Corpay, Inc. (CPAY) August 2026 Conference Transcript

All righty. We have made it to the end of the Deutsche Bank tech conference, and of course, we saved the best performing stock in my coverage, at least for last. So very happy to have Peter from CorPay here. Thank you very much for making it. We're excited to wrap things up with you.

Great.

Thanks, Greg. All right, that threw me off a little bit. But just going to start off, talk about two key results, right? Really strong momentum across each of your businesses, able to raise the guide above and beyond some of the macro tailwinds that you're seeing across the business. So maybe just taking a high-level step back, tell us what you're seeing across the business that gives you confidence that this momentum is going to sustain into the back half of this year and then beyond that as well.

Yeah, happy to. I mean, the underlying drivers of the business are strong. We talked about them on the earnings call, right? in terms of sales, retention, same source sales. We're pleased with Q2 results, but it's obviously our fourth quarter of beat and raise. So consistent, strong performance and our fifth quarter of double digit organic growth. So as we look in the back half of the year, it's about continued execution and we have a lot of insight into that. So really feel strong about what we put forward in terms of 2026 and our midterm guide.

Great to hear. Before we jump into trends in each of the segments, anything you can share in terms of macro trends or what you're seeing across your businesses? Quarter to date, this could be areas like cross-border, FX demand, Brazil, all of the fun stuff, but anything worth calling out that you would point investors to?

Yeah, I would say things are tracking kind of exactly as we expected from the assumptions in our guidance. So nothing material that I would share. I'd say, you know, customer activity continues to be strong. Sales continues to be strong and retention. So, again, feel good about the quarter and the rest of the year.

That's good to hear. No changes is a good thing. So diving into the segments, I think we should start with corporate payments. For sure. Given the importance of that segment to the overall business. Organic growth remains very, very solid, 16% in the most recent quarter. Can you just talk about the underlying drivers of growth across the various aspects of that business? So spend management, cross-border, AP, where are you seeing the most demand in recent quarters? Where do you expect the most demand to come from in the near term over the medium term?

Yeah, great question. So really pleased with corporate payments performance for the first two quarters of the year. We delivered 16% organic growth. and what we shared in the call is we expect to deliver, you know, similar in the back half, if not a little bit above that. And we're seeing strong performance across all three of the solutions you mentioned, right? So commercial card, spend management, commercial card, AP automation, cross-border. What we're really focused on, right, and I love being the CFO of this business because I'm the ultimate customer of our products, right? We're very focused on serving real-world problems for CFOs and their teams. So we're having a lot of success doing that. The other thing that really excites us when we look at, you know, the three solutions going forward for the business is this is a huge TAM, $600 billion TAM for us. And, you know, the main competitor that we're facing is the regional and local banks, right? That's who has a lot of this business today. So we believe that we really bring an advantage product. And at the end of the day, our goal is to help businesses save money. And we're having great success at that.

Yeah. You touched on what was going to be my next question, and you did this great cross-border teach-in a couple of months ago, which was super, super helpful. You talked about the primary competition being these regional banks, right? I guess I keep going back to a question I get all the time is, what is preventing the Tier 1 banks? I will refrain from naming them, but the biggest players globally from entering this space, you guys are clearly growing super fast, and it's a big TAM growing rapidly. So why aren't the bigger banks getting into this? Why aren't other fintechs getting into this? What is kind of preventing additional competition from coming in and infringing on this great opportunity you have in front of you?

Yeah, great question. I think one of the key points of the cross-border teaching that we did was really to explain this structural issue in terms of serving middle market clients that we're addressing with our cross-border offerings. So if we look at the enterprise segment, the enterprise customers are primarily served by the Tier 1 banks. And the Tier 1 banks are very happy to serve those customers. I'm an enterprise-level customer. I'm serviced by several of the Tier 1 banks, and I get great service. When you move down to the middle market, the middle market does most of their banking with regional or local banks. They're not typically with the Tier 1 banks. And so the Tier 1 banks, they really lack the FX and global capabilities in order to service those customers. So that's really the opportunity for us. We don't see the Tier 1 banks coming down to compete with the Tier 2 banks and take these middle market customers because they've got such an opportunity in the customers that they serve today. So I think that's a really important distinction to make. When you look at the overall kind of market of this, right, we believe in the middle market's about a $160 billion revenue TAM for us, whereas you look at the enterprise and it's about a $700 billion TAM. So the enterprise is the largest piece, and that's what they have today. We're really focused on the middle market.

The last specific question on corporate payments, it'll come up again, but you did an acquisition last year, Alpha Group, and I think a big topic that you've talked about on earnings calls, investors ask about all the time, is the integration efforts associated with Alpha, driving some earnings accretion this year. So you've made substantial progress, maybe some things a little faster or larger than you had previously expected, but maybe you can give us an update on work you've been doing, what's to come with regards to alpha integration. Is it work on the Salesforce side of things, expense side, to realize there's additional synergy system update there?

Yeah, happy to. So I think we shared at the beginning of the year, really the end of last year, that in terms of integrating the Salesforce, that that went faster than we expected it to, and so we saw a benefit of that in the last back half of last year. And then just in general, as we go through the integration, that's been quite successful. I mean, we're not new to this game, right? This is our fourth cross-border acquisition that we've integrated. In terms of kind of recent milestones, we shared on the last call that 80% of the corporate business has now been migrated onto our one global platform. So that's super important. There's about 20% to go. That's kind of always the tail. We expect that to happen in Q4. And then that will be fully integrated. As a result of that in the corporate business, that'll allow us obviously to realize synergies as we're only supporting one system going forward for the overall corporate business. Then equally as exciting, I'd say on the global bank account product, obviously we had our own product called the MCA product. Alpha had a global bank account product. We are bringing those products together and what we're calling kind of global bank account 2.0. We didn't mention this on the earnings call and we expect that all to come together end of year this year. And what What we're really excited about with that is when we purchased Alpha, one of the deal hypotheses is we could take their product, their global bank account product, sell it in the same clients in the U.S. and in Asia where they were not licensed and we were. We are realizing some of that benefit today, but because we're not in one system, it's not fully realized. That should give us some additional tailwinds as we go into next year.

That's good to hear. Maybe turning to vehicle payments next, did see a little bit of a deceleration in growth to 8%, still really strong in the high single-digit growth for the rest of the year on the most recent earnings call. I think a topic that comes up all the time is you and Ron have talked about sort of reallocating some of the investment dollars away from vehicle payments and into other areas with higher return, namely corporate payments. So could you just talk about that philosophy there? I know this sort of capital allocation decision is something you do as a normal course of operating. But maybe just call her on why you're shifting dollars from one segment to the other, why you think that's the right decision, both in the near term and the long term.

Yeah, happy to. So we delivered 8% organic growth for vehicle payments in Q2, still in line with our expectation of, call it, you know, high single digits. Our Brazil business continued to perform really well, so call it, you know, mid-teens growth there. Our Europe rest-of-the-world business, call it 9% to 10%, so call it around the line average. And it was really U.S. vehicle payments that we, you know, defocused on from an investment perspective. And really the view there is that incremental spend within U.S. vehicle payments, we can get a better return on it in corporate payments. So that was really the driver of it. As you know, we've announced two divestitures this year. So we're really focused on kind of the future of the portfolio, right? And we're focused on fewer, bigger, more advantaged business as we go forward. And I'd say the U.S. vehicle payments business doesn't fit squarely within that framework, so that's not going to be something that we're overly investing in.

Yeah, a lot of threads there I want to keep touching on. Maybe just first one, just in terms of the outlook for the rest of the year in vehicle payments, you talked about the growth profiles in Brazil, Europe, U.S. into, is that kind of the same ballpark that we should expect for contribution from each of these segments, or is there anything to call out? Again, get asked about Brazil all the time. I think there was some issues with search engine optimization. Just wondering if you could give an update if those issues are behind us.

Yeah, it's interesting. I mean, we offer 10 lines of business in Brazil. That was related to one line of business, and somehow it was like, unfortunately, a runaway train in terms of, I think, a much bigger deal out of it was made. you know when you have you know go to market and how you go about sales you always find a way to work around things so I'd say the issues we identified earlier we've worked around those issues see Brazil continuing to have you know strong growth in the back half in terms of call it mid-teens organic growth expect the same performance that we have from Europe and rest of world and so kind of the 8% that we delivered in Q2 somewhere in that range give or take would be a reasonable assumption for the rest of the year.

Got it. makes a ton of sense uh you also mentioned the divestitures right um you did pay pay by phone earlier in the year you just announced epics as well so maybe you could talk about the characteristics of these divestitures that you were doing what sort of you know makes these assets um you think a better fit outside of the core pay portfolio than within it um obviously i think you've been pretty clear on using the proceeds of those divestitures to buy back stock Does that calculus change at any point with the price of the shares going up? So, one, generally on divestiture philosophy, and then, two, how should we think about use of proceeds going forward?

Yeah, so, you know, I think this is the most active we've been in divestitures with the two that we will have completed this year. We haven't completed the second one yet. And the philosophy here, right, is we're really focused on the corporate payments business, so assets that don't fit squarely within that that I'd say are, you know, TAM-constrained assets in terms of kind of they're already the max size that they could grow to or lower growth type businesses. They could be highly profitable, just lower growth that don't fit within corporate payments. Those are the things that we're interested in kind of pruning the portfolio for going forward. I'll never kind of specifically comment on which assets we're in market with or not because it's a disadvantage for me, obviously, when I'm doing a potential transaction. But I would say, as we talked about on the call, you could probably expect over the next 18 months, there's probably three or four additional businesses that we'd be interested in divesting. And you're absolutely right that when we make those divestitures, we'll use the proceeds for share buybacks. And that's really because we're focused on minimizing the EPS solution from the sale of these businesses.

Makes sense. And I guess just to clarify, So I think pay-by-phone was an asset that was growing pretty healthy clip, right? That's something you had talked about. So that seems like it fits more in the TAM-constrained bucket rather than the low-growing asset. I guess just in terms of Epyx, would you say that's more TAM-constrained, more low-growth, or somewhere in the middle between the two?

Yeah, I'd say Epyx is more TAM-constrained within the U.K. That being said, I think Epyx has opportunity to grow outside of the U.K. But the question is, if you look at the business, it's a really interesting, cool business, right? I mean, it's basically the software that sits between the garages that are servicing the vehicle and the lessors of the vehicle, right? So great business, great margin business, but you've really got to take it to another country in order to grow that business. So the thought is, do you want Ron and I spending our time on growing a $100 million business, or do you want us spending our time in cross-border growing a $1.5 billion business? So I think that's how investors should think about it is we have, you know, limited resources, not in terms of capital necessarily, but in terms of our own time, and we really want to be focused on those businesses that can have the biggest impact on shareholder value and growth going forward.

Yeah, I think it's a great point. We'd like to have you focus in on corporate payments too. Maybe just one on lodging. I think that I'm stealing Ron's phrase here, but had been a problem child for some time, right? It seems like we've started to turn the corner, got back to flat growth, a little positive growth in 2Q. I think you've been pretty consistent on the messaging for acceleration into the back half. So maybe you could walk us through some of the drivers that led to the return to growth in the first half of the year, whether those are going to sustain into the back half, and then how we should think about your confidence visibility into sustaining growth in 27 and beyond within lodging.

Yeah, so lodging is really coming in for the first half of the year and what we're seeing for the back half of the year right in line with our expectations in terms of we expected it to go flat, flat, and then improve in terms of the growth rate throughout the year, kind of ending, you know, call it mid-single digits in terms of growth rate. So what we saw in the first half of the year that was beneficial is we didn't have the overhang of emergency volume from FEMA that was a tough comp in the prior year. We also started to see some of the sales in the back half of last year come online, but that was more in Q2. As we look in the back half, we see more of those sales from the back half of the year in the front of this year come online, and that's what gives us confidence in the organic growth rate improving there. The thing about the lodging business that's different, for example, than our spend management business is the time to implementation is longer. When somebody buys a spend management program for me or a cross-border program for me, right? Implementation can, you know, be very, very quick. I don't want to say immediate, but very, very quick. Where lodging is much more, you know, client specific in terms of what they're looking for and how we implement. So it just takes us time to ramp. Yeah.

And on that implementation, is that more sort of like technology integration, beta testing, that sort of work? Are there macro factors where it's like, I don't want to say like, hey, you know, there's a conflagration in the Middle East, oil prices are going up. I'm going to take time to decide on that. Or is it more just on the tech side of things with regards to that?

It's much more on the front end, right? So we're meeting the clients and their needs, right? So we're adjusting what the implementation is. Typically, they want to make sure that it's, you know, do it in a pilot phase. Is it working? Okay, now we're ready to go live, right? So if you think about that business, for example, you know, airline is a portion of that business where we serve distressed passenger and we serve crew. When you're making that changeover, the last thing a large brand-named airline that we all know would want to do is not make sure things are well-tested and vetted with inside their specifications.

Makes sense. Before we talk about some of the long-term targets that you and Ron have laid out, maybe we just wanted to ask on the M&A environment, right? So you've done some pretty sizable ones, Alpha being the most recent. So maybe given where leverage is, what's your current appetite for more acquisitions, particularly within corporate payments that we've been talking about? To the extent that you do do deals, should we expect a focus on tuck-in acquisitions or anything more chunky? just how should we be thinking about M&A going forward here?

Yeah, great question. So I'd say we are size-agnostic, return-disciplined, right? So I would say we are open to tuck-in capability or larger, right? And we've got the capital in order to do that. You know, we'll produce $1.8 billion of free cash flow this year, right? So every year I get topped up and decide how am I going to use that. I think it really goes back to what is our capital allocation philosophy, right, and how we deploy that versus buybacks versus accretive M&A. But if we do M&A, you're going to see us solely doing it within corporate payments.

Maybe I could also use this opportunity to ask for an update on Avid Exchange. I think it's a company a lot of investors know quite well from its time as a public company. Now you have a stake. So any update you can give on sort of how that business is performing, how you're thinking about the connection with the rest of the corporate ecosystem as we go forward?

Yeah, so I think it's been a really successful partnership. We bought Avid Exchange along with TPG. We obviously have the minority stake. They have the majority. So between ourselves, TPG, and Avid Management, really been focused on, you know, the next turnaround of the business, so to speak. We have been sharing in earnings calls. Ron and I have both been sharing, right, kind of updates on the business because what we wanted investors to know is, hey, so far so good, right? We're pleased with what we're seeing. We're seeing sales increase. We're seeing profitability increase, et cetera. You know, one of the reasons we didn't, two reasons we didn't buy Avid outright is their organic growth would have been diluted to our corporate payments, so we wouldn't have wanted to do that, and their financial performance would have been diluted to our just DPS. So we needed time to work through, you know, improving the business overall, and I think that's going really well. I would say also we've learned a lot from Avid. You know, I'd say they really have some really strong products out there and have done really well with products, so those two coming together is going well. What we were really focused on in the budget process was, you know, reducing focus on, call it, non-core projects and reallocating resources to sales, so we've significantly increased the investment in sales, and that's why we're seeing the return on sales. So I'd say kind of get to the end of the year. Let's see what their exit organic growth rate is, And as we see that kind of lift to our line average, it becomes much more attractive that we would pull the trigger on an acquisition of the rest of Abbott. Now, we could buy a portion of it to gain control, or we could buy all of it. It'll just be kind of a capital allocation decision and performance decision when we get there. But a long way of saying we're encouraged by what we're seeing.

Yeah, it's great to hear, great to hear. And maybe we can bleed that into some of the long-term targets that you've talked about on recent earnings calls. So maybe I'll ask about the 10% organic growth first, right? A question we get asked all the time is, like, is there the ability or, I guess, maybe the desire for corporate to lean into certain areas of the business? Hey, we're really leaning into corporate payments. That's a faster grower than 10% organically. Is there the potential for that to come up from 10% to a number that's higher than that? Or do you really want to manage the business to 10% organic growth because that's more sustainable, something you control more, something you have more visibility in? Obviously, there's always going to be external factors, but how do you think about the balance between, hey, 10% is a steady number that we think we can hit consistently, or do we want to drive that higher?

Yeah, great question. I would say today we want investors to underwrite to 10% because it is repeatable and it is durable. We've delivered it five out of the last six years. We've delivered, you know, double-digit organic growth for the last five quarters in a row. So I'd say that's the number that we want everybody to underwrite to. When we think about potential upside from corporate payments I think you're absolutely right that as we rotate further into corporate payments is the ability to revisit that number but until we get to that destination we don't want to get over our skis right we want to repeat you know we want people to really underwrite to what we know we can deliver. I think it's important to kind of step back and maybe look at our overall algorithm that we've laid out which we've got a lot of questions about so 10% organic growth is super critical. We've had a lot of generalists coming into the stock lately and asking questions. Let me just be clear for everybody, because I think it'll be helpful since this is being webcast, is when we do organic growth, right, we're taking out the impact of fuel, we're taking out the impact of FX, and we're taking out the impact of acquisition. So as we looked into it, there's actually very few companies in the S&P that report organic growth. And so the question would be, well, like, why do you guys? Because it's a true measure of the health of business without these external factors. So we did read some feedback, get some feedback. There's some confusion about organic growth. So just be clear about what the definition is. So hitting that 10% is a critical milestone in terms of achieving the overall algorithm. The next piece of the algorithm is 13% growth of profit before tax. And that's really driven by scale of the business. And then the next piece of the algorithm is 20% plus adjusted DPS growth, right? We're going to deliver 27, 28 percent this year. And so we're able to do that not only through the business, but because of the yield of the business and our ability to create additional cash flow through yield and our ability to continue to borrow against the business, but still maintain a 3x leverage ratio. So that formula is what really drives us to the $50 EPS target that we've recently shared with everybody. So hopefully that's helpful in terms of your idea.

Well, it's helpful. And you preempted my next question on the $50 UPS target. I think that was a really helpful sort of like framework on getting to the financial targets. And this is maybe a little bit of an aside, but I had referred to this cross-border teach-in that you had done a couple of months ago in your last answer you asked about, or you mentioned that generalists were coming and asking for more clarity on certain aspects of the business. Is there a desire or a willingness on your end to sort of recognize like, hey, there are a lot of moving pieces, a lot of different business lines within Corp.A. today? seems like this cross-border teach-in was well-received. Do you think you're going to give incremental disclosure and incremental teach-ins to help maybe that generalist population that may be less familiar with all these moving pieces, more color into how the business is operating?

Yeah, absolutely. I mean, we've made, I think, and hopefully investors are seeing it, we've made a significant pivot in our investor relations within the last year, right? We've done the cross-border teach-in. We have a new investor deck out there, which really points to, hey, what is the future of the company? What's it going to look like? because we rotate into corporate payments. We've had someone on the road out talking to investors for several NDRs, which has been super helpful. It was super helpful, I think, actually, as we continue to refine our story and think about how quickly we divest some business and rotate, divest businesses and rotate into corporate payments. We discussed all of that with some large, long-only investors who have been in stock for a long time and got their opinions on it. So that's been super helpful. I think, in kind of what you're seeing in our thinking today. And then we did our first investor perception study that we've ever done, you know, in the history of the company. And one of the top things that came out of it, and it was great because its validation was, hey, the company is just complex, right? So corporate payments is where we're focused. But what happens is because there's complexity, we talk about things like lodging, which one could debate, is that a corporate payments business or not a corporate payments business, right? Or USPP, which is less of a focus for us, much more corporate payments. So I'd say the complexity issue we're really focused on. And then the other thing that we've gotten feedback around, which I think is totally fair, is, hey, you need to give us better information in order to underwrite corporate payments, right? So when we think about the 10% organic growth, what we think about is, hey, we're going to do 20% sales growth, and that would be 20% of sales off of the base of last year. Our retention rate is 93%, so we're going to lose about 7% of business, right? Some of that is M&A, businesses going out of business, or in some of the other businesses where credit risk we're not willing to underwrite the business anymore. So now you get down to call it 13, you have same source sales, which can be plus or minus one, and then a little cushion, and that gets you to 10, right? So I think what would be really helpful for investors if we provided more of that level of granularity, maybe at least on an annual basis came out. So what I would say is we're focused on that.

I think all of that would be really well received, and like I said, the cross-border teaching I think was super helpful from my perspective. I will ask two maybe more thematic questions, given this is the tech conference, and then I'll open it up in case anyone in the audience has anything. So I'm going to ask you an AI question and a stable coin question.

Before you go there, just one thing I meant to kind of cover in the $50 of EPS question, and then you're kind of thought about, hey, should the organic growth rate be higher? You know, one thing that we've been talking about overall is, hey, as corporate payments does become a bigger piece of the business, right, the business should become more valuable. So we're trading at about 13 times today. We do believe that that's going to lift as we further rotate into corporate payments. So the equal-weighted S&P is at like 16. So internally we've been talking about 15 and 50. So 15 times $50 VPS is like a $750 stock price. So by no means are we giving guidance on the stock price. I'm just telling you internally as we look forward out the next couple years, we're optimistic about the future and the valuation of the company.

$750, I think, is a little higher than where we're trading now. That's for sure. So, yeah, that's super helpful. I appreciate the detail there. We'll ask on AI. I think every company that has been up here presenting has gone the AI question. So maybe you could talk about your strategy, how you are using AI, both on the cost efficiency side of things, but maybe more importantly in terms of product development, where you're seeing sort of progress in terms of rolling out new products, features, solutions to your clients across any of the particular segments, and kind of how you see AI changing the structure of your business over the long term.

Yeah, happy to. So maybe focusing on the product side, where we've been focused on AI, is an AI agent that can replicate kind of some of the core functions that we're selling into. So think of it as an AI fleet manager. Think of it as an AI AP manager, right? So because we have the ability to see across the best and brightest of the people doing these roles, creating an AI agent that can do some of the function for them and really create value for them. So those are products that are in some level of completion or innovation that we expect to roll out. So we do think that there is value in the product. The next question would be, okay, Peter, you can roll those out. You know, how do they monetize, right? And I think we've got to see, you know, what the reaction is to the product before we see monetization. But I think you know as well enough to know that we'll be super focused on creating monetization out of those products. If I go over to the expense side, I'd say where we're most focused on it is within our engineering teams and making those teams, you know, significantly more productive because of AI. And what we've chosen to do within the current year is reinvest that money back in the business. We're about to kick off the 2027 budget process. So whether we decide to reinvest that money back into technology or to divert that money other places or take it to bottom line, we'll revisit it. but that would be the place I'd say we've been most successful in terms of expense reductions or productivity improvements.

Super interesting, and I'm sure you'll get many more AI-related questions going forward. I will ask about stablecoins. It was interesting. I was going through with my team and going through our notes from the tech conference last year, and every meeting for every company, stablecoin came up a bunch, and I was going through my core pay notes, and it was a ton of stablecoin questions, and I don't know how many stablecoin questions you got today. I would imagine it's a lot less than you got last year. Jim is making the finger one at me. Nonetheless, you're going to get a second question here on stable coins. I guess the question is, like, I don't want you to sort of rehash what you're doing strategically within the cross-border payments business. Maybe I would recall a comment that Ron made. I think it was on the 1Q earnings call when he was asked about sort of demand and what you're hearing from your corporate payments clients, right? And I think he used the word crickets, right? Like it's just not there yet. I'm wondering if that's changed at all over the last six months. Is there are there any areas within your business where you're starting to see an uptake in demand or is it still kind of more just theoretical, something that could happen a few years down the line? Just has there been any change in the overall demand environment with regards to stable specifically?

Yeah, I mean, what I would do is I would change the narrative and I'd say it's not about stable coins. It's about blockchain. And I think what got lost a year ago, right, with any new technology, somebody is really excited about it. Right. And people heard the word stable coin and they thought, oh, that's a solution for everything. Right. And stable coin is just the tokenized actual currency. Right. It's not even the blockchain. And the blockchain is what really creates the value. Right. So what the blockchain allows you to do, really, the two advantages of it is to move money 24 by 7 and to move money to potentially exotic countries. Right. So what we firmly believed and now we've kind of seen it played out is. There's no way that the major banks are going to see all their deposits leave and go to stablecoin providers so that they can mint a stablecoin and then destroy a stablecoin so they can move it over the blockchain, but rather the banks are going to develop their own tokenized network. So no surprise, earlier in the year, JPMorgan announced Conexus, Citi announced a competitive product, and basically what they're able to do, and we've elected to go with Conexus, is they've been able to say, hey, we can do a digitized token, and we will settle it 24 by 7. So they're basically, they are giving the things that stable coin quotes that they would bring to the market. The cost of the Conexus network is similar to what we're paying today to move currency on the rails. In the cross-border teach-in, we provided the four rails. But the cost to use Swift versus Conexus is the same. The advantage of Conexus is I can credit you on a Saturday for the money that I owe you. So I think it's really important to peel it back and say what is the issue and how do we understand it. So I don't see stablecoin as a threat to the business. I actually see the blockchain and tokenized deposit as an enabler of our business. Our thought is it will move a significant volume onto Conexus by the end of the year. So whether our clients are asking for it or not, we're actually moving them in that direction within our cross-border business. And I think the other thing that's important to understand, I've kind of used this analogy in the past. You know, if you were sitting here today and you called Cartier, you know, somewhere in L.A. and said, hey, I need you to deliver a diamond ring to me today because I have an important event tonight. When they show up with that diamond ring, you don't turn, I'm going to use a New York analogy, but you don't turn to the delivery person and say, did you take the train here? Did you take cab? Did you take Uber? Did you drive? That's the analogy to what the rails are. It's just the mechanism of delivering the value. It doesn't create any of the value. It doesn't exchange the currency.

Yeah, makes a ton of sense.

I'm not passionate about the topic.

Yeah, clearly not. And hopefully my wife is not in the audience and heard the Cartier comment. Well, you know, it could be her lucky night. I will open it. Speaking of that, I will open it up for questions in case anyone in the audience has any.

Yeah, I've got a quick one. Scott Barishaw from Deutsche Bank. I think I'm the financials and fintech specialist. Nate did a great job walking through, like, a lot of the company and, you know, where we are, Peter. But I just – you said you redid the slides a little bit, and I looked at them when preparing for today. And, you know, you've got that section of the solutions in there, and spend management has such a massive TAM. And you've got less than 1% of it now. You know, maybe talk a little bit about how and what you're going to do to, you know, take advantage of that opportunity and the competition out there, because I'm sure the competition is, you know, diverse. There's other payments companies. There's banks. You know, talk about, like, what you're doing to win some of that opportunity.

Yeah, great question. So really large TAM within spend management, right? When we look at spend management, we define that as commercial card, AP automation, et cetera, right? So those are the products that we have within the spend management space. What I'd say is we've seen others like ourselves move into that space and be innovators and capture really high values in terms of transactions for doing it. We love that because what that says is, hey, there's validation that the space needs to be disruptive and that there's value to doing that. And the main owner of the space today is banks, right? Banks are primarily providing those services, or in the case of commercial cards, American Express. So we believe on the commercial card side that we've got an advantage product because we're able to bring our proprietary networks, either in virtual card or within fuel card, into that spend management space. And then if we go over to the AP automation side, right, we're able to come in and provide a complete solution for a client where typically the bank is able to provide a part of a solution. Like they may do the ACH for the client because the client can't do it on their own, but the client may use somebody else to print their checks. It's typically a mix of things there. So that's how I think about where we are today. Something that Ron talked about on the last call was our thought process on moving left. And so what does that mean, move left? The thought is that we're going to move left across the value chain. And we believe really the big opportunity there for our middle market clients is to come out with a procurement offering that, again, focuses on saving them money and creates value from them. But really, we start further along in the process. So right now, we're primarily on the payments piece, but we're going to go more to the beginning of the process and actually help them with their contracting. And I think when you think about procurement, the places where we think we can create value is things like benchmarking, things like negotiation, things like running RFPs. If you're a middle market client, you typically don't have a procurement department. You don't have access to these things. So with the advent of AI, there's the ability for us to provide this, I think, in a way that will be really helpful for the middle market.

And so, I mean, just a quick follow-up. I'm sure there's some other questions in the audience. But is there more that you need, like, in terms of, like, is this a part of area where you'll look to acquire other businesses in here to have a more full offering?

Great question. So I think when we look in procurement, I think there's two options, right? It's always buy, buddy, or build. So I think the question will be, you know, really what's the best option for us and what's the quickest way to market? Most likely it's kind of a buy or buddy, I would think, just because there's a lot of great products that have been developed out there by companies that have no customers, right? So our advantage is we've got a massive customer base. Let's partner with you and provide the solution.

It is.

That gun, Avacene Investments. I wanted to ask first, I guess I'll call it a trade war with Canada now. Like, obviously, that's a, you know, pretty big deal just given your business and everything. So is there anything to call it there of risks that you potentially see with that? And then also, I'll just, you know, I'll bring the stablecoin question up again and take it to three total for the conference, which is just looking at what the banks are doing and just kind of like OpenUSD, what do you think that they're looking to do with the stable coins and how could that potentially impact your business? Do you think that they'll also look to do kind of the cross-border side of things and just really focus on the enterprise or just where do you kind of see that fitting and what does it mean for Corpe?

Yes, so really good questions. Sorry, your first question was on Yeah, so, you know, is this a taco or is it not a taco, right? I mean, we see this stuff all the time, and the business weathers through it, so I would say we don't see a significant impact, right? If you go back to the cross-border teach-in, what we try to do within the teach-in is kind of provide you how broad the business is across the globe. We operate in five geographies, pretty distributed business, right? It's a very dispensable business in terms of, you know, One geography has something going on you're going to sustain within the rest of the globe. So that's how I think about kind of the current conflict. And who knows, it may be all resolved tomorrow, right, and change and turn around. In terms of stable coins, I mean, again, I would drop the word stable coins. The banks are not offering stable coins. The banks are offering tokenized deposits and it's money movement. And this is just an extension of what the banks do today, right? The banks move digital currency, and they have been for 20 years. Instead of digital currency, now they're moving tokenized currency across the Internet, and the advantage of it is a 24-by settlement. So we see this as the banks, you know, the large tier one banks really providing the capabilities of the modern day. We don't think it changes the view that they are focused on enterprise customers and they're not focused on the middle market customers. just the cost of the acquisition for the banks in the middle market would be so different than what it would be for an enterprise. I just don't think the economics are there for them, and we don't see any sign of that. So it's mostly owned by regional banks today.

Any last questions out there? I don't see any hands, so I will wrap up with one, maybe high-level one. When you are back at the conference, hopefully in two to three years' time. As long as you stay in this location. Yeah, exactly, exactly. I think we will. And you've successfully executed on this strategy, focusing on a bigger, more simplified business. What do you think will be the biggest differences between the company that investors are looking at today and what they'll be looking at two to three years from now? And I guess really it wraps down to, like, what is the last message you want people in the room, people tuning into the webcast that we've worked today?

Yeah, so I think there's really three things that investors should take away. I think, one, it will be a simpler company that's easier to underwrite. Number two, I would say, is it will continue to have a proven track record of performance, so confidence in the algorithm of 10, 13, 20-plus that I spoke to will continue to be proven, and that will give people more confidence. And then three, investors will continue to see that we've got multiple ways to create shareholder value.

That's great. Peter, thank you so much for your time. Thank you for coming out. Everyone, join me in a round of applause for Peter for joining us. Thank you very much.

Appreciate it, guys.