FIS - Earnings call transcript Q3 2021 | Fidelity National Information Services, Inc.

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Nate Rozof

Good morning, and thank you for joining us. Go ahead. I'm sorry.

Operator

Good day. And thank you for standing by. Third Earnings FIS, the to Quarter Call. XXXX, Welcome are listen-only mode. this time, a participants all At in After presentation, the session. question-and-answer speaker there will a be To the ask during Instructions]. a session, [Operator question this is Please conference advised that being be recorded. call Nate now would hand over Investor I Instructions] Rozof, like of [Operator Head the to conference to Relations. ahead, sir. go Please

Nate Rozof

are Thank accelerating presentation in webcasted. XXXX CEO, Officer, available the and Call. Financial Earnings our will all today the you. take Stephanie This guidance, thanks continue Woodall, and Today's then also Administrative the maximizing then at our for Woody call Norcross, Ferris, strategy performance through joining joining the Chief morning results for value. and our being Officer, Q&A to news additional some will of and merchant and growth Conference you Chief president FIS, corresponding release, FIS be webcast Good segment. is website Gary our portion. for everyone disclosures call revenue Third our on review and our discuss Bruce Quarter shareholder review fisglobal.com. will and our the Lowthers, call financial Chairman

are Also, Safe language. earnings to otherwise, presented events to required by update our Company, over Harbor described obligation any this by and cash to The release. to contain GAAP. forward-looking EBITDA, adjusted measures turn remarks X. earnings Turning result that, adjusted statements the including in are GAAP subject These information remarks we information the uncertainties no of of I except call will free will on as numerous undertakes in or Company earnings, not the the important non-GAAP other These measures but release as Please to Slide risks statements will Gary, forward-looking press filings financial begin will are information, defined with future Reconciliations are and conference SEC. With to financial financial a and as new share, as Slide law. non-GAAP the call, today's refer as our X, performance net statements. be presenting the for flow. per net information, adjusted throughout

Gary Norcross

Thanks, joining Nate, and you us. for thank

strength Our per XX% growing of XXX to reach share. exceed basis revenue across demonstrate Company, where continued Margins the $X.X results third execution to to XX%, XX% EPS adjusted expanded $X.XX a quarter billion. points increased and

of We to increased million We in bringing an banking this backlog year the XX% increase total to while across to quarter, the organic annual billion run exiting our $XXX exceed sales a portfolio integration schedule on and $XX in markets. [indiscernible] demand our original $XXX see target basis. elevated million early. by beating million accomplishing our solution and Worldpay with $XXX this across execution a driving our year, on related synergies capital continue a Revenue remain rate X%

integration their well platform Our clients million. similar monitor banking confidence to In new account. Cloud the cost another to as million These utilize illustrate new demonstrate one approximately conclude Native exit our new us wins growth. wins banking synergies increasing schedule. strategy will savings ahead quarter, gives across of look operational wins, the expense is the is new the around to PayPal million in This Worldpay wide $XXX these to we modern our and story, on continue of high-yield range PayPal. inclusive that software. in in and $XXX year of tell versatility two our include with the banking platform our schedule working enable including $XXX to a of a In quarter.

Turning to our merchant segment.

offering. differentiated on build to global continue its e-commerce We

us a to XXX expanded relationship like region differentiator reach currencies, than and authorization from alternative accounting countries, This Microsoft. in XXX recently complexity enterprises, while XXX for We for global us. support our remove a allows extensive Who cost single in multinational more globe. Our now is rates different the to significant payment increasing operate for methods. span

Our new also FIS. sophisticated emerging expand verticals to and into rapidly differentiates offer ability capabilities

continue this business quarter. planningcrypto.com, to a we their build won strong authorization foundation superior to demonstrating that in example, by incumbent far For Crypto, this are provider. rates We

solution expanded Travel from Capital latest new also We our winning client transitioning of fully is and carrier. Airlines an Legacy the share, to market as a domestic example In Citi a Global impressive with outsourced FIS. Allegiant in-house Markets

happier the Company power out digital growth our X leverage of technology advisory driving to could of capabilities registered will their Capital with be our innovative another team help significant is While the segment. We not investment solution. Market

strong differentiated highly Fintechs. new set our proud Multinational for segments leading for of performance companies our quarter. important other and solutions. can innovative throughout companies our industry. wins to Domestic, Few such team include across a are ongoing another provide clients note Merchants and solutions complementary am the our all as institutions, this technology well Financial as I to It's and of dedication delivering Our improvement that their

level, very Slide is X, to our at to continues team Turning clearly while not price high share performing execute our a well.

update performance. our the heavily strategy heard. that assumes our definitely he open can on accelerate and will address the We Over questions years. to the where quarter's providing well last technology constructive with we as areas changing Company, team the value standing the segment or and is call, we community investment leading as landscape, in then Woody by competitive financial allocation and compete, our capital provide growth. into innovation and case unable to the case. this believe dive sustain a and FIS engaged directly of bear over deep the begin invested last strength after not X in We our merchant is the transparency and will competitive I'll most and still on dialogue an The and recaps anticipated we the position, a X the common messaging in improve today's few business. our about of management months,

as remain our business durable will our Therefore, ensure future. additional needed continue to with properly FIS a business, a understand and shareholders competitive the the is sustainable value FIS. global to leader and true and of that clarity model, now strategy will advantages into provide we Ours

of X. our the X/X our and grew has ever. Slide markets generate mix, assets mission-critical approximately revenue with faster operate demonstrating are exclusive segments the relationships, best revenue durability applications pandemic, of capital growing the FIS contracts of These deep Banking collection to covering streams through needed than the in industry. to Turning client clients’ their businesses. long-term and

segments success suites Through was ongoing earlier. the exceed Our FIS. investment new our new record these $XX within generates re-occurring revenue of and sales already of created quarters, in referenced revenue, year in also a in in the now year-to-date organic XXXX, This software growth. which signed has entire that billion increased and backlog for historical three technologies I accelerated year which

be success, for and year year-to-date our continued to sales, and is segments that drive another the XXXX strong record-setting Given growth across beyond. XXXX going will into

currently five-star accounts our segment high boasts are client X/X with It merchant mix. about expertise relationships sophisticated exceptionally deep of service. revenue retention vertical and client for Our that supported by rates

meet and are the professionals expert ground Our every any geography to need. on

capabilities. to channel omni support clients on ambitions -channel every Our with by their to global software-lead them innovative sales us opening depend and

proportion accelerating sales and channels record of too, segment's growth we're high growth. is revenue an generating the account growth Here new increasing as for

and our we channels, of dynamics these market expect expand high-growth new in consistently to the share win wallet. Given clients

with choose advantages innovators adoption as key quickly which our durable extensive combined their enviable FIS and scale capabilities. why are drive is to and consistently streams Another global to portfolio, allow enable new technologies. disruptors and client invest incumbents, There distribution us delivery of in effectively and These us differentiated reason solutions aggressively partner choice. of a revenue

and and our this lead strength Company global directly the will Turning powers continue powering the address digital position, intersection economy. software, to like Slide why of competitive finance. embedded I'd X. way to FIS the the of payments to

enablement, whether Our electronification core banking, online, and treasury, enabling retirement. transactions automating is or electronic the and the of or competency at wealth BXB, point-of-sale, that's commerce

an Cloud of and enhance migration integration now distribution, global client position our a competitive portfolio. to strategy and value. share Worldpay advantages, to complete, reach, including generate our to competitive With the capability, I'd multiple have breadth infrastructure like extensive the We close, shareholder to our and coming enviable further

new the emerging to digital value true to in products of global our will innovation. technology, By speeds third-party faster platform. It forum. facilitates is complete for customer prototyping, testing where exciting to that developers, this financial assets we they the as do for expose set platform as of FIS as unlock experimentation with extensive and positioning experiences. rapid by capabilities, component push well new the capabilities, the create assets market, through by technology get continue need weaving together as and by well our destination the preconfigured strategy expands our Our of they unique to our new them innovators it FIS no-code to developer can and and low-code the providing everything helps as sandboxes And integration, TAM adoption rapid

shareholders, our supports it growth, X% strategy through EBITDA points time for while free debt. our revenue revenue expansion to for to technology XX and margin basis additional creating cash of annual outlook will XXX flow. by scale benefits speed simultaneously adjusted automation for FIS self-service and superior This Importantly, eliminating and mid-term X%

our by Our and phase major at very executing enterprise FIS past keep industry the success well, forefront the we transformation. will next execute team technology our demonstrates of that programs of the

years, our Today, technology debit the of three first all hear solution us continuing allocation our demonstrating by capital At breadth our leveraging decade new is to cash next-generation Instead, by enterprise And new U.K. foods, new examples our these as that NYCE of remarks utilize of class concept we our As portfolio the I'll less to Each started They FIS. on on old we global omni capability by in Capital thinking relationship capabilities we've advance in the expanded the whole by power the leader, out X. who e-commerce online client of traditional Markets. background. empower capabilities great the for industry prepared ago. Amazon across traditional of of of of forward example their enabling management the internationally. this the slide our buying acquiring scaled conclude begin look my next us FIS Amazon technology less capability, journey lock and users leveraging with markets, to value fade talk our brings capability being segments to their strategy reviewing new Opening and in-store for network to a its treasury they -channel a innovative location FIS, you'll combine experiences. Forestar from and our about powerful of ways embrace enter sharing do and exciting over users, a segments, and clients. ways. a super a silos is we'll super exciting X

is Our well actively that to by to innovative priority internally to continue new capabilities, M&A, the as expanding clients long-term value as TAM. In improve bringing parallel, our we're our investing to deliver growth adjacencies. high-growth while enter to we pursue

represents view team shareholder the for innovative will solutions Year-to-date, back scale value. we our our acquire, driving a and accelerated million buy our revenue maintain Our both capital attractive in successfully billion $X of opportunities, our we have by markets well-established repurchase that generational headroom highly being where of inorganic Through invest XX record FIS share organic repurchased expertise shares our investments in while able authorization for shareholders. have this has the We simultaneously shares, growth us track enviable and technology in to positioning of business aggressively. with significant synergy in to currently remaining, puts profitability The buying opportunity. differentiated. successfully FIS consistently stock and outperforming businesses reflecting and we still position returning of accelerated and a deliver of we targets are integrating combination to growth

growth without We invest expected our to XX%, growth. are and rate and affecting beyond. to dividend dividend XXXX annual ability payout committed enable to over increasing growth our us several our dividend consistent to in This years expand in will ratio are

will else reach together With our This FIS for doing now ratings. is drive Company. global has industry, and many what at no a a conclusion, strategy I breadth allocate can a to over our capital strong strategy to years purposes Balance At one merchant while Woody of is clients unique investment-grade competition continue the bringing Woody? innovate discuss call capability to returns. to to speed. capital deep and segment. In built will Our our leading to allocation been enablement and commerce enable FIS, financial shareholder underpinned and we and Sheet dive credit results the for is turn into that, consistent robust provide we're a intense by to across

Woody Woodall

XX%. as and our XX%, joining will Markets through margins adjusted well us and all before due reported and revenues strong to results XX% high and margins Capital organic I'll revenue quarter, two Thanks, its contribution performance expanded begin Flow, this merchant thank I growth high on on Capital primarily and leave taking again, XXX Sheet, continued to as as ramping from Both deep margin, created expanded tailwind as by Slide XX%, our its growth, XXX leverage. XX, continued Guidance EBITDA disclosures. segment's recurring quarter growth. you points adjusted basis due and additional X%, and operating to markets well touch quarterly benefit. Cash execution. client large-bank with EBITDA revenue today. discuss Starting revenue revenue with of Balance to revenue primarily merchant points Gary, also EBITDA the for renewals. you recent growth XXX wins, our Banking recurring basis reflecting points accelerated for growth sales accelerated Adjusted were margins dive margin to later. reflecting expanded contribution timing of banking ongoing points, basis reflecting now The synergy new to third

Turning $X.X earnings. pace generated XX. buybacks in the for cash We adjusted a XX% quarter, slide revenue, in billion. during tripled net repurchasing shares million representing of our approximately excess free $X.X to flow billion quarter, of of the XXX% or We share of X the

stock buying remain market. we aggressively in now, we active right are M&A back the While

in impact we our per to no growth for ability year. Gary dividend have mentioned, from to XX% to continue this XXXX We're are so. As rate increasing to intention or growth our XX% on will to going invest and do

Free we XX%, XXXX, about our see ratio as million full-year and Flow. keeping XX% you'll during decade. clear, only payout mostly To fact, In which end dividend after it Cash cash the grows compared this of of grows $XXX by raising is earlier year. mid-teens to towards if we're XX, this will our our will reach On insignificant Slide guidance the that unchanged a incremental annual it EPS be consume our adjusted

EPS share We fourth our third end line range increasing count. expecting costs, from the are to some EPS lower end during on the up in our due the I'm with be per to adjusted operating $X.XX of results on offset lower color guide to pressure our brought We quarter, further of our and and add due repurchase share share. expectations. lower $X.XX To consensus quarter. rising margins incremental revenue are to this labor and by EPS for

but years. to pertains mentioned, to expansion. incremental mid-term it platform the that basis the XX of and continues represent transformation we've to in the points been included does is Gary on X a revenue executing past this growth As initiatives, investment, margin This not X% XXX of for enterprise outlook our X%

in assumptions begin merchant appendix. Slide on the XX. detailed dive deep provide and With As will guidance usual, the let's we that,

expanded adjusted in and your the further to the contribution rates to of mentioned, unusual additional XXX Many high XX%, I benefit. outlook into Therefore, deadline ongoing XXXX. the they four evaluating reflects business. in and tax of are approximately the which segment's third filing results, with us we slides. of basis Starting are told growth the in comparable for XXXX. headwind every show layer margin, transparency the an the timing our my Merchants by I XX% period of synergy On quarter As will EBITDA of about merchants’ third versus shareholders U.S. points for several XX, excluding us margins striving created will heard increase next to business revenue to quarter, merchant XX%, our provide track detail, grew dive revenue revenue the from feedback merchant grow our points quarter challenges Gary the rates deep the in but consistency to Clearly, networks. country with compared performance mind. pandemic, on as business rest the with that describe that the the exactly case we X% Worldpay clear of this bear or XXXX in and volumes basis, the every our pro first quarter, the in through relative second the in the the of X% how continue networks Slide It's forma throughout to in growth to in X same quarter. growth closely FIS's and the rebounding, accelerating acquisition. don't is

back easy create better concerns our loss. detail revenue type release can volume of first included of within we by about data quarter additional provide client going the on We to transparency quarterly the In XXXX. Slide extra any shareholders comparisons earnings provide addition, and We evaluate this so to share level transaction XX.

and our $X eCommerce Omnichannel web-only American Enterprise Our business key eCommerce merchants, merchant U.K. Enterprise. a and included annual serves This the with creates in than Business Global is revenue million advantage. is is meaningful scale Global client sales type in North fastest-growing and excludes volume, more with opportunities. a merchants which cross-selling strategic includes

distribution We Global us both Enterprise, channels, choose new Marquee for Brands have making go-to powerful for eCommerce across adoption. and and technology partners the [indiscernible] striving

Finally, service annual small comprised through and than U.S. volume. our attracted software-led with world-class $X to of million technology-enabled merchants are partners, these or in merchants leading SMB who software-led We sales enterprise primarily capabilities. less scale is

strategies proforma pie client deeper, revenue of the merchant’s text from The including show BCG's compared dive XXXX defined chart pies merchant Slide clear The for the reach. summarizes business mix where to Along we each. slide, based bottom by our these and TAM X Global eCommerce payments the slide, on client recovery growth the a type is is on global X respective the Beginning quarterly global [Indiscernible] as differentiated global XX, each takeaway the for. TAM by growth total progression report. down basis -- its Moving below the types. show revenue client each our for on slides type next XXXX, acquiring the thus

licensing help We transactions most have ability Unlike multinational multinational of unique gateway countries, XX% revenue corner, growth the leading In world. [indiscernible] domestic XX% enable client’s our transactions a eCommerce with companies right-hand card-not-present estimated transact we is expansion. to Global support to of and within the brands basis. the to we around our seamlessly on global peers various show [indiscernible] upper global local

roughly split International. is Our eCom U.S. and between the mix XX/XX

As you is is is XX%. while global a up important, the is fastest-growing with cross-border to can growing This TAM market. see, our fast-growing single-digits, domestic XX% eCom -- advantage area of the TAM why provides growing in it so reach distinct area

TAM Lastly, eCom in to is opportunity. growing play currently market it this don't XX% strategic a the see portion expansion of and XX%. We as SMB,

by the rates FIS accelerating right in see corner, can benefiting is the shift you As online. lower elevated the from growth

to mix as outpace revenue opportunity to us Our merchant continues a of fast-growing increase, global the continue whole. to acquiring creating eCom for TAM

and nimbly expertise, for enterprise banking unique split the relationships. global the Grocery growth and we footprint X% Enterprise potential Turning our Within of Vertical. discuss see debit at growing continued future as TAM to technologies. by sophisticated to between clients the and X%, Serving international relationships compete routing, our to low U.S. such and capabilities price Many and our points, global [indiscernible] virtual enabled greatest international. new while expansion through integrating on geographic quickly is enterprise, to are Enterprise. require -- Slide XX scale SNAP, within Enterprise built vertical decades economies long significant

shown business X% XX. U.S. to is slide Our software-led TAM is SMB on SMB X%. growing

Restaurant this growing reopening, each verticals. or strong also our experienced exception, challenges, the than slower some to is trend, our the whether plus it's during verticals is notable of staffing its demonstrating the quarter. while significant quarter is other XX% of recovery to performance of year, this growth slower due It's have difficult discern recovery most with a We partners.

and expertise. strategy, provides continued that win However, providing problem a the partners by ISV with rates clear sign software-led is vertical to us given we it partners, there to on to leads Further, SMB our deep across improve not our by continue significant making our our service. new advantages Space ISV

open consolidated significant opportunity access launch the And mentioned of of for continue and on you two from to As X% any business. the us, expanding you with Markets advantages Banking SMB event, Q&A; leave following of I'd our believe significant that sticky line the we see to it's we I can like our especially our before is Capital with enjoy thoughts competitive contracts of long-term earlier, driven e-com revenue. as first, XX% breadth a client revenues Slide we across Worldpay. relationships. a XX, of

the our our revenue in software-led merchant, XX% capabilities. by and differentiated mix eCom, Enterprise Within are Global we of

commerce described. appears represents to which our the focused vertical, across be enabling U.S. our market segment, the in growth about revenue, a every sliver While by digital Enterprise driving is as SMB, on every strategy of Gary in

XX, TAM Slide on believe Second, market for reinforces for acquiring growth that total double-digit X% our outlook merchant. revenue the growth we XX% sustained to within

strong a grow continues opportunity expansion into upside, business capabilities to in to have that really eCommerce drive Enterprise overall our opportunity We a unique eCom we as downstream international of The have mix. our and revenue portion creates SMB. a additional

confident FIS, the to you of and driving serving are future for like in business our We would for colleagues efforts continued thank line clients would our following. I questions? open their Operator, our and in the

Operator

ask question your a [Operator question Instructions]. And withdraw you. to reminder as Instructions]. To [Operator a Thank

Our JP ahead. Huang Please with first question Morgan. of comes from Tien-Tsin go the line

Tien-Tsin Huang

good of you morning Thank all you. busy this been guys. going all is data. This through And having to

and so picture useful. I that a Gary, as had much don't It's really if start mind thanks So I'll for with for sharing you follow-up. it. question really, bigger my

the revenue volume do and revenue volume here. both from data data. merchant transactions. lot you've the lines The given show stuff clearly us guess side, and transaction a very But derive you're tracking you network good well the I of with on Just

would how a those you evolving a like-for-like mix ultimately revenue we want and get of that's plays to pricing we to benchmark guide metrics, and clearly if So I there role? us sense wanted all against because better Thanks. think some how of

Woody Woodall

volume Tien-Tsin. growth role to plays detail and release. the in transaction certainly We the it materials both within tried press a growth outline Yeah,

growth been ways. effectively some back in XXXX, also think I to gave to XXXX, as many of us trying forget we have levels and

XXXX, We which And of of QQ kind growth we if you movement. volume is also and bit, Ultimately XXXX what the yield the its us expected have at noise rate. on expect where growth move it closely XXXX the track. growth to little We've very global compared attract yield the seen third transaction that shift to growth slow the of tax had in look incremental the quarter, providing we revenue about to volume, terms incremental compared networks. points and a benefit. to And versus X to continue that -- we volume XXXX, out both of really between of takes seen

the at you So very to and about give our that every be on. extremely that's today we've to data piece revenue focused one tried growth thinking But we transparent look we of been trajectory.

Tien-Tsin Huang

for Thank We'll you studying that. definitely it. be

of all on longer-term? because a all larger, thought think what's versus your businesses. these As But envision Just you but course think FIS peers suggesting bundled also I scale different consumption you that about really across to and have maybe was trying you this I'd about I really shift of mind I but mean buying solutions servicing summarize that, Gary, or from different have to here for point A because bigger of a follow-up I'll lot lot division are comment would imagine some there's that, have guess. best-of-breed you of Does power, buying? this don't superuser picture you you, that just clients things diversified interesting. my there,

Gary Norcross

seeing Absolutely. Yes. would I you we're Tien-Tsin, right. it already tell

seen talked around -- solutioning platform that's industries So, lot more point a a people want world. outcomes really to very we've markets our what to is customers are drive we've what a being and leverage for and to all we're way all us of about. all dynamic a What put across able about in in

large As are going FIS have massive transformation. a to through you all to companies go think about

to completed And completely our years and Cloud. journey so had we we've started transition X now ago that

and the migration, that the made of all we've Cloud we've of So getting benefits

Gary Norcross

payments platforms whether available. nap, modern lot that one, it's about we've through whether a next-generation it's digital then whether application are and its in on stacks, componentization, and leaned platform, We banking it's goes whether that on. with list the talked one,

huge the the bring that phase clients to see as already a going our open take now in a grow to of weave anybody is market. for next-generation just over very next years. And We of large innovators, capabilities that conglomerates, and various segments, next X how place subset. see do highlighted to dramatically opportunity. advantage it together you the that together we small a leveraging X all So you're one-stop across capabilities looking very

also our will migrate You get continue to technology see as existing clients displaced our debt as framework well. level of this to

another platform So We about highlighted X modern excited wins future. we're real on the banking today.

to existing One of FIS system first of those to core an wins transitioning for start was NBP. the customer up that signed banking has

resonate up we've at and long-term continue this that transformation this confident the see you'll in years. just forefront coming So so EPS, our XX% really is the next step in in continue. the and we're and we'll And to why journey lot, talked mid-teens we're a in are as of FIS' guide

Tien-Tsin Huang

for thoughts. stuff. your Good Thanks

Gary Norcross

Thank you.

Operator

of with comes America. the question Kupferberg line Next Jason from of Bank

open. is line Your now

Jason Kupferberg

extent wanted updated sets think your a you're about current feeling I than around the feel just it's the understand just and economies in thought enough you're guide do maybe margins, exactly natural an it's we various capital what's know in expansion, basis to just targeting to XX the to On ever. how to is but, business, of in average business given year contemplated XXX strategy, by invest multiyear you I sure, dynamics the of margin gives XXXX? scale process there as extension to And type for points still make your with your flexibility end to this allocation in there. changing that the on that, faster of see just expansion markets Certainly, obviously line but are where wanted that? you just consensus

Woody Woodall

operations through times, sustainable we expansion, automation a the to expectations normal within to we've to that regard that business. talked expansion with drive expansion. numerous mid-term drive side margin with in of that's contribution high of about margin of to business leverage the through to points we've the have think efficiencies baked Incremental our XXX it, that operating of XXX tremendous basis a Yeah help continue basis into as points XX investment the we as there's XX outlook margins of as margin With revenues regard do and investment our well.

drive, and to So ability continue we sustain built that about our we've out. feel to invest, that to profile growth good accelerated

are two think comments those about addition, margin. the in I So would really

If about That our XXXX, around not XXX until margin changing terms revenue 'XX basis expansion. said, XXXX, X% you think outlook to guide X% XX mid-term anything updating not we're formal our of to points and growth of of in we're February. to

to as number longer-term outlook continuing a keep So quarters. a for we've what been consistent saying with that of

Jason Kupferberg

assets. wanted on that Understood. I initially? be part dilutive Stephanie's be And capital it help are like bill of us a little where you as a there area, sounds you know understand ask pipeline And there like can [indiscernible] that sounds some certainly lot follow-up, bit strategy. that spending In to M&A, I just time for updated emphasis more of my considering higher the deals terms towards might you growth be M&A in just could will of the allocation

Gary Norcross

strategy, pricing markets prior in do, to our that TAM, calls, the on things M&A. continue for product definitely expand but We're anything on as in capabilities, going on M&A new getting behind accelerate our been us focus fit be me know. also strategy shifted is is us Jason the continuing say other add would important. focused into about large we'll strategy start, on us and our in a talked consistent areas. to opportunities We've drive helping very years, that will going on let our M&A others typically We've Let market to certain we're focusing the on market adjacent Certainly, to not that we growth. drive, move M&A drive look new before return, on things, will that we you lean other there. very or things We've I been and Stephanie's on buyer and then on. that throughout the we

that's XXXX, continue so going and And beyond. XXXX, to throughout and

always important part will our it an of strategy. be So

Woody Woodall

round saw as some also out probably emphasis the and integration. Worldpay complete there You we

Gary Norcross

Right.

Woody Woodall

focused we the move before integration next. on very We're to completing each

where we're So good about integration. on we at that feel

something on accretion only don't around dilutive. at as metric. your that's dilution we comment would Secondly, We the look whether value accretion dilution do

of gaps whether distribution In it's think it's profile is portfolio that one just our we filling our about out we probably our think fact, push product long-term strategically enhancing or into can M&A creation through many growth more and value we how channel. much

accretion never But an think potentially yes, So shareholders, to drive doesn't term. analysis. dilution incremental from long that dilutive would we value about something

Jason Kupferberg

Thank you.

Operator

comes question Wolfe the from of next line Our Darrin with Research. Peller

line Your is open. now

Darrin Peller

Thanks, guys. for on the merchant all the Thanks side. disclosure

on the to to I side I the demand and on end in that able well quickly hearing do see of next being when CAP maybe several the from pipeline just just potentially services still majority doing, the just we're general. tech been touch and XX% strength this there Capital with revenues, see the items you a offer? a But focus has strong banking for the the about markets you the And side it's think obviously you given, For you generate in modern growth minute, some on markets you in over What the platform of want years markets. products your really just when banking banking were minute? touch banking for that the very on demand and growth the then how kind financial banking though, Market for organic on pulled X% and especially uncapped side, about know forward. can on

Gary Norcross

let we we've all really in on leaning to that. we Cloud when journey going And Tien-Tsin I about in that Markets, investments so started and remind was Yeah, started then what Banking the we you; We about as embracing [indiscernible] I'll Capital seeing be started capabilities I see Darrin, we'll talking now we made, Bruce couldn't results next-generation on this. you're excited start, this over mentioned really more years on of computing. to the X add I'll almost ago

to continues is Our pipeline grow. fullest, the

this up ago seen growth now in and quarters record that it's well in Banking sales over also especially, years upper the You're rate if being and single-digits. digits, This seeing move you'll record by mid-single low-single to you've -- years, consistently X performing the journey put remember started from team digits year-after-year. in

clean quarter more X%-point business going had in of even the [indiscernible] prouder group. because bright we repositioned in expanded couldn't We industry negative traditional XXXX, So what we've was had so to or we done. get because I Markets outside strong our mean, the there invested X%, and in the and frankly, player license my market broad really so was be TAM what I those bumps. is markets that what great the licenses we in and is that as We in But really, those we portfolio. We great feel Capital on very, importantly. expand needed back the about can obviously, -- the now prepared great really future renewals. results. a a tailwind moving, you're about That's just solution just is there well again, of adjust term part of once was as as negative results. a set. where some found business that for We customers team But lot And -- and nature, capital business, said started you if the -- product markets. a you out heavily we about we very growing out, capabilities, solutioning. seeing -- remarks, a those of domestic not it's you go got feel with of global international very we're a U.S. they've that markets into this

Woody Woodall

add little just on to here. I'd Gary bit a

We able rallied people teams really really in our WorldPay client question I building assets had have our ago. how to bases and how accelerate of of out those out even position. we this focused verticals, them years obviously set good we've and how around job building an became that's, on, be we products us the put think cross-sell excellent consume going very wanted strategy a into had to broad before that earlier, growth big, we -- we're we do a again, of to around And that. done They've the this We to cross-sell? in started organization. several the part

is better consolidation has data all-time As same high capital several other high. comment pipeline all-time Gary originally Probably Market's over is, as last Capital years, projects while meet of TAM those a as it see taking to new our mentioned, our our after was thing, [indiscernible] excellent, of year, cross-sell. things, of We opportunities we're as would Yet very been to we've to again, grow, a And customers. these continue to close we've sales today the stand the through and come and continue on our those, redeploying our that to I gone the execution some in last excited we're our we lot into products [Indiscernible] add of products the expansion these challenges capital moving new markets. and lots about accelerating to of

very feel can to business comfortable we a So and grow [Indiscernible] this continue we healthy very that

Darrin Peller

you to guys. XXXX especially mentioned but there you demand Markets the -- higher for profile in look you was quick of a regard just what curious side Cap growth for just obviously versus of segments, [indiscernible] in be some And that elevated guys these the at it think used terms you is of somewhat helpful. when norm and again, follow-up, Like won't really new if the two a be? That's these Okay. rates, on more negative that??Thanks?

Gary Norcross

end on back Yeah, to And at look bit have Legacy technologies. businesses, more Darrin, little really at these and day been up the the at think got customers these a traditionally of the and older, look customers I they you serve.

increase and to serve deliver, overall And investments, an ownership, in increase always lower shift. what solutions. they FIS, start made in clients historical the moving can't to I've several which the their their on way our their total last openness you your to shared Bruce point going that talk is likes of they just about. And quarters, speed do our which have time for customers. we've so cost at at the With where point-to-point The we're inflection speed, the prospects are their that

is starting of And you benefits now timing produce. -- so that what are to as seeing you the

the job months over are segments very a you're and industry. pulling very cycle, long-term get seeing and time. months team sales X very well a high cycle. So these Bruce in and inflection that'll averaging different done But a back for positioned reoccurring. nice unique faster very We're are of that businesses We're different point about his has X contracts to averaging on on-boarding an now XX

but you nature upper on not will segments so to the the see And going maintain mid given what's and only markets. continue these single-digits, of grow in

Woody Woodall

clients just lot a And products need the that I have. will add reiterating, our there's of for of -- we all that and the have

Gary Norcross

That's right.

Woody Woodall

Vertical base. So model, to we've and able those it's running of business run their that are the all that over to in Management, same taking across help be Markets, our do the and really Capital of business. Treasury one institutions We're client is their applicable able things things the years, Services been Financial those

we are happens on positioned broad offer capitalize everything do. our that. they is that need That so a of eCommerce partner for things of looking as that is even a we And they're handle about one and solutions talked to it set continuing, trend well in in prior can clients, the quarters exceptionally well, to that

Darrin Peller

Very Thank you. helpful, guys.

Operator

ISI. is Our next of line question from David Evercore the Togut from

now line Your is open.

David Togut

morning. expanded good Also and KPIs. merchant you, the appreciate disclosure on Thank

Looking two-year at at global headwind slide looking point percentage e-commerce XXXX. revenue XX XX, you highlighted to growth, versus stack the

solutions? As merchant in rate through growth recovery solutions your what be thinking how global terms next expect you of revenue airlines in look progress like to travel do XXXX, could growth, and or year to you merchant travel to

Woody Woodall

I -- to we David. it's slower probably Thanks, we ago, would travel anticipated. if tell from than improve. continue see originally a quarters few you, Yeah, improved

that XX% merchant believe of better business low than for and saw XXXX. about we is in XXXX, would So XX% what but at of of XXXX. you; which it I certainly end it's the in double-digit will to we do growth is today, just over at help outlook XXXX, in going course through where the terms XXXX. we It help to travel XXX% back or it's be support tell of going I to improve anticipate the to be know that by don't continue

Gary Norcross

rapidly into you I'd and reality the nature smaller will and to quarters smaller our it's XXXX, disclosure good and growing, mid is see tailwind our almost a but going P&A trending how XXXX, eCommerce several given be for last just the add. business. It's of going the and overall a us up. become of into XX% business the there segment

And thrilled so really about we're what space. positioning the merchant in that's our

so business, -- that we fastest in that's are we've at best and look area the you there. got the and As growing capabilities positioned market industry-leading

execute the of business little [indiscernible] as but news seeing good said, the to actually the it, a on in a in Woody So long little faster other the is the of is side we in recovery we're accelerated slowing as like continue some verticals.

that's all-in-all, to got double-digits XXXX So in and we've going going continue in one a and business got great to perform forward beyond. the we've model

David Togut

by Free just Cash comment appreciate And XXXX Flow XXXX, versus week, Cash XX% Free could Cash Woody, as FiServ Flow follow-up, your for Free sure my outlook Flow this just I you conversion their XXXX? cut make for want year on to that. I last expand upon commentary outlook. your understand for

Woody Woodall

free yet. a XXXX don't ratios. said, reduction conversion metrics our in cash for That or flow we any conversion I anticipate Yeah. haven't you given

going did High This of revenue in very forward. free we've levels earnings quarter good into previously XX% continue XXs be guided. earnings conversion roughly conversion being to a XXX%, cash on in flow as item, that the feel generating revenue we'll of in adjusted we terms conversion. terms XX% going those XXXX, net adjusted of plus I and

good So back going for very we're conversion XXXX. cash into no, we're or about anything not else. having how flow We're positioned to any pull investment

David Togut

much. very you Thank Understood.

Woody Woodall

you. Thank

Operator

question is from The Koning head. Baird. next Dave Please go from

Dave Koning

a would a that signals you U.S. you're high pertains topic were your metric a think growth mix just coming? losing it that that think it's catch a share XXX% of issue MasterCard, gap? there mix well, you and would to think -- just [indiscernible] say maybe bullish just is but I there I button is 'XX. every -- argument such just off that really numbers causes a little out-sized Do as bit issue to And anything, means Visa, it's say, start it's as if up, XXX%. and The To hot

Woody Woodall

we it's back, we've issue, coming have Dave, mix Everything It way just year outside of is that coming. out Volumes portraying back, travel pandemic. the course is Absolutely. continues recovery we last the are coming are talked back. over thought. the or believe coming from show to We growth about and yields a the laying

think So, only the got yeah, you thing I that's there.

Gary Norcross

digesting And have just of all given today. come think I this I I start mean, you back as different at you level mean, various provided of the granularity guys verticals you same it really we've will this, say thing. rates.

the mix, So we business. very a about good absolutely feel it's but

Woody Woodall

And I of that well. will lot sales just add seeing we're a acceleration operationally, as

from back last go year year; close deals. You to an rates this you're seeing on increase in

the the of lot in board momentum us merchant for a actually. across positive space So

Dave Koning

Merchant, that. thanks sequentially. look to normalized we X% seemed sequential more in know, more this secondly, different you. normal. was just so as what sequentially trends And Well, for pace year? to be actually that was Last that last down year year in just think at Merchant was up just 'XX, back maybe then and I about Is I Got

Woody Woodall

it's pace XXXX, compared to the quarter forward. normalized some think use a color two-year think stack. we 'XX, we accelerate We're going Comparing fourth Yeah. to more going to and sequentially that continues the

think right we the So Dave. we're direction, just back in headed

Dave Koning

Okay. Well, thanks, job. Nice guys.

Woody Woodall

you. Thank

Operator

Cowen. from Mihalos George from is question next The

line Your is now open.

George Mihalos

in that to higher, back it going merchant the for at forward, should disclosure way would kind growth right that first think about for think of rates should the should look is that You no your Is for all get to that business out for if e-commerce call right? in the that reason that going you I XXXX, to of that and able a assumption? expecting talking the to you would sustain question were that -- growth there. [Indiscernible] in there's about forward. increase Thank XX, to percent all if I we slide you not revenue And accretive increases high-teens? correct yield, is able where global you're guess, just the as it me, improved the data be be double-digit revenue be

Woody Woodall

there. things of couple A Yeah. in

tried basis, global color normalized some us. on think, that for will First, we've grow eCom XX%+ give to we a

that as we certainly mix. So larger of helps larger our revenue portion a get to and

that be really do least right. that case, been drive think the eCom term. helping able tried longer And sustain to Merchant and to to you're growth with double-digit at term. there's accelerated also that that I But I skepticism we long is not really global support us for that growth longer-term growth believe the think accelerating we that, some won't highlight we

We normalizes double-digit XXXX, they call coming We we over pre, growth merchant it yields revenue continue where as think those time into everything with to were thought. see out, you'll continued back as business. see the within yields

George Mihalos

XX%. the Okay, that's great. appreciate Really

of that's again, the Thank sounds -- on you. capital revenue really are important the there. going perspective just follow-up, sort we of kind allocation or as And priorities, And it Woody, maybe to quick just get spend broader anything to predominantly a strike of shouldn't back targeting? a think on within guys that forward? a change you any expect bit the sort a in I of to be or capex out going focused like is really M&A going on little merchant M&A is zone side. M&A, that from it a percent as that the like

Woody Woodall

a point give side view let M&A. and you me the I'll of CapEx Let the Gary touch on on then

correct. You're

to I not Free by we're Cash beyond. probably my CapEx continued We year-to-date XXXX, are that does into X.X%, today, Flow changing incremental think any anticipate it we're revenue. which going is call discussion anything yields on would discussion. level around and supported continue yield expectations about is forward Our And think that drive at there. of Free around, I expectations CapEx to where The which not Flow or CapEx, Cash

CapEx doing. could [Indiscernible] Gary, no touch what the So been historically over we've you on incremental And then

Gary Norcross

George really Yeah. is unchanged. Look, on our M&A strategy I mean.

changed starting to are the has our for pointing we're about going a that, material and continue I -- really, appreciate here. XX%, our wide all have what but We through looking he it's really the in aperture; raising growth next things cash. an We're talked we than out, strategy allocation financial drive other opportunity our capital to and growth of that have our use you not overall year accelerate from to to continue is dividend can

of buy buy a saw. companies our got free back, continue very we've or either our back you you, and lens flow as So open to cash to share

segments so to for we'll the leaned our generational really -- for history. and rate was history biggest its operating are we the things at for Banking, all of continue We FIS it's opportunity QX Markets really but moment. look Keeping And in We think I in levels Company. their of in, really from mind that the our that quarter just highest in are. QX, can in think think Capital some buying of we growth X at where we this accelerate

pre where over but shows in the rate very Merchant very it And you it's meanwhile heading business you -pandemic. a direction at so accelerated model. -- was see give -- Merchant's all durable are trend an business And every -- X -- that durable will right

So strategy the than the -- market, that be a going M&A drives if that grows find we faster that it us be expands from we absolutely are in can to continued complements new TAM, in that business. standpoint M&A to

George Mihalos

That's great. Thank you.

Operator

is Our Please from go ahead. Dolev next from Mizuho. question Dan

Dan Dolev

results, Thank Great guys. quarter. you. Great

Woody Woodall

you. Thank

Gary Norcross

Hi, Dan.

Dan Dolev

follow-up. I So a then I have have a question and

have if I I And question have a then I a quick follow-up. missed it. and got I'm You've sorry it.

it I've into this, versus about are where of quarter. fourth we trends bullish handle? You quarter,?COVID-XX? terms are and very October sounds did potentially talking about we like you're comparison on Or follow-up? talking in XX%, and seeing 'XX, this Are quick in the and a?X then a got high-teens? having you the

Woody Woodall

the quarter, mid-to-high third expect with in last XXXX, mid-t-high comparison we XX% compared still a fourth bit sequential the described with it growth of teens on how quarter, I Consistent and quarter. did anticipate growth to in teens comparison We XXXX. quarter both Yeah. into to but keeping actually third the we fourth the the that

Dan Dolev

that's forte [Indiscernible] that where at restaurants, make Gary, their I'm to regarding be or keep then know -- if better eCommerce, Does you're you I -- this the beginning maybe sense. sense point Coming my this well, as know you're still I good operating space it on off Makes there. like where release, is the was seems etc.? that to think strategy [Indiscernible] in thing I mentioned through look it. like And there. only some a I at Got there from is saying, perspective. focusing not

Gary Norcross

going look, I lead on lean continue in will in continue We're Dan, to that. to e-com. Yeah. to obviously

a SMB, though been and on the of has think strategy good initiatives very specifically. and describing SMB did great in sound very I software-led Our what's Woody -- job a since start. our going software-led

restaurant seen overall to our it's a percentage small starting have Company. You recover, very of

seen immaterial as needs didn't whether really closures, whether that was was to partners, as pandemic. might it's software So changing have the point they during bit some a issues, respond at recover, in But due this our staffing that that to it starting of to and the should of due you due of to quickly to some whether have was time.

job within debate, And throughout but great be highlighted just strategy done to open about Bruce going that, an SMB. partners sign a that strength. team our has pandemic. that's of up of we just All sales And not very would to continuing our feel SMB. good the software-led the

which go here on Woody And will to across software-led standpoint. Our through strength business see growth QX, international, driving rates to QX improvement lot you on seen and travel, SMB a all our continue can what we've from solid has start those we're fantastic. segment, about been And in is of market talked e-commerce what now going strategy. to leaning with we the across actually really we've the in our travels domestic the we've disclosed And to but a got seeing fronts. without e-com

Dan Dolev

Appreciate quarter. all you. great Great. the Thank detail,

Woody Woodall

you. Thank

Operator

Thank you.

from next Ashwin from Our question Shirvaikar Citi. comes

open, is go line please Your ahead.

Ashwin Shirvaikar

direct the addressing investors. of these Appreciate from folks. some of you, questions Thank

cost perhaps ongoing it's on. Cloud relationships to spend? nimble? lot do so that, spear How from level to would between and you've clear a out the speak that you Thoughts of Can stay the that build need perspective? you a or that a consulting As quite we and channel delivery innovation, great. need done the on of you front as be intended digest tip set you on componentization of Do SI of

Gary Norcross

group. with need let's the they Well, consulting first which a last start part, would

a As that a and of Company for narrative. strategic number I consulting you owned know, years, Ashwin, our didn't overall we actually, in fit see

firms. there and system partner integrators we'll So large other to consulting with out continue large

componentization, of consulting partnerships we've to us with can that owning you'll not in given group the demand given we've have we the to is another as great. you imagine, As people front, a which grow had; see made continue lot wanting investment those And on necessary. but partner is

journey. it you systems, historically before amount the that question bit look at of really if -- investing summed prior on it's X.X% back of started Bruce trended existing just about Woody think on very this up revenue. we're CapEx I confirmed well, right a and into That's a it, now our operating we little up

down the X.X in it was As you range. type might remember,

realities saw transformation get as you get has You down, the on this numbers. up to delivery to about up, the our ago costs right? availability it, seeing Cloud years in our speed embrace The this to technology that get up, it trended had because our we coming. we So come think to you're waves in

X. building in saw banking and But us really into Capital whether within that's going come and Worldpay, access and solutioning industry application and that's front, payments back-office. doing middle then X the things we're all nap around Markets digital You in our out on verticals, whether modern platform really our wave, that's

in a so that weaving on waving components, us not of together our next-generation those which really we're rolling them heard out and You've is way -- markets, the today. call, platform, talk embrace now we're taking new to now really about serving this

advantage we be the incubate, all because the places kind to capital that to investment opportunity require going innovators that of a made. don't in, closing, all that's as capital and investments expand seeing. are those we growth up for And we're driving still going that redeploy. to increase TAM, start as other think of to markets low-code platform, But you we're you as in and weave in bringing the environments, So in through you're you no-code bringing given now taking start as an whole another at to come see a we've frees programs now

guide in shows it our in a execution continue where shows a think it confidence in on I real Company is, real confidence and we'll the given lean fronts. to all those

Woody Woodall

Yeah, has products revenue team new from focus driving very to on nice products. the a continuing Ashwin, accelerating and we're that done the innovative job

continues so And our when new at percentage it is revenue to -- track accelerate. internally, we -- we what products from and look

with the trying ideation challenges customers our to new new team's a So delivering that we in the about our innovation the partnership solutions feel job of very to solve and good facing. And engine nice the done market. products they're

Ashwin Shirvaikar

Understood.

and well, global XX Chart great it's Looking chart. at a acquiring TAM as

[indiscernible] One out you things It's actively could and a enterprise mix sticks have question. your more about be been slower tail it's at are stay pivoting you Obviously, areas, -- just you the strategy? how how bit segment faster? large talk years. to to you dollar's growth of but happens that little is obviously, it the in -- more how very So terms faster of the also that big towards to the exposed because do that's do the particular for in enterprise that But you

Woody Woodall

question. it's Ashwin, a great Yes,

several growth And right believe the we really that e-com on the -acquisition think And heard Worldpay to to it team. the quarters. pre on continues us I strategy over even last on you've focus was e-com invest Worldpay drive even and faster.

you the a ago. If few X a significantly our XX% to than was but growing in points of years revenue segment lower this highest just mix that X remember, lower

you can our today. investment to that's of our in improve growing also We access is domestic geo our nap, we've market been it about XX-XX the share So global that on-boarding market over e-commerce continuing where play most SMB in some cross-border. high between most really most to our investment we capabilities specifically, absolutely -expansion, back slide, right don't speed where of incremental pretty talk growth mix Worldpay in think time we if focusing. Further, in now and we investment in and e-commerce a of of investment where go profile, market were grab

that's a So segment. is our for to where revenue these very think in yes, total XX% as up markets. Hopefully, of to focus our lot us drive as the growth over we strong much revenue mix merchant time, to portion an that's in in of this excellent continue of mix way our And high-growth sustain significantly. is, getting

Ashwin Shirvaikar

the you all you, hard Thanks. Thank here. work

Operator

to this time, Norcross closing remarks. I'd like turn Thank you. At the any over back call to for Gary

Gary Norcross

for colleagues they to world-class ahead you show technology thank to solutions commitment the will for and dedicated their foundation to XXXX stay us and continue joining again growth can beyond. this that our who in clients curve. you morning our commitment for providing This Thank lay the so of our

any questions our Goodbye. to Relations Investor enjoy rest you of that further out please the reach this were and If not day. you call, you, hope on team. have addressed Thank your I

Operator

for you Conference today's Thank concludes Call. This participating.

disconnect. now may You

Fidelity National Information Services (FIS) 4 Nov 212021 Q3 Earnings call transcript