Fidelity National Information Services (FIS) 27 Apr 232023 Q1 Earnings call transcript

Good day, and welcome to the FIS First Quarter 2023 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. ahead. go Please

and and the everyone, This for us With corresponding joining is our available Good at website first thank quarter for fisglobal.com. presentation release, news FIS webcasted. call. are XXXX today all being on morning, Today's you webcast our earnings call me by strategic Hoag. results our lead Stephanie financial and on the morning Eric and and guidance. President; call Ferris, call Stephanie this a operational will followed update, our reviewing the with forward provide are CEO CFO, and conference Erik

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

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

turn With to call that, the I'll Stephanie. over

to joining is this us for morning. thanks to in everyone a off to FIS George, report very pleased and that Thank strong you, I'm start XXXX.

our on growth across EBITDA adjusted revenue and our segments. outperformed exceeded adjusted expectations of EPS. three results all key financial revenue, metrics: Our all Organic operating

the XX% well of businesses, e-commerce of markets revenue well business, FIS, X% combination by ahead consumer impacts, of financial and a growth deposit driven revenue spending strong capital sector. recurring across includes our driven banking as broader and growth was outperformance growth organic in of macroeconomic both X%. and levels Merchant by including Heritage posted stronger market. grew which services transaction the account higher better-than-anticipated This our as executions,

flow to cash XX% efficiency delivering and cash against on on We globe, leadership pulling excited confident very are are track together be team than year. and flow forward. the greater and conversion the across I'm expectations and future company our the across of our results strong and and can free build very extremely the colleagues our our remain proud improving focused to target for in These on FIS. attributed all our future the to I'm team, about of

are I a our am As full raising performance, we year announce pleased outlook. of our result to strong

our First growth enterprise. quarter expectations, of the X% results meaningfully exceeded revenue reflecting stronger across

deposit Solid growth. and of execution Capital fueled and a levels our revenue services expectations, growth benefiting environment activity, X% financial including Banking favorable outperformance. higher more this of exceeded recurring elevated macro Markets from transaction and account

Merchant segment, in revenue and point very Within XX% consumer E-commerce expectations. improved with impact upside. quarter, additional the spend Russia-Ukraine our most organic growth had another of internal stronger strong to excluding the drove execution growth, an relative revenue merchant of contributing the the quarter

and the quarter volume trading levels reflect from in quarter consistent with first the guidance second experienced full second updating We QX. high of to slight year very our are the in a to moderation quarter, trends

relative year segments. operating to February we our the outlook Our for full strengthened across in of has all the provided outlook

our while We we recently the the our Merchant increasing back segment year. account outlook. are to confident XXXX Given full to macroeconomic impacts and for of raised risk strong results and performance, in continuing half of delivering are understand associated our outlook, importance our overall year on our the with commitments improving operating in

making of spin-off urgency on range of Worldpay a initiatives. of forward progress moving with is high The across continue sense and track. We are our

management office with separation both progress meaningful our of regulators. internally the and We making externally are with our formation

deliver initiatives, an XXXX to we drive exceptional by not Future start. our I'm $X.XX savings billion Our only $XXX cash effectiveness Forward confident savings off XXXX. will cash greater efficiency, is growth, our but at least on target of to and million, year-end of achieve designed target

forward interest. governance in all front, high-quality, taken to to align the management stated changes These our plans goal price to force align reorientated programs operating higher-margin of pursuing further On we've deals. also our with compensation share broad with were to long-term steps align performance. made compensation sales compensation order our executive shareholder We've

driving culture the both up globe. performance-based tops across a down and are We bottoms

business. good business the FIS making partners quickly. are a and to with separation This forward focus for dedication work, We preparing testament progress of marshalling spin-off tasked Worldpay hard is the our and of planned the the colleagues

created separation a Charles are with having he and office meaningful progress Drucker, to both work management We making me.

working with are separation addition to eye required regulatory towards and across approvals, two companies an negotiating urgently In minimizing the revenue securing we agreements business disruption dis-synergies. commercial and towards

formal to we provide working this estimates actively not call, the dis-synergy dis-synergies. are any we impact minimize While on are ready to of yet

like the in disclosed Previously, to of company very that $XXX synergies and operating revenue offer $XXX framework expense I'd Worldpay acquisition. for through the impact, will achieved we the it which thinking be manageable. synergies million post believe million a total of potential a

with of spin. act majority for partner revenue expect to an We million to distribution continuing $XXX as achievement, the Worldpay the important post FIS maintain synergy

maintain portion savings. to integration Worldpay FIS expect of expense also a operating We meaningful

Additionally, results focus all opportunities of execution, pricing my Drucker such partnership with sales maximizing and areas, to is FIS. as the in is key across and meaningful Charles driving bringing business already

start. I As earlier, a Forward transformation is our program Future mentioned enterprise great to off

investing on of our $XXX have of million line savings but achieving are executing while direct million client targeted improved cash the next-generation development XXXX, $XXX expected in in of into and clients. XXXX, sight We for additional only in confident our cash service savings not product

savings quarter we've excess first rate annual XXXX, $XXX an As of a achieved in cash of run basis of total on million.

to expense operating course savings the the expect of We accelerate over year.

team target savings billion Forward clients. is the enterprise of to cash across FIS and Future billion unlock to continuing for effectiveness at opportunities our identify additional the reiterating least year-end are -- growth, and efficiency $X.XX XXXX, $X.X we While our for

FIS, program the deliver the cash We quarter meaningful and services not it commitment clients the remain solid for savings at we importance to our are at believe recurring their who decision-making. revenue growth come our our of will underscores our confident and of offerings expense of place first While center the will customers' future. on own our

trends banking want events recent banking across with provide the segment. to we Given regarding our update global an you across sector,

markets sector, positioned beneficiary to we of term, the near a significantly have is banking developments recent driven activity in impact believe term. FIS disruption volatility be recent the well long to the across While us and in this not expect in the do and

which should technology to insights Our accounts. by business impact spend resilient core Recent current of factors deposit IT confidence institutions situation we balances, is of presently bank points a the is periods following underpinned financial are our Curinos, events have A leading a near-term historical both precedent, financial recent duress. by and data, in study on revenue for not impacting to and noted: provider limited processors as seeing current

cycles during across historically challenging spend been the resilient prior processing technology industry has uncertainty. banking of also Additionally,

periods what supports not during It outlook aligns noted, elevated since fallout increases in our study which perspective, Curinos revenue. SVB is the the seen challenging the March, file the banking primary accounts of have core on across to we early of with and resilience serviced banking on onset our confidence the platforms, file in for us. industry experienced prior surprising with driver our in Curinos line our the our as accounts is banking The and In segment.

benefit funds as depositors FIS which is As accounts, core driving disperse FIS across banking leading ultimately positioned a of of provider business. growth, more the base to technology, financial particularly well multiple account to primary large bank is our institutions,

recent to the FIS benefit segments. increased in is both results turbulence extent across banking positioned the and regulation, capital to Additionally, the markets well

for customer FIS one with than of boasts base revenue. company accounting highly a X% more no diversified client

SKU banks. larger to what towards of us consolidation are customers, the banks, recently many across of respect somewhat the with should as our financial institutions, sold which seen expect we've larger FIS thus benefit financial and be failed out FIS would exactly this distressed is space to banks, play these we buyers far Given

XX% XX% a acceleration steady. file the modest Since accounts revenue remain Additionally, volumes tied transactions. transaction our predominantly and on and of announcement, seen growth we've to accounts in SVB is to

dynamics, events. not recent with we anticipate do our business these a the Given associated significant impact to

executing over introduced it to refresh quick to Eric, turning I'd a just goal. ago making this close and Before we months against with a progress agenda are like the we short new the significant few of

they remain or in can for to forward, quarter. enough see, sustained value creation we decline on whether to we this raise all As from first conditions, macroeconomic have are positively are urgently financial you of The impacted put a And regardless services whether related, outlook the FIS results for our for stakeholders. path consumer point our or year. moving the confident

is creating track, Worldpay two of a companies bases. spin-off on planned world-class respective focus their sharpened on client The with

Our of ahead transformation on better shareholder to Heritage sustainable a margin total efficient returning with to flow positioned drive the accelerating improved we're more initiative into focused Future the expansion, double-digit And is generation FIS revenue steady of innovation. company and FIS progressing the on past, growth, focus schedule, Forward agile of return. and cash a back compounder free lastly, a model

financials. turn Eric? through over me it the to Eric, will let that, who With take you

detail I'll Slide allocation Thanks, financial our on XX FIS. results forward moving us Stephanie, capital begin some guidance, morning. our priorities Heritage and into thank joining you for increased with all and achievement additional for future this on before

$X.X and exceeded $X.XX. the adjusted Our metrics. expectations came in X% financial to growth of our an organically of EPS with first end margin quarter above results points EBITDA X Revenue adjusted across of XX.X% outlook. high all our Revenue increased billion,

stronger levels financial a both transaction sector. including EPS strength well in adjusted and benefit through As and growth consumer across deposit exceeded as the expectations driven spending services macroeconomic Adjusted was of EBITDA impacts, this operating operational the Stephanie outperformance expense. interest of and combination higher both by performance, as account net better-than-anticipated mentioned, and

to Forward XX% of to of decreased flow revenue, conversion, of or flow cash cash our our shareholders $XXX million balance and $XXX X% returned over initiatives. dividends. generated Future We benefits to year-over-year million reflecting the Capital sheet. free million Moving expenditures or $XXX on XX% through our

Lastly, we a X.X with at times ratio total of rate average in exited interest yielding billion weighted quarter leverage the of X%. debt, a $XX

organic X% We're revenue FIS Heritage XX. to driven of revenue Slide to report by Turning our growth. recurring growth on pleased X%, results

Our strong at exiting backlog $XX.X billion. durable, to and the quarter be continues

our new transitioning over this, sales sustainable which team drive higher profitable target As backlog quality, to some to sales of would in the short Because the will anticipate term as high-margin growth. previously these initiatives. aligns softness more are mentioned, teams we

best-in-class EBITDA revenue, performance, incorporated higher as of this the Heritage Overall, the strong saw as cash capabilities sales, result while year. for the sales for sticky into in sustainable well growth year our clients, be is revenue This in increased laying FIS emphasizing high-margin, start change as will driving Ultimately, we new initiatives and a fully the stronger-than-anticipated to for segments operating very outlook recurring our is for quality offerings. above results flow, our providing expectations. this the foundation

Banking during elevated which from of growth the X%, points expectations. in account At the our quarter. exceeded which in was our segment in strong This level, outlook. end recurring our outlook increased organically was high revenue X by transaction execution Strength growth quarter, underpinned was above and driven by with of conjunction recurring business the X% the revenue

and EBITDA onetime primarily driven XX% a to XX.X%, As license expected, contracted XXX fees in margins reduction basis by revenue. adjusted termination points

improved margin anticipate results, leading our we compared half XXXX, the sequential year. continue This of in fourth expansion back performance improvement to in through to margin the to and quarter

growth revenue, the growth nonrecurring revenue continued organic year. the for second we anticipating X% confident are a or reduction and of banking X%, in our quarter, organic incorporates meeting in which we to exceeding remain outlook For

increased the Turning results of by overperformance in the X-point and on exceeding end high recurring quarter, a X revenue markets quarter outlook growth, XX. our tailwind the to Capital with in XX% The driven our in points. markets our was Slide underpinned outlook capital expansion organically X% as in by of points on services revenue industry. Adjusted the quarter one-to-many basis activity was high margin model. growth elevated XX as contribution the operating margins by the to with XX.X%. associated EBITDA the well Margin underlying financial strength expanded

has continue SaaS-based transition strength the to performance resilient for multiyear engagements growth. of foundation see the and our Markets, operating in We to resilient believe laid Capital

normalizing first anticipate organic the assumption quarter, X%, seen X% of recurring associated quarter. primarily second revenue with we the elevated to revenue growth an For the growth of off in

inclusive For the reiterating the outlook of we're license to year, compare tough our fourth X% quarter. of X%, in a

to Turning XX. Slide

as and points in e-commerce investments the Worldplay for see leadership in our with strong high and X% Our exceptional XX% by saw and we opportunity accelerated Broadly outlook Merchant to our from offering. to speaking, this benefit Platforms our our seeing in organically, ongoing strength end we're in continue quarter exceeding Platforms subsegment, accelerating sales Worldplay segment of continued the growth vertical. better-than-expected growth increased for X to spending consumer we in a renewed significant continues structure, and attractive e-commerce.

enterprise our XX.X%, quarter guide, XXXX with the X% contracted and growth of Our fourth result drug vertical. a our subsegments constant across Consistent was higher primarily quarter, points of stronger trends XXX subsegments. share on SMB PayFac our to as in gains similar to $XXX due unfavorable verticals, the spend a and store, margins within revenue a volume to enterprise spend revenue nondiscretionary acceleration e-commerce Global grocery In mix. for This increased result billion. volume to consumer and saw market example, currency outpaced basis growth basis results.

to Turning outlook further of XX the review year. for for Slide a Worldpay's Heritage

As macro growth we deterioration associated decline impacting points. anticipated and in SMB additional with an we organic entered attrition by revenue further point subsegment, the X% XXX-basis The the basis reflected XXX to of headwind a had guide year, X%.

our results our to by outperformed points compared Our of the end first X expectations quarter high outlook.

the expected subsegment, the better SMB in by to spending be than the consumer headwinds and U.K. performed While the U.S. business the continues in impacted

of and year As the year. consistent the quarter second and in we're relatively a updating to improved second from back consumer quarter half result, reflect the to our the spend full quarter, first trends guidance

quarter. expectations. this, our for now to the and improvement material growth anticipate relatively across X%, of down initial second compared quarter X%, to of quarter similar revenue organic subsegments plus full second of to first year negative growth organic This Because we trends revenue X% assumes the X% compared outlook a to

to aided with improvements On the and through seasonality margin Future continue normal consistent front, will see our year we the initiatives. by further Forward

a guidance. XX for Turning of review XXXX our increased to Slide

Given our in quarter. outlook we're XXXX strong our seen to overperformance increasing year start confidently full first to incorporate the the year, the

revenue share first is increase our adjusted the increase aligned to increasing This for results by high million, $X.XX earnings accounting of end we're guide. compared and respectively, in outlook ranges our and our directly Specifically, the for our $XX EBITDA year. $XX quarter million prior a per to

businesses. to outlook in year, trends current we year in Our adjusted has strengthened increased EBITDA now we to consolidated outlook With on of margins and $X.XX. remainder February, growth that adjusted earnings relative the mind, $X.XX to organic anticipate over based the per the provided the share the of of for in XX.X% X%, XX.X% our revenue X% to of

in and for conservative as would remain earnings I deliver continue continues our upside in we projections macro and our account continues last to to increased if This our impact outlook on remain call, anticipate with credibility stable. stated we our forward our As commitments. trends risk macroeconomic segment, further in associated Merchant to build philosophy

as reiterating improvement over outlook anticipate to continue associated of our we benefits we're the flow we free margin Forward, course with the conversion Future XX%. cash over mentioned, and previously ramp As for of XXXX

additional forward guidance as a provided well on to revised for base shifts XXXX some appendix, the we in our segment small Lastly, organic assumptions operating in our rollouts. account as

Aligned in to Turning or to while Future We this to work. sales remain rightsizing around update support, we impact our processes our improving financial committed minimal Forward Slide ways colleagues. automating the Forward. and XX Future base centers ensuring for expense clients a to commitment, and improving investing on and

over million over of for in-quarter Stephanie an rate $XXX the million start a We operational $XXX XXXX. savings quarter, the had million $XXX of and with to our expense million. XXXX strong with targets exiting annual benefit mentioned, $XX As run year of reiterating exiting savings exiting we're

XXXX. a continue during in an $XXX We to XXXX, target incremental million with in $XXX reduction capital expenditures reduction million

In we'll the throughout early with savings of progress, initiative. rapidly we over $XXX on Future as and provide our quarter, updates achievement we the the annualized pleased achieved quarterly Forward to program. million on executed extremely We're continue CapEx

a capital allocation I'll priorities on Heritage our FIS XX. recap conclude with for of Slide

focused debt, successful of utilizing M&A. our FIS reducing Heritage excess share tuck-in the dividend the repurchase increasing remain execution for capital will or on spin, Following and

this, leverage also from First, times. reducing adjusted long-term target while To continue debt, to over anticipate period. growth ratio benefiting achieve we a we X.X approximately total would a of EBITDA multiyear

Next, XX% ratio we committed payout dividend a to remain Heritage for FIS.

these Following capacity will pillars, tuck-in or debt for opportunities. optionality we two utilize cash excess share or repurchase around M&A

M&A providing a while share long-term valuations shareholder opportunities a assess their over Our in of capital default repurchase while proposition prioritize nature, returns. excess in risk-adjusted we for value is robust multiyear allocation will use period. This current strategy value capital conservative at

to thank you for would Operator, I'd like line open their the this questions? morning. please time for everyone

[Operator Huang Instructions] line the from And with Tien-Tsin JPMorgan. today's first question of will come

Your line is open.

good which about Stephanie appreciate the and I the to Thank dive on so wanted just is your in Eric, maybe Great. see. to in here good and much. confidence Because all the disclosure underlying you, through I revenue side, just to on when check And banking. the results. think banking really growth on I attrition, X% the commented think I conversion, you X% mean outlook I backlog recurring about deposits. pricing. inputs, the maintaining

different turmoil So, we formula is than the banking and what SVB, cetera? Any the with maybe there? thoughts saw et now

happy Tien-Tsin. the confident Very our quarter. Thanks, Yes, output with for guide first in Yes. for so banking.

we come our growth, in quarter we're business. increasing across banking accounts the and as incremental from it was What backlog you've seen is, as across the services any organic not this financial landscape the first is we what seeing and broadly guide, in portfolio. you our I through benefit saw growth year, impact into to we going we're think anything from on came mute. That had in expected seeing

across net services net deposit new broadly, accounts entire portfolio. and, new financial our So, we're seeing accounts

good growth. really organic about So, we the feel

we first and really guide. in see good the quarter, it can there You about feel our

Great. about think little pricing? know appreciate PayFac versus spread Can I be that. what's the talked is piece, there. a you. would Slide you front, a great. more on I all the Merchant useful. the with mix really just mentioned Eric, that more bit I XX driving Thank give little But you you -- maybe just on but bit

Eric I'll on like that, if add he'd and Tien-Tsin, Yes. can take to.

were the we pleased with look, really volume growth. So,

better performed and kind book of really in you growth, volume the driven activity first our volume expected really at we little a we top, bit e-commerce just strong saw, from both a which standpoint starting strong saw that the was So by what enterprise than quarter.

come coming you pieces yield as dynamic, the So, really into yield. two the there's impact into to

The our nondiscretionary. is first

So, think grocery higher book, And not on mix. -- and Kroger, drug, our store enterprise on as know, in those things a those and you like volume. priced became are drug transactions, or

those a off drove And yield lower of higher so the a volume. little bit

for we second take our of piece And then PayFac continue the is us, as strategic is is very our know, significant pretty higher-volume business, business. thing lower-yielding, which, a gains share in to which market you

yield to each positively, perform So we sequential fourth two the two in continue of see do impact the those improvement really quarter. as resets reasons. quarter big year and yield to expect drove the the those the But itself. the rest throughout are We mix

for questions. that Morgan Faucette James moment the come of with One from And will line our next Stanley.

is Your line open.

look anticipated out? built not just bit economic to that some anticipated you in this magnitude at Wanted through raise, stronger to seems a guidance little kind that talk macro much. you than If versus can expectations quite the as a the your little your very environment that of the weakness resilience current originally just generally. increasing Thanks, beat with Obviously, much that better pushed of guidance the came you original we kind about you in the outlook. you quarter it we're guidance first talk for Or the that leads assumptions like of as quarter. of just in outlook? beat Have that the bit

the year points -- we minus with basis guide from XXX -- guide think presumed minus increased headwind provided have points. The X% has associated XXX guidance full time about by the headwind we minus a I'll the roughly Merchant residual to guide in the quarter Maybe macro was start I of Merchant macro. basis Sure. guide to so X%. basis X%, improved the points. minus when we midpoint provided with The X%, and at Merchant XXX remaining of at would ago,

if done the know And Got far the it. as the should What's how about split, incremental through you're on any that. cetera. be if expense? in And your then the kind interest that I changes in for needed we Got sense as terms of are -- there eventual it. think being et that may of to working work besides we wondering and dis-synergies. about of we'll be you've look think able to be, how when what you start that been overall I factors taken timing should view clear what look to at structure particularly these want need the -- be will into but to capital very timing other FIS we like? to account just Heritage think

Yes.

for are of working. and pace expect, of So, here is you everyone we Don't update pieces. a us try tightly those Charles right terms as through can very in it. you working all James, see as through in good we working down. might And work to at diligently get now, thinking with that we're have Hopefully, all

I we're terms you of really guide really we'll closer much a can't can't really a should towards commitment have in -- view working But of make the a that you I think to it. of get that. yet. stronger really know there give as tightly spin, a quarter, view, until we a but have we next much

moment will from One Baird. come Dave with Koning And question. of for next our line that the

line Your open. is

Hi, and guys, job. Great

you. Thank

quarter. the in was part a off question, capital that -- about mentioned that markets, my some less elevated of somewhat And a Yes. activity What something creating I is that or is some X% tailwind QX? -- you of guess elevated little kind a falls that? first in recurring

asking that for Thanks Yes. question.

markets of volume COVID. that seen trading across all saw our capital business. at our we We since So, peak across as right, of lots banking haven't volume, cores a trading as well

all that did and of of a supporting that job fantastic business volume growth. business that So leader the

of And had the of points that's revenue in percentage couple a recurring beat what that posted. drove we

quarter, come that moderating we're into starting see as it's across of second moderate still terms portfolios, we're to down elevated. in people So, those slightly as transaction but we volume pretty the growth back

maybe question. back than is a In But better guiding think think the a impact the Tien-Tsin's the And yield you. I through just question, follow-up course little gets you the Got the half. first you're the I little Merchant, half, to a better year. of way said

volume that through does little year? the a bit So, mean decelerates

think it. in fair quarter I was first or we a a think strong. volume Yes, that's fair assumption the really about would as you think X%

coming As back of about about we conservative a it just moderation a year, the bit think the into guide. half we think on of

come moment question. will for Kumar Rayna with from line that our One of the UBS. next And

morning. FedNow, to want to since will view Thanks be an here? taking it released about question. with you in ask July, going just what for as my will release? I FIS it's opportunity And be Good do that

our institutions the We're question. with a tight in roll Fed. base. the across entire out financial of the our for enabling client very We're Thanks to Yes. process partnership in FedNow

the So, to major we'll adoption rails. of in FedNow play continue the role a

it's the payment another is methods thinking we enable distribution specialize the of about For channels. in us, to globally medium payment which market, across our terms in, we what all coming

it, size It's institutions definitely put of excited of the bit financial little ready. become for And opportunity. -- we our We're on opportunity of behalf were financial live. FIS, adopt about a it enabled but we're But make see ready us that pretty it's institutions. as the an too it to and to them help for the enablement early

I Got it. helpful. Payrix. then just ask can't That's And about

you the altering how of and You've acquisition progress about owned go-to-market year that for strategy space? in your the Can a it's talk the SMB now.

Yes.

is Payrix all on our hitting acquisition cylinders. So,

You that it's story can e-commerce the growth see big of part a we're seeing.

payments, to out helped a integrate that platforms which per we our want Worldpay really brought those offering to solidify payments embed platforms that PayFac. become that to software As, or in-house, capability either

significantly. volume It We offering offering. we pleased more the be a have Platforms growing of is full So, with is Worldplay The offered significantly. suite now it. growing success the for out couldn't of

That will line come with for the moment MoffettNathanson. question. One Ellis of Lisa our next from

line Your open. is

a transformation my bit FIS. going was through Stephanie, comment you're side taking on Terrific. I have at question. initiatives underway the on for little you as could Thanks, talent the maybe hoping you

or things retaining morale improved talent, period. about thinking maintained what throughout bringing some like and Just sure are around Thank you of doing you you. are in making this external sort is

for the Yes. Lisa. question, Thanks

an here to retirement. look, as stand FIS and and he role of So, back folks I into might such It's on on to talented come the who wanted moved I talent here expect, as into as as took came team. culture you FIS. have Woody's amazing I some a there's reasons But leadership one rejoining into move retirement, Eric

want So, out move leadership folks team the we those on. as are changing to

and Enterprise We a new President I brought Platforms brought products. -- think we're Technology Officer. really excited about we just of recently on a Chief new on

new at and out brought sure that can last to and on retired Solutions. we Head product continue technology our best-in-class products year, our deliver we the to clients. Martin services looking focusing Banking Boyd really of a So making and on

some So impressive together Forward. bringing really here in talent and to them FIS bringing great team new, focusing balancing the on talent work a as bringing and that's Future really on

Solutions And you. services, maybe view you this nonrecurring can Thank Great. to free Banking then could But on of follow-up mix within us Solutions, one it versus just Banking remind I recurring sort be the just guess. a professional of quality that recurring to revenues, think that the a kind comments around more team sales on change? of kind higher the and then Thank bit on about how maybe focusing pivoting what's little you. you of elaborate segmentation,

we're revenue quarter, in my recurring I nonrecurring prepared Lisa, decline in remarks, as In in the Thanks mentioned in the a revenue. it's question. we increase an significant Eric. seeing first for banking, saw e.g.,

want So, between you then was from quarter. first sales recurring Stephanie, in the nonrecurring And roughly XX.XX a to... do the split perspective, and

Yes.

in as focus as fourth I team Officer the higher on margin, So, new the pivoting higher I started to profitability quarter, chief a mentioned -- we products. sales Revenue hired started -- we Chief and

of terms FIS, that of gamut have services need. everything an would we've job company financial a at products great a set on And company sales. We need, really done would amazing in spans the payments a

from that see can You our backlog.

But delivering expansion, cetera, the below into in as XXXX sales we line et with beyond, line and to expectations. really the margin get we've higher-margin focused our trying back we come into products, them and back on to margins driving repivoted

was original current so, going here. see to And to that all That We did baked start transition into outlook our you're outlook, expect is to and going the happen short in expectation. our backlog we well. it's the as was that, see term our That into would flatten. baked our

moment our Kupferberg will next of of America. from with for One the line that And question. come Bank Jason

Your open. line is

Good I wanted up banking actually resume? to some do where go-to-market think right banking? medium-term fully maybe will this what strategy are take the newer Stephanie, you off, starts for on backlog. And then implement go-to-market there it and what updated left time morning, Understanding guys. strategy, the backlog of implications the just your pick to you on outlook to growth

question, Jason. Great Yes.

the year backlog rest of to muted So, products. ahead we products the the of expectations lower-margin reposition the I pipeline for higher-margin as put going are think remain and the

muted. basis, So, I to would be expect on short-term a it

focused we're into come going really new And we up about other terms then as feel sales. to in good XXXX, really the also where of think end we're though, I I on levers.

as in seeing focusing really over revenue. XXXX, businesses And the nonrecurring you And growth. business, driving then force organic new feel sales come think a fees. XXXX, and levers those if and and sales of as we're lot well you us reason, as can we we're really on we and that termination back of pricing was in our compression, the in about good some pull recurring lot into we positive So, the XXXX muted again bring on Solutions focusing because of the growing growth the if remember, Banking a we're on attrition to

as we will a for percentage so, drive And lapped us. of that that of couple in just XXXX, growth points

to just for maybe Jason, add to And a on Yes. moment. that

through growth that in results we first proof of at X% for a quarter revenue about the the have we lens X% recurring have little range look talked Solutions, revenue -- a point you growth did If quarter but Banking we normalized bit did of the recurring X% organic, in quarter. ago. A the our to X% in

That's Yes. more SMB, with the above? respect mean which for the would all great second. a driving little e-com? in year? is for a to trends. gears just switching and enterprise to you've transaction Merchant on it is really Helpful. is the able Is point. the data to And share of segment, higher the say bit side, just anything Maybe What you it a of in be April might seen volume the what you I merchant outlook

Yes.

all spend I then of think performance. operating our business. But we're all on across very It's segments really three. e-commerce and generally, across bullish our better consumer very,

Payrix very We there. is investments We board. it's continue all some say it's board. our would in in the the really across of generally say in U.K. But did going in see there. It's to across recession drive well. But I moderation I'd

Peller One Wolfe the with moment question. Research. will of And for our come line next Darrin from that

open. is Your line

banking you X% and long obviously just at post growing term, the large it, spin, about importantly, mind know to incorporating in level? if get And at doubles? and investment speaking, -- you banking remind to more singles remind to into look now remainco large yet? thinking we across win or don't But a I of that of you'd back where in bridge look that just to guide When on the -- seem more and looking still the business can strategically in that you you Are we're the are the on guys. terms bank algorithm X% first, us targets, you the, the cap are you from banking us, grade, it call cap if would that markets. long-term markets, expect. somewhere Thanks, be effectively, a

Yes.

this laid in we think call. I out our quarter fourth

to happy So reiterate that.

expect is strategic One in sales, we of X% growth. our we them As for Heritage FIS. impacting. or I heritage XXXX about accelerate given those components FIS we you over. on banking any the grow you think should XXXX, to medium-term plus organic hit said to -- and that, X% about And it's XXXX to don't we as our and its think to its Two forecast own large growth wouldn't X% we as need things in think X% have

of if nonrecurring. to we you our recall, over be lot that. That would in a XXXX, incremental are, growing But

And or in we that X% point over X% that so is grow a XXXX. lift as

X% good the two midterm benefit things. about feel those Heritage we we as really to for X% FIS from So,

the And Okay. quick dis-synergies. just follow-up for on the as potential a

or follow-up? -- be I been you think be would minimize know not out more building that's to to I give much does it's zero, had no not number prepared full nothing mentioned prepared a comments confidence to know us going you're can as alluded or to exact have almost sound an to for you going much or that little the maybe on you it you there probably Can not but doing as saying. yet. a like dis-synergies. we're for that you're that Obviously, some that I everything

Yes, happy to.

mean partner I really the expect those the partnership Worldpay of about to process continue out I with them. distribution the synergies, commercial said a look, is achieved. would arrangement think and be us, retain good of will feel So, building in that. for we what revenue majority I talking a to and we we're previously about

So, we about really feel good that.

them, very the obviously, I to over. not to would those. maintain be that diligently. a to said looking And think, left zero. manage just expense we to we They're side, portion working of operating going we're look not look are we then anything It's I and meaningful On But manage would possible. that's

moment Vasu One next from And with that KBW. question. of for the Govil come line will our

open. Your line is

And banking conversations taking any month terms the tax sales they're your banking? of is last changed events risk my elongate and on in nature gone a And question, current congratulations with insights for thinking that strong what's new of bank on quarter. spend? just guess, the has there in what the side given course the maybe, on over of starting on will further cycle? clients thanks, Hi, a the I Stephanie,

Yes.

we is the side in me of banking majority saying what's seeing happening sales are elongation the start The no cycle. of Let by specific to banks. certain

see seeing spreading for as accounts the we're accounts net their of banks, across across consumers new that positive You is the banks. can most are which generally portfolio net out

us, really dealing are we to is as ecosystem, continues with, in volatility very importance our and for go sure running. making our opened partnership important and that opened, those stand, important market all to banks our deposit systems money what's the get they're those stable accounts all we're say solidify through and very would up and that and I whatever get accounts

through I'm financial hand would quarter, of we incredibly the our with going So, the again just in we this I ecosystem. And proud on. are what's participate no matter to system because I see say important institutions could glove team, how financial

of accounts, my our profusely clients lot and us of of was thank more in thank a whether whatever remained had going, some accounts reporting systems need they more they up or -- their activity just we terms whether more. And I had and stable. team couldn't their our

the So that thinking, was of to what they've quarter. our continue do how banking thinking, they What which platforms. lot they're really is think, and is activity a modernize with I this consistent been digitize

in continue their are not they for impossible need still to the as know, coming consumers branch. focus you technology back not spend financial these to it's And institutions on because,

digitally to stopping. it's services omnichannel, and need cetera. et to them the products deliver financial not So,

important. fact, becomes In even it more

backlog. not and we're needing needing, garner new conversations products So, help seeing those We're any in that more slowdown seeing them around really not any services slowdown in business.

the environment stable. So, I'd and positive remains say

I comment the you. the can seeing second follow-up on quarter? versus talk were in volumes you then you specific U.K.? of quarter. you And expecting U.S. relative were the to the segment. And a about you. Thank sort that April slight quick Anything differences in Great. a got the deceleration Merchant in big any first Thank

Sure.

So, very with trends. April March consistent trends are

February slightly, over has were January grew strong. consistent as are pretty very trends consistent. but And still you. quarter told first and and March moderated March COVID. else elevated Our were with what everybody everybody April

really the about feel decelerate they and coming think January good second quarter. So, do modestly you into February. But as

U.S., quarter everybody than very the And U.K., U.S. first quarter. saw strong. we consumer continues the stronger fourth in coming expected out think I of be to was

moderating. slightly moderating. seeing to not it's improve, any net it's U.K. yet. detail would there quite say starting is I but The is decline So a not

have we expected. than the gets slightly in we're that, as did better year, of positive. It's improving. and going easier environment to go more But wouldn't anticipating I it we terms little bit that call So, grow-overs yet that a throughout

Capital that our come will the One from Markets. RBC question. Perlin with next line moment for And of Dan

Your open. line is

target But mean acquisitions had detail ask the you around here. SMB. the we've within a to Good say of that of I thinking morning, everyone. space of size when you what Stephanie, can just lot really spin. thinking us, couple I you're to degradation wanted offer to maybe question acquisitions about you're remind you in would a the of that in up that a need quarter is pick of I required that -- see would some terms the I help, things. be in guess, Worldpay One

'XX, you maybe a the to you right possible when late early do M&A Understanding think of now, to start in take in going environment? sense about opportunities? do then that get this trying that? allocating your place see 'XX, Like what And to I'm planning current for to you is just see but

have very you It's as expect, great these a Yes. active in Charles question, and Dan. might been And conversations. I

you thing on the Worldpay platform right you distribution. see So, find put global I scaled about incremental the it and a platform will the great -- think it with channel, even is and look, if it can our can you distribution right through asset, incremental and is margin. drive And revenue Payrix the product

So, there. exciting go I think of terms where it's in to really

I mid-single growing getting to think it he'll, merchant to back one, then accelerate and business and as we the think single. upper about

percentage revenue of of as growth mid-single track get 'XX. can I And on think back I X acquisitions terms he in think he and with delivering execution about or the 'XX him. point comes points into higher business a for then really

out of lot think there's opportunities there. a I

bring the lot to want scale I suspect I to of of think companies. he'll to distribution e-commerce a continue drive business. we types those

and of platform. talked do we've as what see to drive talk that our to EBITDA But distribution I'm about I'm of M&A quite that as, revenue to ability XX% strategically, bullish that. the yet company. revenue to he in segment As scale overall starts the not margin -- about about and given and like But outsized the the we'd of prepared strategically become the the growth pretty and evolve who

Analyst Division Information Research Capital – Technology RBC Perlin Rock Daniel Markets,

Yes. And it, looking too. to we're forward

Just a quick one on banking.

the do With all on in the obviously can remind maybe specifically, the financial the asset and us, system elevated benefit just positioned banks, the within gave getting like it's expectation from of tilt us that charge are you slide, new guys you especially smaller to that? particular maybe larger given you maybe And regulations, how institutions. towards

you that your opinion? most see you. of in regulation So fall would Thank where

happy to. Yes,

market does. be deal there'll everybody like regulation else on very We think just complex the capital absolutely we side. regulation, with more So,

are We use into really over good the for very are think there regulated. side about bringing have that solutions global that we products Those that nature them as products really, financial very, the institutions applicable of house. are in banking heavily we

sets. institutions capital over, My regulatory product X are getting a that starting educate about liquidity, people requirements, ratios. larger President interest I already capital manage to and deposit flows, of requirements, of Banking and Capital help President Tier And Markets of financial things those those very process bringing in rate. We're that are our high

we that So, we that's can leverage over, a pretty think and we and bring product we have think differentiated. set nice

with Evercore One Togut ISI. David moment next for And the come our question. from of that will line

Your open. line is

Thank you, morning. and good

Worldpay, continued out Any specific the what's in could within you called more Is talk market the cross in driving share verticals? share of e-com? it gains be e-com detail actually border? about it portion would gains appreciated. You Is

Sure.

it's sales think e-commerce. improved I execution across

serve it's which, we're Platforms, the well consumer growth in access significantly that's terms and And of to market market. very us of of allowing lot generally, e-commerce the contributing e-commerce very is increased companies. SMB I obviously year-over-year level a more of beneficiary and would of of But We broadly it's part platforms. Worldpay performance widespread. shop. high growing multinational doing global the -- verticals. spend We guys from as, or the there, operating benefiting growth through across you As say, strong serve know, is for Payrix One a a global

increased performance least follow-up, cost in $X.XX first What's in billion the Understood. you cash at conviction at have just and as based XXXX. your remarks, achievement? driving year-end takeout Do underscored And a on you least? by just quarter prepared savings

My on Yes. Forward hitting is led look, cylinders. team, all by Corporate is Future leadership my doing an Officer, Performance fantastic my absolute job. --

going table X,XXX throughout We results. really the leadership We're over the leadership initiatives company. have strong sitting Everyone and my on team around company the seeing at engaged. is

feeling really And it's confident. so, George we're there. why at-least And just really liked the words, that's

Shirvaikar for last of with come question from Jay Ashwin will Citi. the our And line

Your line is open.

Maybe it sticking what's dropping is. go-forward a hoping OpEx with And side efficiency the CapEx savings. what better line the kind to the kind assumption that's sort of Is the provide and the of question the side, bottom of Forward. reinvested? being of And if sort could driving Future both versus what understand on the side, I you initiatives? initially what's was effectiveness to growth? What

comes returns. reduced us see those we've our initiatives notion is we which the any quarter. about we're investments, dropping initially Eric think of of clearly down reinvesting it's and the talk I'll all of Maybe first generally and -- talk Yes. the the say that I But it, didn't terms of not bottom would in spend delivering line, of all, at initiatives that how year-over-year, this driving about are were bunch that point. a TAI you so over to can programs initiatives can then winding in a

prioritizing and expenditure of and really the automation improve We processes those reduced big on portfolio products year-over-year. Again, would our services out projects going I client as driving as customers, to our a around say are the as lot returns through experience. projects to delivering into things. well and capital based rationalizing well

base two I maintaining on of revenue That's operating coming we we being share into very, the think to first people and expense the focused sure very productive. we've about also been side, company, that been lion's as it making the expense drive the into drive but think quarters. much on more profitable our trying

AI our really though moving experience into faster, efficient. and -- getting XXXX, activities, and out, we around faster and through faster, making automating products getting to and better of think XXXX on done the I and, as flywheel client go types market focused we're implementations them other more out

about at operating and center focus expense, on grow. capital clients company effectiveness are with we're the the we and helping So, really spending client talked as if I've making efficiency are -- we then the sure that our and the and

how over about term So, it term. a high Eric level, at through in walk let of long those you initiatives the the I'll quarter. are the and kind think near And

Yes.

expenditures the savings, So, Ashwin, reduction course can first first you in perspective, builds see And quarter. we've $XX OpEx the roughly you'd roughly In-period in quarter, million that capital got this from in year-over-year. the a through $XXX year. of million expect, as the financial

with look Future year, you're in second a for really of we Forward the margins balance sequential As having meaningful see to the meaningful the improvement impact at -- in half. margins going

XXX-basis Understood. And the of million versus, a numbers questions. with savings. million you think, $XX indicated And maybe impact. I interest I Last end couple What's point can time $XXX macro explicitly that now? then expense,

So, expense? XQ interest what specifically in happened the lower for

Sure, sure.

our Merchant assumption, we talked The headwind basis call Merchant had points, macro midpoint has points, XXX ago. XXX guide by the about the in on of So, basis Ashwin. of a points improved quarter X

where we X.X down did on revolving credit year Merchant Interest had So, to around assumption facility points. second now question your expense, X I an with the interest revolving for this pricing the expense, say deal as facility. is bonds we is favorable interest would incremental macro credit maturing expense

is our off forward. strong look towards start is company great everyone, you and coming Okay. moving the to future. many day. making morning. be couldn't a and progress. our joining further to strides Have this weeks for updating a the us more I with Thank you, forward great on We confident of FIS team the XXXX in connecting you over

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

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