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Global Payments Inc (NYSE:GPN)
Q1 2021 Earnings Call
May 4, 2021, 8:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by and welcome to Global Payments First Quarter 2021 Earnings Conference Call. [Operator Instructions] At this time, I would like to turn the conference over to your host, Senior Vice President, Investor Relations, Winnie Smith. Please go ahead.

Winnie Smith -- Senior Vice President, Investor Relations,

Good morning and welcome to Global Payments First Quarter 2021 Conference Call. Before we begin, I'd like to remind you that some of the comments made by management during today's conference call contain forward-looking statements about expected operating and financial results. These statements are subject to risks and uncertainties and other factors, including the impact of COVID 19 and economic conditions on our future operations that could cause actual results to differ materially from our expectations. Certain risk factors inherent in our business are set forth in filings with the SEC including our most recent 10-K and subsequent filings. We caution you not to place undue reliance on these statements. Forward-looking statements during this call speak only as of the date of this call, and we undertake no obligation to update them.

Some of the comments made refer to non-GAAP financial measures such as adjusted net revenue, adjusted operating margin, and adjusted earnings per share, which we believe are more reflective of our ongoing performance. For a full reconciliation of these and other non-GAAP financial measures to the most comparable GAAP measure in accordance with SEC regulations, please see our press release furnished as an exhibit to our Form 8-K filed this morning and our trended financial highlights, both of which are available in the Investor Relations area of our website at www.globalpayments.com.

Joining me on the call are Jeff Sloan, CEO; Cameron Bready, President and COO; Paul Todd, Senior Executive Vice President and CFO.

Now, I'll turn the call over to Jeff.

Jeff Sloan -- Chief Executive Officer

Thanks, Winnie. We delivered our best performance since the end of 2019 because of our focus on technology enablement coupled with the excellence in execution. Our results demonstrated strong sequential momentum from the fourth quarter of 2020 and improved monthly throughout the first quarter of 2021. We are encouraged by the overall run rates we are seeing in the business. We exited the first quarter in a better position than we entered it. We are delighted to haveto return to growth in the first quarter of 2021. We were able to deliver revenue, margin, and earnings-per-share growth despite facing difficult year-over-year comparisons as the pandemic did not begin to impact our business until mid-March 2000. None of this would have been possible without the dedication of our exceptional team members, and we thank them for their commitment to our customers, our communities and each other and we continue to expand our competitive mode. We are pleased today to announce two strategic acquisitions for approximately $1 billion in total that further are software-driven technology enabled strategy and deepen our presence in the most attractive markets globally we expect to continue to gain market share and extend our lead.

In combination with the roughly $1 billion in share repurchases we've affected since returning to our capital allocation strategy at the end of last year, we continue to balance appropriately reinvestment in the future growth of our business with efficient return of capital. First with our agreement to acquire Zego, we enter one of the largest and most attractive vertical markets worldwide.

Real estate is the contestants of the type of market that we seek, sizable, global in scope, fragmented and right for further software digital commerce and payments penetration, and COVID-19 has accelerated the underlying changes that make this $6.5 billion target addressable market so attractive. Zego is a leading software and payments technology company with significant scale delivering a comprehensive real estate technology platform to 7300 customers representing more than 11 million residential units in the United States.

Zego is digital omni-channel solutions support property managers and residents throughout the real estate life cycle, from leasing and on-boarding, to work orders, utility management, resident communications, renewals, off-boarding and of course, payments. Through its integrated payments offering, legal processes approximately $30 billion in payments annually in a market with a volume opportunity that exceeds $1 trillion, the company delivers its full value stock through cloud native SaaS platform to enable seamless digital property management and best-in-class resident engagement and omni-channel experiences. It is a highly scalable and predictable flywheel with compelling recurring revenue, strong retention rates, booking trends and lifetime customer value returns with double-digit organic revenue growth. Importantly, we have significant opportunities to accelerate Zego's growth.

We intend to leverage Global Payments scale and digital expertise to further payments penetration into Zego's base, generate incremental property and software partner referrals to more than 3500 sales and sales support professionals expanded footprint outside the United States and generate meaningful cross-selling opportunities into its vertical market including innovative products we already deliver into our merchant business like payroll, data and analytics and replication management. We could not be more excited about further capitalizing on the convergence of software and payments and we look forward to welcoming Zego team members to Global Payments.

Second, we are excited to have reached an agreement to our Erste joint venture to purchase Worldline's PAYONE business in Austria consisting of roughly 8,000 primarily SMB merchant customers in Erste banks home market. We entered Austria through organic market expansion of our Continental European joint venture roughly 18 months ago. This pending acquisition enables us to bring our distinctive distribution and marketing technology to add scale to get another attractive market.

In addition to these strategic accomplishments in early 2021, we also produced a solid first quarter results across our existing businesses. First, in our merchant segment we delivered significant sequential improvement fueled by our technology-enabled focus and the conversion of last year's share and bookings gains into revenue. And we generated these results while absorbing ongoing lockdowns in Canada and renew restrictions in selected markets in Europe and Asia Pacific.

Some highlights in the first quarter of 2021 include record new sales in our Global Payments Integrated business in March and in our US relationship-led business for the quarter, record revenue growth at GPI for the quarter well in excess of pre-pandemic levels, record bookings at Xenial for a cloud-based restaurant POS software and solutions and continued sequential acceleration in our omni-channel businesses. It is worth highlighting that volumes accelerated throughout the quarter, a trend that has continued into April.

Key customer wins include subway, CKE Restaurants A&W Foods and [Indecipherable]. It's also notable that several of these businesses that were most impacted by COVID-19 saw substantial sequential growth in revenue and bookings in the first quarter as our home market end of recovery. For example, active in gaming achieved significant improvement as better macrotrend strong execution and solid bookings over the course of 2020 benefited performance in 2021. In fact, we continue to see positive booking trends across our software portfolio as the ability to deliver a full value stock is increasingly becoming table stakes in the markets we serve.

We also made considerable progress on the partnership with Google that we announced in February. We expect for Google as a merchant customer in select Asian markets in the third quarter with North America to follow shortly thereafter. We have initiated our coastal programs and are beginning to see referrals from Google on a number of their enterprise class clients. We anticipate launching our Wanting Grow [Phonetic] My Business product that integrates Google solutions with our innovative capabilities in our digital portal environment in the fourth quarter of this year and we have launched our co-innovation efforts to develop new commerce enablement tools for our merchant customers.

Second, our issuer business continues to benefit from strong relationships with market leaders and we are excited to announce today that we have entered into a multi-year renewal with Barclays Consumer Bank in the United States. Barclays is one of our largest customers globally and we provide a range of processing and support technologies for both Barclays consumer and commercial credit card portfolios. We look forward to working with Barclays to enable a best-in-class customer experience with unparalleled levels of security and resiliency for its newest partner, the gap and its portfolio of accounts, yet another competitive takeaway. Partnering with issuers that are gaining share in the marketplace is a key element of our strategy.

We were also pleased to have signed agreements with Mission Lane and UMB Financial with the latter being a competitive takeaway in which with the prior processing relationship had spanned decades. In collaboration with AWS, UMB will adopt our cloud-based data and analytics platform which we also successfully deployed during the quarter for a multi-country customer in Latin America. We continue to capitalize on the broad and deep pipeline we have the good fortune to have in our issuer business. Today, we have 12 letters of intent with financial institutions worldwide, six of which are competitive takeaways.

Turning to AWS, we expect to go live with our first joint takeaway with a multinational financial institution in Asia by the end of the year. Our Cloud Prime Instant [Phonetic] is now up and running currently in that market in preparation for the launch. We have another dozen active customers in our pipeline of AWS, up from four at the end of 2020.

Third, our business and consumer segment delivered record revenue growth. I am very proud that Netspend once again facilitated the rapid distribution of stimulus funds to customers most in need. Since late December 2020, we have processed more than 2 million deposits accounting for over $3.5 billion in stimulus payments disbursed by the IRS to American consumers, and this was done days in advance of many of our traditional financial institution and financial technology peers. In combination with the 2020 stimulus payments, we have disbursed more than $5 billion in aid to customers through the first quarter of 2020.

The pandemic accelerated move toward cashless solutions is also benefiting Netspend. For example, we are seeing rapid adoption of our tips solution and we've reached a new agreement with Flynn Restaurant Group for its Pizza Huts and Wendy's franchise locations, which will drive additional PayCard and potential tips opportunities across our combined footprint in more than 1000 restaurants.

We also launched our cashless stadium card linked to a digital wallet with the Phoenix Suns at the Phoenix Suns Arena. These achievements serve as proof points of our differentiated strategy that includes product extensions into the P2P, B2B and B2C segments. I cannot be more pleased with all that we accomplished across our businesses this quarter. In March, we returned to year-over-year growth in each of our three segments and the underlying trajectories are tracking for the long-term goals just as we predicted it would, despite the impact of ongoing restrictions and lockdowns in some of our markets outside the United States.

Paul?

Paul Todd -- Senior Executive Vice President and Chief Financial Officer

Thanks, Jeff. We are pleased with our financial performance in the first quarter of 2021 which demonstrated meaningful sequential momentum and reflected our ongoing strong execution across the business. Specifically, we delivered adjusted net revenue of $1.81 billion representing 5% growth compared to the prior year and marking an 800 basis point improvement relative to the performance we reported in the fourth quarter of 2020. Adjusted operating margin for the first quarter was 40.6%, a 160 basis point improvement from the prior year that was achieved despite the return of certain cost we temporarily reduced at the onset of the pandemic. On a comparable basis, underlying margin trends would have improved approximately 300 basis points. Adjusted earnings per share were $1.82 for the quarter, an increase of 15% compared to the prior year period and was especially impressive in light of the difficult year-on-year comparison due to COVID-19.

The pandemic did not begin to impact our business meaningfully until the second half of March of last year and that as a reminder, we delivered 18% adjusted earnings-per-share growth in the first quarter of 2020. Taking a closer look at our performance by segment, Merchant Solutions achieved adjusted net revenue of $1.15 billion for the first quarter and 4.4% improvement from the prior year which marked a nearly 900 basis point improvement from the fourth quarter. We delivered an adjusted operating margin of 463% in this segment, an increase of 90 basis points from the same period in 2020 as we continue to benefit from our improving technology enabled business mix.

Global Payments Integrated produced a stellar quarter generating in excess of 20% adjusted net revenue improvement, which is ahead of the levels of growth this business was delivering pre-pandemic. Additionally, our worldwide e-commerce and omni-channel businesses excluding T&E delivered roughly 20% growth as our value proposition that seamlessly spans both the physical and virtual worlds continues to resonate with customers. As for our own software portfolio, we are encouraged to see that several of our businesses most impacted by the pandemic improved meaningfully sequentially as Jeff mentioned, and it is worth highlighting that our gaming business returned to growth this quarter and across our vertical markets portfolio bookings continue to prove resilient in the first quarter, providing us with a positive tailwind for the balance of 2021.

We are also pleased that our US relationship-led business generated high single-digit adjusted net revenue growth for the first quarter, which is consistent with our long-term targeted growth rate for this channel despite a difficult comparison to the first quarter of 2020 and notwithstanding a challenging environment in several of our international markets, our portfolio of businesses across Europe and Asia improved significantly and delivered adjusted net revenue that was essentially flat with last year for the quarter. Importantly, because our international businesses are largely focused on the best spending in the markets in which we operate, we are seeing improvement in these businesses well in advance of cross-border commerce recovery.

Moving to Issuer Solutions, we delivered $439 million in adjusted net revenue for the first quarter, which was roughly flat versus the prior year period and exceeded our expectations given traditional fourth quarter to first quarter sequential trends. Excluding the commercial card business, our Issuer segment grew in the low single digits for the quarter and in the month of March, Issuer delivered growth in aggregate despite continued commercial card headwinds as we benefited from the ongoing recovery in transaction volumes across many of our markets. We also saw non-volume based revenue increased mid-single digit in the first quarter. Notably, our Issuer business achieved record first quarter adjusted operating income and adjusted segment operating margin expanded 370 basis points from the prior year also reaching a new first quarter record of 43.2% as we continue to benefit from our efforts to drive efficiencies in the business. Additionally, our Issuer team signed three long-term contract extensions and three new contracts since the start of the year and our strong pipeline bodes well for future performance consistent with our long-term expectations.

Finally, our Business and Consumer Solutions segment delivered record adjusted net revenue of $244 million, representing growth of nearly 20% from the prior year. Gross dollar volume increased 26% or $2.5 billion as we benefited from the stimulus we disbursed to our customers. Trends within our DDA products were also very strong helped by the stimulus and we realized an acceleration in active account growth of more than 45% compared to the prior year. Excluding the impact of stimulus payments and tax, we believe that this business achieved underlying growth in the roughly mid-single digit range in line with our long-term targets. Adjusted operating margin for this segment improved an impressive 750 basis points to a record 33.2% as the benefits of the stimulus and long-term cost initiatives post-merger took effect.

The solid performance we delivered across our segments highlights the resiliency of our technology enabled portfolio, consistency of our execution and the strong tailwinds in our business coming out of the pandemic. We are also pleased that our integration continues to progress well and we remain on track to achieve our increased goals from the TSYS merger of annual run rate expense synergy of at least $400 million and annual run rate eevenue synergies of at least $150 million within three years. From a cash flow standpoint, we generated adjusted first quarter free cash flow of roughly $583 million after reinvesting $86 million in capital expenditures. We expect adjusted free cash flow of more than $2 billion and capital expenditures to be in the $500 million to $600 million range for the full year.

In mid-February, we successfully issued $1.1 billion in senior unsecured notes maturing in 2026 at an attractive interest rate of 1.2%. The transaction was credit neutral with the proceeds used to redeem $750 million of notes outstanding with a rate of 3.8% due in April 2021. The balance of the proceeds were used to reduce our outstanding revolver. We have no significant maturities until 2023. Our strong cash generation and healthy balance sheet have enabled us to create significant value through our capital allocation strategy to the benefit of our shareholders.

We are pleased to have repurchased roughly 4 million of our shares for approximately $783 million during the first quarter, which includes the execution of the $500 million accelerated share repurchase program we announced last quarter. We ended the quarter with roughly $3 billion of liquidity and a leverage position of roughly 2.6 times on a net debt basis, and we are excited to announce that we have reached agreements to make additional investments in our technology enabled strategy and market expansion.

As Jeff highlighted, we executed a definitive agreement to acquire Zego and Worldline's PAYONE business in Austria for an aggregate of approximately $1 billion. We expect to finance these transactions using cash on hand and our existing credit facility. We are targeting closing the Zego transaction by the end of the second quarter and the Worldline acquisition in the second half of 2021 both subject to regulatory approvals. Upon completion of both transactions, given our current cash balance and strong cash generation, we expect our leverage position will be relatively consistent with current levels leaving us with ample continuing firepower.

Based on our current expectations for continued recovery from the COVID-19 pandemic worldwide, we have increased our guidance for adjusted net revenue to now be in a range of $7.55 billion to $7.625 billion reflecting growth of 12% to 13% over 2020. We expect adjusted operating margin expansion of up to 250 basis points compared to 2020 levels. This outlook is consistent with an adjusted operating margin expansion of up to 450 basis points on a normalized basis given the operating leverage in our business and expense synergy actions related to the TSYS merger. However, this is being partially offset by the reinstatement of certain expenses in 2021 that were temporarily reduced at the onset of COVID-19 for most of 2020.

At the segment level, we have increased our expectations for adjusted net revenue growth for our Merchant Solutions segment to be in the high teens, which assumes the current pace of recovery continues worldwide. We expect underlying trends in our issuing business to be in the mid to high single-digit range and above our mid-single digit growth target. It is worth noting that our Issuer business generated high single-digit growth on a normalized basis for the month of March as we begin to lap the pandemic impacts.

As we discussed last quarter, Issuer is being impacted by two distinct and relatively equal sized headwinds. First, we are not anticipating a recovery in our commercial card business as we expect corporate travel to remain depressed throughout 2021. Second, we are absorbing a portfolio sale by one of our customers, which will impact us for the remainder of the year. Taking these two items into account, we forecast our Issuer business to deliver adjusted net revenue growth in the low single-digit range for the year. Lastly, incorporating the benefits of the incremental stimulus, we are now forecasting adjusted net revenue growth for our business and consumer segment to be in the mid to high-single digits for the full year consistent with our long-term expectations for this business. This guidance takes into account lapping the benefits of the 2020 CARES Act, which will provide for a more difficult comparison in the second quarter of 2021.

Regarding segment margins, we expect the up to 250 basis points of adjusted operating margin improvement for the total company to be driven largely by Merchant Solutions while we expect Issuer and Business and Consumer to deliver normalized margin expansion consistent with the underlying profiles of these businesses. This follows the 500 and 400 basis points of adjusted operating margin expansion delivered by Issuer and Business and Consumer respectively in 2020.

From a quarterly phasing perspective, having now lapped muted growth characteristics in the first quarter given the start of the pandemic in mid-March 2020, we will experience the opposite effect in the second quarter before returning to more normalized rates of growth in the back half of the year, a highlight that while we expect to achieve our strongest adjusted revenue growth, adjusted margin expansion and adjusted earnings-per-share growth for the total company in the second quarter, our business and consumer segment will be lapping the impact of the CARES Act stimulus last year. While we anticipate Netspend to deliver modest adjusted net revenue growth for the second quarter, we expect adjusted operating margins to decline for that segment year-on-year as a result. On an absolute basis, we would expect business and consumer adjusted operating margins for the second quarter to be consistent with the levels achieved in the fourth quarter of 2020 period that also saw more limited benefits from stimulus.

Moving to non-operating items, we continue to expect net interest expense to be slightly lower in 2021 relative to 2020 while we anticipate our adjusted tax rate will be relatively consistent with last year. Putting it all together, we now have increased our expected adjusted earnings per share for the full year to a range of $7.87 to $8.07 reflecting growth of 23% to 26% over 2020. Our raised outlook presumed we remain on a path toward recovery worldwide over the balance of the year and it does not include any impact from the Zego and Worldline Austrian business acquisitions we announced today. We will further update our guidance when these transactions close, but it is worth noting now that we do not expect these transactions to have a discernible impact on adjusted earnings per share for 2021.

And with that, I'll turn the call back over to Jeff.

Jeff Sloan -- Chief Executive Officer

Thanks, Paul. Our business is one rating at accelerated levels. The trends of digitization, commerce enablement, software differentiation and omni-channel prevalence driving our performance will serve to catalyze future growth. We said over the course of the last year that we would not stand still or wait for a better day to continue to deepen our competitive mode despite one of the most challenging periods any of us have seen. As a result of our team members terrific efforts, 20 bookings have begun to translate into 2021 outside revenue gains.

The announcement today of our return to strategic investments will provide further avenues for future growth. And all that is playing out against the backdrop of recovery, further differentiation from technology enablement, deeper penetration into attractive markets, sustained share gains and substantial and efficient returns of capital. We now look forward to continuing progress for the remainder of 2021, 2022 and beyond.

Winnie?

Winnie Smith -- Senior Vice President, Investor Relations,

Before we begin our question-and-answer session, I'd like to ask everyone to limit their questions to one with one follow-up to accommodate everyone in the queue. Thank you. Operator, we will now go to questions.

Questions and Answers:

Operator

[Operator Instructions] The first question comes from Andrew Jeffrey of Truist Securities. Your line is open.

Andrew Jeffrey -- Truist Securities

Thank you. Good morning. I appreciate all the details especially regarding the outlook. I wonder, Jeff, if you could talk a little bit about where you're seeing particular strength in integrated and omni, both GL and vertical markets. It seems like that's really more than offsetting some of the challenges you're seeing in Europe and APAC.

Jeff Sloan -- Chief Executive Officer

Yeah. Thanks, Andrew. It's Jeff and I'll start and maybe Cameron and Paul will join me thereafter. It's hard to say with any certainty because we've had integrated business now at Legacy Global Payments for probably eight and half years, but I would say that our Global Payments Integrated business just delivered its best quarter ever from a revenue point of view and that's especially noteworthy when we haven't lapped the majority in the first quarter of 2021, the majority of the grow over from the first quarter of '20.

So I think what you're really seeing in the integrated business is the solid bookings growth, the new partner additions that we saw last year really flowing into revenue and I think we have the flywheel on that business really just right. So, it's going to be more pleased with our team on integrated.

I think on the omni-channel business is really pretty much the same thing. Our business accelerated sequentially in the first quarter of '21 relative to the fourth quarter of '20 and grew absolutely at the right, as Paul described 20% year-over-year. Again, without lapping the pandemic pretty much for the first quarter -- from the first quarter of '20.

So if you are really good about that performance -- that performance as well. So we couldn't be more pleased. Plus in our home market in the United States it's 70% to 75% of the the company. You really have to go and you're pulling back the rest of geographies and the rest of the markets, you really have to go kind of country by country to see what's happening. I would say we do see areas of growth in Asia-Pacific, but of course in the Philippines, are more difficult as I'm sure everyone has been reading about the difficult, the terrible situation in India. Canada, really at the end of the quarter, really post the quarter has enacted pretty strict lockdowns but that's probably about 3% or 4% of the company, Andrew, just to kind of quantify what the size of that market is.

And in Europe, it's really a mixed bag. I would say our business and staying domestically is growing at very high rates notwithstanding the broader macro issues across the European Union, the UK has really started to recover, but there are other markets like in Continental Europe and our Czech Republic business and, of course, we announced the other day with Erste Bank that market also remains under substantial lockdown.

So I think the good news for us is we're growing right through it. We did mention today that active in gaming in some of our markets share in the United States have recovered pretty substantially. They still present some headwinds relative to the rate of growth that we just announced today. Thus, we able to show 900 basis point sequential expansion from the fourth to the first quarter of '21. In our Merchant Business I think it's one of the most noteworthy things of today.

Cameron and Paul, you guys want to add to that?

Paul Todd -- Senior Executive Vice President and Chief Financial Officer

I think I had actually covered it pretty well. The only other point I would make just to top that off, Andrew, is just as it relates to new sales in both of those businesses that you highlighted in particular integrated and omni continue to be very, very strong. In our e-com business here in the US market, our e-com sales were up something like 330% year-over-year. So clearly demonstrating that the trends we've seen around consumer buying patterns as well as merchant adoption of omni-channel and e-commerce capabilities continues to be quite strong, even a year after obviously the onset of the pandemic. So we think that's a very positive sign as it relates to the future growth of the e-com and omni business.

And then on the integrated front, again, our new sales in the quarter were 120% of our target something like 120% kind of year-over-year. So again we're seeing great momentum in the business continuing as we enter the second quarter as well. So as Jeff highlighted, I think the strong new bookings and new sales performance we saw last year clearly contributed to the performance in Q1 and it's nice to see that strain -- that same execution has continued into 2021 as well.

Andrew Jeffrey -- Truist Securities

Thanks, I appreciate that. Just as a follow-up on Zego, can you offer a little insight as to revenue mix there. How much of that is payments or merchant discount versus software and subscriptions?

Cameron Bready -- PRESIDENT AND CHIEF OPERATING OFFICER

Yeah, Brian, it's Cameron. Sorry, Andrew, it's Cameron again. So, the business is a mix of software and payments today. It really started as a payments business but has moved more into software over the course of time and particularly driving more resident experienced solutions through its software platform. So it's still a majority payments today, but the software elements of the business are growing more rapidly and I would expect over time that they will slip and begun the majority of the business long term. So it's about $30 billion of payment volume today. It's very healthy portfolio from a payment standpoint. The nice thing about the business is it's not that penetrated within its existing customer base from a payments perspective and obviously the ability to cross-sell software into that base of existing partners today, as well as to take Global Payments Software and sell into that environment with our own value-added services drive meaningful revenue tailwinds we think for the business in the future.

Andrew Jeffrey -- Truist Securities

Thank you.

Jeff Sloan -- Chief Executive Officer

Thanks, Andrew.

Operator

Your next question comes from David Togut with Evercore ISI. Your line is open. David, your line is open, you may be on mute.

David Togut -- Evercore ISI

Thank you. You've underscored very strong trends e-comm, omni and integrated and I'm curious as the year evolves, how would you expect consumer behavior to change? Do you think we'll see continued strong e-com trends and debit funding or do you think the consumer will return more to the physical point of sale and start to use credit cards more view and related to that, how would you see that flowing through your tech-enabled solutions businesses and some of the key verticals that make those up.?

Jeff Sloan -- Chief Executive Officer

Yeah, David, it's Jeff. I will also let Cameron to join. So let me -- let me just start by saying by not answering the question, but I do want to call out our relationship-led businesses. So they also had a very good quarter. So we produce high single-digit growth in our relationship-led businesses compared to the first quarter of '20 for which 85% in the first quarter '20 had no pandemic. So I want to call that out. We also said in our prepared remarks -- prepared remarks, we had record new sales in our relationship-led businesses in the first quarter of '21, again, coming out the pandemic. So I don't want to lose sight of that before we address your question more directly.

Second, as it relates to your question. Look, I don't think consumers are going to go backward. I don't think people are going to say, I'm going to spend more time in line, we're gonna fine the ATM and get more cash, the reasonable market for cash. I think what we've seen the pandemic view has accelerated three to five years of behavioral change as a consumer side. Cameron just went to it a minute ago in response to Andrew's question the bookings growth in our e-com, omni business which is logistics [Indecipherable] again not lapping the pandemic for the first quarter of 2020. So, listen, I think at the end of the day, in my opinion, to answer your question, I just don't see the trends of say for e-commerce, [Indecipherable], omni-channel acceptance, I don't see folks moving backwards. I think it's going to accelerate the underlying trends that you've seen over time.

And also to say relative to kind of credit get mix. I don't see that changing either. The only time that we've really seen debit cannibalize -- cannibalize credit is back in the early '09 recession when credit is really tapped. So all that is left out is that we really haven't seen that here. I do think you'll see alternative means of payment of course in Europe where I know you're focusing particularly we've got assets account to account transactions, we've got real-time payments that kind of thing, of course, we've got Afterpay and those types of installment payment plan, which I think we're market leader in both on our issuing business and our acquiring business.

So I think there may be mix changes in terms of how people actually pay for things. But I don't think we're going to see debit cannibalized credit like we saw in LA. We have not seen that really throughout -- the throughout the pandemic. And I don't see people kind of going backwards on convenience of use.

David Togut -- Evercore ISI

Thanks for that. Just as a quick follow-up. You've had a lot of success in Europe with bank JVs like HSBC, [Indecipherable], Erste. I don't see acquisition of Worldline PAYONE in Austria sync up with your Erste JV. Is that -- are those two operating independently entirely or do you see some synergies potentially between the both?

Cameron Bready -- PRESIDENT AND CHIEF OPERATING OFFICER

No. David, it's Cameron, I'll jump in on that. This is actually a great opportunity to extend our joint venture with Erste. We're actually purchasing that business through the joint venture with our partners at Erste and [Indecipherable] as well. So this is an extension of our existing partnership with Erste. They were very excited about the opportunity to grow and expand our business in their home market of Austria.

As you'll recall, and I think we mentioned in our prepared remarks, we initiated a business in that market about 18 months ago. We've had very good success building essentially a greenfield acquiring business with our partners and this adds significant scale and obviously an opportunity to grow and expand that business more rapidly going forward. So this is very much a part of the joint venture that we have with Erste in Central Europe today.

David Togut -- Evercore ISI

Understood. Thank you very much.

Jeff Sloan -- Chief Executive Officer

Thanks, David.

Cameron Bready -- PRESIDENT AND CHIEF OPERATING OFFICER

Thanks, David.

Operator

Your next question comes from Tien-Tsin Huang of JP Morgan. Your line is open.

Tien-Tsin Huang -- JP Morgan

Thank you. Thank you. Good morning. Really like the property management acquisition. I'm curious if it's -- if we were to compare it to the EHR space easier, harder to monetize than that. Just trying to get a sense of how the time -- to timeline of potential payment penetration and did you give the revenue run rate and growth before synergies? Thanks.

Cameron Bready -- PRESIDENT AND CHIEF OPERATING OFFICER

So, Tien-Tsin, it's Cameron. Good morning. So I would say, on balance, I would think it's probably easier to monetize the payment opportunity in the real estate space. There is obviously secular trends there that we think are very powerful around the digitization of the payment stream within real estate whether it's recurring monthly rental payments, A2A fees or other one-off fees that less needs to pay. So we think the opportunity to drive better penetration from a payment standpoint in that market is going to be easier than some of the other vertical markets we've been and I think we view real estate really as the quintessential vertical market where you have the intersection of software and drain payments were that nexus is very strong and obviously creates a significant opportunity for us to drive meaningful growth and share gains and obviously margin expansion over a period of time.

We expect the business, to your second question, to generate roughly $100 million of revenue in 2021. It's growing double-digits nicely. It's sort of fits the Rule of 40 for a software business very nicely today, and obviously, we think we can do a variety of things to accelerate that rate of revenue growth over time and scale the business more effectively by leveraging the broad global payment ecosystem.

Tien-Tsin Huang -- JP Morgan

Wonderful. No, I like it. I think it's great. If you don't mind, maybe a quick one, just on the Merchant revenue growth, building on Dave's question, it did positively decouple from Visa Mastercard credit volume. So just from a benchmarking standpoint, what do you expect going forward here? It sounds like SMB spend is coming back, relationship is doing great. Anything to add?

Paul Todd -- Senior Executive Vice President and Chief Financial Officer

Yeah. So, Tien-Tsin, this is Paul. And Cameron may want to add that we've been talking for several quarters now about this positive decoupling and obviously we saw in the more dramatically certainly on the positive side this last quarter and so, yeah, we continue to kind of see that positive decoupling continue and we expect that to continue for the segment since we had outlined before when we said that we expected that positive decoupling to occur once things got to a much more kind of normalized basis. The only other thing I would highlight is as you look at that overall revenue growth number, do recall that we have probably 300 basis points of headwind related to those three vertical market businesses that are still while they have improved from the depths of the pandemic and we highlighted gaming is being now an absolute grower, we're still seeing some meaningful headwind related to the active school business and the gaming business that if you kind of looked at it ex though, as you kind of add 300 basis points to the overall growth rate and then you do that, you can see really some -- on a volume-to-volume basis some very positive decoupling.

Cameron, I don't know if you have anything to add to that.

Cameron Bready -- PRESIDENT AND CHIEF OPERATING OFFICER

Yeah. The only I think I would say just on top of that is international markets continue to be a bit of a drag as well. So if you really look at US payments and our growth in US payments, it was probably high-single digits, maybe almost 10% pure payments in the US market in the first quarter. So even more decoupling, then I think that's where highlights represent. And the other thing I would say is over time, I expect that decoupling continue partially because our international businesses are more exposed to domestic trends in those markets. So as those markets reopen, we're not as reliant upon the cross-border volume to drive revenue growth in those businesses. As domestic markets reopen internationally, we'll obviously see a nice tailwind as a result of that.

Tien-Tsin Huang -- JP Morgan

Great. Thanks for the answers. Great content.

Jeff Sloan -- Chief Executive Officer

Thanks, Tien-Tsin.

Operator

Your next question comes from Ramsey El-Assal of Barclays. Your line is open.

Ramsey El-Assal -- Barclays

Hi, thanks for taking my question this morning. I wanted to ask about a kind of a high-level question about whether the pandemic will have any lasting effect on your sales process, particularly in Merchant. Given the increasing importance of e-commerce and omni and digital, have you had to change your kind of go-to-market or sales approach or do you contemplate having to do so? And then if you could also just comment on bookings trends more generally as we head into Q2 that would great.

Cameron Bready -- PRESIDENT AND CHIEF OPERATING OFFICER

Yeah, sure. I'll start. It's Cameron and then I'll ask Paul maybe to jump in with a little bit more color as well. So I would say, maybe to start even well before the pandemic, we've been equipping our sales professionals around the globe with the best technology, the best capabilities to be able to sell and obviously, we think that pay meaningful dividends through the course of the pandemic and our ability to continue to sell at very strong levels notwithstanding obviously the impacts of the pandemic. And I think partly a credit to our sales teams in particular, they found new and innovative ways to continue to sell in a difficult environment. In particular, our relationship-led sales professionals here in the US market, they really operate under a commission-only model. They were very motivated and incentivized to go out and find creative ways to be able to sell into the marketplace.

So the use of technology and deploying more technology toward the sales process itself as well as the ingenuity, I would say, of our sales professionals, I don't expect that to change post pandemic and I think a lot of the lessons we've learned through this process will allow us to continue to be very effective and very productive from a new sales point of view as a go board matter. I'll call out a few particular highlights on the first quarter bookings performance and I'll ask Paul maybe to jump in. If I start with our US relationship-led business, we had a record sales quarter as Jeff and Paul highlighted in the prepared remarks, it was about 5% higher than our old records and up about 27% year-over-year, which I think is a really important metric as well given that again 10 of the 12 weeks of the first quarter of 2020 were really not impacted by the pandemic.

So very strong performance from the new sales point. Again, with particular strength in our e-commerce, our bill-pay, text by pay [Phonetic] solutions within our relationship-led channel. We also had great new bookings performance in our payroll business as well. We had record sales in that business up again 43% year-over-year.

So very strong performance in our US relationship-led payments and payroll business in the first quarter. Integrated, as I mentioned previously, they were above plan and well above last year's new sales performance and bookings performance in the first quarter as well. Within our vertical market business, we saw very strong, I'd say, booking trends across the business. TouchNet had record first quarter bookings performance, which I think is a very good sign as it relates to the university environment heading into the fall.

We actually started to see some buying of new sales in our schools business. Our lower school K through 12, we had three significant new wins in the quarter from a new sales point of view. Obviously, we're still waiting and relying upon kids getting back in through K through 12 environment for that business to recover fully, but obviously it was encouraging to see new sales begin to thaw [Phonetic] in that business in the first quarter as well. And we also had record bookings in our enterprise as QSR business in the first quarter as well. So, again, good trends across the board, I would say, in our vertical market business. If we look internationally again, despite the macro environment being challenging in some of the markets that we operate in, I would characterize new sales performance across the board internationally sort of aggregating a bunch of different markets there, it was above plan for the first quarter, above last year's candidates for example was up 40% year-over-year. So, again, the trend of new bookings performance being very strong continued well into the first quarter and, thus far, in the second quarter as well.

Paul, I don't know if you had any [Multiple Speakers].

Paul Todd -- Senior Executive Vice President and Chief Financial Officer

Yeah, the only thing I would add Ramsey is that we've been talking about the sales figures for the last two quarters and I think you're seeing it in the performance today that sales production is producing kind of outsized results for us to be able to grow our integrated business at better than kind of the long-term target rate in an environment that still not normalized and the same thing as Jeff just mentioned about our relationship-led business to be growing in the high-single digits. I mean, kind of speaks to the fact that the sales success we're having is leading to kind of additive performance in the environment that we're operating in.

Ramsey El-Assal -- Barclays

That's terrific. It sounds like things are really trending in the right direction. So I appreciate your answers. I'll hop back in queue. Thanks.

Jeff Sloan -- Chief Executive Officer

Thanks, Ramsey.

Operator

Your next question comes from George Mihalos of Cowen. Your line is open.

George Mihalos -- Cowen

Great. Good morning, guys, and thank you for taking my questions. Wanted to start off on the Issuer side of the business. Again, it sounds like you're seeing some real momentum if we look at it on sort of a normalized basis up high-single digit. To Paul, just wanted to ask the 20% that is commercial was that down again sort of another 30% in the first quarter and now, how are you thinking about that as I understand it's not going to recover, but the comparison should start to ease sort of going forward.

Paul Todd -- Senior Executive Vice President and Chief Financial Officer

Yeah, that's right. So, yes, we were down north of 30% in the quarter as it relates to the overall environment there. And, yes, you are right in the sense that the comparisons do ease as we move out now into the remaining three quarters. But just as a kind of an overall kind of headwind relative to our -- back to our kind of more normalized growth rate that's still providing roughly about half of that as when we -- that we called out in the prepared remarks.

George Mihalos -- Cowen

Okay, that's helpful. And then specifically looking at the acceleration in merchant, which again seems to be really be sort of taking hold across the board and the outlook were sort of a high teens rate of growth, again, should we be sort of thinking for modeling purposes, that we're talking about a growth rate in the second quarter that sort of in that 30% plus range for the Merchant business.

Paul Todd -- Senior Executive Vice President and Chief Financial Officer

Yes, George. I mean, yes, you're thinking about that right. That's exactly kind of the right range to be thinking about. Okay, great. Thanks, guys.

Jeff Sloan -- Chief Executive Officer

Yeah. Thanks, George.

Operator

Your next question comes from Darrin Peller of Wolfe Research. Your line is open.

Darrin Peller -- Wolfe Research

All right, thanks, guys. When we look at the guidance and the increase, it's obviously nice to see the first quarter and then buybacks are also helping. Can you just touch on what's implied or what's embedded in the guide outlook in terms of macro assumptions from here on out. Just looks like the trends and the current trajectory should allow for potentially more upside that you can raise so far. It's just really where you keeping some element of conservatism in the outlook versus including some mix. Thanks.

Paul Todd -- Senior Executive Vice President and Chief Financial Officer

Yeah, Darrin. So, this is Paul, and I'll ask Cameron may want to add as well, particularly as it relates to Merchant. But I think our outlook is consistent with, to some degree of what we outlined last time which is that the trajectory that we were on going into the year and the trajectory that we can continue on is, as we kind of said before kind of a slow grind higher and we continue to what we're very optimistic about the future and very pleased with the results. We also want to kind of see how things play out as it relates to particularly around the world where we have different kind of dynamics playing around the different geographies. But we've said before, it's still true. The top end of the range is not perfection, it does not assume any type of just kind of some massive kind of kick back to normal but instead our grind back to normal with the third and fourth quarter kind of be a much more normal kind of -- or more normal environment.

I would say as it relates to just March, we were very pleased with the overall growth rates that we saw in March. And those were sequentially better on a monthly basis and obviously what we saw in February and January and particularly some more normalized kind of growth rate there, but that's the way I would frame it from an overall standpoint.

Cameron, you got anything to add on that?

Cameron Bready -- PRESIDENT AND CHIEF OPERATING OFFICER

I mean, I think that covers it well. I would just highlight to Paul's point earlier, I don't think we have to see perfection to get to the high end of that range. The guidance doesn't assume that. We assume that the trends that we're seeing in the business continue to flow through the balance of the year. We're encouraged by the performance in the first quarter and the underlying trends. Obviously, we're very -- we remain very mindful of the back of some markets around the globe are slower to recover or appear to be slower to recover from the pandemic than others and those are markets that we have a reasonably sizable businesses in, but I think as we sit here today, the trend in the business are quite favorable and we're very optimistic about how we're positioned to perform through the balance of the year.

Jeff Sloan -- Chief Executive Officer

Yeah, Darrin, it's Jeff. I would just say as follow up on Cameron and Paul's commentary. So in March, revenue for the business, which did not really last at least for a half month of pandemic. Aggregate revenue was up in the 20% plus range and earnings [Indecipherable] per share. So just to give you a sense as to what we saw in March, obviously, time will tell but that's kind of the run rate.

Darrin Peller -- Wolfe Research

All right. That's really helpful. Guys, a follow-up is on the tech-enabled businesses. When you think about the mix now with Zego, and again, great to see more software acquisitions. You combine that with what you have. First of all, Jeff, I mean, where do you feel the company is positioned now in terms of its software presence versus your long-term strategy. Do you need to do more? Do you want to do more near-term or long-term? And then Cameron as well on the on the AWS or the global relationships on the cloud. I mean, something we focused on, it sounds like you're winning good business there. If you could just give us a little more color on how that's been trending just in the context of other tech-enabled opportunities. Thanks again.

Jeff Sloan -- Chief Executive Officer

Darrin, it's Jeff, I'll start. So you're still [Indecipherable] from the Investor Day that we're [Indecipherable] in September. But I would say -- I would say that and will set out a new target for what percentage of the business is coming from tech-enabled the next few years there. But obviously general volume cost at 60% by fall last summer, six months earlier than we thought, the yields play out a point or 2 units to that number, but obviously we're targeting well north of about 75% of the company think about just directionally up from 60% last summer where we'd like to be longer term and that percentage of revenue, which means the vast majority of the growth by definition is coming from those coming -- from those areas.

So we're really pleased. Our pipeline is full. And then there's a whole array of things post Zego, post PAYONE. Our pipeline remains full. It includes more software assets in it. So time will tell. We get those over to finish line, but I think you're directionally right where you're going.

Also on AWS and Cameron can comment as well. We couldn't be more pleased with our relationship with with AWS. We're actually on track for all the things that we outlined last August when we announced the relationship in the first place about sells. We talked today about UMB competitive takeaway, find somebody else for three decades. They're going to be our first instance in data and analytics in the cloud jointly with AWS, the Asian bank we referred to now that's happening environment live, Google Love and in the year and another competitive takeaway. And I think what we said in our prepared remarks, we'll be triple the number of [Indecipherable] joining with Amazon. There are mid to late stages today versus where we were year-end of '20.

So I think you're right to say that we're firing on all cylinders there and we really couldn't be more pleased with the transition we made there to cloud native environments.

Cameron, do you want to comment on Google a bot?

Cameron Bready -- PRESIDENT AND CHIEF OPERATING OFFICER

Well, I think the comment for Google is very much the same as Jeff highlighted greater. Yes, we couldn't be more pleased and delighted with the partnership we have with Google and how they have performed year Q4, recognizing we are obviously early in that relationship and really building momentum as we sit here today. So everything that we outlined on our fourth -- our year-end call back in February as it relates to the partnership is very much on track. As it relates to the go-to-market strategies, we're obviously end market with them already. We're already in the midst of having conversations with a variety of medium to enterprise-sized customers who are leveraging Google Cloud services today and very optimistic about the future of that technology-enabled distribution strategy and how we'll augment obviously our existing go-to-market strategies in the merchant space.

Darrin Peller -- Wolfe Research

Okay. That's really helpful. Thanks, guys.

Jeff Sloan -- Chief Executive Officer

Thanks, Darrin.

Operator

Your next question comes from Jason Kupferberg with Bank of America. Your line is open.

Jason Kupferberg -- Bank of America

Okay, great, thanks guys. So, appreciate that disclosure in the month of March there, Jeff, with regards to revenue and EPS growth. Could you get those numbers for the month of April as well and had any breakdown by segment that you would give us some revenue growth by segment, again, for the month of April.

Jeff Sloan -- Chief Executive Officer

Yeah, Jason. We wouldn't have that to give on a call like this right now. So I think generically speaking as a volume matter, we are seeing sequential improvement on the volume side in the month of April and so obviously and that's kind of what we would expect given the trends we saw in March. So we're very pleased from an overall volume perspective, but it -- as it relates to the financial results for April, we wouldn't have that.

Jason Kupferberg -- Bank of America

Okay. Okay. Just as a follow-up, kind of a bigger picture question. Wondering what you're seeing in terms of merchant demand around the world to accept crypto and just general thoughts on longer-term implications of that growth in the crypto ecosystem for Global Payments and the merchant acquiring industry more generally.

Cameron Bready -- PRESIDENT AND CHIEF OPERATING OFFICER

Yeah, it's Cameron, I'll jump in on that. So I would say certainly it may be a commentary on the merchants that make up our business and the merchants we're targeting. There is really zero demand among our merchant base doing [Indecipherable]. Obviously, over time being involved if you more Central Bank developing their own crypto currencies that really just become a digital form of their domestic currencies then obviously that environment can change today, but I think as it relates to utilizing crypto currency for the sake of evacuating commerce among merchants in our businesses around the globe, there's really no demand for that today. Crypto was really not a currency for commerce. It's a security and as a result of that, we're really not seeing a significant demand or uptake of that in our business at all.

Jason Kupferberg -- Bank of America

Okay, thank you, guys.

Jeff Sloan -- Chief Executive Officer

Thanks, Jason.

Operator

Our final question comes from Dan Perlin of RBC. Your line is open.

Dan Perlin -- RBC

Thanks, guys, and I appreciate you squeezing me in at the end here. The question I have is really around in the embedded in the guidance, can you just kind of help us parse out really what stimulus is actually driving in terms of the increase that you've seen. I mean, I think I recall that you guys said you had contemplated the first round embedded in the first quarter, but maybe hadn't been thinking about the second and most recent round. And so, now that those are contemplated, I'm trying to understand how much you think that actually influence in the increase in guidance and how many quarters do you think it takes to kind of play out. Visa seems to imply a couple of quarters of benefit. So I would just love to get your thoughts there.

Jeff Sloan -- Chief Executive Officer

Yeah, so maybe we'll kind of answer that kind of two respects. One, what stimulus has as it relates to our Business and Consumer Business. And then the second as it relates to stimulus across really all three of our segments. As it relates to stimulus in our Business and Consumer, it is a piece and the driving piece around us as it relates to our overall revenue outlook for that segment of move into that from mid-single digit kind of a mid -- mid to high. So that's kind of -- we want to try to kind of quantify the impact of additional stimulus net of the effect that stimulus had on other products, on yield, the overall tax season picture. So that gives you kind of a quantification of kind of that difference between kind of mid single-digit growth for that business and that kind of more mid to high single-digit growth as it relates to just a revenue matter and we've obviously kind of talked about the margin impact we saw what we've had for a marginal impact in the first quarter and then obviously that play through in the second quarter. The other direction as we grow over stimulus in 2Q of last year of roughly kind of from a margin standpoint of kind of a similar size. I would say as it relates to stimulus across our overall business I think time will tell. Clearly, you're getting some impact in volumes related to stimulus. You're just seeing it kind of across the board.

I think it's just a little bit harder to kind of piece part that into the overall volume picture and say, well, how much is stimulus, how much is unemployment benefits, what all that kind of looks like. And so when we're looking at the overall volume landscape, obviously, we're taking some of that versus what we saw last year and the impact of stimulus and got and embedding that into our overall picture, but outside of our business and consumer segment, it's very hard to kind of get discrete around what kind of revenue impact that's discrete we're having.

Cameron, I don't know if you have anything to add to that.

Cameron Bready -- PRESIDENT AND CHIEF OPERATING OFFICER

No, I think if you look at the Merchant Business more broadly, it's not driven that much by stimulus. If you think about it and we talked about this before, we're more exposed to credit than we are in debit in our Merchant Business and stimulus isn't really driving incremental credit spend. What we're really seeing in the Merchant Business I think obviously is the impact of the recovery as well as the fact that savings rates are at generational highs. I mean, there's a lot of pent-up demand and obviously we expect that trend to continue obviously as we progress through the end of 2021 and probably well into 2022 sitting here today.

So certainly on the margin, putting more dollars in consumers' pockets is going to be helpful to the Merchant Business but I don't view sort of the expansion we saw at Q4 to Q1 to really be driven predominantly by stimulus. I think it's more just the macro recovery in general and the fact that obviously consumers are very well positioned to be able to spend in the current environment as the recovery progresses.

Dan Perlin -- RBC

That's great to hear. Just a quick follow-up on margins, I know you called out 250 basis points for the full year. I think you said normalized underlying basis is like a 450 basis point improvement. When we think about the cadence of that throughout the year, I think we'd originally thought maybe $50 million per quarter of kind of reinstated cost. Is there any reason to believe that that shouldn't be pretty ratable or is there going to be some higher cost as the rebounds really start to kick in into the second half? Thank you.

Cameron Bready -- PRESIDENT AND CHIEF OPERATING OFFICER

Yeah, no, I wouldn't call out anything you need from a timing standpoint. I think the thing we have highlighted is this dynamic that we're having obviously in 2Q as it relates to the margin. So we're going to have outsized margin expansion in 2Q, particularly as it relates to not only just the incremental kind of cost add backs, but also just the comparison to 2Q of last of last year and then more normalized kind of margin expansion in that third and fourth quarter. So, yeah, nothing I would call out unique from a timing standpoint other than that 2Q comp.

Dan Perlin -- RBC

That's great. Thank you all.

Cameron Bready -- PRESIDENT AND CHIEF OPERATING OFFICER

Jeff?

Jeff Sloan -- Chief Executive Officer

On behalf of Global Payments, thank you for your interest in us and joining us this morning.

Duration: 63 minutes

Call participants:

Winnie Smith -- Senior Vice President, Investor Relations,

Jeff Sloan -- Chief Executive Officer

Paul Todd -- Senior Executive Vice President and Chief Financial Officer

Cameron Bready -- PRESIDENT AND CHIEF OPERATING OFFICER

Andrew Jeffrey -- Truist Securities

David Togut -- Evercore ISI

Tien-Tsin Huang -- JP Morgan

Ramsey El-Assal -- Barclays

George Mihalos -- Cowen

Darrin Peller -- Wolfe Research

Jason Kupferberg -- Bank of America

Dan Perlin -- RBC

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