Fidelity National Information Services (FIS) 26 Feb 242023 Q4 Earnings call transcript

Good day, and welcome to the FIS Fourth 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. Please go ahead, sir.

Thank you. thank Quarter joining XXXX and the today everyone, Fourth FIS Earnings morning, you us for for Good Conference Call. being is call webcasted. This Today's and our news presentation all release, on available webcast website are fisglobal.com. at corresponding

with call financial President; James, the who followed and call Kehoe, our James a results. strategic the are and Stephanie me On and will Stephanie by our Ferris, CFO. will our with review CEO morning lead update, this operational

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

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

delivery missing in in with facing contribute It scarce. products, it significant company a were Simply George, new too for capital and we where at momentum positive selling FIS had bottom FIS. years. was inflation the to to commitments in It growth And over of clients uncertain areas complex years XXXX of us. XX opportunities. was and as and while that not was the When put, banking and year CEO, the crisis, slow you, Thank recent stepped market was line. meeting success, navigate a its of thank company you, joining economy, everyone, was statured was a I in lost focus a for an expectations. financial market didn't

and financial Fast forward our put value to measurable a unlocking a for who sustainable results. year much a company time, moved different long-term we to center path urgency short on commitments shareholders of do. at everything focus, we outcomes recommitting In took and expectations. are now for of decisive we later, number the clients ahead a operational a consistently of company action period with delivering vision the executed while successfully renewed with significant and of and We are a success,

we month, landmark Earlier our the of operational to this companies GTCR, with announced creates key for a X This rapidly the and respective their margin opportunities on capitalize the successful growth flexibility business to markets. in majority transaction focus market-leading milestone completion greater evolving strategic of sale and Worldpay future.

both solutions. bank FIS organizations strategic preserves XX% powerful holds benefit to the with agreements closely and value our FIS our it access a while channel distribution finance first FIS's when from embedded is what to continuation important for continuing Worldpay as started we array an together. remain services, X will of of such our came X tech for propositions companies in partnership stake future. go-to-market through of Worldpay Worldpay together in commercial key we companies, established to continue The the the a clients work and meaningful will

growth. We on are we GTCR, management is team are Drucker, business to confident reinvigorate revenue and the and and to Worldpay earnings partner right the trajectory Charles excited the with

first-mover our a corporates of of focus on capitalize faster-growing the outlook advantages, technology into and position us segments push allowing governments. XXXX trends sharp FIS's enterprise as as are revenue our on software and demonstrates. institutions, on separation marquee needs verticals our growth technology the leader, The quickly complex a global to financial and global servicing accelerate of clients, to most With set builds favorable reinforces industry the positioned we multinational market. well This

ample recapitalize Worldpay also same reinvest flexibility accelerating target. to at The balance providing to I'm raising us while pleased once shareholders that capital we the lowering share in announce sheet, leverage transaction the business, allows time, to and returns again our to ratio. are repurchase our our

quarter back now We our target. are $X billion buying in billion previous XXXX, the of this stock repurchases $X.X our up brings committing to fourth at from completed of least XXXX, Including commitment total increased on capital This of and buyback view share strong the the shares. reflects a confidence our intrinsic at value billion. up $X repurchase position FIS's business, least our to in in

execute to clients and is effectiveness operational operates a exceeding program our for Forward increasing The excellence on our continue targets changing we Future XXXX our and driving commitment FIS XXXX. with way efficiency, in the for and our strategy, FIS. focus Lastly, greater growth against for for

Our are proof tangible by and successful efforts underpinned points. distinct

half XXXX, force prioritize year-over-year able efforts to improve the to customer expect next-generation in sales our were second accelerating return expansion, to we the company of profitability and drive margin value, of sales, to our further solutions. higher-margin technology We intensified to For example, we our we technology refocused experience, the higher improvements including implementations over XXXX. and

be time. to a FIS plenty together accomplished year's couldn't the still and of done, While we've of team there work prouder be what just in is I

results. turn to let's financial discussion of a our Now

including growth company a and on company strong X% revenue Turning already X. quarters X Capital of of Markets of including was recurring We basis. The ahead growth year our we financial of outlook, revenue XXXX undertook driving growth full are outperformance actions delivered segments. total Banking XXXX improved Adjusted total across to consecutive X%, recurring our results outcomes. X% by Slide driven significant financial in

half primarily improvements driven as in margin high company as and meaningfully XX% to a revenue XXXX as compared XXXX, XXXX, normalized in Forward execution XXXX XXXX. Capital result in license a in adjusted Future nonrecurring free against We termination to X% cash down from resulted total were despite program. This to revenue XX% expanding Profitability X% Future of our flow expenditures of margin initiatives. continued by declined second EBITDA of Forward over the in improved fees. adjusted headwinds such conversion in approximately

Lastly, combination the over we of the to share with million and in quarter. repurchases our fourth capital both dividends in billion shareholders $X.X $XXX returned over through

to both Turning inflecting X. our XXXX. growth profitability The trajectory management of are year Slide growth recurring the us expense revenue that continued and in and exiting confidence trends gives revenue

in sustainable a XXXX growth adjusted from in expect more We to in X% XXXX. X% than acceleration revenue

meaningful at XXXX. in least principally a This XXXX acceleration to improvement X% is in in revenue X% driven from by growth Banking's

into our the in over from continue The to the with few continue verticals. past gains We benefit and segment to expect growth Capital experiencing healthy momentum we've years share of in X%. excess Markets will newer expansion market been segment

success time positioned years. Building quarter expansion adjusted XXXX fueled the first the are for our sustainable beyond. Future we the on success EBITDA for of the company nearly third margin of X During confident the the and to expansion by Forward the the year-over-year in we of is underlying that of margin Future Forward fundamentals business, XXXX, strategy, and company in returned

negative impact. normalized discussed, allow us EPS and coupled acceleration will single-digit dissynergy with deliver X% capital a deployment, high revenue to to growth, X% just operational which includes balanced The improvements

of to XXXX. and our we dividends improved returning shareholders financial capital result As in a of outlook, to across over are billion buybacks committed this $X

Looking as us operational for drive, are acceleration to we forward, confident market beyond we as the further well that trends efficiencies current positioned continue favorable earnings XXXX. leave

to Turning X. Slide

we resonate, beyond revenue as to products especially with an in are increased institutions. aiding XXXX. sales and seeing services are growth financial pipeline, seeing growing acceleration continue of the to our in pipeline XXXX compared We activity a we our new client sales Based across on demand as level and large XXXX, expect current

fourth market wins across enterprise marquee businesses. quarter, sales core increased digital regional we for our payments of strong platforms, community offerings core from the During seeing bundled Beginning signed our through and bank implementation. with new demand the we're multiple

Additionally, expanded California, Bank key and billion and a financial competitive including $XX in community we assets. with signed several regional institutions, core international takeaway, engagements approximately with of new

remains digital solutions FIS's banking Also, demand strong. for

by Hancock from assets experience was for our regional management. we've solutions First all Citizens regional personalization digital offers banks and Whitney, and leading with national Bank financial growth, greater banks, Studio including seen customer capabilities deposit Bank the deployed platform Digital suite, with our sales One of most deeper robust banks continued of cross-sell Digital including have their institutions, super which some asset improvement objectives. under Our and manager One than support These of Montreal. Likewise, in product selected in trillion a global and demanding $X

our progress large financial double digits. pipeline underscore from with to our demand continues sales banking, the increasing in institutions expand digital To in

areas these multiple represent. engagements premier debit we another of retailers continue global to runway businesses Our media strong expanding focus payments growth gain sales. and had new the our are institutions, The and in sales signed and financial We traction, companies. new they long NICE network quarter with network given

now certified now send XXX Additionally, to or receive gain both to FedNow traction. we're over clients our either and in in have pipeline continues contract and We payments.

Capital with provider selected processing, asset and financial Moving leading Beginning market-leading and our manager. on alternative Markets. technology a was global a to trading by clear securities solution derivative

online sales. provider. governments, and Additionally, care leading quarter a solutions new a technology municipal had health our We treasury multinational company, an of signed new several another with apparel strong financial engagements provider consumer

quarter. This could of number expanded institutions partner included or automakers, were support leading several U.S. impressive a a seeking the had European base. also who Solutions a several global service Lending and well their in new client as wins Our global financial as automaker, who

our innovation team approach. improving second encouraged and incredibly a accelerating was client poised simplifying I'm positive strategy the acceleration commitment and centricity, half confident focus for and meaningful on of sales we experienced future their FIS. proud at year XXXX XXXX are product XXXX. in to of I'm forward momentum the significant the over of a our by trends heightened the we for go-to-market

we Capital XXXX framework. Tuesday, can targets on York course, that our a for forward. hope you our our Worldpay Banking multiyear of allocation host separation, in City May and, playbook mind, are financial on to further and discussion XXXX go-forward give improve sustainable us strengthened on post segments Markets that going join right performance capital outcomes financial strategy in confidence the our and FIS to X. and in path and success the Day corporate our for entering Investor We operational plans With in position an Our me New

that, me of James? to With financial and it a quarter our for XXXX fourth turn over results discussion outlook. let James

and Stephanie, morning. XX earnings begin with you, of on drivers Thank power year. good our key on upcoming the Slide for comments the performance and XXXX I'll some

The end the $X.X billion was having guidance billion of original results noted, are high-end Stephanie the EBITDA is range. of was in Markets, and the discontinued pleased our high our came to the recurring Capital we program reflected above operations. As actual and results, better-than-expected both Banking growth consistently now strong profitability with in by from Worldpay, outperformance outlook. Forward fueled driven well performance $X.X the improvements by The exceeded and revenue Future which from

XXXX from well both offset of the projected core inclusion to first-time XX% negative to FIS investment positions investment its adjusted sustainable to to dissynergies. the and method from return Future them Worldpay success, excluding deliver a On a end while is from XX and January growth Worldpay growth expect negative business. their continuing a accelerating to levels X.X% a sale on acquisitions revenue single-digit X% the companies including the basis, the to accelerating strategies. Adjusted allowing Worldpay impact and is and contribution. down completed or proceeds margin normalized to to in of now points. structure, expand X.X%, Strong FIS Forward accelerate focus transaction performance to EPS transaction XX, of business appropriate program investment-grade for is allowed deployment margin grow operations significant the than dissynergies. including XX% a The will capital contribution on rating business. of allocation EPS Adjusted X% to dissynergies. debt XXXX respective projected basis, future we XX capital in more also capital in expansion. Revenue by grow markets to for basis to year-over-year EBITDA impact ensure paying an to of from X.X% high shareholders transform equity have our X% we On X%, to the majority return with appropriate pursue The to to has and positioned allowing

equity income forward. reported Turning XX% now the to Slide XX considerations in going for of our on now be XXXX, on the Beginning few the statement. of financial line reporting in a Worldpay first method investment quarter separately interest will FIS's financial

adjusted closed Our EPS note $X.XX be including our EPS have the $X.XX include adjusted for on with from resulting to the $X.XX a a we basis. $X.XX to $X.XX year, for $X.XX the Consistent forma transaction EMI year XXXX end $X.XX results adjusted EPS basis. GAAP our also a both months will providing operations outlook contribution that of of continuing Worldpay full XXX% condensed Please the only. Had adjusted includes last EPS for is go-forward XX contribution EBITDA to to on $X.XX prior a in our and adjusted a financial higher, Worldpay. of $X.XX been basis, Worldpay XXXX outlook quarterly messaging, pro on and revenue and would at will

segments. for operating our growth an revenue Solutions adjusted going reflects FIS constant Capital growth currency year-over-year and This basis. be Lastly, Markets revenue Banking will on forward, presenting

total turn results quarter performance high fourth with is to the Overall, by Worldpay, the company quarter EBITDA flat Including our back this end Slide decline With and of an to margin quarter the held discontinued adjusted margin meeting on or EPS company we are a with of fourth revenue consecutive fourth in XX.X% EBITDA adjusted in Total operations. was and pleased outlook. XX. let's that, exceeding increased $X.XX. our our adjusted $X.X of billion, margin of year-over-year, X%

by was reflecting by operations expanded growth expense XX with for EBITDA Capital to compared in continuing meaningful nonrecurring of expectations. was of expansion quarter, in year, basis, flat and services. points negative EPS both Solutions. revenue led by $X.X $X.XX. basis a Adjusted continuing a across Banking in and the Adjusted decline declines operations margin Strong in margin was this revenue higher strong year-over-year, $X.XX recurring Banking a impact billion, and professional Markets line On a the our interest X% with at was revenue expected offset prior

increased less XXX basis points to $X.X mix revenue operations, of a Adjusted expectations. billion, certain ahead X% discontinued of For reflecting our modestly expenses. revenue and timing the margin contracted EBITDA favorable

ended debt we of improvements. quarter, ratio leverage flow to of rate with cash year a our cash year XXX% continue where to the normalized We XX% cash XX%. conversion. $XX.X very with now compares billion $X.X full Moving and full the favorably in flow of year billion metrics conversion This flow with free fourth free than resulting of conversion free sheet balance generated in strong target total to drive greater XXXX of cash Xx. flow a We of a

we $XXX returned As the over previously quarter communicated, repurchased during in $X.X $XXX as fourth resulting the of of capital year for the whole. to in a million of and billion million shares shareholders 'XX, quarter

to on Turning XX. Slide now segment results our

was revenue our adjusted with line expectations. quarter, the growth For year-over-year, flat in

expected, As billion. remained stable, backlog up $XX.X

was headwinds. X% strong nonrecurring Continued by revenue recurring anticipated of growth offset

spend Banking grow-over. business Forward and year stronger-than-expected the quarter consumer our revenue XXX the Future benefit EBITDA including grew our in adjusted expanded a was flat healthy from by in driven margin prior points, cost while Banking recurring revenue primarily initiatives. X%, basis payments

calculation reflects changes. recurring Note growth X Banking that of revenue our

we nonstrategic Solutions businesses, First, in wind with certain down to Other historical segment. Corporate have expect from which and practice, to we sell keeping the transitioned Banking or

with the this from Second, we to revenue change revenue pandemic related total federal of to relief have no funds to with expiration recurring revenue. moved nonrecurring programs, revenue

appendix. the these a table in provided have detailed for We adjustments reconciliation

a recurring growth have changes revenue As in our will unchanged, basis growth you minimis revenue full impact mere XX growth. X% by the see, revenue while XXXX de points. XXXX increase of on a these adjustments recurring recurring is year Banking

revenue in other nonrecurring services XX%, other of respectively. relief decline pandemic difficult and was XX% offset The a an revenues, in revenue the expected the XX% services headwind from professional professional decline reflects recurring declines X% revenue The in decline includes nonrecurring while and by growth of comparison. in

to now adjusted revenue recurring continued increased X%, revenue of by Turning Markets. growth Capital Capital X%. led strong Markets

point contraction. to difficult nonrecurring of nonrecurring The revenue by decline year-over-year in a license the the comparison license expected, we related driven which XXX As throughout driver have year. fees, basis consistently was revenue margin by primarily the XX%, primary messaged higher-margin declined

be recurring we alignment nonrecurring headwinds Looking see forward, we and to between expect revenue professional will growth revenue growth. closer from services other and and revenue, both facing adjusted lower

by growth Adjusted recurring professional contracted revenue X%. Turning in Slide X%, results on year the revenue to of Forward strong flat, second now margin but growth strong of recurring our the Markets lower license margin margins half of margin revenue primarily second X%. led services. margins offset was XX. EBITDA Capital to growth lower up revenue increased Adjusted contribution Future accelerated. led and revenue half basis X% segment lower in strong growth XX.X%, of of full higher as were recurring Adjusted was revenue from nonrecurring by very Banking revenue declines the X% X%, over a year points to increased due by savings fees. year, XX reflecting the EBITDA as

delivered in-period to to update Slide Forward. see upside million. from savings goal $XXX an are We $XXX $XXX million I savings our Future above on we in original XXXX And XXXX. have and to of am target report savings, EBITDA pleased our we of target XXXX for OpEx million. Forward well now Future our $XXX further exceeded for we raising that incremental XX Turning million,

We cash program. Forward for our of are reiterating target total $X savings Future billion the

target, savings integration increasing view We are OpEx regarding goal our expenses. reduction other reaffirming conservative and the a in more adopting acquisition, and reduction our capital slightly

XX. Turning now to our capital allocation Slide priorities on

capital accelerate capital allocation growth while intend from maintaining remain a shareholders. rating investing the investment-grade sheet to priorities. returning quarter. consistently an We to ample to to include flexibility and prior These use balanced priorities of financial strong Our balance position and our capital allocation priorities prioritize set unchanged

approximately We strong business leverage free of an of $XXX already at earnings. Reflecting this which we from billion net again $X.X flexibility And cash while to our flow we $X.X confidence have and the to And share a For paying allows stock through at adjusted the dividend. grow our repurchase line months ample we expect committed ratio are dividend prior XXXX, repurchase to the will in once above-market least approximately We in in invest we our the commitment. business for in year. the generation, assuming XXXX, are target our of us X.Xx, repurchase billion. with repurchased remain target increasing the forward, going target. share up least $X of billion our now X million of first year, raising year-end

from we selectively growth for our we faster in shareholders allocation $X proposition invest in scale framework balanced creation. and value M&A can greater will long-term to Lastly, across complementary This In total, return XXXX, to expect distribution a drive up where tuck-in robust verticals. XXXX. $X.X strategic shareholder to value billion we leverage in billion capital provides than

let's Slide financial XXXX confidently Now to revenue on forecast accelerating on 'XX XXXX, XX. growth the margins. outlook move improvements and outlook our on Building and of expanding operational our

reported and in billion from in We $XX.XX this impact 'XX currency to X% includes X% of XXXX. million. to adverse an growth are revenue revenue Adjusted projecting X.X% accelerate billion $XX.X of $XX will to around

mostly include this impact offset be tuck-in projections XX basis adjusted points X.X% acquisitions, growth revenue points approximately closed to of would a XX X.X%. impacts, by these is basis Net of negative dissynergies. Our from from but

acquisitions grow of XXXX. X% up X.X%, to anticipate compared Banking between in the from Markets X% X% X.X% X% or net XXXX. expect We revenue or and to acquisitions of X.X% of in to X.X% And as net dissynergies, we to to to Capital X.X% growth segment X.X%

the is program, from in XX transaction benefit year-over-year our this favorable dissynergies points continued Included and to Forward in We model. the will from impact margin offset and leverage $XXX basis of outlook Forward Worldpay business are $XXX more inherent the year-over-year this from million. a forecasting program Future million reflecting XX of expansion the Future than

with the details in additional assumptions our below-the-line regarding provided key the some have appendix. items We

million expect we We of million XX-month at X% is D&A XX.X%. to billion shares and around expect and shares, grow negative a XXXX. $XXX EPS translates of high outstanding an a we XXX to compared On Including X% are basis. EPS we XX.X% we of contribution a rate anticipate Interest reduction growth a and This basis, to adjusted single-digit to operations between of $X.XX tax $X.XXX projecting a to X%, EMI XX% $X.XX. projected from on of a of $X.XX deliver of impact to continuing normalized including expect XX% expense to dissynergies. $X.XX, to rate adjusted

Lastly, $X.XX. of XX on basis, adjusted $X.XX of contribution, anticipate months we EPS forma a Worldpay pro to including EMI

confident we our believe long-term outlook balanced XXXX to in We accelerate are well are growth. and for earnings positioned

Continuing a and higher and at was of EMI range. was EPS results normalized of On on call. an operations end where again, we provided EPS am normalized range to the we in XX-month ranges an adjusted Let's the continuing quarter I the normalized report end third move EPS toward for our to this on both EPS XXXX normalized a provide normalized came Adjusted to quarter, XXXX basis. $X.XX happy now is ops reconciliation $X.XX. higher was XX, Slide a EPS that $X.XX. that the guidance provided. contribution, basis, EPS of estimated $X.XX the Last and for $X.XX XX-month was we provided the we within range

quarter overview Moving an for now to our of outlook. XX Slide first

X.X% revenue with to X% projecting Capital X.X%, to Markets X% We X% are Solutions at Banking and growth at X%. of to

year, to comparisons over expect reflecting the favorable stronger the We impact year-over-year over easier second revenue growth of XXXX. Banking sales half the course new of from and the accelerate revenue

expected X-month to and are margin a points, high We we which Continuing XX% of $X.XX. XX% to $XXX savings. to Including on of contribution translates projected adjusted million million, EMI expansion EBITDA Future $X.XX XXX of to to growth operations $X.XX, year-over-year anticipating basis. of single-digit is EPS EPS normalized increase expect estimate reflecting to Forward adjusted XXX an we $X.XX basis $XXX to

the is year between a revenue improved last and of expand compared alignment recurring with Margins summary, adjusted quarter the to In revenue expecting start this we half accelerating fourth good will revenue consistent growth delivered the growth. to in performance with and and second the are year.

XX. wrap Worldpay we reposition success we transaction In for me enterprise positions The are long-term companies and the completion and future the meaningfully we structure. believe right closing, are on as results improves Slide Let our success. by for both encouraged the on now path XXXX capital our of up

the that, We attractive once XXXX business the performing, are confident growth repurchase revenue stock, in will financial of total. With please least we deliver X% have in growth questions? at to operator, than our and our how open improved And to XXXX FIS $X.X a with consistent given again and expansion. confidence least could in adjusted margin raised at accelerated return in for line you of total is $X target and our billion share the valuation flexibility business our billion greater

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

know outs sketch backlog formula to hoping the just side, a in the new for little segment. talked you a retention. on there's there acceleration maybe the as a about call comment just Any have we revenue conversion, there I Banking further you little outlook? Just the bit, Banking sales,

Thanks, company well as as revenue Yes. Banking to growth be Yes, very total accelerated specifically. we're to in an XXXX guiding in Tien-Tsin. excited

some As but a pretty came we standpoint last recurring as in facing we we're year. disclosed we year, talked all headwinds strong, about revenue nonrecurring from

come feeling those XXXX, into we about really As good lapping headwinds.

strength the coming a we XXXX 'XX. we're half revenue in of 'XX the think and in as and as together coming Solutions Banking more back in about of sales standpoint, growth sales back half and the recurring into seeing line as on and thinking XXXX about and in delivering revenue into those that from So well total

terms for of XXXX, confidence and guided. Solutions total both why scenarios growth about good we've company us Banking us feel in accelerate is what to So revenue the helping in are giving which we

It's good.

know to follow-up Risks? piece. Opportunities? lot respect questions bank One-Discover sector-wise, I the with been, on Cap then. a getting to in M&A Just we've of Stephanie, quick my anything the sector? consider

strategically payments in forward, as critical many piece. it's still ecosystem, for Capital of FinTech with thinking of it's how terms assets of Worldpay FIS representation have et know, access all, relationship across important issuing, why different cetera. Well, the say One-Discover, Yes. with we'll strategic first having think which, the at you about people No. struck to is network, terms of really And we I going I'd in and then another the us acquiring value

of So assets I in relationships the Discover, with and together terms very to those a have having it's all why important. With value seeing of strategic demonstration is we One think both. respect Cap

So in consolidation. Broadly positive. see it TBD ecosystem, us we terms of in of the across terms a for net

We'll else. consolidation we see to to be regulatory happens to and folks continue tend you everybody love We that financial larger would the consolidate. we see serve tend what beneficiaries that institutions. like know, But But with as the environment. to of because waiting I'm just seeing

line El-Assal And of next with moment question. that will the One Barclays. from Ramsey come for our

if particularly of thoughts your bank to environment, assumptions in sort spending through about the help general as think relates wondering guidance. was And IT you I any could the sort macro us it backlog. the of maybe

say, I start, he'll on. I assumptions, we the XXXX say payment would side of But our if Maybe spend I'll James business, Banking we macro would Sure. consistent in in XXXX. terms thinks of as the on add miss we in business anything, within pretty over broadly, kept and consumer come

different a Where making to you their see can products frankly. demand focused we really gather think I spend. ability been continuing not the trend. X new Banking prepared deliver and the and quite remarks that happening. I digital banks in certainly sure In things They've about me continue services terms we around see down who of to my discretionary talk it think heard enhance is doing to on It's to that then trend they have see overall opportunity and spend spend, deposits. around we

the and our depositor capabilities primary become for their lenders. a them movement capabilities to So payment utilizing money our of lot help

I spending always a in continues RegTech up, the would capabilities. And around as to So focus say there's interest our environment around movement products. regulatory money heat around digital, then

sector anything they Banking pretty I say is consider around So discretionary. it spending continue would see move spend the to just and categories those would less in We that overall, IT into consistent.

magnitude wanted I the professional you pieces And of And should should business the about the services over services those reacceleration I type How of normalized think of called professional we on and Okay. revenues it the a nonrecurring think we were also should know moving Is how segment side, there about I where some in kind that? Banking. the of around to that and of of of timing ask the the believe, is time, some basis? grow thing rest out. the sort parts and Or about tough comps where, growing? there on

I'll Yes. not revenue to say least in adjusted think we equal you XXXX, expect We're would slightly in better. and recurring the it. be revenue. at What maybe guidance did to comments, a revenue for we give just about to probably explicit recurring way prepared providing the

So if recurring has gone to slightly the revenue the up is X, total company compared positive that.

but total services reduced So there's compared slight nonrecurring, and to professional coming dramatically that still the from other headwind year, it's implies that a next XXXX. of

could average caution year, will the message recurring nonrecurring, key average, -- year the is as if but be that's of vary. only you, an better So for there's quarters would the give than you the on the I you and take the

in overall, So we're between that, and revenue recurring it's bit very total But a growth. the realignment sometimes choppy all confident in over quarter. little particular a

from line the Koning next One Baird. of David will question. moment That with for come our

first Ramsey, job. recurring. bit like Guys, a little on question, guess my nice I And

to you're maybe grew half get X% And second X-ish the half 'XX, the in decelerate in What second better little it calling than was strong in happening first right. percent. why back that of recurring? half 'XX? the think so recurring, in was if about So X%, you And come down that it I a now I does for then

Yes.

if Capital in think is line. I you look out, Markets generally

or probably if in we We target expect And -- full Banking, is line quarter with line well the XXXX, basically payments the to you'll look in points X% that the be course include And we're X.X%. the during you did through revenue the almost quarter, strong that's I is it's look with just X every adjusted average first provided. trend that where Banking which think to the in ahead the recall of rate, of the an QX quarter. fourth was the that planning probably -- at above in of X% for then recurring it The all X%, the X% the business, was should you year X%. closer guidance. And exceptionally and to around was in

period, delta, it we're it, So know, another, then artificially basis that an basis you X the item gives prior don't year I know, the XXX XXX in don't prior I lapping depressed points. period, call which call points. And

real those next So to a equalize a you take of a like outperform out, to of into targets. it we get X% the adjusted I and Banking as X adjustments. year. of in kind other like We're will And getting we the kind prepared recurring trying of to couple the were said if comments,

the What year. be. X% numbers So will quarter, I it has kind where forward say, to the in they has fully that business though, need full business comfortable of the substantial territory We're was the -- a on get we the as substantial show goals very Banking does look power the into not to to the choppy representative. fourth X%

maybe going just I to $XXX Great. integration And quick year, integration to merger do was down be came in What soon to costs this And closer be QX. which those to that on costs -- you in expect X? a follow-up think, are how XXXX? see, nice million just

Yes.

of a We've to got program. item the there. I Future call. the integration It's It's think actually Forward in costs. it's not single biggest a -- little stuff is not early bunch

will a out But 'XX. has base next that So coming inflated will base more year, and the of in remember, out reduce lot year Worldpay the and taken year. we still 'XX is the disappear costs in of we've have fairly seen Worldpay will that we've we're separation costs long-term looking in And TAI. 'XX. They big dissynergy at had you've impact. a what is right now 'XX. What in

to look to was through be the regain we As gain -- we're forward implemented programs lost 'XX, need thinking 'XX of Worldpay. what post efficiency that into and kind

of is [ million in TAI 'XX number I ]. next cash around flow the think explicit impact $XXX year

I also might add.

we significant. is up pretty of free So separation flow you know, showing cash this -- conversion. year, in lot did Worldpay as The yes, it's the a

else, elevated. to we've it's conversion. we significant Everything as And free down we costs that But that XX 'XX months. to pulling before, that and in So keep keep there's cash a not though, pretty nothing get flow higher deliver 'XX expect expect Worldpay we to to to separated. discussed up take

So we'll spend out. some pretty significant dollars to get those guys

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

of the closing the Worldpay. on Congrats

you. Thank

-- it your little just a mind, really minute. overall. first, this underlying for Forward I yet, to savings margin and forward, transaction you to expecting that the start in a is bit were you operations dissynergies you assumptions and a off raised. So bps the said XX you continuing about to underlying off trajectory i side business just a Maybe margin, of in segments on both wanted like the looks with Future your the see operating with also just start margin company think bit I Look, basis. wanted raised leverage don't talk if but going XX And

Yes.

think can and I'll maybe -- then were we in. James I add start

we -- I program. pleased -- been you the our be that's the Forward guys of going. think Future to focused versus ends. And culture we've program in as really, we're a know, with and driving pushing on and how extraordinarily been outperforming company we really, it We're really that

offset 'XX 'XX, increased that So going both expectation in we're is for any able really to pushed and that, hard, dissynergy. an as on to and said, we which, deliver

especially the margins, the into about think technology-enabled should expect that we be margin from less sales I as expansion sales shift as higher we the go-forward in would think natural technology-enabled business, sales. we there

you Solutions that margins we expand mix see as so the business, And expansion. in Banking Banking with would to Solutions do expect naturally that specifically

terms ultimately, I and Markets think in growth. overall growth think time, of I any talked out We over of about we've organic Capital there margin squeezing more drive their being want to them consistent. hurt really will pretty organic

think in to But I out question, So Day more clean probably really think about be we this XXXX. 'XX. flattish of that until as view more expect past margins about on a punt give I would Investor the going we to -- how you we'd out think Darrin, past

in that -- margin we expansion comments this Yes. Darrin, consistent prepared say, to But the is the we over return did time.

some -- with that top through with you time the you So at obviously, and give of amount Investor together line Future algorithm, bringing improvement. imply businesses Forward, will we'll And the will margin consistent can growth Day, of growth deliver expansion. spend fair a

and comments, are well strongly executing Future that are really margins to but very, we're the as in is very both margins Markets, if And really as I Forward, against -- seen businesses emphasize both probably strong. Banking businesses, read the said, You've XXXX. through Stephanie Capital growing you want

of this be more rate then What it And more a provide back give guys. would what this even great. Markets? really a of just supporting I'll now a us it? strength, But KPIs the is driving to can just any A bit Banking, This is be providing bit is question. Tien-Tsin's strength a forces for follow-up maybe you that's little to what's Capital sustainable? to are queue. And going turn helpful of recurring confidence more that's that of the detail -- if the revenue And growth could the

probably in I we And in relative now, for and present right the #X will about Capital about number the is the actually the ex-acquisition total market. is this what's is growth TAM the the for And Day, the -- is X%. of TAM. or at addressable makeup topic Markets, coming It's of example, the from breakup each which businesses think Investor the

it's verticals. the market. got in attractive same you're time, they're very into you've expanding a coming favorable -- got actually, very, So verticals the And at in tailwind from, new

a it, supported expansion bunch questions because very, very support total -- addressable for into we've and market So the good TAM provided it's sight on 'XX. on Markets we'll bring we but of line and Capital TAM journey we the of by number you and have new on know to people have guidance

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

broader Obviously, of any that to top around CapEx wanted just after a ask elements are there XXXX. I And the and from 'XX conversion 'XX, assumptions then the flow for free you conservatism XXXX in bottom or outperformance if in line about comments outlook cash make a overall guidance. either standpoint? can

they're We -- I'll in flow nature. free free year, success. onetime We own mostly benefits benefits cover sometimes the with you from flow, Future capture your you're massive of a conversion. had when year drove this victim tremendous a but And cash on Forward. cash

continuing high We conversion. achieve was the And year? we somewhere if XXs say take what probably XXs the out low next ops percent you So is, in free XX% forecast XX% the region the the to question -- cash can to flow Forward noise, we XXXX. in cash would in of Future in on that flow would all

XX%. So compared the it of ingoing up we're to position taking in XXXX

could be Now we're that. to capital forward, And better how depending bit outlook we on can little looking net working a the at long-term XX% XX%. even than manage our going

through how capital in So much just bear We're working of working off through just mind, programs. We're we're we need the spun working the company. cash business. part -- do in we

look your and the and it's 'XX XX% was? to second XX% probably and closer XXXX the question into And 'XX. XX% for of So you if part

CapEx and Guidance. Yes.

on -- the I yes. side CapEx think

it guiding I expecting a down the brought brought to it about side, it really come We're XX%. We CapEx X% we consistent really down ability thrilled with transparent guide in be know, I We to to be the credible. of is important, to one talk high an terms our good. thought the acceleration of think to in point feel we're range we was And guidance, it say, XXXX. expectations. we much and continue and On X% we're as we're we what and from X%. and think what point. from X year, you with more and hit in to business. With how at to Last about respect able sits to revenue historically we would I thrilled meeting to Probably just invest consistently become to XXXX we of Jason, as think continuing down, have think

of will with Mizuho. Dolev our that next come question. from One moment the for Dan And line

it job. do can A sort question, -- Is question the was like with of Nice in out it acceleration 'XX. like positive, quick on good see negative. do we guide? to for like How there flat, a make that to sense backlog, a it? negative, growth guiding organic we the mapping connect of Great

Yes. Great question.

So came in accelerating in or third it quarter of the fourth of $XX out look, billion about in I backlog, terms September $XX.X billion. think quarter, of

I billion. Flat December of felt good billion with that. $XX really XXXX, $XX So to about so

number. this come Day, to backlog into we as KPIs than better to think give going I you we're Investor look

As it's a you number. know, fairly complicated accounting

what rate a off around been think how supportive we and backlog giving as helping But durable it know, you. large something goes bit accounting again, $XX it's stuck aligned it's there's guide. we've we that of and you I September, it's it's the look thinking little to a with quarter. the pieces. you in number, billion give been would growth the about just lot consistent, broadly, from number this historical revenues and it, technical more as adjusted accelerating came would would specifically is say understand the into a We've it third say number. But And compares I to you of

as goes into a XXXX. to feeling bit it different meaningful But as come and very about love Day. give you good we more little we'd at so in something it And Investor

On how you. meaningful beginning you have we're changes like super changes of behavior in months and FedNow, kind helpful. X mentioned or for follow-up That's And of changes implemented? quick seen in, FedNow Stephanie, maybe, maybe any you that is

Yes.

amount as pipeline. the a and large seeing think large -- demand I banks across I There's universe for said, it. FIs we're a of from

money in enabling ecosystem. move movement. how they that can having TBD other the But it in and banks. is the the definitely and underlying things money whether offer downmarket of are focused adopted customers I it faster in business moves it it their of terms those the of ways quiver of terms to in challenge think banks becomes adopted underlying becomes it terms on for the in than in

I think be that played remains out. to

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

the talk wins, new seeing cross-sells. a I as more bit segments, little whether about a between you traction could sales more the more guess within the one, you little then Maybe you're segments first bit talked Stephanie, X core where my it's momentum. and about

Just color would some there be helpful. super more

to. happy No, Yes.

they momentum, So that of I more specifically -- you sell would know, solutions. our new sales team in the as the so shifted technology-enabled we're think we

So the space money I'm is seeing where momentum in and space. movement in digital the really

need for So teller, solutions, them of whether as capabilities about focused online, you a refreshed their all demand on et order have, think in to what products and and lot mobile, banks deliver in to doing, are digital it's the there. cetera, sync they there's be and

demand to for One of gather as really lot banks are looking our our a seeing So deposits. capabilities Digital Studio, business Digital One

money the want last the bank. sure demand. to really need they want primary XX capabilities the So over then be about loans -- that movement And gathered be right years, they've digital deliver are have in banks primary they to capabilities account high those that make to as think the they deposit for

our lot remarks, payments. I so and digital would prepared talked about solution. market-leading clear demand we're of a we've dealers. continues the our in subsegments. It are about a this talking think And in across demand Capital little solution Thinking and to seeing outside Markets, in I of X spent a seeing securities all time really and processing, bit say we about broker be derivative of even traditional the

So demand. that's been high in

the outside really technology lending adopted traditional commercial even solutions Our are institutions. getting financial

treasury. need financial high and then they sophisticated a so large financial auto demand And capabilities. services a other talked corporate, lot They you're lot about services, a there. dealers of if sophisticated So are we seeing

solution best-of-breed, place ESG. demand a then is adopting across that of see folks corporate treasury landscape. And and the we're Our that other ton we seeing the in overall is

there. fantastic a a lot SEC of company Every product. company have capability some have demand sort ESG to to reporting that's registrant see an needs ESG We of

That's super for James. a helpful. And quick follow-up then just

give if low else of we that trend should think something the year. us And you on think how I if EPS, teens. model these could flow you future line, the all roughly through also a way good the to Is is equal? timing exclude just about normalized dissynergies, dissynergies to

I Forward a the really absorbing to necessarily said think X% Future X%, we X significant it's reason add forward I because The -- so why ramped Well, up we've it's but impact. to wouldn't project together dissynergy help no there's offset this next levels. level year year, the of to current the will from I contribution from dissynergy, -- obviously, down level of but Forward And the go dissynergies. year-on-year Future think

months. total revenue with each the We come until a you Let's of detailed growth, potential to we'll just in couple addressable through and together markets, power margin algorithms short want earnings on up business, the wait Investor walk Day. of the bring the a the

And we with Ashwin will and from of Citi. time for one question, come the do that have Shirvaikar final line

see to Stephanie, was hear you. you with to good it Charles stage on Drucker... James, from Stephanie, good

Ashwin. Thanks,

direction I products adding conference. you sales of of give mentioned towards some it are sales so you Is right, primarily your us Could going and sales force guess such. speaking on? sales to sales you've higher-yielding count, flavor and Yes, the on the redirection? the sales conference, quarters what's comments, Or in force? of with

really Yes. No, so it's above. the all of

and at took were the last point a all we were force that how equal. we compensating at year sales considered look beginning of dollars So at the

to specifically did higher margin respect of year, seeing with comp was higher in sales so beginning incentive the what revenue. the the sales of and so from hold last the and change will That transition And that higher-margin compensated be we recurring lower margin. took products we're those to the the

over 'XX to of point an 'XX, low to think in we the mix time, In high fact, I from increase margin basis saw margin. XX

So we're it. definitely seeing

pretty the from metrics productivity was productivity back at the productivity. other look the we wanted the some beginning, of pretty expecting. first of year and thing really we across teams in in last 'XX look sales a did of -- the 'XX, the beginning half -- our did saw significant back significant at to the half that what think how I Again, we increases were sales at

a overall In then higher margins. the seeing say as think output that I salespeople, of and same would number number, in because are terms they're we of think productivity but general, as of well we result better I of

as into of get to half come in as back 'XX think and the we confidence giving that's some delivered So those and sales us about the start 'XX P&L. what

Got it. granularity then, James, it. just Got cadence by And more on segment.

just You side, we of that both quarter-over-quarter from and of sort on a model to perspective. provided the Banking as think Market how should equity but line the be quarters, X we obviously, regard the helpful would out Cap with on modeling

Yes.

said, quarters. I pretty performance. sales of upward on revenue the be pick second And is consistent Capital up 'XX Markets will Banking an on each half the the As the in trend as half on based second

lowest As and quarter, called X you at first we first equivalent it's out was there. that actually in look the the that quarter X months quarter in contribution, is got NCI in And $X.XX. to bear mind month the only the

could of work the out you So kind quarter. first

quarter. now in We of give to I want the guidance terms I only give equally. the is to you could quarters maybe think forward, build other not go beyond the first I pretty think the treat guidance I'm don't prepared. really

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

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