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Edited Transcript of FIS earnings conference call or presentation 6-Aug-19 12:30pm GMT

Q2 2019 Fidelity National Information Services Inc Earnings Call

JACKSONVILLE Aug 9, 2019 (Thomson StreetEvents) -- Edited Transcript of Fidelity National Information Services Inc earnings conference call or presentation Tuesday, August 6, 2019 at 12:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Gary Adam Norcross

Fidelity National Information Services, Inc. - Executive Chairman, President & CEO

* James W. Woodall

Fidelity National Information Services, Inc. - Corporate EVP & CFO

* Nathan A. Rozof

Fidelity National Information Services, Inc. - EVP

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Conference Call Participants

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* Ashwin Vassant Shirvaikar

Citigroup Inc, Research Division - Director and U.S. Computer and Business Services Analyst

* Brett Richard Huff

Stephens Inc., Research Division - MD

* Daniel Rock Perlin

RBC Capital Markets, LLC, Research Division - Analyst

* Darrin David Peller

Wolfe Research, LLC - MD & Senior Analyst

* David John Koning

Robert W. Baird & Co. Incorporated, Research Division - Associate Director of Research and Senior Research Analyst

* David Mark Togut

Evercore ISI Institutional Equities, Research Division - Senior MD

* Georgios Mihalos

Cowen and Company, LLC, Research Division - MD & Senior Research Analyst

* James Edward Schneider

Goldman Sachs Group Inc., Research Division - VP

* Jason Alan Kupferberg

BofA Merrill Lynch, Research Division - MD in US Equity Research & Senior Analyst

* Lisa Ann Dejong Ellis

MoffettNathanson LLC - Partner

* Ramsey Clark El-Assal

Barclays Bank PLC, Research Division - Research Analyst

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Presentation

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Operator [1]

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Ladies and gentlemen, thank you for standing by. Welcome to FIS Second Quarter 2019 Earnings Call. (Operator Instructions) Also, as a reminder, today's teleconference is being recorded.

And at this time, I'll turn the call over to your host, Head of Investor Relations, Mr. Nate Rozof. Please go ahead, sir.

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Nathan A. Rozof, Fidelity National Information Services, Inc. - EVP [2]

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Thank you. Good morning, and thank you for joining us today for the FIS Second Quarter 2019 Earnings Conference Call. This conference call is being webcasted. Today's webcast, news release and corresponding presentation are all available at our website at fisglobal.com.

Turning to Slide 2. Today's remarks will contain forward-looking statements. These statements are subject to risks and uncertainties as described in the press release and other filings with the SEC. The company undertakes no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise, except as required by law. Please refer to the safe harbor language.

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

During today's call, Gary Norcross, our Chairman, President and CEO, will discuss our second quarter 2019 highlights and the successful closing of the Worldpay acquisition. Woody Woodall, our CFO, will review FIS' and Worldpay's second quarter financial results and provide guidance for the remainder of the year.

With that, I'll turn the call to Gary who will begin his comments on Slide 3. Gary?

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Gary Adam Norcross, Fidelity National Information Services, Inc. - Executive Chairman, President & CEO [3]

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Thank you, Nate. Good morning, and welcome to today's call. I'm very pleased to announce that FIS and Worldpay have officially combined. We now begin the next exciting chapter in our pivot to growth strategy. I'm especially excited to welcome the Worldpay team as well as their clients and investors into the FIS family. Charles, Mark, Stephanie and key leaders from Worldpay are staying with the company and joining our team to continue driving growth in the merchant business and other areas of FIS. I couldn't be more optimistic about the future of this company and what we will accomplish together.

Clients and partners from both companies have shared how excited they are about the opportunities that the new FIS will bring to the table with our expanded capabilities. As a leading provider of technology for merchants, financial institutions and capital markets across the globe, this gives us the unique ability to create seamless end-to-end experiences. Together, we will advance the way the world pays, banks and invests, positioning us to power the digital economy. This combination redefines our road map to accelerating organic growth.

Both FIS and Worldpay had a strong second quarter, providing us confidence that our markets remain robust and that our teams remain focused on execution. FIS has successfully generated 6 consecutive quarters of exceptionally strong sales. In the second quarter, sales were up more than 30%, increasing our backlog by 7% organically, giving us clear line of sight to continued accelerating revenue growth.

Wins in the quarter continued to amplify client demand for our solutions to improve the digital experience for their customers and drive operational efficiencies. For example, in our IFS segment, a large regional bank with more than $35 billion in assets expanded its relationship with us through a significant new multiyear agreement for our Digital One item processing and capture solutions to gain new efficiencies, reduce costs and improve the digital experience for its customers. This move toward outsourced solutions also propelled a large U.S.-based insurance company to select our hosted enterprise platform to streamline key back office processes and improve the customer support experience.

Additionally, in our GFS segment, a regional arm of a top 5 U.K. institution signed a long-term agreement for an FIS core banking solution in support of the bank's goals to better serve its German-speaking markets post-Brexit. Also, a large asset management firm with more than $60 billion in assets under management chose to partner with FIS to gain cost and servicing efficiencies within its transfer agency operations.

Similarly, Worldpay has maintained a strong growth trajectory as the business is ideally positioned in secular high-growth payments markets, including global e-commerce and integrated payments. Within global e-commerce, Worldpay continued its exciting sales momentum by adding 14 new cross-sell wins during the quarter, bringing the total to 56. These wins show that Worldpay's global reach and tailored solutions are clearly resonating with merchants.

On day 1 of the FIS-Worldpay combination, FIS organic growth rate increases from 4% to 6% on a pro forma annualized basis. The combination also creates significant revenue synergy opportunities of $500 million. We expect to begin realizing revenue synergies in the coming months, accelerating organic revenue growth trends towards 7% next year and then into the 7% to 9% range in the future. In addition, we will continue to invest in new value-creating opportunities to reinforce and enhance our growth by harnessing the power of our combined cash flow.

Later in the call, I'll provide further perspective on our transformation into a unique global leader within commerce and financial services and the differentiated value proposition that we'll bring to our clients.

But first, Woody will take us through our second quarter financial results. Woody?

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James W. Woodall, Fidelity National Information Services, Inc. - Corporate EVP & CFO [4]

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Thanks, Gary. I'd also like to express my enthusiasm for closing the transaction and my sincere thanks to our teams for making this a success. We have been hard at work since the transaction announcement to provide the investment community with a complete package of information today in order to paint a clear picture of how we see FIS going forward. This includes presenting both companies' outstanding second quarter results as well as quarterly historical pro forma combined financials, combined company guidance for the rest of the year, plus initial thoughts for 2020. It's been a heavy lift, but our teams have done a great job.

Turning to FIS' consolidated results on Slide 4. In the second quarter, revenue increased 5% on an organic basis. Our EBITDA margins expanded 170 basis points to 37.6%, and adjusted EPS grew 9% to $1.78 per share.

Our top line growth continues the acceleration we saw in the first quarter and reflects the strong sales momentum that Gary mentioned. Our healthy margin expansion was enhanced by our data center consolidation program and the ongoing benefits of prior year divestitures. We are very pleased with the first half of the year, and we're excited for the future of FIS.

Moving to Slide 5. Our IFS segment continues to accelerate and increased 6% on an organic basis as EBITDA margins expanded by 150 basis points. IFS' strong top line performance was broad-based, and our banking and wealth, payments and corporate and digital businesses each grew 6% during the quarter.

GFS also had a very strong quarter with organic revenue growth accelerating to 4% and EBITDA margins expanding by 120 basis points. Within the GFS division, our institutional and wholesale business returned to growth, increasing by 3% on an organic basis. We anticipate this business will continue to experience improving trends in the second half of the year.

It was another impressive quarter for Worldpay, as you can see on Slide 6. Revenue increased 9% when excluding crypto and foreign currency headwinds. Adjusted EBITDA margin expanded by 330 basis points and adjusted EPS increased by 19% to $1.24 per share.

Fueling Worldpay's strong top line, its technology solution segment continues to deliver exceptional upper-teens growth, increasing by 19% when excluding crypto and foreign currency headwinds.

The Merchant Solutions and issuer solutions segments each grew 2% on a constant currency basis, in line with expectations.

Worldpay achieved $50 million in cost synergies during the quarter and completed its U.S. platform migration, keeping it on track to successfully complete its $250 million annualized cost synergy program by the end of the year.

These results reflect continued strong business momentum, providing a solid base to begin the second half of the year.

I'll now turn the call back over to Gary to discuss our go-forward operating model, beginning on Slide 7.

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Gary Adam Norcross, Fidelity National Information Services, Inc. - Executive Chairman, President & CEO [5]

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Thanks, Woody. As we bring our 2 great companies together, we will structure our organization into 3 operating segments. This new structure reflects our distinct but complementary global businesses and the integration of Worldpay's talent and technologies. Going forward, our segments will be Merchant Solutions, Banking Solutions and Capital Market Solutions.

Starting with Merchant Solutions. FIS will go to market using the Worldpay brand. The segment will be led by Mark Heimbouch, Worldpay's former President and Chief Operating Officer, who will continue to build its leading market position in global e-commerce and integrated payments.

Our Banking Solutions segment will be led by Bruce Lowthers, who previously led IFS. In his expanded role, Bruce will continue to drive accelerating growth across our global client base.

Our third segment will provide best-in-class solutions across all facets of the capital markets industry. Martin Boyd will lead this segment, serving buy-side and sell-side firms as well as corporations and insurance companies.

The common denominator across all 3 of these segments is digital enablement across global markets. All 3 serve the largest multinational clients with leading solutions at global scale. They also bring innovative capabilities to help our small and midsize clients to be agile, resilient and to reach their full potential. Finally, all 3 are uniquely positioned in secular, high-growth markets.

Turning to Slide 8. We will go to market in all 3 of our segments with a powerful client value proposition. For over 50 years, FIS has driven growth for clients around the world by creating tomorrow's technology, solutions and services to modernize today's business and customer experiences. We do more than develop technology. We provide access to innovation by continuously investing to create innovative, secure, enterprise-grade solutions that position our clients and their customers for success today and in the future. With our data and insights, we create new intersections between markets and technology that solve for our client's future while delivering experiences that are more simple, seamless and secure to advance the way the world pays, banks and invests. Using our world-class scale, we enable our clients with global reach at the local level. With our connections across the global financial ecosystem, we provide our clients access to new enterprise-grade solutions that enable them to run their businesses more efficiently, grow more effectively and enter into new markets with greater speed and lower cost of entry. Delivering innovation and insight at this global scale puts us at the heart of commerce in the financial world. This is why I'm so confident in our ability to build on the strong foundations already laid at FIS and Worldpay to accelerate our revenue growth even further together.

I will now turn the call back to Woody to round out our financial discussion before he opens the call to questions. Woody?

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James W. Woodall, Fidelity National Information Services, Inc. - Corporate EVP & CFO [6]

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Thanks, Gary. Moving to Slide 9. We have a compelling financial profile, which is further strengthened by the Worldpay acquisition. Our high-quality revenue is supported by long-term contracts for mission-critical solutions. This creates recurring revenue that's predictable and resilient. The Worldpay transaction enhances these attributes by providing meaningful exposure to secular, high-growth markets like e-commerce and integrated payments. Our world-class scale creates operating leverage and drives substantial margin expansion. We deliver solutions using a one-to-many SaaS model and aggressively focus on operational excellence.

One of the attractive components of this transaction is that the Worldpay team has the same focus, and together, we will use this operating mindset to drive significant cost synergies.

Finally, FIS is known as a strong cash flow generator, which will be significantly enhanced going forward. As we achieve our integration targets, free cash flow will almost double over the next 3 years, dramatically expanding our capacity to invest for future growth. These attractive qualities, combined with our constant focus on creating shareholder value, will create substantial earnings growth.

Turning to Slide 10. Consistent with past practices, we have taken advantage of the past 4 months to do detailed integration planning. Through this planning, we've identified opportunities to accelerate our time line to achieving synergies. We now have line of sight to exit 2020 at $150 million of annual run rate revenue synergies, $50 million more than our original expectations, making us even more confident in our ability to generate a total of $500 million in annual run rate synergies by the end of 2022. As we achieve these synergies, we expect our organic growth rate to accelerate from approximately 6% on a pro forma annualized basis in 2019 towards 7% in 2020 and higher in the future, as Gary mentioned.

We will initially generate revenue synergies by driving additional volumes across our payment networks, optimizing our loyalty and fraud solutions and enhancing Worldpay's issuer business. All of these opportunities are supported by solutions that are in market today with a demonstrated value proposition for our clients. As we move further out, longer-term opportunities include increasing authorization rates for our e-commerce platform, leveraging our global presence to expand market share in emerging geographies and utilizing our global bank channel for merchant referrals.

Turning to Slide 11. Through integration planning, we validated the time line that we expect to deliver cost synergies, including increasing our total expected expense savings to more than $500 million on an annual run rate basis by the end of 2022. This includes more than $100 million in net interest expense savings annually due to our successful refinancing of Worldpay's debt. We will quickly begin executing our operational synergies by achieving operational efficiencies, technology optimization and corporate alignment now that the transaction is closed and expect to exit 2020 at a $200 million annual run rate. This annual run rate will step up to $300 million and $400 million by the end of 2021 and 2022, respectively. Consistent with past transactions, we look forward to updating you on our progress for both revenue and cost synergies in the upcoming quarters.

Turning to Slide 12. Our capital allocation strategy remains consistent. This quarter, we generated over $400 million of free cash flow, representing a 20% conversion to revenue and 18% growth year-over-year. Our current leverage is approximately 3.5x, and we are committed to rapidly delever to approximately 2.7x in 12 to 18 months. Even as we delever, the strength of our balance sheet gives us the flexibility to consider tuck-in acquisitions to further enhance growth. We will also continue to maintain and grow our current dividend program, which returned over $100 million to shareholders this quarter. Finally, we'll continue to use our strong free cash flow to invest in industry-leading technology initiatives to drive sustained organic growth. With the strength of our balance sheet and the power of our free cash flow, we can do each of these things while still hitting our leverage targets.

Turning to Slide 13. We are presenting third and fourth quarter 2019 guidance for the combined company, which includes Worldpay's contribution to our results beginning on August 1. Our revenue guidance supports 6% organic growth for the full year on an adjusted combined basis, and it supports our conviction in approaching 7% organic revenue growth in 2020. Our EBITDA guidance reflects ongoing margin expansion at both companies, primarily driven by our data center consolidation program and Worldpay's $250 million cost synergy program. Going forward, we will continue to expense stock compensation, which Worldpay has previously added back. This creates approximately $70 million in stock compensation within our guidance that would not have been incorporated into prior expectations for Worldpay.

We expect to incur approximately $30 million in stock compensation expense for Worldpay employees during the third quarter and approximately $40 million during the fourth quarter, which is factored into this guidance.

I'm pleased to report that following constructive dialogue with the Securities and Exchange Commission, we will resume our prior method of reporting adjusted EPS, which excludes amortization of purchased accounting intangibles only.

For the third quarter, we anticipate adjusted EPS of $1.33 to $1.37 per share and $1.47 to $1.53 per share in the fourth quarter. We've provided a reconciliation of our EPS guidance between both methods in our earnings release and the appendix of this presentation to ensure transparency.

Along with the additional assumptions provided on the slide, I would also like to message that we believe our full year weighted average shares outstanding will be approximately 453 million to 455 million.

While we provide formal 2020 guidance on our Q4 call, I wanted to give a quick recap on some of our 2020 commentary. Given the strong trends within our business and our confidence to exit 2020 at $150 million of annual run rate revenue synergies, we expect our organic revenue growth rate to accelerate from 6% towards 7% in 2020. Further, we expect to exit 2020 at $200 million of annual run rate cost synergies, in addition to generating over $100 million in net interest expense savings. Given our success to date with this integration, we now expect the Worldpay acquisition to be accretive in 2020.

With that, I'll turn the call over for Q&A. Operator, you may open the line.

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Questions and Answers

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Operator [1]

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(Operator Instructions) And we'll take our first question from Dave Koning with Baird.

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David John Koning, Robert W. Baird & Co. Incorporated, Research Division - Associate Director of Research and Senior Research Analyst [2]

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Yes. Guys, congrats on all the progress.

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Gary Adam Norcross, Fidelity National Information Services, Inc. - Executive Chairman, President & CEO [3]

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Thanks, Dave.

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James W. Woodall, Fidelity National Information Services, Inc. - Corporate EVP & CFO [4]

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Thanks, Dave.

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David John Koning, Robert W. Baird & Co. Incorporated, Research Division - Associate Director of Research and Senior Research Analyst [5]

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Yes. I guess first of all, it's interesting to see the new segment results along merchant banking and capital markets. And I'm wondering, you gave the 10%, 5% and 3% growth for the 3 segments. I know you're expecting acceleration over the next couple of years. Maybe you could talk a little bit about how each of those segments contributes to the acceleration, which ones maybe more than others and how you see those segments growing.

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James W. Woodall, Fidelity National Information Services, Inc. - Corporate EVP & CFO [6]

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Yes. I think you're right. We're looking at the merchant to being kind of a high single, low double-digit growth rate over the next few years. We're looking at banking in the mid-single digits and capital markets to be in the lower single digits. I think we'll see revenue synergies in both banking and in the merchant business driving higher growth over the next few years, but we're very pleased with the acceleration we've seen in both businesses and the momentum both businesses have going into 2020.

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David John Koning, Robert W. Baird & Co. Incorporated, Research Division - Associate Director of Research and Senior Research Analyst [7]

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Okay. Great. And then, I guess on -- originally, I think maybe 18 months ago or 12 months ago, you talked about -- I think it was 2021 being 7% to 7.50%. And now since then, you said that this deal will be accretive to the midpoint of that range, I think, or accretive to at least that range. But now also, you had better results than expected across both companies. You had interest expense going down. I mean are we kind of thinking higher end of that range now?

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James W. Woodall, Fidelity National Information Services, Inc. - Corporate EVP & CFO [8]

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I think what we've really clarified today was that instead of a dilutive deal in 2020, we're looking at an accretive deal in 2020. Hadn't really updated as far as where we're at on 2021, but certainly pleased with progress to date and are certainly pleased with being able to accelerate the revenue synergies earlier.

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David John Koning, Robert W. Baird & Co. Incorporated, Research Division - Associate Director of Research and Senior Research Analyst [9]

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Okay. Great. Lastly, just free cash flow nearly double exiting 2022, what does that mean exactly? Double from what level? Or just -- how do we think of that maybe in dollars or...

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James W. Woodall, Fidelity National Information Services, Inc. - Corporate EVP & CFO [10]

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Yes. If we go back to the announcement day deck, I think you looked at -- we described a 2022 or a post-synergy number of $4 billion to $4.5 billion and are still looking at that number in the out-year, Dave.

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Operator [11]

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Our next question in queue comes from David Togut with Evercore.

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David Mark Togut, Evercore ISI Institutional Equities, Research Division - Senior MD [12]

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Congratulations.

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Gary Adam Norcross, Fidelity National Information Services, Inc. - Executive Chairman, President & CEO [13]

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Thanks, Dave.

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James W. Woodall, Fidelity National Information Services, Inc. - Corporate EVP & CFO [14]

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Thanks, Dave.

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David Mark Togut, Evercore ISI Institutional Equities, Research Division - Senior MD [15]

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Looks like the second consecutive quarter of 5% organic growth for core FIS, and that's probably the first time in at least 3 years. So what would be your assumption for organic growth for FIS stand-alone for the back half of this year? Because it seems like you're trending above the 4% to 4.5% organic revenue guide for the full year.

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James W. Woodall, Fidelity National Information Services, Inc. - Corporate EVP & CFO [16]

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Yes. It's a good question. We're certainly seeing the investments that we've been making paying off into sales, sales turning into revenue now. We've talked about that for the last few quarters. If we were on a stand-alone basis, we would be raising our stand-alone guide to more like a 5% number right now for the consolidated FIS stand-alone, Dave.

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Gary Adam Norcross, Fidelity National Information Services, Inc. - Executive Chairman, President & CEO [17]

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Yes. Absolutely, Dave. Look, we now had 6 quarters of consecutive strong sales, obviously, very strong sales this past quarter. Pipeline looks really good. So we're real pleased with all the investments we've made on modernization, all of the work that we've done around data center consolidation. We've talked about new availability limits that we're bringing into market, our mass enablement programs. All of those are really pushing the former FIS in the mid-single digits, and we feel very confident that's going to continue across that base.

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David Mark Togut, Evercore ISI Institutional Equities, Research Division - Senior MD [18]

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Good to see. And then on the synergy targets, the $50 million revenue raise by year-end 2020 on revenue synergy and $100 million raise on cost synergy for year 3 exit rate, what specifically changed in the last few months to give you the conviction to raise the targets so early on?

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Gary Adam Norcross, Fidelity National Information Services, Inc. - Executive Chairman, President & CEO [19]

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I think, Dave, when we start pulling the teams together and we started working on the -- when we started working on the various tracks, whether the business lines got together and start working on the revenue opportunities, and what we saw is the potential new product deployments across the various client bases. And even when we saw it across the -- on the operating side as well, we just started building a lot of confidence in our ground-up planning. When we come into announcement, we've done top-down due diligence based on experience. And based on what we saw during due diligence, we come into a synergy number. And that always gives us high confidence, and that we always have a -- we're always very good at exceeding those expectations. But then, as you build ground up, you really start gaining confidence on how you're thinking about what products, where the market opportunities are, what the cross-sell is, what's the total addressable market to address against that, and all of that has driven us a lot of confidence going into next year and delivering the revenue earlier than what we thought. We've also had great feedback from our clients. Both on the Worldpay and on the FIS side, our clients have been reaching out to us. They're excited about what this combination could mean for them. So all of those things come into play with why we're confident in the revenue synergies going forward.

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Operator [20]

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The next question in queue will come from Jim Schneider with Goldman Sachs.

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James Edward Schneider, Goldman Sachs Group Inc., Research Division - VP [21]

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Maybe just following up on David's previous question. Can you maybe just give us a bit of a sense about some of the earliest revenue synergy you expect to materialize and some examples of kind of what those could be, whether that's more on the e-commerce side or whether that's global distribution throughout your bank network of Worldpay's products, et cetera?

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Gary Adam Norcross, Fidelity National Information Services, Inc. - Executive Chairman, President & CEO [22]

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I think the short term, what we're going to see, Jim, is, as Woody discussed in his prepared remarks, it's really our existing capabilities or Worldpay's existing capabilities and our ability to deliver that across our new combined client base. So early on, obviously, we'll be focusing on debit-routing initiatives. We talked a lot about that on the launch. We think there's some real opportunity to be gained there. When you start thinking about the data and analytics that Worldpay can do around merchants and merchants' portfolios to provide that access into -- that information to merchants, we were really nascent in that space over our merchant portfolio, so a real opportunity going that way. You see other areas where -- as you think about cross selling other opportunities on both sides, that will also step up. Longer term, we'll start seeing more pickup of merchant referral programs. We're going to start seeing more pickup of using our loyalty as a currency that we've talked about in the past and being able to deploy across that base. So we've got really a good line of sight into the revenue opportunities. The sales teams now post close are coming together and really building out all their go-to-market plans. Marketing has done a great job in letting them hit the ground running with launch materials on what we're going to be selling in those bases. So all of that's triggering a good, strong insight into our revenues side.

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James Edward Schneider, Goldman Sachs Group Inc., Research Division - VP [23]

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That's helpful. And then maybe as a follow-up, can you maybe just give us, Gary, a little bit of an update on the strategic and macro level from your core kind of Banking Solutions clients, what they're saying about the current interest rate environment, if it's having any kind of impact on their spending or outsourcing decisions? And kind of how do you feel about the remainder of the year in that specific segment and heading into 2020?

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Gary Adam Norcross, Fidelity National Information Services, Inc. - Executive Chairman, President & CEO [24]

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Jim, it's a good question. I mean everybody watches as interest rates go up and go down and what does this means for financial institutions. And clearly, as you're looking at interest rates being lowered, especially on a number of our customers, that will directly hit their net interest margin and therefore, hit their income. But what we're seeing, honestly, is what's going on in the industry, I think a lot of financial institutions, and we've talked about this on prior calls, they've really held on too long to their historical legacy technologies. And I think they're really in a mode now where they have to invest. And so what -- we've seen 6 consecutive quarters of very strong sales. We have a very full pipeline going in the back half of the year across all of our businesses, both Banking and Capital Markets and Merchant Solutions. So all of those things make us bullish and confident on the future. I don't think that banks are going to be able to pull back their spend in the short term because, at this point in time, they have to move to the next-generation platforms. They have to move to the cloud. They have to move to digital enablement in order to survive. And FIS is very well positioned to capture that -- those revenue opportunities as people are making next-generation decisions and really pushing in that direction.

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Operator [25]

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Our next question in queue will come from Ashwin Shirvaikar with Citi.

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Ashwin Vassant Shirvaikar, Citigroup Inc, Research Division - Director and U.S. Computer and Business Services Analyst [26]

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Let me add my congratulations, Gary and Woody, on both closing the deal as well as this initial presentation deck here is -- it's very useful.

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Gary Adam Norcross, Fidelity National Information Services, Inc. - Executive Chairman, President & CEO [27]

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Thank you, Ashwin. We appreciate it.

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Ashwin Vassant Shirvaikar, Citigroup Inc, Research Division - Director and U.S. Computer and Business Services Analyst [28]

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Sure, sure. Yes. Let me actually start with some disclosure type of question. FIS used to provide, obviously, both for IFS and GFS sort of the underlying multiple lines subsegment information. Worldpay used to also provide 3 segments underneath. What should investors expect going forward as you think about that next level underlying information as well as if you can provide sort of the timing of when some of the historical information, so we can do proper analysis? Any color on that would be great.

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James W. Woodall, Fidelity National Information Services, Inc. - Corporate EVP & CFO [29]

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Yes. Ashwin, thanks. I think the team did a great job in pulling the pro forma combined historical information. If you look at the data in the earnings release today, you can see it all the way back by quarter, back to Q1 2018, which I think can help you with there. We're going to continue to have new segments around merchant, banking and capital markets. That will be the external disclosure, if you will. We'll continue to provide some color in the commentary around technology solutions, the Merchant Solutions and what's going on both globally and domestically within banking but probably won't externally disclose at that level of granular detail. But we'll continue to provide transparent information to the market on our results and what's driving those results.

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Ashwin Vassant Shirvaikar, Citigroup Inc, Research Division - Director and U.S. Computer and Business Services Analyst [30]

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Got it, got it. And then with regards to -- obviously, there is a market expectation that's based on your track record that you will exceed sort of the synergy number. You started off well here with increased confidence, and -- on one side and also increasing synergies on the other. I wanted to kind of get a little bit deeper into that sort of what's changed between the last time you were speaking publicly and now with regards to bringing up the synergy -- the near-term synergy expectation and why would that not explicitly bring up the longer term as well.

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Gary Adam Norcross, Fidelity National Information Services, Inc. - Executive Chairman, President & CEO [31]

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Well, why don't I start, Ashwin, and I'll let Woody chime in. I mean honestly, when you look at the operating synergies, the team just did an outstanding job refinancing Worldpay's debt, I mean, really generating over $100 million of savings there. So that's why, obviously, we needed to increase our $400 million target on that number going forward. Obviously, we got very high confidence in the operating synergies. As you know, we've historically exceeded those -- exceeded our synergy expectations by more than 30%. As you look at our revenue side, we're increasing the rate at which our revenue is on boarding. We've not extended beyond $500 million. I think we've just, to my points earlier, really are getting clearer line of sight of how those revenues are going to come onboard. So Woody talked about it, but I can't trivialize how hard the teams had worked between signing and close. If you look at all of the prepared information and do a combined call like this is, it's nothing short of amazing. But also, all of the business owners have really been doing deep dives week-in and week-out, building those plans around where we're going to tackle the expense side and the revenue side. So that's all -- that's really what's been the big change since our last public conversation about those topics. So high confidence on the $500 million. We see that revenue coming in earlier than what we originally expected, which is great. That will actually smooth that curve out some over the next 3 years. When you look at the operating expense, frankly, we want to make sure that everybody saw the interest savings that we did here and stay committed to the original guide on our OpEx, so that's why we raised that overall expense savings number. But we're very pleased at where we are at this point in time. The cultures of the companies have come together very well. I commented the landing of the leadership team from Worldpay in key positions in FIS was very important to me personally. So all of that just gives us a lot of confidence as we go into the back half of the year and into 2020.

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Ashwin Vassant Shirvaikar, Citigroup Inc, Research Division - Director and U.S. Computer and Business Services Analyst [32]

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Got it. And one quick thing, if I could squeeze it in, is the -- just to be clear, the $100 million incremental on the interest side, is that all going to the bottom line? Or are you going to reinvest a piece of it to get better growth? Or I mean how should we think of that?

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James W. Woodall, Fidelity National Information Services, Inc. - Corporate EVP & CFO [33]

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That interest savings will go dollar for dollar to the bottom line. It will start August 1.

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Operator [34]

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The next question in queue comes from Dan Perlin with RBC Capital Markets.

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Daniel Rock Perlin, RBC Capital Markets, LLC, Research Division - Analyst [35]

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Congratulations again on everything you guys have accomplished thus far.

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Gary Adam Norcross, Fidelity National Information Services, Inc. - Executive Chairman, President & CEO [36]

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Thanks, Dan. Appreciate it.

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Daniel Rock Perlin, RBC Capital Markets, LLC, Research Division - Analyst [37]

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You bet. I just wanted to get a sense kind of the macro backdrop has been evolving pretty quickly here, and there's a fair amount of exposure in terms of cross-border e-commerce opportunities that you guys have. But it also can be somewhat of a risk in these kinds of environment. And so I was just curious what you're hearing from your clients, what, if anything, are you seeing kind of in near term. Obviously, your guidance suggests that things are going be okay, but I'd love to get any kind of incremental color on that.

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Gary Adam Norcross, Fidelity National Information Services, Inc. - Executive Chairman, President & CEO [38]

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Yes. Yes, Dan. It's early. I've been -- as you would expect, I've already met with several of the largest Worldpay clients since close, so we've been real busy and engaged with that in those areas. Frankly, not seeing any concerns at this point in time. Frankly, when we look at the trends, they're very consistent across the board. We've modeled continued slowing in the U.K. due to Brexit. Obviously, we're not expecting any turnaround there. But our e-commerce volumes seem like they're performing well. Our same-store sales are growing well. And so all of those things would indicate we're pretty pleased with what we're seeing and that we feel very confident in the forecast.

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Daniel Rock Perlin, RBC Capital Markets, LLC, Research Division - Analyst [39]

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Great. Can you -- Woody, maybe can you just help us a little bit on the third and fourth quarters kind of organic growth assumptions? I think you said you thought for the year you'd land at 6%, if I heard you correctly. I'm just trying to think about how that trends since we got a little bit of kind of a stub in terms of the third quarter and then rolling into the fourth quarter.

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James W. Woodall, Fidelity National Information Services, Inc. - Corporate EVP & CFO [40]

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That's right. I'll start with the fourth quarter first. It's about a 6% organic grower in the fourth quarter as you get all 3 months of Worldpay and get a more consistent point of view on the numbers flowing through. Third quarter is a little lower than that. Really, you're getting 2 months instead of 3 months of Worldpay's higher growth as a contribution there. We've got a difficult comp from last year. That was our high watermark last year in terms of growth with the third quarter. And we got a little bit of accounting conformity in both the third and the fourth quarter but impact in Q3 a little heavier, so that's what you're looking at there. You add those, you pull those out, you're looking at more like a 5% grower in Q3 really driven by some of those points I just mentioned.

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Daniel Rock Perlin, RBC Capital Markets, LLC, Research Division - Analyst [41]

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Okay. And then if I could sneak one more in. Worldpay's EBITDA margins were kind of off the charts strong. I just want to make sure. Is that just the synergy attainment in terms of closing the U.S. platform? Or was there something onetime in nature?

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James W. Woodall, Fidelity National Information Services, Inc. - Corporate EVP & CFO [42]

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No, not onetime. Very strong synergy attainment. They looked at $50 million in quarter, still on track for the $250 million for the full year and grow it just like we thought we would.

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Gary Adam Norcross, Fidelity National Information Services, Inc. - Executive Chairman, President & CEO [43]

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Yes, Dan. Also, they are completely done with the U.S. consolidation movement, which is really positive. So just as we thought and we talked about in the announcement day, we felt very confident that not only the NAP program over in the U.K. was going very well. We also felt very confident in the U.S. and that U.S. platform has been consolidated now, so that's behind us.

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Operator [44]

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The next question in queue comes from Lisa Ellis with MoffettNathanson.

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Lisa Ann Dejong Ellis, MoffettNathanson LLC - Partner [45]

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Gary, could you comment on -- from your perspective, what aspect of the merger is going to be the most challenging and sort of where are you spending your personal time focused?

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Gary Adam Norcross, Fidelity National Information Services, Inc. - Executive Chairman, President & CEO [46]

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Well, right now, I'm not seeing -- I mean it's a great question, Lisa. Right now, I'm not seeing any red flags. But with that being said, where I always spend most of my time in these very early days post close is with employees and clients. I've already been out on day of close, I met with 2 of the largest clients in Worldpay's portfolio. Right after this call, I'm on my way to London. We've already been in front of -- on a global town hall our employees because you want to make sure that everybody stays focused on our commitments, and that's something that I hit very strong, focus on the clients, make sure that we meet the expectations in the market. And then frankly, focus on sales. We just don't want anybody to get distracted. So early on, I'm focused there. I also spend a lot of time making sure that the cultures blend together. I talked about that in a minute -- earlier on the earlier call. These cultures are very aligned, which is great. But we will find subtle differences, and it's important to get those identified and get those perceived barriers or cultural barriers eliminated, so everybody can come together as a team. Landing the leadership team, as I talked about, was very important. So I feel great that we were able to do that between signing and close. So we've brought a lot of talent into FIS because of that. But right now, in the early days, that's where I'm focused. Obviously, that will shift very quickly to -- we are pivoting the growth here, and so we're going to have to shift very quickly in the next few weeks and really start focusing on go-to-market prospects, and I'll make sure that I'm getting engaged there as well. But Mark's doing of an excellent job. He's been with Worldpay for years. He really understands the business, and obviously, he's hitting the ground running, so -- but that's really where I'm focused on right now.

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Lisa Ann Dejong Ellis, MoffettNathanson LLC - Partner [47]

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Terrific. And then my follow-up. The global expansion revenue synergy is one of the critical ones over the longer term and in the out-years. Could you just describe what sort of actions you're taking over the next 18 months to make sure you're on track to begin generating that synergy revenue out in 2021? Like sort of how will we know it's progressing and is on track?

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Gary Adam Norcross, Fidelity National Information Services, Inc. - Executive Chairman, President & CEO [48]

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Well, you're going to see it through the revenue growth line. Obviously, you're going to see our organic growth rate accelerate, as we talked about, to approximately 7% next year. You're going to see it move beyond that to 8% and 9% in the years out. What we're doing, and we've already been doing it, we've got our teams together, our banking teams and our capital markets teams, sales teams and go-to-market teams together with our Worldpay teams. We've got -- in certain markets where we have huge presence, whether it's India, whether it's Brazil or whether it's Australia, we're getting those teams together. One of the things that's different about us is we're really a global company, but we have a local presence, which is very important. And us being able to leverage that local presence to make those introductions and accelerate change business for e-com penetration in those markets is going to be very important. So we're well down the path with those conversations today. Obviously, we're also doing steps to augment the product. We want to increase those authorization rates. We want to decrease those fraud rates. Really, we're already separate and apart with regards to e-commerce when you think about where the authorization rates are today. But how do we raise that 200, 300 basis points and really further distance us. So those 2 things will really help us accelerate into those new markets, and we're pretty excited about it. I think we'll have some really good traction. While we said, that's going to be later in the process, I think we'll have some -- we have potentially good -- some good, early wins here in the next 12 to 18 months.

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Lisa Ann Dejong Ellis, MoffettNathanson LLC - Partner [49]

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Okay. And then maybe one last one that's not related to the merger. I know you've highlighted for core FIS that faster payments and fast ACH is an important growth area for you. Can you just quickly comment on how announcements like the fed announcement or fed now and then this morning's announcement from Mastercard of buying Nets account-to-account business, how those types of changes in the market impact you? Are they...

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Gary Adam Norcross, Fidelity National Information Services, Inc. - Executive Chairman, President & CEO [50]

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Yes. Well, I think it's a great question. I saw the Nets announcement today. It looks like a good acquisition by Mastercard. A lot of people are focused on where faster payments is going, where -- how money movement is going to occur. We talk about it a lot. It's been a huge area of focus for us. We actually got into real-time payments now a little over 4 years ago with our Clear2Pay acquisition. That's gone very well. We're now in more than 20 countries running their real-time payment platforms today form on FIS software. When you look at what the Fed announced, didn't surprise me. It's logical that the Fed would also look to accelerate what they're doing in real-time payments. What I would tell you is those -- all those things create opportunities for FIS. So as money moves across the various channels, what's important to us is to make sure that we have the full breadth of capability to capture those payments as they move across various verticals. So as real-time payments accelerate, we're very well positioned to capture that volume. As e-commerce accelerates, we're very well positioned to capture those volumes. So we talked a lot about the breadth on a global basis across merchant, across banking, across capital markets. The other thing we have to realize is there is a breadth across our asset portfolio that really allows us to not be disintermediated as these new technologies roll on. So all of these announcements are just will long-term be positive things for FIS, as more and more money moves to various channels, so we can absolutely capture that and drive our revenue stream.

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Operator [51]

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Our next question comes from Jason Kupferberg, Bank of America Merrill Lynch.

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Jason Alan Kupferberg, BofA Merrill Lynch, Research Division - MD in US Equity Research & Senior Analyst [52]

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So just wanted to see if we can go a little deeper on the commentary around the deal now becoming accretive in 2020. Can you just clarify? Do you mean that on a full year basis, it'll be accretive? Or that exiting 2020, it'll be accretive?

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James W. Woodall, Fidelity National Information Services, Inc. - Corporate EVP & CFO [53]

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So we think it's accretive on a full year basis in 2020. And really, to kind of get your base, we use some assumptions and projections that are disclosed our joint merger proxy that show what our expectations were on a stand-alone FIS basis. That's a $6.16 number for 2020, so that's kind of the market we're talking about.

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Jason Alan Kupferberg, BofA Merrill Lynch, Research Division - MD in US Equity Research & Senior Analyst [54]

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Okay. That's very helpful. And I was just curious on the OpEx side of things. I know at this juncture, obviously, the deal just closed, so you're still sticking with the $400 million target, excluding the interest expense savings. But hypothetically, if you do ultimately deliver upside potential on that $400 million, would you expect that to be more on the operational side, technology, the corporate alignment piece?

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Gary Adam Norcross, Fidelity National Information Services, Inc. - Executive Chairman, President & CEO [55]

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It's too early, Jason, to really talk about that at this point in time. I think Woody gave some insight into how we see the $400 million spreading. As we dig into these situations, we're very confident on the $400 million. We think in -- at FIS, we look across the full enterprise to make sure that we're taking advantage and getting the maximum leverage we have out of these combinations without damaging the business. Obviously, we want the -- we've said this a number of times, this is about pivoting to growth, accelerating our growth in the upper single digits and hopefully higher in the long term. So -- but we feel very good that a lot of those synergies will come out of the technology and business side but also the corporate side of FIS. But as we build into more of that, it's early. One of the things that we've always taken great pride in is being very transparent on where we are on synergies throughout the process. So as we get several quarters into this, we'll start giving more insight into where the majority of the synergies are -- we see are coming from or where we might see upside in any of those 3 areas.

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Jason Alan Kupferberg, BofA Merrill Lynch, Research Division - MD in US Equity Research & Senior Analyst [56]

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Okay. That's helpful. And just last one for me. I know on the Worldpay side, tech solutions was really quite strong, again, at 19% on an adjusted basis. Was just curious what kind of trajectory you're assuming for the second half of the year on that metric.

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James W. Woodall, Fidelity National Information Services, Inc. - Corporate EVP & CFO [57]

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Yes. We've been thinking about technology solutions in line with that mid- to high-teens growth rate that's been outlined for a number of quarters. It's executing very well, and our expectations were to continue to execute in line with what's been described in the marketplace.

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Gary Adam Norcross, Fidelity National Information Services, Inc. - Executive Chairman, President & CEO [58]

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And if you look on what they -- Shane and his team had another great quarter of cross-sells. We talked about it in the prepared remarks. I mean that really gives us strong confidence that he's going to continue -- he and his team are going to continue to execute. And based on what we're seeing in volumes and everything, there's just -- there's no indication that it should come off that guide.

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Operator [59]

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The next question in queue comes from Brett Huff with Stephens.

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Brett Richard Huff, Stephens Inc., Research Division - MD [60]

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Hey, Gary and Woody, congrats again on getting this deal done.

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James W. Woodall, Fidelity National Information Services, Inc. - Corporate EVP & CFO [61]

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Thank you.

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Gary Adam Norcross, Fidelity National Information Services, Inc. - Executive Chairman, President & CEO [62]

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Hey, Brett. Thank you.

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Brett Richard Huff, Stephens Inc., Research Division - MD [63]

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Two questions. One, unrelated to the merger. I've been focused on the modularization and the rewriting your guys' cores that you've been doing where you kind of rewrite a back office thing and then kind of spread it out. Where are we in that process? Are we still early innings? Or -- and then also kind of related to that, what's the uptake on those -- on that particular program right now?

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Gary Adam Norcross, Fidelity National Information Services, Inc. - Executive Chairman, President & CEO [64]

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I appreciate the question, Brett. As you know, when we announced that, that was a very long-term project -- program build. It is going very well. I would say we're in mid-innings to late innings. So we continue to -- the response has been terrific in market. We've actually made some announcements of key wins with some really early-stage innovators. We have now 1 in production on that platform. The product continues to be being built out on a modular basis. Obviously, we're doing it in a very agile, nimble way, launching from the ground up in the cloud. We're going to have some really nice announcements on that platform in the coming quarters, and we feel very good about that program.

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Brett Richard Huff, Stephens Inc., Research Division - MD [65]

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Great. And then second one, related to the deal. One of the great sort of things you guys have done over the years with the deals you've done is you've taken on the data center consolidation kind of behemoth several times. And I know that this one started, I think, 3 years ago. How -- tell us how this gives you insight into getting the cost synergies with Worldpay. I'm assuming it's getting rolled in. And then what potential pitfalls do we have kind of joining the Worldpay data center project, which I assume is going to start soon, with the one that's ongoing? Is there any kind of -- how do we manage that risk?

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Gary Adam Norcross, Fidelity National Information Services, Inc. - Executive Chairman, President & CEO [66]

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Well, it's a great question, Brett. I tell you, Ido Gileadi, our global CIO, and his team have just done a phenomenal job with data center consolidation. We have over 80% of our digital applications now in the private cloud. We've launched -- we've announced publicly to our clients availability of less -- guaranteed of less than 15 minutes now, which the industry is at 24, in some instances, 48 hours. So it's really, really gone well. And so naturally, as we put these 2 technology groups together, that comes under common ownership within FIS. And naturally, those data centers will become part of the overall consolidation plan in the future. So we feel very confident. We've got a great team geared up. We're well -- we're 3 years into this program. You're seeing the benefits drop to our bottom line. And we'll just keep the team now churning as we bring these groups together. So we have very high confidence on execution. We have very high confidence in taking advantage of the next-generation technologies, and they'll be a key contributor to our synergy saves.

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Operator [67]

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The next question will come from George Mihalos with Cowen.

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Georgios Mihalos, Cowen and Company, LLC, Research Division - MD & Senior Research Analyst [68]

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And let me add my congrats on getting the deal done.

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Gary Adam Norcross, Fidelity National Information Services, Inc. - Executive Chairman, President & CEO [69]

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Thanks, George.

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Georgios Mihalos, Cowen and Company, LLC, Research Division - MD & Senior Research Analyst [70]

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Wanted to go back to the tech solution segment within Worldpay, which, again, as Jason said, was very, very strong. Can you talk a little bit about the trends? It sounds like there's a lot of momentum continuing on the e-com side, but maybe what you're also seeing on the integrated payment side? And then, as it relates to e-com, some of the changes that are happening, SCA in Europe coming on at some point at least over the next couple of months, is that really more of an opportunity for FIS? Or are you concerned there could be some disruption there?

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Gary Adam Norcross, Fidelity National Information Services, Inc. - Executive Chairman, President & CEO [71]

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Well, let me first start with the integrated side. Honestly, it still continues to be strong. We continue to win new business. We actually think there's increased opportunity with the combination just given our size and sales, scale and reach. So we're very excited about integrated and how that business performs. We've talked a number of times on the call. Shane's really been very strong on the overall e-commerce side. So we don't see any issues. Frankly, as you talk about changes, typically, change is our -- is the benefactor to us. I mean it's the same way Worldpay is. We talked -- what's interesting about the businesses is when we see any kind of regulatory change or any kind of change whatsoever, we typically see that convert into a tailwind for FIS. And so we're confident that our growth rates are going to continue to be strong.

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James W. Woodall, Fidelity National Information Services, Inc. - Corporate EVP & CFO [72]

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We saw a really good growth in both components there, with e-commerce probably a little higher than the 19% that we saw and IP a little lower, blending to the 19%. But that was in line with expectations and where things would go (inaudible). If you look at some of the regulatory changes that are coming onboard, we think some of our low fraud rates can actually drive some of the exemptions and drive some wallet share opportunity in some of those areas to reduce friction with that deal authentication that's coming down the line.

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Georgios Mihalos, Cowen and Company, LLC, Research Division - MD & Senior Research Analyst [73]

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That's great color. And just a quick follow-up, shifting gears a little bit to capital markets. That returned to growth as you expected. I think, Woody, you laid out kind of long-term low single-digit growth. Should we expect, though, over the back half of '19 that growth to accelerate a little bit from 3% given the somewhat easier comparisons over the second half?

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James W. Woodall, Fidelity National Information Services, Inc. - Corporate EVP & CFO [74]

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That's exactly right. We're seeing some accelerated growth. Some of that is just good execution by Martin and the team, but we also are facing a little easier comps in the back half of 2019 within capital markets. You're exactly right.

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Gary Adam Norcross, Fidelity National Information Services, Inc. - Executive Chairman, President & CEO [75]

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Sales continues to be strong in that area, George. I mean when you look at the historical backlogs and you look where backlogs are today and you look at the execution, we'll continue to go through a little bit of volatility noise just on that movement from license, on premise to outsourcing, and we'll continue to see that. But honestly, from an execution standpoint, our ability to take share, the teams are delivering very nicely against those sales. So we're -- we feel good about that business going forward.

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Operator [76]

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The next question in queue comes from Darrin Peller with Wolfe Research.

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Darrin David Peller, Wolfe Research, LLC - MD & Senior Analyst [77]

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Congrats on the deal closing. Listen, when we look at the FIS trends stand-alone and we look at where they're trending now, 5% this quarter, even last year, 4% adjusting for onetime items, and we compare that to the prior year or 2, I know you guys said it's -- you would expect it to be 5% this year. But just what exactly is different? Can you specifically point to what products are growing more quickly? What -- is it the end market that's better? I'd be curious to hear what changed so substantially -- that and why that's sustainable. It's great to see it. Just curious more color on that...

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Gary Adam Norcross, Fidelity National Information Services, Inc. - Executive Chairman, President & CEO [78]

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Well, I think 2 things, Darrin. What's really changed is, honestly, if you look, we're well positioned in the larger financial institutions around the world, right? So whether you look at the mid-tier or large financial institutions, FIS is well positioned. If you look at that client base specifically, they really have held on to their technology investment way too long. Look at SunTrust and BB&T coming together, all about scale to drive innovation. So you're just seeing in that secular market an increased spend rate around technologies. And they're focusing on a number of different things. They're focusing on digital enablement of their capabilities where they're really going -- trying to go to next-generation omnichannel capabilities. Obviously, we're a leader in that space with our Digital One application. If you look at some of the things that Brett talked about -- asked about on Stephens, where you're even looking at componentizations and how do I move my legacy technology from some of these applications that have been in place for 30 or 40 years, how do I really move on to a next-generation cloud-based platform. All of these things are just driving an increased spend rate. And when you look at 6 quarters in of really strong sales, it just gives us high confidence that's going to continue. We've got a number of significant opportunities in flight, pipeline's very full, teams really engaged. And so I think timing is just really working in favor of FIS, giving where we're positioned in market, giving the type of clients we have, also giving where we've made investments. We started these investments on cloud-based technologies 4-plus years ago. We started these investments on next-generation applications 4 years ago. And all of that's really accelerated to our benefit as our customers look to modernize and transform themselves.

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Darrin David Peller, Wolfe Research, LLC - MD & Senior Analyst [79]

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Okay. All right, that's helpful. And then, guys, I mean, with regards to the e-com side, and again, there was 19% growth in overall tech solutions. Did you already have the benefit of any of the revenue from the cross-sells between them and Worldpay? When you list off the incremental 14-or-so this quarter, there were some that already started last year. I think the second half is where we're hoping for the revenue for some of those to really start to come on. Is that still on target? And should that help with the growth rate of e-com and overall tech solutions in the second half?

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James W. Woodall, Fidelity National Information Services, Inc. - Corporate EVP & CFO [80]

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Yes. I think what we actually described was more of that revenue benefiting 2020 from a growth perspective. Year-over-year, we're certainly seeing the cross-sell right now and are excited about it, but more of that revenue growth is in 2020 as those convert.

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Gary Adam Norcross, Fidelity National Information Services, Inc. - Executive Chairman, President & CEO [81]

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Yes. Keep in mind, Darrin, I mean, as you think about new sales across e-commerce, very similar to the FIS business in banking, can be a long sales cycle, but it also can be a fairly lengthy implementation cycle, right? You've got to integrate the software into the e-commerce environment. They're going to actually slowly start moving volume over. So the ramp really you start seeing in 2020. But as Woody shared earlier, we still feel very confident about the back half of the year and what we're seeing in those current growth rates. So really, sales, as we talked about it in these quarters, are really indicative of what it's going to look like 3 and 4 quarters out.

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Darrin David Peller, Wolfe Research, LLC - MD & Senior Analyst [82]

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All right. Just last quick one. Those low-hanging fruit revenue synergies around a nice network and core production, those should be coming out on plan?

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Gary Adam Norcross, Fidelity National Information Services, Inc. - Executive Chairman, President & CEO [83]

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Yes. No, we talked about it. We really think that we're going to start seeing some revenue benefit here very early in the process, and so that gives us high confidence as we guided in 2020. They're really start pushing towards 7%. And we've got really good line of sight into those -- some of those topics we discussed on prior calls and today.

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Operator [84]

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We do have time for one more question. That will come from Ramsey El-Assal with Barclays.

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Ramsey Clark El-Assal, Barclays Bank PLC, Research Division - Research Analyst [85]

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I actually wanted to follow up on Darrin's last question about the near-term synergies where you mentioned, in addition to some of the network optimization, you mentioned optimizing loyalty, fraud and enhancing Worldpay's issuer business. I'm trying to just get a little more granularity about that. I thought maybe optimizing loyalty might have to do with your pay -- with pay-with-points program. It seems like that might have been a little later on in the planning in terms of revenue synergy realizations. So if you could just give us a little more color what exactly is optimizing loyalty, fraud and enhancing Worldpay distribution business, I'd be grateful.

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James W. Woodall, Fidelity National Information Services, Inc. - Corporate EVP & CFO [86]

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Yes. On the loyalty side, I think you're going to see that in the short term and in the longer term as well as we take that capability and push it through the existing distribution channel. That was already growing for FIS on a stand-alone basis, so that will continue. We can accelerate that with Worldpay's distribution. And then longer term, we can build it into the e-commerce platform and grab incremental differentiation there. So that's the biggest component there. On the fraud side, it's really more incremental. We have more data sets to work through, more data sets to drive through our processes. Those are the 2 biggest components from additional color standpoint. We will see some level of revenue synergy more in the fourth quarter starting to come online, but it's pretty minimal in terms of its end-year contribution for 2019. More of that is coming in 2020.

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Ramsey Clark El-Assal, Barclays Bank PLC, Research Division - Research Analyst [87]

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Okay. And then -- and lastly for me, can you give us some indication? You spoke a bit about that -- the evolution in the marketplace, of kind of faster payments and how you're well positioned on a lot of different axes to benefit from that. Can you speak to any capabilities that the merger will unlock in terms of potential honest alternative path -- routing paths to go from merchant to bank? Or is that something that's in your road map? Or any color there would be helpful, too.

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Gary Adam Norcross, Fidelity National Information Services, Inc. - Executive Chairman, President & CEO [88]

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Yes. No, Ramsey, we think there could be a real opportunity there. Obviously, when you start talking about long-term combination of the company and some opportunities that might exist, that's one of them that we're looking at. But we're not really prepared to talk about that today.

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Operator [89]

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At this time, I'll turn the conference back over to our presenters for any closing comments.

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Gary Adam Norcross, Fidelity National Information Services, Inc. - Executive Chairman, President & CEO [90]

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Thanks for joining us today. We are thrilled with this combination. Worldpay is a respected global brand with the best-in-class executive team and over 8,000 talented employees. They have a loyal and extensive client base and partner network who represent some of the most successful businesses in the industry. This, combined with our profitable and very predictable financial institution business, banking and capital markets, all aimed at the heart of commerce and the financial transactions that power the world's digital economy, makes us a powerful combination. We are grateful to all our loyal clients who depend on us to keep their businesses running and growing every day.

Finally, I am personally thankful for our now 55,000 leaders and employees for their hard work and dedication in serving our clients. FIS is dedicated to advancing the way the world pays, banks and invests. Thank you for joining us today.

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Operator [91]

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Thank you. And ladies and gentlemen, that does conclude your conference call for today. We do thank you for your participation and for using AT&T Executive Teleconference. You may now disconnect.