FIS - Earnings call transcript Q4 2021 | Fidelity National Information Services, Inc.

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the FIS fourth quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star, one on your telephone. Please be advised that today’s conference is being recorded.

further press any zero. require you assistance, star, please If conference to your I like the over would now hand to speaker, Mr. Nathan Investor Relations. of Rozof, Head Please go ahead.

Nathan Rozof

Ferris, our FIS our unlock guidance, Stephanie webcast call financial Gary and will for describe FIS, is performance thank Woodall, us CFO webcast. to priorities, at Today’s year and and fisglobal.com. for provide Financial finally corresponding being our operating President available earnings our fourth presentation strategy CEO our call on release, the Deputy the then will website the Woody Q&A and forward XXXX The morning XXXX Hoag, results Chairman full all quarter and will Norcross, call. review Good conference of our also news discuss portion. value and Erik the are Officer you for be our Chief will joining joining our

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

Gary Norcross

performance for for our joining delivered FIS morning. operating thank us all metrics in Starting and colleagues X, a Slide Thanks by XXXX. historic this Nate, you on

an level. continues team resonate high exceptionally and our and execute with to strategy clients prospects our Our at continues to

operating For expanded the basis the XX% to EPS XX% was per revenue for Growth nearly driven to by performance in at to merchant XXX adjusted XX%, over increased the billion. and X%, banking variant. our XX%. Margin across quarter, came year, than markets segments In share. X%, points omicron with we year strong increased to and capital the due full $XX expected softer at merchant $X.XX at by

merchant late you deep in merchant December, and in our will have been deck, even higher. November our on dive growth later impact this the see would in As without

the offering ecommerce We cash For billion year, $X of billion. for primarily which flow will that platforms accelerate our we to and serve generated SMBs. free shareholders, dividend, record increased $X.X Payrix, acquired returned merchant’s

ahead synergy a integration expense target. beating revenue initial by completed year of than our We XX% nearly Worldpay target also successfully our and synergy initial more the schedule, doubling

have We quarter even the sales for the differentiated to solutions. due demand with strong omicron variant a our very strong

for record increased of By FIS history. account, our a XX-year and billion, any was increase sales to year organically. strongest X% backlog in this a record our New performance the operating $XX an

their global trusted platform this Turning was the across client cloud-native modernize in process. Digital infrastructure the expansion transform to company or XX strategy, their includes our expand to a sales platform decision-making them success, point Slide and also growth using FIS a our This strategy. which their X, to our we to They clients and selling and their In banking highlight in to enable prospects wanted institution to accelerate as modern will wanted financial who cloud-native given processing selected several landmark their a with digital FIS by to who our top One their executing business. help U.S. platform. wins key banking, partner innovative use look to technology

current which to a indicative of new partner. the how bringing increase Bank solutions year. This to a banking a to technologies, deal significant segment of great savings will Amerant allows capabilities drive most drove the which the than business differentiated more multi-vendor solutions innovation signed Amerant for outsource their the in most of These to portfolio. significant the Additionally, for transform is sales wins their them FIS while example our the are to XX% single a power their of solution FIS, a from in

our countries, we expansion buy XXXX, of a was continued tenet the merchant seven strategic of push merchant growth geographic in to segment, to offerings, Turning our new which entered rationale Throughout especially Worldpay. core to accelerated our ecommerce.

result markets One global processing They platform we direct this partner sophisticated they the business. and signed are quarter. the for Argentina, a and those airline vertical largest was will FIS trusted a their chose looking as them expertise with grow because help country’s of that

merchants. acquisition our This relationship new to of utilize for are for to our merchant the significant acquirer now insight we this data Preferred. into we innovation longstanding processing transaction. Worldpay’s new is of revenue processor combined authorization innovative We trusted Worldpay to This and take both solutions Another and rates. our integrated on much dramatically XX% our cardholders as both rates our increases merchant authorization to capability. as advantage Netflix where increase generates key sides this this advancement, our uplift participating transactions the quarter Authmax declined create of of ability transactions Based expanded and quickly can rationale authorization solution the significant historically issuer issuer , based for this clients. solutions With for improve on

building of our pipeline, this are In Templeton. of merchant year. differentiated increase strong than business our capital international solution markets. for our the a wealth XX% signed a of to provide leg with the transfer us in that Franklin quarters the deal growth we leading record in vertical, Like Rowe more on for global client markets, few this with establishes looking Price agency forward will announcement player new capital we T. ago our in a Given history new sales largest a as anchor

capital done significant in XX% transformation this channel. business. in combining enterprise year. quarter, our their and create debit markets. sales clients team growth discussed across Slide market made solution. before solutions a experiences. Last outstanding our solutions Amazon, and merchant platform last more derivatives quarter, for On which new transition clear the markets are topic middle our not favor opportunity SocGen job our capital solutions products a markets driving Additionally, investments we across from that sales sales to their consuming utilizing forward cash from I’d end-to-end of our is with our This the adding revisit more to advanced network and through other from together organic like are client pleased our omni-channel of more We had banking NYCE bring we move X, management has brought of capabilities resonating acquiring our an unique increasing innovative the treasury that new our Buyer solution record clearly with seeing with and that that into year quarter, segments. first in consuming than our our preferences example to capabilities are has in Like to occurred the we including segments, continue the the industry-leading structural could we’ve to which will our be wins, office back recent within capital

unique grow Given ways. better our of the our addressable us of our integration, for differentiating success through changes solution market driving broader Worldpay that real and list we to as working our allows evolve in our clients advantage unique revenue we continue alignment, are business and across go-to-market segments are These synergies a with to results which strategies organizational take set.

to innovative power programmatically of new experiences to addressing this As build truly FIS. the create we opportunity continue capabilities, unlocks

will rates alone coming forward to this We this from levels. think our we in could as continue current growth accelerate bring quarters the

Place to to few, XXXX, of In Slide a FIS a in the Innovators tremendous lay LGBTQ+ as fourth our Most the which Magazine Post-Trade we Company our also a and Fast community derivative by invent the to Year Workplaces and were named their This for Access consecutive Best by for business. Global earned XXXX Company for the products, we with Fortune to rate employees wealth recognized year. new the awards were a cleared The suite In year, our named fintech merchant, PAM X. on companies for capital Group. processes, some new To recognizes our was global banking, Offices in and moment Family management highest Technology our as Unity their improve As Strawhecker the Best in We recognize ways of closed awards, Work System company. authorization list, Worldpay of honors empower Group. and to leadership FIS doing take we recognition priorities was Investor markets, Admired the for like earned saw our named for in I’d that Best name platform for named create

recognized the we IR Lastly, for ESG Reporting Best were by Magazine.

at our we for growth, level. executed FIS invested have at XXXX, consistently delivered highest and Turning to the focus at scale, innovation

We unlocking solutions centered cloud compelling This organized will significant advantage innovate start of and delivering the way. power to around on will be systematic speed. FIS the continue for at our clients new to our focus head of taking and an in in

reside make new available client, all regardless the We to expand solutions will where and stack continue to enable growing they fast attractive every of technology crypto This today. like capture verticals markets. will also new to segment to componentize us into our our to industry-leading emerging

we’ll demonstrate organic will next further years will This an exceptional to We drive rates. and grow have continued and leader into XX and the business FIS built shareholder which maximize we cash continue over FIS returns again over free its how and flow, profitability generate past XXXX, XX in strong years. lead will growth to industry use the

we like a that quarter. I’d made executive announcements Finally, this couple address to of

leave Lowthers outside role Bruce the to First, pursue decided company. a to FIS

in result been Bruce years, his been wish next of role. transformation all a to of you FIS. Thank the and XX for past at your with the best service has acceleration a our contributions FIS, your focus the and significant champion has you We growth Bruce. Over

Chief transformation, Stephanie, XXXX. executive earnings a and inclusive pleased joining acquisition will welcome. to platform FIS. in announce President and of have Ferris FIS Congratulations, She returned us to from I’ll you. originally into tremendous we in a to with year technology Stephanie and promoted joins after the this as global to businesses. experience be that years XX Second, impressive engagement, I’m and today Stephanie participate also customer is future on This role. call to achievement, calls. are the excited driving Stephanie. has She continue new digital seasoned turn company growth. frontline payments Officer step experience Administration leading Worldpay of I Stephanie is She over of of September last to the

Stephanie Ferris

I’m what a want Thanks solutions, Gary, already global All already create solutions everyone. embedded little markets of and network adoption and more uniquely here to the positioned have. power participants one. to about bit a FIS. capabilities by is we the a financial delivered and institutions, scale global have our of and and build BXB market at leading good have trying merchant and those drive to deposit, morning with capital They scale. to unlock are We trying share that to offer excited best to and are with broadest assets coming we reach. one large to FIS finance issuing lending, set of start-ups are to be the at and vision

we using how landmark crypto XX, and like our choose ecommerce with enterprises market SMBs, their global segments and through experiences post-pandemic to the win around next FIS and these deliver capabilities global speeding in need opportunity to Payrix Multi-national of three as all reach, segments: we merchant’s within needs. is Serving into team space. authorization solve our win their within brands across primarily are effectively in capabilities client payments by through of our segment of medium-sized centered the and new talented shifted fraud and to drive By to bringing Beginning and have in challenges underwriting an example ecommerce on-boarding. help capabilities solutions, our segments, blurring. this for is and clients because requires compete best-in-class our businesses expertise. innovation or and traditional clients enterprise see compete we this small expertise modernize platform, embedded finance to and embedded will into We opportunity consistently FIS. all payments help enable us countries welcome we translating help this suite businesses. on of of unique platform between the segments lines directly together Today, them to extremely enterprise, them our are but leading the deliver leading reality. to clients The has experience Slide are unique build our traditional white providing who I’ll our rates, Our high and finance differentiated generation new excited that small have their millions automated glove or clients ecommerce. entry platforms expand serve a family. service. growth us product Their of into specialized the our

the and the provide formally like a again the but in study to acquisition, with crypto We a top will you about five little about Payrix you to be and why launch into this of have four more win on XXX% Following platforms back in to how update client exchanges this, vertical. I and give we next Slide serve we ecommerce year, expect retention. I’d entry we XX, case share about operate our enterprise first quarter color later an

Crypto named we launching this Our XX the into markets and settlement our Apple offer payment AM both Provider crypto we faster Crypto and Payment Pay combination vertical by peers. expand a leadership. for across to are of in emerging were expertise Service now direct currencies success first than markets because to We able XXXX. and product were have crypto. Year to We was reflects FIS the methods offer quickly the new enter our XX the of innovation in and technology

that solutions other that and and serving assess properly sophisticated us airlines, underwrite verticals, by other understand. We that new complex developed to also clients travel not we like have may allow players

interesting. it Here’s where gets

both We banking are expanding our capital expertise and in markets. to crypto merchant from

of all high in clients want this segments access Our our growth to vertical.

By buy, in currency for Digital side customers checking to clients and crypto One, displaying We’re side. partnership their integrating and through hold them mobile their to open we their NYDIG. traditional accounts can accounts crypto and offer to enabling banks enable customers crypto saving accounts our apps, sell with and by these

trail CEX.IO. cards new a card and exchange of line the the offering handle Europe blazing by segment. aspects processing will our leveraging issuing and also FIS card This are innovative for consumer of our U.K. crypto management We crypto is banking across within capabilities. all for crypto-based

growth are our These our expertise summary, from merchant guidance. to to clients exchange this powers banking and capital solutions in exchanges, our traders markets software we are in asset Woody order results Additionally, I’ll to call participate the enable clients our quickly high a capital demand financial our all deploying markets expertise In provide reach our discuss and expanding segment the by developed that Woody? are now and With to to that, crypto managers. crypto XXXX there. and we of vertical. turn in over of

Woody Woodall

growth on adjusted our XX, you the to on strong XXX operating revenue leverage adjusted merchant quarter enhanced Both you margins margin before which all XX%, merchant constant from primarily Capital EBITDA will XXXX expanded to basis basis points, XX%. our touch due and higher Merchant’s year to I generating of and EBITDA and reflecting basis new markets due expense leverage. joining on Banking’s revenue XXX EBITDA wins. sequentially our a and fourth margin cost related points with to primarily thank balance margin growth Stephanie, markets XX points to through capital per guidance continued Worldpay Starting at to bonus cash $X.XX results, XXX operating by taking adjusted then grew and offset basis quarter flow, and adjusted Thanks synergies adjusted remained for us. fourth accelerated XX% begin associated X% expanded expanded with sheet, full XX% acquisition. revenue revenue primarily share. grew with consolidated XX% points banking EPS EBITDA the basis revenue while Slide disclosures.

growing year Adjusted leverage $X.XX Turning to synergies per due EPS on Adjusted sales on was associated midterm. primarily and execution. margins continue banking our or grew revenue new to grow XX%. the points, adjusted grew execution accelerated will share. points banking, in expanded primarily XXXX, results approximately basis Slide operating strong consolidated Merchant new basis full growth fees. primarily backlog Worldpay as X% more were XXX and due revenue XXX X% to basis strong expect as a to revenue margins banking of XX%. revenue XX% we acquisition. grow Based and due expected digits the EBITDA cost EBITDA pandemic-related to in XX, on expanding This due In with to to our to termination In large high is single pipeline well opportunities, lapping and of grow-overs. and lower stimulus the

segment COVID-XX of well revenue the new confidence upper strong accelerate single new of strong digits recurring our another sales will growth merchant execute cross-sell gives to to variants new continues markets and well of near XXXX also year digits opportunities, in This beyond. positioned driven is to While double results, term X%. that with revenue low affecting Capital revenue are growth and us in growth. mid sales, by XXXX, to grow

Slide to dividends the full $X buy for flow billion back paid balance $X.X which of million and sheet cash cash we flow. strength on we nearly We free during year, and used in billion shares, XX, XXXX. XX Turning to touch of the free I’ll our generated

million acquire Payrix. in the quarter, used free During approximately primarily fourth we which cash we generated $XXX flow, to

recently dividend grow This XX% approximately our adjusted gradually increased intend income. addition, our us quarterly to net of by board year. our to payout per In We dividend XX% approximately increase $X.XX dividend share. to by XX% directors to our of ratio per allow will

we quarter expect XX, Turning on of in to revenue X% to organic X%. first guidance growth the our Slide

basis of to adjusted lastly $X.XX to per share. our increase to points we EBITDA to by generate XX%, margin expect EPS and $X.XX approximately XX adjusted We expect

the we year, X%. For growth to revenue of expect full X% organic

basis our expect adjusted to to We XX%. to margin EBITDA XX by increase points XXX approximately

points operating generate basis year. XXX This margin higher will leverage points We basis labor costs, expansion expansion and expect to XX the XXX from be resulting guidance to of of XXX of in of our synergies. for offset full partially to annualization by margin

As per revenue to full to expect our result growth and range to adjusted to margins, of $X.XX a grow year XXXX. expanding $X.XX a for XX% EPS accelerating share we of XX%

is To XX% to leverage we expect repay growth XX% and We for of three reduce we’ll free the year, repurchase. start the about conversion year. earnings debt which generate and before full flow approximately cash XX% of revenue, of of improve turns below approaching resume our share

then our the guidance repurchase billion of share assumes on appendix note of have half $X share mostly counts provided rate detailed depreciation Please and and within that approximately this presentation Our XXXX. assumptions for the XX Slides XX. and tax during of amortization, back we

to now to merchant Turning our trends track enhanced on networks. closely with disclosures our XX, Slide the continue volume

global XXXX, to volume compared stable remains growth As XX%. at

reminder, and the growth a As fourth also quarters. third between stable volume the networks the experienced

about again volume On compared we Our with to basis to consistent U.S. trend show volume growth networks. as accelerated Slide trends the XXXX. is XX%. XXX points This growth XX,

XXX networks remained significant more show growth quarter. the as to where larger I at the In helped consistent the due U.S, while do exposure, us volume is will to volume a accelerated points few not than you currently accelerate serve basis XX% impact, slightly platforms, SMB We which in minutes. this or a ecomm global our Our modestly. XX%. by volumes U.K. the had our variant networks’ to omicron This accelerated

We to step as mentioned first earlier. gap, use this to are Payrix Stephanie as close looking a

in in to in the lapped started with continued XXXX, be volume growth January In modestly in new we began improve International cases U.K. last as our the networks stimulus. slow to trends began we consistent year’s January. January U.S, as As volume slowed the volumes to omicron

our we recedes, variant track the to closely networks. with omicron the volumes continue As to expect

the fourth compared Turning detailed as updated that to last Slide data we showed to results XX, include to our we sub-segment XXXX. quarter quarter

volumes yield variant well compared to SMB, yield and the quarter. a positive fourth improved quarter. our a as pandemic. the above On yielding reducing international levels, the sequentially the future continue XXXX as potential impacted the more revenue basis, compared year-over-year XXXX high omicron our travel, from all mix note, merchant affected as both XXXX Omicron While sub-segments on primarily and grow for growth to by revenue of to segments demonstrating recover

slides, generated each of to merchant few you shown I XXXX, billion the as Global results XX. our on the will in ecommerce contributed how revenue Slide revenue Over next sub-segment talk through and $X.X during growth. they

XXXX. shows to During with levels volume XXXX, versus saw and the May the on revenue airlines. airlines. pulled our monthly difference quarter, ecomm sales right growth travel fourth The store omicron wins. these in to our volumes chart on we new global client the and grew and due travel The as Travel effects accelerated compared XX% then excluding same travel of results, strong between November through but is December. back to total Even

back As to growth. and travel exciting verticals we continue future significant see emerge, new comes crypto like opportunity for

XX, during billion XXXX. to Turning in Slide generated revenue enterprise $X

of During XX% revenue the U.K. mid-teen obvious, dropped December are in omicron from to zero where quarter, grew over impacts levels the the growth year-over-year right-hand previously. fourth the XXXX. on corner, In X% and upper

as business as over as in enterprise This the omicron also December in some not quarter, in growth U.S. pullback is in clearly decelerated severe shown XX. SMB but the was verticals. revenue U.K. on occurred nearly XX% all deceleration saw to Slide to fourth the due XXXX as Our

for revenue while mix, expected variant in banking ability SMBs to of on digit to this growth portion TAM Further, through continue beyond. to our X% The and grow the would gives to summary, XX% expect in to like XX. term, colleagues continue more growth as overall by recedes, I we’re Slide and and in I’d clients Operator? continued continued forward. we revenue short confidence our With as as growth driving with of XXXX outlook ecommerce. push in from excited to opportunity strength open Q&A. in efforts our grow and ecommerce see to confident that, and larger the a outpace like As TAM our thank midterm, the we in with larger our combination us generate is FIS. and shown of we we serving In future re-accelerate; are line business our capital double however, the impacts merchant into low the to merchant XXXX growth their pandemic to merchant to for our markets the in

Operator

[Operator instructions] with first question Rayna Please Our from will come UBS. Kumar ahead. go

Rayna Kumar

Yes morning to team, Norcross Can Stephanie. seeing been on Rayna, strong your thanks. demand lot and Honestly, where a banking a question. you from strength It’s focus Gary client - great standpoint change environment spend this financial Good a and you don’t--we’re XXXX. IT of and to institutional congratulations we into the not accelerate comment continues expect solution and year? demand very it’s Gary A it - that

coming legacy needs year off occur ahead was well well, in the of industry a our massive in year is record XXXX, banking so that signings. are that of a off we’ve as seen off record a that trend. in consistent we’re sales and this acceleration technologies, seeing transformation XXXX and We’re in we What

As you of more other the market a entering transform need brought go them five that really topics allow to are ago, over financial world the disruptors so institutions nimble are to space. as banking, of the that those to then highly last to forward, know, we started against systems migration strong we started architectures, some our development ago, and open the to in going drive one and around years pipeline componentized, innovate applications was three end all years that brought we cloud-native seen modern our cloud around

interest spend them on financial As continue been to and extremely going demand this there’s those we’re it you actually into but rate interest think fronts, good touting of will well of embolden institutions, that about so think expansion, obviously to for a is that our we accelerate XXXX. rates, and lot news positioned

continue We’re great banking, coming year going year. a to that’s in throughout next and off

Rayna Kumar

very that’s very it, a that’s interesting helpful. Got Payrix, acquisition.

of what year? about what ecommerce exposure acquisition the the could then modeling, Payrix from regards table to in new for brings impacts you. and capabilities, for should earnings If purposes revenue we this and you on to talk the your FIS vertical and Thank anticipate

Stephanie Ferris

Yes, us. but strategic that. happy I’m small for talk Payrix is acquisition about a highly really to

to First of platforms, Connect. Stripe ecommerce all, downstream it capabilities brings through SMBs global leading similar our to

brings automated on-boarding, to it be able really us and which for around Specifically, capabilities that are critical to access marketplace. underwriting

Secondly acquisition enables us as embedded strategic, to both taking, service embedded our unique create haven’t of capability, ecommerce omnichannel very so able be it’s think as market and of we even also deposit capabilities, to a card our issuing, FIS with more being before we terms whether banking add finance an value an but experience, this strategically, accessing about out to capabilities as it the we present financial in along to start in deliver unlocking really been services to marketplace. this

Woody Woodall

to EPS. its a I financial to of dilutive terms In probably it’s and rate few pennies tell dilutive, top would impact, you modestly immaterial to the line organic growth

Rayna Kumar

it, thank you. Got

Operator

you. Thank

will Please ahead. Kupferberg America. Bank next question from from Jason come go Our of

Jason Kupferberg

trajectory growth question. the spread Like the of out absolute bit to get for volume there absolute could the you revenue a way for versus the merchant suggest investors’ level sense expectations be maybe there is networks, XXXX. in would what Do how obviously attribute thanks just of you the networks. any versus growth, quarter widened the to but the slides growth been the to the I’m or of during omicron? guys, not convergence you. volume of just you perhaps be merchant a some Do if FIS where the trying calibrated similar, that the outlined go just wanted taking level have in volume quite is actually quarter. Morning I to to in all and should think for there growth back you said, omicron? Thank

Woody Woodall

it was think Yes, I omicron-related. definitely

out you comes to I XX% look segment to the the at our the it the clearly U.K. impacts. think revenue and or of the to merchant so in as our U.K. and dropped compared of it’s from others potentially, you’re obviously U.K. very clear exposure seeing so zero December,

the We comes as like around in and some of to saw but started a definitely back little we obviously and so certainly feel volumes cases in some come reduce As anticipate omicron-related. back well, bit volumes to it first related. we guide as the reopening U.K. we for come particularly of on it having it’s in January, quarter, back, our that impact the see there, improvement there it’s omicron was

Jason Kupferberg

is just the long think like Then - there the in segment but market? SMB merchant be ecomm add. A revenue this more I’ll takes understood. overall don’t or to Gary on needle do then strategy the you and sounds growth over implemented execute a once move Stephanie you strategy let on so, formal how start - quarter Norcross out I will to the follow-up announcements the next Okay, Why and start it

As in the the growing double see merchant for business we’re guiding digits this we low coming really year. merchant business,

If Stephanie we to that to future in look greater ecommerce to so in, it’s we in the end going move really that’s merchant grew very are but this this our very we on I’ll to important actually that. at tailwind This market acceleration short acquisition into and COVID, enterprise where let we prior XX% talked is business traditionally think strategic the strong this us, new the is a based add very market. on a this in so about for business. calls, prior why low is that be into than do think for term to be expansion not XXXX level. certainly historically at at We substantial ecomm travel got we’ve touted given exposure growing you going our airlines, minus

Stephanie Ferris

Gary to that. think the answer nailed I

obviously haven’t in as we’re The best-in-class, at before, capabilities segment this into the market segments that a we full us the to other bring and very we the about and starts and able thing would one of set and access banking It we being--you think also do--we’re really is ecommerce know, look that. markets to capital embedded as we strategic. it’s the about been enables finance to of customer excited and being I value, say very merchant unlock

we ecommerce finance a but take those so going is bit us time, already as both for have, it. accessing asset really that’s point, the that deliver embedded granted, us Now strategic Gary’s really starting the to we’re of from really segment well as capabilities to about excited to

Jason Kupferberg

the thank comments. All you well for right,

Operator

Thank you.

ahead. Davis next Please with will John from question Raymond James. Our come go

John Davis

good Hey, guys. morning

First, do touch basis XXX Also, outside is and for about guide that basically X% a stimulus contracts banking. anything CPI in that breakout headwinds of in fees, so first, is points the there banking just segment, are over called the inflators just basis you any XXX growth term that Woody, each? or that points have - you wanted in maybe number? on to the the out

Woody Woodall

do lending Paycheck in growth a on the we Yes, roll we out basis capabilities of terms where within about the really of in expectation that - terms the of we higher XX shape year. how over about term roll with term kick are too, the so is those little contracts how CPI points on of this in the - as rolled and that year our and over is basis back Program annualization, We XXX in last will course lower points, fees the think fees contracts the CPI. think have impact year. the the The stimulus they year It’s primarily expect come Protection of just our half roughly contracts year.

John Davis

once you through guess growth. about XX% you we bit do to flow cash that I the follow-up XX% Okay, just flow, how talked forward, rolls growth, than the quick EPS going cash growth to think thanks. which conversion the on when is free growth D&A? expect to catch cash a free a faster and but capex XX% do Then little flow EPS

Woody Woodall

a it’s John. great point, Yes,

heavier We’ve of several highlight to but X% X% the I this years. We’re towards to about We the it many capex than well. rolling trying lower see world capex could anticipate for actually spending been year, end that in past the it of as outlook.

growth, now. right now up that of D&A cash into growth teens seeing level. it direction right one As we that, that few years and where of in last XX% seeing capex expanding normalize and per catching several see you’ve out, outpace it D&A we you’ll where see free convert flow cash it higher were we’re flow is share next the will but headwinds the The other the then the then go potentially for the EPS earnings at for you’re is seen years, terms

John Davis

guys. it. appreciate Okay, Thanks

Operator

you. Thank

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

Darrin Peller

guys. Thanks

you you segment banking medium on markets but of remind term in the magnitude tell Gary, growing driving smaller the of talk ancillary cap to can us terms bigger that’s I do has to - banking? just banking we absolutely just about and to X% think chain banks, if can through just time. term, growth because highlighted for from capabilities, Woody the increasing our A right mind. Darrin, coming look to core because and but best - a you great a the completing, free X% the trying a Yes as the the in so just down, work in large lot knew and flow range, at in enough you us yourself we’ve touch have up cash if there you now into have quick components point is gears for a it’s deployed a scenario. of are is spend you that X% The ground similar asset our that this Digital easily When moving the various mean, long are up One pool, and hundreds of you from what’s institutions right, with at the we maybe our shift from too. process. beyond I of offer banking. class value it Connect, of cloud-native have if all a think to - X% given segment answer for I we’re experience, Code large get got truly that and know build, our Let’s really is merchant, been but bigger cloud-based in minute. it we in some programs were Digital think program both question. But an look There’s cap that From lot in to Norcross which And near then, on size, have assets look and headwinds is of now? standpoint the these just we’re couple and going call of this companies of to look terms One offering your been platform. and in markets that at sustainable in - a see medium Gary hundreds strong, you these to what get digital products, we growers term go along omni-channel

through When look deploying our etc. were an through you similar and application capabilities going and a through solution we ownership software cloud solid capabilities, beat some our model With deployment, wins. into advanced being very banking we we’re our story. that you have one-to-many had in competitors even of at can markets, applications and in availability, at after our look beat to brought of and as us today, one we announce they’re back key years we entering further leading cloud. everybody endorses service that office-type stack on no at those think said, the together three-plus stack, that modern outcomes that end-to-end modernized leader space, us services, delivery look our You private ability platform have of in it’s most to our market a the the some start into leaning as strategy just started total our we well our When the capital and public stack. as cloud, one can no told ago. application We on and driving Today, cost to that our burst we

revenue in to You market continues over continued fee only the license for percentage just look both we’re our grow-over very have we’ve XXXX, number due term really markets very the telling years, fees fee volatility of tied headwind capital years what license of of those we to been in in we have now in have so recurring decline, through market nature look XXXX, has very fees. resilient what our looking and a well that exceptionally firms strong the this saw the still the headwind continue. to seeing but businesses at due it. highly that our very--these is two equity and which consistently going institutions is outsourced been very, of XXXX, going to a The now feel great this coming perform acceleration timing be very we The these to we all do of a you at but to years, on license these private grow than is a that that revenue business, all has growing a and are through feel strong, they’re investment the large year Woody fashion. about talked strategy, can been drive to going that easily to inflection businesses, financial to business about two continued modernization need We this given and grow-overs point banking X% houses, little businesses greater in good the about, in

Darrin Peller

that’s helpful, Gary. right, All

narrowing so free given--you focus and if and you you’re considering bid-ask in Just on put the And can capacity, actually really side, your the assets? a cash everything obviously buybacks growth capital some even valuations towards these direction, capital, the either the you believe spreads now, e-companies, know, you in the on of liquidity strategy fintech private on market’s smaller right that have the there’s guys. these or the stock probably even quick saying, and allocation. for what some growth can M&A, move given The your thoughts of obviously follow-up of when way there, are the should of so M&A? Thanks you trading of the just us remind a debt some around, the

Woody Woodall

a had debt to to debt that three we it’s we going our interesting of going M&A. rating things is to us in years The down back a extraordinarily At interest call rising I below our environment, in put couple One, buy turns. on credit so do about to that pay first. Darrin, In there. going think midyear talked pandemic rate - Yes either this three it or we’re turns, look we’re terms back we’ll probably focus additional reducing year, shares time, of behind two below point important.

purposes. for talk default M&A, look about, at would buybacks we share you’ve As consistently but rather us we do heard

ago, got once in or to would role thing will only a for balance - from interesting, it be to of pretty I bring We’ve when here. to very important, that drive always hitting an there’s now, Darrin, there, when we chessboard obviously look bit it continue service to they find so aperture talked say six add capabilities our wide strong our some return’s consolidate accelerate are into some product might of also able more scope marketplace, the an given gets M&A, our kind ways differently pull-backs serve, on we’ll about into is, or sheet out that our reloaded, A are and valuations. that the a it, look comes have new it, but did, our - get assets right, can of assets look where - a in look we a valuations Norcross Woody’s and is lot point important, Financials to that investment play growth we to occur adjacency. other at aperture other that culture’s existing M&A break strategic market of that distribution us got right things resets shareholders a continue as or to interesting for we’ve the we’ve to Yes make we these channel. open, an business. maybe we important for look that Gary Your to months at matter, the we than

gone looking FIS. do not been We’re a to turnaround tremendous that. very and at transformation we’ve We’ve about deals through clear

strong to You of our lens merchant acquiring and so look end become you we’ll at really market, continue even can platform the going on the with it’s effort to us, accelerate us, capabilities businesses these when can year performance, really that at go was across and be that starting look growth year Worldpay to levels. you Last so about from so things this any side, modernization just new operating record current Access is behind our M&A. our right, evaluate one a growth on all for

Darrin Peller

Thanks guys.

Operator

you. Thank

from will go Ramsey ahead. El-Assal come Please Our Barclays. next with question

Ramsey El-Assal

due could continue rest Hi, expect this so taking wondering much expectations travel, would trend other in on ask the appreciated. question and for commentary year, travel ’XX you any to for I was the if guess to in and whether revenue ’XX, but volumes in the trend and of be expansion the morning. factors, fiscal mix-related primarily should see my yield I about we thanks I recovery revenue yield to

Woody Woodall

thanks to Yes, anticipate Ramsey. Yes, we revenue improve. continue to yields

revenue yields to compare were a quarter, you’re third minus-X quarter to see that. plus-X you the starting so XXXX, in As and fourth the a in

the - an really then impacted XXXX really minus-XX improvement, highlight that, and and then know, step minus-XX back trying fourth we a year-over-year you the You year to those and a course of so but over the the come you back by to versus saw yields. in and in compare bit and at to looking continue minus-XX, to a quarter, we omicron, omicron saw little XXXX forward XXXX, obviously but expect a for sequential of yields you saw minus-X,

Ramsey El-Assal

work from right. the it, componentized organizationally, follow-up to internal ask of and about What I to of type solutions all be integration me, that what done cross-segment wanted type Slide technologically or A you take on that Got execute sales. repurchase needs X really is to strategy? in whether order if Gary Also, Norcross A - so could comment me share guide. in let the done cross-segment be you to on contemplated needs EPS Yes, discussed. the

guide that and and so that from drive far exceeded What of our our need what across through to significant the needs cross-sales cross-sales, opened the done exceeded that we a entire we’ve done cross-sell be investment these in platforms standpoint through is opportunity product just opportunities base, this to some is componentization. continue exposure modernization and to got thought so team’s than million job original more we we the what think driving I of an up we excellent Worldpay we in would $XXX has get. acquisition

be We’re going this year, at on and to programs continue predominantly then that those time. will through that to completed work

our this stuff of compute us now groundwork We’ve of lot through of seen the technical the of some cloud, so got in the in cloud. aspects that lay XX% the done a over we’ve You’ve are done.

pull in motion. Historically, have segment. the very starting together within are with nature a sales our we the go-to-market they’ve enterprise enterprise organization our different organizationally nature, been to been in Now, way while in

most of generated. first and bringing We’re base sales starting our FIS. where that entire top by that’s engage want company, full we’re revenue those XXX team teams enterprise in our where where focusing our - first drive the the and on to doing now to lean is base they’re together across lifting client that we’re nature We of to really and in onto capability sales up bring that they’re

up know, just to little all that We’ve XXX That’s top our on executing really that. started clients our with success with customer segment over and the XX got today lot are first past, this sales a exponentially We’ve of get going three there’s across lifted a grow change. from product over--you level. a in level had the to of first the the level segments. where then this little to We’re we’ve

targets We’re our enterprise could doing growth rate this up accelerate level, to the really with same it thing opportunity. now excited from the are. so lifting where alone X% think about X% We to our we’re this current

We’re our on going to to this. to date continue up investors keep certainly

what week excited future the it last through rolled change out about the sales as and made our kickoff really so Just here. meetings, holds we

Woody Woodall

year, have answer and half the modeled part the To of share repurchase, Ramsey. second and $X that’s the billion in in mostly anticipate question do back share your around about we of buyback,

Ramsey El-Assal

Thank very it. you much, appreciate

Operator

you. Thank

come Koning ahead. Baird. with from Please Our next will question Dave go

Dave Koning

way, XXX%, permanently economy, think and shifted I gets XX%, back normal say to have any Yes, mix normal merchant back think the a a XX% this year question year yield just you to if it volume have hey because of reason of guys. yield yield is back get or let’s merchant we a could has to Is from Thank of the that do XXXX. XX% ask mix so, extra if yield, like plus-XX% could you to business? could there you. about Maybe you another normal

Woody Woodall

verticals about said, talked see quarters, travel we the continue expect occurs we to certainly it the recovery That back of Norcross last for in the the way, to about, Yes, we’re seeing seeing levels. decline do yielding not as yields at course increase - in XXX% yields more difference A benefit other as But Simply verticals, levels. high don’t XXX% as higher anticipate as they do year, right over back We actually. you’re coming but the being particularly yielding to to as XXXX. pandemic. we’ve we be to we’ve normalized net return several anticipate stated, due - Gary that in talked those would a Dave, pre-pandemic the invert to of no

anything so As our impacting viewpoint. back they zero pandemic, come that after yields evidence the yields we’re the return, from of seeing

Dave Koning

or to XX% future? growth year recovery-type to can this in the despite guiding get and what’s there, thank I back future. mid-teens Then the--you just I remember think you as I you know, a through when follow-up, assumed growth you, and if EPS Got know announced the revenue you’re to think growth. revenue good delta I pretty Worldpay, the XX% right, Maybe we back mid-teens you. in better

Woody Woodall

think can. we I Yes,

When over the labor things mid-teens about of level this of the we term, in couple costs, anticipated you’ll bit next in the headwind some headwind, the a of points see we guide. again think normalize and of headwind got then basis and think basis labor some EPS. a few that of a growth seeing together expansion point costs you’ve here. in bit being of don’t that you’re originally, think years, short D&A in to we XXX as we that little terms a I I got that are XX XXX of pulled a yields margin that We’ve

Dave Koning

thanks you, Got guys.

Operator

Thank you.

Please Our Credit next ahead. Suisse. with question will come from Timothy Chiodo go

Timothy Chiodo

Good Thanks this Great, morning. the question. on finance thank you. It’s embedded for taking opportunity.

update the give large a you’re as and I business a on maybe working through a starting that and pretty with new - software a software SMB embedded talk with a and number just little business, Maybe about lot number it’s companies addressing integrated good follow-up, platforms your could with through already could expansion existing you finance the absolute bit point. that payments an of partners talked You opportunity and for about book traditional you this of us into the ecommerce. understand

Stephanie Ferris

Yes, it’s chat. to great happy question, a

Our to automated ISV they we that business, to there. because on-boarding started us that we have in we you works you’re a needed underwriting order since that partners they to base existing embedded capabilities enable for our and really capabilities as can best-in-class been you us thousand to what our ISV relevant been that do it’s finance, for XXXX, vertical existing don’t so and about is as brings In acquiring the in so and the We’ve Payrix one-off, automated, it underwriting that’s out exactly partnered if so a existing capability us, bring terms acquisition them, those to using payment integrated with they’ve do automated specific extent it’s right, really capabilities. an offer capability base. now to boarding to you know, because But opportunity is go through of you. this them, our

the pivot acquisition our to been access strategically of dating always platforms, starts has know, strategy software-led, us, strategy The Mercury. and our current strategy SMB embedded software-led but now to capabilities. ecommerce our you way really As finance continuing that but we for bought software-led back within our term getting capabilities is - has us our to Payrix been when

have terms both but well, ISV in our to existing including really go embedded out excited to of capabilities access serve being offer can’t as also about that base platforms didn’t not it. capabilities, pretty able about We’re the sit payments back also we the because in C&P today it, and finance, just to excited we but these market so

Timothy Chiodo

you. thank Great,

Operator

you. Thank

MoffettNathanson. Our Lisa ahead. with come next Ellis will Please question go from

Lisa Ellis

up Hi, around Authmax thanks the announcement Preferred. you I wanted to taking on made my for question. follow

this. for in we Gary customer what I capability, your all connect think ability or merchants a a drive our it’s but together end should either the capability like At existing product TAM applicable Stephanie of issuer you maybe specifically--not solution. the base great offer type side and the going specifically, FIS? and to start solution. acquisition, bit You for this and on about let question. acquiring is Can - a to this Norcross that time to day, we’ll this recall, opportunity really the our merchants, good are from this Worldpay the of dimension highlighted what side processing the at it’s to, portion had the Yes add of could I’ll that’s fantastic Lisa, of the ecommerce just how the is A differentiated of

pointed Netflix, can very come There in this getting really We here lot a put out, that companies the has successfully together. was you The of very, area this for successfully that rate, QX, when was as to very decline see growth. As and late that decline together. manage strong two we unique an as rates, drive thought of we to a was you’re important team of to this it. and these being highlighted make in it’s adopter very together. data there as in some the We significant able we ecommerce possible really that as early in world, launched especially in streams a and tie work on-boarding opportunity order improvement to all together

merchants, early FIS on all into differentiate merchant our see ecomm for another push we’ll way lot but as I a of going strength our down demand forward. from will the capabilities think us of it to just of

Just launched just QX future in late excited about so it. coming it the and of online,

Stephanie Ferris

we but I acquiring think more for our ecommerce or keep and and SMBs really together I is that because, being and It powerful. transaction beating revenue I also not marketplaces marketplace on it’s Yes, platforms think any business, SMBs really the their but serve really said, relevant revenue The think--you Gary power said, businesses’ data driving global about ecommerce help able they’re global for having also authorize as end really base for it’s that think platforms, those drives relevant, is so very end this more Gary who’s is to software-as-a-service out as relevant know, relevant to platform drum for them. it only to revenue, deliver transactions really our to so or issuing customers. clients. trying a or very of also really there I to

Lisa Ellis

area my what players FIS to be then strategy of Slide some market? ecomm right-hand that to I highlight is--you on and Can lot you’re this side a differently and XX. you FIS to the in historically and other space doing is be players that not really the TAM end has just highlighted more, on the you where what’s coming I here Thank small of differentiate maybe going a bottom on space an Payfax in the relative Okay, know focus. of competitive very SMBs the pretty of you. elaborate new to like you guess, with huge vertical-specific, in up at going SMB attractive was follow-up This know, a opportunity, the been

Stephanie Ferris

Yes, going so software. do be really embedded it’s that all believe is payments to in about--we

a do a to do payments capability Software we getting giving how and that, SMB really and through ultimately see payment bought the so be you’re or marketplace, which their strategies. our are for platforms software-as-a-service leading starting a the enabling Payrix software-led then those consumed, but the vertical-specific we’re is with through Lisa, is SMBs software whether platform strategy term. is being going why we’re around we enable We optionality direct, asset. ourselves long to around piece, see some platforms,

haven’t been service, the those see that and players service. all stand the niche the up in to We for capabilities us. of providing answer software. think player coming these of that’s payments right you perfectly really as-a-service as software-as-a-service payments see us companies, to lot midterm, all and kinds We services. risk - can answer a as start positioned to a as are types embedded for of of service, deliver right checkout we finance think to a those a platforms As buyer for we the don’t We you and a be know, there’s

starting term back service vendors that in helps. these just which have see many that solution, Hopefully but a their complexity with we and what is in-house, and We’re don’t have that we payments wanting banking as office. platforms to long much

Lisa Ellis

you. Thank helpful. super Yes,

Operator

will for and last have go we come you, with Please ahead. Morgan. That Thank do Tien-Tsin JP time question. Huang one from

Tien-Tsin Huang

follow congrats up much. what Lisa’s so happy the here title the morning. and I’m wanted - on and said Steph Good for thanks by there, just on you and question Hey, the way, Tim you. change, and to I

there Just strategy how transition on front payments back change, co-exist? the embedded here. describing how versus just two I’m the those revenue, to for book understand it, book now that what the plays thinking and and integrated trying the of do just implications you’re out about are

Stephanie Ferris

Yes, great question, Tien-Tsin.

I integrated. think started world the with

by don’t competitive, but and an capability, software think evolved embedded, even, so seeing available, much I platforms. now embedded payments and either. well I integrated evolution, embedded I the market you’re fintech. pushed an solution of think do The as world next-gen the bit down to the moved as we which be you’re more with it’s payments became itself will and need converge has is is world on then always envision long think a I very embedded lives embedded fintech. those

the think us think nice I model the want. about any acquisition give Payrix for enables us to it is people

Remember, we’re to keep all that, we’re for pretty you and lot have at think monitoring, can solution KYC, offer, also with a and around along other present and back capabilities solution back a that we and know, we’re and happy offer is integrated book but model. we We have we have that looking a-la-carte capabilities have for. a with now on these close out really can kinds We services the platforms on-boarding capabilities. we embedded their good have payments risk be it excited excited now Payfax solution do there and because pretty in might model. financials book. that out the the significant embedded We beyond underwriting, credit both embedded as that, that of book like of we of these in opportunity people Some front that ISVs, eye card do model, about a think about pretty been

Tien-Tsin Huang

here, know I ask it’s to fits appreciate wanted on solution I I margins, Got everyone, we’re not the so one at and there’s I one but don’t full that. mind. spectrum think hour if No, you to good you. have that an

room know, You’re push bit like the invest guiding to you of as the what back we the towards implementing good. bookings than platform which as quite more a sounds book, have the enough make well were some expected. side, little and these--you Do expansion had for

you. it’s of balance margin Thank great always try versus expansion to Norcross margin Just curious We A Yes, a versus expansion. out around integrating balance investment. Gary normal the question. the playing investing, - thanks Tien-Tsin,

we capex outlined quite maybe not as of in has the we some capex, revenue those haven’t resourced enough that capital have the of synergies resource our Stephanie’s and expansion, about of about higher capabilities beyond. to to back as and drive we help call about able drive and we’re capabilities out even a year, that so When on light feel still talking good to money having of focused been in past, synergies the able well. as to growth and the as talked through push X% towards these been investment. invest operating will that of deliver continue that allows being We within we and business level margin and to ’XX still in we’ve labor so bit but invest high to enough being us build leverage costs The revenue pulled ’XX to properly feel well, it about good good this having think it

Tien-Tsin Huang

you. thank Great,

Operator

Gary would closing answer the Norcross and participating any thank for session. in like call now question you to I turn remarks. back Ladies over gentlemen, today’s and Mr. to for

Gary Norcross

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

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

Operator

Ladies call. for participation. and conference Thank gentlemen, today’s this concludes you your

You may disconnect. now

Fidelity National Information Services (FIS) 15 Feb 222021 Q4 Earnings call transcript