FIS - Earnings call transcript Q2 2018 | Fidelity National Information Services, Inc.

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the FIS Second Quarter 2018 Earnings Call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session. The instructions will be given at that time. And as a reminder, this conference is being recorded. turn over to Mr. our like now the to call host, I'd Gunnlaugsson. Pete Please go ahead, sir.

Peter Gunnlaugsson

Good and morning, second Brad. you, Thank everyone, earnings call. quarter welcome conference XXXX FIS' to

on Executive Norcross, Turning is X; the also website conference today's with quarter. our Financial with with Chairman, the Officer, Chief for will news Woodall, being corresponding will President company to webcast, highlights begin Gary presentation fisglobal.com. release call and Officer, slide Woody financial call today's This available Chief at and continue results.

in Turning X, events, as statements no press undertakes the slide result a otherwise, described and today's to with forward-looking also meaningful remarks information, are company whether required Reconciliations today refer GAAP results to provided non-GAAP Safe supplemental materials and as you except the to statements. and are uncertainties, obligation press in I to of the between new the as will to measures These by release release presented to slide language on Appendix in or The periods risks filings law. the the include non-GAAP presented. The references contain and update other between slide. the subject of order future the presentation. provide any to will the Harbor SEC. statements, as forward-looking attachments financial comparisons more

the business for pleasure my call Turning highlights Gary Gary? now discuss X, to turn the to the is it slide over to to quarter.

Gary A. Norcross

with joining today I FIS quarter that with in Thank solid you, morning you our pleased am delivered Pete. Good expectations. announce to thank line us. and another for results

our strong Sales signaling engagement our solid around and with momentum backlog. growth increasing strong continues see demand for investing to be client the continue revenue pipeline in a to future, solutions. for We

the Our row for in for end provide our Financial our half the full-year. and our us in EBITDA accelerated will margin and combined second segment, the growth strong in details high quarter into a to financial Solutions the Woody half raise range EPS remarks. our visibility guidance Integrated his results, the the second of allows more year, with first to push of

solid long-term programs We scalability, solution operating results, consolidation, continue resiliency. growth, other drive These will efficiency and progress data to center operating initiatives. modernization, towards our make and

Turning in to slide X, and quarter key pipeline, outsourcing. on sales, trends strengthening the focus towards themes improving continued

saw Turning segment quarter of segment to growth Integrated growth Solutions organic with another our Financial our results, sequentially. accelerated strong

also payments strong expected, As banking, our wealth, business, a our across accelerated remains volumes segment. for rebound we saw demand and retail nice in the Processing solutions. while digital

solutions, competitive our growth. the convert long-term solution FIS' the strength of an the wins in FIS core mid-tier because Midwest significant, chose chose This and the given banking core being the example is was As overall in advanced sector. client a FIS quarter, our to commercial to This acquiring support in key banking suite. continues large the example for based a to strength takeaway bank deal, in solution of bank acquired to underscore complex its

preparation tax an of work taxpayers. exclusive a for payment making the IRS to solutions, provider won our we expand leading contract exciting significantly with Additionally, us provider company's

a platform, Finally, their new relationship existing flawless with and and our solution showcasing the scale, us by billion converting core solutions, occurred a output to over strength financial item institution with FIS $XX solutions. single full and of week banking execution including digital This expanded includes a office a new which deployment processing, funds and conversion, seamless onboarding. and electronic numerous back channels, data transfer,

call, last spend our on environment remains discussed the we IFS robust. As

agreements into XXXX. of large reflect continue quarters, these over Global build the XXXX grow instead results the half We a the licenses. positive several on into future. business, revenue sales processing also They and segment, Financial XXXX. in momentum to is This very in the outcome to last in our outsourcing swing license higher fees of predictability towards much established over a for a on-premise In driving long-term results Solutions creating back reflect the swing good continued

be which advantage the more with business, over quality transformation to evolve our this segment. solutions, to breadth trend. on operate are with will pleased continue this to we well-positioned time IFS Based we demand, and of of like We strong continued the coupled our take believe of

help signing a For and to real-time payments FIS with new by House hosted expanded solution example, regional for payments real-time a its Clearing connect relationship The to large a the agreement network. bank bank

to is services. end-to-end America. for want leveraging announced As FIS all leveraging second launching services power participate new digital This real-time earlier the direct leadership American provide certification portfolio, institutions these its bank. North of North and is processing. component-based now to financial from A this bank that offering continues FIS direct banking our including our in in new direct launch across we entire solutions quarter, hosted This banks role core institution

bank relationship investment providing compliance expanded over-the-counter solutions global and its by and our also risk the We for with cleared listed outsourced business.

and became Payments-as-a-Service as As company API to payments, a This such financial faster our offering. a recently the UK, go innovative client customers, traditional their including new solution payments, the payment enables as live ACH. to as offer example, to final on first digitally type services wires market in well any our cloud-based

first back success the drive and to we half Given XXXX. in the of GFS current half year, the expect during of sales growth stronger pipeline the

of a strategy for the very thousands industry, to progress in Investor clients hosting and driving We solid long-term on most the drive our Europe, these our within of within focusing year, the remaining and and XX% Turning our by good modern Day for end operate to in are technology set efficiencies X, from just and cloud at continuing large continue in the than our us results private solution initiatives of our drive to provide including more we our track transformational four We May, to increased investments executing momentum overall solutions you our accelerating America, on slide that North Pacific. actions our of will making outlined number clients. completed Asia events operations.

value-added demand modernization the solution aligns success integration forefront been and and on continuous Our our growing of sales year. client with the and has at throughout pipeline focus

We to the pleased they clients our about organizations. strategic and their bring are will enthusiastic benefits areas our that focus are

to feedback Client clear all gives our line action. underscores global for events, coupled us our first with also decisions, We half This through value on continue completed remain ability in the into sight translate is for provide our in of will strong sales through Accelerator on year, consistent to the these are We confident results in innovation, quarter. strategy been and returns to innovation was results for will solution very shaping and and again extended believe of focused drive now value which profitable just are third investment which that annual goals, potential and and confidence results, and FinTech build shareholders. delivering additional our start-ups. long-term our our differentiation, sponsoring detail has into to proof across another strategy the program, and solid we growth our our deliver on clients Woody continue the scale. increase financial for FinTech which high program, our

James W. Woodall

X% an Thanks, quarter, XX.X% Adjusted XXX EBITDA the results the X% quarter. the Gary. basis to In of our increased $XXX begin for expanded X EBITDA quarter. a organic billion consolidated second and increased for to I'll margin with adjusted points basis on on million. revenue summary slide $X.X to

XX.X% the share would X.X% and increased $XXX was Excluding adjusted margins EBITDA share basis to have per million XX quarter. would have divestitures, prior-year Adjusted earnings approximately in per $X.XX compared points. to share grown and expanded net per earnings $X.XX

first EBITDA basis on billion, adjusted to margin basis $X.X expanded XXX the the points an XX%. of EBITDA half Adjusted revenue increased X.X% and year, grew For billion. to X% to organic $X.X

would grew share. points. and earnings approximately grown Excluding would've margins have EBITDA per XXX expanded XX.X% divestitures, share to Adjusted per X.X% basis $X.XX

IFS a an revenue Moving quarter. to X.X% million versus points healthy the revenue on quarter, X, slide operating the margins EBITDA to in and million X.X% growth to EBITDA XX prior-year grew expanded efficiencies. $XXX primarily grew on basis driven second by basis. cost XX.X%, leverage $XXX organic in

For period. to increase year, half an increased adjusted X.X% to EBITDA basis grew revenue first prior-year the compared on $XXX and X.X% a of the the organic million,

Turning solutions, to the primarily volumes. as quarter. for by grew well output and in banking was The as driven wealth performance and X.X% strong wealth slide an processing XX, overall increase

the rebounded and X%. payments expected, quarter in grew As

Corporate As flat we solutions. million increasing fraud quarter, Term in anticipate to groups. be growth still with fees prior the compared prior-year versus discussed call, We in the on X.X% in and strong we're growth period. This full fees by solutions. transaction growing relatively seeing were million both last $XX driven to debit year. year our our our term the $XX quarter grew in digital loyalty volumes market-differentiating and also demand in was the in

the of with first Gary performance As the pleased expressed, IFS for very the year. we're half

the an divestitures. divestitures revenue XX.X%. EBITDA declined as result second GFS a X.X% enabled million, of Turning primarily $XXX declined expansion points to quarter, to slide margin XX, XXX These X% organic in basis of to basis.

points XX.X%. year, to compared $XXX of period. to X.X% first basis expansion organically; grew the increase This the million, of margin XXX For EBITDA half X.X% increased revenue a represents to adjusted prior-year the

acceleration messaging, ASC first with natural adoption previously segment. the for to discussed anticipate the growth As we was license May, February second half due impacted and the renewal of of for the of half known in GFS still Consistent timing year by this the XXX.

to lower banking our payments solutions. revenue revenue and in growth slide our primarily institution the and license increased with by quarter, offset group, recognition. by transaction Moving business wholesale X.X%, XX, flat, payments for our lower Banking driven declined license was in

base IFS long-term demand a improves line upfront a perspective, are arrangements outsourced business is while license creates short-term our We segment segment. revenue and the GFS continues in a this processing seeing as and sales, recurring headwind acceleration to more top our like from an our operate versus positive for trend

which with predictability for this GFS pleased are We our market segment. creates trend, higher

the year trend, this of revenue from recurring months approximately first the to point proof year. a XX% in for six about increased of XX% the positive prior As

for compared of and was from Corporate prior-year $XX in data million segment in center the program results EBITDA expenses, and ongoing period. efforts. the by cost primarily results to reduction our driven a second $XX to include in represents quarter slide million corporate Other XX, million. the This Moving and Other of management consolidation The XX% revenue $XX an corporate million with quarter Corporate expenses loss $XX

as XX, interest of rates. about conversion fixed cash was slide to year. at average is Debt of outstanding outstanding rate for for with the expect interest weighted still X.X%. XX% the approximately flow debt XXX% $XXX of the free XX approximately Moving billion, we was million quarter and our June free $X.X of flow cash

the Through the quarter, in we average in shares. the share. buybacks. price dividends million of our X.X dividends approximately end weighted $XXX During shares repurchased of have July, paid year-to-date for shareholders form and of $XX.XX million million million a second repurchased to share X.X per we $XXX and returned $XXX We million at

remaining our We have $X.X authorization. existing billion share repurchase approximately of

share weighted basic count do our disclose Our quarter, the was and XXX so. backlog we diluted share million. to our filings the million our to average XXX count we'll was in and public continue end at began Last quarter, of

For million results. $XXX approximately the backlog contributed These strong last the of to have sales discussed to few we year. compared quarters, to have our prior an increase

to Before May. the to compared our give top has an created in end especially of to FX. of line the against headwind review the strengthened, July, which the an update dollar this I in million call, has real, our our on last continued. I guidance, wanted $XX Through move trend second a quarter expectations Brazilian Since

third six help For To impact believe negative $XX year, fourth last be revenue anticipate to with modeling, headwind about to currently quarter. we impacted still a We than FX. the the slightly is months per immaterial. share quarter of the we due more million this by the earnings expect of to impact the

in we range approximately full morning an growth our demand this to of upfront and We're X% consolidated the X finally, of IFS GFS IFS increase from acceleration backdrop X.X% year driven license a revenue IFS shift which for we prior volumes discussed organically. by GFS XX, slide margins each profile margin GFS, our bottom now in range, are segment. primarily our to EPS We to believe of This IFS. of by XX%. with point in guidance guiding positive of grow market EBITDA to to Moving outsourcing or the to also agreements GFS are driven trends shift and the both we And primarily X.X% from the from X% X point to by our both, increased our reiterated increasing in end was segment business, expect previously and end $X.XX. the segment, high to

to to we year, full per the to growth. For EPS representing $X.XX share, adjusted XX% now XX% $X.XX be expect

color remarks, year. to Before roughly for too the consensus expectations, estimates a and the in provide like I'd to I conclude are little quarter the EPS by the our too in my low third of fourth Compared $X.XX remainder on quarter. high

to line Moving to strong allow our top predictable for line margin to EPS you continue future will growth, now prepared the our concludes leverage to we These XX, That growth expansion, for invest market Operator, strengths slide to shareholders. questions. flows. cash our growth, value leadership may and double-digit open the and exceptional produce return remarks. us

Operator

we'll And Koning Dave the to you. go go with of Thank ahead. Please line Baird.

David J. Koning

guys. Yeah. Hey,

Gary A. Norcross

Dave. Hey,

David J. Koning

Yeah. guys. Hey,

to that as term, just more relationships, all go expected, So that first due slowed takes to time margin timing. shift and long a through. outsourced But to was I QX you the obviously, think, of little high on GFS, in

So, X% growth QX, different X% in quick you're think such the and guess, there just from why half. back I'm the in of Is to wondering return expecting QX? QX a I back I half, anything and kind

James W. Woodall

Yeah.

outline tailwind renewals reverses under we for this and QX think really in February we so first XXX the net QX impacted trend and tried of it I in GFS a May. QX. of for ASC in both around us. impact recognition year, The get quarter half That particularly in to

of look you Gary's XXX. coming. tried license recognition shift that to If in and let was from we outsourcing. the to point, upfront back this from renewals adopting go certainly of know February, you seeing some did just we that see To and terms We're outline at in commentary the

I trend think continue. that will

a that's it's expectation, think probably but original a accelerating I bit our from long-term again good outlook.

Gary A. Norcross

on you around that, revenue. in to Woody's No, it comments Dave, reoccurring build saw Yeah. the

a take their that advantage signaling. in and You've of overall in just been seen But do of lower of a not that our only is but we've cost. software, now GFS XX% got our advantage ability year, to take we accelerate and to lot total clients from this processing reoccurring XX% how trend we've FIS' really looking

the move of like So we see continue GFS out as to it's delivering our the an margins data center because that IFS number. a time will environment. out outcome over of more for Those great accelerate – you'll business, get economies

So it's a long-term good outcome segment. for the

David J. Koning

over time. great seems It margins Yeah. for

Gary A. Norcross

(XX:XX:XX).

David J. Koning

I And, guess, just a Yeah. follow-up.

has you to part X% – should like to QX be we if to on the get part half X% sounds and said, So in for is back it of the lower for assume – GFS I think that what it QX guidance fair? just to that higher the based

James W. Woodall

exactly a XXX. some looking X, That's just we growth said October re-recognition right at different under we're When start from way.

and it higher So that's about would lower. think QX how QX we is a being exactly a little being little

Gary A. Norcross

business, the been But if historical that QX a quarter... you at context has big look of always always

James W. Woodall

Yes.

Gary A. Norcross

they project program. can very it's a clients big agreements ...in the with so year new sales. big And traditional that kick into or enter our off

business big been always has a QX specifically. quarter so, And in that

David J. Koning

Got Great job. thanks. you. Great,

Gary A. Norcross

right. Thanks. All

Operator

ISI. with go David ahead. next our will Togut from question Please Evercore come And

David Mark Togut

morning, Thanks. Woody. Good Good morning, Gary.

Gary A. Norcross

Good morning, Dave.

David Mark Togut

called banking, you priorities? little into online You mobile is you're of areas bit quarter of third in it spending turn IT banks that spending and a digital, drill of the specific a Can you out in bookings is are looks the and key growth. Gary, like QX, IFS? What seeing strength payments? in for called for sort down the strong this consecutive growth

Gary A. Norcross

been seen in it GFS, in the a across three No, feeling but in seeing sales IT and your IFS, been of And areas. Yeah. good really really within more strong row both payments several Frankly, about to really IFS entire good strong, adoption. segment. the sector, quarters Frankly, sales IFS segments, it's across We're is. general has point. across spend we're about we've both specifically

out and, their clamor banking. So we're of we so interaction and across, seeing We try of as out frankly, seeing really We're mobile our prepared to take an a channels, We're both seeing is number volumes. office to the core those cost back We're a come sales to in digital with clients seeing across wins success omni-channel embracement omni-channel, our strong also Digital accelerated drive customers. segments. their which actually the capabilities, of highlighted roll that frankly, next-generation better out deployment remarks. also our One

product really, Dave, it's So across lines. multiple

FIS' that's does the and portfolio, it think I also show strength product overall of resonating.

ability once market. to people So signing we drive highlighted become architecture that APIs with big again, to open another market, bank digital allows us. pretty bank standard on America. North more We've speed much get And, core open quick the with digital to in a deployment to in that componentized

our the with seeing trends pleased across we're channels. we're sales So

David Mark Togut

Understood. Thanks for that.

On quick terms if ASC call Just adjustments? wholesale to we impacts, after strip strip in the I&W as there underlying software follow-up. outsourcing any in from a license, trends shift to business, particularly making demand for XXX of the institutional are GFS, out out out those

Gary A. Norcross

had I&W We interesting. sales quarter it's Well, specifically. very a in strong

value In three year. standpoint, ahead we a fact, bringing into And sales in true sales from new that. it strong a were of we've firm, where our total had contract quarters of from engine last we're the

And talked feeling this really that in products. good SunGard down about lot you so we our the boil When finding acquisition. really we're the demand about for a it – we're

up, an and saw that. products these opportunity success and we're put lot remember, So of we solutions, you to actually form together you seeing if more back with a end-to-end

and GFS has solution, year. really products multiple it centers. well operating our sales last this the now people the data think give contracts as they're and this or the solution things is consistently now take that because where end-to-end driving therefore But service, an drive in wanting also total I to into of through entering and us that's some very take we'll a software engine's with for

for the quarters. sales two And so results pleased we're first at the

David Mark Togut

much. Thank you very Understood.

Gary A. Norcross

Thank you, Dave.

Operator

line Stephens. from ahead. come the will question Brett next Huff of Please The with go

Brett Huff

guys. morning, Good

Gary A. Norcross

Good morning, Brett.

Brett Huff

that from Number efficiencies. in questions. one, was your of Two margin mentioned, you Woody, cost in think, I expansion part comments IFS the

used sort more think of give us but on normal that? wondered you if hearing change can on is a just that just matter that GFS that little or that's hitting gone numbers. and there to a we're side, Or a – of finally the I is on the course, it's is insight

James W. Woodall

Yeah.

of prepared had heard flow if definitely the The think really consolidation to center quarter, dialogue early profile this was in GFS. we're that, go certainly in Investor that that back my through and IFS I data around seeing around some we Day corporate, the and the IFS margin you results at remarks strong and it in you clean. was

I to you're ability we'll seeing think to area. as So of early and drive that we continue results that margins in our see anticipated

The a other talked within thing that is about leverage operating times we've of business. just number that

As like last and organic the profitability. quarters, you leverage growth couple the have we to accelerating, bottom see the really operating line of pushes the

Gary A. Norcross

a that going Brett. I'm build on Yeah, minute, to

by have As $XXX XXXX, at with time million we'll consolidation. we just talked And early of we'll by we're run of in program operating through savings the that $XXX about rate the center Investor have data year complete million in of Day, this end rate. out run

IFS. this So, business confidence forward. projections working we very seen We've really We're you're years margin Investor operating in the going the of leverage. of why getting together going this much Day so about to at – for the leverage that's see The well. team's benefits had the

contribution see nature, you'll So naturally that those margins grows up. business margin a faster, by also will the higher pull as

Brett Huff

Thanks than thing? a guide? on trigger question XXX I in deals detailed Were of more your think, or difference sort more one gradual folks just to made thing any that the going for maybe handful then the thought. that swung point the I that for terms And view get of helpful. there of it everybody that insight. that GFS. impact quarter, That's is, really changing on like a of of Was was there kind kind the

James W. Woodall

the was it's as renewals and QX. GFS in really effect under articulate and opposite That's We that No, in May to come the February around in what there. to the and a certainly fruition. we tried we of in that natural saw market to timing low see That renewals re-recognition were XXX. we QX going those have anticipated to see of anticipate we to watermark

So in a X% to said very saw in GFS We X%. clearly, QX. we decline about X.X% anticipated roughly

lowering us really of other we primary terms The towards drive forward, and helps some between but two guide the in is the point going license, move X% X% and roughly in are shifts. confidence that that versus upfront The which outsourcing really to outsourcing its the those talked was increase backlog now. the GFS in change shift about gives license change

Gary A. Norcross

outsourcing IFS, on you the we've IFS was point, think heavy before that oriented you're the ago somewhat a used is on to to license customers But traditionally licensed big prospect been first then sales multiple for this Woody's solution have process product more itself. through and dramatic product Brett, bump to years through I a would and year. itself XX% really the pushed the and be as with sell process, reoccurring a of as going have business, or in surprise the the XX% in more those a single towards us way,

you good there, look is recognize back will the a the license will this that year, but to trend, also thing, continue. half which of continuing outsourcing be model we fees continue we're to at If

James W. Woodall

Yeah.

I'll the May. backlog, gave you us just in you confidence it more gives back we build As outlook we tell that in the

have backlog revenue that more recurring we So to build see grow on. and

Brett Huff

One question it Okay. slip me, to for in. last just

or of earlier been that updated you update in guys kind the that wins way. bang less systems you of migrate that? You processing Were big Can function of try give your any modernization? of announced working folks in that new comments, have to on on difficult strategy Gary, and modularity some your a – of a core switchover us

Gary A. Norcross

lot Brett. success. a was, having it We're of Yeah,

about this investment to results years into and of starting actually now you're a seeing and the we multiple is that talked Investor some at As that We're see now Day, wins. journey.

we're more bear. existing new of investment modernizing But that fully we'll of taking well platforms and componentized to bring those solutions over time. In launching our as also more fact, be and our and advantage we'll to continue

get business upgrade as through will them And clients of benefit FIS so that take part as our of with we cycle. the doing the natural

teams So are that into come where and seeing this start also we're the excited effort we're market on now. to excited development actually

Brett Huff

it. appreciate Thanks, Great.

Operator

Wolfe will next Darrin from Peller And Research. our Please question go come with ahead.

Darrin Peller

right. specific talked XXX Thanks, and then growth when the higher particular. of about quarter Gary, just what the And we'd get this might give level, this impacts expect without been to for could clear, All X% GFS timing-wise to anything shift you in you have X% guys. rate outsourcing, be changed or there to growth exactly business just maybe that to longer think now you term, us seeing you the that would've now. that Look, Is do GFS back you're profile? just view,

James W. Woodall

if you, out, things to looks in to you our at X%. line tell all long-term X% with I'll what close other we've look stripping talked which the about very is in Yeah, around guidance,

Gary A. Norcross

Yeah.

Darrin Peller

Okay.

Gary A. Norcross

a over know May. we That's that. of let quarters you do about seeing of to been see can't XXX, of what good couple tried year guys outline to feel as about have We and to in we've much outlined of a times this adoption lumpiness, That's in what that with number the outlook. some going we do we're and terms we

Gary A. Norcross

right. That's

James W. Woodall

of health underlying in the solid The business is GFS.

Gary A. Norcross

Absolutely.

form the the lumpiness think license And about comes that, you fees. so, in as of

got that clients pull early, XXX, to fees. right, remove were in historically able license Now we've we those and

increase, XXX. as the actually that in re-recognition. Woody's into more see gives at Darrin, through back guide, not point, year of normalized accelerate in the year, to you're in you look half less. gets Honestly, beyond. it To but confidence XXXX percentage that going the the not the and us see of And back of only you'll So half reoccurring the that revenue

So it's very to comfortable as been processing we're we and the these growth. performance large onboard sales has accelerate – going onboard very the The business. agreements, this with strong. And

Darrin Peller

All right.

the of just XX to confidence? XX out I asked would follow-up you months. play year good on that's next what, hear. is I should think that had guess, But revenue, bookings to we second to giving Now the probably, revenue this I strength, I this to guess, conversion last what's that, the be over some before. half mean, someone year in generating that

Gary A. Norcross

Absolutely. It's model. a consistent very

As come reoccurring SaaS margin... offering, onboarding cycle, into and to good on you've IFS, like XX- revenue, just solid got you've a people a then got XX-month this high contribution

Darrin Peller

Okay.

Gary A. Norcross

lifecycle of the that ...throughout contract.

Darrin Peller

good. Very

good showed the in Just quarter. very quickly, very was IFS strength. Obviously,

of want be right sustainable nothing there that. sort Just is about now? clear trend This onetime was to a

James W. Woodall

No, back that's things the we growth see good sales as we strong, lot And we on talking time conversions, actually the IFS and of too. Spent volumes, going of very but reason GFS increased guide sequential there, XX basis about outlook was of decrease increase the the IFS strong points. processing and the really to for those see half continue year forward we like. all that a

Darrin Peller

That's good to hear (XX:XX:XX).

Gary A. Norcross

QX, good last year, IFS. QX solid QX, all in And point, sales now and saw we Darrin, to in your

going stuff to the part and all back year. early of onboarding half is that next be in So

the think as was we as a straight and it's get. quarter you So story news really fairway just the about down real good can

Darrin Peller

you. Thank guys. great, That's Okay.

Operator

Huang And JPMorgan. our next comes question with from Tien-Tsin

Tien-Tsin Huang

Thank that. just Good I was morning. following-up on you.

in you're could to converting licensing? high quickly? How would from in heard Just the XX% I go say what XX%. from how and you processing inning that

Gary A. Norcross

can you if now quickly the and the So more is data to at it larger you purchasing out how and get larger our looking center their driving Well, tell right? XX-year look – their I a see XX%, of moves. getting clearly But of roughly was institutions benefits IFS, it's long that software. license taking investment. you'll historically are transition with as term power so that leverage really of was people one there's it IFS, kind very quit suppliers, to market on on-premise depends over about continue way of

us. that You more much cost investing replicate is do it a rate we can no technologies with come in There private for and They more hear clients just than our And as example. how as really cloud, an more we much they sense spend. to at technologies, effective these cloud-based our can. move we're should of into

movement this the see future to you'll over So quarters. continue

Tien-Tsin Huang

up So that would providers? to your expanding of pipeline overall this opening looking banks on-prem looking it as fair to and is say transition TAM as-a-solution for off be are the and

Gary A. Norcross

contracts that clients the out Yeah. putting the for as capabilities end-to-end more I larger solutions landscape. we're larger across think together and with you'll I&W signed a No, start being especially reoccurring see it's fair much revenue, embracing that of higher GFS our

see as reoccurring to it I do you the backlog it in So well. you'll quarter-over-quarter, think highlighted and significant grow. Woody see continue growth revenue this that in

Tien-Tsin Huang

Thank you.

$XXX is talking within just primarily that? million broad my year, is about follow-up, that more that So or prior than last GFS based backlog versus the the trend being up you're it

James W. Woodall

both I in It's build tell GFS but But would in was IFS. It's you, heavier both terms a backlog little in in of segments, it was both. segments. than

Tien-Tsin Huang

know. to Thank you. Good

Operator

And question William Chris will with go from our ahead. Please Shutler Blair. here next come

Chris Charles Shutler

Good Hey. morning.

the just that activity, much good sales of stronger but you over quarter. we years period? the us prior to sense number, compared some revenue. again multiple last On the I sales give I backlog have Could this few been think some quarters reflects know how have

the So great. just the on of more be any magnitude color would improvement

Gary A. Norcross

where double point this definitely digits saw in Chris, it quarter-on-quarter, sale very year. We gotten definitely the but we're growth, at strong. disclosures success so and into very the we pleased haven't it was is

Chris Charles Shutler

about trends sight Okay. into on the what you to could of flipside, you talk client and revenue and then line And periods? Gary, compared prior have attrition in

Gary A. Norcross

to look when predict It's now at metric our our acquisitions modeling flat are to occur. really Right we're fees term going big still to term very year-over-year. we be that there hard is fees. The Yeah.

certainly last we – based seen that to So an at it's year. continue something to that, watch. haven't increased we're not on we forecast least our over exposure seeing But

Chris Charles Shutler

Thank you. right. All

Operator

line Perlin with the next from RBC question Capital. Dan our comes of And

Daniel R. Perlin

Thanks. they accelerating relative legacy that it ways to more promote towards on to hit you able kind something your that's about to on back of cross-selling. Good you're I Like, tilt to wondering shift lot. you're way more outsourcing. I to just outsourcing able I'm outsourcing you in enabling which transaction? these deals do the circle know just type cross-selling license of morning. are do opportunity, these wanted the is a structure But the to there

Gary A. Norcross

Dan. it, driving there think I several are things

about up. think let's back it, you If

together, that of went products and buying form that. to integration. more By We're the individual which got of was front, sales those sales decisions. end-to-end a of the then the and end-to-end leverage landscape, capabilities, wins we of I&W also back or of product got market lines We of the solutions, pulled number doing that, organization did of out out the lot discrete we've lot historically more force. seeing One through highlighted started over more We things we we quarters. very especially a a office that putting across as SunGard had the the benefit now bought we middle,

the you couple when about of model. business scale the add all that model. SaaS operation, There's a data then fact but the is segment's So exceptions, talked that, of general, almost we FIS, IFS SaaS minor lot a taken our entire a a in given center in in now IFS

some for clients leveraging lower. frankly, scale seeing, we're themselves of alternative when ownership our So and overall or lot practices ways you a by their cost, and of centers, more more solution, now prospects solution only the capability not of push product drive they about. of to a class in to around best at with quite them, the just look not really time, how we're we've their we're and to environment. and ability, lot we And lower and go And drive seeing the is data And this to talked processing highlighted can clients we've total cost that. at but but which access our only we've working it looking a given what our also world

can lower to cost, our themselves larger themselves just a more customers customers more up, open our seeing only and do open We're very well. can drive it at up that not capability. of we of we So kind

the solution sell And aligns models third compensation lower of looking trend people level So ownership. can that part the an getting prior capability SunGard total their of is cost it in at they of entire Part is sales our is now are more of the have to just their out arrows really product realize force and the this really do. market, the more a force organization then effectively. quiver we line, didn't just in for overall the where so it sales they

we're three things of those seeing. think of outcome I So combined is the some really all driving

Daniel R. Perlin

then of think Just currency different of there areas around And great. geopolitical follow-up. risks, Are of about around just certain That's weakness, geographies specifically Okay. GFS? different commentary areas kind as strength, my quick any you callouts certain Thanks. given movements?

James W. Woodall

Yeah. Nothing this out call quarter particular to one versus another.

change you FX had an perspective. the has from the and dollar, weakened the we've real Brazilian against If right, think that's about currencies, biggest certainly probably

benefit UK point offsetting some and view it's around cost But those in the of the an would earnings areas. the also kind side, on cost We given the pound of major the be saw in impact. rupee side immaterial

Daniel R. Perlin

Okay. you. Thank

Operator

comes ahead. our Please Jeff And next question go Guggenheim Cantwell Investments. from with

Jeff Cantwell

Hi. morning Good

Gary A. Norcross

Hi Jeff.

James W. Woodall

Good Jeff. morning,

Jeff Cantwell

taking my question. for Thanks

you back wanted touched banking driven if modest IFS the the the can and revenue You've more It looks margin little in which us to the see color some the the half half a outlook give to expansion. on contribution growth like of year. I was by also drove front year, but on for this, of wealth,

is we think just mix in margin wondering back the how a segment I'm any color the half. of and we half about see additional we guess, in Could half, segment revenue I margins if year? to that So, first we the of in or have on Thanks. you the expansion would as the you shifts in contribution saw EBITDA comment the degree contemplate should greater back on than IFS

James W. Woodall

Yeah.

through see, Talking get in down we continuing X% We things saw anticipate about in comps rebound, a QX, in about to the growth. improvement you increase easier on we as QX. we the and of do one think we were were expected up payments it see revenue some payments talked earlier, We an that. card good is the I IFS of in growth banking well are would and are right very But year now. to in and very going I'm overall wealth. continue half expect right both back see converting with digital, that, I and to where pleased sales the the on things and IFS corporate The beyond sub-segments production. both across we now.

Jeff Cantwell

And wanted a that. what one. ask about seeing I you're I to high particular. international Europe Appreciate have in in then level and you

is we've unknowns constraining creating of technology spend. One Brexit their FIs, a of is for consistently lot the heard things is that which pretty

start as hear should coming more your guys? over is we revenue we something for as front revenue, their we that the Just with thoughts there shift medium that. potentially budgets, eventually, on growing could you that to backlog you over towards Is FIs your we could perhaps see term, to for Brexit new posture through which wanted past start move be foot this and a where aware to see as

Gary A. Norcross

whole we've like No, – about Yeah. we've question. last a a years. slower over and the return several number of Honestly, good calls, it's talked would we European had we have market had it the than on

regulatory good UK, launching our on (XX:XX:XX) We a meet seen sales highlighted rolling of We new gateway a We've API Payments-as-a-Service offering changes. the the API our very some have momentum client in and cloud-based backlog. win lot new to all our is our in and a recently ready. of nice out which had success of

us to see years. you'll think quarters Europe the is and coming strengthen environment I for continue over do I improving. think So the do coming

Jeff Cantwell

very Okay, Thanks great. much.

Operator

of Arvind next line with from our question the KeyBanc. Ramnani And will come

Arvind Anil Ramnani

taking Thanks question. for my

outline maybe of that you factors of of versus available? if three in kind lot also of offering. driving features a about the your digital. other You on digital you or the digital sales highlight your is four competitively maybe kind And kind of progress talked some kind of winning solutions certainly some that's Can solution can

Gary A. Norcross

a highlighted our it's actually a number great No, We've of conferences. in question. Yeah.

about think XX which of banking, on third the evolution been was Internet or generation digital ago, you to argue back of if of we we're and We've mobile the we're in that. dating forefront years all digital, would digital deployment. over major way So heading the the into banking just well

we've steps our a with through around clients today next taken we've we're competitive across a of the really number omni-channel years, this and an deployment. business, is about very traction What Internet, lot mobile, wave architectures talked et we're what small of and the cetera. is also digital very, see Over our getting we really

to both So how through and and them way for unassisted consumer that architecture? all a start and our only seamless the leverage gets where frankly, experience. well channels, as environment branch of do the common you channels clients the the not leveraging into do how you assisted but take a digital It's really a bring

journey as our technology, advantage of that resonated clients in to well that's us a in invest take So new that clients. we you that see with on with of And very capability, our lot new that. getting

Arvind Anil Ramnani

a on and a you offerings it (XX:XX:XX)? follow-up lot clients can just these selling existing of assigning quick into essentially as Great. is a new for or I kind logos result that. new if of And them Are taking

Gary A. Norcross

It's all of the above.

the client and logos also base of lot existing market. cross-sells we've a large to come client new given of base our our the our Given U.S., how been in in customers. taking in sales form But

So it's across – GFS. both both our really and a combination IFS segments, both of of

Arvind Anil Ramnani

Thank helpful. very That's you.

Gary A. Norcross

Thank right. All you.

Operator

morning this with of George from Cowen. come Please ahead. will question go last Mihalos line the our And

George Mihalos

guys, thanks Good me morning, squeezing for Hey. in. and

Gary A. Norcross

George. Hey,

George Mihalos

sort when tailwinds. you are competitively, to ask, sounds obviously, specific you maybe at any ability talked I Gary, macro optimistically your to wanted – you IFS, of to business? at just Woody, from and the win are And more there standpoint. But Gary it just change Investor seeing look with core and, sales curious guess, the market strong Day, maybe the a FIs larger then, pipeline processing servicing more like, competitively about in

Just that to on curious any as progress front.

Gary A. Norcross

frankly, the George, space, focus and in North are really especially modernization the at No, institutions look larger our with in we – specifically America I'm our they Yeah. And, seeing get as clients. financial banks you as resonate And larger those they're larger banks capabilities bank solutions, now in you as get I look market. and argue would if becomes large existing best-in-class specifically of at larger, our greater. IFS – our share market the addressing

occurs consolidation starting times is in in that all us that buying of of know modern we you're our get years. of in And seeing of this just – in you investing for We industry. acquired on clients for see share, been to remarks, example actually next get We where has for a customers our years, banking in solution. our now occurred But entity our the example prepared the on of you're for one over to If capabilities – roadmap just to to bought. generation to the unusual that highlighted an that more take client the number That's layer move unusual core capability. last we've to an unusual only not convert then very take a several highlighted quarter. it bank's the one couple not

of only take $XX in billion, as more our functionality advantage you're And We're our we're but $XX more in banks in pipeline. signings. seeing also seeing to really FIS need So billion, our $X of seeing signings, sales grow not that capability. and a the that these to billion, and pipeline strength and

a So in great the about We outcome about the U.S. it future. we making. the good market the plays banking we're FIS for feel feel solid really for We investments think in

George Mihalos

backs the an add added add or $X.XX It I the that. about back, to the of it look adjustments there Thanks were the full of tied year. that Great. changed a $X.XX call back. if more was terms a accounting more though, $X.XX drab Capco, to for in in so I outlook just like like you've could And doesn't sort looks Woody, for question. of end, bit It guess,

an So be line adjustment right? about, increase from the There's than very you clear, what to of your that's that just guide, were different sort EPS tied in the is fundamental to thinking improvement. nothing standpoint below

James W. Woodall

business; No, and growth, revenue fundamentals. higher improvement fundamental, good fundamental margins, in higher the

George Mihalos

guys. Great. Thanks,

Gary A. Norcross

ongoing you in to two row. raise of year, half performance us for joining share the for with today of which first our pleased us in your for the guidance Thank and the interest a allows quarters FIS. per earnings We're operating

results us core strong closing, like into of our to XXXX. I'd reinforce our positions year the half and back pipeline for fundamentals. robust the Importantly, In in

innovation We for continuous have position capabilities. leadership driving modernization improving and a proven market your

us leaders, The shareholder financial record us And employees and investment loyal we to market track running between commitments. continues and for our to on healthy have clients, financial growing segments continue thank have generating forward every our today. very their Thank enables believe our like serving are to to returns. and our depend day. the delivering compelling proven who empower world. business a I'd thesis improving strong look to and a successful to clients a fundamentals keep on of you We business partnership joining FIS we with and

Operator

Thank and replay you. will Tuesday, XX:XX midnight. gentlemen, after made August at And, available for morning running be this this ladies and conference through XX,

conclude Executive XXXXXX. You access can access using may the does XXXXXX. AT&T our with and code time dial X-XXX-XXX-XXXX. AT&T at Playback conference International It access X-XXX-XXX-XXXX Those entering any your for the and for by Service code the dialing X-XXX-XXX-XXXX for participants again TeleConference. X-XXX-XXX-XXXX or today. participation numbers Thanks

disconnect. now may You

Fidelity National Information Services (FIS) 31 Jul 182018 Q2 Earnings call transcript