from the ramping of the new logo. And secondary was just the existing book of business, particularly the tax business. So we're seeing both contributions from net and logos going live. And that'll contribute to 2025 as well on a whole year basis.

Scott Barons: And the existing call up things for sales growth in kind of our base, the core business, our existing base of business. So I think that combined with, again, focusing later this year in really getting 2025 deals progressed sets us up well to sell early and be able to contribute revenue in 25. So I think across all three of the segments, 2025 is setting up, setting up well.

Scott Barons: We've talked about the payments hub, and we are starting to build a pipeline for the payments hub. I think I'm completely clear that we're wanting to make sure that we don't get too far ahead of our scheme. We want to show the customers what they're really going to get before we get too far down the path. But there's significant demand, and we are having those great conversations like I mentioned before. So I expect that to contribute beginning in 2025 to the revenue growth as well. We're not counting on a lot from 2025, but we'll see it and expect that to be accelerating throughout next year.

Tom Warsop: Yeah, agreed. And then the only thing I would add is we've talked about the Payments Hub and we are starting to build a pipeline for the Payments Hub. I think I've hopefully been clear that we're wanting to make sure that we don't...

Unknown Executive: get too far ahead of our skis. We want to show the customers what they're really going to get before we get too far down the path. But there's significant demand, and we are having those great conversations, like I mentioned before. So I expect that to contribute to revenue growth beginning in 2025 as well. We're not counting on a lot from 2025, but we'll see it. And I expect that to be accelerating throughout next year.

Speaker Change: Get too far ahead of our skis. We want to show the customers.

Scott Barons: Okay, no, that's great.

Scott Barons: And then just anything more specific on the updated expectations for at least at the segment level within the change to the full year guide this year. I think prior you said, and it banks would be at the upper end of the range, merchant maybe at the lower end, just if there's been any change to the segment level resumption. Thanks. Not particularly; we're generally in line. I would say Billers is performing better than we expected. Obviously, coming in at 13%, that's well above our high end of our growth rate. So the strong quarter and billers strong first half and biller, I think has helped us really get comfortable with raising our outlook.

Unknown Executive: Not particularly so. We're generally in line. I would say Biller's is performing better than we expected, obviously coming in at 13%. That's well above the high end of our growth rate. So the strong quarter in Biller, the strong first half in Biller, I think, has helped us really get comfortable with raising our outlook. You could say on the bank side that any license fees, especially new license fees, could be tightening issues. But on the Biller side, because it's fully recurring revenue, you really start to be able to bank that upside. So I would say if there's anything six months into the year that we're seeing better than expected, it would probably be on the Biller side.

Speaker Change: Not particularly. We're generally in line. I would say Villers is performing better than we expected, obviously, coming in at 13.

Speaker Change: That's well above the high end of our growth rate. So the strong quarter in Biller, the strong first half in Biller, I think has helped us really get comfortable with raising our outlook.

Scott Barons: You could say on the bank side that any licensees, especially new licensees, could be could be timing issues, but on the billers side is fully recurring revenue. You really start to be able to bank that upside. So I would say if there's anything you know six months into the year that we're seeing better than expected, would probably be on the billers side. Okay. That's great. Thanks, guys. Thanks for.

Speaker Change: You could say on the bank side that any license fees, especially new license fees, could be timing issues. But on the biller side, because it's fully recurring revenue, you really start to be able to bank that upside. So I would say if there's anything, you know, six months into the year that we're seeing, you know, better than expected, it'd probably be on the biller side.

Operator: Again, if you would like to ask a question, press star one on your telephone keypad.

Trevor: Thanks, Trevor.

Speaker Change: Again, if you would like to ask a question, press star 1 on your telephone keypad.

Jeffrey Cantwell: Do you have a last question comes from the line of Jeff. Well, let's see for research. Your line is open. Hey, thanks guys. Just a couple of follow-ups. I have. The results this morning on your bank segment revenue, that increased by 20% of the quarter, looks strong there. You talked this morning about the renewals, a strategic expansion, the bigger drivers. We would talk some more about what's get out as far as the biggest contributors to those results in your banking revenue this quarter. Was there anything lumpy or one time this quarter's number was really execution and delivering above expectations with maybe some benefit from the secular trends that you mentioned, like with real-time payments.

Jeffrey Brian Cantwell: We do have one last question, which comes from the line of Jeff Cantwell with Seaport Research. Your line is open.

Unknown Attendee: You talked this morning about renewals, strategic expansion, and the biggest drivers. Can you maybe talk some more about what stood out as far as the biggest contributors to those results in your banking revenue this quarter? Was there anything lumpy or one-timers in this quarter's numbers, or was it purely execution and delivering above expectations with maybe some benefit from the secular trends that you mentioned, like with real-time payments? Just trying to get a flavor for what's contributing to the strong results you're seeing there right now. And maybe you can talk about how the mix of revenue that you're seeing right now in banks is changing over time if you compare now, this quarter, versus a year, two years ago. Thanks.

Speaker Change: We talked this morning about the renewals, a strategic expansion, the various drivers.

Speaker Change: for those results in your banking revenue this quarter.

Scott Barons: Trying to get flavor for what's contributing to the strong results you're seeing there right now. And maybe you can talk about how the mix of revenue that you're seeing right now in banks is changing over time compared now this quarter versus a year, two years ago. Thanks. Yeah, and I wouldn't confuse, you know, getting renewals done sooner is being something that contributed really to key to results. Outformance and key to really and coming from the biller. That's where we saw the surprise. It wasn't a banks yet; biller delivered, you know, a bit more in terms of new license and service revenue than we were expecting.

Speaker Change: And maybe you can talk about how the mix of revenue that you're seeing right now in banks is changing over time if you compare now, this quarter, versus a year, two years ago. Thanks.

Scott Barons: But really, mostly outside performance came from the biller, and that was again getting deals live and ramp sooner and getting higher things or, you know, transaction growth. So less, less really the function of bank over performance as much as was biller. The point of the getting renewals done early is again, we can turn our votes. You're in the second half to to getting new new license deals done. Get your new show, new vote, was new apps and then progressing to 2025. So that and so to the question is, is there anything in Q2 that was kind of won't be a non recurring and I would say, no, it would be, it would be kind of your art traditional license.

Speaker Change: Came from a biller and that was again getting deals live and ramped sooner

Speaker Change: and getting higher same-store transaction growth. So less really of a function of bank overperformance as much as it was Diller. The point of getting renewals done early is, again, we can turn our focus here in the second half to getting new license deals done, so new logos, new apps, and then progressing 2025. So to the question is, is there anything in Q2 that was kind of lumpy and non-recurring? And I would say no, it would be kind of near our traditional license renewals.

Unknown Executive: Yeah, I just emphasize the point about the pre-signing of the renewals that that has zero impact on the quarter. It's great, and you know it makes everybody more comfortable with the rest of the year. It does not have an impact on the second quarter at all.

Scott Barons: Yeah, I just emphasized the point about the presigning of the renewals that that has zero impact on the quarter. It's great, and you know, it makes everybody more comfortable with the rest of the year. It does not have an impact on second quarter at all. We have, you know, we have a small amount of new logo business or new new business and a little bit of additional cross sell and banking that contributed a little bit better than we expected, but that was not a big driver for the over performance in the quarter, which actually makes me feel great because, as Scott said, when you're over performances in recurring revenue, that's fantastic.

Unknown Executive: We have, you know, we had a small amount of additional cross-sell in banking that contributed, did a little bit better than we expected, but that was not a big driver for the over performance in the quarter, which actually makes me feel great. Because, as Scott said, when you're over performing in recurring revenue, that's fantastic, because it's, as the name would imply, it keeps coming. And so we love that. And, you know, banks are performing very well, a little bit better than we expected.

Speaker Change: New logo business or new new business and and a little bit of

Speaker Change: additional cross-sell in banking that contributed, you know, did a little bit better than we expected, but that was not a big driver.

Tom Worsop: Because it's as the name would apply, it keeps coming, and so we love that. And you know, banks is performing very well, a little bit better than we expected, and we've been able to retire a very significant part of the second half. The new book already, and as Scott said a couple of times, that allows us to focus on the new revenue and bring it in center and getting 25 really solid.

Speaker Change: And so we love that. And, you know, Banks is performing very well, a little bit better than we expected. And we've been able to retire a very significant part of the second half.

Unknown Executive: And we've been able to retire a very significant part of the second half renewal book already. And as Scott said a couple of times, that allows us to focus on the new revenue and bring it in sooner, and get 25 [inaudible]

Speaker Change: renewal book already, and as Scott said a couple times, that allows us to focus on the new revenue and bring it in sooner and getting 25 resolved.

Scott Barons: Okay, that's great. And then a follow-up on Trevor's question. I'm your full year guidance raised. You talk a little more about that for the revenue line. Is that raised that you're doing in the backup? Are you raising expectations for banks' revenue or maybe help us understand? The segments which are compelling the raising the full year guidance and the same thing I've adjusted you, but the same question, what are the callouts for that raise? How are you coming more profitable, meaning where's the operating leverage coming from? Anyway, you can elaborate on the raising the full year guide would be great.

Unknown Attendee: Okay, that's great. And then a follow up on Trevor's question. I'm your full year guidance race. Can you talk a little more about that for the revenue line? Is that raise that you're doing in the back? Are you raising expectations for banks' revenue, or maybe? help us understand the segments which are compelling the raising of the four-year guidance. And the same thing I've addressed at EBITDA, same question: what are the call-outs for that raise? How are you becoming more profitable, meaning where's the operating leverage coming from? Any way you can elaborate on the raising of the four-year guidance? Yeah, I think, you know, let me take the wheel.

Speaker Change: Okay, that's great. And then a follow-up on Trevor's question.

Speaker Change: help us understand the segments which are compelling the Raising the Four-Year Guide, and same thing I've addressed at EBITDAS, same question, what are the call-outs for that raise? How are you becoming more profitable, meaning where's the operating leverage coming from? Any way you can elaborate on the Raising the Four-Year Guide would be great.

Scott Barons: Thanks. Yeah, I think, you know, let me take the leverage. I mean, we have traditional license to SaaS models. So you being the mental revenue related, we're seeing across all three of the segments is driving, you know, pretty high flow through the profitability. So I would say the profitability growth is just coming from scale to business. The upside again, I go back to my comments around builder. I mean, banks, it banks looks. I'd be cautious about saying banks can overtake where we're right now. You know, we've still got new logo business. New app business to get done here in a second half, but I go back to saying it's really builder at this point, you know, coming in at 13% growth in a second quarter is higher than we were expecting.

Unknown Executive: Yeah, I think, you know, let me take the leverage. I mean, we have a traditional licensed SaaS model. So the incremental revenue, really, that we're seeing across all three of the segments is driving, you know, pretty high flow through the profitability. So I would say that the profitability growth is just coming from scaling the business. The upside, again, I go back to my comments around Builder. I mean, banks look, I'd be cautious about saying banks can overcheat where we're at now. You know, we've still got new logo business, new app business to get done here in the second half. But I go back to saying,

Speaker Change: Yeah, I think, you know, let me take the leverage. I mean, we have a traditional license to SAS model. So the incremental revenue, really, that we're seeing across all three of the segments is driving

Speaker Change: The upside, again, I go back to my comments around Biller. I mean, banks, I'd be cautious about saying banks can overkeep where we're at now, you know, we've still got new logo business.

Scott Barons: And so I wouldn't say, at this point, I've been, I've been all over the land a year. I think it'll be both builder and banks, but again, that's fine because it's not business. So the merchant is basically tracking kind of where we thought.

Scott Barons: Okay, great. Thanks so much. Thank you.

John Kraft: There are no further questions at this time, Mr. John Glass. I turn the call back over to you. Well, thanks everybody for joining us this morning. We look forward to catching up the upcoming conferences in the coming weeks. I'm great. Thank you, everyone.

Operator: This concludes this conference fall. You may now disconnect. Thank you.