Fidelity National Information Services (FIS) 3 Nov 222022 Q3 Earnings call transcript

Good day and welcome to the FIS Third Quarter 2022 Earnings Call. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker, Mr. George Mihalos, Head of Investor Relations. Please go ahead.

Great. operator. you Thank and the everyone for us joining Good third thank quarter for FIS call. XXXX today morning, you earnings conference is being call This webcast. on corresponding are release, and our available news fisglobal.com. website Today’s at presentation all webcast our Norcross, business Chairman provide will Gary a CEO, overview. and will President, operational an our update. Ferris, provide Stephanie

Finally, Erik results. CFO, review our will Hoag, then our financial Deputy

update the GAAP. to undertakes release as to today’s as described whether uncertainties to a X, Slide forward-looking law. obligation and to EBITDA, company, Also, presenting and non-GAAP call earnings filings will not contain company statements. cash flow. be over earnings non-GAAP net measures earnings share I the the performance forward-looking any adjusted risks release. as press events financial but refer turn language. Reconciliation our result the important statements, future information, as throughout SEC. including information, measures will of and With These or adjusted per of call, Turning will in for the defined this information remarks the Please required GAAP are to new information These statements presented free our no Safe by net adjusted Harbor other with are otherwise, The that, is financial conference we subject to in financial Gary. except are by

for all morning. this thank us and joining George you Thanks,

will our Chief and to day established years Erik begin Board. on upon and be of Officer. new as by I’ll have official has and forward on the assume going Woodall’s quarter, well-earned as In contributions this Stephanie the revenue Financial grew X, roles tremendous for testament Congratulations, build Executive her the expectations, Stephanie’s foundation Banking and a he lead excited me over Let saying an ability industry quarter X%, also CFO the overview for to in with will of of past Solutions experience, Slide been was on a as I this XX I of His our to promotion. to this Hoag revenue resiliency XXXX. quick last on fundamental firm results. with line Organic a EPS role our of the XX and Woody this the working company for executive business. positions continue X in in am all delivered CEO and promotion. the Solutions President am we very X% business become future. varied for Merchant her grew FIS begin in well her markets capital excited confident understanding adjusted Chairman years industry Stephanie our the and growth Ferris organic basis. I January X%. grew X%,

This EBITDA such supplier profit primarily in of a continued quarter. wage as adjusted weakness and businesses contracting downstream the pressures Our Merchant a increases the such saw incremental in as the by overall as function pressure inflationary basis as inflation XXX margin an margins Solutions in consumer and Banking well macro resulted in headwinds points UK. year-on-year, cost

We the and performance world. in backdrop with seeing the because businesses to address and of slowdown, the insight certain business of profitability pleased the not taking performance the operate to underlying actions are continued did geographies on are We them. the we given you in we economic some are provide want the around

On underlying to adjustments with key the growth the have see businesses. help minor provided trends you some will of investors these we slide, performance see

businesses in the the growth trends you underlying backdrop. good are As this can of see,

calls. which had XX%. for adjusting we Russia, Capital of eCom Ukraine, license numerous the pandemic Merchant growing for growth If our X% you adjust during impressive for volatility our business on X% banking revenue Solutions an grew markets fees, grew quarter. services, X% the have with discussed adjusting

leverage on also the returning dividends billion in credit ratings. almost while commitment to million $XXX investment of addition maintaining grade of in We X.Xx of of to paid, through capital share shareholders executed at repurchase $X support our our

allowed seeing banking, we of continue indications as Smaller taking a saw economic we to last Turning several $XX deals last quarter, In more to discussed slowdown. close broader we X, to than the greater time over than Slide we are million, the see we the years. we transactions more expected even compared and contract last same show greater saw In momentum, pullback this us quarter value across to good continued last quarter to United banking close Kingdom, new as which year. than quarter. to merchant,

pivot Capital first well our benefit months in payment non-discretionary pressure strength leverage are as This as go-to-market big-box a through given there segment. expertise presence markets, FIS operating of scale has that is but our this shifts from as to verticals U.S. distinction the and economic our strategy card of we our in expectations towards continues supported beginning profitability capture grocery year, well the strategy our the exceed spending model, and capabilities. a in and We resiliency to one-to-many to their simplify allowing volumes has to see positioned needs. strengthened in SaaS-based and the the X e-commerce these merchants. a revenue continue scale complex also in clients to enterprise stability of see the and Should the to pharmaceutical volume U.S., the to as market-leading size be shift

fees demand issues under the will continue solutions this are come and license our segment to we macroeconomic continued SaaS-based pressure. for each Given seeing, quarter in the

us credit this industry the during strong FIS will the times. uncertain trend ratings will and us continue foundation actions with differentiate monitor to we conclude provides with ensure in a to and closely. are others taking stability. We growth from I investment-grade long-term

long-term. anticipate balance debt Because our share with a focus fund we do fortify of incremental the to our to on continue sheet free XXXX will in repurchase cash out We excess not above this, currently flow. taking

to free down maturities. remain allocating market conditions efficiently pay flow on our upcoming will deteriorate, cash focused will deploy We capital should and we robust

share enterprise will of the to to to Fortunately, incremental with cash, excess our returning fund our dividend. capital beyond above continue and strength our shareholders us repurchase allow

business We capital are significantly operational also a announcing through expenditures. on program flows prioritizing with the focus cash transformation and both an enterprise to excellence enhance

over able data we we As center our completed banking, markets significant modernization programs, to several now capital are investment programs reduce our consolidation and several the the last merchant requirements years, have and future. including capital in

testament are to to operational FIS to for growth and now payout our plus XX% will XX% Stephanie the update. true differentiator our industry others We flow reaffirming commitment a of that, generation. annual and target, call With a dividend cash over compared the a to I the turn in

this for Thank you, morning. Gary and thanks you us to all of joining

and thousands forward working years partners finally, and also for by XX,XXX and welcome FIS our mentorship privilege his of I for a to outgoing on congratulations clients forward to our is of honor Chairman. Executive our to the be what with you Gary, our look assuming around Hoag, the of to and me saying closely X. world. service it an And and many your you role role January CFO, start with thank Let CEO CFO. as and working look in of to colleagues I your and thank leadership you new Woody, new Erik

was quarter me the Let third that comments challenging. echo Gary’s

We are not with satisfied results. our

immediate pressures enterprise the of are of the cost inflationary environment, action impacts permanently persistence via and cost our cash transformation flow, structure margin the to the resulting to free company Given changing and taking program. the reduce macro we

our costs to consumer reductions our maximizing program a capital at Turning revenue deliver with both enable this while business goal expenditures center growth, and will remains in simplifying everything Slide This model. do. very the X, significant actions focus will of we on operating client while targeted that through of ensuring to operating always us

long-term highest improved activities Enterprise our cash expansion reinvigorate reallocating operating Transformation flow conversion. thus has key and driving designed while clients, Our spend to goal is to to our deliver the model. program two for margin restructure pillars value-creating capital This

through focused current and are non-value-added on cost spend, reduction cost actions surrounding reduction and our and reshaping outsourcing the we and permanently reviewing the of rightsizing structure These activities of include vendor initiatives. the containment workforce. optimization First, both

value opportunity products our our increasing segments. the enterprise Second, of sell take focused program white existing revenue by will to Amplify, of targeted across cross-sell called unlocking advantage current the significant through we on space which our are company the

simplifying excellence aligning will well our We as on commercial reviewing, be structures pricing initiatives. as various incentive other both and and also focused

and to have begun towards early million $XXX take expectations underway We least to the determined at process. immediate to additional our we are planning actions deliver savings is upside as Detailed with program. go through this be cash planning transformation of

we backdrop, the you framework pressing as quarter complete earnings of in XXXX program economic are many a Given to update possible. I these for fourth sizing and call. plan more deliver as to our with on the savings

platform to a and management. exception the XX of to environment, across at primarily our revenue organic nearly remains segments a overview and exciting UK. Revenue in-house efficiency segment grow leading markets Migrating sales had I realize solution business margins enable strong sales FIS’ a strong, by our the cross-border and next-generation even quarter, include macroeconomic third core, selected consumer the growth network banking wins. across for segments, PaymentsOne our sales to capital were from X% including in the highlighting that driven Key this expected that for solid our in global both for Strength in to company card uncertain corporate adjusting or scale. XX and segment, begin results continued Demand wins platform continues countries. demand its solutions with new robust. positive EBITDA our Solutions PaymentsOne, solutions with prepaid mission-critical further on card will largely serves in its digital for API-based grew came management be our as more provider with Slide solutions Banking platform end-to-end over. mixed. on wealth were was X% pandemic several showing. macro will next-generation conditions issuer, In benefits deterioration the pipeline Adjusted our challenged. brief Moving of

to banks for more for our proof payback expansion. world’s factors Philippine finally, discounts cross-selling premium its across to point U.S. benefiting offer segments. see merchants their issuing unsecured and the of them innovative a PaymentsOne rewards went are Premium Payback tremendous processing shopping card loans this monetize leading and with and looking Additionally, FIS of institution frictionless decisions. significant credit to a portfolio, offers We one helping into market cardholders selected across locations. innovation consumer challenging economic inflation live retailers its of currency. way like and financial to And A largest both drive as card who shoppers, play

been sales Turning to license X% Capital to a Markets multiyear solutions solutions. revenue, excluding Revenue slowing X% backdrop. shift license a from another had we has SaaS-based increased with strong quarter, strategy capital even on organically markets, or to

cross-asset Capital Markets pleased multiple We institutions environments, for Asia. only We this provide had will approval Europe several to to are single their and back-office impressive very these and platform and changing asset Not middle quarter wins of with the financial platform front, support including to segment cross operations, the our regulatory the solutions success strategy. our trading regulatory platform caters banks. this local across see within making for several FIS client easier wins with leading a the

also deepened management. and relationship cash receivables our for savings data with as of flow expand analytics purpose leading We they effective a cost company their more to drive the of payables corporate our automation, customers solution empowering use and their

Slide the XX, performance segment. of on Solutions the to will Turning touch I Merchant

position update past you years, as that is strategic underway. I’d to take and recent in the on pivot strategy our merchant in as competitive to few its a Given like Worldpay currently the business well the evolution minutes of interest

throughout XXXX. We further to and UK, in growth increased nature basis, X% complementary an while Solutions other impacted merchant organic deep Merchant with deterioration strategy comprehensive on segments quarter. our the more remained consumer dive spend consistent revenue solutions differentiated our will a provide early by its U.S. much in negatively into the

pharmacy. is business immune the Furthermore, economic XX% would we excluding UK. is in downturn through the not slowdown, sub-segments, of to is expect channel of a from and We increased merchant spend grow to an to business including e-commerce X% indexes resilient recession. from quarter. box believe well retail, SMB. the an economic the the our and relative our big While categories, revenue sub-segment the North enterprise these more Approximately, sourced This business positioned American towards segment Enterprise nondiscretionary grocery be in sub-segments

key out this strong coming While result pandemic, continue Merchant strong in Solutions. is see the of this growth and we some to comparisons, of a expect year-over-year of of growth segment

We especially our the offers have several business, highlighting global e-commerce our scale that clients. notable in strength wins this and our quarter, to reach

maximize Global Solution last large reduced e-commerce this we momentum fraud we for order quarter. order with global help times, recently our conversion the approved First, consumer while all on which and payments, you while are them the end-to-end fulfillment solution financial of eliminating introduced guaranteed still rates very early chose orders. to are liability pleased to giant days, A launched seeing we electronics

expanded our large the services new U.S. retailer Payback our for adding Platforms excited we also I and launched by have tokenization FIS relationship We a that Premium Worldpay volumes offering, officially discount solution, encryption by acquisition. Payrix and with like processing expanding and announce leveraging the services. to branded provided the capabilities am

SMBs is While will with to at drive addressing tools via financial market services we and still We next platforms offerings. innovative with believe the the early leading platforms days, and payments approach of the payments the are for capabilities banking I with seeing. to are SaaS software unparalleled evolution era the our new the across am Platforms pleased services of the merchant we that forefront FIS’ and by momentum and way. of SMB Worldpay empowering

several improve are quarter, transparency, of as we this such effort post-pandemic in additional the some wins This in business providing we to the an and and call. regarding response closed on your detail veterinary. media performance questions notable to verticals In

albeit fair revenue steady levels XXXX vertical when growth results. and grow amount on market be indexes to around sub-segment, depending continue revenue aggregate, noise of to remained has strength showing To market in acquiring, changing line disruption revenue in been e-commerce enterprise market consistent volume which and card and have high and Further, our adversely business, us by stable, in yields dynamics. Solutions to share growth while Merchant very category. rates and growth are consistent despite single-digit size First, remained shifts, allowed impacted the clear, deliver and present each SMB growth. in top volume our by volume above indexed has where they sub-segment, business our merchant we has to and The

ultimately growth about opportunity that, quarter in share as well market at call XXXX. our for we Erik revised I where as of couldn’t to Erik? to embedded continued with for plus FIS. I And with the I us discussion outlook will and strategic XX% segment account embedded I end finance, our be more results third over excited for front forward Going the our to shift of turn further in now started. and total revenue. e-commerce e-commerce payments of will expect

EBITDA us Thanks, and to Stephanie Slide third sheet I financial allocation will on This forward-looking today. deeper balance joining touch and you third to on quarter I’d metrics thank dive morning, commentary. and with results cash the quarter like for begin move and into margins, results, our particularly flow then XX. our around capital

by points adjusted in X% As our on basis On EPS an organic XXX and with as the contraction geographies to XX.X% for incremental expectations more in line increased Gary basis mix $X.XX, inflationary costs, in headwinds than consolidated high-margin the was quarter. and such offset a basis, of revenue adjusted and in pandemic expansion UK. was margin mentioned, macro margin contracted EBITDA merchant, reflecting corporate a reduction grow-overs in banking markets expenses a as capital and

margins. as-a-service segment pressure, deals, Turning high with in Banking results. revenue inflationary primarily contraction associated basis to pandemic-related currently to revenue XX.X%. variable EBITDA segment and X% Margin ramping XXX adjusted increased our to margin a with as are points contraction of driven dilutive was reduction costs organically which

deals strong time. While over quarters past are over continue aided will these in expand as-a-service margins have and our to several they growth the banking currently dilutive,

compared in resulting down this period, As growth in mostly license a non-recurring year impact revenue but revenue. expected, termination on fees offset the to forward prior were pull

larger cycles, remain seen we the leader for market particularly this also expect where persist deals, industry. in both have in sales and others versus a the negatively impacting some headwind remainder quarter of the in for is margin the year. This to revenue and We we elongation growth

to of associated the was driven XXX as basis Turning to growth basis the emerging impacts segment. strong within of on incremental as cost to X% margin UK in XX.X%. channels organic by demonstrating Markets with contraction Capital macro leverage Merchant by was X%, discipline and operating the Solutions, expanded and FX. investment Europe, consistency quarters. contraction well and revenue organic primarily points Margin driven with wage over points basis increased XX by last the primarily resiliency segment and Margin several the inflation XX.X%, an

quarter, we have taxable been now excluding our for Slide the of to and of generated rate impact approximately conversion anticipate weighted average free third approximately Turning XX, maintained the capital the swaps anticipate million $X.X normalized X.Xx quarter. tax conversion XX%. excluding cash had We flow, of free stock. fourth and as free this cash We leverage cross-currency associated to approximately utilize conversion X%. And XX% to $XXX flow back flow would million fourth $XXX in conversion year-to-date in buyback quarter, conversion anticipate returned we cash outlook of free in of resulted including of we a our for an for a Reflecting quarter, would the billion flow the the million flow free of interest we year. in cash from approximate share shareholders, cash year. approximately the the impact, headwind in XX% more the with This buy $XXX quarter XX%, excess gain

cash in the capital free We’re targeted highly Enterprise expenditures conversion driven by the a focused in outlined program. on with moving aligned flow priorities improving our forward, reduction transformation

will This we’re macroeconomic around putting dividend fund and believe philosophy, capital longer with XX% of committed mentioned, no We given balance we an debt modestly plainly, in incremental growth focus the further commentary for annual de-lever plus of competitive the environment. share a our the continue on XXXX to to remain as anticipate Said that sheet as is target. out a our differentiator. allocation strength XX enterprise XX% growth, taking ratio heightened payout Slide to in a repurchase. Gary sheet to Turning supporting our appropriate EBITDA balance conjunction

Beyond our cash will be repurchase consistent historical default dividend expenditures, capital strategy. capital with our excess use free flow, and share our of allocation

are We outlook incremental guidance. to and year. adjusting Stephanie that year vectors discussed Slide driving reflecting in several XX. the our Turning reduction primary we’re throughout persistent our headwinds There the have full XXXX presentation, for Gary, I the and three

factors factors on Most seen we’ve these macro of region. broader incremental the the is Europe, within pressure streams. and trends notable putting macro First, within various our our merchant volumes recessionary of the impacting portions UK revenue

the of markets, reduced our level slowing credit in assumption to due Given quarter. the bank consolidation deteriorating termination we’ve for fees

this XXXX is our driving to While a material the benefit ultimately over it’s expectations. of a health the FIS to reduction longer-term,

The inflation infrastructure pressures costs. base. and of would second incremental wage, inclusive and cost the expense is vector be impacting This vendor

mix elongation zero while an and previously impacted margin. and some This it a has which last price revenue push via on forecasted revenues, due resulting margins. has larger to timing been certain benefit with negatively associated pass-through revenue Additionally, in in vector incremental sales revenues. is execution low The inflation our in continued has transactions, to to resulted carry streams higher escalators, also

We also incorporated our third expectations. compared original quarter results into this revised to outlook

backdrop and While the mix profiles. a and backlog businesses however, different the concentration margin our revenue of us recurring offset most revenue has of to of challenges, allowed is size challenging, our with

of remains our we We that within earlier, our the teams very are expansion mine the address margin closely. will finance believe Stephanie be longer-term these model. priority announced enterprise our A pressures a staple inside key looking and and to discussed operating transformation control through things managing cost that program

across enterprise. drive the manage we control look incremental the capital to operating through cannot and macro, micro expenditures we to While profitability both the and will cash

guidance. Turning Slide a XX of summary for revised to our

$XX.XX $X.XX resulting EBITDA to of of $X.XX. to year, we of the billion billion now anticipate revenue Adjusted XX.X% $X.XX revenue EPS XX.X% X%. of to consolidated in X% and billion of $X.XX margins $XX.XX organic to billion growth For or adjusted to

from to our current guide. fourth incorporate proactively our XXXX clear, above full de-risking our are additional and To business be macro We fourth forecast what deterioration our year is experiencing. guidance currently is quarter quarter

decreased our assumptions we’re visibility. capital U.S. challenges For a are incorporating non-recurring With across to high the and, UK we both to further associated markets, margin and respect lowering with revenue banking lesser Merchant, the given extent, consumer

I more the on As to setting CFO, the incoming as prudent side backdrop, relates uncertain forward to the caution it’s think of expectations. it given err

this As expect investors, be philosophy should forward. you to guidance my going

XX. Slide to Turning

guidance Given midterm we the macro uncertainty our we next readdress will in year. backdrop, reassessing are early the which

premature XXXX. at do this juncture $X.XX for some XXXX While offer provide it’s relates into amortization, our Beginning below-the-line and full year for want assumptions several the updating the outlook I is your with to as depreciation $X.XX to of to a purposes it billion color models. on formal to projection performance, current a billion of range operational

Moving to net interest expense.

of year range expense Assuming $XXX of interest debt, rate current our at for $XXX to the the million be full refinancing interest the million maturing XXXX net would projections. in

becomes our XX% around upcoming a below-the-line for repurchase optimal to our be At share in of use I continues to XXXX financials. share and repurchase expect we more to should we our economic if range our XXXX. time, back-end a Presently, higher XXXX, progress period will As would to reduction in $XXX rate expect end modeling year believe approximately externally slightly loaded to be count assist effective through debt over this accordingly. to the execute be in tax communicate share are our reasonable capital assumptions million. XX%,

the which investment his As will the to continues and wrap enterprise of financial by to Woodall with and and as being next merchants capabilities I continue a streams drive a provide saying of we and capital, expense for all and contributions we to institutions, allocator differentiate shareholders recurring finish disciplined results operating expansion, my of challenging community. value macroeconomic not this to to up chapter commit finance mission-critical line revenue model I’ll Session for prudent the from the conservative acknowledge clients one-to-many to across manager benefit prepared believe leadership I remarks, be now FIS underlying transparent FIS you Question-and-Answer remiss through Q&A. highly we enterprise of your communicator expertise Thank I’m with a margin for the will mentorship and and time morning. to through excited years the conditions, come. sustainable to for if and Woody company please predecessor, driving again Operator, did assume you I’d I our organization. open my the a consistent deliver of

Thank you. [Operator come Baird. And of question Instructions] today’s first line with go Koning Please will Dave from ahead. the

the Yes. Hey, been first for my the think the all guys. I competitive great you. a Thanks, data over It’s with And gotten most Woody, around Merchants, working of of time it guess years. question, XX%, like points just have we’ve when little we been seems over. maybe

You mid-single were guys digits.

you of soon take does line You maybe the do think it some get you And UK. again and the how between with grow think And But to again? are moving do industry can what with the you you explained the back? what industry? gaps the maybe parts in

Yes, that. Stephanie. take Dave, you. is I’ll This thank

consistently. been XXXX I look, at Merchant, you it’s consistent over been quarter-over-quarter. It’s mid-single-digit – think grower if XXXX, I pretty So a look think

Let’s terms we of deprioritizing. break what’s down strategic in what’s for and thinking about then strategically what are in us here

drive card-present as by far being think we the and providers. enterprise of we provider a large-scale one gains. scale to our of share in of about with the e-commerce provides That So the U.S., along market largest know, which business if lot most you business the broadly, really a strategic piece global the away, to are continue need is, you

seeing changes given Platforms. Given deprioritizing in with historically in our of are we SMB we’re over that payment the strategically Worldpay to there the portfolio. significant and the for embedded shifts industry, it had our structural we’ve strategy post moving all partners And those pandemic,

we continue to be the and as will mid-single-digit see is, way we forward the So we been go a world grower. have

You the and add you will to growth a higher drive has continue e-commerce segment, of portfolio. growth see which, part us know, in as our

our time, portfolio card-present not piece from upwards the the the rate. and XX% that SMB card then shift total of higher business to And of XX% back to of present pivoting pivot mix are We e-commerce over business strategy will this to a should growth take SMB.

know XXX% XXXX margins. was And businesses you. I year, both to And are and to we pressure. XXXX. we some zero. it’s at Great, close this the in all position guess I Merchant, it Yes. months thank expectation? just ago, Are maybe the on cost costs Like X, incremental just really margins where can When anniversary see is started, XX big to this I from that we’re feeling then away on we kind the plus far first And that if of anniversarying pressure savings that program? in margin look just normal don’t not it’s closer of think that a start if from inflation. again we incremental that, now

David, I way fair that’s to a it. think it’s Erik. Yes, about think

we’re as here. which seeing I at third broad-based down come high impacts is well predominant very drivers the macro quarter As would margins, two Payrix and include Ukraine. margins, incremental and in continued which where think the revenue UK about really One investment emerging channels, would as geographies Russia, be

Okay. guys. Great, thanks,

Please with Jason go [Operator Thank line And Kupferberg will you. from the Bank of America. Instructions] come that of ahead.

Appreciate for guys. Thanks, questions. taking Good you the morning.

medium-term be mentioned you pretty sounded certainly on know to relative high I I update quarter. met know September, guidance we you the Erik, when coming mean, an cost with there’ll I priority in next like So it is that for revenues. a you even

to some today. seem of underscoring be that You

our last have we And may evolve? Merchant how just financial said that time period model kind should some response to as have question, adjusted and we mid-single of the for we piece at try parts we properly of in models some those digits the be kind Are least. may think the Stephanie the is mental of out think about trending I right as in So should outlook of multiyear the get considering years? just

to that think it. about Jason, fair is way a

back us, We I As referencing to I And for for got are in items performance going focused in the we lastly, session, very, both during that to key excess relevant. believe operating that The into XXXX we’ve we’re cash got about visibility points well on the not beyond. as one-time were get think, expense. free my talked that with very I as repurchase. we’re macro as operational ongoing be things there interest well. we’ve – challenge prepared continues going four then to commitment for to four But capital lunch. that ensure expense, expenditures into XXXX wanted the still deep that mentioned flow a we spending sell-side and across remarks, to some associated the

Right. Right. XX Slide that And walk too, there. color doing really No, helpful, helpful. was just guidance that Yes. was actually

sounds trying million you’re $XXX Just to plus the as the how the at versus sense much CapEx expect in bottom of line point, reinvest? And OpEx that follow-up the would of a to the about, mix on cash drop get talked to XXXX. you at like versus in your component? of it What’s most rough savings, this you

Yes. that. I’ll answer know morning. yet. Don’t Good

aggressively So we we about, both as expenses. going are operating talked after,

Gary at As cycle. of we’re mentioned, the end investment our

and to guys down. makes at we’ve take of our right investments very a the momentum sitting the As now capital capital sense Those investments products natural modernization in those cycle, demand. terms significant made investment in in in market know, and it for But banking products merchant. positive as markets, very, you across yielded significant us

of $XXX in CapEx, or I flow improving much you versus reduction going pushing reallocation margins I increase at are XXXX, call, we’re ‘XX nonrecurring. very just yet into don’t then then on as to we’re flow experiencing feel on and for capital and And Overall, in much we impact have don’t as yet a have in But cash mentioned looking etcetera. Erik in that’s into coming XXXX. XXXX. So our how around OpEx, and the driving going cash million we’re significant the active of some really operating the expenses, inflationary and

We just planning will come to in actions detailed and fourth quarter now. you happening because the back we’re

Okay.

Thank you soon. see will We you.

that Thank from you. [Operator Instructions] And line Please with Peller the of go will come Darrin Research. ahead. Wolfe

different guys. My always a looking or has been Thanks, around, at portfolio is historically, throughout manager good question really assets FIS business. the manager a

makes focus, off are cash want being whether assets reconsider And markets areas really that better company at just assets to so with is wonder, of those versus you there merchant do got it looking while well, that business whether to another could could and a that, continuing parts be obviously be could banking, just you right, makes it’s sales. sense from some the or me again, reinvest if that use grow to in

divestitures some just So it’s acquisitions make – on assets real maybe whether that there any is into and a sense then consideration revisit as is – management, well? broken given whether merchant side if there, there portfolio the of quick out further the or of

Yes, question. for the Absolutely. Darrin, thanks

sure that I divest here portfolio one, underperforming strength, businesses, capital, have FIS as strategic which We think well M&A. and good say, strong is a being we’ve two would as I we of making at in strategically, really, etcetera, reallocate provider very managers things: been really

come come full-scale as doing to bottom business, and and should of that, I think Erik So top review, a at looking in just terms I into we we are we the be what doing.

it’s platform. said, important Although three be on these strategically, one for that I segments believe, being really to together

products where because either countries we really business transaction would of capital company, getting underlying might large assets do look certain small like we focused allocation we see getting across right to us return, someone model, So of big, correct, we’re the operating on don’t better with now together. going of do simplifying to sure you’re any certain we’re getting right ability on cross-sell sell. making the believe, suited the areas why for strategically, buy at out What we selling we of you else. structure in But things us us cost the think or think And being these segments. the that focus our is see not look be the to is

We So that capital. on creation. are value focus allocators we always always of said, being prudent

look leverage the will to flow sure we we’re what And always make two return the But at to that. the cash really is drive driving over we on the really focused and can next to the costs that continue we need so quarters company. of out operating

when M&A. me wouldn’t do environment you We that lowest that be trough into heading let environment when Darrin, believe would we’re will starting out. be see do I M&A That’s add fundamentally about of there. historically, their is, future reality mean one ask The come the you M&A and did into level softening. would a downturn, macro opportunity. you macro and just to do thing also at the going you’re valuations you the

they how if occurs long balance just So talk that an to and and It going evaluate one is to an fortifying deep, be not, position take sheet given when right? is see opportunity we’re how about that in give the the to and advantage puts is sheet there of we but when trough on that, of the a balance really then doing based us or things recovery. recession – it team will economic that the

So I that. just share wanted to

point. a great That’s

Yes. No, a lot sense. that of makes

sense. banking follow-up just you been merchant resilient. could is capital makes touch Just permitted. markets gave If we very thoughts and the the quick It’s and and strong the on [indiscernible] on on information

And been? front think as demand you And on it? about questions as with we now, into some next around are what market when year resilience even the so in that macro the strong it’s seeing X? Is or

and some be we listen, – on I there. investments say institution solutions can need both financial continues the Yes. enough continues be very and to our the modernize made meet would about broadly strong, is get I and a they that the I market needs Erik significantly also omni-channel and on products digitization to time. markets. those to at spending perfect few But in add capabilities No, capital The banking demand commentary didn’t really then give how things color

the and and demand in to really seeing, quarter, sales second we the just cycles. high. So flagged What elongating started it be seeing we’re we it is continues

here. somewhat the why that’s we’re macro so And calling

to decisions. taking financial seeing We’re institutions make longer

the have And we don’t products. slow we that great quarter slow. and decisions products, quarter, not certainly third seeing saw but as We’re they They we like in then seeing are a decision like second the visibility.

close. We strong. what financial think are economy. in of the they great prudent being have bit terms institution challenged those that’s a But we’re a the market I with a little of going It’s the And just pipeline. little transparency to when very becoming across are seeing

behave. So for people is demand bit how we’re I macro be of seeing to the strong. there terms in would What out a you say the we’re of continues calling

on interesting. Let I seeing It’s with what, alone through yesterday to I’ve talking three CEOs different a was seen going bit stronger. the with Darrin. what they industry that, really in add banking never the little our etcetera. me relationship, are market, on what’s

You are seeing massive interest rate increases, so expanding. their NIMs

up. profitability So way is going

quality it’s are You’re they causing very separate reality maybe of they we the pause because them credit seeing something concerned don’t else occasions, is – know. everybody is actually seeing just what are three we all strong. not. on I And to the is their that comment are well, that, had there

but not past. And in so demand elongating a we have issue, that’s the sales cycle. It’s seen what’s this the

they very take something And strong cautious XX because interest the yesterday days concerned equity they and that so, the the to might strong are XXX saw They taken rates, you days, though it even in have are rightfully are a growth. with market. So, might just profitability close, the latest right. just to having market rhetoric very, responded how

and is then baked and you occurs decline. messaging see it’s We in say there that the continue to

and seeing. very that decisioning. and prudent is And very time are products timed. business leaders, are very that’s what very All But a of more demand good, that our little just take well strong makes in we

Stephanie. Thanks Gary. Thanks it. Got

bet. You

Thank ISI. will the David Togut Instructions] you. That [Operator Evercore go come line with ahead. Please of from

Good you Heritage really In a the in the mitigate earnings specific UK? plan of in UK? other pressure aimed enterprise to transformation Worldpay at UK-based, morning. you. largely the Worldpay Since Heritage is Thank taking are what part steps is words, the

Yes.

them. take is UK will I of XX% Worldpay. So, The

the I American-based. So, I Actually, would it Worldpay consider North consider don’t broadly business a base. Worldpay

And our given there there you is enterprise. also would e-commerce North North is present the size as in expect, If portfolio, about – card of primarily it, of then is is market. global a you think large American really America, which the a lot

So, the it of piece UK XX%. is

right, in You what time then a days about we least what Prime going pretty was a guide they very recession we felt a I in we mean once, economic it Ministers ago, is XX thought and challenging quarter changed at happening maybe was there. there, considering good gave are – second – twice.

the look next economic the in so struggling, pretty recession, over days, to UK as and it. call in it’s a out even conditions consumers tied are are we their consumer spend. tough XX are And to are we challenging. the And They

high-margin So, as is payment and it goes up business, just down, processing. that like a

million So, cost of is costs, program our in broad-based. of terms $XXX

cuts impact the there. you And really margin it never will of it is the we business make that or are ability business impair but Of we so course, small. our We will will the such UK, but very what customers. we are looking really at us the couldn’t is see on UK, just for grow the the make expand do conscious to

across program just So, entire global we would that portfolio. on It’s will And say enterprise-wide. enterprise be I transformation is that. everything focusing our

the I that. Appreciate thinking was before merger. of Worldpay Heritage Vantage

that market-based comments Just revenue in X%, weakness on a of Stephanie, quick follow-up, in versus QX how much SMB FIS-specific? your merchant is solutions down

would we strategically – think a from – book. say I in our that about of to are portfolio card-present our I us the that us, that’s think perspective mean terms business business. book, pivoting ISV ISO terminal-based on primarily being I to platforms market so probably for it’s largely

an card omni So, not present capability.

we of more platforms our strategically piece business, us. It’s to away business, ISV And it’s want for focused business just from that. are or whether and on business be that a our we not high-growth via So, ISO in e-commerce. pivoting SMB

So, would say than the the us more I number broad market. probably is

Congratulations you. Stephanie. Thank Gary and

you. Thank

Thanks David.

from That Instructions] Huang [Operator the with you. Thank will go Please line Tien-tsin JPMorgan. ahead. of come

Thank given you Hey. I of Good have to already. I the much. think, so morning. on, some you answers build wanted

the we – about super thinking I buyer. know about Just talked Gary,

But merchant mentioned you have bit. has banking. changing and a I if because relabeled market project the focus equity apps still on feels And think you it’s curious is providing services that am important. little the Amplify. and intensity of it I changed cross-selling like and just Stephanie, as super It

So, that Amplify? Do I the in have test main mind? of project targets to Has you want changed just importance again way? in the the

Yes.

No, go Stephanie. ahead, ahead. Go

we say bullish So, Tien-tsin, it. I are more even would about

So, I think bit. a evolved have we this

the retailer doing. and piece, not and about to And across if we out of financial You us product majority are some across what’s to segments, talking the global are them go grocery sort are to, CEO, at talk when almost really top three I if really us clients are mean transaction enterprise, services. our embedding are in the for financial we right, just the services them provider happening to about world large about which about every the to book it’s all of of talking largest and e-commerce seeing And we or think a have transaction have out whether looking is – technology but payments all point the we our we example, users. continue super that look encouraging. evolution in in the the of broadly, the you you XXX and at

And segments of so our broad breadth customers. of capabilities our resonate large across all and

And so our into opportunity. we are we calling Amplify formalizing are what it

excited the will more back opportunity. about it reasons fourth initial goaling success. lot view absolutely, the I we towards we more We be size some why a it, giving quarter, of seeing are It’s and one are am on in the very and

drive revenue opportunity significant very incremental a of by have growth it. We to more doing

don’t to it. And we be about very that know excited continue so it’s evolving than other I

I would thing it, super concept Tien-tsin. you app. add one Yes. the used to add mean one just would I I –

large We that than to development. simply that cross-sales that do I next level. had the with super and to up real amplifying integration the careful. to we super would is be would view taking user a different success a we the app, of going super So, app Worldpay want dictate This are

not So, absolutely housed. cross-sales more that over the of really fundamental large they starting in Stephanie and customers is FIS, incenting to all think a team to all traditional the driving sales about drive behavior our segments across within way. And

need they three all segment segments, Our large just are not one the of customers, most capabilities reality the them enterprise is in in.

effort here. Stephanie development There incentive effort there not is large large focused here. a not There a spend is So, is is that driving. a

a things to I And that. I merchants. there of they lot know think Thanks Perfect. users do there. look, clarifying of some can and for overlap and bank their want is

I clarified me. for you So, am that glad

more, know if and and it just think like quick don’t it I FIS to wholesale doing going in learn SMB face-to-face SMB sense. quick. – is – side, willing the I provider sounds you just within mind, to my more this just on follow-up, I Omni, you don’t be which we but know said pivoting If My to then are platform makes the

a you platform example, service is A pay-in, SMB Does type platform towards pay-out, moving to there. new lot there? for to larger different is because can mean inorganically? or invest more do Thank piece, services. to know enterprise, important on organically of that SMBs either what really are it’s in this need you within areas think I you. but moving it that be on I need Do to and successful feels platforms, you need like you e-comm there platform. have

Great Yes. question.

both We are payment absolutely strategy to Payrix asset. behind our buying was payments embedded shifting capabilities, significant to and services the via the deliver financial our reason through That structure. platform

asset embed services finance. payments, also to enables not financial that embedded think only embed us So, to but

that pivot strategic we are is embarking point the Tien-tsin, right. that’s exactly upon. So, And your

payments embedded we So, today. have

for people we the Worldpay we have through have deploy SMBs that And platforms, behind because technology a deposit service integrating is three are capabilities already as into and sheet. Platform. the We a sit into the we issuing that taking a biggest balance as those then it FIS have want service, service their as which the will the lending that

have we in we it provider. have kind standpoint, have So, with it’s historically or ecosystem to embedded three you been infrastructure whether if platforms, That’s in sat respect our in service you about SMBs, things. where to have a to the software from think as that be the effectively of

balance uniquely do our think e-commerce ultimately capability, platform to provide We it to institutions. a you use technology sheet, and the have are the positioned have not is we sheet. the the going What you then into financial enable but have that to their will connectivity the we have able capability. be balance to are because to service own have we have tap of to global can we have You financial because

exactly are you So, right.

here. components We are have on platform and building. organically believe components We strategy were a we already the embarking the

now capabilities strategic the it’s was we getting we build a bought already not and enabling have. Payrix for So, huge the it’s that us. platform The all through piece big

it, add That Stephanie to some seeing only to I Erik platform. related referenced, going pressure just in is the are Yes. was Tien-tsin. hit mean merchant the I was of the in mean investment I and have, margin we

on let’s but So, it’s well-established base. – all organic not internally a

done well. So, very, the products very

very, but the are organically it a strong key but growth. it’s days, We seeing funded. be very business, of future overall to component certainly It’s merchant the early will

you Thank for Thank long-winded giving question. a you. Okay. this

MoffettNathanson. line will Thank come with from you. ahead. [Operator And Ellis go Instructions] Lisa Please the that of

Stephanie, Good Thanks Hi. for question. morning. this for my is one taking you.

lot ground a covered today. have of We

here. lot You have of good underway a initiatives

from how now? priorities tying when about you differently thinking Just will all that together, are your look be FIS, to thinking investors it XX months FIS vision months and should XX for

thanks Lisa. for question, the Well,

will operating see embedded of us most So, we just thinking is to pivoting which and over to not But as focus to of platform strategy described, drive to do expenditures to incremental creation how space and months, we operating think next first, strength get importantly, next be, then base. to is best-in-class, products X focused is we flow the across conversion model capital operating marketplace after the significant also FIS I existing think is have taking its think in, are be the company, make only that which cross-sell the cost XX our start my thinking made we I see from cash we and Worldpay really to across really, you about our would are like continue revenue then back or and us to looking And really standpoint, some on do about and do start that a our going to how you probably selling space, I the but segments going FIS the in XX where strength, think the what deliver given in which strategic continuing really go to XX to we once through existing the services see flow expenses the possibly look pivot has value to the or of been. M&A. be ours. about And and cash And will us a Amplify, over our capital. on really months, embedded to and redeploying want given where strength back at either we differently, you return free sheet, the continues improvements cost model finance. it where we But and best-in-class payments, months our at to balance M&A, on cash to has products months them want terms point, payment given underlying growth customer structure, in structure to Gary’s in to sure for

how the months. think about Erik and I where that’s months So, XX I to over focused XX is focused next am

revenue, X% excluding the corporate you. just on Thank biggest today, it new the program. a What Okay. transformation of the Good. And the the it’s you out list running at called know know are presentation because in for the headquarters. just on side. about some you mentioned then follow-up enterprise CapEx I areas I it’s – of

of then were So, side where I think question about balance And you in the the after how you that Tien-tsin’s bring kind what business? investments are you down with some just am thinking areas of you CapEx? calling can just the platform out

Yes.

So, it is literally just that.

remarks, center their made segments all we mentioned products. Worldpay, consolidation, years investments over access platform, and modern the have Demand so market. clear platform, we significant in high. new investments derivatives last is Gary I are They PX, in acquiring X his prepared made in as products. have in mean So, data banking now of the

them. seeing a great in are We big uptake

end start levels. of that cycle down us normalized it’s So, at to a more bringing natural just the investment a of lot for to

first normal much a the doing. hard as because I are it it’s thing that the investment that’s at So, not of And we as cycle. honestly, would say, is end

pulling So, we those down. are

are exactly you right. Now,

We are focused creation it, definitely of some it. of all and we and making investing are not value on that sure investing

we capital etcetera. back been to not need the is it strategically that sure have of nearly platforms all But heavy business, Some investment our the grow we have that making. into it making we

into XX we of then we will And but call the next to levels where expenditures yet businesses see end time. down months down growth us to forward. see will it expect to to Not XX so but wouldn’t up, where going need bring months, X% significantly we in revenue capital reallocate over see normal and over you the would we ready it think coming

you. Thank perfect. you. It’s Thank

Please [Operator Thank go line will El-Assal the Ramsey you. come Instructions] And Barclays. with that ahead. of from

just sort it’s question, are and Hi. much now. more – taking more But and we Thank you like of time, the to this sort competition free flow the we follow-up have of answer is business question this tech cash and a larger a changed intensive heightened should of so whether a think It And normalized my more Lisa’s of of requirement just conversion much is for cash capital have you forward. return to time? morning. – question may businesses requirements. whether non-recurring conversion become will flow there started a of for investments, sort sounds has impacts, capital free having touch over – profile we of more on over it the a perhaps go as you the Should levels because to about and the as it seeing on

Hey Ramsey.

that one-time believe us anything lead are other structural model it about you think right. thinking to There in nothing nature. in than would is that it’s I our

Okay. sort from enterprise of there? hanging I the And question program. was that of I had I transformation in fruit Jason’s – were? a think you of do it lowest-hanging it fruit earlier around reduction on kind see buckets. the expense lowest question be Where follow-up larger as called seem to sort any some terms you Are of out areas there know particular the

that. on give to color Happy Sure. some

I bringing that spoke capital coming for terms about, of is what us down down just think levels. fairly in is just the the normalized evolution I fruit thinking of low-hanging which to about natural expenditure

spend. around vendor second The is

as can are pressures around prudent we So, brought the have and vendors. making as through company there. capabilities to can inflationary given the you great be that offsetting we our inflated proactive sure us, we But we continue that together, around expect, we very our costs vendors have coming

of lot those obviously, we activities and really So, across looking of then we the in And duplication – then are really see work operate segments, first cost containment opportunity spend. vendor a broadly. at we looking all be operating at then countries. hard And some things high-level company. we we are looking But want are those need if a global so we We to are around in operate lot at. countries world, rationalizing a in the the of and of

Thanks That’s super helpful. much. so

you. Gary does closing Thank This remarks. would call conclude of Q&A like turn question-and-answer now any End today’s of over today’s Norcross call. Mr. the I to portion for to

of to have Executive to engaged more your staying our leading years, the Thank way our than FIS. including the upon serving for closing, that built as you. continue is as XX XXXX. share dedication withstand you economic In backdrop, company will served colleagues to the uncertain on CEO you the been I since embark and for forward [Technical it next has have we a this joining made like would privilege to I we to our today. company Difficulty]. At across Thank to will The Thank an Chairman as position look build advance we to we serve. we for markets FIS, call chapter actively clients. to XX,XXX continue

today’s you concludes Thank This conference call. for participating.

disconnect. now may You