Financial Data and Key Metrics Changes - Core FFO per diluted share for Q4 2025 was $0.35, down from $0.37 in Q4 2024, attributed to the sale of two projects and higher net interest expense [26] - AFFO generated in Q4 2025 was approximately $18.7 million [26] - The company completed refinancing activities, issuing $400 million in new bonds and repurchasing $245 million of higher coupon bonds, resulting in annual savings of approximately $0.04 per share [27][28] Business Line Data and Key Metrics Changes - Total leasing volume for 2025 reached 2.5 million sq ft, representing about 16% of the portfolio, the highest in over a decade [8] - In Q4 2025, approximately 679,000 sq ft of leasing was completed, with 70% related to new tenants, leading to a year-end lease percentage of 89.6%, an increase of 120 basis points over 2025 [10] - Rental rates for leases executed in Q4 increased by approximately 12% on a cash basis and 21% on an accrual basis [11] Market Data and Key Metrics Changes - The number of Fortune 100 companies requiring a five-day workweek in the office rose to about 55%, compared to 5% two years ago [6] - Positive absorption was reported in 50 markets in 2025, up from 33 in 2024, marking the highest number since 2019 [6] - Sublet availability has declined, with only 4 million sq ft of new office space delivered in Q4 2025, the lowest since 2012 [7] Company Strategy and Development Direction - The company aims to leverage its portfolio of recently renovated, well-located properties to drive sustainable earnings growth in 2026 and beyond [9] - The focus is on maintaining high occupancy rates and increasing rental rates, with asking rents still significantly below new construction costs [9] - The company plans to stabilize its out-of-service portfolio by the end of 2026, contributing to future FFO growth [12] Management's Comments on Operating Environment and Future Outlook - Management believes the occupancy trough occurred in Q4 2025, with expectations for mid-single-digit organic FFO growth in 2026 and 2027 [12] - The company is optimistic about the demand environment, driven by large users returning to the market and a focus on upgrading office experiences [50] - Management highlighted the unique positioning of their portfolio, which is not heavily reliant on the tech sector, allowing for continued demand from various industries [51] Other Important Information - The company has two land parcels under contract, expected to generate over $30 million in gross proceeds upon closing [24] - The 2026 annual Core FFO guidance is projected to be in the range of $1.47-$1.53 per diluted share, reflecting an increase from 2025 [28] Q&A Session Summary Question: What is the breakdown of renewal versus new leasing in the 1.7 million-2 million sq ft target? - Management indicated it is roughly 50/50 between new activity and renewal activity [34] Question: What is the potential cap on lease percentage given structural vacancies in some markets? - Management believes they can push lease percentages upwards of 91%-92% across the portfolio, despite some challenges in specific markets [40] Question: What type of product is the company targeting for disposition in 2026? - Management noted they are looking to monetize non-core assets, particularly in Houston, and are considering dispositions related to the New York City lease [44] Question: What is driving the robust demand environment across the portfolio? - Management highlighted the trend of users upgrading their office experiences and the strong demand from various industries, not just tech [50]

Financial Data and Key Metrics Changes - Adjusted revenue for full year 2025 was $3.04 billion, down 4.2% from $3.18 billion in 2024 [15] - Adjusted EBITDA for the year was $164 million, compared to $124 million in 2024, with an adjusted EBITDA margin of 5.4%, up 150 basis points year-over-year [15][16] - Adjusted free cash flow was -$130 million for the year, with Q4 adjusted free cash flow being positive at $28 million [19][20] Business Line Data and Key Metrics Changes - Government Segment adjusted revenue was down 6.3% at $922 million, but grew 1.8% in Q4 year-over-year [17] - Transportation Segment adjusted revenue was $609 million for the year, an increase of 3.9%, with adjusted EBITDA margin up 300 basis points versus 2024 [18] - Commercial Segment adjusted revenue was $1.5 billion, down 5.9% compared to 2024, with adjusted EBITDA margin of 10.2%, down 30 basis points year-over-year [16][17] Market Data and Key Metrics Changes - New business Annual Contract Value (ACV) signed in Q4 was $152 million, up 11% versus Q4 2024, with full year 2025 new business ACV at $517 million, up 6% versus 2024 [12] - Government Segment new business ACV was up 50%, and Transportation Segment was up 14% versus 2024 [12] - Commercial Segment new capability ACV increased by 60% this year [13] Company Strategy and Development Direction - The company aims for consistent year-over-year revenue and EBITDA growth, supported by strong free cash flow generation [5][6] - Key priorities include faster decision-making, financial discipline, lowering cost structure, rationalizing the portfolio, and improving conversion rates of the ACV pipeline [9][10][11] - The company is focused on organic revenue growth and will categorize businesses as fix, sell, or grow [10] Management's Comments on Operating Environment and Future Outlook - The CEO emphasized the need for transparency and accountability in executing the turnaround strategy [7][22] - Management is optimistic about the government and transportation segments, while acknowledging challenges in the commercial segment [43] - The CEO highlighted the importance of adapting to technological changes, particularly in AI, to maintain competitive advantage [64] Other Important Information - The company plans to host an Analyst Day in New York City to discuss strategy and execution plans [7] - The qualified ACV pipeline stands at $3.2 billion, up 4% year-over-year, driven by the government segment [14] Q&A Session Summary Question: Metrics for evaluating business units for fix, sell, or grow - The CEO mentioned factors such as growth metrics, predictable EBITDA margins, capital allocation needs, and competitive moats as key considerations [25][26] Question: Philosophy on keeping related business units - The CEO stated the importance of focusing on core competencies and avoiding being everything to everyone, emphasizing the need for discipline in service offerings [31][35] Question: Evidence of revamped go-to-market strategy in commercial segment - Management acknowledged the need for improvement in the commercial segment but noted positive momentum in government and transportation segments [42][43] Question: Exposure to AI disruptors - The CEO estimated that 15%-20% of the business may be exposed to AI disruptors, emphasizing the need for partnerships with technology providers [64] Question: Free cash flow expectations for 2026 - The CEO expressed optimism about turning around free cash flow but did not provide specific guidance [75]

Intercorp Financial Services (NYSE:IFS) Q4 2025 Earnings call February 12, 2026 09:00 AM ET Company ParticipantsAlonso Aramburu - Associate PartnerCarlos Gomes - Managing DirectorCarlos Tori - CEODaniel Mora - Equity Research AssociateDaniela Miranda - Legal ManagerErnesto Gabilondo - DirectorGonzalo Basadre - CEOIvan Peill - Managing DirectorLuis Felipe Castellanos - CEOMichela Casassa - CFOConference Call ParticipantsYuri Fernandes - Equity Research AnalystOperatorThank you for standing by, and welcome to ...

Financial Performance and Key Metrics - The company achieved fourth quarter 2025 operating earnings of $1.19 per share, bringing full year 2025 operating earnings to $5.97 per share, exceeding the top end of the guidance range [9] - Total shareholder return for 2025 was 29%, one of the highest in the industry [9] - The company reaffirmed its 2026 full-year operating earnings guidance range of $6.15-$6.45 per share, with a long-term earnings growth rate of 7%-9% for 2026-2030 [10] Business Line Performance - Retail sales grew 7.5% in 2025 compared to 2024, driven by significant commercial and industrial sales growth of nearly 10%, primarily from data centers in Indiana, Texas, and Ohio [23] - The generation and marketing segment saw meaningful performance, driven by favorable energy margins and benefits from contract optimization [21] Market Data and Key Metrics - The company reported a historic load growth, with total system sales exceeding 200 million MWh for the first time [22] - The company now has 56 GW of firm incremental contracted load additions, doubling the previous figure of 28 GW [11] Company Strategy and Industry Competition - The company is focused on significant infrastructure investment to meet unprecedented customer demand across its 11-state regulated service territory [5] - AEP is deepening engagement with customers, regulators, and suppliers to align long-term goals and achieve favorable outcomes [6] - The company has secured over 10 GW of capacity from major gas turbine manufacturers and entered a long-term partnership with Quanta Services for transmission infrastructure [7] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of scale in mitigating supply chain risks and meeting massive system demand [6] - The company is committed to maintaining a healthy balance sheet, with an FFO to debt target of 14%-15%, currently exceeding this target [31] - Management expressed confidence in the execution of their robust plan, emphasizing the importance of affordability for customers [32] Other Important Information - The company is exploring generation solutions, including small modular reactors (SMRs) and plans to purchase $2.65 billion of fuel cells for a generation facility in Wyoming [12][13] - AEP operates nearly 90% of the 765 kV infrastructure in the U.S., positioning it as a preferred utility partner for large load customers [14] Q&A Session Summary Question: Insights on the impact of doubled signed contract load on CAGR - Management indicated that the $72 billion five-year capital plan does not include the incremental load growth and will provide more definitive ideas on financing and growth rate in future calls [38][40] Question: Confidence in ESAs amid local pushback - Management expressed confidence in the financial commitments backing the ESAs and highlighted the importance of community relations in supporting economic development [42][46] Question: Details on transmission projects and associated investments - Management provided a breakdown of approximately $5 billion associated with transmission projects across various regions, emphasizing their leadership in the 765 kV system [59][61] Question: Conversion rates from LOA to finalized customers - Management noted the quality of counterparties making financial commitments and expressed confidence in the strong backlog supporting future load [104] Question: Expectations for 2026 EPS guidance - Management reaffirmed the 2026 EPS guidance range, emphasizing a cautious approach to forecasting while remaining confident in execution [83][89]

Financial Data and Key Metrics Changes - For the year 2025, adjusted EBITDA grew 11% to over $1.9 billion, with an EBITDA margin expansion of 30 basis points to a record 4.9% [7][25] - Adjusted earnings per share (EPS) reached a record of $3.98, reflecting a 26% growth, which was more than double the adjusted EBITDA growth rate [7][25] - Fourth quarter net sales increased 3.3% to $9.8 billion, driven by total case volume growth of 0.8% and food cost inflation and mix impact of 2.5% [23][24] Business Line Data and Key Metrics Changes - Independent restaurant case volume grew 4.1%, marking the strongest net new independent account growth of the year at approximately 4.7% [10][23] - Healthcare and hospitality segments grew 2.9% and 3.1%, respectively, in the fourth quarter, with the company achieving its 21st consecutive quarter of share gains in healthcare [10][24] - Chain restaurant volume was down 3.4%, primarily due to slower industry traffic and strategic exits [24] Market Data and Key Metrics Changes - Chain restaurant foot traffic was down 2.8% for the fourth quarter, decelerating 230 basis points from the third quarter [9] - Despite challenges, the company remains confident in capturing profitable market share in a highly fragmented industry [9] Company Strategy and Development Direction - The company is focused on executing its long-range plan from 2025 to 2027, emphasizing operational excellence and productivity initiatives [5][8] - The company aims to enhance its technology leadership through new AI capabilities and improve customer service experiences [12][14] - A new 100% variable compensation structure for the sales force is being implemented to drive long-term growth [17][66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2026 financial targets despite weather-related disruptions in early 2026 [32][33] - The company anticipates a lower inflationary environment compared to 2025, projecting adjusted EBITDA growth of 9%-13% and adjusted diluted EPS growth of 18%-24% for 2026 [31] - Management remains optimistic about the underlying momentum of the business and the ability to drive profitable growth [41][75] Other Important Information - The company repurchased approximately $930 million of its shares and completed two tuck-in acquisitions for over $130 million in 2025 [8][29] - The corporate credit rating was upgraded by Moody's to Ba1, reflecting solid operating performance and credit metric improvement [30] Q&A Session Summary Question: Can you provide more color on quarter-to-date volumes and underlying momentum? - Management noted strong momentum in early January, rebounding from weather-related disruptions, and highlighted the strongest organic independent case growth in two years [41][42] Question: What are your expectations regarding inflation and its impact on gross profit per case? - Management indicated that self-help initiatives are the primary drivers of gross profits, and while disinflation had a slight negative impact, strong results were still achieved [46] Question: How do you view the maturation of the sales force and its impact on case growth? - Management expects productivity from the sales force to ramp up significantly in the latter half of 2026, contributing to growth acceleration [50][52] Question: Is the net new business growth driven more by headcount growth or existing salespeople? - Management stated that net new business growth is driven by both existing sales force productivity and consistent hiring over the past three years [61] Question: What is the expected impact of the new compensation structure on case growth? - Management believes the new compensation structure will unlock sales force potential over time, enhancing overall growth [76]

Financial Data and Key Metrics Changes - Adjusted revenue for full year 2025 was $3.04 billion, down 4.2% from $3.18 billion in 2024 [15] - Adjusted EBITDA for the year was $164 million, compared to $124 million in 2024, with an adjusted EBITDA margin of 5.4%, up 150 basis points year-over-year [15][16] - Adjusted free cash flow was -$130 million for the year, with Q4 adjusted free cash flow being positive at $28 million [19][20] Business Line Data and Key Metrics Changes - Government segment adjusted revenue was $922 million, down 6.3% from 2024, but grew 1.8% in Q4 [17][18] - Transportation segment adjusted revenue was $609 million, an increase of 3.9%, with adjusted EBITDA margin at 3%, up 300 basis points from 2024 [18] - Commercial segment adjusted revenue was $1.5 billion, down 5.9% from 2024, with adjusted EBITDA margin at 10.2%, down 30 basis points year-over-year [16][18] Market Data and Key Metrics Changes - New business annual contract value (ACV) for Q4 was $152 million, up 11% from Q4 2024, with full year 2025 new business ACV at $517 million, up 6% from 2024 [12][14] - Government segment new business ACV increased by 50%, while transportation segment was up 14% compared to 2024 [12] - Commercial segment new capability ACV increased by 60% year-over-year [13] Company Strategy and Development Direction - The company aims for consistent year-over-year revenue and EBITDA growth, supported by strong free cash flow generation [5][6] - Key priorities include faster decision-making, financial discipline, lowering cost structure, and rationalizing the portfolio [9][10] - The company is focusing on organic revenue growth and improving conversion rates from the qualified ACV pipeline, which stands at $3.2 billion [10][14] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the current environment as a turnaround story, emphasizing the need for transparency and accountability [7][22] - The company is committed to executing its strategy and improving financial performance, with a focus on sustainable revenue growth and margin expansion [22][23] - Management is optimistic about the government and transportation segments, while acknowledging challenges in the commercial segment [43][44] Other Important Information - The company plans to host an Analyst Day in New York City to discuss strategy and execution plans [7] - Management is reviewing each business unit to categorize them as fix, sell, or grow, with clear accountability for results [10][26] Q&A Session Summary Question: Metrics for evaluating business units - Management will consider growth metrics, EBITDA margins, capital allocation needs, and competitive moats when evaluating business units [26][27] Question: Philosophy on business unit overlap - The company aims to focus on core competencies and avoid being everything to everyone, emphasizing the importance of client relationships [34][35] Question: Evidence of improved commercial performance - Management sees good momentum in public sector businesses but acknowledges the need for improvement in the commercial segment [42][43] Question: AI disruptors and revenue exposure - Approximately 15%-20% of the business may be exposed to AI disruptors, with a focus on partnering with technology providers [64][67] Question: Free cash flow expectations for 2026 - Management is focused on improving free cash flow and expects to provide more precise goals in future guidance [75] Question: Portfolio rationalization status - Portfolio rationalization is a high priority, with efforts to accelerate the process and focus on core business operations [76][77]

Financial Data and Key Metrics Changes - In Q4 2025, adjusted EPS was $2.39, reflecting double-digit year-over-year earnings growth despite external pressures [23][24] - For the full year, revenue was $4.2 billion, adjusted operating income was $550 million, and adjusted EBITDA was $743 million, with adjusted EPS at $9.61, indicating another year of double-digit growth [31][32] Business Line Data and Key Metrics Changes - The EFT segment showed strong performance with revenue growing 8%, adjusted operating income increasing 12%, and adjusted EBITDA growing 13% [24] - The epay segment experienced a revenue decline of approximately 2%, with adjusted operating income down 7% and adjusted EBITDA down 8% due to macroeconomic pressures [25] - Money transfer revenue declined 1% year-over-year, with adjusted operating income down 6% and adjusted EBITDA down 5%, primarily due to macroeconomic conditions and immigration-related dynamics [26][27] Market Data and Key Metrics Changes - The global digital channel for money transfer saw 31% transaction growth and 33% revenue growth in Q4, with a significant increase in new customer acquisitions [20] - The gaming-related branded payments business within epay accounted for 37% of total branded payments margin, benefiting from the growing global video game market, projected to grow at a 13% CAGR through 2031 [15] Company Strategy and Development Direction - The company remains focused on digital growth across all segments, with significant investments in digital strategies and acquisitions to drive future growth [8][19] - The acquisition of CoreCard is expected to enhance the company's capabilities in credit card issuance and processing, aligning with its strategy to expand into high-growth fintech areas [12][13] - The company aims to maintain a disciplined approach to capital allocation, balancing growth investments with shareholder returns through share repurchases [33][34] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about potential improvements in the operating environment, particularly regarding immigration policies and macroeconomic conditions [39][40] - The company anticipates adjusted EPS growth of 10%-15% in 2026, supported by ongoing growth initiatives and an optimized operating model [30][31] Other Important Information - The company returned approximately $388 million in capital to shareholders through share repurchases in 2025, reflecting a commitment to shareholder value [7][33] - The EFT segment's growth is attributed to its diverse product offerings and expansion into new markets, including Morocco, Egypt, and the Philippines [24][25] Q&A Session Summary Question: Are there signs of improvement in macro issues affecting the business? - Management noted some positive trends in January but cautioned against drawing conclusions too early, emphasizing the ongoing challenges posed by immigration policies [39][40] Question: What triggered the review of the money transfer business? - The review was initiated to ensure the organization aligns with the growth of the money transfer segment, which has seen significant success since the acquisition of Ria [44][46] Question: What is the expected contribution of CoreCard in 2026? - While specific numbers were not provided, management indicated that they expect CoreCard to perform well, leveraging its strong platform and customer base [72][75] Question: How does the company view the impact of competitors' partnerships? - Management stated that the impact from competitors, such as Kroger's exclusive relationship, would be marginal, and they remain focused on their diversified business model [81][82]

Financial Data and Key Metrics Changes - For Q4, GAAP revenue was $97.9 million, net income was $27.9 million, and earnings per share (EPS) was $0.39, with a year-over-year increase in GAAP earnings primarily driven by $3.5 million net accretion on investment fundings [11][12] - For the full year, GAAP revenue was $385.6 million, net income was $114.5 million, and EPS was $1.59, reflecting a year-over-year increase driven by $17.2 million net accretion from investment fundings [12][13] - The total portfolio at year-end was valued at $7.1 billion, with an estimated unrealized capital appreciation (UCA) of $9.3 billion, marking a $200 million increase from the previous quarter [9] Business Line Data and Key Metrics Changes - In Q4, the company closed on 10 transactions, including 9 ground leases and 1 leasehold loan, for an aggregate commitment of $167 million, with a focus on affordable housing in Southern California [7] - For the full year, the company closed 17 ground leases for $277 million and 4 leasehold loans for $152 million, totaling $429 million in capital commitments [8][9] - The ground lease portfolio included 164 assets, with 101 multifamily properties, and has grown 21 times by both book value and estimated unrealized capital appreciation since the IPO [11] Market Data and Key Metrics Changes - The portfolio's gross loan-to-value (GLTV) remained flat at 52%, and rent coverage was unchanged at 3.4 times [15] - The company received a credit ratings upgrade from S&P to A-, achieving single-A ratings from all three major rating agencies, which positively impacted the cost of capital [8] Company Strategy and Development Direction - The company aims to increase ground lease volume in 2026 compared to 2025, enhance visibility for Caret's value, and implement share buybacks when market conditions are favorable [5][6] - The management emphasizes the importance of expanding into new states and sponsors, particularly in the affordable housing sector, while also exploring opportunities in other asset classes [4][22] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing headwinds but expressed optimism about progress made in Q4 that could positively impact 2026 [4] - The management believes that recognizing the value of Caret is crucial and plans to focus on strategies that highlight this value to shareholders [25][26] Other Important Information - The company ended the year with approximately $1.2 billion of liquidity, supported by potential capacity in joint ventures [9] - The effective interest rate on permanent debt is 4.3%, with a cash interest rate of 3.9% [17] Q&A Session Summary Question: Will the company consider investing in office assets? - Management indicated a cautious approach to office investments, preferring to focus on other asset classes while remaining open to opportunities [22][23] Question: What is the outlook for office valuations in Q1? - Management noted some strengthening in core markets like New York but acknowledged uncertainty regarding whether the bottom has been reached [24] Question: How does the company plan to recognize Caret's value? - Management emphasized the need to spotlight Caret's value and explore liquidity or monetization options to help shareholders understand its significance [25][26] Question: What is the strategy for buybacks in the coming year? - Management expressed intent to conduct buybacks in a leverage-neutral manner, considering the stock's discounted level [32][34] Question: What are the expectations for unfunded commitments and funding strategies? - Management highlighted that many lower-yielding commitments have rolled off, positioning the company well for future funding with improved margins [39][40] Question: What are the challenges in expanding outside California? - Management acknowledged the regulatory complexities and the need to build relationships in new markets but noted progress in other states [61]

Financial Data and Key Metrics Changes - Total net revenues increased by 21% year over year to $18.8 million, driven by higher services revenues and growth in recurring subscription and support revenues [4][10] - Subscription and support revenues rose approximately 5.1% to $9.1 million, while service revenues increased by 40.9% to $9.6 million [10][11] - Gross profit was $9 million, representing 48% of net revenues, with cost of sales at $9.8 million or 52% of net revenues, reflecting improved margins [11][12] Business Line Data and Key Metrics Changes - Services revenues grew significantly, primarily from new implementations, indicating strong demand for the company's offerings [4][10] - Recurring subscription and support revenues increased by 7.2% to $18 million for the six months ended December 31, 2025 [14] Market Data and Key Metrics Changes - Demand for digital automotive retail solutions remains strong, with new dealer groups and franchised dealerships signing on during the quarter [6][7] - The company secured a $50 million four-year contract extension with a tier one global auto captive, reinforcing customer trust and revenue visibility [6] Company Strategy and Development Direction - The company is focused on product innovation, including the launch of an AI-enabled credit decisioning engine, Check, to modernize credit underwriting [5][9] - There is a commitment to expanding the global footprint and enhancing solutions to meet evolving client needs, with an increased revenue growth guidance for fiscal 2026 to nearly $73 million [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in capitalizing on market opportunities and emphasized the importance of long-term customer relationships supported by a strong pipeline [18] - The company acknowledged macroeconomic and currency dynamics as considerations but highlighted a solid foundation for continued growth [18] Other Important Information - The current ratio of 2.3 reflects strong liquidity, providing flexibility for growth initiatives [4] - The company appointed Sardar Abubakr as CFO, enhancing the leadership team to support the next phase of growth [7] Q&A Session Summary Question: About margin improvement expectations - Management anticipates improving margins in the coming quarters, driven by investments in growth strategies and new hires [22][23] Question: Inquiry about non-controlling interest computation - The company follows standard GAAP definitions for non-controlling interest, with profits from the Pakistani subsidiary allocated accordingly [35][36] Question: Consideration of stock buyback or dividend - Management is open to the idea of allocating cash for stock buybacks or dividends but will decide based on board discussions [39][40]

Financial Data and Key Metrics Changes - In Q4 2025, adjusted EPS was $2.39, reflecting double-digit year-over-year earnings growth despite external pressures [22][23] - Full-year revenue reached $4.2 billion, with adjusted operating income of $550 million and adjusted EBITDA of $743 million, indicating continued double-digit earnings growth [31][32] - Consolidated operating margins expanded by approximately 30 basis points compared to the previous year, with expectations for continued margin improvement into 2026 [31][32] Business Line Data and Key Metrics Changes - The EFT segment showed strong performance with revenue growing 8%, adjusted operating income increasing 12%, and adjusted EBITDA growing 13% in Q4 [23][24] - The Money Transfer segment experienced a 1% decline in revenue year-over-year, with adjusted operating income down 6% and adjusted EBITDA down 5%, primarily due to macroeconomic and immigration-related pressures [24][27] - Epay revenue declined approximately 2%, with adjusted operating income decreasing 7% and adjusted EBITDA declining 8%, reflecting product mix shifts and macroeconomic challenges [24] Market Data and Key Metrics Changes - The global digital channel for Money Transfer saw 31% transaction growth and 33% revenue growth in Q4, with a significant increase in new customer acquisitions [19] - The gaming-related branded payments business within Epay accounted for 37% of total branded payments margin, benefiting from the growing global video game market, projected to grow at a 13% CAGR through 2031 [14][15] - Remittances into Mexico declined approximately 2% in Q4 2025, reflecting broader industry trends influenced by macroeconomic conditions [27] Company Strategy and Development Direction - The company remains focused on executing growth initiatives across all segments, particularly in digital strategies and expanding its global network [4][8] - Recent acquisitions, including Kyodai and CrediaBank's merchant acquiring business, are expected to drive multiyear growth and enhance the company's competitive position [7][11] - The company aims to optimize its operations and enhance digital customer engagement, particularly in the Money Transfer segment, to support future growth [17][29] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the operating environment, acknowledging ongoing macroeconomic challenges but highlighting positive trends in January [38][39] - The company anticipates adjusted EPS growth of 10%-15% in 2026, supported by a strong pipeline of growth initiatives and an optimized operating model [30][36] - Management emphasized the importance of maintaining a diversified business model to mitigate risks associated with specific markets, such as Mexico [82] Other Important Information - The company returned approximately $388 million in capital to shareholders through share repurchases in 2025, reflecting a disciplined capital allocation strategy [31][33] - The EFT business is evolving from a model centered on ATM ownership to one focused on payments infrastructure, enhancing its capabilities in digital transactions [13] Q&A Session Summary Question: Are there signs of improvement in macro issues affecting the business? - Management noted some positive trends in January but cautioned against over-optimism due to ongoing challenges in the operating environment [38][39] Question: What triggered the review of the Money Transfer business? - The review was initiated to ensure the organization aligns with the growth opportunities and customer base, not out of desperation but to optimize operations [42][44] Question: What is the expected contribution of CoreCard in 2026? - Management indicated that CoreCard is expected to perform well, leveraging its strong platform and customer relationships, but specific numbers were not disclosed [71][74] Question: How is the merchant processing business performing? - The merchant acquiring business is experiencing significant growth, with combined EBITDA from both epay and EFT segments reaching approximately $90 million [51] Question: What are the expectations for free cash flow in 2026? - Free cash flow is expected to improve in line with earnings growth, with a strong focus on supporting digital initiatives across all segments [55][56]