Fidelity National Information Services (FIS) 2 Aug 232023 Q2 Earnings call transcript

Good day and welcome to the FIS Second Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [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. Investor of Head Mihalos, Relations. George Please go ahead.

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

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

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

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

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

and you us thank morning. everyone George, you, joining Thank for this

enterprise our sense and for the with stakeholders. a making path speed of move drive progress, and We and to our of change strategic strong financial accelerating to on urgency, we're continue all forward, commitments delivering across our

Worldpay FIS from us and path accelerating unlock on long-term separation. transaction On value with July landmark success announced Xth, GTCR, for planned shareholder positioning to the both the we and a

and our effort, And impact client-centricity, the expectations Our and results driving initiatives improving second and financial business across guidance. our exceeding the of our Future while this company. outcomes efficiency increased quarter are simplifying Forward show

work the to more more of have bring team we and very than Future proud company our do, While we I'm optimistic Forward. as I'm ever

to quarter delivered another Turning slide solid six. results. I'm pleased to financial report FIS of

adjusted Second the of EPS all EBITDA our quarter revenue, range. guidance end adjusted high and exceeded

continued discipline business the Solid execution segments outperformance a relative all drove of on outlook. expense three to our and focus our across

of basis, the normalized growth On a rate X% combined posted we in and over improvements ability profitability a cycle improvement Markets the represents we quarter, X% Capital Banking within segment. in more by EBITDA growth recurring improvement in X%. Banking businesses to Building of the to margin on second healthy the the XXXX, course range. This of our are revenue confident sequential led adjusted our delivered deliver Solutions

free closely free the impressive guidance earnings. and net on transaction, the cash again XX% We outperformance Worldpay raising are revenue EBITDA on track Post to with flow further flow current would Reflecting with we year-to-date conversion XXXX, for trends, first XX%. align we business even adjusted XXXX. our today and more half to are for our the commitment conversion cash deliver an of closing expect than greater

Turning seven. to slide

XX% announced with firm we private the expertise we sell to July, Merchant the As deep Worldpay a early in business leading equity GTCR, a stake in payment agreement a definitive to signed Solutions space. in

upfront our superior proceeds highly and into to the a FIS represents transform companies, to two markets. focused generating create forward capital substantial Worldpay transaction pay sheet, balance pursuing public relative quickly capital Worldpay return the for believe path a of investment, infusing down We to independent FIS' new accelerates spin-off debt, outcome for shareholders. while to into shareholders and It

deal approximately announcement. representing value represents for EBITDA. an over to of a trading establishes Worldpay Worldpay's the immediately times transaction times This FIS' billion prior premium XXXX multiple $XX.X the XX market-aligned to business, First, attractive, adjusted eight

on As on is further. financial to strategy we valuation continue commitments, deliver to multiple we expand our our FIS execute well-positioned our believe and

at billion proceeds us his at Second, on allocation levels. capital Erik capital least de-lever of unique, to $XX.X accelerating discussion of to will attractive the will financial quickly, the allow valuation returns elaborate shareholders upfront results. while priorities our balance simultaneously during our sheet

we and in valuation the significant our shares for capitalize the However, benefit on dislocation see eager at value rapidly of to levels current are the shareholders.

close respective believe FIS companies, by the two this positions focus clients their promoting transaction better a best on colleagues, markets, Lastly, partnerships. crystallized and commercial continued to Worldpay relationship while and we between

will tech FIS' partner forward, to to distribution important and an benefit closely the management to of Worldpay Worldpay while I Going forward team continue to for from remain and services. come. with many Worldpay working bank solutions array FIS, access Charles will years and channel look for Drucker

The updating excited to our partnership maintaining look shareholders ensures ample we developments also as first that with near-term for and Worldpay and meaningful approach access we healthy while the sheet. to forward We're about have you to pursue opportunities balance generating XXXX. inorganic the closing prospect capital GTCR of returns will on by a growth quarter transaction

with seeing on within and eight base of in annual clients existing our to of May, trends an our flagship Turning for and Capital across key Markets influencers we growth Banking slide held drivers businesses our attendance. industry conference, we're X,XXX update and clients. the Emerald, In

FIS are to the are from for excited well-positioned trusted forward market and are clients about several conference their is that trends C-suites. help was landscape. better of looking serve across mind evolving takeaway like partners our technology clients them on FIS The our to top overarching the their that path navigate

with modernized transactions traditional and user The retailers of banking growth defined Capital with more First, competitive across as supports encroach companies that digital and and the as more on The technology embrace and money never has are cloud-native landscape variety global the technology to greater. fintechs, next-generation upstart need a been digital-first normalized interfaces banking blurring take lines digital channels. our even offerings. across of movement financial place rate towards secular shift Markets broadly has Banking permeated

just current cloud and of which was with awards. XX% in recognized the the Modern FIS several industry of was in several and the of launch for Payments One, Digital promise solutions, embracing including early Banking over digital-native compute cloud technology, Platform, One,

While prior investments we cloud, ensure types prioritize the and advantage, the all digital leverage continue movement. standing experience still an we early-mover improve enable further money FIS position and of spend are to end-user to with not

the the money Second, accounts environment to rapidly greater and competition for of rising across accounts, interest rate on managers institutions relying online the ultimately accounts is Financial banking and high-yield deposits. total are savings creating access asset increasing system. number market digital-only

continued across our sequentially partnered from segments. which digital-only chip and of banks FIS the and across primary and growth are transactional Capital of Markets the fintechs has growth, a platforms Account number Banking recurring account drivers first the with FIS revenue growth their offerings. both quarter blue powering organic

are new discussed financial fallout, with greater offerings and but regulations to proactively regulatory focus preparing being operations. for SVB Reg situation a legislators, the mission-critical is increased banks' managing still need interest on fluid The oversight is profitability. post Also, by and with tech rate institutions the risk best-in-class regulators for

beneficiary at requiring financial We're provider sheet assist in the onboarding skew given we've larger scale. to and of management relative towards company's acquiring a demand quickly solutions seeing for is industry expertise accounts core a the of We recently new lastly, to consolidation, seamlessly financial believe FIS trusted and consolidation institutions. consistent and treasury across balance momentum increased the and expect continue. seen institutions industry that And

this slide nine. software-led report beyond of that we've across to FIS markets, several range notable extending institutions. financial a reach diverse a resonating quarter are closed solutions I'm across product of of wide Turning pleased a with end wins our solutions. host range offers increasingly traditional to

set. wins global Beginning expansion of with platform of we platforms, momentum our include as as Notable large across a the services provider. to well sale product core fintech enterprise saw Digital our provided One solid an

Payback underpinned quarter, signed Payback & engagements and leading a and offerings, Networks solutions, proprietary by Next, major tailwinds. our financial loyalty network, new Premium see NYCE, in our the second several US institution. retailer We continue our including a Payments debit to including Premium

debit be continue offering of a about NYCE and the prospects of II going rules. expect implemented We the forward be recently to excited beneficiary network Reg to our the

And demand business, verticals sales continues institutional and insurance large auto the including as our be companies. board, finance management treasury robust, for non-traditional across with strong. solutions our such penetration seeing traction and Capital our particularly to corporates, we're increased In risk solutions across remain Markets of solid

delighted across the I'm cross-sells to making the our to strategy remain sales a clients. we're selling We post progress enterprise. partnerships, of forward the commercial come. transaction. distribution multiple going with Worldpay our and Finally, across Amplify a for quarter accelerate Capital will we was designed Markets Amplify of Market Supported Banking Worldpay channel services for expect a by part key core into Acquiring solid Banking years of remains which particularly had initiative, the and Capital Services sales, Amplify-driven

Future Turning on to savings delivering continued into those transformation progress way our and slide client-centered expense Forward. savings our well cash we're XX, enterprise-wide our outcomes. We're on across to shifting making previously communicated program,

to of users our continue stack, our focused on products. improving for cloud, end interface modernizing investments We simplifying leveraging user technology the digital our the prioritize experience and

with a welcomed Technology technology extensive consumer recently Officer We background new Chief an the digital FIS space. at in

the Our CTO in lead is entrusted of the place embrace appropriate a FIS and continues to innovation-driven culture forward curve. personnel developer-focused, ahead to stay with with ensuring FIS

customer costs, accelerating care. for about timelines, presents of excited development and promise and the productivity, improving our our employee client AI product holds implementation We're quality AI improving the business reducing and clients. prospects and and

We AI-driven coming across results expect programs months. initiatives ongoing materially early The are initiatives increase of over encouraging. to several have number the these we and the company the from

Erik? I over that call will to With turn Erik. the

slide Stephanie, results. I'll overview second of Thanks, joining morning. this begin XX you on quarter for and thank with all financial us our an

of organically exceeding billion a Overall, consolidated of $X.X commitments, On per EBITDA we revenue the the our basis, margin effectively adjusted increased XX.X%, against outlook and our earnings adjusted X% quarter. share $X.XX. end for of with high to delivered

end. segment by Revenue our Markets line with and Merchant outperformance high quarter in outlook, with of high was driven our Capital the both the Banking the in end exceeding

EBITDA merchant As EBITDA exceeded each $X.XX, sequential adjusted driven our our we quarter. the by returning end with favorability segments margins, EPS in quarter. in the anticipated, Adjusted saw line outperformance improvement in in some expansion of outlook high below and to their three by of the the operating

and multiple Moving see to vectors. across to cash improvements we flow balance sheet, continued our

flow second decreased of or XX%, cash than Forward Our free of XX% year-to-date revenue, million, generated continued conversion a $XXX to cash free We conversion. XX% in year-over-year in of our benefit flow above our from quarter, $XXX well capital commitment Future the full-year reflecting resulting million initiatives. greater X% of expenditures

drivers by $XXX on strengths, returned continues team value The Lastly, million to average X.X% focus our to of we debt and of operational flow our interest to $XX.X shareholder times long-term to at rate we sustainable total million ratio leverage billion, dividends. over X.X through reduced fundamentals yielding a approximately a shareholders $XXX weighted as cash both creation.

to recurring driven the growth growth. results Turning Banking On Markets the slide and combined by on XX. of Capital revenue organic X% X% revenue a our delivered quarter, basis, segments in

in Our stable with recognize large sales. X% expectations, while revenue backlog $XX quarter as steady year-over-year growth and with flat at line sequential exiting growth replenishing we and held reflecting billion, of our the new

This durations yet of times backlog implementation, metric contracted one with our sales many inputs varying it and contract growth. unrecognized making to includes to underlying

over past growth handful largely backlog large driven years outsized the of back, by transactions. a and was few unique Looking

Excluding transactions, stable. has backlog been outsized these growth

Capital XXXX revenue, has healthy of flat more recently, our recurring recurring backlog cycle growth for And in posted Banking within seen excluding While revenue growth to we've X%, year-over-year growth guidance. these first and our transactions, between the half Markets. ranged while

the we drive seeing into noted sales. while sustainable success the some sales improvement indications which continue year new high-margin the margin of contribution change and sales with still transition sales, early As to in outlook growth. higher-quality transition, will initiatives incorporated This long-term on our new for in our to previously, in we're early is teams

high-margin revenue Adjusted by At increased points an mix, down X%. basis one-time primarily revenue X% we in margin a basis XXX reduction as first EBITDA XX% was improvement quarter. recurring points organically Margin quarter, segment driven contracted the revenue. with contraction XXX the the from Banking to we in the saw XX.X%, saw level, of growth in

margin Banking as Forward segment in year half We to the continues expansion the for continue the to anticipate of back ramp. Future

the Shifting modernized of continues Revenue and which suite, quarter, a revenue to in SaaS-based to growth by of organically strategy. our the execution XX%. to the the Capital increased Markets from was exceptionally with driven well. license perform growth Capital solution strong shift recurring segment, strength sales multi-year Markets go-to-market X%

to continue first and to the come. as services. points basis XXX in progress in in by on of and we the expanded margins Overall, in we're EBITDA was in Adjusted the profit for high-margin year FIS expansion for professional the revenue, revenue, position pleased XX.X%. driven recurring contributions Margin low-margin growth half high license to with growth earnings a years quarter revenue sustainable reduction

segment revenue XXX trends first XXX slide to streams year-over-year Turning points EBITDA the increased Adjusted XX. basis revenue seen X% sub-segment our delivered operating cost to with quarter. by Global grew or revenue points points yield two on grew X% we results. sequentially, the in and by as quarter similar execution, while Worldpay strong as in the consumer compared organically, and basis both our our driven quarter, across margins volumes management. spending first expanded high-margin improved

Future slide for Forward. XX to on Turning financial a update

As outlined Stephanie's rightsizing ensuring our expense in the of to investment an appropriate messaged, we initiatives remain while previously committed level base, in comments.

as a with focus goal, on Future ways program work market and we the improving around Our go-to company. centers a Forward this

we in our expense reduction, savings a to quarter. over $XX million $XXX over benefit resulting million achievement. quarter, in in we Holdco annual progress the a cash On continue Exiting run-rate significant make operational achieved to the basis,

to capital million also million our increased We our commitment expenditure we to $XXX trend as $XXX XXXX. continue over achievement in to

Future I'll targeted provide program health, operational and while to provide enhancing estimates In moving on expense summary, financial moment, benefit to Forward we our forward. ways some In a work. the P&L a continues tangible the operational to FIS the

XXXX of FIS. XX slide capital close, priorities excess Throughout tuck-in or dividend the to will capital a appropriate and on repurchase paying and an M&A. using remain our reducing for Turning focused share debt, recap for for following transaction FIS allocation

ratings. a sheet strong and Our investment-grade balance remains priority first

generation of our flow range recurring free adjusted and times cash long-term revenue EBITDA. comfortable a gross X.X with times highly streams, to leverage X we're Given

Next, off we reiterating in adjusted intend with paying remain based our earnings our we net dividend, FIS' net with earnings. consistent practice. committed to grow ratio forward are and this XX% historical going We a adjusted to line payout dividend

this share will attractive our inclusive the our upside default stock. Lastly, with of valuation be least at excess number, $X.X proceeds, capital potential repurchases, tied to transaction use billion of of to given

Longer robust term, advantages while shareholder This strategic capital leveraging growth value our capital creation provides share to supplement allocation tuck-in verticals with of we to complementary excess strategy repurchases, multiyear long-term intend proposition to value distribution return period. consistently a through shareholders scale and over in a M&A. our for

basis, us to in Consistent our our billion change overview $XX.X with EBITDA. of $X.XX confidently increase increase billion our a end the slide while second and first to quarter ranges. with adjusted increasing our an our for low our this our Turning XX revenue quarter assumptions of results lead revision, billion quarter in to revised guidance aligns the to to a high $XX.XX in beat, On outlook. billion of in FX to Holdco guidance $X.XX second addition significantly end to

business half continuing this. that operations for will will will to an outlook the discontinued in reflect be our look Beginning FIS' At operations. quarter, third time, Worldpay to first be provide restating the financials and to we transitioned updated we XXXX

less this, adjusted FIS' into adjusted And be of discontinued transition investors operations. we're the given provide we revenue business on updated impending until because outlook Worldpay the and operations. Our EPS now of EBITDA metric continuing meaningful focusing an for will

respectively. On a organic to we approximately end X% to and X% revenue organic both and This X% consolidated Capital anticipate to growth X%, Banking an reflects outlook X%. Markets the now basis, to low of growth of increase

from underlying business. XXXX remain transition year updating pleased our time. half of in the guidance to first are the confident impending segment not this we're the previously Given That the segment's our at and strength Worldpay discontinued full over said, we the we performance Merchant operations, of with outlook issued

benefits cash over improvement anticipate as are Markets reiterating associated in Capital Future we ramp with of we for the And conversion continue We outlook our to flow Forward. free Banking and margin XX%.

in we seen confident on As remain our our delivering year-to-date in results, commitments.

with I'll conclude XXXX. some on XX number in for considerations FIS slide

was This the $X valued will equity share XX% Following our GTCR. current stake a transaction, the share stake partnership $X business accounting approximately close Worldpay retain per with FIS billion, in over for at of at count. the equity in

effective from in effective the our increases This due accounts for rate XX% We in reduction and rate of to the XX%. is TRA tax to certain regions. current approximately tax anticipate increase corporate benefit rate tax an of FIS for the primarily

As the debt stated, gross previously would total closed. billion of after $XX anticipate we transaction

approximately debt interest a We of to X.XX%. will expect this carry rate X.XX% average weighted

corporate $X As noted we in approximately the RemainCo billion, our the estimated transaction, announcement deleveraging of X.X EBITDA to $X.X billion would of times, to to translating anticipate adjusted approximately of expense. an inclusive

program. our original separation, we of a Worldpay EBITDA FIS of to Forward adjusted previously $X regards million in With Future XX% anticipated expect approximately savings to for the the year-over-year We cost retaining benefit $XXX program, substantial post XXXX. billion approximately of

of with exiting approximately XXXX. the approximately this transaction, the an $XXX million, will annual Following become close of $XXX $XXX rate million run million

anticipate including EBITDA $XXX revenue of expense million of approximately million, also We of FIS dis-synergies adjusted for $XXX $XXX dis-synergies. million incremental dis-synergies operational and

to with will these We our look minimize Future Forward program. dis-synergies

and we've diligently While both both these we're to allocated disentangle on expense items. commentary infrastructure entities. progress, depreciation further expense amortization two provide still we'll working appropriate, the of between When and significant made

by saying made fundamentals the progress of to conclude we've come. and the the FIS excited the forward to I'll business that that about team underlying to years are for continue move and I

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

Kumar Instructions] question [Operator come our And you. Thank with the from UBS. line first will of Rayna

Your line is open.

Erik. and Good morning, Stephanie

cycle? how with the Can changes you as are You and both salesforce. talk see of you to navigate conversations clients helpful about little recent on sales improvement starting a they detail some your to macroenvironment been bit in you're banking uncertain making gave some your the Banking any have

Thanks the question. for Rayna. Sure,

remarks, as would So banks you really on expect, deposits. my focused, as prepared I are discussed in

That's did continue they those banks as looking they through can how will of in up we those terms with conversation having those. our we're their do and digital them. MBP them think it And branch enable conversations, a having our deposits. to we're deposits, gather would to part gather product they're they that network or so digitally to big of product like are perfect and set for products further DX conversations, And

part that, of getting as addition and I In across mentioned system. well, seeing the banking to opened a as we're lot deposit-gathering, of this the accounts

the as the I And up net-new banking mentioned, overall continued recurring and growth segments. the the think revenue are given transactions growth, accounts Markets both well them is system. banking drives so the And first profitability, what growth since say organic as up across talking thing is both March in I'd to mentioned, net-new I to deposit and deposit might quarter, as about be expect, as you Banking since we Capital we're final as conversation think, things as on to conversations starters And at which respect moving looking with impending the board. profitability regulatory prepared all for their sales across piece, products With deposits, outsourcing the across as digital, us look increased they're are focused around product of remarks. Erik deposits us in his at board. well their having a we mentioned more challenges. activities, couple to more of the our set They're I

to continue We backlog being flat. see

We're the intent sales that's board, repopulated we the across expected so products, with are seeing pipelines closed seeing We higher-margin about having we sales guide that. get exactly But we sales It's as the with feel products we remain flat complicated the as that we even a backlog. -- measure. backlog And sales predicted, higher-margin our confident fairly to had expected. really expected flat. the

that green product new of with backlog seeing So and profile terms of feel types sales and of those repopulating the the in terms products positively shoots pretty of in margin margins. bringing some on we're the

you of to on announcement? helpful. GTCR What business on impact transaction. clients wanted from since concerns very existing feedback to Are the the touch just of have That's commercial Worldpay hearing private or received the any the the you then relationships sale regarding the And I equity?

go a always great of and this. our we Every talk all we very time to we Yeah, are on out obviously question, and focused transaction, clients. No. do

was by So, more fact being with investment, to that know, of to clients utilize. all been no us was positive. typically led activity, then disruption. products There in more more as for bear to equity That be private our to owned able And before. has you brought were experience for Worldpay M&A clients those

asset concerns, So any we're not couple done before. we've transactions of of with this primarily hearing because the

little have have We these track do proven be a and impact can we types value-enhancing. actually no on to that transactions record of clients it have and

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

open. is line Your

morning. good you, Thank

Looking of at a within new plans your bank for to rollout componentized there cloud-native these slide new what specific core offerings? timeline offerings MBP? solutions are each Is introduce eight,

David. Yeah, thanks for the question,

as So architecture know, MBP, is you componentized best-in-class core. a next-gen for

first pretty did we I were couple of a recently most to it win market, awards. and think unique

we deposits. consumer up and So are live with

have We with live I say have fully the would of up out lending, obviously -- that deposits. quite deposits. running. rolled roadmap XXXX, consumer a in we quarter product then so We few banks went as next consumer and at second commercial our is over step look would be And we

with really MBP. we where are So we're good feeling about

We over timeline really our the launching financial have, a getting live these know, year excited about they the key expect the see of we good first about of in become the would conversion We products them pipeline quarter months institutions, throughout several and it, some of XX significant or second live with are move the as those you last next are here. rest quarter as of and XXXX. feel large then big in of to signed amount guys,

just And a it. follow-up. Got quick

and referenced seeing of II. talk from Visa You about up to pipeline for Can network's pick you're processing Mastercard? NYCE online Reg the preparation you opportunity away

out networks you know, so is -- no, Yeah, of only a one It's so NYCE there's asset there. for great as many FIS.

Reg It's really very There's about to we're significant II in there. and feeling lot as all of good online. but space for of network Reg an us pipeline is we a obviously see the continue opportunity interest comes it. We very II -- obviously a have competitive,

of question. Jason the with of line you. Kupferberg America. That One for moment next Bank will come from our Thank

is open. line Your

morning, Good guys.

backlog When specifically. organic moves It on think start target, for we then positive And quarter get do Banking segment, into growth? medium-term when a flattish growth you're maybe you still backlog. year-over-year Ops? to to QX, get like we wanted revenue specifically back the discontinued thinking sounds for Merchant next the Just will

to can on Yeah, for I think to some tough backlog, to now our down Erik over three you. the quarters. next remains think, as repeat I'll he but that the guidance predict, change so we I trying profile But gave coming And thought that remind into to there. and the margin assumes remarks slightly plan four XXXX backlog about right was of the flat products

I component sales backlogs. the the is growth talking really, think understand the and growth a plus the about revenue the the Banking our is it, obviously, backlog thing sales account some net-new we growth activity to across new remix we also us gives platform there there's and why recurring but that transaction net-new that's to going about new deposit, keep organic while

little guidance, bit guidance. to be with cycle cycle giving to think soon respect I

is just guidance not we've guide around a cycle XXXX. for wouldn't for cycle FIS I yet. us be segment think cycle expect to mid-term We're until what of said get guidance closer to I the guide ready guide XXXX giving or overall cycle we our for X%. to X%

Understood. as And follow-up. just a

million inclusive is the billion of for pro-forma of that RemainCo $XXX adjusted the So year, dis-synergies that you mentioned? $X next of EBITDA

morning. Yeah. Hey, Jason. Good

I'm column. So the do from the to whole try call-outs just me to summary walk a going let quick thing. the of material

Future incremental a X%, I This million referenced EBITDA FIS dis-synergies, of includes The to of includes then a basis Future the to that, revised X.X% points dis-synergies, from admittedly, basis interest of Keep estimate of million. $XXX for prepared and expense. effective split these and have lot rate EBITDA post-transaction. corporate program, an XX% 'XX forward. talked million weighted $XXX range about million a $XXX $XXX points. of average XX% adjusted offset adjusted $XXX rate XXX dis-synergies. reduced moving in I the an operating million beyond revenue So XXX It of disclosed mind we to of to also expense the that tax Forward remarks, in And will year in Forward impact

The to an Future clarification. thought is that aligning Worldpay related One with clarification Forward to there. just important bit respect much versus We RemainCo of of the the Forward is was Future reduction FIS. how

one with will And you. come next And moment JPMorgan. Thank from of the Huang line our for question. that Tien-Tsin

Your line open. is

Hey, thanks.

was Markets you any especially curious, growth the outlook curious recurring Capital just for Capital we've on half, And in seen that possible, non-recurring this review for here Some segments? Banking recurring both call-outs double-digit encouraging I sustainability. if the results, first versus can for second Markets. the in in just maybe Just Capital Thanks. Markets half? and it's the

Yeah.

recurring So first from associated a balance the some recurring elevated with growth the some through bank seen Banking about transaction the of perspective, quarter called -- I in growth half revenue crisis. Capital the bank the out the through steady revenue as has specifically some year. Markets would think first the anomalous mini of of year. We

X% good a from Capital to feel X% the Markets guide full-year we the about X% on to However, X% to raise of basis.

there I and would is be the really pointing business thing in really Markets add about high continue the Capital and set the you strong how Tien-Tsin, is out product excited it being and we the it. for to demand other thank

is FIS into good. the The to As look significantly. high, is transition this we going very to the you recurring think well, about see are moving very products margins to would continue the extremely to really well, transaction, non-recurring demand resonating business post from expect us Worldpay grow look

and broadly look this resonates investments, product at significant investments continue can it board with capital and the across of well the how clients. So we in space, make to we'll as expect strength you set given the

looking finished? services What clients we're bit I know or of seeing? are just guys time, projects heard, consistent, the follow-up, thanks quarters. update to the for about Okay. to backlog. two to -- and with How Any you and little from hearing or Perfect. get across down a next loud started IT flat you're pushouts. And pretty slightly and what in are or delays conversion? convert then I quick clear, three outsourcing, hearing a on the

I saw Yeah, too. that Interesting.

-- robust So backlog. a we have it's

our anything live not So faster? we hear about can the actually have We're what from is, we us get slowing hearing backlog. what you clients in

there the the to In pieces faster? of we one use fact, of drive Forward, look the we're is, team on the I've component things how really part we It's big who our of Future the to really it's implementations move get Beatty, our one reason in at I along AI. pushes faster. think, Can that program, asked drives Can can focused do of have flywheel we that it product And one development faster? as upsides, our machine team we AI? Kelly implementations Forward of Future with

not of from anything products to Actually, of terms for either savings wanting I'm because faster growth So slow. to clients is on they their the that. want or do they get banked in them back what have hearing out

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

open. is line Your

Yeah, hey, so much. Great job. thanks

Thanks.

Thank you.

I Worldpay and cash remain was and first post I of free to Yeah, of guess, last really than it conversion good And I'm year convert probably strong, spin, flow is cash conversion? it would this couple was flow on better rest the all, the then a because years, drag the simply of the wondering, quarter. actually guess supposed has

hear to strong. flow conversion good Cash from David, Hey, you. was

we've some it notable cash a of expect yes, is first regarding feel XXX%. then improve generally We they flow number we've quarter here year conversion, with rest quarter forecast further free drivers Forward. two, in number guided separation. to XX%. had had free of couple would about cash and And with post we've conversion was of conversion XX%, conversion, question flow XX%, In that Future success the second align one. So Year-to-date the to good we

slower. faster, spend We've introduced processes. collecting are spending we're We governor some

As down year-over-year. remarks, mentioned prepared materially in CapEx my I is

costs contract six down in materially through a year-over-year. spot nice sitting year. We're cash deferred with Our flow free of are very conversion the months

is And I you the basis, equities, dis-synergies, then a what of of Thanks. post-spin Great. on the as there things. And revenue a basis? that recognize a million on minority couple a $XXX that would follow-up, guess what the dis-synergy, just would stake, will be? interest like non-GAAP The little

Stephanie. it's Dave, Hey,

yes. think I so, yeah, So, would

get to agreements given a as to of majority those, we untangling commercial keeping do respect in we that we that. up have to partnerships tough -- we come Chief with some them. Officer think about expect to across the some working a way away anticipate of non-GAAP the from the But would as about we one that And one board those is do terms about about originally. predict, probably that to we across be having the board, actually that renegotiated the interest feel dis-synergies, because and booked through the And Accounting ecosystem minority obviously, to to revenue we're Our thought the as potential, company. But we that, good that. stake, be we well with would it think of broadly set had what part anticipate of becomes our of then partnerships

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

Your line open. is

recall, rate, there think, one-time Hey, I comps. thanks, them segment as guys. tough revenue let's I the call If Banking were other, we recurring just or growth at look

and maybe the of, of remind items can example, for fees, of out is or importantly, more other the this beyond on just see company time. just you non-recurring more Stephanie, very above grow-over term And the T. you a focused the when larger was factors? like So us then some question, you license fees, cultural Rowe, anniversary start just here, for called to banks

people transition the talk do transition right Thanks. you have anyone is you just lost to so especially the gained And the the for transition in Banking mid-size, that you can on back about culturally, how segment? you the and going, that, that need have or

start second, the Erik first lean Maybe then Sure. one. into and with can the I'll

as and largest about business, standpoint. the institutions through in really serve both financial as down regionals community flagship think Banking, we -- as we the our it's world banks think well the I into the our

So I people place well. still product Obviously, serve those all the have needs. areas, clients think have clients that focus in that we those priorities, different set

of set trying products bank, to you're obviously you're a So SIFI for us. a consume large if you different have

own stack, You system. middleware those then run you have consume your a very core deposit own you and products your tech large so and

about are those. a Platform with their from making only as looking but As they Then are space, new Banking And franchises really as a the go businesses, they that about of share we lot really down their across community are us. sets at on lot business not products you have all the the we regionals and sure think the global movement market you space. take there. there. Those into money serve of board of And think Modern you move bank cores, down focused regional into transforming are --

IT in and what provide We vendors we're services FIS nuts. because the and look, soup everything, the back go tech not, know, best-in-class both And also is, if becomes them As we heard in shop those need adding very it challenging primarily office to Ops if folks. teams products want to you they more we for and run from price, their the to given terms them for of forced I've are just but have. out,

different They would say, three of have those we and I serve all needs segments sets. So much well. very product

brought that are the serving feel we we for have our largest Durrant Capital he's that's new a Nasser of And that those there, also with our Khodri, also him, the team our complemented lot business, Banking John and President leading key would putting Solutions think leaders institutions the say, good really the in, I around we about segment those here financial I Markets globally. already today. talents

business having sit across So in nice of nice spot board. in the book a of think really I we a terms

unions. As the We don't community never you or we have. credit banks smallest know, serve

wouldn't and about over see are banks we that need. our depending feel it be So those where I to -- best-in-class making we significant they what really to sure us But think you. think that for you continues that's look I Erik, products, that I'll enter good a upon in turn space way. a

would from T. a Recurring steady. about half. steady. any expect in the behind in that the customer-specific Banking us, Price's back Rowe quarter, got Darrin, first revenue volatility second as also, We've implementation And think as Yeah. half about X%, was the have the think recurring I X%. perspective, revenue half back back I would we'd so we don't

norm, not if -- the may day, the headwind steady now wondering assuming that's there's just what delivering recur, you of at like already you're the it unless but what need, mean, X%, front. where recurring of is was was that right. new more end then or X%, you that I was doing all X% sounds to I right to there grow-over, there guess, kind a at the go I the Okay. on

that's fair. think I

for it's recurring. think I steady

us back The sit now it's non-recurring largely I growth the half in transactions. those were We recurring. through not overall of year, grow-overs which down. have revenue for but to in grow-overs this keeping think the go, in what's big is still guide lumpiness the some

One Citi. moment of And question. line our that for will the with Ashwin from come Shirvaikar next

Your open. line is

down wanted goes you I terms your in into growth you mix to thanks. sequential you the benefit mentioned through? in flowing just what what break down in break early into could of is to Hi, improvement margins the sort back Forward Future in that. of maybe scripted remarks. go that If EBITDA just goes that already Could improved versus

down with fourth hear margin improvements 'XX, of taking margins to the from good points basis I'll it's you. the year-over-year. a In Ashwin, just Hey, quarter back we've Maybe that made. were XXX some step on start

XXX first they basis The were points. quarter, down

XXX were basis down The they points. second quarter,

quarter at basis XX Our down third sort points. of the midpoint, RemainCo

say the back to Forward through of Future margin of continued course make the the year. in on we So improvement progress predominantly I would success.

on time take sales of shoots the of installed. will those for green we're customers to some a think little side I us seeing get the that bit

And and the to that apply contracts remix How But figure principle it, out perspective And modeling we back of same a to get the one been remixing if wanted look the process that then impact backlog I taking consideration? you've to how I down. revenue being exist of and for what's just future better think can, future that, about time, if for more Understood. a to that to that's to go sort flat does profitability. the about trying at you're should that? existing

great question. Ashwin, Yeah,

way the better. product variable we around, we've to an in margins make that the think at think cost to the I mix those or can looked the is fixed cost really approach improve either and products about took

client renegotiate those As contracts, you long-term a have until the we covered know, -- little natural tough they're their it's we covers And revenue have base. go the renewal. in so for them and up to

improve So broadly. margin through cost the the how either terms I mix do think the Future overall cost to the Forward, variable more we fixed it or of of continue about in improve to product

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

Your open. line is

overlap affect change or evolution in mix in business just and to on backlog may there how just segment, Thanks its focuses to their made their Banking as that how of back very at I revenue, much. ultimately, of about salesforce really? wondering you've products we is not profitable with et flows wanted I'm cetera, potential the quickly and if through, think that and development the to go a that and all should more could the salesforce changes focus. that how in backlog

question. Great

the of really, core how not way, of in just that organic those signed. not deals. not deals really we think, And the you're transformative large was by on I it's terms -- with interested mix because in wouldn't we kind what that them relying drive recurring challenge seeing revenue backlog the around the strategic to in We're growth. be

wouldn't you it change So the if and let think I that to material we given when contracts. have the tenure I necessarily those, backlog take be know. too a the there'd will through the in the think impact we'll long just modeling. of

Got it. Got it.

comments, that that feeling about about looking how you're in Just macro looking environment at, how that seeing to if you. especially helpful. your changes That's you're generally, you at in all. have then outlook more guess more the just And change you're related been And generally? assumptions in the impacting what of there the thinking Okay. formulation may at? are the Thank I any be

So hear from you, good James. to

that's We step good feel consolidated further the back. guide broadly. a taking about gone up So

we and With steady. year-to-date that we consideration is guide in had have the end the up confident taking low Banking the Capital results pulling in we into Markets, that of the feel macro both feel and

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

is open. Your line

Thanks Hey, ongoing to after for FIS taking GTCR. bit and question. to little in dig arrangements I the commercial sale between was understand RemainCo, Worldpay partial good my and morning. a the better hoping

Stephanie. an ongoing think times, the what a You you the what maybe Like we -- couple entities? that In about negotiated? commercial will like basis what more negotiated? process just a through Can arrangement are in should how on either commented walk on this already little being look bit arrangements two between of of detail

sure. Yes,

So happy to.

is our Banking we're so initiative, clients and into lot a think successful think I So clients. selling those where we're we're side, acquisition. loyalty, very corporate Worldpay NYCE then products cross-sell either flip where And the Markets of our since clients, been where Capital on To-date, about into which issuing Amplify, acquiring has the the think, trying there. that -- selling, about

because However, there the segments revenue between share one we're any been hasn't company.

go-forward the only. of would the would revenue channel channel distribution that preserve is terms would share at to I product reasons. think It the synergies not create companies and sure on partnerships, selling forma in revenue compensating, and go-forward sold a a just making a be the channel. for compensate normal been for will a normal expect very like the we look in you companies, as but where go-forward length think and two two sale that's the really required One, about And product share and arm's historical. product is We're are that pro into also channel between back two fair the distribution for basis. really commercial the go arrangement, we product, for we get the it go what's way that distribution going whichever you to a on So to to think it agreement, other's a

we think about how it that's simplistically. So most

Got it.

follow-up a maybe as And just then related to FedNow. Okay.

about just you're Thank account-to-account FedNow seeing a So talk just the opportunities broadly, in FIS, FIS globally bit terms across well in here the you what account-to-account from in little really you. or US. broadly for as active either networks landscape? has of Can more been as

absolutely trend. It's Yes. a Sure.

been there. there We've for time. As you long know, a we're

a currently certifying of amount significant and have for testing banks We FedNow.

pipeline. We banks the in XXX over have

when Clearing hundreds to launched ability more early demand. some bit upon seeing probably momentum in the have ramp quarters, more We're than depending House the We the coming RTP. a

is certification first the on just I'd early these with Lisa. from know, you then say it's the there. it and step, continues As things,

enable right and terms As promise. hype are, whomever FIS the I think how And lot And in it. you enablement. I a of impacts do what the would but we're terms always fast of is to it's financial in ramps, it in there of a think market. there like TBD important know, overall there's really to trend use

John from for moment Davis will And that of James. line question. come One with the our Raymond next

Your line is open.

billion, Hey, good morning, $X does quick Future to synergies guys. Forward billion clarification. Hey, Erik, $X.X just savings? The include and that a the

It does not.

of just million it corporate FIS we and of there, which you incremental And expense. estimate and from as Forward FIS $XXX million total inclusive in down adjusted got Worldpay. dis-synergies, Forward From $XXX me moving let is Future million post operating million we've walk billion $XXX to for benefit, break billion clarifying split then again, forward. So to $XXX revenue, John. between also referenced disclosed in EBITDA transaction, Future million for FIS is we Thank $X.X for expense the $XXX $X that the I question.

And XQ would year, Any would quick I points. still points the which think second Is just follow-up. Okay. margins, Thanks. XQ to points said about? basis basis XQ, full color as XXX on about of right the to a up cadence the that expansion XX helpful. of kind are margins be half call, XXX on On you think way Banking imply for the basis

Banking improve. would continue Well, for to through year the margins the sequencing

get Banking forecast coming seen some the of that under we on onetime the revenues based think to year of I current high-margin full margins we've down. mix flat shift

with We do of the line time will KBW. come question that final you. one Thank have Govil for and from Vasu

Your line is open.

Hi. Thank you taking my question. for

not for to mostly needs macro get again? is Stephanie, normalized again? there done growth. get revenue else But for a anymore the relying you, what you're one to deals be the First do to the signing get point? can it going Or your something X% on happen end to of those Is you larger X% sort that of market to this think that Banking side. on back that to Understanding issue at

Okay.

let I've make because gotten questions, sure. sure me two want I So clarify I to make and

We stepping market. large institution are the financial from away not

there for a type normal I strategic sales. think for out what have where like backlog large is called Those historically example, been Price, some are the Rowe type transformative is institution. not that T. we've transactions a deal

think What underlying on say as from we've transactions guidance X%. large is been away rely the driver medium-term to stepping for going strategic company of not large to to the institutions. a X% for I we're cycle we're trying not So those financial

years to still if absolutely couple in overall percentage Banking. more call interested look pipelining the of a and you those last couple at those out those. points were in specifically. But of contributors, are growth would We them of We back

number, And that so single-digit normalizing backlog X% doesn't as include to you down those. out, more mid on upper guide cycle you're said, think X% think a FIS coming and those about, from we about a the normalized would to of like we for more RemainCo,

opportunities as time, the have part we normal and recurring does most come activity. of Now of sales those backlog we those to we one about those think participate be extent terms those, of which in continue of margin processes. in And terms transparent and we'd of the wouldn't should win in as to different absolutely and profile, it with that to a our very expect

clarifies. I with created if any that. that I So hopefully, apologize confusion

like end those what we wondering elongation I think large year, those it that point? something guess. start be if Because more making some in I takes that's No, deals. of deals there's you I do issue of cycle an just winning just -- haven't you that's started of macro to aren't those that, for That decisions just a that at done was could was of And sales or types absolutely again? drive I because just allow guess clear. you last I you to for wondering think to

Yes. No. Yes.

Sorry.

or they year. part for down the want whether of still them. saw that large use an a be end those Those they cycles outsourced imagine. to Thanks can partner are where making transformative in decisions, Sorry. banks all hybrid businesses, still in partnership, Those be they clarifying. whether are macro. They're want looking deals to as Those at last strategic of to we at elongated, you slow want are whether

have in deposits, lot With keen although a really towards terms the on have a the focus banks profitability. gathering, of they very still deposit refocused eye

drive activity So banks do I'd deposits really are But types moving primary transactions on the profitability. those their of as typically and into deposit gathering are focused broadly, say and profitability.

of think, I I macro. down again, are a Tien-Tsin a So big I hearing from from deals think more those standpoint. slowing it's macro providers, if And IT lot you're think outsourced transformative mentioned,

helpful. quick quick to Erik. a you. ask Thank super And -- I follow-up if That's a may

number that Worldpay the You've that of million about wanted interest the in revenues just sort back the right on we make the to of were million side. we backing on And something laid the well $XXX were the Worldpay. FIS into $XXX Is side dis-synergies into out you to sure of as minority flow split the and side. between that we as I will think on Worldpay costs? would how that ballpark? backing like And sort

would impact revenue total of dis-synergies roughly million. Good be $XXX $XXX question. of $XXX side, The it Worldpay and for million OpEx Yes. dis-synergies EBITDA million a of

Mr. Thank George question-and-answer to you session. would any for remarks. Mihalos now the in participating over I closing for call like back to turn today's all

to everyone, Relations us. you, and with out Please questions with we'll speak for soon. feel reach joining on Thank free Investor you any

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

disconnect. may You now