CompoSecure Inc (CMPO) 2024 Q2 法說會逐字稿

Good day, and thank you for standing by. Welcome to the CompoSecure Q2 2024 earnings call. (Operator Instructions) Please be advised that today's conference is being recorded.

美好的一天，感謝您的支持。歡迎參加 CompoSecure 2024 年第二季財報電話會議。（操作員指示）請注意，今天的會議正在錄製中。

I would now like to hand the conference over to your first speaker today, Sean Mansouri, Investor Relations. Please go ahead.

現在我想將會議交給今天的第一位發言人，投資者關係部門的 Sean Mansouri。請繼續。

Thank you. Good afternoon, everyone. And thank you for joining us to review CompoSecure's second quarter 2024 financial results. With me on the call is Jon Wilk, CompoSecure's Chief Executive Officer; and Tim Fitzsimmons, Chief Financial Officer. They will begin with prepared remarks and then we will open the call for Q&A.

謝謝。大家下午好。感謝您與我們一起回顧 CompoSecure 2024 年第二季的財務表現。與我一起參加電話會議的是 CompoSecure 執行長 Jon Wilk；提姆‧菲茨西蒙斯（Tim Fitzsimmons），財務長。他們將從準備好的演講開始，然後我們將開始問答環節。

During the call, we will make statements related to our business that may be considered forward-looking, including statements concerning our plans to execute on our growth strategy and our ability to maintain existing and acquire new customers, as well as other statements regarding our plans and prospects.

在電話會議期間，我們將做出與我們的業務相關的可能被視為前瞻性的聲明，包括有關我們執行成長策略的計劃以及我們維持現有和獲取新客戶的能力的聲明，以及有關我們計劃的其他聲明和前景。

Forward-looking statements may often be identified with words, such as we expect, we anticipate or upcoming. These statements reflect our views only as of today and should not be considered our views as of any subsequent date. We undertake no obligation to update or revise these forward-looking statements.

前瞻性陳述通常可以用「我們期望」、「我們預期」或「即將到來」等字眼來識別。這些陳述僅反映我們今天的觀點，不應被視為我們在任何後續日期的觀點。我們不承擔更新或修改這些前瞻性陳述的義務。

Forward-looking statements are not promises or guarantees of future performance and are subject to a variety of risks and uncertainties that could cause actual results to differ materially from our expectations. For a discussion of material risks and other important factors that could affect our actual results, please refer to the information in our annual report on Form 10-K and other reports filed with the SEC, which are available on the Investor Relations section of our website and on the SEC’s website at sec.gov.

前瞻性陳述並非對未來績效的承諾或保證，並受到各種風險和不確定性的影響，可能導致實際結果與我們的預期有重大差異。有關可能影響我們實際業績的重大風險和其他重要因素的討論，請參閱我們的 10-K 表年度報告以及向 SEC 提交的其他報告中的信息，這些信息可在我們網站的投資者關係部分找到以及SEC 網站sec.gov。

Please note that the discussion on today's call may include certain non-GAAP financial measures, including adjusted EBITDA, adjusted net income, adjusted EPS and free cash flow. The company believes these non-GAAP financial measures provide useful information to management and investors regarding certain financial and business trends impacting the company's financial condition and results of operations.

請注意，今天電話會議的討論可能包括某些非公認會計原則財務指標，包括調整後的 EBITDA、調整後的淨利潤、調整後的每股收益和自由現金流。該公司相信，這些非公認會計準則財務指標為管理層和投資者提供了有關影響公司財務狀況和經營業績的某些財務和業務趨勢的有用資訊。

These non-GAAP financial measures should not be considered as an alternative to net income or any other performance measures derived in accordance with US GAAP, and may be different from similarly titled non-GAAP measures used by other companies. A reconciliation of GAAP to non-GAAP measures is available in our press release and earnings presentation, available on the Investor Relations section of our website. Thank you.

這些非公認會計原則財務指標不應被視為淨利潤或根據美國公認會計原則得出的任何其他績效指標的替代品，並且可能與其他公司使用的類似標題的非公認會計原則指標不同。我們的新聞稿和收益報告中提供了 GAAP 與非 GAAP 衡量標準的調整表，可在我們網站的投資者關係部分查看。謝謝。

And with all that, let me turn the call over to Jon to discuss our second quarter results.

儘管如此，讓我把電話轉給喬恩，討論我們第二季的業績。

Thank you, Sean. Good afternoon, everyone. And thank you for joining us for our second quarter conference call. We've got a lot of exciting news to share with you today, but I want to start and begin by discussing the strategic transaction that we announced in a separate press release issued after market closed today and covered on slides 3 and 4 in our earnings presentation.

謝謝你，肖恩。大家下午好。感謝您參加我們的第二季電話會議。今天我們有很多令人興奮的消息要與大家分享，但我想先討論我們在今天收盤後發布的另一份新聞稿中宣布的戰略交易，並在我們的收益幻燈片3 和4 中進行了介紹推介會。

Dave Cote, former CEO of Honeywell and current Executive Chairman of Vertiv, will become Executive Chairman of CompoSecure following the acquisition of a majority interest in the company by the David Cote family. In the transaction, all outstanding Class B shares will be converted to Class A shares, and David Cote family through Resolute Partners will purchase 49.3 million out of the 51.9 million shares at $7.55 per share, resulting in an investment of $372 million upon closing of the transaction.

霍尼韋爾前執行長、Vertiv 現任執行董事長 Dave Cote 在 David Cote 家族收購 CompoSecure 公司多數股權後將成為該公司的執行董事長。在此次交易中，所有已發行的B 類股票將轉換為A 類股票，David Cote 家族將透過Resolute Partners 以每股7.55 美元的價格購買5,190 萬股股票中的4,930 萬股，從而在交易結束時投資3.72 億美元。

This deal unlocks shareholder value by removing our dual class shares, eliminating tax distributions to our Class B holders, simplifying our reporting and removing market overhang and uncertainty related to the future sale of Class B shares. Importantly, we anticipate a positive impact of more than $20 million in incremental free cash flow on an annual basis, providing CompoSecure with additional cash to invest in the business, to drive growth and reward shareholders.

這項交易透過取消我們的雙重類別股票、消除對 B 類股東的稅收分配、簡化我們的報告並消除與未來出售 B 類股票相關的市場懸而未決和不確定性來釋放股東價值。重要的是，我們預計每年增量自由現金流將產生超過 2,000 萬美元的正面影響，為 CompoSecure 提供額外的現金來投資業務、推動成長並回報股東。

I've included a slide where you can see more about Dave Cote and his background. As you can see on the right side of this slide, Dave has an incredible track record of delivering returns for shareholders in his capacity as CEO of Honeywell for 15 years and as his current Executive Chairman at Vertiv. His experience during global organizations will be invaluable to CompoSecure as we enter a new phase of growth and continue to focus on creating value for our shareholders, customers and employees.

我添加了一張幻燈片，您可以在其中了解有關 Dave Cote 及其背景的更多資訊。正如您在這張幻燈片右側所看到的，Dave 在擔任霍尼韋爾首席執行官15 年來以及擔任維諦技術(Vertiv) 現任執行董事長期間，在為股東帶來回報方面擁有令人難以置信的記錄。隨著我們進入新的成長階段並繼續專注於為股東、客戶和員工創造價值，他在全球組織中的經驗對 CompoSecure 來說將非常寶貴。

Separately, we are also pleased to announce that we have amended and extended our credit facility with favorable terms, which was due to expire at the end of 2025. Tim will walk you through the details a little bit later in the call on that.

另外，我們也很高興地宣布，我們已修改並延長了原定於 2025 年底到期的信貸安排，並提供優惠條款。蒂姆稍後將在電話會議中向您介紹詳細資訊。

Now let me summarize our quarterly performance. We're pleased to report that net sales increased by 10% to a record $108.6 million and reflected the highest revenue in the history of our company. In addition, our adjusted EBITDA increased by 8% to $40 million. These results were driven by continued growth in our domestic business and strong international demand.

現在讓我總結一下我們的季度業績。我們很高興地報告，淨銷售額成長了 10%，達到創紀錄的 1.086 億美元，反映了我們公司歷史上最高的收入。此外，我們調整後的 EBITDA 成長了 8%，達到 4,000 萬美元。這些業績得益於我們國內業務的持續成長和強勁的國際需求。

We expanded our partnership with Fiserv to include the marketing and reselling of Arculus Authenticate. This enhances our ability to bring FIDO2 secure authentication to Fiserv's extensive customer base of financial institutions and fintechs. Overall, given our strong progress this year, we have narrowed our fiscal year 2024 full year guidance to the higher end of our previous range.

我們擴大了與 Fiserv 的合作夥伴關係，包括 Arculus Authenticate 的行銷和轉售。這增強了我們為 Fiserv 廣泛的金融機構和金融科技客戶群提供 FIDO2 安全身份驗證的能力。總體而言，鑑於我們今年取得的強勁進展，我們已將 2024 財年全年指引縮小至之前範圍的較高端。

We now anticipate net sales between $418 million and $428 million versus previous guidance of $408 million to $428 million and adjusted EBITDA between $150 million and $157 million versus $147 million and $157 million in our prior guidance.

我們現在預計淨銷售額將在4.18 億美元至4.28 億美元之間，而先前的指引為4.08 億美元至4.28 億美元，調整後的EBITDA 將在1.5 億美元至1.57 億美元之間，而之前的指導為1.47 億美元至1.57 億美元。

Turning to slide 6. I wanted to cover some of the new, exciting programs our customers launched. We continue to support our customers ability to offer highly attractive premium card programs, such as the limited edition American Express White Gold Card and the first Wells Fargo and Expedia co-branded metal card. In addition, you could see that Turkish Airlines and Atlas, a fintech also recently announced or launched new metal card programs.

轉到投影片 6。我想介紹我們的客戶推出的一些令人興奮的新計劃。我們將繼續支持客戶提供極具吸引力的優質卡片計劃，例如限量版美國運通白金卡以及首張富國銀行和 Expedia 聯名金屬卡。此外，土耳其航空和金融科技公司Atlas最近也宣布或推出了新的金屬卡計畫。

Moving on to slide 7, for some insight on the card market. Card issuers maintained steady purchase volumes and drove strong customer acquisitions in the second quarter. This continues the trends we have seen throughout the year and has reaffirmed our belief in a strong and growing market for premium and metal payment cards.

繼續看投影片 7，了解卡片市場的一些見解。發卡機構在第二季度保持穩定的購買量並推動了強勁的客戶獲取。這延續了我們全年看到的趨勢，並重申了我們對優質和金屬支付卡市場強勁且不斷增長的信念。

In addition, on slide 8, you can see several of our customer and partner quotes from the second quarter. These call-outs underscore our commitment to marketing and innovations that will attract and retain premium card customers.

此外，在投影片 8 上，您可以看到第二季我們的一些客戶和合作夥伴的報價。這些宣傳強調了我們對行銷和創新的承諾，這將吸引並留住優質卡客戶。

Turning to Arculus on slide 9. We have maintained good momentum and remained on track for our total net investment in 2024 to be lower than 2023 with the expectation of turning positive for fiscal 2025. For the quarter, Arculus net investment was $2.3 million compared to $4.2 million last year in the same quarter. And year-to-date, the net investment in Arculus was $4 million as of June 2024 versus 8.7 last year.

轉向幻燈片 9 上的 Arculus。我們保持了良好的勢頭，並預計在 2024 年淨投資總額低於 2023 年，並預計在 2025 財年實現轉正。該季度 Arculus 淨投資為 230 萬美元，而去年同期為 420 萬美元。今年迄今，截至 2024 年 6 月，Arculus 的淨投資為 400 萬美元，而去年為 8.7 美元。

As I mentioned earlier, we recently signed a marketing agreement with Fiserv to expand our relationship and allow Fiserv to begin marketing and reselling Arculus Authenticate. This builds on our already successful collaboration and solidifies our joint commitment to add functionality to payment cards that improves the customer experience.

正如我之前提到的，我們最近與 Fiserv 簽署了一項行銷協議，以擴大我們的關係，並允許 Fiserv 開始行銷和轉售 Arculus Authenticate。這建立在我們已經成功的合作基礎上，並鞏固了我們為支付卡添加功能以改善客戶體驗的共同承諾。

In addition, we recently previewed an exciting Arculus capability that leverages our secure hardware wallet to enable payment at point-of-sale terminals using digital assets. This capability is still in the early phases but has promising applicability for Web3 payments.

此外，我們最近預覽了一項令人興奮的 Arculus 功能，該功能利用我們的安全硬體錢包來支援使用數位資產在銷售點終端進行支付。該功能仍處於早期階段，但對於 Web3 支付具有廣闊的應用前景。

With that, I'll now hand it over to Tim to review our financials in more detail.

現在，我將把它交給提姆，讓他更詳細地審查我們的財務狀況。

Thank you, Jon, and good afternoon, everyone. I'll provide a more detailed overview of our Q2 2024 financial performance and then turn it back to Jon before we open the call for questions. Unless stated otherwise, all comparisons and variance commentary are on a year-over-year basis.

謝謝喬恩，大家下午好。我將更詳細地概述我們 2024 年第二季的財務業績，然後在我們開始提問之前將其退還給喬恩。除非另有說明，所有比較和差異評論均以同比為基礎。

In Q2, net sales increased by 10% to a record level of $108.6 million compared to $98.5 million. As Jon mentioned, the increase was driven by continued growth in our domestic business and strong international demand. Gross margin for the quarter was 52% compared to 55% in the prior year. This decline was mainly due to product mix related to the timing and demand for some of our new card constructions, as well as inflationary pressures on wages.

第二季淨銷售額成長 10%，達到創紀錄的 1.086 億美元，而去年同期為 9,850 萬美元。正如喬恩所提到的，這一增長是由我們國內業務的持續增長和強勁的國際需求所推動的。本季毛利率為 52%，去年同期毛利率為 55%。這一下降主要是由於與我們一些新卡建設的時間和需求相關的產品組合，以及工資的通膨壓力。

Net income for the quarter increased by 3% to $33.6 million compared to $32.7 million. Adjusted EBITDA in Q2 increased by 8% to $40 million compared to $36.9 million in the prior year, with an adjusted EBITDA margin of 36.8% compared to 37.4% in the second quarter of 2023, again, driven by the factors I just mentioned. We always like to provide you with the year-to-date results in addition to the quarter.

該季度淨利潤成長 3%，從 3,270 萬美元增至 3,360 萬美元。第二季調整後EBITDA 成長8%，達到4,000 萬美元，而上一年為3,690 萬美元，調整後EBITDA 利潤率為36.8%，而2023 年第二季為37.4%，這同樣是受到我剛才提到的因素的推動。除了季度業績外，我們始終希望為您提供年初至今的業績。

On slide 12, you could see our year-to-date financial results, which reflect our continued growth on the top and bottom lines and puts us on track for the updated guidance that Jon provided.

在投影片 12 上，您可以看到我們今年迄今的財務業績，這反映了我們在營收和利潤上的持續成長，並使我們有望獲得喬恩提供的最新指導。

Now turning to slide 13, and looking closer at the split between our domestic and international business. You could see that our second quarter domestic net sales remained strong at $85.2 million, up 9% year-over-year. Our international business also improved, increasing 14% to $23.4 million compared to the year ago period. This is due to strong international demand that included accelerated demand for our innovative products, such as the Echo Mirror card.

現在轉到投影片 13，仔細看看我們的國內和國際業務之間的劃分。您可以看到，我們第二季的國內淨銷售額仍然強勁，達到 8,520 萬美元，年增 9%。我們的國際業務也有所改善，與去年同期相比成長了 14%，達到 2,340 萬美元。這是由於強勁的國際需求，包括對我們的創新產品（例如 Echo Mirror 卡）的需求加速。

Turning to the balance sheet. As of June 30, 2024, we had cash and cash equivalents of $35.4 million and total debt of $330.9 million. This includes $200.9 million of term loan and $130 million of exchangeable notes. As of December 31, 2023, we had cash and cash equivalents of $41.2 million and total debt of $340.3 million.

轉向資產負債表。截至 2024 年 6 月 30 日，我們的現金及現金等價物為 3,540 萬美元，債務總額為 3.309 億美元。其中包括 2.009 億美元的定期貸款和 1.30 億美元的可交換票據。截至 2023 年 12 月 31 日，我們的現金和現金等價物為 4,120 萬美元，債務總額為 3.403 億美元。

The decrease in our cash balance compared to year end 2023 was primarily driven by the special cash dividend/distribution of $0.30 per share or approximately $24.5 million paid on June 11, 2024. It also included the tax distributions to members of $26.2 million, payments of debt of $9.4 million, as well as other CapEx and financing activities totaling $11.8 million.

與 2023 年底相比，我們的現金餘額減少，主要是由於 2024 年 6 月 11 日支付的每股 0.30 美元的特別現金股息/分配，約 2450 萬美元。它還包括向會員分配的 2,620 萬美元的稅收、940 萬美元的債務支付以及總計 1,180 萬美元的其他資本支出和融資活動。

These were partially offset by positive cash flows from operations of $66 million. We provide both our overall debt leverage ratio and our bank agreement secured debt leverage ratio as our bank agreement is calculated with slight differences. On June 30, 2024, our overall leverage ratio was 2.2 times based on a total debt of $330.9 million and trailing 12 month adjusted EBITDA of $150.4 million.

這些部分被 6,600 萬美元的營運正現金流所抵銷。我們同時提供整體債務槓桿率和銀行協議來擔保債務槓桿率，因為我們的銀行協議的計算方式略有差異。截至 2024 年 6 月 30 日，我們的整體槓桿率為 2.2 倍，總債務為 3.309 億美元，過去 12 個月調整後 EBITDA 為 1.504 億美元。

This compares to 2.35 times at December 31, 2023 with the improvement driven by paying down debt and increased trailing 12 month adjusted EBITDA. At June 30, 2024, we had a bank agreement secured debt leverage ratio of 1.29 times based on a total secured debt of $200.9 million and trailing 12 month bank adjusted EBITDA of $153 million. This compares to 1.39 times at December 31, 2023.

相較之下，截至 2023 年 12 月 31 日，這一數字為 2.35 倍，原因是償還債務和過去 12 個月調整後 EBITDA 的增加。截至 2024 年 6 月 30 日，我們的銀行協議擔保債務槓桿率為 1.29 倍，擔保債務總額為 2.009 億美元，過去 12 個月銀行調整後 EBITDA 為 1.53 億美元。相比之下，2023 年 12 月 31 日的數字為 1.39 倍。

As Jon mentioned earlier, we recently amended our credit facility led by JP Morgan Chase with Bank of America and TD Bank, which now includes lower rates, an upsized revolving line of credit, a longer term and more flexible covenants. Importantly, a majority of our lenders in the previous debt agreement participated in the amendment, reflecting the confidence of our lenders that they have in our business. The amended facility also provides us with the capacity to continue driving growth and innovation along with the ability to retire our exchangeable notes maturing December 2026.

正如喬恩之前提到的，我們最近修改了由摩根大通牽頭、美國銀行和道明銀行牽頭的信貸安排，其中包括更低的利率、擴大的循環信貸額度、更長的期限和更靈活的契約。重要的是，我們先前債務協議中的大多數貸款人都參與了修訂，反映了我們的貸款人對我們業務的信心。修改後的設施也為我們提供了繼續推動成長和創新的能力，以及註銷 2026 年 12 月到期的可交換票據的能力。

Turning to our cash flow statement on slide 15. You can see that net cash provided by operating activities increased 24.6% to $66 million compared to $53 million in the comparative period. The increase is primarily driven by an increase in net income of $7.2 million and favorable changes in working capital accounts of $8.1 million.

轉向投影片 15 上的現金流量表。您可以看到，經營活動提供的淨現金成長了 24.6%，達到 6,600 萬美元，而同期為 5,300 萬美元。這一增長主要是由於淨利潤增加了 720 萬美元，以及營運資金帳戶發生了 810 萬美元的有利變化。

Turning to EPS. GAAP EPS for the three months ended June 30, 2024, was $0.44 per basic share and $0.32 per diluted share compared to $0.31 per basic share and $0.29 per diluted share for the three months ended June 30, 2023.

轉向每股收益。截至2024年6月30日止三個月的公認會計原則每股基本股每股收益為0.44美元，稀釋每股收益為0.32美元，而截至2023年6月30日止三個月的每股基本股每股收益為0.31美元，稀釋每股收益為0.29美元。

On slide 16, you can read through the footnotes on the slide that take you through the complexities of the allocation of net income due to the Up-C structure and the shares that are included in the basic and diluted calculations.

在投影片 16 上，您可以通讀投影片上的腳註，這些腳註將帶您了解由於 Up-C 結構以及基本和稀釋計算中包含的份額而導致的淨利潤分配的複雜性。

On slide 17, we're also providing non-GAAP adjusted net income and adjusted EPS, which excludes the impact of non-cash fair value adjustments to the warrants, the earn-out revaluation and stock compensation. We believe that this provides a clearer picture of the economics of the company's operating results. Non-GAAP adjusted net income for the three months ended June 30, 2024, increased by 10% to $25.2 million compared to $22.9 million with adjusted EPS of $0.31 per basic share and $0.27 per diluted share compared to $0.29 per basic share and $0.25 per diluted share during the three months ended June 30, 2023.

在投影片 17 上，我們也提供了非 GAAP 調整後淨利和調整後每股盈餘，其中不包括對認股權證的非現金公允價值調整、盈餘重估和股票補償的影響。我們相信，這可以更清楚地了解公司經營績效的經濟性。截至2024 年6 月30 日止三個月的非公認會計原則調整後淨利潤增長10%，達到2520 萬美元，較之前的2290 萬美元增長，調整後每股基本股0.31 美元，稀釋後每股0.27 美元，而每股基本股0.29 美元，稀釋後每股0.25 美元截至 2023 年 6 月 30 日止三個月的股票。

On slide 18, you will find out year-to-date GAAP EPS and on slide 19, our year-to-date adjusted EPS.

在幻燈片 18 上，您將看到年初至今的 GAAP 每股收益，在幻燈片 19 上，您將看到我們年初至今的調整後每股收益。

I'll now turn it back to Jon to discuss our guidance and give closing remarks.

現在我將把它轉回喬恩來討論我們的指導並發表結束語。

Thanks, Tim. As I mentioned earlier, we've tightened our fiscal 2024 full year guidance. We now anticipate net sales between $418 million and $428 million and adjusted EBITDA between $150 million and $157 million.

謝謝，蒂姆。正如我之前提到的，我們收緊了 2024 財年全年指引。我們現在預計淨銷售額將在 4.18 億美元至 4.28 億美元之間，調整後的 EBITDA 將在 1.5 億美元至 1.57 億美元之間。

In closing, I'd like to summarize the call today. We generated a record quarter of results on both the top end and bottom line and the momentum in our business is strong. Our amended credit facility supports our continued growth and enables us to retire our exchangeable notes maturing in December 2026. We expanded our partnership with Fiserv to include the marketing and reselling of Arculus Authenticate and we remain on track for our total net investments for Arculus to be lower than 2023 with the expectation of turning positive in 2025.

最後，我想總結一下今天的電話會議。我們在高端和獲利方面都創造了創紀錄的季度業績，我們的業務勢頭強勁。我們修改後的信貸安排支持我們的持續成長，並使我們能夠收回將於 2026 年 12 月到期的可交換票據。我們擴大了與 Fiserv 的合作夥伴關係，將 Arculus Authenticate 的營銷和轉售納入其中，我們對 Arculus Authenticate 的總淨投資仍有望低於 2023 年，並預計在 2025 年實現正值。

And finally, we are very excited about the benefits related to the strategic transaction with the Dave Cote family through Resolute Holdings with our Class B stockholders. This transaction provides compelling benefits for CompoSecure and our shareholders. And Dave's career and track record is unparalleled and I'm excited to leverage his deep expertise steering global public companies.

最後，我們對透過 Resolute Holdings 與我們的 B 類股東與 Dave Cote 家族進行策略交易相關的好處感到非常興奮。這項交易為 CompoSecure 和我們的股東帶來了引人注目的好處。戴夫的職業生涯和業績記錄是無與倫比的，我很高興能夠利用他深厚的專業知識來指導全球上市公司。

With that, I'd like to open up the call for Q&A.

至此，我想開始問答環節。

(Operator Instructions)

（操作員說明）

Brian Vieten, Needham.

布萊恩·維滕，李約瑟。

Great. Thanks, guys. And congrats on a great deal here. Just a quick one on the Robinhood side. What's the sales sensitivity around that Robinhood card? It sounds like there's been a lot of signups from the wait list. What's the embedded assumption, I guess, for this piece within the guidance, is that a possible source of upside? Just wanted to better understand there. And it's obviously topical with Robinhood also presenting right now.

偉大的。謝謝，夥計們。在這裡恭喜你取得了很多成就。只是羅賓漢方面的一個快速的。羅賓漢卡的銷售敏感度如何？聽起來等待名單上已經有很多人報名了。我想，對於指南中的這一部分，嵌入的假設是什麼，這是可能的上漲來源嗎？只是想更了解那裡。羅賓漢現在也出席了會議，這顯然是一個熱門話題。

We are very excited about the partnership with Robinhood. If you remember, there are two parts of it. We've got our core sort of metal veneer gold card and then the unique, very limited edition solid gold cards that we're doing. And as you mentioned, the excitement around that from their customers we think is really high. So we are excited about building and growing that relationship. And yes, we think it can turn into a nice growth opportunity for us. I'm not going to comment on specific volumes with the program. But suffice to say, we are very excited about the program.

我們對與 Robinhood 的合作感到非常興奮。如果你還記得的話，它有兩個部分。我們已經有了核心的金屬貼面金卡，然後是我們正在製作的獨特的、非常限量版的純金卡。正如您所提到的，我們認為他們的客戶對此感到非常興奮。因此，我們對建立和發展這種關係感到興奮。是的，我們認為這對我們來說可以成為一個很好的成長機會。我不會對該程式的具體卷發表評論。但可以說，我們對該計劃感到非常興奮。

Cassie Chan, Bank of America.

卡西·陳，美國銀行。

I just wanted to ask, I mean, it seems like you guys raised the full year guide by a bit more than the 2Q beat at least relative to our estimates. Just wanted to know what's driving that underlying shift, is it a change around expectations for domestic versus international growth, number of cards issued or maybe growth from top two clients or the posture of the macro? Just wanted to know relative to three months ago, has there been any underlying shift that you've seen in demand that's driving the full year outlook rate?

我只是想問，我的意思是，看起來你們將全年指南提高了一點，至少相對於我們的估計而言，比第二季度的節拍要高一些。只是想知道是什麼推動了這種根本性的轉變，是對國內成長與國際成長的預期、發卡數量的變化，還是兩大客戶的成長或宏觀情勢的變化？只是想知道相對於三個月前，您是否發現需求發生了任何潛在的變化，從而推動了全年展望率？

As we look at full year, yes, we had a strong quarter, both domestically and internationally. So we talked about expecting to see that bounce back in international after a slower first quarter. And what we saw there, I think, was some excitement about some new programs launching internationally that drove some nice volume in the quarter, we think steadies out as we move through the year.

當我們回顧全年時，是的，我們在國內和國際上都有一個強勁的季度。因此，我們談到，在第一季放緩之後，預計國際市場會出現反彈。我認為，我們在那裡看到的是一些在國際上推出的新項目令人興奮，這些項目在本季度推動了一些不錯的銷量，我們認為隨著這一年的推移，銷量會趨於穩定。

So as we started the year, if you remember, Q1 international was about 11% of business. This quarter was about 22% of our business. We've said historically that, that comes in around 20%. With the slow start that we had, we said it would get back on track. We think that does on a full year basis. It still probably comes in on the -- slightly under where it would be typically. So net-net, our answer is strong domestic growth with returning international business sort of getting us back to a nice pace there.

因此，在今年伊始，如果您還記得的話，第一季國際業務約佔業務的 11%。本季約占我們業務的 22%。我們過去曾說過，這一比例約為 20%。由於起步緩慢，我們說它會回到正軌。我們認為全年情況都是如此。它可能仍然略低於通常的水平。因此，我們的答案是強勁的國內成長，國際業務的回歸讓我們回到了良好的步伐。

And if I could just ask a follow-up. I know you guys mentioned removing the dual class shares and an incremental $20 million in annual free cash flow, which was nice to hear. I guess, do you guys have a longer term free cash flow conversion or target out there? And how are you guys prioritizing capital return?

如果我可以問後續情況。我知道你們提到取消雙重股權和增加 2000 萬美元的年度自由現金流，很高興聽到這一點。我想，你們有長期的自由現金流轉換或目標嗎？你們如何優先考慮資本回報？

So we gave you the free cash flow conversion calculation at the end of the year last year, I think, it was about 13% on a full year basis. This unlocks quite a nice sized chunk of additional free cash flow. So obviously, it depends on where the stock price comes out as we compare it to the value of our equity. But we expect to see really nice pop in that metric for us in terms of the free cash flow that comes from the elimination of the dual share class structure and importantly, gives us more to invest back in the business. So I think we're excited about it for the business. We're excited about it for shareholders. We have not set a long term guide for where that should come out.

所以我們為大家提供了去年年底的自由現金流換算計算，我認為全年約 13%。這釋放了相當大的額外自由現金流。顯然，這取決於我們將股票價格與我們的股權價值進行比較時的結果。但我們預計，就消除雙重股權結構帶來的自由現金流而言，該指標會出現非常好的成長，重要的是，這會讓我們有更多的資金重新投資於業務。所以我認為我們對此業務感到興奮。我們對股東感到興奮。我們還沒有製定長期指導方針。

Jacob Stephan, Lake Street Capital Markets.

雅各史蒂芬，湖街資本市場。

Maybe, if I could just touch on the Fiserv Arculus partnership. Certainly, seems like a nice announcement, but maybe if you could kind of give us some color there. What do you think this distribution kind of reseller partnership does for the card?

也許吧，如果我能談談 Fiserv Arculus 的合作夥伴關係的話。當然，這似乎是一個不錯的公告，但也許您可以給我們一些啟發。您認為這種分銷類型的經銷商合作夥伴關係對該卡有什麼作用？

Number one, I think it helps validate the thesis here around the capability of a card can do more than it does today by turning a credit or debit card into an authentication token. We've been talking about that. And we're starting to see those conversations with banks and feeling the momentum there a bit. So being able to open up a distribution channel like Fiserv, we think is a terrific opportunity. They are an amazing company and amazing partner, and the roster of clients, the number of clients they have, is extraordinary. So we look forward to building this out but wanted to share that announcement.

第一，我認為透過將信用卡或金融卡轉變為身份驗證令牌，這有助於驗證有關卡片的能力的論文可以比現在做得更多。我們一直在談論這個。我們開始看到與銀行的對話，並感受到了一些勢頭。因此，我們認為能夠開闢像 Fiserv 這樣的分銷管道是一個絕佳的機會。他們是一家了不起的公司和出色的合作夥伴，他們的客戶名冊和客戶數量都是非凡的。因此，我們期待著實現這一點，但想分享這項公告。

And maybe if you could help us understand the kind of seasonal new card program launches. It seems like for this quarter, obviously, we had Robinhood last quarter, but maybe help us understand. Do you kind of expect more kind of in the second half of the year here, or is the first half typically the seasonally strong point for new card launches?

也許您可以幫助我們了解季節性新卡計畫的推出類型。顯然，在本季度，我們上個季度有 Robinhood，但也許可以幫助我們理解。您是否對下半年有更多期待，或者上半年通常是新卡推出的季節性強勢點？

So please don't take the four as, these are the only ones we had in the quarter. We're giving you just a select set of examples of some new programs that we think are exciting. There are a good number of more than that in any given quarter. But you asked about seasonality and we've said we don't typically see something that -- fourth quarter Q1 are always up down, it doesn't follow that type of seasonality.

因此，請不要將這四個視為我們本季僅有的四個。我們僅向您提供一些我們認為令人興奮的新計劃的精選範例。數量比任何特定季度都要多得多。但你問到季節性，我們說過我們通常不會看到第四季第一季總是上下波動，它不遵循這種類型的季節性。

What we do see internationally, and we've talked about this, is we've got a smaller number of customers, smaller volume. And there's more lumpiness at times where you'll see customers launching programs in a specific quarter where you may see more volume where they have a need to deliver cards. We saw a little bit of that in Q2 with some popular programs that we were running in Europe. But net-net, we don't see it sort of based on time of year, it has to do more with time of launch for our customers.

我們在國際上看到的，我們已經討論過的，是我們的客戶數量較少，銷量較小。有時，您會看到客戶在特定季度推出計劃，您可能會看到他們需要交付卡片的數量更多，從而出現更多的混亂。我們在第二季在歐洲運行的一些受歡迎的項目中看到了一些這樣的情況。但是網絡，我們不認為它是基於一年中的時間，它必須根據為我們的客戶推出的時間做更多的事情。

(Operator Instructions)

（操作員說明）

Reggie Smith, JP Morgan.

雷吉史密斯，摩根大通。

It's Charlie on for Reggie. I realize it's early days on M&A, and I doubt the strategy is fully backed yet. But how are you thinking about M&A, I guess, on the consolidation side where you acquire a different card manufacturer versus product extension where you acquire a company offering different products that might also fit your bank partners?

查理替補雷吉。我意識到併購還處於早期階段，我懷疑該策略是否得到了充分支持。但我想，在整合方面，您如何考慮併購，即您收購不同的卡製造商，而不是產品擴展，即您收購一家提供可能也適合您的銀行合作夥伴的不同產品的公司？

We've had an M&A framework in place where we've looked at potential deals that I think cut across the different types of opportunity, you describe vertical, horizontal, opportunities. Today, we haven't seen anything that we fell in love with. For us, it's early days with this deal just signed, it's too soon to get into details, I think, about what our forward strategy will look like. Really look forward to partnering with Dave Cote and his partner Tom Knott with their experience in this space and look forward to sharing more down the line on this.

我們已經制定了一個併購框架，我們在其中研究了潛在的交易，我認為這些交易跨越了不同類型的機會，您描述了垂直的、水平的機會。今天，我們還沒有看到任何我們愛上的東西。對我們來說，剛剛簽署的協議還為時過早，我認為現在討論我們的未來策略的細節還為時過早。非常期待與戴夫·科特 (Dave Cote) 和他的搭檔湯姆·諾特 (Tom Knott) 合作，分享他們在這個領域的經驗，並期待在這方面分享更多資訊。

Thank you. I'm showing no further questions at this time. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

謝謝。我目前沒有提出任何進一步的問題。感謝您參加今天的會議。這確實結束了該程式。您現在可以斷開連線。