What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-05 compared with 2026-05-08 · 214 added, 87 removed, 187 unchanged (62% of the section changed)

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We also continue to execute on integration and business transformation activities, such as combining business operations, streamlining technology infrastructure, eliminating duplicative corporate and operational support structures and realizing scale efficiencies.

On January 9, 2026, we acquired 100% of Worldpay from FIS and affiliates of GTCR and divested our Issuer Solutions business to FIS.

On January 9, 2026, we acquired 100% of Worldpay Holdco, LLC ("Worldpay") from Fidelity National Information Services, Inc.

("FIS") and affiliates of GTCR LLC ("GTCR") and divested our Issuer Solutions business to FIS.

Worldpay is an industry-leading payments technology and solutions company.

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Consideration received for the divestiture of our Issuer Solutions business consisted of (1) approximately $7.5 billion in cash and (2) FIS’ ownership interest in Worldpay.

As part of our Worldpay integration, in the second quarter of 2026, we realigned into three reportable segments:

Enterprise, Platforms and Small and Medium-Sized Businesses ("SMB").

Through our Enterprise segment, we provide payment and related commerce solutions to large enterprises and multinational clients.

Our offerings include card-present and card-not-present payment acceptance, solutions that help businesses accept payments across channels, emerging AI-driven commerce platforms, and other value-added software and service offerings designed to support complex payment environments.

Through our Platforms segment, we provide payment and embedded commerce solutions through software partners, integrated software vendors, payment facilitators, marketplaces and other technology-enabled platforms across numerous vertical markets.

Our offerings include embedded payment acceptance, payment facilitation services, platform enablement technologies and other value-added commerce solutions.

Through our SMB segment, we provide payment, software and related commerce solutions to small and medium-sized businesses (“SMBs”).

Our offerings include point-of-sale technologies, business management software and other value-added commerce solutions designed to help our SMB clients operate and grow their businesses.

Our Issuer Solutions business met the criteria to be classified as a discontinued operation, and we have presented the historical operations of our former Issuer Solutions reportable segment as discontinued operations for all periods presented.

Our continuing operations consist of our Merchant Solutions reportable segment.

Prior to the completion of the Worldpay Acquisition, we operated in one reportable segment, Merchant Solutions, and certain operating overhead, shared costs and share-based compensation costs were included in Corporate.

As of March 31, 2026, the determination of our organizational structure to incorporate Worldpay and the effects on our reportable segments was still in process and therefore, we have reported corporate costs and the results of operations of Worldpay from the acquisition date to March 31, 2026, within our Merchant Solutions reportable segment.

See “Note 2—Acquisition,” “Note 3—Business Dispositions and Discontinued Operations” and “Note 15—Segment Information” in the notes to the accompanying financial statements for further information.

Highlights related to our results of continuing operations for the three months ended March 31, 2026, include the following:

• Revenues for the three months ended March 31, 2026, increased to $2,969.7 million compared to $1,820.3 million for the prior year primarily due to additional revenues from the acquired operations of Worldpay.

• Merchant Solutions segment operating income and operating margin for the three months ended March 31, 2026, decreased compared to the prior year primarily due to an increase in amortization expense from acquired Worldpay intangible assets and higher acquisition and transformation expenses.

Highlights related to our results of continuing operations for the three and six months ended June 30, 2026 include the following:

• Consolidated revenues for the three months ended June 30, 2026 increased to $3,320.8 million compared to $1,969.3 million for the prior year, and for the six months ended June 30, 2026 increased to $6,290.5 million compared to $3,789.6 million for the prior year, primarily due to additional revenues from the acquisition of the Worldpay business.

The Worldpay acquisition also contributed to revenue growth across all three reportable segments.

• Enterprise segment operating income increased for the three and six months ended June 30, 2026 compared to the prior year primarily due to incremental operating income from the Worldpay acquisition.

• Platforms segment operating income for the three and six months ended June 30, 2026 increased compared to the prior year primarily due to incremental operating income from the Worldpay acquisition.

• SMB segment operating income for the three and six months ended June 30, 2026 decreased compared to the prior year primarily due to higher amortization expense related to acquired Worldpay intangible assets.

• Consolidated operating income and operating margin for the three and six months ended June 30, 2026 decreased compared to the prior year primarily due to an increase in amortization expense related to acquired Worldpay intangible assets and higher acquisition and integration expenses.

The higher amortization expense also resulted in lower operating margins across all three reportable segments.

Strategy and Business Transformation

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Results of Operations

Our continuing operations consist of our Merchant Solutions reportable segment, which includes corporate costs and the results of operations of Worldpay since the acquisition date.

We operate our business in three segments:

Enterprise, Platforms and SMB.

We evaluate performance and allocate resources based on segment operating income, which includes externally generated revenues attributable to the segment less expenses directly related to those revenues.

Centrally-managed corporate costs, technology and operations costs, share-based compensation expense, corporate bonus costs, impairment of goodwill, gains or losses on business dispositions and other reconciling items are not included in determining segment operating income.

For further information about our reportable segments, see “Note 15—Segment Information” in the notes to the accompanying unaudited consolidated financial statements.

Key Drivers of our Results of Operations

Our revenues are dependent upon the volume of payment transactions we process and other factors (referred to herein as "transaction volume").

As a majority of our services are priced as a percentage of transaction value or specified fee per unit or transaction, many under multi-year customer arrangements, our revenues generally grow period-over-period in line with the rate of increase in transaction volume.

As a majority of our services are priced as a percentage of transaction value or specified fee per unit or transaction, our revenues generally grow period-over-period in line with the rate of increase in transaction volume.

Our operating expenses consist primarily of amortization of intangible assets, the cost of the technology to provide services to our customers and our people costs to support the operations.

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Continuing Operations

The following table sets forth key selected financial data for the three months ended March 31, 2026 and 2025, certain data as a percentage of total revenues and the changes between periods in dollars and as a percentage of the prior-period amount.

The income statement data for the three months ended March 31, 2026 and 2025 is derived from the accompanying unaudited consolidated financial statements.

The following table sets forth key selected financial data for the three months ended June 30, 2026 and 2025, certain data as a percentage of total revenues and the changes between periods in dollars and as a percentage of the prior period amount.

The income statement data for the three months ended June 30, 2026 and 2025 is derived from the accompanying unaudited consolidated financial statements.

Three Months Ended

March 31, 2026 % of Revenue (1)

June 30, 2026 % of Revenue (1)

Three Months Ended

March 31, 2025 % of Revenue (1)

June 30, 2025 % of Revenue (1)

Change % Change

(dollar amounts in thousands)

Revenues (2) :

Enterprise $ 838,301 25.2 % $ 149,022 7.6 % $ 689,279 462.5 %

Platforms 652,768 19.7 % 287,774 14.6 % 364,994 126.8 %

SMB 1,648,952 49.7 % 1,333,423 67.7 % 315,529 23.7 %

Other revenues (3)

180,770 5.4 % 199,068 10.1 % (18,298) (9.2) %

Consolidated revenues $ 3,320,791 $ 1,969,287 $ 1,351,504 68.6 %

Operating expenses (2) :

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Selling, general and administrative 1,689,791 50.9 % 1,041,256 52.9 % 648,535 62.3 %

Gain on business disposition — (3,993) 3,993 NM

Impairment of goodwill — — % 33,218 1.7 % (33,218) (100.0) %

Gain on business disposition — — % (267) — % 267 (100.0) %

Consolidated operating expenses $ 2,983,670 89.8 % $ 1,575,979 80.0 % $ 1,407,691 89.3 %

Operating income (loss) (2) :

Merchant Solutions $ (15,646) $ 367,966 $ (383,612) (104.3) %

Gain on business disposition — 3,993 (3,993) NM

Consolidated operating income (loss) $ (15,646) (0.5) % $ 371,959 20.4 % $ (387,605) (104.2) %

Operating income (2) :

Enterprise $ 247,593 $ 84,305 $ 163,288 193.7 %

Platforms 192,794 120,248 72,546 60.3 %

SMB 628,460 669,187 (40,727) (6.1) %

Other revenues (3)

180,770 199,068 (18,298) (9.2) %

Corporate and other expenses (4)

(449,966) (396,748) (53,218) 13.4 %

Technology, operations and product development expenses (5)

(462,530) (249,801) (212,729) 85.2 %

Impairment of goodwill — (33,218) 33,218 (100.0) %

Gain on business disposition — 267 (267) (100.0) %

Consolidated operating income (6)

$ 337,121 10.2 % $ 393,308 20.0 % $ (56,187) (14.3) %

Operating margin (2) :

Merchant Solutions (0.5) % 20.2 % (20.7) %

Enterprise 29.5 % 56.6 % (27.1) %

Platforms 29.5 % 41.8 % (12.3) %

SMB 38.1 % 50.2 % (12.1) %

NM = Not meaningful

(1) Percentage amounts may not sum to the total due to rounding.

(2) Revenues, operating expenses, operating income (loss) and depreciation and amortization reflect the effects of acquired businesses, including our completed Worldpay Acquisition, from the acquisition dates.

(2) Revenues, operating expenses, operating income and operating margin reflect the effects of acquired businesses, including our completed Worldpay Acquisition, from the acquisition dates.

See “Note 2—Acquisition” for further discussion.

Operating income (loss) and operat ing expenses included acq uisition, transformation, and transaction expenses of $387.3 million and $94.7 million for the three months ended March 31, 2026 and 2025, respectively, which were primarily included within selling, general and administrative expenses.

Revenues for the three months ended March 31, 2026 increased by 63.1%, from $1,820.3 million in the prior year to $2,969.7 million, primarily due to additional revenues from the acquired operations of Worldpay.

The Worldpay Acquisition contributed approximately $1.2 billion in revenue growth.

(3) Other revenues primarily consist of revenues related to certain portfolios and relationships that are non-core and are not aligned to our go forward strategy.

(4) Comprised of centrally managed corporate functions, including human resources, finance, legal and compliance.

These expenses are included within cost of service and selling, general and administrative expenses.

(5) Technology, operations and product development expenses relate to functions managed at the corporate level, which support and benefit the overall business.

These expenses are included within cost of service and selling, general and administrative expenses.

(6) Operating income included acquisition, transformation and transaction expenses of $197.8 million and $133.7 million for the three months ended June 30, 2026 and 2025, respectively, which were primarily included within Corporate and other expenses.

The following table sets forth key selected financial data for the six months ended June 30, 2026 and 2025, certain data as a percentage of total revenues and the changes between periods in dollars and as a percentage of the prior period amount.

The income statement data for the six months ended June 30, 2026 and 2025 is derived from the accompanying unaudited consolidated financial statements.

Six Months Ended

June 30, 2026 % of Revenue (1)

Six Months Ended

June 30, 2025 % of Revenue (1)

Change % Change

(dollar amounts in thousands)

Revenues (2) :

Enterprise $ 1,560,690 24.8 % $ 284,499 7.5 % $ 1,276,191 448.6 %

Platforms 1,220,854 19.4 % 561,906 14.8 % 658,948 117.3 %

SMB 3,152,293 50.1 % 2,546,981 67.2 % 605,312 23.8 %

Other revenues (3)

356,636 5.7 % 396,219 10.5 % (39,583) (10.0) %

Consolidated revenues $ 6,290,473 $ 3,789,605 $ 2,500,868 66.0 %

Operating expenses (2) :

Cost of service 2,567,493 40.8 % 996,947 26.3 % 1,570,546 157.5 %

Selling, general and administrative 3,401,505 54.1 % 1,998,433 52.7 % 1,403,072 70.2 %

Impairment of goodwill — — % 33,218 0.9 % (33,218) (100.0) %

Gain on business disposition — — % (4,260) (0.1) % 4,260 (100.0) %

Consolidated operating expenses $ 5,968,998 94.9 % $ 3,024,338 79.8 % $ 2,944,660 97.4 %

Operating income (2) :

Enterprise $ 409,088 $ 154,835 $ 254,253 164.2 %

Platforms 359,772 235,451 124,321 52.8 %

SMB 1,180,663 1,252,636 (71,973) (5.7) %

Other revenues (3)

356,636 396,219 (39,583) (10.0) %

Corporate and other expenses (4)

(1,093,550) (733,770) (359,780) 49.0 %

Technology, operations and product development expenses (5)

(891,134) (511,146) (379,988) 74.3 %

Impairment of goodwill — (33,218) 33,218 (100.0) %

Gain on business disposition — 4,260 (4,260) (100.0) %

Consolidated operating income (6)

$ 321,475 5.1 % $ 765,267 20.2 % $ (443,792) (58.0) %

Operating margin (2) :

Enterprise 26.2 % 54.4 % (28.2) %

Platforms 29.5 % 41.9 % (12.4) %

SMB 37.5 % 49.2 % (11.7) %

NM = Not meaningful

(1) Percentage amounts may not sum to the total due to rounding.

(2) Revenues, operating expenses, operating income and operating margin reflect the effects of acquired businesses, including our completed Worldpay Acquisition, from the acquisition dates.

See “Note 2—Acquisition” for further discussion.

(3) Other revenues primarily consist of revenues related to certain portfolios and relationships that are non-core and are not aligned to our go forward strategy.

(4) Comprised of centrally managed corporate functions, including human resources, finance, legal and compliance.

These expenses are included within cost of service and selling, general and administrative expenses.

(5) Technology, operations and product development expenses relate to functions managed at the corporate level, which support and benefit the overall business.

These expenses are included within cost of service and selling, general and administrative expenses.

(6) Operating income included acquisition, transformation and transaction expenses of $585.1 million and $228.3 million for the six months ended June 30, 2026 and 2025, respectively, which were primarily included within Corporate and other expenses.

Consolidated revenues for the three months ended June 30, 2026 increased by 68.6% from $1,969.3 million in the prior year to $3,320.8 million, and consolidated revenues for the six months ended June 30, 2026 increased by 66.0% from $3,789.6 million in the prior year to $6,290.5 million.

The increase in consolidated revenues was primarily driven by the acquisition of the Worldpay business, which contributed approximately $1.4 billion and $2.6 billion in revenue growth for the three and six months ended June 30, 2026, respectively.

The remaining change was attributable to the effects of business dispositions in 2025 that were not individually significant.

Enterprise Segment.

Revenues from our Enterprise segment for the three months ended June 30, 2026 increased by $689.3 million to $838.3 million from $149.0 million in the prior year.

Revenues from our Enterprise segment for the six months ended June 30, 2026 increased by $1,276.2 million to $1,560.7 million from $284.5 million in the prior year.

The higher Enterprise segment revenues resulted from growth in card-not-present activity, which increased $549.5 million and $1,016.6 million for the three and six months ended June 30, 2026, respectively, and growth in card-present activity, which increased $139.7 million and $259.6 million for the three and six months ended June 30, 2026, respectively.

The revenue increase in both areas was primarily driven by the inclusion of the acquired Worldpay operations.

Platforms Segment.

Revenues from our Platforms segment for the three months ended June 30, 2026 increased by $365.0 million, or 126.8%, to $652.8 million from $287.8 million in the prior year.

Revenues from our Platforms segment for the six months ended June 30, 2026 increased by $658.9 million, or 117.3%, to $1,220.9 million from $561.9 million in the prior year.

The higher Platforms segment revenues resulted from growth in the embedded payments service line, which increased $145.6 million and $272.4 million for the three and six months ended June 30, 2026, respectively, and growth in the integrated partners service line, which increased $219.4 million and $386.6 million for the three and six months ended June 30, 2026, respectively.

The revenue increase in both service lines was primarily driven by the inclusion of the acquired Worldpay operations.

Revenues from our SMB segment for the three months ended June 30, 2026 increased by $315.5 million, or 23.7%, to $1,649.0 million from $1,333.4 million in the prior year.

Revenues from our SMB segment for the six months ended June 30, 2026 increased by $605.3 million, or 23.8%, to $3,152.3 million from $2,547.0 million in the prior year.

The higher SMB segment revenues resulted from growth in the Americas, which increased $183.1 million and $332.7 million for the three and six months ended June 30, 2026, respectively, and growth in the rest of the world, which increased $132.4 million and $272.6 million for the three and six months ended June 30, 2026, respectively.

The revenue increase in both geographies was primarily driven by the inclusion of the acquired Worldpay operations.

Other Revenues .

Other revenues for the three months ended June 30, 2026 decreased by $18.3 million, or 9.2%, to $180.8 million from $199.1 million in the prior year.

Other revenues for the six months ended June 30, 2026 decreased by $39.6 million, or 10.0%, to $356.6 million from $396.2 million in the prior year.

The decrease in other revenues was primarily driven by attrition on non-core portfolios and relationships.

Operating Expenses

Cost of Service.

Cost of service for the three months ended March 31, 2026, increased $778.4 million, or 157.2%, to $1,273.6 million from $495.2 million in the prior year, primarily due to additional costs from the acquired operations of Worldpay.

Cost of service as a percentage of segment revenues increased to 42.9% for the three months ended March 31, 2026, from 27.2% in the prior year.

For the three months ended March 31, 2026, the Worldpay Acquisition had the effect of increasing cost of service by approximately $764.1 million and cost of service as a percentage of revenue by 13.9%.

Cost of service for the three months ended June 30, 2026 increased by $792.1 million, or 157.9%, to $1,293.9 million from $501.8 million in the prior year, and cost of service for the six months ended June 30, 2026 increased by $1,570.5 million, or 157.5%, to $2,567.5 million from $996.9 million in the prior year, primarily due to additional costs from the acquisition of the Worldpay business.

Cost of service as a percentage of revenues increased to 39.0% for the three months ended June 30, 2026 from 25.5% in the prior year, and increased to 40.8% for the six months ended June 30, 2026 from 26.3% in the prior year.

For the three months ended June 30, 2026, the Worldpay acquisition had the effect of increasing cost of service by approximately $732.4 million and cost of service as a percentage of revenue by 9.7%.

For the six months ended June 30, 2026, the Worldpay acquisition had the effect of increasing cost of service by approximately $1,496.5 million and cost of service as a percentage of revenue by 11.7%.

Amortization of Acquired Intangible Assets .

The most significant component of our cost of service is amortization of acquired intangible assets, which was $747.2 million and $197.2 million, or approximately 59% and 40% of cost of service, for the three months ended March 31, 2026 and 2025, respectively.

The increase in amortization of acquired intangible assets for the three months ended March 31, 2026, compared to the prior year was due to the effect of the Worldpay Acquisition.

These costs generally do not vary in proportion to changes in revenues, rather they are most significantly affected by acquisition activities.

Selling, General and Administrative Expenses.

Selling, general and administrative expenses for the three months ended March 31, 2026, increased by $754.5 million, or 78.8%, to $1,711.7 million from $957.2 million in the prior year, primarily due to additional costs from the acquired operations of Worldpay.

Selling, general and administrative ex penses as a percentage of segment revenues was 57.6% for the three months ended March 31, 2026, compared to 52.6% in the p rior year.

For the three months ended March 31, 2026, the Worldpay Acquisition had the effect of increasing selling, general and administrative expenses by approximately $735.7 million.

Operating Income (Loss) and Operating Margin

Merchant Solutions segment operating loss for the three months ended March 31, 2026, was $15.6 million, compared to income of $368.0 million in the prior year.

Merchant Solutions segment operating margin for the three months ended March 31, 2026, was (0.5)%, compared to 20.2% in the prior year.

Segment operating loss reflected an increase in amortization expense from acquired Worldpay intangible assets and higher acquisition and transformation expenses.

This had an unfavorable effect on operating margin of approximately 27.6% for the three months ended March 31, 2026.

The most significant component of our cost of service is amortization of acquired intangible assets, which was $757.6 million and $200.7 million, or approximately 59% and 40% of cost of service, for the three months ended June 30, 2026 and 2025, respectively.

For the six months ended June 30, 2026 and 2025, amortization of acquired intangible assets was $1,504.7 million and $397.9 million, or approximately 59% and 40% of cost of service, respectively.

The increase in amortization of acquired intangible assets for the three and six months ended June 30, 2026 compared to the prior year was due to a higher intangible asset base from intangible assets acquired with the Worldpay acquisition.

Selling, General and Administrative Expense.

Selling, general and administrative expense for the three months ended June 30, 2026 increased by $648.5 million, or 62.3%, to $1,689.8 million from $1,041.3 million in the prior year, and selling, general and administrative expense for the six months ended June 30, 2026 increased by $1,403.1 million, or 70.2%, to $3,401.5 million from $1,998.4 million in the prior year, primarily due to additional costs from the acquisition of the Worldpay business.

Selling, general and administrative expense as a percentage of segment revenues was 50.9% and 52.9% for the three months ended June 30, 2026 and 2025, respectively, and 54.1% and 52.7% for the six months ended June 30, 2026 and 2025, respectively.

For the three and six months ended June 30, 2026, the Worldpay acquisition had the effect of increasing selling, general and administrative expense by approximately $792.9 million and $1,528.7 million, respectively.

Corporate and Other Expenses .

Corporate and other expenses for the three months ended June 30, 2026 increased by $53.2 million, or 13.4%, to $450.0 million from $396.7 million in the prior year, and corporate and other expenses for the six months ended June 30, 2026 increased by $359.8 million, or 49.0%, to $1,093.6 million from $733.8 million in the prior year, primarily driven by the acquisition of the Worldpay business and higher acquisition and integration expenses.

Technology, Operations and Product Development Expenses .

Technology, operations and product development expenses for the three months ended June 30, 2026 increased by $212.7 million, or 85.2%, to $462.5 million from $249.8 million in the prior year, and technology, operations and product development expenses for the six months ended June 30, 2026 increased by $380.0 million, or 74.3%, to $891.1 million from $511.1 million in the prior year, primarily driven by the acquisition of the Worldpay business.

Operating Income and Operating Margin

Consolidated operating income for the three and six months ended June 30, 2026 was $337.1 million and $321.5 million, respectively, compared to $393.3 million and $765.3 million, respectively, for the prior year.

Operating margin for the three and six months ended June 30, 2026 was 10.2% and 5.1%, respectively, compared to 20.0% and 20.2%, respectively, for the prior year.

For the three months ended June 30, 2026:

• Consolidated operating income decreased $56.2 million and operating margin decreased 9.8% primarily due to an increase in amortization expense related to acquired Worldpay intangible assets and higher acquisition and integration expenses;

• Enterprise segment operating income increased $163.3 million, reflecting incremental operating income from the Worldpay acquisition.

Enterprise operating margin decreased 27.1% due to higher amortization expense related to acquired Worldpay intangible assets;

• Platforms segment operating income increased $72.5 million, reflecting incremental operating income from the Worldpay acquisition.

Platforms operating margin decreased 12.3% due to higher amortization expense related to acquired Worldpay intangible assets;

• SMB segment operating income decreased $40.7 million and operating margin decreased 12.1% due to higher amortization expense related to acquired Worldpay intangible assets.

For the six months ended June 30, 2026:

• Consolidated operating income decreased $443.8 million and operating margin decreased 15.1% primarily due to an increase in amortization expense related to acquired Worldpay intangible assets and higher acquisition and integration expenses;

• Enterprise segment operating income increased $254.3 million, reflecting incremental operating income from the Worldpay acquisition.

Enterprise operating margin decreased 28.2% due to higher amortization expense related to acquired Worldpay intangible assets;

• Platforms segment operating income increased $124.3 million, reflecting incremental operating income from the Worldpay acquisition.

Platforms operating margin decreased 12.4% due to higher amortization expense related to acquired Worldpay intangible assets;

• SMB segment operating income decreased $72.0 million and operating margin decreased 11.7% due to higher amortization expense related to acquired Worldpay intangible assets.

Other Income and Expense, Net

Interest and other income for the three months ended March 31, 2026, decreased $4.5 million to $33.5 million, compared to $38.0 million for the prior year.

Interest and other expense for the three months ended March 31, 2026, increased $93.8 million to $242.4 million, compared to $148.5 million for the prior year, primarily due to an increase in our average outstanding borrowings.

Interest and other income for the three months ended June 30, 2026 increased $9.2 million to $44.7 million, compared to $35.5 million for the prior year, and increased $4.6 million for the six months ended June 30, 2026 to $78.2 million, compared to $73.6 million for the prior year, primarily due to the acquisition of the Worldpay business.

Interest and other expense for the three months ended June 30, 2026 increased $125.0 million to $277.5 million, compared to $152.5 million for the prior year, and increased $218.8 million for the six months ended June 30, 2026 to $519.9 million, compared to $301.1 million for the prior year, primarily due to an increase in our average outstanding borrowings associated with the Worldpay acquisition and higher average interest rates from recent debt refinancing in the first half of 2026.

Income Tax Expense

For the three months ended March 31, 2026 and 2025, our effective income tax rates were 5.3% and 16.7%, respectively.

The decrease in the effective income tax rate was primarily due to the jurisdictional mixture of (loss) income from continuing operations before income taxes and equity in income of equity method investments as well as related tax effects of tax credits, foreign branch operations and other earnings outside the U.S.

These permanent differences, applied against lower income before income taxes in the current quarter, resulted in a decrease to the effective income tax rate.

Our effective income tax rates for the three months ended June 30, 2026 and 2025 were (4.7)% and 14.8%, respectively.

Our effective income tax rates for the six months ended June 30, 2026 and 2025 were 13.9% and 15.7%, respectively.

The decrease in the effective income tax rate was primarily due to the jurisdictional mixture of income (loss) from continuing operations before income taxes and related tax effects of tax credits, foreign branch operations and other earnings outside the U.S.

These permanent differences, applied against lower income before income taxes, resulted in a decrease to the effective income tax rate.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S.

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On January 5, 2026, the OECD released additional guidance and announced the Side-by-Side package which introduces simplifications and new safe harbors for U.S.

The OBBBA and Pillar Two directive did not have a material effect on our financial statements for the three months ended March 31, 2026, and we are continuing to evaluate the potential effect on future periods.

The OBBBA and Pillar Two directive did not have a material effect on our financial statements for the three and six months ended June 30, 2026, and we are continuing to evaluate the potential effect on future periods.

Income (Loss) from Continuing Operations

Loss from continuing operations was $192.8 million for the three months ended March 31, 2026, compared to income of $235.9 million for the prior year, reflecting the changes noted above.

Income (loss) from continuing operations was $130.9 million and $(61.9) million for the three and six months ended June 30, 2026, respectively, compared to income of $255.4 million and $491.3 million for the prior year, respectively, reflecting the changes noted above.

Diluted Earnings (Loss) per Share - Continuing Operations

Diluted loss per share was $0.78 for the three months ended March 31, 2026, compared to earnings per share of $0.93 for the prior year.

Diluted loss per share for the three months ended March 31, 2026, reflects the net loss discussion noted above as well as a 26.1 million increase in diluted weighted-average number of shares outstanding to 273.2 million shares for the three months ended March 31, 2026, compared to 247.2 million shares for the prior year.

Diluted earnings (loss) per share was $0.43 and $(0.36) for the three and six months ended June 30, 2026, respectively, compared to diluted earnings per share of $1.03 and $1.96 for the prior year, respectively.

Diluted earnings (loss) per share reflects the net income (loss) discussion noted above as well as an increase in the diluted weighted-average number of shares outstanding to 270.1 million and 271.6 million shares for the three and six months ended June 30, 2026, respectively, compared to 243.6 million and 245.4 million shares for the prior year, respectively.

Liquidity and Capital Resources

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Accumulated cash balances are invested in high-quality, marketable short-term instruments.

We believe that our current and projected sources of liquidity will be sufficient to meet our projected liquidity requirements associated with our operations for the near and long term.

We believe that our current and projected sources of liquidity will be sufficient to meet our projected liquidity requirements associated with our operations for the near term and long term.

Our consolidated statements of cash flows include cash flows from discontinued operations for all periods presented, and therefore the following liquidity discussion includes both continuing and discontinued operations.

At March 31, 2026, we had cash and cash equivalents totalin g $5,861.3 million.

At June 30, 2026, we had cash and cash equivalents totalin g $5,409.0 million.

Of this amount, we considered $1,697.9 million to be available for general purposes, of which $253.8 million is undistributed foreign earnings considered to be indefinitely reinvested outside the U.S.

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While this cash is not restricted in its use, we believe that designating this cash as a Merchant Reserve strengthens our fiduciary standing with our member sponsors.

Funds held for customers, which are not restricted in their use, include amounts collected before the corresponding obligation is due to be settled to or at the direction of our customers.

We also had restricted cash of $263.2 million as of March 31, 2026, representing amounts subject to regulatory or legal restriction in their use, including amounts deposited by customers for prepaid card transactions, funds held as a liquidity reserve, and cash deposits held in escrow on our behalf by third parties.

Operating activities used n et cash o f $288.8 million for the three months ended March 31, 2026 a nd provided net cash of $555.1 million for the three months ended March 31, 2025.

Operating cash flows for the three months ended March 31, 2026 reflect the payment of costs associated with the Transaction and certain liabilities assumed in the acquisition of Worldpay.

Investing activities provided net cash of $5,716.1 million for the three months ended March 31, 2026 and used net cash of $173.1 million for the three months ended March 31, 2025.

The primary source of cash during the three months ended March 31, 2026 was the net proceeds from the sale of our Issuer Solutions business of $7,362.3 million .

During the three months ended March 31, 2026 and 2025, we used cash of $1,389.2 million and $49.9 million, respectively, for acquisitions.

We made capital expenditures of $261.3 million and $127.6 million during the three months ended March 31, 2026 and 2025, respectively.

Funds held for customers, which are not restricted in their use, include amounts collected before the corresponding obligation is due to be settled to our customers or at their direction.

We also had restricted cash of $283.9 million as of June 30, 2026, representing amounts subject to regulatory or legal restriction in their use, including amounts deposited by customers for prepaid card transactions, funds held as a liquidity reserve, and cash deposits held in escrow on our behalf by third parties.

Operating activities provided n et cash o f $373.8 million and $1,372.6 million for the six months ended June 30, 2026 and 2025, respectively.

Operating cash flows for the six months ended June 30, 2026 reflect the payment of costs associated with the acquisition of Worldpay and divestiture of our Issuer Solutions business, along with certain liabilities assumed in the acquisition of Worldpay.

Investing activities provided net cash of $5,452.6 million for the six months ended June 30, 2026 and used net cash of $476.8 million for the six months ended June 30, 2025.

The primary source of cash during the six months ended June 30, 2026 was the net proceeds from the sale of our Issuer Solutions business of $7,362.3 million.

Du ring the six months ended June 30, 2026 and 2025, we used cash of $1,421.5 million and $205.8 million, respectively, for acquisitions.

We made capital expenditures of $497.0 million and $279.7 million during the six months ended June 30, 2026 and 2025, respectively.

These investments include software and hardware to support the development of new technologies, infrastructure to support our growing business and the consolidation and enhancement of our operating platforms.

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Our borrowing arrangements are further described in "Note 6—Long-term Debt and Lines of Credit" in the notes to the accompanying unaudited consolidated financial statements and below under "Long-Term Debt and Lines of Credit." Financing activities also include cash flows associated with changes in funds held from customers, changes in settlement processing assets and liabilities, common stock repurchase programs and share-based compensation programs, cash distributions made to our shareholders and cash contributions from and distributions to noncontrolling interests.

Net cash used in financing activities was $8,410.5 million and $31.5 million for the three months ended March 31, 2026 and 2025, respectively.

Repayments of long-term debt were $13,618.6 million and $2,546.6 million for the three months ended March 31, 2026 and 2025, respectively.

Proceeds from long-term debt were $4,668.0 million and $1,551.0 million for the three months ended March 31, 2026 and 2025, respectively.

Net cash used in financing activities was $9,244.4 million and $522.3 million for the six months ended June 30, 2026 and 2025, respectively.

Repayments of long-term debt were $18,055.4 million and $3,769.6 million for the six months ended June 30, 2026 and 2025, respectively.

Proceeds from long-term debt were $9,331.1 million and $2,755.1 million for the six months ended June 30, 2026 and 2025, respectively.

Proceeds from and repayments of long-term debt consist of borrowings and repayments that we make with available cash, from time to time, under our revolving credit facility, as well as scheduled principal repayments we make on our senior notes, finance leases and other vendor financing arrangements.

Changes in settlement processing assets and obligations, net were a use of cash of $534.8 million and a source of cash of $479.2 million for the three months ended March 31, 2026 and 2025, respectively.

Changes in settlement processing assets and obligations, net were a use of cash of $694.2 million and a source of cash of $630.2 million for the six months ended June 30, 2026 and 2025, respectively.

The change in cash from settlement processing assets and liabilities was due primarily to transaction volume and the timing of month-end.

During the three months ended March 31, 2026 and 2025, we had net borrowings of $1,077.1 million and $867.6 million, respectively, under our commercial paper program.

During the six months ended June 30, 2026 and 2025, we had borrowings under our commercial paper program of $674.4 million and $797.7 million, respectively.

See section "Long-Term Debt and Lines of Credit" below for further discussion of our recent debt transactions.

Activity under our settlement lines of credit is affected primarily by timing of month-end and transaction volume.

During the three months ended March 31, 2026 and 2025, we had net borrowings of $675.9 million and $223.2 million, respectively, under our settlement lines of credit.

During the six months ended June 30, 2026 and 2025, we had net borrowings under our settlement lines of credit of $827.5 million and $87.6 million, respectively.

We repurchase our common stock mainly through open market repurchase plans and, at times, through accelerated share repurchase ("ASR") programs.

During the three months ended March 31, 2026 and 2025, we us ed $549.9 million and $446.3 million, respectively, to repurchase and retire 7,262,557 and 4,218,350 shares of our common stock, respectively.

The share repurchase activity for the three months ended March 31, 2026, included the repurchase of 7,262,557 shares at an average price of $75.73 per share under an ASR agreement we entered into on February 18, 2026 with a financial institution to repurchase an aggregate of $550.0 million of our common stock during the ASR program purchase period.

During the six months ended June 30, 2026 and 2025, we used $1,099.9 million and $691.1 million, respectively, to repurchase and retire 15,220,854 and 7,261,834 shares of our common stock, respectively.

The share repurchase activity for the six months ended June 30, 2026 included the repurchase of 7,215,492 shares at an average price of $69.30 per share under an ASR agreement we entered into on May 6, 2026 with a financial institution to repurchase an aggregate of $500.0 million of our common stock during the ASR program purchase period.

This ASR program was completed on June 8, 2026.

The share repurchase activity for the six months ended June 30, 2026 also included the repurchase of 7,262,557 shares at an average price of $75.73 per share under an ASR agreement we entered into on February 18, 2026 with a financial institution to repurchase an aggregate of $550.0 million of our common stock during the ASR program purchase period.

This ASR program was completed on March 17, 2026.

The share repurchase activity for the three months ended March 31, 2025, included the repurchase of 2,449,366 shares at an average price of $102.07 per share under an ASR agreement we entered into on February 13, 2025 with a financial institution to repurchase an aggregate of $250.0 million of our common stock during the ASR program purchase period.

The share repurchase activity for the six months ended June 30, 2025 included the repurchase of 2,449,366 shares at an average price of $102.07 per share under an ASR agreement we entered into on February 13, 2025 with a financial institution to repurchase an aggregate of $250.0 million of our common stock during the ASR program purchase period.

This ASR program was completed on March 11, 2025.

As of March 31, 2026, the remaining amount available under our share repurchase program was $1,950.0 million.

On May 6, 2026, we entered into an ASR program to repurchase an aggregate $500.0 million of shares of common stock during the program purchase period, which will end prior to June 30, 2026.

The total number of shares to be repurchased under the program will generally be based on the average of the daily volume-weighted average prices of our common stock during the repurchase period less a discount and subject to adjustments pursuant to the terms of the program.

We paid dividends to our common shareholders of $68.2 million and $61.1 million during the three months ended March 31, 2026 and 2025, respectively.

We also made distributions to noncontrolling interests of $6.0 million a nd $10.3 million during the three months ended March 31, 2026 and 2025, respectively.

On April 30, 2026, our board of directors declared a dividend of $0.25 per share payable on June 26, 2026 to common shareholders of record as of June 12, 2026.

As of June 30, 2026, the remaining amount available under our share repurchase program was $1,400.0 million.

We paid dividends to our common shareholders of $134.7 million and $121.5 million during the six months ended June 30, 2026 and 2025, respectively.

We also made distributions to noncontrolling interests of $37.8 million and $30.1 million during the six months ended June 30, 2026 and 2025, respectively.

On July 28, 2026, our board of directors declared a dividend of $0.25 per share payable on September 25, 2026 to common shareholders of record as of September 11, 2026.

Long-Term Debt and Lines of Credit

We have $16.2 billion in aggregate principal amount of senior unsecured notes outstanding as of March 31, 2026, which mature at various dates ranging from April 2026 to August 2052.

We have $15.6 billion in aggregate principal amount of senior unsecured notes outstanding as of June 30, 2026, which mature at various dates ranging from January 2027 to August 2052.

Interest on the senior notes is payable annually or semi-annually at various dates.

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On March 5, 2026, we issued $1.0 billion aggregate principal amount of senior unsecured notes consisting of the following:

(i) $500.0 million aggregate principal amount of 4.550% senior notes due March 2028;

and (ii) $500.0 million aggregate principal amount of 5.400% senior notes due March 2033.

(i) $500.0 million aggregate principal amount of 4.550% senior notes due March 2028 and (ii) $500.0 million aggregate principal amount of 5.400% senior notes due March 2033.

We incurred debt issuance costs of $7.7 million, including underwriting fees, professional services fees and registration fees, which were capitalized and reflected as a reduction of the related carrying amount of the notes in our consolidated balance sheet.

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and (iv) $1.75 billion aggregate principal amount of 5.550% senior notes due November 2035.

Interest on the senior unsecured notes is payable semi-annually on May 15 and November 15 of each year, commencing May 15, 2026.

Interest on the senior unsecured notes is payable semi-annually on May 15 and November 15 of each year, and commenced on May 15, 2026.

The debt issuance was completed in connection with the acquisition of Worldpay.

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The notes, which are currently convertible, are presented within long-term debt in our consolidated balance sheets based on our intent and ability to refinance on a long-term basis should a conversion event occur.

Term Loan Facility

On April 21, 2026, we entered into a term loan agreement with a syndicate of financial institutions as lenders and agents.

The term loan agreement provides for a senior unsecured $1.0 billion term loan facility due April 21, 2028 bearing interest at a one-month Secured Overnight Financing Rate plus 1.05%.

Borrowings under the term loan facility may be repaid prior to maturity without premium or penalty, subject to payment of certain customary expenses of lenders and customary notice provisions.

As of June 30, 2026, there were borrowings of $1.0 billion outstanding under the term loan facility with an interest rate of 4.7%, and no available commitments under the term loan facility.

Revolving Credit Facility

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The Revolving Credit Facility replaced our previous unsubordinated unsecured $5.75 billion revolving credit facility (the "Prior Credit Facility"), dated as of August 19, 2022, as amended, which was scheduled to mature in August 2027.

In May 2025, all borrowings outstanding under the Prior Credit Facility were either repaid or continued under the Revolving Credit

Facility pursuant to the terms of the new credit agreement.

In May 2025, all borrowings outstanding under the Prior Credit Facility were either repaid or continued under the Revolving Credit Facility pursuant to the terms of the new credit agreement.

The Prior Credit Facility was terminated in connection with the execution of the Revolving Credit Facility.

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The amounts available to borrow under the Revolving Credit Facility are also determined by a financial leverage covenant.

As of March 31, 2026, there were borrowings of $1.6 billion outstanding under the revolving credit facility with an interest rate of 5.1%, and the total available commitments under the revolving credit facility were $4.6 billion.

As of June 30, 2026, there were borrowings of $1.6 billion outstanding under the Revolving Credit Facility with an interest rate of 5.0%, and the total available commitments under the Revolving Credit Facility were $5.0 billion.

Committed Bridge Financing

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We have a $2.0 billion commercial paper program under which we may issue senior unsecured commercial paper notes with maturities of up to 397 days from the date of issue.

The commercial paper program is backstopped by our revolving credit facility, in that the amount of commercial paper notes outstanding cannot exceed the undrawn portion of the revolving credit facility.

The commercial paper program is backstopped by the Revolving Credit Facility, in that the amount of commercial paper notes outstanding cannot exceed the undrawn portion of the Revolving Credit Facility.

As such, we could draw on the Revolving Credit Facility to repay commercial paper notes that cannot be rolled over or refinanced with similar debt.

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The proceeds from issuances of commercial paper notes will be used primarily for general corporate purposes but may also be used for acquisitions, to pay dividends, for debt refinancing or for other purposes.

As of March 31, 2026, we had net borrowings under our commercial paper program of $1,077.5 million outstanding, presented within long-term debt in our consolidated balance sheet based on our intent and ability to continually refinance on a long-term basis, with a weighted average annual interest rate of 4.3%.

As of June 30, 2026, we had borrowings under our commercial paper program of $674.8 million outstanding, presented within long-term debt in our consolidated balance sheet based on our intent and ability to continually refinance on a long-term basis, with a weighted average annual interest rate of 4.3%.

Compliance with Covenants

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The revolving credit agreement contains customary affirmative covenants and restrictive covenants, including, among others, financial covenants based on net leverage and interest coverage ratios, and customary events of default.

As of March 31, 2026, the required leverage ratio was 4.50 to 1.00.

We were in compliance with all applicable covenants as of March 31, 2026.

As of June 30, 2026, the required leverage ratio was 4.50 to 1.00.

We were in compliance with all applicable covenants as of June 30, 2026.

Settlement Lines of Credit

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Accordingly, the amount of the outstanding lines of credit may exceed the stated credit limit.

As of March 31, 2026, a total of $31.6 million of cash on deposit was used to determine the available credit.

As of March 31, 2026, we had $1,010.3 million outstanding under these lines of credit with additional capacity to fund settlement of $2,133.4 million.

During the three months ended March 31, 2026, the maximum and average outstanding balances under these lines of credit were $1,017.4 million and $408.7 million, respectively.

The weighted-average interest rate on these borrowings was 4.64% at March 31, 2026.

As of June 30, 2026, a total of $29.6 million of cash on deposit was used to determine the available credit.

As of June 30, 2026, we had $1,136.8 million outstanding under these lines of credit with additional capacity to fund settlement of $2,707.7 million.

During the three months ended June 30, 2026, the maximum and average outstanding balances under these lines of credit were $1,208.0 million and $451.1 million, respectively.

The weighted-average interest rate on these borrowings was 4.79% at June 30, 2026.

Effect of New Accounting Pronouncements and Recently Issued Accounting Pronouncements Not Yet Adopted

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis