All right. Thank you everyone for joining us. We're at 1:45 P.M. We're going to get started. My name is Michael Infante. I cover fintech here at Morgan Stanley. I'm very pleased to be joined by Corpay's CFO, Peter Walker. Before we get started, I do just have a quick disclosure to read. For important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. With that out of the way, thanks for joining us, Peter.
Yeah, great to be here.
Before we sort of get into some of the nitty-gritty, the business over the last several years has evolved quite materially. You've obviously been historically concentrated in the vehicle payment segment, but have really aggressively mix-shifted towards what is a faster growth and higher margin segment in corporate payments. Just talk to us about that transition and how you think about the future trajectory of the company on a go-forward basis.
Yeah, happy to. Corporate payments was 40% of the revenue in the first quarter. To your point, really well on our way on that transition. To that point, we've created a new set of investor materials that are available on our IR website, because what we wanted to paint for investors is what does Corpay look like two or three years from now, right? We've made a big rotation into corporate payments, but what does it actually look like as a pure corporate payments pure-play provider? Ron and I have been on the road last month, this month, meeting with investors really to kind of share that vision of the forward look of the company. What I would say is, the reaction has been very positive.
I think people are really excited about, one, the corporate payment space in terms of really large TAMs, faster-growing business, higher retention, better credit quality clients. Then I think even beyond that, the idea of really making this shift from our roots as, call it, a fleet company focused on SMB clients globally to being a corporate payment company focused on the middle market has been resonating well. It's been helpful to get that feedback. Maybe I'll just unpack it for you a little bit. What I would just say to everybody listening is definitely go to our website and check out the investor presentation we put out there in May, and I think it'll help some of these concepts I'm talking about kind of come to life. First I would say we hold our strategic offsite every year in March.
That gives us an opportunity to walk away as a group and step out of the day, step out of the quarter, step out of the year and say, "What's the midterm strategy of the company?" Not only what is the strategic view of the company, but what's the financial view of the company? That's where we all walked away as an executive team kind of going, "Yes, pure-play corporate payments. That's where we're headed. That's where we've been headed." Kind of more committed than ever to that's where we're going. What does pure-play corporate payments mean? It means that we see ourselves really in three primary businesses as we go forward. One of them is employee spend. Think commercial card is one of the largest products that would be employee spend for us. The next category is vendor spend, so think of AP automation.
Also think about us going left and moving more into procurement and offering procurement offerings. Then the third is our cross-border business, which we most recently held a teach-in on that business, which I know you attended in the recent couple of months, so those materials are out there as well. That kind of sets the stage of what do we think we look like, call it two to three years from now. Now there's two things to think about when we go through that. One is, "Okay, Peter, how about the remaining pieces of the business that don't necessarily fit within that structure?" I would say some of those businesses will continue to hold. They'll be a smaller part of the portfolio, but other of those businesses we'll divest, right? We've divested PayByPhone in the first quarter.
We used the proceeds from that divestiture to buy back shares, so we didn't have any EPS dilution from that. What I would say is we continue to look to divest kind of non-core TAM-constrained businesses, that we will use the proceeds to buy back shares to minimize any dilution. We're in market with two other business, which we've been publicly talking about, of about $1 billion in proceeds.
Yeah.
I'd say there's another handful of businesses that over the next year or two we'll look to divest of. We're never going to share the names of the businesses or the segments because that puts us in a disadvantaged position, not only from selling the business, but running the business and with employees. We see a strong path into this pure-play corporate payments rotation and some divestitures along the way. Probably the other piece I should comment on that is M&A. Our view today is we spent about $15 billion on M&A over the last, call it, seven-plus years, seven to eight years. Our view is we have all the capabilities today that we need to compete in these three categories I mentioned of employee spend, vendor payments, and cross-border.
When we think about M&A going forward, it really will be about new geographies, new customer segments we're not in today. We're no longer on the capability hunt. That gives us even more confidence in the ability to grow these three large businesses we're talking about.
Super helpful overview. If we just focus on the corporate payments piece in particular and how you think about Corpay's value proposition and the durability of that over time, we obviously have countless crosscurrents from a thematic and sort of headline perspective as it relates to competition with new product innovation. How do you think about Corpay's ability to continue to win over time?
Yeah. I have high confidence in it. I would say in the three businesses that we talked about in the pure-play corporate payments, these are all three of the sectors that have $100 billion+ in revenue TAMs available today. Really large TAMs. The majority of those TAMs are owned by the banks today. When you look at the Tier 1 banks servicing enterprise clients, they obviously do that extremely well. I'm not looking to compete with the Tier 1 banks' enterprise clients. I'm looking to compete with Tier 2 through 4 banks and really focus on that middle-market underserved clients. Hey, Tier 2 through 4 banks do things really well, right? They handle deposits well. They loan these businesses money. It's important that they provide these middle-market business services.
We know we have a differentiated product that we can sell and really take that market share from banks. I would say specifically within employee spend, there's been some innovators out there in the space today, which we actually see great because that really points to people are investing within the space because they know there's the opportunity to take share. We think we're uniquely positioned in that space. We have a four-in-one card that is much different than kind of any of our competitors today. Hopefully that's an overview when it relates to competition.
Yeah, no, it helps. I think another sort of underappreciated aspect of the story is just the rate at which the business has been compounding over the last-
Yep
Four to five years, maybe even longer, right? Mid plus teens of EPS generation sort of through the cycle on an organic basis. You laid out the target for $50 of cash EPS-
Yep
In the future. Talk to us about the cadence timing at which it would take to get there as you sort of think about the model from here.
Yeah. This is another thing that kind of came out of the offsite that we do. When I first joined Corpay, several people in the office would say, "10%, 13%, 19%." I was like, "What's happening? Is this like 'Rain Man?' Why are they repeating 10%, 13%, 19%, right?" Obviously, a couple of weeks into it, I learned, okay, 10%, organic growth. We're going to consistently deliver 10% organic growth. By the way, we've delivered that four out of the last five years. That's what we lead with in terms of organic growth. The 13% is EBITDA growth. We can obviously grow EBITDA faster than we can grow top line because we have scale in the business. We have a, call it, 80% + incremental margins. That's how you get to 13%.
How we got to 19% is because we've got strong yield in the business, right? We've got the ability to either buy back stock with our cash flow, or we've got the ability to do M&A. That got us to 19%. When we went through our offsite and we reviewed that model, we said, "Wait a minute, it's not 19% anymore, it's 24%," right? We've got another five points there in terms of EPS growth. Call it for a midterm, call it 10%, 13%, 20% +. The 24% that I'm talking to, and really the expansion is driven by two things. One, the stock is undervalued today, right? My ability to buy back more of that stock increases in the current environment.
Number two, what we hadn't factored in before is, well, hey, if we continue to maintain a leverage ratio of call it, 2x-3x , we'll continue to borrow more money over the midterm as EBITDA grows. We'll kind of call it have $15 billion of cash flow over the next three and a half to four years. Our view to the market, to investors, and this has been received really well, is, hey, we can't control how we're valued. We think we're undervalued, call it 12x or 13 x, depending on the day. As we continue to be undervalued, we're going to take that cash and we're going to bet on ourselves and buy our own stock back. That's how we're going to create value for you, even though the market is not rewarding us.
The thought process is that over time, right, as maybe we move out of this AI boom and there's a shift back to fundamentals and people really appreciating our business, our unique ability to be a top-tier performer, that the stock does appreciate, and then maybe we probably move into more of a balance of using those proceeds, that additional cash against M&A and buybacks. The idea of getting to $50 EPS, call it in the next four years and really leaning into buybacks, we've socialized it with a lot of our investors, they've been really enthusiastic about it again at these current valuations.
Durable 10% organic growth, +20% cash EPS growth from here.
That's it.
Understood. Maybe just in terms of the growth algorithm that builds to those results, Ron obviously coming from more of a selling motion and obviously instilling that throughout the organization. You also have the target of delivering 20% sales growth across the organization. Just talk to us about what really drives the Corpay sales engine, just because the magnitude of those dollars starts to get big when the base obviously expands.
Yeah, great question. I would say that sales is our secret sauce. To your point, Ron comes with a background around it. We have incredible discipline around it and analytics behind it. Our view is we're going to increase our sales investment every year by 20%, and we believe that's kind of at the efficient frontier. You get to a certain point where you could over-invest in sales and you're no longer productive. If you look actually in the investor presentation materials I was referencing people before, we provide our sales growth kind of over the last five years in those materials, and we've been at 20% or greater, right?
If you look at the history, right, as a predictor of the future, we feel really confident that we can continue to grow sales by 20%. If you go over to the retention side of the business, we reported 93%, a little better than that, 93.5% retention for the quarter. Call it, we're losing 6% - 7% of the business every year. That's your algorithm that gets you, call it, at a 10% organic growth rate. Obviously, the more we move into corporate payments, the retention rate becomes stronger because we've got a middle-market customer, and you've seen that improvement in our retention rate over the last couple of quarters.
Very helpful. Ron made a comment in the cross-border teach-in that the market is so large. You're delivering, call it, high teens organic corporate payments growth. He wants that to be north of 20% and sort of pushing the organization to deliver against that. What is the sort of practical bottleneck to growing faster within corporate payments as you think about the opportunity from here?
It's a great question. As we shared in the teach-in, it's got a $160 billion revenue opportunity in Tier 2-4 space for us to go after. If we're going to be about $1.5 billion this year in revenue and cross-border, we've got less than 1%. The good news is a ton of market for us to capture. I'd say, the opportunity for us is how do we do that efficiently. How do we grow the sales team efficiently and responsibly to capture that market? If you look at that business in 2017 when we went into it was a $100 million business, and now it's a $1.5 billion business.
I'd say it's continuing to do the things that we're doing, the market opportunity is there, and then adding to the sales team responsibly in terms of getting a good growth rate from them. Realizing you can't over-add because then it becomes unproductive.
Yep. From a competitive perspective, obviously the focus on the middle-market customers, the larger G-SIB focusing on the enterprise cohort in terms of servicing those needs. How do you think about what you've seen on the ground in terms of Tier 2-4 banks, in terms of their competitive response to the pace at which you guys are growing, and where they're thinking about trying to mitigate some of that share loss in the future?
It's a great question. This is kind of key to our partnership with Mastercard in the financial institution channel. If you look at the cross-border business, call it even one year ago, it was primarily a business that was selling into the Corporate segments. That's where we've built all of our business. Going after those customers directly that are being served by banks. With the purchase of Alpha, we moved into private capital markets space. We added another segment, and then we were in the financial institution segment already, but a relatively small business that we had there. What we were excited about Mastercard is Mastercard has relationships with Tier 2 through 4 banks across the world. They have the ability to open the door to these banks for us.
As we announced last year and then closed in the fourth quarter, was the partnership with Mastercard. They obviously made an investment in us as part of that partnership that valued the cross-border business at $13 billion. We've been quite successful. The thought is, if we're not going to take the business directly, let's go to the banks and offer them to sell our solutions. Whether they white label those or sell them as Corpay, we're really agnostic to it. We know that there's an underserved customer that has a need to be met, and we'll either do it directly or be a partner of the banks and help them be successful. The concern for those Tier 2 through 4 banks is that the customer outgrows them if they can't get their cross-border needs met and they go to the Tier 1 bank.
They don't want to lose the lending relationship. We think that we have a great value proposition to say, Hey, we can complement your relationship. We can complement your lending with international payments, risk management services, and global bank accounts.
Helpful. Maybe just to piggyback on Mastercard, just a status update in terms of where you are with that relationship. I think you've historically said that you expected it to contribute, call it one to two points of acceleration to the cross-border component of corporate payments. Does that still hold, and how do you think about the potential for incremental acceleration in 2027 as some of these sort of slower converting sales cycles begin to close?
Yeah. Good question. I'd say overall, the partnership is going really well. Mastercard has committed resources to the partnership that are kind of opening the doors, and then we're obviously bringing the SME to sell the product. We've closed three clients to date. We've got a really strong pipeline. I'd say that's progressing well. In terms of what's the % that it adds to the organic growth in cross-border, I think when we shared that one to 2%, it was before my time, and it was when the cross-border business was quite a bit smaller and before the Alpha acquisition.
Sure.
It's probably a little bit lower because your base has gotten so much bigger. Last year in 2025, we were less than $1 billion. Now we're going to be $1.5 billion with Alpha. What I would say is you are right. It is a slower sales cycle within financial institutions. I'd say, wouldn't get over my skis, but say when we revisit 2027 guidance and we've had more time in terms of the sales cycle, we'll kind of revisit what we think the contribution is going to be. Overall, we do believe it's going to be meaningful.
That's great. Maybe just in terms of the cadence of wallet share expansion. In terms of the typical adoption behavior of a customer, sort of initially starting with payments, expanding to things like risk management, your bank account product, et cetera, what evidence or data are you seeing in terms of just the multi-product attach in the organization and sort of how that's either improving retention, driving yield, et cetera.
Yeah, it's a really good question. I would say in our Corporate segment, we see that about two-thirds of the revenue, their clients are using two products. If you think about it, a client comes to us, and they typically first need help with executing the international payment, right? The FX payment, that's when they come to us, right? When they come to us with that, the immediate thing that we bring to the table is, "Hey, there's volatility in currency, and you really should be protecting yourself against this volatility." That naturally leads to the risk management services that we can provide. Those two products really, we say, go together like peanut butter and jelly.
I think it's important when you're thinking about other players, emerging players in the space, that if you're only offering the payment product, you're at a disadvantage because you can't offer a full solution. Adding on the bank account product, the real benefit of this in the corporate space I'm speaking to, we call it a Multi-Currency Account. What it allows the client to do is to see all their bank accounts, right? They can connect it to their primary bank account, so you can see all their global bank accounts and then manage their money across the globe. Like I said, a high correlation between the first two products, and then the global bank account adoption is also growing.
Makes sense. Maybe just spend a minute or two just in terms of how you think about the concept of netting in the organization.
Yeah.
You obviously gave the statistic in terms of 60% of your cross-border trades being netted internally. Just talk to us about what that means in terms of the lack of need to externally source FX and how that impacts unit economics in the business.
Yeah. Super powerful concept. For those of you who are not in the weeds of cross-border, which I wasn't until about a year ago when I joined this business, right? The netting concept would be the idea of you're in the U.K. and you need dollars, and I'm in the U.S. and I need pounds. Because we sit across five continents today, and that we run 60% of our business on proprietary rails, that I can net those two trades from a liquidity standpoint. Kind of self-fund that liquidity. It's incredibly helpful not only in terms of executing the transaction for my customer, but also in terms of the efficiency that it allows me to achieve and the margins that it's allowed us to grow in the business. Like I said, run 60% of the business on our own rails.
Got it. I wanted to pivot to JP Morgan and their Kinexys product just in terms of what they're building there, what they have been building. Just talk to us about where Kinexys sort of fits into your payments orchestration stack and how you think about the sort of mix or flows on the Corpay network that are still on SWIFT, and how the Kinexys platform can help in the future to sort of drive that mix down over time.
Yeah, happy to. We think that blockchain is pretty exciting in terms of it offers the 24 x 7 settlement, right? The kind of out of banking hours settlement. We had in our mind that kind of, let's say, mid last year when I joined Corpay, that it wasn't going to be very long until the banks entered into the blockchain space because the other providers of stablecoin, etc., the banks are obviously going to be protective of keeping the deposits of all the corporates that they work with, right? When JP Morgan came out with the Kinexys product, what we were pretty interested about it is they've got 220 correspondent banks across the globe, it's a very wide network to use. It's the same cost as SWIFT, but it gives a 24 x 7 settlement capability that SWIFT does not have.
The reason why we made some comments about, hey, taking a significant amount of our volume off of SWIFT, right.
Sure
60% of it on our own rails, kind of that remaining 40% is up for grabs. We see a lot of that probably going to the Kinexys partnership that we formed because we can, again, do it at the same price, and we can get it done outside of banking hours. I think it's a pretty great rail product that JPM has created. Citi has one that they're coming to market with as well, and I expect there'll be copycats across the top tier banks.
Sure. It sounds like an incremental capability for you guys from a rail perspective.
Yep.
I'd say to sort of play the other side of the same argument, I think one of the common pushbacks we get from investors is on the corporate payments business. Historically, the moat of Corpay has been sort of predicated on the breadth of your banking network, the ability to sort of source FX equity in various corridors. What sort of prevents either a startup, an existing sort of remittance business that has some FX capabilities from partnering with someone like a Kinexys, leveraging their banking network, and the sort of settlement layering on the FX and sort of reduces Corpay's value prop over time. How would you respond to that?
Yeah, I mean, maybe two questions. One, they could have done it with SWIFT for years, right?
Sure.
The main difference between SWIFT and Kinexys is a 24 x7 settlement. I don't know that that's going to inspire somebody to invest a whole bunch of capital into a business to build something when they could have built a cross-border business on top of the SWIFT network that operates today. One analogy that I've been using to try and help people understand kind of the rails part of our business and our middle-market customers is say you made a call this morning to Tiffany's in Soho, and you decided to buy an expensive piece of jewelry for somebody who is important to you, right?
My wife told me she wants one.
All right. Here we go. All right, this is a live example, right? You called Tiffany's, and you said, "Hey, I need it by 4:00 P.M." You spent $250,000 because you just got your bonus for the year and you wanted to reward your wife for supporting you, right? You're sitting here kind of waiting for it to come at 4:00 P.M. because you've got dinner tonight and you want to have this in your pocket. When that delivery person shows up with that diamond that you bought, I don't think you turn to that delivery person and say, "How did you get to the Intercontinental? Did you take Uber? Did you take the subway? Did you take a taxi? Did you bike?" You don't care, right?
Sure.
Is that fair to say?
Sure.
What do you care about?
Got the diamond.
You got the diamond. When you look at it's the $250,000 diamond that you paid for, right? If you take that analogy to Myspace, where we're serving the middle-market customers, when the CFO or the treasury of a $300 million- $500 million company calls us and they need to have a payroll happen by Friday, so their employees in the U.K. get paid, or they need to have a tax payment happen in Germany the very next morning because they're going to be late if they don't. They're not specifying for me cross-border, "Hey guys, I want you to use Kinexys for this payment," right? It is a teeny-tiny part of the value of the transaction.
Yeah.
What they're looking for me to do is use the payment method, the rail, that gets it to them based on their business needs, right? In the purpose of the diamond we're speaking about, right, we would've picked the route that got it to you fastest, ensuring it got to you in full value, and it was fully protected. That's the value that comes in cross-border, right? That's tied to one technology platform that sits globally. The liquidity corridors that we talked about housing 60% of our rails. The regulatory and compliance that we put in place, and probably most important, the fact that we've got 800 professionals sitting across the world in our go-to-market team that knows how to sell this pretty unique product, right?
You're selling it into organizations who actually really need help with treasury management as opposed to selling it into, call it, an enterprise organization that has a super sophisticated treasury management team.
Yep. Very helpful.
Hopefully your wife's happy tonight.
Hope so. Hope so. Maybe pivoting to Alpha. You obviously spoke about the rationale for that acquisition, the incremental sort of capabilities that you gained as it relates to the private markets, the exposure to the asset management ecosystem, the deposit base, et cetera. What has sort of surprised you most since the acquisition, and sort of contextualize for us where we are in terms of the synergy realization, both on the revenue and the expense side?
Yeah, I'd say, we've done over 100 acquisitions in the last 25 years.
Yeah.
One thing you should know about Corpay is when we buy something, we typically know everything we possibly can about it before we wire the funds to buy it. But I'd say maybe to the upside, what we've been surprised by is just the cultural match between Alpha and our current cross-border team, right? They were a much smaller organization. We're an S&P 500 company, so we've really been able to blend those go-to-market teams even faster than we thought. I think we even shared on the Q4 earnings call, right? We saw a little bit better performance out of Alpha than we expected in the last two months of last year, just because we were able to kind of gel quickly there. Then I think your second part of the question was about the integration.
Yep. Synergy realization.
Synergy realization. Yeah. What I would say is there were some synergies that were kind of relatively day-one synergies.
Yep
could execute on that were relatively light, but helpful, right? We run a much larger business, so all of our banking contracts are a much different scale than theirs are, right? That's a good example of kind of some early synergies we were able to take in the business. The other two synergies we're focused on, which are more kind of back-end loaded. One is revenue synergies, and there's revenue synergies really in two places there. One, Alpha was only licensed within the U.K. and the continent in Europe, and we are licensed in the U.S. and Australia. We are already selling to private capital market clients in all of those geos. Today, we're not doing it on one system.
As we move to integrating the system, call it July or August, we'll see even a bigger uptake in clients that were current clients of Alpha now in different geographies of cross-border. That's going to be super helpful. The other piece is Alpha didn't typically provide the risk management services that we did in the past. Also that's another revenue synergy, again, kind of more back-end loaded this year. In addition, when we move to one system, we're obviously going to get a lot of cost synergies out of that.
Yeah. Makes a ton of sense. Just for those in the audience, the nature of the private markets customers, these are upper echelon private equity firms, the Bain Capitals of the world that have funds in various corridors and now have the licensing infrastructure to be able to move funds more efficiently.
Yeah, that's exactly it. Alpha really built a great niche business with their global bank account business. They've got about $3 billion in deposits as of the end of the year. The value prop was, hey, Bain Capital, to use as an example, and they're not an actual client. If they want to do a deal in Germany, they need an operating account in Germany. We can create that for them in, call it, seven to 10 business days. Once we create the global bank account, then there's the opportunity to sell them the FX payments and the RMS services. You're absolutely right that the hypothesis here is Bain is going to use us for those services now in the U.S. and in Australia, and that is the plan that's being executed on.
On the tech platform migration. I think the rest of the migration is happening throughout the balance of the summer.
Correct.
What sort of changes, post-migration, when it's complete? Does it sort of lead to some form of Step function change in Alpha margins? What sort of changes, either from a financial or a commercial perspective?
Yeah. It kind of goes back to the synergies I was speaking to. One, it gets my global sales force all on one system, and primarily, right, that's the corporate business of Alpha and the private capital market business of Alpha. That's a synergy there that allows the private capital markets business at scale to sell within the two new regions that we spoke about. The other thing it does is it does improve the margins because I've got the ability to shut down a system and take down all the costs supporting that system.
Got it. In the few minutes left, I just wanted to open up the floor, see if any clients had any questions. Guy in the front.
Just a quick question on your move from SWIFT and pursuing 24/7. Are you moving all your volumes off of SWIFT, just to clarify, or just for kind of those circumstances that are 24/7? How agnostic can you remain if and as SWIFT or other providers and rails provide 24/7 remittance capability?
Yeah, great question. We're not moving everything off SWIFT. I'd say it's really based on the client's needs, and we believe the 24/7 part of Kinexys or another type of blockchain offering like stablecoin is attractive, right? That's where we see. It's the same price point. That's why we believe a lot of volume will migrate there. We are establishing stablecoin rails. We did introduce a relationship with BVNK as an infrastructure provider to help us do that. We'll be able to process the blockchain either via Kinexys or via stablecoin. Kinexys is much better priced right now because there's just not enough volume on stablecoin today. We'll always pick the rail that's the best for the client.
Any other questions?
SWIFT announced a blockchain product, I think it was about a year ago. I guess since you're moving away, is that not making progress?
It's a great question. I don't have the answer to it. I've been in the seat for less than a year. Obviously it's not hit our radar in terms of using it. I would probably say that's probably the conclusion, is that it's not providing us any advantage to using that.
Great. Well, two minutes left here. We spent a whole chunk of time on corporate payments.
Yeah.
We did want to hit on Vehicle.
Yeah.
Talk to us about sort of the three components within Vehicle. You have the U.S. business, you sort of have the international ex-Brazil business.
Yep
You have the Brazil business, each sort of with different same-store sales profiles, different growth rates, different business mixes. Just talk to us about them either in isolation or as a portfolio and sort of how that builds up to the organic 10% vehicle payments target.
In totality, vehicle payments, we expect to perform, call it, 9% or 10%. Consistently at that 10% the last several quarters. If you unpack that by geography, Brazil is the fastest-growing business within the three, call it high teens, mid to high teens. That's followed by our Europe and rest of world business, which grows, call it, 9%- 10%. Both of those have grown at those rates very consistently for the last four to five years. Then U.S. vehicle payments is now the smallest business within vehicle payments. That's growing, call it, mid-single digits. Hopefully that's helpful.
It helps. 30 seconds here, lightning round in terms of buybacks. Ron was probably more, what's the right word to describe this? More pounding the table on sort of the dislocation in the stock and the buyback opportunity from here really than I've ever heard him.
Yeah.
How do you sort of think about what that signals and sort of what you guys are seeing in terms of either private or public valuations and how we should sort of think about the trade-off from here?
I think it kind of goes back to where we started our conversation, right? That when we kind of stepped back and looked at our four-year model, and the ability for EPS to grow much faster because our yield has expanded, right? The fact that we're so undervalued, our view was, "Hey, we can create value for shareholders. While the market's not valuing us correctly, we believe, undervaluing us, we're going to create value by buybacks." What I want to emphasize is, should our value go to more what we think it is, that's probably not the best use of our capital, and we'll shift it then to more M&A. He really wanted to make the point to investors is, "I can create significant value by just running a great business, even if the market doesn't reward me for it.
Awesome. Well, we'll wrap there. Thank you, Peter, for joining us.
Great to be here. Appreciate it.