Fidelity National Information Services (FIS) 13 Feb 232022 Q4 Earnings call transcript

Good day and welcome to the FIS Fourth Quarter 2022 Earnings Conference 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.

operator. you, Thank everyone. Good morning, for quarter joining the you today us earnings conference fourth XXXX FIS call. Thank for This call is being webcasted. Today’s news on fisglobal.com. available are webcast release, corresponding our presentation website and all at

our this CFO. results our will and our update, lead a guidance. are call followed Erik with Stephanie the call providing and on President; and forward me Stephanie With financial Ferris, strategic CEO the by and Hoag, reviewing morning operational Erik

risks These as Slide uncertainties X, Please will statements whether company The today’s refer Safe in to are statements, press as the and of statements. required law. except any a events obligation update to the filings to to described new Turning with other contain subject undertakes remarks and information, result no as by language. forward-looking forward-looking Harbor future SEC. otherwise release the or

are be of Also, non-GAAP cash adjusted earnings throughout information defined per presenting share earnings net Reconciliation financial is by for measures are our information, to as not non-GAAP including These financial release. we conference presented free earnings, call, financial EBITDA, adjusted the information company, GAAP net important in GAAP. this and the but our performance measures will adjusted flow.

over With that, will to turn Stephanie. call I the

all Thank as my first this the for you, earnings CEO thank George morning. and you call us joining Today marks of FIS.

clients, recommit our the reflect on to to opportunity our and begin me by our feel saying by future restart privileged Let investors. and incredibly I past, colleagues

FIS is marquee and a set of a company clients. assets tremendous with world-class

to intersect. leader change, positioning Today, industry chapter. will than history, present where the next We decades and with five more you are opportunity of I challenge an

Worldpay. strategic financial and of including lot specific a have business the of quarter to our cover, includes XXXX guidance fourth which spin-off merchant of planned results, our outcomes We our review ground

by for financial that that me met fourth to Let report the pleased I goals we am sharing quarter. start our

meet do the to are of forward. our a a of business and is we a our recognize expectations that have will align we of needs share to we this our the work shareholders. of taking Today, While we better step, to lot number expectations actions with clients our good first decisive going

me path Let our through forward. take you

set Turning earnings of performance a and the business, quality. free improve operational agenda we improve the have client to sharpen X, to new the well cash as the of focus, the as Slide our both company flow

We drive three do to key underpin that of value. following this by principles will all go-forward our will actions

of at clients we First, culture. we center do the ensure will that everything client-centric are creating a by

And of and to foundation the for market continue Combined, to innovate will solutions simplify and decision-making growth these principles we effectiveness to profitability. across growth. profitable improve our to our drive ensure will portfolio of efficiency, and to our Second, time clients. third, streamline operations, efforts form our we

to Turning Slide X.

with have Over strategically past moved of XX number the focus a we of sense the important highest urgency advance and days, to initiatives.

shareholder value we goal structure First, client assessment stronger with FIS results, company’s of and announced comprehensive we a enhance and positioning to of increase Directors Board strategy, operations in December, the with the that of the drive experience. initiated

my the expected is today and the FIS assessment, announce phase is and public transaction. world-class pleasure Charles strategic the planned to Worldpay. the an will It of as creating my closing business, we a we also ongoing to Worldpay’s this merchant a two announced of Drucker, As agreed adviser become our of me. companies, Worldpay’s CEO, lead pursuing close colleague, friend former outcome is spin-off are return preparedness and of to CEO has Charles, who to upon spin-off that

effectiveness of the program, an to are ahead company by exceed target this enterprise performance the Future growth we driving XXXX. our we original savings million year with the exiting to by is XXXX. net $XXX which we across the improve When cash we and speed billion transformation program. million the our deliver facet effect to branded the enterprise. am November that end of expect launched year efficiency, the happy in $XXX targeting have that moving of of across increasing Forward, Future to now announced end profitable to every in Second, we launching This and to I share savings prior of spin-off $X.XX company operational we am by are I target Forward,

we cost As cash be will continue intensely focused and generation management, are earlier, earnings to I on and mentioned quality.

company we on be our December to us And creation, first performance Third, to I realignment tied Directors able commitments, Board beginning and to realigning is scores. we for shareholder am to have what governance. the our just our continued of proud programs order independent fourth, of in satisfaction announcement, XX is us. with This the have this consistent our we been reshape client days. for do value In for are incentive deliver to critical.

clients value our pace also separating describes best should team additional respective two for each Worldpay way simplify The that operations standalone will management businesses. of of It rationale critical all result give X Worldpay like FIS and flexibility and for for a business capital the for increased in market creation leaders, the proposition businesses a deliver the commercial clients is disruption capitalize for of value-creation finance partnership each alike. capabilities different It key dis-synergy. to expected through shareholders strategy operate will close that accelerating, allocation merchant and ahead to in growth our to The two FIS value opportunities limiting from rapidly the potential separation preserving significant is and markets. payback on their our well-positioned both of payments and delivers Slide in investment the requiring premium and business. maintain a in embedded loyalty

their and strong and Worldpay different underlying rating FIS while will strategies to enables to aggressively it capital pursue growth A enabling a to targets separation invest FIS Worldpay needs. more credit market implement allocation Specifically, also enable investment-grade which align growth. in to

Slide and and together. Both operating as asset remains commercial a institutions, global together, global unrivaled entities, FIS market banks can in right spectrum. technology, separate superior scale. marquee Both serves of of payment one a across the to By Worldpay forging own global we of the serve boast by the retail will their one acquirer and X. a number relationship Turning transactions. blue-chip affect compared them community keeping and needs internet number leaders be the and remains to provider of by outcome world’s FinTech global global FIS Both companies Worldpay needs distribution companies. the regional set technology clients. companies set the serves financial managers companies

will for most Let the the context institutions. maintain Slide is me some on means complex this roots. advantage additional for X. its FIS provide competitive its transaction in to This to business innovative financial focus what standalone to the next-generation delivering solutions company allow returning technology FIS

the position way conservative be capital to aligned are investment Additionally, that growing better to return model a compounder structure capital We Worldpay before dividends. shareholders and FIS more which committed balance investment to quality Putting to grade in FIS with our organic operated closely its FIS the returning is will it M&A. we with and historical ratings, of remain complementary acquisition. altogether,

margin and revenue emphasize growth, As capital recurring consistent return a disciplined compounder, quality steady expansion FIS shareholders. to will

spend, will Consequently, and to conversion growth. free less the our and I cash move would we flow higher expect Importantly, working capital expenditures. maximizing prioritize revenue post capital free permanently lower cash reflecting profitable flow volatility

measures deploy. cash Lastly, reported earnings flow and earnings provide to and improving additional our with narrowing discussion cash committed free our GAAP includes will the we of Erik delta presenting are to align color we the the that his of available quality This during earnings. between have financials. adjusted better

which company Worldpay to and in require capital we dynamic Heritage better is does more consistent shareholder disruptive with a and the The the market M&A and touch an more Worldpay return I the more relative FIS that more to to Now operates investment Worldpay Central growth-oriented of a drive strategy, more strategy on investor suited separation growth from not to pursue will closely to will believe enhanced rating. FIS structure a a grade end with is expectations. growth a focus. for strategy allow aligns value.

towards repivot total strategy percent back strengthen the is proposition Worldpay platform to with organic steps increasing revenue. the Beyond an includes for business investment its ISVs investment, of value in aggressive company’s to toward taking the the team This growth. push and the e-commerce continued a

While an near-term growth shareholders profitability, are to can we impacting investments are the return confident for and value entity. independent business deliver as

of some expansion. insight so additional I’d to durability businesses. the markets banking they into I deliver Slide and accelerating am And Turning revenue and to our are growth poised why confident capital to that like margin provide XX,

specific recurring performance business, which to the of more the reorienting are Banking There a We masking path are in challenges sustainable, revenue of quality growth. FIS two are underlying higher particularly our segment. toward XXXX,

transactions. very our discussed is our transactions first The large win stable. remains opportunities To for elongation be sales previously clear, on pipeline and in rate our robust is of cycles

as confident economic accelerate. are conditions sales stabilize, We will

We better profitable help also We well highly cross-sell as hire growth sized a institutions. deal driving penetrate us Officer regardless to financial recurring existing focus smaller this revenue with Revenue on clients believe of hired and Chief as size. will up-sell

a and do largely one-time to XXXX. The in headwind similar headwind second revenue consolidations. to challenge XXXX. deconversion fees be headwind is to one-time X% from growth and another licenses We non-recurring revenue, this remain We a tied fee expect anticipate deconversion bank license in not

the While which XXXX. our X% our in future capital a With markets and a underlying headwind banking growth to short-term we and businesses. segments the markets margin for capital above strength is are normalized on and from rate these expecting for us, demonstrates high-quality revenue the approximately for forward our benefit believe banking recurring trends creating we growth initiative, of X%, refocus expansion are

of year. our return hit actions, will we low margin and these result of have the expansion of a their are back half margin confident As that businesses in timing to the the contraction the point around

now of expansion growth, value create generates a robust flow. margin free On forward actions that are altogether, the all we to the future trajectory a cash recurring have planning quality FIS taken take. to Tying and single-digit mid on compounder shareholder it as consistent is back revenue

in like initiative the billion I’d a these the Turning how of the year I flow performance to XX, efficiencies quality. for designed to regular end improve toward will of internally, Forward while generation targets. Forward. is by permanently by to company free by have Slide savings this million XXXX. $X.XX progress our the a outcomes achieve of the on to end driving cash Future we we operational to earnings $XXX improved moment will and spin-off, take delivering describe you cash clients prior net Future updates of achieving effect the and described with already provide multifaceted

technology solutions more by our We anticipating needs. continuing clients that the Worldpay human with of accelerate operating effectively post-spin. efficient align the on by development continue best their by focused next-generation driving our future through our and and more outcomes of reduced needs a at are complexity initiatives structure resources on meeting of and toward growth to capital the returns Driving prioritizing needs focus and and lastly, important improved continued FIS shareholders. And sales a These clients will productivity, clients. expected the

to to on our will XXXX financial steps sustainable XX turning business value over and beyond. and of will profitability the his Erik in for XXXX creation next reposition work review. to I before to FIS return as Slide a year recommitment for we cover growth, the be call

XX we months. are next we within Worldpay, of spin-off which complete the focused executing expect First, the on to

continue to of our we sharpening our operational promote and to all commitments a Second, to focus on stakeholders. are client-centric our deliver to culture

that value on Forward we Third, and flow Worldpay and improved progress action And FIS to with have in made performance. with are am laser-focused cash our short quality. will finally, are both initiatives period forward. am time. pleased the confident path I on continue and such earnings right a shareholder creating within of the we Future I maximize we

and And it over I turn fourth with outlook. our quarter that, Erik will discuss to XXXX to results Erik?

priorities of team Thanks, on before a new Stephanie. our I’d our by financial management touching some outlining start as like results. today to

beyond. be expectations that to revised about and I’d call, line out As with few priority like is outlook. for priorities we transparent last delivered more a in I our of Today, stated and results to lay XXXX a future ours

will we as FIS predictable and high-quality consistent a growth. First, with compounder manage earnings

achieve. compounder Our This a which shareholder will and financially structure strategy the to double-digit tenet long-term operationally is capital total of delivering FIS operational allocation prioritize core thesis, is return. investment and positioned

on in FIS. increase mentioned, and million. decreasing Stephanie flow cash enhancing as the XXXX, of Next, reduction we on $XXX steps to driven in cash increase In focused despite by approximately cash capital primarily This earnings, basis. characteristics are are taking an by a year-over-year anticipated expenditures will our we actionable our EBITDA flow be

I to and term. actions over we conscious shareholder integration strong taking spend the transformation are the to associated correct with returns confident also programs. taking deliver reduce one-time actions are We longer am

With with grew an quickly banking margins the fourth our adjusted X% results. that the XX.X%, as the billion, revenue quarter. consolidated $X.XX. to let’s pressures. margin level, to unfavorable an on basis, due quarter $X.X Banking EPS of in of inflationary touch X% segment yielding increased were revenue On adjusted and organically backdrop, a mix pressured At organically EBITDA cost

revenue. license revenue benefit in with We included X drove a Fourth of an growth which quarter capital increase organic had of and XXX points exceptionally growth margin renewals with basis timing non-recurring XX% strong expansion. point a quarter markets XX% the in revenue associated

a in license message headwind quarter the in should as any fourth tailwinds quarter to flagged or this benefit headwinds, look the of be I XXXX. As potential one-off proactively

increased tailwind, this trends. of ahead markets X% organically, historical well capital Excluding

the Additionally, grew recurring recurring XX%, than growth quarter fifth marking X%. revenue revenue greater of consecutive

strategy deployments continues remained Ukraine. constant Merchant durable Our grew headwind point to associated currency increasing a market. XX% transition and to a currency constant of growth basis Russia on quarter, to in strong, in basis. revenue fourth including on with the SaaS E-commerce a resonate X% the

the Our economic product believe SMB channel best lower and anticipate we softness investment, of and reflect These in compression present in this attrition weakness enable which new remedy. enterprise, in trends. did spin saw sales experienced year. further not UK card as outpace to trends the us a deterioration SMB and will lack And we

average was X.Xx. negative X.X% with we quickly sheet, as billion on in roughly capital more specifically flow $X Merchant to generated Touching $XX debt working lower free cash which of was timing flow and billion originally than XX/XX balance rate cash primarily a leverage segment. approximately receivables interest Total of the within and XXXX, of expected, weighted of the approximately due was

XX Slide our guidance. XXXX to for Turning

XX.X% year, forward our we look in build of in or X% to the With conservative remains anticipate billion organic billion $XX.XX commitments. Merchant assumes credibility guidance consolidated EBITDA $X.X of continue we global on X% positive clear, to billion $X. adjusted $X.X to billion of throughout To to further per be including a of revenue, that outlook recession philosophy Our deliver and deteriorate or XX.X% This year. impacting deterioration, projections and $XX.X $X.XX of growth margins assumes negative for to our as segment. share trends to earnings adjusted our the our macro revenue to macroeconomic mind,

revenue expansion We sustainable over as the expect course revenue expect X% margin revenues benefit shift we banking total improve expansion. well level, organic associated impact includes to over continues revenue our coupled growth to the growth over we of license Markets, of the At company This SaaS elongated to X%, half. non-recurring margins margin compares with of will X% throughout expect non-recurring difficult XXXX return the to associated continued as as with segment cycles. benefits Forward. multi-year which sales segment we lapping the cycles, improve to near-term Banking second ramp Capital with of organic In deployment a revenue. margins X% year, in the with Future

deterioration impacting and In XXX merchant, an anticipating attrition growth and basis organic basis to of point guide with revenue further SMB additional associated This we’re the headwind sub-segment, XXX in decline macro a compression reflects X%. by points. X%

post as scale organic with reaccelerate spin in again inorganic investments to market. to Worldpay and expect both the itself We differentiate leverages its once it

flow anticipate cash expanding flow focused fundamentals free over XXXX. Lastly, in cash conversion to on our XX% our and we’re

XX. Turning to Slide

impacting rate X% two is X%. believe empirically As Stephanie the mentioned, year headwinds growth this these segments to underlying and have temporary we

fundamentals various we for these strategic believe forward. our will which segments, undertaking priorities We’re moving improve

we’ve Revenue a First, focus sales and growth. Chief hired new to sustainable higher quality Officer on

banking we where while to expand have a will we clients. as solutions FIS our Specifically, clearly share of markets cross-selling we between to capital and want to market lasting transactions our we take clients ensure still large our with priority. pursue valued breadth that differentiated, The relationships continue existing is remains

an ramping through to expanding also XXXX see margin the support Forward and XXXX profile. Future of benefits We already

Lastly, mentioned, our operating our we spin on segment as the of of investments help focus clients. Merchant will our the our believe Stephanie and most pressing simplify model needs

overview turn headwinds, merchant Accounting known is With two to for profile I’ll growth we on an that, Merchant the X%. #XX. normalized growth of to Slide believe X%

of of approximately investment, these SMB first merchant sub-segment, X in lack The compression has guide. a headwinds our for product been and attrition our points of headwind in new accounting driving

spin confident successful structure philosophy. nature a addressed and capital to and transitions directly is will We’re this as the growth-oriented be Worldpay near-term of it with investment in

the anticipate year. is this Second impact macroeconomic we

markets, further in guide. for recessionary assumption priorities banking in the X% Similar assumes off the growth its normalized deterioration we’re and our The segment rate. will and our in in to to profile. merchant X accounts enhance this capital U.S. approximately profile competitive new growth product points recession accelerate guidance merchant taking macro investments from headwind to a benefit UK Our strategic and of This actions X% to

Additionally, and profitability later increasing beyond. in Future support help XXXX Forward will

noting finish contribution Future in the a Forward will in I’ll high the as the accelerating that benefit. beyond margin off segment underlying model. expansion XXXX by revenue carries in growth margin margin, revenue All very segment, as accelerates X% the view X% we it in, to which drive expansion the with normalized incorporated

and of expansion in In profitable Capital a leveraging margins of to over Banking Forward. Future margin Both the are These margins of to expected on would EBITDA revenue. and expand the Markets Moving expansion strength margins segments as expand XX XXXX. EBITDA Capital in and anticipate XX for durable longer term, Banking our model are #XX. both margin over one-to-many concentrations contribution businesses underlying and growth operating as Markets positioned to significant Slide increase high with to breakdown a in by points adjusted and expectations basis Capital basis. we recurring XXX reflects well This Markets Banking,

anticipate performance revenue payments. seeing anticipate in XXXX and associated we we a Merchant with incentive associated a expense weaker divested we’re headwind Merchant, EBITDA with with reduction lower businesses our impact corporate comparable from a the segment, on with segment, temporary and In higher Conversely, our In Corporate associated residual tough costs. coupled a in increased compensation. in

of two Looking beyond are confidence. margin moving appropriate path There tenants company we’re confident the XXXX, underpinning expansion. that the this we’re to key

Future with incremental to to First, XXXX. in Forward ramp benefit from continue expect we benefit to initiatives our

Second, from forward. structure, which we implemented will sales initiatives Both growth. of will higher continue to newly margin and moving these revenue benefit expansion FIS at commission margin our and support ongoing consistent emphasizes

Turning overview support Future cash. to profitability base for Slide of further and expense to will how our continue XX an Forward rightsize and

expect $XXX operating ramp generate rate savings These run to approximately of a expense We million exiting to million in-year XXXX. $XXX basis reduction. on will approximately

will our capital Forward Future to in savings, OpEx cash one-time reduction priority our expenditures these support flow a to addition and through In spend. improve program

a targeting another in by intend $XXX we CapEx reduce XXXX. million in and We’re $XXX to CapEx XXXX, reduction during million

ramping projects, aggressively integration with such in resulting as a cash. and consolidation platform transformation down associated also We’re spend to benefit

Taking $X.XX exiting this cash expected associated savings all to pleased into billion approximately we’re XXXX. account, forward future to net increase our of with

of program. those outlined provide aligned These targets achievement quarterly performance initiatives with We updates FIS of today. directly continue our improving and will of priorities operational bedrock the to for the the are the throughout on life

in current we’re XXXX, with and on capital our CapEx. debt, In increasing XXXX focused priorities I’ll paying on our XX. allocation dividend down – decreasing conclude Slide

is operating utilize key excess ratings, a cash capital our debt long-term FIS’ First, and flow in of investment-grade to credit support pillar which strategy. we reduce to free

we core XX% recently our than dividend more the our to year we XX%, target quarterly to and Next, exit ratio. anticipate of payout an approximating announced increase

line increasing to intend our dividend with earnings in we growth. forward, Moving roughly continue

As and capital this mentioned Stephanie in throughout prioritizing my I remarks, also are year. reduction prepared a expenditures

needs. putting return targeted heightened aligned an are focus We’re a making appropriate to to and on ROIC investments investment client ensure on

volatility conduct of review with comprehensive in in net expense. structure future our we spin, the conjunction a to will reduce our Finally, interest capital

with outcomes. of moving sense drive high to these a We’re urgency

the confident and this path earnings. remain we the that challenges, face right company’s flow is performance, to cash improve we free While forward

thank you their and open Operator, to like I’d morning. in the would note next this time everyone the assumptions spin our please guidance, appendix. questions. for steps Please line for additional on

from you. Tien-Tsin Instructions] question Thank come Huang Today’s [Operator with Morgan. first will JP

open. line Your is

so into work a went much. the thanks thought spin Hi, hard Stephanie, of decision. lot and

on I I spin cross-selling, Amplify, the changed what a project ask that. away versus about simplifying And follow-up. to wanted to And here of we’ve kind have and fluctuating which thing? of talked move and that well focus, from I management as promise and So know then the etcetera,

Yes, Tien-Tsin, thank you.

in as both accomplish to ability markets. time might been M&A short we’ve came really down So two you to very to be allocation what imagine, like very allocate about yes, and separate is a to organic excited period. It looking to what capital, and end able capital our

the lot market, So the and as payments M&A a with piece. associated more Markets Banking you Capital the needs know, it, that

we that and each we came looked separately in as at two those really to So other. need from set

primary the that driver. was so And

of I it simplification terms apart. you about think is three and operating all will breaking our finally, the as on piece, and actually ahead say, things would cross-selling we’re that obviously, simplifying Amplify important. of and always and full divisions, models secondly thirdly, across focus management become I think speed in on operational important very

us commercial between that We to partnerships Worldpay facilitate FIS both will cross-sell. establish and

view as still we So big a opportunity. that

dis-synergy We with there. and revenue as partnerships will respective up set that just make opportunity the the don’t commercial those we shares lose sure to

Right.

perfect. Okay. And that’s

to bit a So and final into my actual you. And That’s that? now component guess happen question. be a little built I about post we spin. commercial agreement reminder cross-selling between co-FIS piece. Thank the that understand Are the there is to more the going I spin M&A Worldpay? going will between and learn

yes. yes, Yes,

So we are working at high speed.

urgency. sense a from high see can You of

will – get back commercial to as specifically. will the soon be I And out, we working be we as you. will out Charles them So and we out have partnership worked those

every quarter. to specifically. But expect the out to those give us can relationships You see you update spin an would work on expect

cross-sell And we each sides to continue on other’s incentives to have so mitigate the dis-synergy. that and products both

the Thank you. with line [Operator Rayna Come UBS. Kumar of Instructions] from

Your line is open.

Good question. taking morning, my guys. Thanks for

assumes As economic persist a in would they conditions today? as growth your and how your curious UK. you guidance I’m U.S. the look are recession at just mentioned, the overall

couple So underlying that. does a a to the is drivers existing of guide include recession. There

said, First, macro. UK got the we’ve as you

The second shift is sub-segment. in predominantly seeing goods piece we’re the U.S., from enterprise our in a services to

We are merchant sales we XXX in – elongation seeing the spoken some of business. basis roughly, in points the as in for several we’ve we’ve the with that our quarters And banking deck, roughly cycle our macro. last about headwind as guide you saw in associated incorporated

Got it. Thank you.

Thank of you. Instructions] From MoffettNathanson. [Operator the with Ellis line Lisa

Your open. line is

detail I question. the early Thanks your get A detail, just commentary taking days. to guess, you know businesses? you how saw that unwinding Worldpay for of you there in? Or the mitigate good wanted the to that talk – about you. or FIS those merger we Thank separation I give expected re-separation here, managing know but have guys. I kind you’re there. synergies Like through Hi, we be the can how cost it’s good stuff, ways of thinking any that the to come lot are lot – together? of handle, going I you. will Thank my more on back assuming from costs to a are Should acquisition, of that? the of

Thanks, Yes. Lisa.

third be it out. the have and out, spun spun it back will we feel So confident, and this we – will time Charles sold given so it I very

it cost and the with out. the with familiar really it that structures and we’re taking in So putting benefits come

realize the to of I about way synergies it is we a lot think it cost did in. think bringing

as enter what we we dis-synergies relationships as commercial would dis-synergies. know to as fairly think we the We not can are manageable. have are, those think many I into many

So of Future and for we combination Worldpay both as to Future commercial Forward partnerships continue FIS. in through will the Forward. as to think continuing well lean

there, on manage to They lever we we’re we come that. had as out. the both in, coming that we extent push dis-synergies. at the But stop to the benefit forward, offset but think continue them will and sides not we we So, to as will well are tightly that going that of them look,

it. Got

Okay.

you down as the that. – Okay. it that said that You follow-up, bit allocation just can to little capital And then really ultimately, point a my on just you came elaborate it made?

I allocation change separated? do – what’s as you unable guess side So would a on combined capital entity have what been that to the being

Lisa. question, great Yes,

FIS standpoint, the to you as which drive investment-grade payments for a haven’t historically to as committed very any been M&A. our our big rating growth, an able or move in underpins weakness from into us know, really we’re And allocate ability So we we to been that’s capital forward business.

quickly. business different will We with at to that look for global they just end the the you so a we if having payments it peers, years. us, capital do that market think M&A that parent. we doing itself, I which repurchase our share been for given just towards scale enable believe distribution that the it have give historically, haven’t Unfortunately, is inside able moved couple fine. M&A of over platform last and a allocating been is do the cannot But business allocation

line Dave that Koning of Thank come the from you. Baird. with will [Operator Instructions] And

open. Your is line

Thank you a but it’s Payrix, Yes. on it’s quarter, bottom? question going through my in might context be how And the do And year. think been stable then see kind is Hey, to first when merchant, longer give on you I the and pretty term Could little of the I that little even you. guys. the guess down more. I a first full down think slightly, year

grow that’s just expected it well? lot. to think I transpiring a And how as maybe was

points numbers I that qualitatively will need Yes, be might take more it, on fine Dave. Erik if the good. we thinks And

obviously services. quarter, have Mastercard in about in fourth the talked I think standpoint U.S., from the recession seen Visa UK. a a And say broadly, we what with to would consistent we goods deterioration continued shift from the in

in guide shift. year, baked have throughout we continued that our so And the

just to to talked Erik wouldn’t overall in be are note, seeing we January, merchant flow expect positive about that think basis economic but positive through. impact XXX I the a about On we a points.

the about business. broad-based a from we’re recession So standpoint, how thinking that’s

as allocation with I we get continuing in XXXX. and really or be of mid-single-digit grower recessionary We ties and to a that back think capital, throughout come think can have back reside back just more M&A the do that a those business growth trajectory. this

maybe Alright. sum of Lisa’s of kind Alright. I expense question. have of there any everything? about corporate percent of kind then way The guess And what we the just think like of and something think is our – X% to when of my follow-up merchant, for add revenue us and or revenue to parts along we of

not yet, Dave. Yes,

back you on out be to will that. We

I thoughtful. sure before. I’m we could think right we was have back come to it into what not just be

to And you so back we be that. on will

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

is Your open. line

morning, start Good I the since that of RemainCo. the Banking obviously biggest part on side wanted guys. the to

grew just of X% midpoint you. in you’re that in recurring and guess, you’ve just I at bps XXXX. Thank there, Can XXX considering XXXX you organic a unpack mean, down about bit? XX% surprising. somewhat expecting, You deceleration I the revenue got

morning. Thanks Hey, Yes. the good question. for

large two In to – lapping of couple things good hey, a XX of number, the predominant here. drivers XX One deals. is the walking morning. So there is

longer value very the which quarter, contract second predominantly million. banking recurring the which of revenues. termination So XX. the elongated, of of Non-recurring some term of have roughly in second health overall spent the Those a drive large the XX calls $XX And is reduction quarter time segment. over and in total revenues the will fees driving the excess talking we about deals improve in revenue third to license from and down fees, some non-recurring half higher is step deals,

Okay.

to a wanted I Merchant go question, for second minute. my For to

sense Thank we us X% enterprise SMB? for you XXXX, X% if versus assuming at what you give So of are you. a down can for versus the e-com look to

Yes, sure.

is sub-segment, So is sits, single-digits, half enterprise up UK this well, continues down where double-digits. e-commerce our book, SMB book to low roughly which perform the double-digits. And down the the mid sub-segment, the

from Research. you. Darrin the That Thank Instructions] line will of Peller [Operator with Wolfe come

open. Your line is

Cap strong we showed for If for on could the Markets and – guys. want I follow-up as if Banking. well, to frankly, Thanks Hi. Banking just just and Markets Cap the minute a segment or segment –

or in Banking or has cost-saving anything help will despite you growth it’s the some term. can the coming not the just it are really you in growth to about, good want investments have in between I initiatives and it, us affect business your others. need the growth items of you Digital or that talked to you Modern on some mean you conviction where level returning as I One is, guidance sustain digit out us PaymentsOne in rate touch Your on mid-single whether profile? to the your give of But costs know that be business assets, that balance but

Yes. Darrin, a happy take that bit. little to

real recurring being the last in market, sure investment that best-in-class business move the amount years the in One, we as associated over have significant products Modern the capital of out investment you So, of Banking us to growth of making some All platform, terms nicely in I to mentioned, benefited etcetera. really has has we see revenue, played X driving revenue think forward. deliver the there, of you years Digital of right terms for as a amount investment with that out from X PaymentsOne,

around the very So, we more associated investments normal what reducing comfortable with to we feel rate. run consider that

lot strongly so recurring you and margin expansion. around business this costs costs expense more And on we expect, protecting of that the the ensure on around growth, focused can a revenue expenses for things. would we have underlying business deliver or one-time. as are then the – are infrastructure the of the in our to side We side, believe functional ability in to So, on very operating definitely capital reductions

As XXXX, in Erik has believe will reaccelerate X%. We coming terms as business of committed and two to impacting items the X% believe in We new on. you it to high the are said, margin know, really of it. it

laid about very cutting we growth continue underlying initiatives, cost Future to cutting So, as Forward feel to expand cost as ability And sake. margins. good about really our aren’t the our out as revenue of well kind we or

reduction faster time faster to market, agility, the flat speed, go see focused making we can faster You implementations that versus of etcetera, on just a really are expenses. out engine and

thanks. Stephanie Okay.

merchant e-com to being the back follow-up strategy able to the the the just what’s for on show Just really a I getting And growth foresee area of just are about strategy revisit to, business. side that a basically – guess the of SMB and/or acceleration the about quick that When is you still you that talking moment. the an an segment? it maybe on think side profile, we is getting

Of the overall segment? Yes.

I So, strategy the consistent. – is think look,

some I created structural our haven’t real challenges feed pandemic we some think enough segments. key in it the the of challenge to as for us been is because M&A, of able of our product, really lack

drive into say continuing are on to would we really I e-commerce segment. the So, broadly, focused more

in As you world. global are we largest know, acquirer the the

large e-commerce we only well. the not also platforms. we ability the think the now down but That’s space. of on focused payments, in have and move provider be to I been primarily with the And market embedded as bring acquisition are largest Payrix,

accessing for e-commerce it’s only large clients, small. So, not also us the but

imperative. to that continues be So, our strategic

of in software. book in that know, SMB our of card-present that historical ISO are the As you impaired primarily consolidation have restaurant ISV in some retail our we space pieces terms businesses or structurally are

And of process so those to large software become for business pieces more but those providers, like they would are we continue very enterprises. now our that

I the focused to distribution global say omnichannel to be platform e-commerce continues deliver capabilities, global forward payment the and the So, capabilities strategy and going best-in-class using would strategically, products. on

we challenge the put over M&A, best the market as end years platform across the to of for we is to need inability I think the sure moves. the our make couple that us get products use last to

with James. from come [Operator will Instructions] John you. Raymond Thank the of line Next Davis

line open. is Your

a go-forward guys. and the think this on how you going a said top morning about Stephanie, get I comments going about of buybacks more assume to we capital year. you EPS forward? RemainCo, digit kind Is that front, in Could way high-single growth going the And any there? the bit to Good the to about line get maybe just growth think EPS should Hey. wanted good we algo X% expand on points then RemainCo basis I forward basis? expansion? a talk X% XX allocation to little margin So,

Yes. Thanks John.

focused kind our future, becoming on are we around compounder. look, a returning back to of going to the So, roots

expansion, a balanced and double-digit I focus extent us of you going then is but portfolio and the think repurchase for free obviously, also dividend, the should to on sense focus flow share really that margin M&A makes pursuing both look what through, to TSR us forward. for cash on

Thanks. much any versus making basis business? the looks you would of And there merchant investments How margins are XXX are top color like in Erik, it it points, Okay. XXX Just of this merchant line then is points weaker that from be implied kind down another the basis like year. helpful.

Yes. of A Hey Number one, couple going in you the right. John. on things are margin side.

margin are got We down have on revenue. – we lower-high

and investing in Russia-Ukraine think your I some UK, think extent I compression are point, – think I that, also that sales to I are note And would thing seeing the third to crypto, So, We book. annualizes. in SMB the residuals we is, higher and the product. we

Instructions] the Thank Evercore that line with Togut you. David And will come [Operator from of ISI.

is open. Your line

Thank continue What of other but Good demand elongated in year closing flesh to ahead? deals commentary Solutions, assumptions remains the some little that in the Banking cycles. your you. you words you morning. are a in sales in bit for Could these pipeline out your strong

to. No, Thanks happy David. Yes.

we sizes, of all really provider think you about serve but in financial So, sit large we where also premier what financial services we if to we the institutions. serve, terms are

what large deals have large that won. we very XXXX, was we so frankly, saw in quite And – the some of historically

Templeton we can about T. a serve point examples of providers have the that of are client. think historically only that one that are where size you driven or really If of Rowe growth, Franklin

economic As mean put. institutions in financial conditions more those I more became uncertain, simply cautious, just XXXX just became

be those So, the continued push there. just to continue to They in transactions pipeline. out

institutions a where terms financial to go, they them, line frankly, there. to going is little cautious until are to about feel good going about bit of but we economy dotted to wanting really on So, those the sign be better feel continue in really the large

We out that’s But those don’t XXXX. still significantly hang in there. have closing high visibility. have also They we why

the conditions in our them. number us have pipeline, work big XXXX. to again We continue and XXXX, have don’t them But to we a prudent us guide, really in and have to want in and given happened to we happened economic

your a this platform as then roll And follow-up, year? are plans your in And what in from that? additional Modern Understood. guide Banking incorporated out to what’s modules

Yes.

Banking clients. platform mean of product last us. be us sign Modern continues for So, a amount over demand the strong years, up I significant of couple you saw really to a

and to is all We full swing continue mode. of those well. are one space, implementation Each at go different them in a

sell sure incremental do is and meet making for assets the our our significant focus I versus modules. that around But know would I work they more new can think that on and that us, our implement I expect clients and we current demand lending deposit-taking But we those to the continue module existing other. products continuing – not is the and modules. good, will each to current that deployment

Thank you. from come the Shirvaikar of [Operator Citi. Instructions] And with Ashwin will line that

is line open. Your

Stephanie and Thank Erik. you,

morning. Good

or Could is mention there on Should like are currently. concluded, business view Good about a for review have And that talk believe the business. structure assume one and the your it now might needed times early action been the set performing you the the this we better were debt of meaningful spinning what such the then things level in ongoing? or course is is you the selling a current question M&A was putting Can different doing two do on best or morning. maybe multiple because strategic as investors structure. of you or in you merchant of I M&A did leverage guess Cap the pieces. the Markets, – you that still

clarity get what to on is else want more needed just here? I So,

happy Yes, to.

far. really XX days with our all, announced of to am what with So thus we I of first review the sense urgency been strategic decide ago. think, to pleased we how – able I have

we of possible, focused, out quarters, we took have on spend merchant get this really those we execute to I making Ashwin, what couple respect on the refocus think the are given for guys as quickly need and with on M&A. next as to in sure

really strategic We not a obviously that delivering Forward. said, days. we include are also being Future All review XX will after on focused no,

in forward though, really allocate opportunities. continue terms the inability pressed it our capital evaluate thing of to to grow merchant to that and will was for we The separation properly. So, a

have don’t allocation. capital grow and we same to side, Markets that continuing it with Capital to respect the On issue well the

for bigger business merger the will but burning we evaluate. continue us, platform to always So, a became much

broad In speak to in terms of piece the Newco, on am terms. going second I the

M&A an would probably we of investment-grade will go the again, and think they that they way historically Charles Worldpay value It the rating. delivering to don’t think do he credit want to they terms But about after want. to would think go them going and over. is that clearly, impede I I did, this probably in amount would it, given his as team of takes the and

know, something So, that, below but Capital are of speak grade, for – I were will bit for be don’t I also in we all Historically, high it – But the think at well slightly us. to position but different a want investment them. they don’t worked they will given as you and out that. look suspect quite yield, out worked Markets a I

some we I coupled think in with strategic that have partners terms are we of M&A, today. up

this timing I the coming and terms valuations think I where the given fortuitous. think ultimately high certainly there why their results quite it sit needs. to and market will from was ability of of segment, market be different spin allocation down, in such And things capital the of get a moved I and is – is the of structure urgency a because as you kind sense that with that there see can of

guess question you are for normalized I growth segment, the margin should that it. the And the about? each one Got is other is think assuming for rates what structure that normalized

market capital continue to expect margin see from and standpoint, expansion. think a I would we banking to

expansion returns Worldpay the expect to once think you there. see margin would growth, to I

highly are exactly recurring trajectory, these right to margin on I much. accretive growth speak know, you can’t how highly revenue the As businesses generative.

segment, Banking, merchant, Forward there terms the structurally can into there. how of Markets in really You is from see unlike in Future are we wrong the And driving Capital cost nothing business. much

be And have should we expand able those historically. to so to margins like continue we segment

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

is open. Your line

Would as and review his entertaining to you Thank between you it follow-up be Ashwin’s to bids just possible inquire first would on Hi. business? question, my I whether merchant and to of taking on wanted questions. parts now open sell for parts spin conceivable question the that be whether higher business or the the should think and the that the the business to final potentially strategic growth, is of in over we that step? of sort intact attractive of keeping of run more part some long about

Yes.

on the we spin of the are think business. focused whole I

think and the are do side scaled team parts, of path other whole particular certainly global distribution. the the fundamentals on business platform I thing from the let and for pieces is to management they We a with looked this spend determine Merchant I business what at they structurally that are but then to want best think the there.

again, us, For is the structure. different allocation a capital catalyst here the for need really

at as need. that doesn’t really FIS, parts because the and pieces M&A feed can’t I I, help So,

costs can you you. can for OpEx around Stephanie, excess costs that do to forward? Terrific. a growth of potentially generally, confidence kind to reduction, sort your where by doesn’t can and thread accelerating particularly find investing the and More also out of that the your sort one levels balancing about of ability follow-up me. as of you you your you move take Okay. confidence basis? that not How thoughts talk And for while gain growth on Thank go-forward – impact needle kind grow and we

that I and question, day. great think a all about it’s Ramsey, every day, Yes. it’s one

things. albeit as and We around move product a attainable new into modernized very think have Officer I and to XXXX. great focused we made have will Look, the Banking growth and Capital XXXX revenue those, we that product think of I mix, business and have in in are investments capital to profitability X% couple products the forward. develop at do revenue Markets continue returning set Revenue be a Chief levels. focus that lower growth of X% significant, we will We with in been expenditure the going that and to and So, think we very

banking deliver Future I Beaty, both did side, like quarters. on of cost expanding I Forward contraction said, speed because the Kelly focused I and Banking lot am over that Performance and growth not could I is just sure on And a market, and the we revenue margin program. like Officer business program. couple program, Capital results really appropriately to will that’s happy that that of just President a margin saw expansion. in cost-cutting in report being led my think which being that cost of our the And lots through we that really purposely to balance to I you make Markets, by being versus of a wanted delivering margins a our being the benefit last is but program, Corporate faster, things

Dolev Thank with question, that And one have Mizuho. final we for the do from come time line you. of Dan will

open. Your is line

Hey. Thanks appreciate also congrats just I it in, the follow-up. a for a I for me maybe but decision. the I it, know, just to on a short Stephanie, assume housekeeping missed and then And recession? Markets want I Banking thing, squeezing maybe have guidance ‘XX Capital does very and

Dan, morning Good right. that’s Hey.

minutes We Markets. have ago, say, couple our speaking, I element guide the the we Capital cycles in and elongation about that included predominant broadly of as sales of would for a Banking is – have Stephanie talked

it. Got

just you. guidance margin then missed if maybe And does. you Thank it. just Can And by a it it maybe Slide So, segment? I quick apologies just I maybe unpack follow-up, get on I again, missed XX. your

Sure.

XX business, So, Banking roughly basis expanding, points. the we margins have

Capital got segments. are we got associated have Markets declines revenue corporate in margin and the basis with basis headwinds Merchant We experiencing that Corporate points. have XXX the in points expanding – segment And XX both to those we

in to for Ms. call any session. closing you like participating for to Ferris over question-and-answer now you. Stephanie Thank turn the Thank today’s all I would back remarks.

you appreciate everyone on very Thank joining short it. for much notice. I such

And commitments value year are a noted be bold that FIS. shareholders earlier, and with just stakeholders. our will delivering forward I FIS incremental to XXXX months I of and look making our we progress am the for mind, taking moving you. I company into with recommitment focus alike. journey a we in the proud move of creating future. to actions on our the are across great forward a our on strides towards you short few FIS clients As keeping to the making for colleagues updated in great on and globe Thank

you Thank concludes This participating. for all program. today’s

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