Corpay, Inc. (CPAY) Earnings Call Transcript & Summary

All right. I think we can get started. Good morning, everyone. Thanks for joining us. My name is Ken Suchoski. I'm the U.S. payments analyst at Autonomous Research. And we're excited to host our 10th Annual Future of Commerce Symposium. And we have a great group of speakers lined up, and we're excited to hear their thoughts. We're going to do fireside chats. So all I prepared questions for each of the speakers, but you'll have an opportunity to ask questions throughout each of the sessions. And we'd like to make it interactive. So feel free to raise your hand if you have a question. There's breakfast and refreshments outside, so feel free to help yourself. we'll do an hour lunch break at 12:15, and then there'll be a reception at the end as well. And any questions, feel free to flag down Autonomous people. We're floating around and willing to help. So with that, let's get started. We're really excited to have Corpay here this morning. We have Mark Frey and Jim Eglseder from the company with us. Mark is the Group President of Corpay's cross-border business, and he was -- he's been with the company since 2017, I think. You came over with the Cambridge acquisition. He was there for seven years. And prior to that, you were at Western Union Business Solutions for 10 years. So it feels like you spent your whole life in cross-border payments. Very much the case.

Yes.

Well, great. Thank you for joining us. And so like I said, I prepared questions for Mark. And if there's time at the end, we'll open it up to Q&A, and you guys can raise your hand and ask questions.

So, Mark, maybe to start off, the Corporate Payments segment, it's become a bigger part of Corpay's business over time. I think back in 2015, it was 10% of revenue. Now it's approaching 40%. Maybe you can give us a lay of the land in terms of the underlying businesses within that segment. And it might be helpful for investors to understand just the relative sizes of those and the different growth rates as well.

Yes, absolutely, Ken. So yes, it has been a purposeful shift towards Corporate Payments. We see higher organic growth rates in these businesses as well as it's been a primary focus from an acquisition and an M&A perspective for us as well. So we see this business growing to near 50% in the very near term of the overall corporate enterprise. If we -- when we think of the Corporate Payments business at Corpay, it's really two separate divisions. So there's the domestic payables division focused on Canada and the United States. And that is a business that is, let's call it, a $700 million revenue business, growing high teens, sort of low 20s over the past few years fairly consistently, broken into, I'd say, three key segments. So there's a traditional sort of corporate payments, commercial card business, virtual card, T&E and expense management component to that business. That grows a little slower, sort of high double digit -- or sorry, low teens, I would say. And then there's a larger component of the business, about 60% of the business that is a full AP outsourcing, so an AP automation business. So it's really think about a business process outsourcing of your AP department that includes all of those commercial card components as well as a business process workflow in terms of AP automation. That business grows a little faster than 25%. It is sort of the lion's share of the franchise and continues to scale. And then there is a channel partner reseller business ultimately, where we enable our capability in other fintechs to go off and sell that commercial payments value proposition. When we think of the cross-border business, you can think of it roughly as a $1 billion revenue business, just under in '25, really broken into four key customer segments. So one and sort of the heritage of the business is the Corporate segment that was historically very sort of small business focused has become more mid-market to large market focus, large cap. That is, let's call it, an $800 million business and growing high teens year-on-year pretty consistently going back over the past decade. We have a financial institutions and fintech practice. So this is a little bit more than $100 million business. It grows about 25% year-on-year, continues to scale nicely. And this is us servicing financial institutions and fintechs with cross-border payments. So think of the Tier 1 money center banks of the world, the BofA, Citi, sort of Wells Fargo organizations where we provide payment execution and currency liquidity in the emerging market world. So we make payments from the Northern Hemisphere to the Southern Hemisphere with a particular focus on Latin America and Africa. For the Tier 2, Tier 3 financial institutions, we really focus on providing growth beyond the G20 currency corridors that they historically have as part of their correspondent network. We expand their capability into a larger geographic reach. And then for the Tier 4, 5 smaller financial institutions, it's really an outsourcing of their global payments capability. They might not have international SWIFT connectivity. They might not have correspondent accounts in other major currencies, and we can provide them all that infrastructure and execution ultimately for their corporate clients. The third category of our business is sort of a rocket ship for us right now. In 2014, our institutional private markets business was a $5 million business at the end of 2014. We'll exit this year at about a $70 million business. So very impressive growth over the last 12 months. And it's really just taking our existing resources and pointing them at a particular customer segment and finding a really attractive niche to sell into. So that business does very, very well. And we provide FX services and banking services ultimately to those private markets customers, funds and SPVs and other -- and global investors ultimately. The final category of our business is the digital currency space. And so this is relatively new. This is something that we've been building, I'd say, for the past 12 to 15 months and have really just launched commercially in '25, and it's scaling quite nicely. We've had some big client wins and is really beginning to gain some traction.

That's great. Very detailed. Thank you for that. I want to touch on that rocket ship comment because I think on the last earnings call, I think management highlighted that the Corporate Payments business, the cross-border sales were at a new record high. So maybe talk about why so much traction. And I'm curious how have trends been through the third quarter, just given all the macro noise and the tariff discussions.

Yes. We in the cross-border business, think of customer acquisition or sales as our superpower as an organization. This is something that we do exceptionally well. I'd say almost every single quarter is a record quarter. We do see particular jumps in growth at different junctures. And the private markets business, the financial institutions business has been an added element that add some fuel to that growth over the last couple of quarters. This year, we're anticipating to print just under $200 million in realized new revenue from customers that trade with us for the first time in '25. When we annualize that or what we call starts, we will look at something a little bit north of $300 million in sales for the cross-border business against a base that was $700 million, $700 million and change at the beginning of the year. So super attractive growth set of math ultimately in terms of how this sets up for the future and continues to scale quarter-on-quarter. We continue to find success both selling against banks, which are our primary competitors as well as fintechs. And what we think of is when we sell against banks, what we're really selling is our capability, our customer centricity, our integration technology, our ability to move fast, make decisions. In addition to the fact that we've got all the capability of the big banks because we've absorbed all of their capabilities into our network. So we've got the comparative strength of the financial institutions, but a very customer-centric fintech attitude in terms of the way that we do business and much better technology. When we compete with fintechs, which about 2 out of 10 of our customers come from, it's really leveraging the other side of that equation. It's the financial strength, it's the balance sheet. It's the very sort of institutional nature of our business. In addition to the fact -- and the global capability, the network that we have, in addition to the fact that we can compete on technology, and we have breadth of service that beats most of the fintechs in our space. So what we're really trying to do is create something relatively unique where we sort of charge up the middle of the marketplace, able to compete very favorably with banks, large and small, the Tier 1s because we're more customer-centric, the Tier 2s and 3s because they don't have the capability that we have when it comes to cross-border payments and FX execution. And in the fintech world, we just beat them because we've got a bigger balance sheet, we've got more capability. We've got a bigger global network and scale is super important in this business. That between those capabilities and the fact that we continue to add products, features, new customer segments that are high-growth categories that are super durable in our mind as well. The future of our business in terms of our financial institutions practice, the future of the private markets business, we think that this is a generation of growth for us in these categories that will augment our traditional corporate business.

Yes. Maybe we could dig into the cross-border part of the business a little more, Mark. And I think one of the things that we wanted to focus on is just the evolution of the business from a go-to-market perspective as well as a geographic evolution. Because I think the cross-border business used to be very North American concentrated, but you've diversified away from that into other geographies. So how has that mix evolved? And maybe talk about why that's important to build out a presence in other geographies?

Yes, we've diversified and certainly reduced our risk to a certain extent, but moved into categories and geographies that offer us higher growth as well. So it's a shifting of the growth math ultimately to something that is a little bit more durable. So historically, the business was very North American-centric, small business focused and sort of moving into the mid-market. Over the last five, six years, we've moved from mid-market to the large corporate market in the North American geography and then have replicated that sort of go-to-market strategy in the U.K. and across Continental Europe and now in Asia Pacific as well and continue to add geographies, particularly in Continental Europe that we think are super nutritional to the brands. The FX centricity or the cross-border centricity of business in Europe, it lends itself a little bit better to our value proposition than the U.S. does, quite frankly. So we see it as a more target-rich environment with less competition and less capable national champion banks in each of those geographies. So we think of Italy and Spain and France and Germany as all being markets that have a $150 million to $200 million market potential that's realizable over the next four or five years. So we see a lot of growth coming from Continental Europe. We've also expanded in Asia Pacific, opening up a business in New Zealand. We've launched in Singapore, where we're contemplating next to go to Hong Kong and India ultimately. And then in North America, in addition to expanding our sort of presence across the United States, we've recently started originating customers in Mexico as well. So very diverse sort of sprawl from a geographic perspective and continuing to take the same model and technology, deploy it in new geographies and scale the business. The other part is really moving away from that sort of direct sale primarily model to a channel partner model as well. So a good portion of our new business comes from partnerships and introductions that we get from other organizations, both where we've embedded our capability and their technology and also where they're just providing introductions to clients. So we've really augmented both the go-to-market strategy as well as the sales methodology as well.

Great. Often, we see on the merchant acquiring side of the payments industry, companies in the middle market or maybe slightly upmarket have multiple providers. Is that the same when you think about these companies on the cross-border side? And you kind of hit on it earlier, Mark, but what are sort of like the two or three key factors that companies consider when choosing a provider?

Yes. I think we do oftentimes see in the mid and large corporate space, there's certainly a focus on having a primary provider and then a redundant partner at the very least. It would be very rare that you would unilaterally own 100% of a customer's flow in all geographies, let's say. Typically, that incumbent is a financial institution until we just lodge them and then they become the redundant partner ultimately is always the goal. I think the points in which we compete on our network connectivity capability, how can we move money everywhere in the world, the strength of our FX franchise in terms of risk management execution as well as just trading liquidity for clients. It's certainly a big part of our focus over the last number of years is building customer-facing technology, particular workflows for individual segments of customers that have sort of niche requirements that end up being very big sectors ultimately. So we build customized technology for a group of customers that we can then go and sell to hundreds of millions of other customers or hundreds of millions of dollars of revenue of other clients in that space. So it's the technology that's important, the network connectivity, of course, the balance sheet strength as a counterparty and then the geographic reach is super important.

Is that connectivity, that's like, I guess, the integrations into the ERPs and customizing it.

Yes. It's a big part of it. So I'd say five years ago, the arms race was on to integrate with as many vertical and horizontal ERPs as possible, and we did that. And it gave us a super solid foundation in the corporate space. I think how that's evolved today is it's more front-end integration with other fintech players or e-commerce firms where our capability is just embedded in their front-end user experience. So the customer that's utilizing our services, almost like when you're booking an Uber, you don't realize you're making a payment. The same thing occurs in our technology today when we're partnered with our go-to-market partners. So it's really a technology-first value proposition, and that's part of what allows us to win.

Yes. Lots of cross-border companies talk about the large networks that they've built out, right, these cross-border fintech players. Can you talk about some of the key differences between Corpay's network versus others? And maybe also touch on the direct connections into the local schemes. Like I'm curious how much of your connectivity is direct into the local scheme versus having to rely on a bank partner?

Yes. So our direct connectivity and in-country payments today is a little bit more than 50% of our overall flow. So that's grown from 5% five years ago to 50% today. So it's clearly the trend of shifting away from SWIFT and bank connectivity to a single counterparty to in-country connectivity via local gateways. I think when we think of our network, it's sort of four levels ultimately. So 10 years ago, we were very focused on building bank connectivity all around the world, not just in the major currencies, but the emerging market world, building primary and redundant partners that could execute mass payments for us at scale, hundreds or thousands of payments at a time. as well as FX providers that we can do large ticket FX transactions with in places like Nigeria and Kenya and Central Africa. And so building that network of bank connectivity was sort of the first area of focus 10 years ago. The next thing came in-country connectivity and connecting directly to local schemes without a bank between you and the scheme ultimately. The value there is speed, efficiency, cost transparency, cost effectiveness, but also that you can be the arbiter of your own risk appetite because there's no one else that dictates you're not going across someone else's rails. So that's a big driver of that as well. So for the last eight or so years, we've been focused on building that in-country scheme connectivity that moves away from SWIFT that has guaranteed full value transfer, guaranteed on-time delivery, no fees and it costs pennies of transaction as opposed to dollars of transaction. So it's been a significant shift from SWIFT to those in-country gateways. The next area of focus over the last two or three years was to build real-time connectivity and real-time capability. So the experience that we all have as consumers, we want to now replicate in the business world as well. So instant payments or near real-time payments has been a particular area of focus for us. So taking many of those in-country gateway connections and turning them into real-time connections to do SEPA instant payments, ACH instant payments and other real-time rails, even in emerging markets, not just in major currencies. So that's been a particular area of focus. I'd say the fourth area that we've actually been working on for a number of years going back to 2019, but now really beginning to scale is sort of our blockchain stablecoin digital currency capability ultimately as well. And the clear value here is while real-time payments can allow you to move money instantaneously and super cost effectively, which is a core part of sort of the stablecoin value proposition or blockchain. What stablecoin or blockchain does is sort of the always-on 24/7 element. So it's an added capability that you can build into your network by enabling blockchain payments, which is something that we've been going down this path, in particular, geographic corridor since 2019, and we've invested very heavily over the last 18 months or so to build out this capability, both in terms of being the last mile of payment delivery for third-party remittances, but also in terms of treasury flows, our own treasury flows and our large corporates so that we can move pounds thrilling on a Sunday afternoon ultimately. We've always long enabled our customers to trade on the weekends and have the FX liquidity capability to be able to do that. We're now moving money for customers over the weekends as well.

Great. It's a good segue into the next question because I wanted to hit on stablecoins, one topic that we're getting a lot of questions on. I guess thinking longer term, Mark, I mean, what role do you think stablecoins will play in B2B payments? I mean, are there certain use cases that you think will take off? And I guess, how is Corpay thinking about leveraging stablecoins in its offering?

Yes. Whether it's stablecoin or blockchain-enabled payments, we sort of think of those as one category, and that is that fourth component of our network. And we think of it as that always on 24/7 element. That's really the value that it delivers versus some of the other things that have already solved a lot of the problems that stablecoin solves versus SWIFT, but not necessarily against real-time payments that are already near instantaneous and tremendously cheap, pennies a transaction. In many cases, the value of an in-country payment or the cost of an in-country payment is lower than the gas fees associated with the stablecoin payment. So it's not really cost where we are benefiting. It's that always on 24/7 elements of being able to move money irrespective of cutoffs or on the weekends. And I think that is the primary use case that we're thinking of stablecoins for. So when we have treasury needs to help manage customers' liquidity across geographies between the U.S. and Australia, let's say, or other Asia Pacific organizations or to be able to move money after cutoff ultimately. When our customers come to us today, they don't say, hey, can I make a stablecoin payment? They say, I need to move money to this jurisdiction at whatever time of day. And then we leverage the capability that will deliver that in the best and most cost-effective fashion. It's not always a stablecoin or a blockchain payment. It could be a real-time payment or an instant payment. The value of having that sort of four-part network is that we can deliver value to the customer and what they're looking to achieve, solve the business problem, and it's not just with one tool, and there's not a reliance on just one tool. I'd say the other thing that people probably get confused about stablecoins as well is that it's going to take over the cross-border business and begin to compress FX spreads. And the reality is that every stablecoin is linked to a fiat currency, and there's still a need to do FX conversion, whether it be on chain between stablecoins, euro versus U.S. dollars or if it's off chain in the fiat currency world, 95-plus percent of our economics come from that FX conversion. So whether it's converting from a U.S. dollar stable coin to a euro stablecoin and we do that on chain or we do that off chain in the fiat world, that's still where all the economics come from. And we're prepared to do that in either environment ultimately.

Yes. Great. I think you hit on my next question, so maybe I'll skip that one. But I guess when you think about a comparable transaction, Mark, right, same corridor, same currency, same pair, do you know what the cost might be to send a payment via a stablecoin versus, I guess, using your own network or another rail that you guys leverage to move money?

Yes. So I would say, typically -- so let's just take a $100,000 payment or a $10,000 payment. To send a payment via SWIFT cost dollars a transaction. To send a payment via stablecoin cost quarters per transaction. To send a payment by an in-country instant rail is pennies per transaction. So it's still more cost effective in many cases, to send an instant payment than it is a stablecoin payment. The gas fees are higher than the $0.03 it costs me to send a SEPA payment, let's say. I'd say the other thing that is still a point of friction with respect to digital payments is the on-ramp and off-ramp scenarios. So in most cases, our customers today that are taking delivery of payments via digital means, they're not then holding those in stablecoin. They're having to off-ramp those into a fiat currency account, and that's where the friction, that's where the real cost is. So when you talk about gas fees, that's relatively inconsequential. When it comes down to the on-ramp and off-ramp friction, that's where the real cost comes in for the customer.

Yes, totally. Yes, it seems like the scenario where there would be risk is if customers operate with stablecoins and they transact with stablecoins, but it seems like the probability of that playing out is quite low, just given the need to often on-ramp.

And it's growing, and we will see -- we start to see certain customers begin to have greater appetite to hold liquidity in stablecoin as well and actually transact and do business corporately in terms of stablecoin or digital wallets ultimately. But that's not really ubiquitous in the marketplace today. There's generally an on-ramp and off-ramp. That on-ramp and off-ramp friction is also a commercial opportunity for us. So in our digital currency practice, this is a big part of our focus is to provide on-ramp and off-ramp solutions to native crypto exchanges, native stablecoin providers that don't have the fiat currency liquidity and capability to facilitate that on-ramp and off-ramp for their customers and try to drive costs lower. So that is another opportunity that we see as a significant driver of growth in the coming years as there's greater stablecoin and crypto adoption, especially amongst the corporate space. We, with the partnerships that we put in place and the relationships that we have, will continue to benefit from that on-ramp and off-ramp flow that is super attractive for us.

Yes, totally. I guess my one question that we get is -- so I get the cost structure is for a netted transaction is quite low, right, where there's an offsetting flow. There's still a wide delta between the revenue versus that cost structure. So the margin is still quite attractive. I guess what prevents other players from coming in and trying to chip away at that margin if they could replicate that low-cost structure that you have?

Yes. It's a super deep and wide competitive moat, thankfully, that we've spent a lot of time trying to cultivate and develop over the last decade plus. So it's the regulatory framework being licensed in as many jurisdictions as possible that is then required to have the local connectivity. Without local licenses, you can't connect to the local schemes. To build that out takes years and years going geography by geography ultimately. It's the customer-facing tech. So it's the ERP connections, the API connectivity, whether it be soap, rest or fix APIs, having a product set that can touch different customers, meeting them where they are in terms of their tech development journey. It is having the ability to embed capability directly in your customers' user interface or their front end or their web technology, their e-commerce platform. So that technology element of solving the friction in actually the execution of payments and FX is a huge component. Then it's the network. It's the global reach and being able to move money to Central Africa or Nigeria. What we see from our customers is typically, a corporate will come to us and they'll -- 90% of their flow is in major currency corridors. But if we can solve their pain point with respect to moving money to Nigeria or moving money to Brazil, which might be a small part of their overall flow, but a big part of their treasury friction and the thing that consumes time. If we can solve that unique use case for them, then we get all the rest of the flow as well. We get all the euros and the sterling that we can make really good spreads on that are super easy to automate and everything else. So it's that investment in the in-country networks globally in the emerging and frontier market world over the past decade that are really reaping significant benefits for us today.

Yes, totally. Are there parts of the cross-border business that might be more insulated from this perceived stablecoin threat? I think there's some services outside of the traditional FX fees that you generate just as we think about the different revenue streams within that cross-border business.

Yes. The economics that we get paid for moving money are a tiny part of the overall revenue of the business. So 95-plus percent of our revenue comes from FX conversion, whether that be digital currency or fiat currency and the movement from one to the other. Ultimately, we feel as though as long as the global economy doesn't completely dollarize, which I think there's less risk of that occurring today than there was a generation ago, mainly for political reasons and the independence of monetary policy around the world. We just don't see that, that FX spread is going to come under pressure given that layer of value that we've created around technology and network and everything else that we built for customers. It's the compression that we may see in transaction spreads as costs come down to move money and the market moves more away from SWIFT payments to these other rails, but we believe that we've built the network to capture that flow and to win there as well.

Yes. Maybe just building on the stablecoin discussion. You guys partnered with Circle. Maybe we could touch on that partnership. I'm curious what customer feedback has been? What has demand for USDC been? And then I think separately, I think Circle is introducing a new network called Circle Payments Network. What are your initial thoughts on that network? And I'm curious to get your thoughts on how successful that might be?

Yes. So there's a lot there. So we've done a number of partnerships in the space with -- we've had a long-standing partnership with Ripple, for instance, Circle is a new partner for us. We think of these relationships is really twofold. It's taking their capability from a digital currency space and embedding it in our technology and making it part of our network. And then it's us being the on-ramp, off-ramp provider for them to be able to reduce that friction for their customers as well. So it's sort of a two-pronged attack and that contributes to the growth of both organizations. I think the Circle Payments network is an interesting network, sort of a closed-loop network that has some treasury applications for corporates, certainly has some third-party room, so last mile payment delivery as well that we see some capability for. I think it will take a little bit of time to build. I think what they've created though is an ecosystem that will invite a number of financial institutions to participate in. Whether they have the capability and the appetite and the technology to step into that world will dictate how quickly each of them can run. But we do see it as a valuable piece of the ecosystem in the digital currency space, much like what we partnered with and built with JPMorgan and Kinexys, for instance, is a capability that we use to move money on a 24/7 always-on basis from a treasury perspective. Each of these networks creates different opportunities and solves for different use cases for our customers.

Mark, I wanted to ask about another big announcement you guys had this year, which was the Mastercard minority investment into the cross-border business. I know it's early days, but how is that partnership progressed? And I think what everyone is trying to figure out is how big of a contributor can this partnership be as we think about revenue or volume?

Yes. We're really excited about the Mastercard deal. If I think about it at sort of a top of house level, you have this organization that has 27,500 financial institution customers around the world. Each of those financial institution customers has needs and holes in their networks in terms of the way they move money and provide FX liquidity. And we see this as a means by which we're a trusted partner of each of those banks can then introduce us to help solve those needs in those bank networks ultimately. So we've stood up or Mastercard has stood up a dedicated sales team to partner with us to leverage the relationships that they have to introduce us to the Head of Transactional Banking in each of those financial institutions to walk us in the door, give the introduction, give this the pitch and then allow us to do the needs analysis and the implementation. So we think there are a lot of legs to this partnership. We've actually been able to get the flow of referrals and introductions going already. It will begin to meaningfully show up in our sales results in Q3 and Q4, and we think is going to be a multiyear driver of our financial institutions practice. It really speaks to part of the strategy as well as we've got these four key segments in our business in cross-border. We try to support each of those segments with corporate development work, whether it be partnerships, acquisitions, and certainly, this Mastercard deal is a big part of driving that financial institutions and fintech practice for us. We think it will be financial institution rich, but fintech partner-rich as well. So what probably is lesser known about the Mastercard network is their connectivity to financial technology partners and fintechs all around the world. And we think the adoption of our capability by them because of their ability to integrate to our technology faster will be perhaps even more robust.

Yes. Great. Maybe turning to the acquisition of Alpha Group. Alpha has a bank account product and a bank account consolidation software solution. And I think that's going to be new to the Corpay portfolio. Maybe talk about the importance of those products, Mark, and the need for them across the broader portfolio.

Yes. The Alpha deal is super exciting for us. I think it's our fourth such deal that we've done since 2021, and we can sort of walk through those. But we have the belief that this could potentially be the most impactful, the biggest deal, the most successful deal that we've done yet in terms of the way that it augments our value proposition. So what we have historically done is we focused on building a multicurrency account solution for the corporate market. And it's been -- we've launched that in the past year. It's been very, very successful. What Alpha has done is focused on building a bank account solution for the private markets business. So thinking of providing bank accounts in a super-efficient AML fashion to funds, SPVs, funds administrators to stand up a bank account for a new legal entity when it goes to launch that investment ultimately to the public market. That capability is not just a bank account capability, but the technology layer, the connectivity to a banking platform globally and then the regional capability embedded in each geography in which funds are typically organized around the world. So it is super impactful in terms of driving value in the private market space. And we think that given our geographic footprint, the fact that Alpha today only really operates in the U.K. and Europe that we can take that capability and sell it to our institutional customers in Asia and also in North America, we see as being a tremendous runway for growth for that bank account product. But what we also see is that Alpha delivers to us incremental geographies in Continental Europe that are high priority targets for us that we want to build boots on the ground and build big businesses in. So introductions to Germany, Luxembourg, Austria, a much bigger business in Malta, the Netherlands. That geographic expansion ties in with our overall Continental geographic expansion strategy for Europe as well. So we're super excited about the Alpha business. We think it's a tremendous fit and gives us great runway for growth.

Mark, you mentioned the four acquisitions since 2021 on the cross-border side. Can you give us a sense of how those acquisitions have played out versus expectations? I mean, I think the idea is you acquire these businesses, you put them on the Corpay platform, you get a lot of accretion, a lot of EBITDA growth by doing that. So I'm just curious how those have played out.

Yes. So the model for us is super clear. We want to be a 20% organic grower on our own, leveraging our capability and the products that we built, and we've been able to historically deliver that. We believe it's durable into the future as well. And then when we think of each acquisition brings both capability to the organization, but a portfolio of customers that we can then optimize as well. So if I go back to the AFEX deal that we did in 2021, it was a low teens grower, 10%, 11% grower per year at a 15% EBITDA margin. By lifting all of the customers out of that technology platform, moving them on to the Corpay technology where we could optimize revenue and cost base and then decommissioning the legacy technology and infrastructure of AFEX, we took that from a 15% EBITDA margin to a 50% EBITDA margin in 12 months. we're able to move super-fast on the integration. Sort of the fintech pedigree allows us to do those sort of tech connections very, very quickly. GRG was a similar sort of story. So it's accelerate growth from high single digits to 20%, take EBITDA from 30% to 55% and move it all over in 12 months. GPS, we're only 9, 10 months in, but same exact strategy. With Alpha, the strategy will be a little bit different because there's more capability ultimately that we are uncoupling from the Alpha tech, bolting on to the Corpay technology and then selling to all of our customers around the world. But the strategy is super clear. Take all of these tech platforms, take the capabilities that come with each one of them. separate those from the legacy technology, add them to the Corpay technology going forward, but we have one single tech stack everywhere in the world, one operational platform, which allows us to move way faster than a traditional financial institution. So when we build new capability or a new product or a new technology connection, we can push it across the entirety of our network and all of our geographies all at once. So it allows us to move super-fast when we introduce new ideas, new products. And with each organization that we acquire, it comes with incremental geographies, incremental licenses, incremental software that we can then add to the capability mix going forward. So what we think of is with each accretive acquisition, it's a chance to acquire a portfolio of customers that we can optimize significantly given our increased products. It's little pieces of technology that become valuable in connecting to our overall technology stack and then the ability to significantly scale and optimize the P&L of those businesses and accelerate sales as well.

And it sounds like this is real consolidation, like you're actually maintaining that one platform. You're not maintaining multiple platforms as you do these acquisitions.

Yes. We've got sort of a religious belief about it. There's one way to do this, and it's proven to be very successful for us. We've looked at other deals that have happened in our space that have proven to be very unsuccessful, and we can understand the reasons why. A lot of it relates back to the technology strategy and how that's worked out. So there's usually a very clear game plan. It's really about time line, it's about execution and how do we do it without causing -- or by causing as little disruption to the network of customers as possible.

Yes, total. We've got a handful of minutes left. I have a few more questions, but if anyone in the audience has questions, feel free to raise your hand. Mark, I guess one of the new products that has ramped pretty quickly is the multicurrency accounts. I think you have over 10,000 bank accounts, $1 billion in deposits. Can you talk about why adoption has been so strong? And is this more of -- do you guys see it as a revenue -- more of a revenue play? Or is it more of like a retention tool for the portfolio?

Yes. It's -- so we are really excited about this product. If we take a step back and we think of our business, we provide FX liquidity solutions. We've moved money in as automated a fashion as possible. And now we provide global bank account solutions to our customers in the different categories that they sit in. We believe that it's a great retention tool, makes the customer sticky to us. The way that we think of it is that we want to be the international financial institution of choice for our customers beyond our domestic market. So if you're a U.S. corporate and you have a relationship with JPMorgan or Bank of America, but you want to expand to Europe or Australia or Canada, we don't want you partnering with RBC in Canada or Barclays or National Australia Bank. We want Corpay to be your international bank of choice. And that's essentially what we're seeing from our customers. So at the end of Q2, I think we had around 10,400 accounts that had been opened by corporate customers in a space of about six months. We've built a base of deposits from effectively a very low base to more than $1 billion by the end of quarter. We are continuing to add geographic capability, different currencies that we're adding in, different front-end technology that will make it more useful to certain customer categories. So we think this is a big runway for growth and sort of, again, continuing to widen that competitive moat and making us insulated versus banks and nonbanks, but it's a big revenue driver as well, the fees as well as the float income that we generate on all that cash. And the way that we think of it as well is when we are the bank for the customer, we control the cash flow, we are the incumbent provider. They come to us as a default ultimately for their payment execution and their FX liquidity. So it really makes them stickier to us ultimately and allows us to differentiate much better versus fintechs, especially and allows us to compete better than a domestic bank trying to do business internationally with that customer.

Yes. No, it seems like it's a great, I guess, share of wallet opportunity, right? If you keep taking share and you go from, I don't know, 80% to 90%, 95%, that's the real needle mover.

Yes. It's just kind of frustrated we didn't think of it years ago, but it certainly is a super power in terms of adding capability to the organization and one that's helped us from a customer acquisition standpoint as well.

Yes, totally. Mark, I know over the last few years, there was a discussion of cross-selling different products across the Corpay portfolio. One of those, I think, was specifically Corporate Payments and cross-border being a piece of that. Can you remind us where we are on that journey? Is there still an opportunity for cross-selling? And is that still an area of focus for the company?

Yes. We still think there's a lot of upside, and we're very early days in terms of our integration with certain parts of the Corpay franchise. So we've long worked with our sister company in the domestic payables business, and we've got lots of interconnectivity for us to be able to deploy card solutions to our customers internationally for the payables business to leverage our FX liquidity and money movement capability internationally for the U.S.-based corporates. We've got sort of three major initiatives of partnering with the international business, our international fleet vehicle mobility business. That's sort of a European U.K. and ANZAC-related business, where we are embedding our cross-border capability in their front-end technology to sell to their customers. So that is really, really new. We've actually just launched that Corporate Payments capability in Europe for the first time that we believe will actually transform that vehicle mobility business into more of a Corporate Payments business. So again, supporting that bigger top-of-the-house strategic shift with a significant pivot towards Corporate Payments that is now well underway in that international vehicle mobility business and then continuing to do the same things in the North American market as well. So I'd say it's super early days in terms of those things. We're in the first or second inning, and we've got a lot more runway to go.

Any questions from Mark? I'll ask one more.

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Very good question, both. So I'd say the way that we think of moving money internationally is if it's a cross-border transaction, a domestic international transaction, we break it into its constituent parts. So everything for us becomes a domestic transaction. It doesn't look that way for the customer, but we're leveraging a domestic rail or domestic connectivity on both sides. So we get the benefit of that pennies per transaction on everything that we settle ourselves, even though we may even charge the customer for a cross-border transaction. In terms of the economics for us, whether it's stablecoin or blockchain-enabled payment versus an off-chain fiat transaction, the economics are largely the same. I would say that the take rates and the overall economics that we generate in the on-ramp, off-ramp world are actually higher than our corporate payments business today. The flows are bigger. The volumes are more attractive and the spreads are super attractive in that space. So there is opportunity for us as we see greater stablecoin and digital currency adoption, we actually think there's improved economics for us.

Great. Any last questions or I'll ask one last one. Mark, I guess, maybe to wrap up, I mean, what are you most excited about over the next few years? And with the stock under a little bit of pressure and the whole space under pressure, I mean what do you think is most misunderstood across the investment?

I think for us, it's -- so if I take a look at the top of the house, it's the pivot towards corporate payments that we think is a super attractive, durable strategy that will continue to generate earnings for the Corpay at the top of the house. I think in the cross-border business, it's the durability of our sales capability ultimately and how that continues to grow quarter-on-quarter. As I mentioned, we're on pace to deliver more than $300 million in sales this year off of a base of $700 million. That's a super attractive amount of growth as those customers scale and ramp and realize that $300 million potential. We believe that we'll continue to add to that. And so the durability of that sales model and the way that we simply think of it is we retain basically 99% of our revenue from one year to the next from existing customers. Then if we can sell and realize revenue from our base of 20% with more upside from those customers as they scale and we get more share and they reach that starts value, we believe that we can begin to accelerate growth even as the business scales beyond $1 billion. So we think that there's tremendous upside. We think the Alpha deal gives us incremental capability, a very attractive new segment with a clear market leadership position in that segment to be the fintech of choice for the private markets vertical. And we see that market as growing 9%, 10-plus percent per annum, where we can continue to acquire share at a super attractive rate. We think the growth potential and the durability of that growth is super high.

Okay. Awesome. I think we're up against the clock, Mark. So we'll have to leave it there. But thanks for joining us. Thanks so much for making the trip, and I appreciate all your thoughts, and we'll do again next year.

Really appreciate it. Thanks so much.

Great. And thanks, everyone, for listening in.