Prepared remarks
Ladies and gentlemen, thank you for standing by, and welcome to Global Payments Second Quarter 2026 Earnings Conference Call. Operator provided instructions to participants. As a reminder, today's conference will be recorded. At this time, I would like to turn the conference over to your host, Senior Vice President, Investor Relations, Nate Rozof. Please go ahead.
Good morning. Welcome to Global Payments Second Quarter 2026 Conference Call. Joining us today is our CEO, Cameron Bready; CFO, Josh Whipple; and COO, Bob Cortopassi. Some of the comments made during today's call will contain forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied, and we caution you not to place undue reliance upon them. They speak only as of the date of this call, and we undertake no obligation to update them. In addition, we will be referring to non-GAAP financial measures. For a full reconciliation of the non-GAAP financial measures to the most comparable GAAP measure, please see our press release furnished as an exhibit to our Form 8-K filed this morning and the supplemental material available on our Investor Relations website. Finally, the slide presentation that accompanies our prepared remarks is also available on our Investor Relations website. With that, I'll turn the call over to our CEO, Cameron Bready. Cameron?
Thanks, Nate, and good morning, everyone. We are pleased with our second quarter performance, which reflects the continued disciplined execution of our team members worldwide. Our integration of Worldpay is progressing rapidly, and we are progressing well against the road map we established to unlock the value creation opportunities from the transaction. At the same time, we continue to enhance our competitive position through strong commercial execution, ongoing innovation and the accelerated adoption of AI across our products and operations while also establishing a strong foundation to lead in the emerging era of Agentic commerce. Our second quarter results underscore the durability of our business model. Adjusted net revenue grew 4% on a normalized basis, which includes an approximately 100 basis point headwind from the impact of the Middle East conflict on our travel portfolio. Adjusted operating margins expanded 70 basis points on a normalized basis and adjusted earnings per share increased 12%. Our ability to generate durable mid-single-digit growth in the face of transient external headwinds demonstrates the benefits of our enhanced scale and the resilience of our diversified revenue streams. Capital allocation remains a central pillar of our investment thesis. During the quarter, we returned approximately $550 million through our previously announced accelerated share repurchase program as well as additional open market repurchases. Combined with our dividend payments, we are now more than halfway to our over $2 billion capital return commitment for the year. Turning to the integration of Worldpay, we achieved a number of key milestones this quarter. First, we completed our operating model design and have now established our entire leadership structure, creating a more streamlined organization with clearer accountability, greater agility and faster decision-making. Second, we defined our target architecture model for our combined technology environment, providing the blueprint to consolidate platforms, reduce infrastructure complexity and improve operating leverage over time while accelerating product innovation. Third, we finalized alignment of our commercial organization around three operating segments: SMB, Enterprise and Platforms, simplifying execution while positioning us to better serve customers across each market segment. With these foundational elements now in place, we are well positioned to advance integration execution, unlock further synergies and strengthen our competitive position across the markets we serve. In our SMB business, our investments in go-to-market transformation are yielding improvements in sales effectiveness. Since the beginning of the year, we have seen a 30% increase in new merchant locations per quota-carrying sales professional. This contributed to a greater than 25% sequential increase in Genius bookings in the second quarter. New customer yields also increased 75% year-over-year, demonstrating that our clients are willing to pay for the value Genius delivers. Genius adoption is accelerating as we expand across geographies and sales channels. In Canada, our long-standing bank partner, Desjardins, is now selling Genius and experiencing strong momentum. In the U.S., we are on track to enable Worldpay's financial institution partners to begin selling Genius during the fourth quarter, starting with 30 of our largest bank partners. Further, our pipeline remains strong, and we continue to win new marquee clients. For example, Long John Silver's recently completed its rollout of Genius digital menu solutions across 100 locations and Pollo Tropical selected Genius for its 135 stores. Jeremiah's Italian Ice chose Genius to replace its legacy point-of-sale solution and to unify its software and payments together with a single provider. In response to the strong demand, we are further investing in new features and functionality for Genius. We recently introduced our sleek new Genius handheld. It is designed for Edge AI, meaning that it eliminates latency by running an AI model locally on the device. Its AI-powered voice ordering technology allows servers to have natural conversations with customers while the point-of-sale system quietly builds a ticket in the background, even in high-noise environments. We also introduced our Genius AI reporting tool. This Agentic Assistant allows users to ask natural language questions across their own operational data and reports. It surfaces trends, patterns and insights from a business's reporting and operational data set to proactively support decision-making. These innovations demonstrate the power of Genius as a modern scalable platform that combines ease of use, robust functionality and AI-enabled capability. We recently celebrated the one-year anniversary of Genius' launch at the National Restaurant Association Conference in May. While its revenue contribution is relatively modest today, our sales momentum, product enhancements and geographic expansion in such a short period of time is impressive and a testament to the strength of our team and the scale of our business. Genius remains central to our long-term strategy, and we are investing meaningfully in the product to enhance capabilities and open new markets as well as in marketing to build brand awareness and mind share. You may have seen our newest commercial that features Genius in the fast-paced high-pressure environments restaurant operators navigate every day. It helped to drive a nearly 60% uplift in Genius and Google-branded search, which ultimately helps to lower our cost of acquisition over time. Looking ahead, we are making additional targeted investments to accelerate Genius adoption and deepen partner engagement. Later this month, we will host Genius World in Las Vegas, bringing together clients and partners to showcase our full suite of capabilities and innovation road map. We're also launching a nationwide roadshow to expose Genius directly to partner bank branches, increasing awareness, education and momentum across our expanding financial institution network. Turning to our Enterprise segment. Our strategy to sell our advanced payments capabilities and value-added services in a modularized configurable way continues to pay dividends. Bookings are up 10% year-to-date, including notable new wins with Shangri-La Hotels, online derivatives platform IG Group, Australian crypto trading platform BingX and a multinational home furnishing brand. We also expanded our relationship with Domino's Pizza to be their exclusive provider for card-present and card-not-present payments in the U.S. alongside our existing relationship in Canada. Further, we extended our relationship with a leading global retailer to support their Canadian locations, and we renewed key municipality partners, including the state of Ohio and the cities of Chicago and San Antonio. We also continue to make strong progress integrating and ramping our recently signed clients with approximately one third of these going live during the second quarter, including our recent wins with Aldi, Morrisons and ridesharing and delivery platform Careem in the UAE. Within our Platform segment, our growth strategy is centered around expanding our leadership position in embedded payments. We are investing to extend our reach with fast-growing PayFacs, marketplaces and software platforms while leveraging our global footprint and broad portfolio of value-added services to drive expansion across both new and existing partners. Within this segment, we signed 48 new partners during the second quarter with more than half of these wins being international. These partners are well diversified across verticals, including B2B, health care, hospitality, personal and professional services and retail. On the renewal front, we were pleased to extend and expand our relationship with Xplor, a leading provider of software and integrated payment solutions across several verticals. They selected Global Payments for platforms because of our scale, service excellence, reliability and, importantly, for our ability to enable their international expansion. Several of our other value-added services, including embedded finance, dynamic payouts and terminal modernization also form a core part of the value proposition we deliver to Xplor and their clients. Platforms BaaS revenue grew 25% in the second quarter, driven by fraud, payouts, prime routing and merchant working capital, and we saw continued double-digit volume growth in our embedded payments platform, highlighting the strength of our capabilities. Across our business, we continue to deploy AI as an accelerator in our products and internal workflows, allowing us to innovate at a faster pace, reduce development cycle times, enrich merchant experiences and provide distinctive customer service. Thanks to the scale of our combined company, the volume of data we process gives us a competitive advantage in value-added services like fraud and authorization optimization. And we are magnifying that advantage by deploying AI. Payment performance is not based on guesswork. It is based on frameworks and identifying patterns and data. For example, our AI-native optimization services continue to drive payment performance and risk mitigation across multiple products, delivering higher approval rates with minimal risk. Our revenue boost solution, which was already generating $2 billion in annual approval uplift, is now delivering an additional 50 basis point increase in approval rates through AI-powered intelligent decisioning. Our patent-pending authentication optimization solution is also utilizing Agentic capabilities to deliver significant improvements in authorization performance for 3D secure transactions. Further, Agentic commerce is an emerging growth opportunity, and we continue to invest in a platform-agnostic modular set of capabilities designed to help merchants participate in new commerce models regardless of channel, agent or payment method. We now have multiple Agentic commerce pilots in flight with leading AI platforms and some of the world's largest global retailers. We are co-creating new commerce experiences, bringing to bear our deep expertise in payments, fraud and authentication to allow advancement to happen at pace in a secure, reliable and scalable way. Our continued innovation and disciplined execution reinforce our confidence in the durability of our business model and our ability to consistently generate sustainable top-line growth, strong cash flow and attractive long-term shareholder returns. With that, I'll turn it over to Josh.
Thanks, Cameron. In the second quarter, we generated adjusted net revenue of $3.16 billion, representing normalized growth of 4%, excluding dispositions. Our results reflect resilient consumer spending trends across our business through the quarter, partially offset by an approximately 100 basis point headwind primarily related to reduced volumes in our travel sector business from the conflict in the Middle East. This is in line with what we discussed on our first quarter call. Adjusted operating margin for the quarter expanded 70 basis points on a normalized basis, excluding dispositions, and the net result was adjusted earnings per share of $3.46, representing an increase of 12%. Turning to our segment results. We are pleased to introduce our three new operating segments: SMB, Enterprise and Platforms, which reflect our go-forward business. These segments align to the go-to-market structure we implemented at the closing of the Worldpay transaction. In addition to our operating segments, we also have other revenue that includes noncore portfolios and certain relationships that don't align with our segments' go-to-market strategies. We will report each of our operating segments on a contribution margin basis, and we'll also have a corporate category that contains all overhead costs. Our largest operating segment is SMB, which provides payment, software and related commerce solutions to help small- and medium-sized businesses with less than $50 million in annualized volume. In the second quarter, SMB generated adjusted net revenue of $1.51 billion, representing normalized growth of 4%, excluding dispositions, underpinned by 4% volume growth. We saw solid growth in North America in the second quarter, and our enlarged and transformed sales force continued to deliver strong results as we accelerated the rollout of Genius, our new flagship point-of-sale technology platform. New Genius locations grew more than 50% year-over-year and nearly 25% sequentially compared to the first quarter. We delivered $891 million of adjusted operating income in the SMB segment, representing a contribution margin of 59%. Our Enterprise segment serves large enterprises and multinational clients with more than $50 million in annualized volume. It provides card-present and card-not-present payment processing and other value-added software and services offerings to support complex payment environments. In the second quarter, Enterprise generated adjusted net revenue of $838 million, representing normalized growth of 7% despite an approximately 400 basis point headwind attributable to the Middle East conflict. Enterprise volumes grew 4%, highlighting our ability to expand yields based on the strength of our solutions. In addition, card-not-present revenue, which primarily represents global e-commerce, grew low double digits. We delivered $653 million of adjusted operating income in the Enterprise segment, representing a contribution margin of 78%. Our final operating segment is Platforms, which offers payment and commerce solutions through software partners, PayFac, marketplaces and other technology-enabled platforms across numerous vertical markets. In the second quarter, Platforms generated adjusted net revenue of $628 million, representing normalized growth of 7%, led by strength in embedded payments, which includes our PayFac and managed PayFac offerings. Platform segment volume grew 10% in the second quarter, reflecting the growing mix of embedded payments within the segment. We delivered $284 million of adjusted operating income in the Platform segment, representing a contribution margin of 45%. We generated adjusted free cash flow of $687 million in the second quarter, representing a conversion rate of adjusted net income to adjusted free cash flow of approximately 75%. This represents sequential improvement as expected, and our free cash flow adjustments declined by more than 70% compared to the first quarter. As a reminder, our free cash flow conversion follows a seasonal pattern and is typically materially higher in the back half of the year relative to the first half. Additionally, we invested $236 million in capital expenditures in the quarter, representing approximately 7% of revenue. In the second quarter, we repurchased approximately 8 million shares for $550 million through our previously announced accelerated share repurchases as well as open market repurchases. Our balance sheet remains healthy. We ended the second quarter just below 3.5x net leverage, and our indebtedness is more than 90% fixed rate with a weighted average cost of approximately 4%. Turning now to our full year outlook. As we discussed on our first quarter earnings call, our prior outlook assumed a normalization of travel activity by the end of the second quarter. However, we continue to see impacts on our travel portfolio, particularly in the Middle East and the associated revenue headwind has persisted longer than anticipated. Accordingly, we are updating our outlook to reflect the assumption that the impact of the conflict will continue through the remainder of 2026. While the duration and ultimate outcome remain uncertain, this represents the most prudent planning assumption at this time. As a result, we now expect normalized constant currency adjusted net revenue growth of approximately 4% to 5% for the full year 2026. We continue to expect normalized adjusted operating margin expansion of approximately 150 basis points, and we now anticipate adjusted earnings per share of $13.60 to $13.80, representing 11% to 13% growth for the full year, which reflects the flow-through of the travel portfolio impacts to earnings as well as less FX impact. Given the recent strengthening in the U.S. dollar, we now expect currency exchange rates to have roughly no impact on reported growth for the full year. We continue to expect to realize benefits from our sales force expansion, ramping of Genius sales and enterprise clients coming live during the second and third quarters and also for adjusted operating margins to expand more meaningfully in the second half of the year as we realize additional integration cost savings. Regarding cash flow, we continue to expect the conversion rate of adjusted net income to adjusted free cash flow to exceed 90% for the full year 2026. Our capital allocation plans for 2026 and beyond remain unchanged. We continue to expect to return more than $2 billion to shareholders in 2026, while investing approximately $1 billion in the business or 8% of adjusted net revenue. Furthermore, we remain committed to preserving our investment-grade credit ratings and achieving our 3x net leverage target by the end of 2027. In summary, the underlying trends across the business demonstrate the durability of our model. The team's focus continues to be on commercial excellence in all our go-to-market channels and disciplined execution of our integration with Worldpay. We remain confident in our prospects for sustainable growth, cash flow generation and return of capital to shareholders. And with that, I'll turn the call back over to Cameron.
Thanks, Josh. As you've heard throughout the call, we are executing well and delivering on the initiatives within our control, exactly as planned. We're continuing to monitor the conflict in the Middle East, but expect its impact to be modest and transitory, underscoring the diversity of our revenue streams and the power of our scale. We continue to differentiate through feature-rich products, distinctive service and support and a reputation for delivering outcomes that exceed client expectations. From industry-leading enterprise payment solutions to innovative platforms like Genius, Global Payments is at the forefront of commerce technology. And with approximately $1 billion in annual investment, we are among the few companies in our industry with the resources to innovate at this scale, anticipating and delivering solutions ahead of demand. Our global distribution network is another powerful differentiator. The breadth of our reach, combined with deep local expertise positions us uniquely to help customers expand into new markets and capture growth opportunities around the world. At the same time, we remain focused on disciplined capital deployment and maximizing total shareholder return. We are a proven compounder with durable and diversified revenue streams and substantial free cash flow generation. We are more than halfway to our $2 billion plus 2026 return of capital commitment and remain on track to return $7.5 billion cumulatively by the end of 2027. Overall, the integration execution, operational simplification, innovation investments and disciplined capital deployment are strengthening the foundation of the company and position Global Payments to deliver sustainable growth, expanding margins and compelling long-term shareholder value. Operator, please open the line for questions.
Questions and answers
Operator provided instructions. Our first question will come from Dan Dolev with Mizuho.
Really nice results, really great to see all the progress on Genius. It looks like you're off to a great start there. Just had a question, Cameron. I think a lot of people are asking, can you maybe help us unpack some of the assumptions underpinning the new guide? I think a lot of investors want to get some more detail into that. But overall, great job here, and congrats again.
Yes. Thanks, Dan. Maybe I'll start with a high-level sort of overview, and I'll turn it over to Josh to get into a little bit of the detail. So look, I think the right way to think about the guide is we're trying to de-risk the back half for whatever the Middle East conflict may entail in terms of ongoing impact to our travel portfolio. As we said in our Q2 results, we certainly saw a pretty meaningful impact from the conflict. We called out 100 basis points. It was probably a little bit higher than that. We were able to offset some of that impact in Q2. But the situation obviously remains volatile and uncertain. And right now, our assumption is that it will persist through the balance of the year and will continue to negatively impact the travel portfolio. The environment is slightly better than it was clearly in the middle of Q2, but capacity and forward bookings within our travel portfolio remain significantly below pre-conflict levels. And the capacity that has come back tends to be more short-haul, lower-yielding domestic routes versus the higher-yielding long-haul routes that drive greater levels of revenue for us. So our guide for the back half of the year is 4% to 5% on a constant currency, ex-disposition basis. I think that allows for a range of outcomes in the Middle East. Previously, we said the back half would be slightly above 5%. Now it's probably going to be closer to that 4.5% range, not to put too fine a point on it, again, trying to allow for a variety of outcomes as it relates to the conflict. But this is the prudent approach to take given the uncertainty that exists and the impacts that we continue to see on the travel portfolio versus taking a quarter-by-quarter view. But we still feel good about how the business is positioned for the balance of the year. And most importantly, it doesn't impact our capital return plans for the year because the impact overall, given the size and scale of the business, is relatively modest. Josh, I don't know if you'd add any more details around that.
Yes. Just a couple of other things that I would add to put a finer point on some of the other pieces of it. We do continue to expect margins to expand 150 basis points for the full year, and that's primarily driven from the realized Worldpay integration synergies and operating leverage from the model. And as Cameron mentioned, we now expect to report EPS growth in that 11% to 13% range, which also takes into consideration updated FX assumptions just given the recent strengthening of the dollar. And then as it relates, Dan, more specifically, to the second half, we would expect revenue growth to be in that approximately 4.5% range, and we expect 200 basis points of margin expansion with margins right around that 43% range. And then as it relates to the general macro, we factored in just a continuation of the spending trends that we saw in Q2 and a generally stable macro environment.
Our next question comes from Bryan Keane with Citigroup.
Solid results here. I wanted to ask about yields. I noticed that the normalized revenue is running above volume for Enterprise and a little bit below for Platforms. Just wanted to understand that and maybe what the kind of go-forward outlook looks like for those segments. And then in SMB, volume and revenue are at the same levels. I'm just wondering with Genius coming into the mix, does that maybe drive yield higher for that segment?
Really great question, Bryan. Why don't I start, and I'll ask Bob to chime in if you have some additional color he'd like to add. As it relates to the Enterprise business, it's a mix of card-present and card-not-present volumes. Card-not-present volumes are growing in the double-digit range, while card-present tends to be more GDP-like levels given the type of merchants we serve. Blend that together and you get a growth rate fairly consistent with overall revenue growth for the business. We also get a tailwind from value-added services within the Enterprise channel. So revenue growth is a little bit higher than volume growth when you mix card-present, card-not-present and BaaS together. In Platforms, it's really a mix question. Volume growth is strong in PayFac and managed PayFac — our embedded solutions — around mid-teens, while volume growth in traditional integrated referral channels is lower. So blended volume growth is roughly 10%, with revenue growth a little lower because the yield in PayFac and managed PayFac channels is a bit less than in traditional integrated referrals. Over time, revenue growth will increase as we move more volume to managed PayFac solutions. In the SMB channel, you're exactly right: the challenge with Genius is size relative to the channel. Genius is a modest contributor today. Over time, we expect Genius to drive better yields, and we see that in the data. But in the short term, SMB revenue growth will be fairly consistent with volume growth. Over time, revenue growth should drift up as Genius becomes more meaningful to the mix. Bob, anything you would add?
One additional item, Bryan. Our expectation is for revenue growth and volume to decouple in a favorable way over time. That's not just anchored to Genius, although we have aspirations for Genius that we think will drive material improvements. It's really about the value-added service portfolio across all three segments. Over time, accounting for mix shift and the trends Cameron highlighted, we expect to drive higher front-book yields and over time higher back-book yields by attaching more products and services to our client relationships across the size spectrum — whether SMB, Platforms, or Enterprise.
Our next question comes from Andrew Schmidt with KeyBanc.
I appreciate all the work on the segment detail here. Really helpful. Two related questions: when we think about segment growth rates, can you talk about expectations for the intermediate term? And specifically within SMB, with Genius as a big driver of value-add services and distribution, could you drill into the key components in terms of driving revenue growth improvement there?
Good question. As we think about the segments more generally: for Enterprise, we called out 7% normalized growth in Q2, which reflects about a 400 basis point headwind from the Middle East. On a normalized basis, that business can be thought of as low double-digit. We expect modest improvement in the back half as card-not-present trends remain strong and bookings convert to live clients. Platforms grew 7% in the quarter and we expect slight acceleration, led by embedded payments (PayFac and managed PayFac). Embedded payments are a bit over 20% of the composition and are growing in the 20% range. SMB was about 4% normalized growth. We see strong trends with Genius — bookings and new locations — and we're still early, having launched a little over a year ago. So the underlying trends are strong and we expect them to continue to contribute.
To add a bigger-picture view of the three segments: Enterprise we would target high single-digit to low double-digit growth depending on e-commerce and other trends. Platforms, high single-digit growth led by embedded solutions and BaaS. SMB we still target mid-single-digit growth; this is a secular story as more SMBs procure payments from their software provider. Genius is critical to our SMB growth strategy, especially in restaurants and retail. Over time, most front-book sales in SMB in the U.S. should be Genius, and the rest of the world will evolve toward that model over time.
Our next question comes from Jason Kupferberg with Wells Fargo.
So I know you said 4.5% growth for the second half of the year. Just curious on cadence there between Q3 and Q4. And then on the Middle East, going back to last quarter I thought we were talking about a 70 basis point headwind in Q2 and another 30 basis points from the IRS contract. It sounds like the airlines alone were a little over 100 basis points of headwind in Q2. I just wanted to make sure we have the facts right there. And then should we assume that the 4.5% outlook for the second half assumes that current run rate of airline headwind stays unchanged?
Jason, maybe I'll start and ask Josh to add color as well. I wouldn't parse too specifically Q3 versus Q4 at this point. Given the drivers of better growth in the back half, it's fair to assume Q4 would be a bit better than Q3, but not by a huge amount. The drivers include sales force productivity ramp, continued progress with Genius, and the boarding and go-live of enterprise signed-but-not-live clients; about one third went live in Q2 and will ramp in the back half. Regarding your memory on the headwind, you are right that in our Q1 call we referenced a 70 basis point estimate. The conflict persisted and the actual impact in Q2 was closer to the 100 basis points we called out. We were able to offset some of that impact in Q2 due to better volumes, some of which were related to the World Cup. For the balance of the year, we still expect a headwind from the Middle East conflict on the travel portfolio. If the situation worsens, the headwind could rise toward the 100 basis points we saw in Q2; if it improves, it could be lower. Our guide allows for a variety of outcomes.
I totally agree, and that's helpful color. I just wanted to pivot to free cash flow for a second. I know you've been talking about an adjusted free cash flow number for next year of $4 billion. As we try to translate that to a GAAP free cash flow number based on how much more of the adjustments may come down next year, what might be a reasonable range to think about for a clean GAAP free cash flow number in 2027?
Jason, when we announced the transaction we expected $600 million of one-time costs to match our overall synergies. In the first half of integration spending we're around $300 million, and we expect about another $100 million, which includes some separation costs. Integration costs are primarily front-loaded in the first half and then tail off into 2028. We feel comfortable with our free cash flow trajectory toward our capital returns and deleveraging back to the 3x leverage point. As we get closer to 2027 we'll be able to provide a better steer on the outlook for that year.
Jason, let me add that we are pulling forward some integration and separation work, particularly separation from FIS for Worldpay's technology environments. The sooner we do that, the sooner we can execute on our plans without reliance on coordination through FIS. We're accelerating some of that work into 2026, which will make separation costs a bit higher this year but helps offset the tax gain on the issuer sale. Over time, these costs will drift down in 2027 and more so in 2028. The most important point is we remain confident in our ability to generate the free cash flow next year that supports the capital return plans we've articulated.
Our next question comes from Darrin Peller with Wolfe Research.
Cameron, I want to ask first a question on Genius. The checks continue to be very strong that the demand is there. What expectations do you actually have for it to permeate specifically the SMB segment and to see success with cross-sell into the Worldpay side over the next 12 months? We're looking for more color on milestones you're looking to achieve that we can watch and see success.
We see the same market signals, which is why we're investing behind product, capability, marketing, brand and distribution. All early results a year in are very positive, especially the sequential growth in new sales and market receptivity. As we get through the back half of the year and into 2027, we'll provide more KPIs for Genius: size, contribution and expected growth rates. It's a modest contributor today, so we haven't broken out specific guidance, but we'll do so as it scales. The broader secular trend is that SMBs increasingly procure payments via software providers; Genius is critical to our capture of that demand in restaurant, retail and adjacencies. Over time, most front-book sales in the SMB channel in the U.S. will be Genius; other verticals will shift toward our Platforms business as more SMBs buy payments integrated with software.
That's really helpful. Josh, my follow-up was on free cash again. You did about $1.2 billion in adjusted free cash and you need about $2 billion in the second half to hit your conversion. Can you walk us through the key specifics that will drive materially higher free cash in the second half, both on an adjusted and GAAP basis, given the strong capital return program?
Darrin, I would point to historical seasonality: free cash flow conversion is lower in H1 and materially higher in H2. Last year, conversion was over 100% in H2. We expect those trends to continue. We've already returned more than half of our targeted 2026 capital return, so we feel confident that between dividends and buybacks we'll exceed $2 billion for the full year.
Our next question comes from Adam Frisch with Evercore ISI.
A couple of housekeeping items on revenue. Since FX was neutral, was the delta between nominal and adjusted essentially the $60 million of divestitures? And relatedly, other revenue was down year-over-year on a normalized basis; what sits in the other revenue bucket and when does it stop being a drag?
Yes. Other revenue represents noncore portfolios and relationships that don't align to our segments or go-to-market strategies. It includes partners that are no longer referring front-book relationships, a couple of noncore processing businesses from the Worldpay acquisition, and a portfolio where the partner built their own acquiring platform and is slowly migrating off our managed services. In 2025, other revenue was about 8% of total revenue; we expect it to be about 6% in 2026. We broke that out to give better line of sight into the core business going forward.
On your first question, Adam, you're right: the difference year-over-year in Q2 is essentially dispositions, roughly $60 million to $65 million. There's no meaningful FX impact. We wanted to highlight the future of the business in the three segments and show transparency around the other revenue that we're winding down. Other revenue will continue to decline as those revenues attrite and we exit certain relationships over coming years.
Our next question comes from Dave Koning with Baird.
I'm wondering how you see the acceleration picture going forward. You're talking about second half 4.5%. Looking forward, it seems the Middle East 1% dissipates, you get Worldpay revenue synergies incremental going into next year and then Genius ramps. Do you feel pretty good today that 2027 will be an accelerating growth year?
Absolutely. Once we lap the Middle East headwinds, and given the acceleration we're seeing around Genius, front-book bookings and the enterprise clients coming live, we expect acceleration into 2027. Moving revenue a point on a business this size is meaningful, but we feel good about the momentum exiting the year heading into 2027.
Quick follow-up: SMB's 4% — was that pretty equal between Worldpay and Global Payments?
It's hard to precisely disaggregate now that we've combined the portfolios and aligned segments. One bright spot and one soft spot: the U.K. market is a bit softer macro-wise, which shows up more in Worldpay given their SMB presence. If I had to pinpoint it, it's probably slightly more weighted to Global than Worldpay on the SMB side, but given the integrated approach to account and relationship alignment, it's difficult to disaggregate cleanly.
Our final question comes from Ramsey El-Assal with Cantor Fitzgerald.
In the context of the higher customer yields you're seeing on Genius, is there a back book of existing customers on the SMB side that you can convert to Genius? Could that become an important accelerant for Genius and SMB segment growth?
Ramsey, yes. Our focus has been converting front-book opportunities to Genius and attaching more product and value around those engagements. There is a back book largely serviced by our dealer network where opportunistic upgrades happen as dealers talk with clients. The new Genius technology — countertop, kiosks, digital menu boards and the new handhelds — is attractive, and incremental functionality is compelling for customers. We see opt-in upgrades, but there's not a mass forced conversion or platform retirement. We upgrade back-book customers at a measured, voluntary pace as customers want the new solutions. Our primary focus is horizontal and vertical expansion, geographies, and increasing sales footprint and sales effectiveness across digital and traditional channels.
Quick follow-up: in Enterprise, the slide presentation mentioned 30% growth in cross-sell bookings. Could you comment further on where you're seeing success and what that means?
That's largely driven by our BaaS portfolio. In Enterprise, we've made concerted efforts to cross-sell value-added services into existing client relationships. We have dedicated teams focused on cross-selling revenue boost, fraud-side products, authentication optimization and other services across our client base. We're seeing good traction and that is contributing to the strong bookings growth in Enterprise year-to-date.
We have no further questions at this time. This concludes our call.