Q1 2025 Fidelity National Information Services Inc Earnings Call

May 6, 2025

Stephanie Ferris: In the first quarter, we delivered adjusted revenue growth of 4% ahead of expectation. Recurring revenue growth accelerated meaningfully from 2% last quarter to 4%, and we expect to see continued strength over the course of the year as signed deals continue to be implemented on schedule. The three client-requested delays that we mentioned on our last quarter call are all live and we have not seen any negative impacts from Macrofax. First quarter adjusted EBITDA was at the high end of our outlook, while free cash flow conversion exceeded 70%, a very strong start, giving us confidence in delivering on our full year outlook.

Since the recession, if you would like to ask a question. During this time simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question Press Star. One again. Thank you I would now like to turn the call over to George Schmitt <unk> head of Investor Relations you May begin your conference.

John: Thank you John good morning, everyone.

George Schmitt: For joining us today for the FIS first quarter 2025 earnings conference call.

George Schmitt: Call is being webcast at today's earnings release corresponding presentation and webcast are all available on our website.

George Schmitt: Global Dot com.

George Schmitt: On the call with me. This morning are Stephanie Ferris, our CEO and president.

James <unk>: And James <unk>, our CFO.

Stephanie Ferris: Adjusted EPS grew 11% to $1.21 at the upper end of our outlook. And we return $670 million to shareholders across share repurchases and dividends.

James <unk>: Stephanie will lead the call with a strategic and operational update.

James <unk>: And James will review our financial results.

Speaker Change: Turning to slide three.

Speaker Change: Today's remarks will contain forward looking statements. These.

Stephanie Ferris: Our solid start to the year and strong execution leaves us confident in reaffirming our full year outlook.

Speaker Change: These statements are subject to risks and uncertainties as described in the press release and other filings with the SEC.

Stephanie Ferris: Now let's turn to slide six for a discussion on new wins and our leading position in the market research. During the first quarter, we find several new marquee engagements across the money life cycle. And we are seeing momentum building in the second quarter, beginning with money at rest. On the heels of a record year for core wins in 2024, we continue to see strong demand for our core solutions and are expecting another year of solid sales.

Speaker Change: The company undertakes no obligation to update any forward looking statements, whether as a result of new information future events or otherwise.

Speaker Change: Sept as required by law.

Speaker Change: Refer to the Safe Harbor language.

Speaker Change: Also throughout today's call, we will be presenting non-GAAP information, including adjusted EBITDA adjusted net earnings.

Speaker Change: Ladies and gentlemen. This is your operator speaking todays conference call will commence shortly you will be placed back on music hold until then thank you for your patience.

Speaker Change: Adjusted net earnings per share and adjusted free cash flow.

Speaker Change: These are important financial performance measures for the company, but are not financial measures as defined by GAAP.

Stephanie Ferris: I'm pleased to announce that our IBS core was selected by a leading East Coast commercial bank with over $15 billion in assets as part of an evaluation following an acquisition. After a highly competitive process, the bank's management team selected FIS for their complex needs as a growing financial institution. This win demonstrates how we are well positioned to capitalize on consolidation given our skew towards larger banks and stronger product sets. This is a positive proof point of our strong competitive positioning and much improved retention rate.

Speaker Change: [music].

Speaker Change: Reconciliation of our non-GAAP information to the GAAP financial information is presented in our earnings release.

Stephanie Ferris: And with that I'll turn the call over to Stephanie.

Stephanie Ferris: Thank you George and thank you everyone for joining us.

Stephanie Ferris: I am pleased to report that 2025 is off to a strong start our.

Stephanie Ferris: Our laser focus on driving commercial excellence across the enterprise <unk>.

Stephanie Ferris: While simplifying and strengthening our portfolio is delivering results for our shareholders.

Stephanie Ferris: We anticipate momentum in core wins to continue in the second quarter, with an active pipeline of opportunities we expect to close.

Stephanie Ferris: Our durable business model is underpinned by high levels of recurring revenue and this allows us to deliver consistent financial results across all economic cycles.

Stephanie Ferris: Our digital solutions continue to gain traction in the market.

Stephanie Ferris: During the first quarter, a Midwest community bank with over $15 billion in assets selected our digital one product to help the bank transform its branch teller technology. The win represents another competitive takeaway for our digital capabilities, which were also recognized by Celent for market momentum and support in their recent report. Moving to money in motion, where our Office of the CFO capabilities are resonating with a broad range of clients.

Stephanie Ferris: And the recently announced strategic acquisition of global payments issuer business and the sale of our minority world pay stake will strengthen our value proposition to clients, while further strengthening our financial profile.

Stephanie Ferris: In the first quarter, we delivered adjusted revenue growth of 4% ahead of expectations recurring revenue growth accelerated meaningfully from 2% last quarter to 4% and.

Stephanie Ferris: And we expect to see continued strength over the course of the year as signed deals continue to be implemented on schedule.

Stephanie Ferris: During the quarter, we expanded our relationship with the leading multinational engineering and technology firm. The company selected FIS's award-winning treasury management solution to assist it with its cash and risk management. The company also selected several of our payment solutions, including our Payments Hub, a connectivity solution that helps corporates centralize, standardize, and process payments quickly and at scale. This is a prime example of how Office of the CFO is expanding our addressable market beyond traditional financial institutions to corporate. We are encouraged by the market reception to our Office of the CFO Offerings and are well on track to meet our sales goal for the year.

Stephanie Ferris: The three client request to delay that we mentioned on our last quarter call are all live and we have not seen any negative impacts from macro factors.

Stephanie Ferris: First quarter adjusted EBITDA was at the high end of our outlook, while free cash flow conversion exceeded 70% a very strong start.

Stephanie Ferris: Giving us confidence in delivering on our full year outlook.

Stephanie Ferris: Adjusted EPS grew 11% to $1 21 at the upper end of our outlook.

Stephanie Ferris: And we returned $670 million to shareholders across share repurchases and dividends.

Stephanie Ferris: Moving the Money at Work. We continue to expand our presence in adjacent growth vectors such as private equity and private capital.

Stephanie Ferris: Our solid start to the year and strong execution leaves us confident in reaffirming our full year outlook now.

Stephanie Ferris: Now, let's turn to slide six for a discussion on new wins, and our leading position in the markets we serve.

Stephanie Ferris: In the first quarter, Atlas SP, a global investment firm specializing in private credit, selected our commercial lending solution to help manage its servicing needs on complex loans and investor reporting requirements.

Stephanie Ferris: During the first quarter, we signed several new marquee engagements across the money lifecycle and we are seeing momentum building in the second quarter, beginning with money at raft.

Stephanie Ferris: The win is a competitive takeaway and represents our first direct lender client for our commercial lending solution. Turning to more traditional capital markets activity, our derivatives processing solution was selected by a premier buy-side firm looking to expand its self-clearing capability. We continue to see a trend of buy-side firms adopting self-clearing capabilities and are encouraged for the prospects of our derivatives clearing solution.

Stephanie Ferris: On the heels of a record year for core wins in 2024, we continue to see strong demand for our core solutions and are expecting another year of solid sales.

Stephanie Ferris: I'm pleased to announce that our Ibs core was selected by a leading east coast commercial bank with over $15 billion in assets as part of an evaluation following an acquisition.

Stephanie Ferris: After a highly competitive process the bank's management team selected us for their complex needs as a growing financial institution.

Stephanie Ferris: Now turning to slide seven for a quick review of our recent milestone transaction. On April 17th, we announced two transactions that accelerate the strategic repositioning of our portfolio. First, we entered into an agreement to sell our 45% stake in WorldPay to Global Payments for $6.6 billion in pre-tax value. The sale price represents a premium to the valuation FIS received when it sold its majority stake in 2024 and accelerates the monetization of world pay versus pursuing an IPO. Second, we announced the acquisition of the issuer solutions business for a net enterprise value of $12 billion, including a $1.5 billion tax benefit.

Stephanie Ferris: This win demonstrates how well how we are well positioned to capitalize on consolidation given our skew towards larger banks and stronger product set.

Stephanie Ferris: This is a positive proof point of our strong competitive positioning and much improved retention rates we.

Stephanie Ferris: We anticipate momentum in core wins to continue in the second quarter with an active pipeline of opportunities we expect to close.

Stephanie Ferris: Our digital solutions continue to gain traction in the market.

Stephanie Ferris: During the first quarter, our Midwest community bank with over $15 billion in assets selected our digital one product to help the bank transform its branch teller technology.

Stephanie Ferris: As a reminder, the transactions are expected to close simultaneously in the first half of 2020. The acquisition of the issuer solutions business and the sale of our WorldPay stakes strengthens our strategic and financial position. Issuer Solutions complements our existing banking solutions product suite with best-in-class credit processing capabilities at scale and enhances our value proposition to large banks and corporates, unlocking greater cross-sell potential across existing clients. The acquisition is also financially attractive. The transaction is accretive in the first 12 months to adjusted EPS, EBITDA margins, and adjusted free cash flow, with greater benefits the longer term as synergy targets are achieved.

Stephanie Ferris: The win represents another competitive takeaway for our digital capabilities, which were also recognized by Celent for market momentum and support in their recent reports.

Stephanie Ferris: Moving the money in motion, where our office of the CFO capabilities are resonating with a broad range of clients.

Stephanie Ferris: During the quarter, we expanded our relationship with a leading multinational engineering and technology firm.

Stephanie Ferris: The company selected <unk> Award, winning Treasury management solution to assist it with its cash and risk management needs.

Stephanie Ferris: The company also selected several of our payment solutions, including our payments hub, a connectivity solution that helps corporate centralized standardized and process payments quickly and at scale.

Speaker Change: Thank you for standing by and welcome to the FY <unk> first quarter 2000, instead of five earnings call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like to ask a question. During this time simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question Press Star One again, thank you all.

Stephanie Ferris: It strengthens our financial profile and provides us with greater recurring revenue. And lastly, the transaction allows us to monetize a non-strategic asset and replace it with a growing stream of durable revenue and strong free cash. We look forward to closing the transactions and are excited to be partnering with Global Payments going forward. We're confident the transactions will represent a significant win for all companies involved.

Stephanie Ferris: This is a prime example of how office of the CFO is expanding our addressable market beyond traditional financial institutions to corporates.

Stephanie Ferris: We are encouraged by the market reception to our office of the CFO, our offerings and are well on track to meet our sales goal for the year.

Stephanie Ferris: Moving to money at work week.

I'd now like to turn the call over to George can you tell us that's Investor Relations you may begin your conference.

Stephanie Ferris: We continue to expand our presence in adjacent growth vectors, such as private equity and private capital.

Speaker Change: Thank you John Good morning, everyone. Thank you for joining us today for the F. I S first quarter 2025 earnings conference call.

James Kehoe: And with that, I'll turn it over to James for a review of our first quarter financials. Thanks. Thank you, Stephanie, and good morning. I'll begin on slide nine with an overview of our first quarter results, which we previewed on April 17th. We had a great start to the year with adjusted revenue growth of 4%, exceeding the high end of our outlook. We delivered upside from both operating segments. Further increasing our confidence in meeting our full-year outlook. Adjusted EBITDA came in close to the high end of our outlook at $958 million, leading to an EBITDA margin of 37.8% in the quarter.

Speaker Change: In the first quarter Atlas S. P. A global investment management, a global investment firm specializing in private credit.

Speaker Change: Selected our commercial lending solution to help manage its servicing needs on complex loans and investor reporting requirement.

Speaker Change: It is being webcast at today's earnings release corresponding presentation and webcast are all available on our website.

Speaker Change: The win is a competitive takeaway and represents our first direct lender client for our commercial lending solution.

Speaker Change: Yes, global Dot com.

Speaker Change: On the call with me. This morning are Stephanie Ferris, our CEO and president and.

Speaker Change: Turning to more traditional capital markets activity, our derivatives processing solution was selected by a premier buy side firms looking to expand its self clearing capabilities.

Speaker Change: And James Kehoe, our CFO.

Speaker Change: Stephanie will lead the call with a strategic and operational update.

Stephanie Ferris: And James will review our financial results.

Speaker Change: We continue to see a trend of buy side firms adopting self clearing capabilities and are encouraged for the prospects of our derivatives clearing solution.

Speaker Change: Turning to slide three.

Speaker Change: Today's remarks will contain forward looking statements. These.

Speaker Change: These statements are subject to risks and uncertainties as described in the press release and other filings with the SEC.

Speaker Change: Now turning to slide seven for a quick review of our recent milestone transaction.

James Kehoe: Adjusted EPS was $1.21. was and it was also near the high end of our outlook with year-over-year growth of 11%. Cash Conversion Improves Significance. as we rolled out working capital initiatives and lapped a week prior year. Free cash flow was $368 million in the quarter compared to $95 million last year. with a cash conversion rate of 71%. compared to 18% in the prior year. As a reminder, the first quarter is historically a lower conversion quarter, so we are off to a strong start on our full year target of 82 to 85 percent. Capital expenditures were $233 million in the quarter, or 9% of revenue, consistent with our full year expectations.

Speaker Change: On April 17th we announced two transactions that accelerate the strategic repositioning of our portfolio.

Speaker Change: The company undertakes no obligation to update any forward looking statements, whether as a result of new information future events or otherwise.

Speaker Change: First we entered into an agreement to sell our 45% stake in world pay to global payments for $6 $6 billion and pre tax value.

Speaker Change: As required by law.

Speaker Change: Please refer to the Safe Harbor language.

Speaker Change: Also throughout today's call, we will be presenting non-GAAP information, including adjusted EBITDA adjusted net earnings adjusted net earnings per share and adjusted free cash flow.

Speaker Change: The sale price represents a premium to the valuation F. I S received when it sold its majority stake in 2024 and accelerates the monetization of where all pay versus pursuing an IPO.

Speaker Change: These are important financial performance measures for the company, but are not financial measures as defined by GAAP.

Speaker Change: Second we announced the acquisition of the issuer solutions business for a net enterprise value of $12 billion, including a 1.5 billion tax benefit.

Speaker Change: Reconciliation of our non-GAAP information to the GAAP financial information is presented in our earnings release.

Speaker Change: As a reminder, the transactions are expected to close simultaneously in the first half of 2026.

Stephanie Ferris: And with that I'll turn the call over to Stephanie.

Speaker Change: The acquisition of the issuer solutions business and the sale of our world pay stake strengthens our strategic and financial position.

Stephanie Ferris: Thank you George and thank you everyone for joining us.

Stephanie Ferris: I'm pleased to report that 2025 is off to a strong start.

Speaker Change: Issuer solutions complements our existing banking solutions product suite with best in class credit processing capabilities at scale and enhances our value proposition to large banks and corporates unlocking.

Stephanie Ferris: Our laser focus on driving commercial excellence across the enterprise, while simplifying and strengthening our portfolio is delivering results for our shareholders.

James Kehoe: And we exited the quarter at our target leverage of 2.8 times. Lastly, we return $670 million to shareholders. including $450 million of share repurchase. putting us well on track to meeting our $1.2 billion annual target for share repurchase.

Speaker Change: Unlocking greater cross sell potential across existing clients.

Stephanie Ferris: Our durable business model is underpinned by high levels of recurring revenue and this allows us to deliver consistent financial results across all economic cycles.

Speaker Change: The acquisition is also financially attractive.

Speaker Change: The transaction is accretive in the first 12 months to adjusted EPS, EBITDA margins and adjusted free cash flow with greater benefits longer term synergy targets are achieved.

Speaker Change: It strengthens our financial profile and provides us with greater recurring revenue and lastly, the transaction allows us to monetize our non strategic asset and replace it with a growing stream of durable revenue and strong free cash flow.

James Kehoe: In summary, a great start to the year with strong execution across all key metrics.

Stephanie Ferris: In the first quarter, we delivered adjusted revenue growth of 4% ahead of expectations recurring revenue growth accelerated meaningfully from 2% last quarter to 4%.

James Kehoe: Turning now to our segment results on slide 10. Adjusted and recurring revenue growth was 4%, with recurring revenue at 81% of total revenue. We continue to emphasize growth in this durable, high-margin revenue stream. Banking grew 2% in the quarter, coming in ahead of the high end of our outlook. Recurring revenue growth outpaced adjusted revenue growth at 3% in the quarter. Non-recurring revenue increased 3% as the anticipated 2% point headwind from termination and license fees was offset by stronger performance from our carb production business. Professional services declined 5% as we successfully concluded some large projects at year end.

Speaker Change: We look forward to closing the transaction and are excited to be partnering with global payments going forward.

Stephanie Ferris: And we expect to see continued strength over the course of the year as sign deals continue to be implemented on schedule.

Speaker Change: We're confident the transactions will represent a significant win for all companies involved and with that I'll turn it over to James for a review of our first quarter financials Jean.

Stephanie Ferris: The three client requested delays that we mentioned on our last quarter call are all live and we have not seen any negative impacts from macro factors.

Speaker Change: Thank you Stephanie and good morning all.

James <unk>: I'll begin on slide nine with an overview of our first quarter results, which we previewed on April 17th we.

Stephanie Ferris: First quarter adjusted EBITDA was at the high end of our outlook, while free cash flow conversion exceeded 70%, a very strong start getting giving us confidence.

Speaker Change: We had a great start to the year with adjusted revenue growth of 4%.

Speaker Change: Exceeding the high end of our outlook.

Stephanie Ferris: Confidence in delivering on our full year outlook adjusts.

Speaker Change: We delivered upside from both operating segments further increasing our confidence in raising our full year outlook.

Stephanie Ferris: Adjusted EPS grew 11% to $1 21 at the upper end of our outlook and.

Stephanie Ferris: And we returned $670 million to shareholders across share repurchases and dividends.

Speaker Change: Adjusted EBITDA came in close to the high end of our outlook.

Speaker Change: $958 million, leading to an EBITDA margin of 37, 8% in the quarter.

Stephanie Ferris: Our solid start to the year and strong execution leaves us confident in reaffirming our full year outlook now.

James Kehoe: As Stephanie discussed, client implementations are on track, and we expect accelerating professional services growth over the course of the year. Banking EBITDA margin contracted to 40.1%, reflecting high license and termination fees last year and the timing of operating expenses.

Speaker Change: Adjusted EPS was $1.21.

Stephanie Ferris: Now, let's turn to slide six for a discussion on new wins, and our leading position in the markets we serve.

Speaker Change: <unk> hundred was also near the high end of our outlook with year over year growth of 11%.

Stephanie Ferris: During the first quarter, we signed several new marquee engagements across the money lifecycle and we are seeing momentum building in the second quarter.

Speaker Change: Cash conversion improved significantly as we rolled out working capital initiatives unlock the week prior year.

Stephanie Ferris: Beginning with money at rest.

Stephanie Ferris: The heels of a record year for core wins in 2024, we continue to see strong demand for our core solutions and are expecting another year of solid sales I'm pleased.

Speaker Change: Free cash flow was $368 million in the quarter.

James Kehoe: Turning now to capital markets, where we had another strong quarter. Adjusted revenue growth came in ahead of the high end of our outlook at 9% with recurring revenue growth of 6%. Non-recurring revenue advanced 47% as the team delivered a strong license quarter, including outsized renewal timing. Professional services declined 5% year over year, reflecting the completion of some project work, and is expected to return to growth in the second quarter. Adjusted EBITDA margin expanded 90 basis points, reflecting strong growth in high margin license revenue and continued favorable operating leverage.

Speaker Change: <unk> to $95 million last year.

Speaker Change: With a cash conversion rate of 71%.

Stephanie Ferris: To announce that our Ibs core was selected by a leading east coast commercial bank with over $15 billion in assets as part of an evaluation following an acquisition.

Speaker Change: Compared to 18% in the prior year.

Speaker Change: As a reminder, the first quarter is historically, a lower conversion quarter.

Stephanie Ferris: After a highly competitive process the bank's management team selected us for their complex needs as a growing financial institution.

Speaker Change: So we are off to a strong start on our full year target of 82% to 85%.

Stephanie Ferris: This win demonstrates how well how we are well positioned to capitalize on consolidation given our skew towards larger banks and stronger product set.

Speaker Change: Capital expenditures were $233 million in the quarter or 9% of revenue.

Speaker Change: On systems with our full year expectation.

Stephanie Ferris: This is a positive proof point of our strong competitive positioning and much improved retention rates.

Speaker Change: And we exited the quarter at our target leverage of two eight times.

Stephanie Ferris: We anticipate momentum in core wins to continue in the second quarter with an active pipeline of opportunities we expect to close.

Speaker Change: Lastly, we returned $670 million to shareholders include.

Stephanie Ferris: Our digital solutions continue to gain traction in the market.

James Kehoe: Moving now to our outlook on slide 11. As messaged on our April 17th call, we are reaffirming our outlook for the full year and we are not changing any of our key assumptions. Implementations are ramping on schedule and we have good line of sight into the 150 basis points of incremental banking group that is tied to commercial excellence. For the second quarter, we anticipate adjusted revenue growth of 4.2 to 5%. We are targeting banking revenue growth of 3.7 to 4.4%. consistent with our commentary on the fourth quarter call and in line with our full year outlook.

Speaker Change: Including $450 million of share repurchases.

Stephanie Ferris: During the first quarter, our Midwest community bank with over $15 billion in assets selected our digital one product to help the bank transform its branch teller technology.

Speaker Change: Putting us well on track to meeting our $1 2 billion.

Speaker Change: <unk> target for share repurchases.

Speaker Change: In summary.

Stephanie Ferris: The win represents another competitive takeaway for our digital capabilities, which were also recognized by Celent for market momentum and support in their recent reports.

Speaker Change: Great start to the year with strong execution across all key metrics.

Speaker Change: Turning now to our segment results on slide 10.

Stephanie Ferris: Moving the money in motion, where office of the CFO capabilities are resonating with a broad range of clients.

Speaker Change: Adjusted and recurring revenue growth was 4% with recurring revenue at 81% of total revenue.

Stephanie Ferris: During the quarter, we expanded our relationship with a leading multinational engineering and technology firm.

Speaker Change: We continue to emphasize growth in this durable high margin revenue stream.

Stephanie Ferris: The company selected F. I S. As award winning Treasury management solution to assist it with its cash and risk management needs.

Speaker Change: Banking grew 2% in the quarter coming in ahead of the high end of our outlook.

Speaker Change: Recurring revenue growth outpaced adjusted revenue growth of 3% in the quarter.

James Kehoe: This acceleration will be underpinned by strong and accelerating recurring revenue growth. for Capital Markets. We expect adjusted revenue growth of 6 to 6.7%. and combined with a strong first quarter this puts our first half group modestly ahead of our full year outlook. We are projecting sequential margin improvement of approximately 200 basis points to around 39.8 to 40% in the second quarter. For the year, we anticipate continued sequential margin improvement over the remaining quarters as we progress to our full-year target of 41.3%. We are projecting adjusted EPS of $1.34 to $1.38, with EPS growth ranging from 0% to 3%.

Speaker Change: Nonrecurring revenue increased 3%.

Stephanie Ferris: This is a prime example of how office of the CFO is expanding our addressable market beyond traditional financial institutions to corporates.

Speaker Change: Anticipated two percentage point headwind from timber termination and license fees was offset by stronger performance from our card production business.

Stephanie Ferris: We are encouraged by the market reception to our office of the CFO, our offerings and are well on track to meet our sales goal for the year.

Speaker Change: Professional services declined 5% as we successfully concluded some large projects at year end.

Stephanie Ferris: Moving to money at work week.

Stephanie Ferris: We continue to expand our presence in adjacent growth factors, such as private equity and private capital.

Speaker Change: As Stephanie discussed client implementations, our own trucks, and we expect the celebrating professional services growth over the course of the year.

Stephanie Ferris: In the first quarter Atlas S. P. A global investment management, a global investment firm specializing in private credit selected our commercial lending solution to help manage its servicing needs on complex loans and investor reporting requirement.

Speaker Change: Banking EBITA margin contracted to 41%, reflecting high license and termination fees last year and the timing of operating expenses.

Stephanie Ferris: The win is a competitive takeaway and represents our first direct lender client for our commercial lending solution.

Speaker Change: Turning now to capital markets, where we had another strong quarter.

Stephanie Ferris: Turning to more traditional capital markets activity, our derivatives processing solution was selected by a premier buy side firms looking to expand its self clearing capabilities.

Speaker Change: Adjusted revenue growth came in ahead of the high end of our outlook up 9% with recurring revenue growth of 6%.

Stephanie Ferris: We continue to see a trend of buy side firms adopting self clearing capabilities and are encouraged for the prospects of our derivatives clearing solution.

James Kehoe: The result is held back by two items with a combined negative impact of approximately five points of growth. Firstly, we are lapping a sizable one-time grow over in interest income as we opportunistically invested world pay proceeds last year. Secondly, we are facing a tough year-on-year comparison on EMI. Worldpay had a very strong performance last including a slower than planned build-up of standalone operating expenses.

Speaker Change: Nonrecurring revenue advanced 47% as the team delivered a strong license quarter, including outsized renewal timing.

Stephanie Ferris: Now turning to slide seven for a quick review of our recent milestone transaction.

Stephanie Ferris: On April 17th we announced two transactions that accelerate the strategic repositioning of our portfolio.

Speaker Change: Professional services declined 5% year over year, reflecting the completion of some project work and is expected to return to growth in the second quarter.

Stephanie Ferris: First we entered into an agreement to sell our 45% stake in world pay to global payments for $6 $6 billion and pre tax value.

Speaker Change: Adjusted EBITA margin expanded 90 basis points, reflecting strong growth in high margin license revenue and continued favorable operating leverage.

Stephanie Ferris: The sale price represents a premium to the valuation F. I S received when it's sold its majority stake in 2024 and accelerates the monetization of world pay versus pursuing an I P O.

Unknown Executive: Consistent with prior quarters, we have provided our detailed assumptions in the appendix.

Speaker Change: Moving now to our outlook on slide 11.

Stephanie Ferris: Second we announced the acquisition of the issuer solutions business for a net enterprise value of $12 billion, including a 1.5 billion dollar tax benefit.

Unknown Executive: Let's now wrap up on slide 12. In summary, our first quarter results were above expectation. with strong starts on both revenue growth and cash conversion. We are on track for accelerating growth from our banking segment, beginning in the second quarter. and we are reaffirming our full year outlook with total shareholder return of 11 to 13 percent. Capital returns were $670 million in the quarter, putting us on schedule for our $2 billion annual capital return target.

Speaker Change: As messaged on our April 17th coal, we are reaffirming our outlook for the full year and we are not changing any of our key assumptions.

Stephanie Ferris: As a reminder, the transactions are expected to close simultaneously in the first half of 2026.

Stephanie Ferris: The acquisition of the issuer solutions business and the sale of our world pay stake strengthens our strategic and financial position.

Speaker Change: Implementations are ramping on schedule and we have good line of sight into the 150 basis points of incremental banking group that is tied to commercial excellence.

Stephanie Ferris: Issuer solutions complements our existing banking solutions product suite with best in class credit processing capabilities at scale and enhances our value proposition to large banks and corporates.

Speaker Change: For the second quarter, we anticipate adjusted revenue growth of four 2% to 5%.

Stephanie Ferris: Unlocking greater cross sell potential across existing clients.

Speaker Change: We are targeting banking revenue growth of three seven to four 4%.

Stephanie Ferris: The acquisition is also financially attractive there.

Stephanie Ferris: The transaction is accretive in the first 12 months to adjusted EPS, EBITDA margins and adjusted free cash flow with greater benefits longer term synergy targets are achieved it.

Speaker Change: Consistent with our commentary on the fourth quarter call.

Speaker Change: In line with our full year outlook.

Unknown Executive: And lastly, we announced a significant transformation of our financial profile. replacing our non-cash minority interest in world pay with a durable cash generating asset in issuer solutions.

Speaker Change: This is celebration will be underpinned by strong and decelerating recurring revenue growth.

Stephanie Ferris: It strengthens our financial profile and provides us with greater recurring revenue and lastly, the transaction allows us to monetize our non strategic asset.

Speaker Change: For our capital markets.

Speaker Change: We expect adjusted revenue growth of six to six 7% and <unk>.

Stephanie Ferris: Place that with a growing stream of durable revenue and strong free cash flow.

Unknown Executive: With that, operator, could you please open the line for questions? Ladies and gentlemen, we will now begin the question and answer session. If you have dialed in and would like to ask a question, as a reminder, please press star followed by the number one on your telephone keypad. And if you would like to make your questions, simply press star one again. We also ask that you limit yourself to one question and one follow-up only.

Speaker Change: Combined with our strong first quarter. This puts our first half growth modestly ahead of our full year outlook.

Stephanie Ferris: We look forward to closing the transactions and are excited to be partnering with global payments going forward.

Stephanie Ferris: We're confident the transactions will represent a significant win for all companies involved and with that I'll turn it over to James for a review of our first quarter financials Jane Thank.

Speaker Change: We are projecting sequential margin improvement of approximately 200 basis points to around 39.8% to 40% in the second quarter.

James Kehoe: Thank you Stephanie and good morning all.

James Kehoe: I'll begin on slide nine with an overview of our first quarter results, which we previewed on April 17th we.

Speaker Change: For the year, we anticipate continued sequential margin improvement over the remaining quarters as we progress to our full year target of 41, 3%.

Unknown Executive: If you are called upon to ask your question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not unmuted when asking a question.

James Kehoe: We had a great start to the year with adjusted revenue growth of 4%.

Valanav Tensin Wong: Your first question comes from Valanav Tensin Wong with JPMorgan, please go ahead. Hey, good morning, everyone. Thanks for the update. Just want to, um... Julian, I think Stephanie talked about timely conversions. I know the three delayed deals did go live. It sounds like you're not hearing any client decision delays.

James Kehoe: Seeding the high end of our outlook.

Speaker Change: We are projecting adjusted EPS of $1 34 to $1.38 with EPS growth ranging from zero to 3%.

James Kehoe: We delivered upside from both operating segments further increasing our confidence in raising our full year outlook.

James Kehoe: Adjusted EBITDA came in close to the high end of our outlook.

Speaker Change: The result is held back by two items with a combined negative impact of approximately five points of growth.

James Kehoe: $958 million, leading to an EBITDA margin of 37, 8% in the quarter.

Stephanie Ferris: I'm just curious what other feedback you're getting in terms of decision-making, pipeline rebuild, and, of course, any client feedback that's worth sharing with respect to bringing the Assure Solutions business on. Thanks. Yeah.

Speaker Change: Firstly, we are lapping the sizable onetime rollover and interest income as we Opportunistically invested world pay proceeds last year.

James Kehoe: Adjusted EPS was $1.21.

James Kehoe: 100 was also near the high end of our outlook would year over year growth of 11%.

Stephanie Ferris: Thanks, Tenjin. So a couple things. Yeah, as we had indicated, those client conversions were going live in first quarter and second quarter. They're all live. So really happy about that. And you're seeing that show up in the banking revenue guide in second quarter and full year. So very good. Everything went well, progressing exactly as expected, and maybe even slightly positive. In fact, our pipeline is actually increasing very significantly, even as we compare it to year over year. So feeling really good about pipeline. We're obviously keeping a very tight watch on it in terms of tariff and economic activity, but I'd say that's the benefit of FIS.

Speaker Change: Secondly, we are facing a tough year on year comparison on BMI.

James Kehoe: Cash conversion improved significantly as we rolled out working capital initiatives unloved, a weak prior year.

Speaker Change: <unk> had a very strong performance last year, including a slower than planned buildup of Standalone operating expenses.

James Kehoe: Free cash flow was $368 million in the quarter compared to $95 million last year.

Speaker Change: Consistent with prior quarters, we have provided our detailed assumptions in the appendix.

James Kehoe: With a cash conversion rate of 71%.

Speaker Change: Let's now wrap up on slide 12.

James Kehoe: 18% in the prior year.

James Kehoe: As a reminder.

Speaker Change: In summary.

James Kehoe: The first quarter is historically, a lower conversion quarter.

Speaker Change: Our first quarter results were above expectations with strong starts on both revenue growth and cash conversion.

James Kehoe: We are off to a strong start on our full year target of 82% to 85%.

Speaker Change: We are on track for accelerating growth from our banking segment beginning in the second quarter.

James Kehoe: Capital expenditures were $233 million in the quarter or 9% of revenue.

James Kehoe: Systems with our full year expectation.

Speaker Change: And we are reaffirming our full year outlook with total shareholder return of 11% to 13%.

James Kehoe: And we exited the quarter at our target leverage of two eight times.

Speaker Change: Capital returns were $670 million in the quarter.

James Kehoe: Lastly, we returned $617 billion to shareholders include.

Stephanie Ferris: It's very durable, highly recurring, and required spend. It's not really discretionary. So like the focus with the ultimate acquisition by us in terms of continuing to focus on financial institutions and on that solution set, because that customer base is typically not looking at merchant acquiring. So very positive all around. Great.

Speaker Change: Putting us on schedule for our $2 billion annual capital return target.

James Kehoe: Including $450 million of share repurchases.

James Kehoe: Putting us well on track to meeting our $1 2 billion daughter.

Speaker Change: And lastly.

Speaker Change: We announced a significant transformation of our financial profile.

James Kehoe: <unk> target for share repurchases.

Speaker Change: Replacing our noncash minority interest in world pay with a durable cash generating asset in issuer solutions.

James Kehoe: In summary.

James Kehoe: Great start to the year with strong execution across all key metrics.

James Kehoe: Turning now to our segment results on slide 10.

Speaker Change: With that.

Speaker Change: Operator could you. Please open the line for questions.

James Kehoe: Adjusted and recurring revenue growth was 4% with recurring revenue at 81% of total revenue.

Speaker Change: Okay.

Speaker Change: Ladies and gentlemen, we will now begin the question and answer session. If you have dialed in and would like to ask a question. As a reminder, please press star followed by the number one on your telephone keypad and if you would like to withdraw your question simply press Star. One again, we also ask that you limit yourself to one question and one follow up only if you are called upon to ask a question or listening via loud speaker al Gore.

James Kehoe: We continue to emphasize growth in this durable high margin revenue stream.

James Kehoe: Banking grew 2% in the quarter coming in ahead of the high end of our outlook.

James Kehoe: Recurring revenue growth outpaced adjusted revenue growth of 3% in the quarter.

Speaker Change: Please pickup your handset the nature that your body is not on mute when asking your question.

Speaker Change: Your first question comes from the line of 10 seen Huang with JP Morgan. Please go ahead.

James Kehoe: Nonrecurring revenue increased 3%.

James Kehoe: Anticipated two percentage point headwind from timber termination and license fees was offset by stronger performance from our card production business.

Speaker Change: Hey, good morning, everyone. Thanks.

Stephanie Ferris: And just my quick follow-up, I know I've asked it before on this call before, Stephanie, but just any updated thoughts on Capital One Discover, now that that's moving a little bit more forward? No, I mean, I think, you know, they had some really positive news. Sounds like it's moving forward. We have a great partnership with them. We had a great partnership with Discover. So we see nothing but positives with them and continue to support them and everything they want to do. It's nice to see them, obviously get through their hurdles and get to the other side of it.

Speaker Change: Thanks for the update just wanted to.

Speaker Change: Julian I think Stephane, you talked about timely conversions under the three relate.

Speaker Change: It really deals did it go live.

James Kehoe: Professional services declined 5% as we successfully concluded some large projects at year end.

Speaker Change: Got.

Speaker Change: It sounds like Youre not hearing any decline decision delays I'm just curious what other feedback youre getting in terms of decision, making pipeline rebuilt and of course, then the client feedback that's worth sharing with respect to bringing the issuer solutions business on.

James Kehoe: Stephanie discussed client implementations, our own trucks, and we expect a similar rate in professional services growth over the course of the year.

Speaker Change: Yeah.

Speaker Change: Thanks, Tien tsin, so a couple of things yeah. We're we as we had indicated those client conversions, we're going live in first quarter and second quarter, They're all live so really happy about that and you're seeing.

Stephanie Ferris: We think it's going to be a great combination.

James Kehoe: Banking EBITA margin contracted to 41%.

John Davis: Your next question comes from the line of John Davis with Raymond James. Please go ahead. Hey, morning, guys, just wanted to drill in a little bit to 2Q guide for capital markets, a little bit of a decel, you do have a little bit of a tougher comp, anything else to call out, recurring, non-recurring, anything else that would be helpful?

James Kehoe: Selecting high license and termination fees last year and the timing of operating expenses.

Speaker Change: <unk> Dot show up in the banking revenue in second quarter and full year. So very good everything went well.

James Kehoe: Turning now to capital markets, where we had another strong quarter.

James Kehoe: Adjusted revenue growth came in ahead of the high end of our outlook up 9% with recurring revenue growth of 6%.

Speaker Change: Progressing exactly as expected and maybe even slightly positive.

Speaker Change: In terms of overall pipeline from clients I mean, that's the benefit of F. I S is regardless of the economic cycle, we have very high.

James Kehoe: Yeah, so I think when you think about second quarter, it really is a first quarter, second quarter. If you look at our first quarter results for capital markets, they had a very high non recurring benefit in the first quarter from a renewal. So that was a timing related benefit in the first quarter, we saw it there, their recurring revenue first quarter, second quarter is very consistent. And then the license, the license and the renewal activity goes back to a normalized. So they were benefiting in the first quarter from that. And so you see our second quarter guide being very consistent with first quarter excluding that renewal time.

James Kehoe: Nonrecurring revenue advanced 47% as the team delivered a strong license quarter, including outsized renewal timing.

Speaker Change: Highly recurring and where required spend so not seeing any impact from clients in terms of slowing spend down in fact, our pipeline is actually increasing very significantly.

James Kehoe: Professional services declined 5% year over year, reflecting the completion of some project work and is expected to return to growth in the second quarter.

Speaker Change: Even as we compare it to year over year, so feeling really good about pipeline. We're obviously keeping a very tight watch on it in terms of tariff and economic activity, but I'd say, that's the benefit of I asked it's very durable highly recurring and required spend it's not it's not really discretionary.

James Kehoe: Adjusted EBITA margin expanded 90 basis points, reflecting strong growth in high margin license revenue and continued favorable operating leverage.

James Kehoe: Okay, great.

John Davis: And then just thinking about the banking segment on a pro forma basis, if you help us, what percentage of that banking segment will now be the combined debit issuing business that you have plus thesis, and just maybe a rough sense of what is kind of an account on file versus a per transaction fee, just so we can get a sense of any sort of cyclicality with with a slowdown from a macro perspective. Hmm. Well, those are great questions, John. I don't think I have all that at my fingertips. I think you heard this morning from the TSIS guys on their call that they have are seeing consistent and strong account on file growth.

James Kehoe: Moving now to our outlook on slide 11.

Speaker Change: And then with the last piece on T says I have to say from a client standpoint. They it's been really really positive. So we did obviously a lot of diligence on the T cell business, we know them. We know the team there just from being in the market for a long time, we didn't compete against them, but they have such a great.

James Kehoe: As messaged on our April 17th coal, we are reaffirming our outlook for the full year and we are not changing any of our key assumptions.

James Kehoe: Implementations are ramping on schedule and we have good line of sight into the 150 basis points of incremental banking growth that is tied to commercial excellence.

Speaker Change: Rand and from their clients that are also clients of ours people, where are we're hearing very strong commitments to them in terms of you know best in class product suite.

James Kehoe: For the second quarter, we anticipate adjusted revenue growth of 4.2% to 5%.

Speaker Change: As well as client service and then you know consistent with didn't really see a value of having merchant acquiring and pieces together. So like the focus with the ultimate acquisition by US in terms of continuing to focus on financial institutions and on that solution set because.

Stephanie Ferris: And they're even, you know, they had positive spend there and transaction growth and still a little bit of muted commercial. From our side of the house, debit, just like you would expect, you know, from a consumer spend standpoint, we're seeing consumer spend on debit continuing to be consistent with what you're hearing from everybody else. We don't see a slowdown. It's also a very resilient part of the business for us. We're seeing very strong debit transaction growth. Our credit portfolio is not very big, but we aren't seeing any slowdown there. So hopefully that's helpful.

James Kehoe: We are targeting banking revenue growth of three 7% to 4.4%.

James Kehoe: Consistent with our commentary on the fourth quarter call.

In line with our full year outlook.

James Kehoe: This is a celebration will be underpinned by strong Honda accelerating recurring revenue growth.

Speaker Change: That customer base is typically not looking at Mac merchant acquiring so so very positive all around.

James Kehoe: For capital markets.

Speaker Change: Great and just my quick follow up I know Ive asked before on this call before and Stephanie.

James Kehoe: We expect adjusted revenue growth of six to six 7% and.

Speaker Change: Updated thoughts on capital one.

James Kehoe: Combined with our strong first quarter. This puts our first half group modestly ahead of our full year outlook.

James Kehoe: I don't have the numbers in front of me in terms of accounts on file or transactions. Yeah, the only thing we highlighted on the call was just we're adding two and a half billion to a banking business that's roughly seven. So the scale and banking goes up by, I think it's about 35%. So it's a 9.4 revenue, 9.4 billion in revenue. Then we said that overall, it's additive to margins by about 80 basis points. We didn't give any specifics here, but we did point out to their strong position in market. And they have, you know, I think the beauty of that business, the average tenure of the clients is 25 years.

Speaker Change: Discover enough that that's moving a little bit more forward.

Speaker Change: No I mean, I think you know they had some really positive news it sounds like it's moving forward and we have a great partnership with them and we had a great partnership with discover so we see nothing but positive with them and continue to support them and everything they want to do it it's nice to see them, obviously get through their hurdles and get to the other side of it we think it's going to be a gray.

James Kehoe: We are projecting sequential margin improvement of approximately 200 basis points to around 39.8% to 40% in the second quarter.

James Kehoe: For the year, we anticipate continued sequential margin improvement over the remaining quarters as we progress to our full year target of 41, 3%.

Speaker Change: Combination.

Speaker Change: Your next question comes from the line of John Davis with Raymond James. Please go ahead.

John Davis: Hey, Good morning, guys just wanted to drill in a little bit to Q guide for capital markets, a little bit of a DSL you do have a little bit of a tougher comp than anything else to call out recurring nonrecurring anything else there would be helpful.

James Kehoe: We are projecting.

James Kehoe: <unk> adjusted EPS of $1 34 to $1.38 with EPS growth ranging from zero to 3%.

James Kehoe: So it's highly durable revenue, which is very consistent with our core banking business. So 80% recurring revenue with margins in the, you know, low to mid forties. Yeah, I think the other thing is it supports what we said at Investor Day in terms of ability to continue to grow payments in a very large scaled and durable way, so debit and credit. And it also gives us an opportunity with clients to do more bundling, as we think about, you know, the cross sell, whether we have debit and they have credit, or they have credit and we have debit, which is pretty significant.

John Davis: Yeah. So I think when you think about second quarter. It really is a first quarter second quarter. If you look at our first quarter results for capital markets. They had a very high non recurring <unk>.

James Kehoe: The result is held back by two items with a combined negative impact of approximately five points of growth.

James Kehoe: Firstly, we are lapping the sizeable one time rollover in interest income.

John Davis: In the first quarter from a renewal.

John Davis: So that was a timing related benefit in the first quarter. We saw there their recurring revenue first quarter second quarter is very consistent and then that the license them the license and the renewal activity goes back to more of a normalized so they were benefiting in the first quarter from that and so you see our second quarter Guy.

James Kehoe: As we Opportunistically invested world pay proceeds last year.

James Kehoe: Secondly, we were facing a tough year on year comparison on <unk>.

James Kehoe: World pay had a very strong performance last year, including a slower than planned buildup of Standalone operating expenses.

John Davis: Being very consistent with first quarter, excluding that renew all timing.

Dan Dolev: Your next question comes from the line of Dan Dolev with Mizuho, please go ahead. Hey guys, great results there. Really nice to see that.

James Kehoe: Consistent with prior quarters, we have provided our detailed assumptions in the appendix.

John Davis: Okay, Great and then just thinking about the banking segment on a pro forma basis.

John Davis: US what percentage of that banking segment will now be the combined debit issuing business that you have plus thesis and just maybe a rough sense of what is kind of an account on file versus a per transaction fee. Just so we can get a sense of any sort of cyclicality with with the slowdown from a macro perspective.

James Kehoe: Let's now wrap up on slide 12.

Stephanie Ferris: Stephanie, can you maybe give us a sense of how you're feeling about the WorldPay EMI outlook and how has revenue growth has been tracking there relative to your expectations? Thank you. Yeah, thanks, Dan. So The WorldPay EMI Outlook is very consistent year-over-year with what we've been putting in the guide. We're not seeing any softening there. In fact, we always think, as you know, that Charles has strong growth, so we're always hoping for outperformance, but nothing negative at all in the EMI Outlook, very consistent with what they've provided to us.

James Kehoe: In summary, our first quarter results were above expectations with strong starts on both revenue growth and cash conversion.

John Davis: Well those are great question, John I don't think I have all that at my Fingertips I think you heard this morning from.

James Kehoe: We are on track for accelerating growth from our banking segment beginning in the second quarter.

James Kehoe: And we are reaffirming our full year outlook with total shareholder return of 11% to 13%.

John Davis: From the thesis guys on their call that they have are seeing consistent and strong account on file growth and they're even you know they had positive spend they are in transaction growth and so a little bit muted commercial from our side of the house debit just like you would expect you know from a consumer spend standpoint, we were seeing can.

Stephanie Ferris: In terms of revenue growth, and I think Cameron gave some updates as well on the call this morning, you know, we're really pleased to see the acceleration of revenue in WorldPay last year. Separating it was clearly the right decision, bringing back Charles and having growth and focus there and investment. They've really been able to turn that business around. You're seeing the revenue growth in the fourth quarter and then into the first quarter. They obviously have a lapping of like everybody else, but their revenue growth continues to be consistent with the market, and they're feeling really good about where they're taking it from when we had it really as a low single-digit grower to back up to mid to upper, so feeling really good about the performance there.

James Kehoe: Capital returns were $670 million in the quarter, putting us on schedule for our $2 billion annual capital return target.

John Davis: <unk> spend on debit continuing to be consistent with what you're hearing from everybody else. We don't see a slowdown it's also a very resilient.

James Kehoe: And lastly.

James Kehoe: We announced a significant transformation of our financial profile.

James Kehoe: Replacing our noncash minority interest in world pay with a durable cash generating asset in issuer solutions.

John Davis: Part of the business for Us and we're seeing very strong debit transaction growth our credit portfolio is not very big but we arent seeing any slow down there. So.

James Kehoe: With that.

James Kehoe: Operator could you. Please open the line for questions.

John Davis: Hopefully that's helpful. I don't have the numbers in front of me in terms of accounts on file our transactions, yes. The only thing we highlighted on the call. It was just we're running two and a half billion to our banking business. This roughly seven so the scaling banking goes up but I think it's about 35%. So it's a nine point for revenue.

James Kehoe: Okay.

Stephanie Ferris: They're highly focused on execution, and I think it'll be a great asset for GlobalPay. Thank you.

John Davis: $9 4 billion of revenue then we said that overall, the it's additive to margins by about 80 basis points.

James Kehoe: Please pick up your handset and ensured that all is not on mute.

Unknown Executive: And just as a quick follow-up, can you give us a sense of the EBITDA margin cadence, given the timing of the investment in the first quarter? for WorldPay. for yeah. The EBITDA margin gains for world pay.

John Davis: We didn't give any specifics here, except that we did point out to the strong position in the market.

Speaker Change: Question.

Speaker Change: Your first question comes from the line of Tien Tsin Huang with Jpmorgan. Please go ahead.

John Davis: They have.

Speaker Change: Hey, good morning, everyone. Thanks for the update just wanted to.

John Davis: The beauty of that business. The average tenure of the clients is 25 years. So it's highly durable revenue, which is very consistent with our core banking business. So it is 80% recurring revenue with margins in the in the <unk>.

Speaker Change: Julian I think Stephanie you talked about timely conversions under the three.

Unknown Executive: I don't think we externally talk about that. I think all we can show you technically is revenue and EMI. You would expect though that they are making investments in the business. They had some benefits in EMI you saw last year because the investments were a little bit slower to get started. They're fully ramping those. So no change from what we've said historically.

Speaker Change: He led deals did it go live.

Speaker Change: Got.

John Davis: Low to mid forties.

John Davis: I think the other thing is it supports what we said at Investor day in terms of ability to continue to grow payments.

John Davis: And a very large scaled and durable way, so debit and credit and it also gives us an opportunity with clients to do more bundling as we think about you know the cross sell whether we have debit and they have credit or they have credit and we have debit which is pretty significant.

Speaker Change: Yeah.

Rayna Kumar: Your next question comes from the line of Ramsey El Assal with Barclays. Please go ahead. Hi, this is Ryan on Ramsey. Thanks for taking our question today.

Unknown Executive: As we start to think about the pro forma business, what would you consider the lowest hanging fruit from a cost synergy standpoint? And any additional color you could provide on this? The rate in which you expect to realize these synergies would be helpful. Thank you.

Speaker Change: <unk> Dot show up in the banking revenue guide in the second quarter and full year. So very good everything went well.

Speaker Change: Your next question comes from a lot of that dollar with Mizuho. Please go ahead.

Speaker Change: <unk> progressing exactly as expected and maybe even slightly positive.

Speaker Change: Hey, guys great results, there really nice to see that.

Speaker Change: In terms of overall pipeline from clients I mean, that's the benefit of F. I S is regardless of the economic cycle, we have very highly recurring and where required spend so not seeing any impact from clients in terms of slowing spend down in fact.

Speaker Change: Kevin can you maybe give us a sense of how you're feeling about the world.

Stephanie Ferris: Sure. Maybe I'll take the types of cost synergies, and I'll default over to James in terms of rate. But I think what we shared was, we think the biggest amount of cost synergies, and just as a reminder, we talked about $125 million, would be rationalizing duplicate vendor costs. I don't know what cadence, James, we gave of you towards revenue and EBITDA synergies. What we said was if you look at total synergies of 150, we said split it evenly over year two and year three. While we will get some cost synergies in the first year, we will have some TSAs from global in the first period.

Speaker Change: Look.

And how does revenue growth has been tracking relative to your expectations. Thank you.

Speaker Change: Yeah, Thanks, Dan so.

Speaker Change: The World P. E M. I outlook is very consistent year over year with what we've been putting in the guide we're not seeing any softening. There in fact, we always think as you know that Charles has strong growth. So we're always hoping for outperformance, but but nothing negative at all in the E. M. I outlook very consistent with what they provided to us in terms of revenue.

Speaker Change: Our pipeline is actually increasing very significantly even as we compare it to year over year, so feeling really good about pipeline.

Speaker Change: We're obviously keeping a very tight watch on it in terms of tariff and economic activity, but I'd say, that's the benefit of that if I asked it's very durable highly recurring and required spend it's it's not it's not really discretionary and then with the last piece on T says I have to say from a client standpoint they it.

Speaker Change: Growth in I think Cameron gave some updates as well on the call. This morning.

Speaker Change: We're really pleased to see the acceleration of revenue and we're all pay last year separating it was clearly the right decision in bringing back Charles and having growth in focus there and investment they've really been able to turn that business around you're seeing the revenue growth in the fourth quarter and then.

Speaker Change: It's been really really positive. So we did obviously a lot of diligence on the T cell business, we know them, we know that team there just from being in the market for a long time, we didn't compete against them, but they have such a great brand.

Speaker Change: And to the first quarter. They obviously have a lapping of Easter and leap day like everybody else.

Speaker Change: And from their clients that are also clients of ours people, where are we're hearing very strong commitments to them in terms of you know best in class product suite as.

Speaker Change: But their revenue growth continues to be consistent with the market and they're feeling really good about where they are taking it and and you know taking it from you know when we had it really is a low single digit grower to back up to mid to upper so feeling really good about the performance there they're highly focused on execution and I think it'll be a great.

Speaker Change: Great asset for our global payments.

Speaker Change: Thank you and just as a quick follow up can you give us a sense of the EBITDA margin cadence, giving the timing of investments in the first quarter.

Speaker Change: That customer base is typically not looking at Mac merchant acquiring so so very positive all around.

Speaker Change: Or eat for world pay.

Speaker Change: For yes.

Speaker Change: Great and just my quick follow up I know Ive asked before on this call before and Stephanie.

Speaker Change: The EBITA margin cadence for we're paying I don't think we externally talk about that I think all we can show you technically as revenue and EMI you would expect though that they are making investments in the business. They had some benefits and EMI you saw last year, because the investments were a little bit slower to get start.

Speaker Change: The updated thoughts on capital one.

Speaker Change: Discovered enough that that's moving a little bit more forward.

James Kehoe: So we'll get our arms around it, but as Stephanie said, we'll go really quickly on cost synergies. I think the upside is bigger than the 150 longer term. What we did say on the call was that only included 45 million of revenue synergies in the first three years, but we did highlight a long-term potential on revenue synergies of 125. So that 150 will build as you look further out in the period. But take a 50-50 over year two and year three, and you won't be too far along.

Speaker Change: Ed they're fully ramping those so no change from what we've said historically.

Speaker Change: Your next question comes from the line of from <unk> with Barclays. Please go ahead.

Speaker Change: Combination.

Speaker Change: Your next question comes from the line of John Davis with Raymond James. Please go ahead.

Speaker Change: This is Ryan on for Ramsey, Thanks for taking our question today.

John Davis: Hey, Good morning, guys just wanted to drill in a little bit the <unk> guide for capital markets, a little bit of a DSL you do have a little bit of a tougher comp, but anything else to call out recurring nonrecurring anything else there would be helpful.

Speaker Change: As we start to think about the pro forma business, what would you consider the lowest hanging fruit from a cost synergy standpoint, and any additional color you can provide on that.

Unknown Executive: Great. Thanks. That's all for me. Congrats on the quarter. Thank you.

Speaker Change: The rate in which you expect to realize these synergies would be helpful. Thank you.

Andrew Schmidt: Your next question comes from the line of Andrew Schmidt with CB. Please go ahead. Hi, Stephanie. Hi, James. Thanks for taking my questions this morning. You know, I know you mentioned that the Eagerly Solutions transaction, you know, will be accretive in the first 12 months. But I'm wondering if you could just comment on the level of accretion that you expect. We get to low single digit for 12 months and then higher, maybe mid-single in 24 months. Obviously, there's probably, you know, some upside to that, depending on timing and favorability and things like that. But any comments there would be helpful.

Speaker Change: Sure maybe I'll take the the types of cost synergies and all default over to James in terms of rate, but I think what we shared was we.

Speaker Change: Thank the biggest amount of cost synergies and just as a reminder, we talked about $125 million would be rationalizing duplicate vendor costs. So when you think about bringing the both card businesses together, whether it's debit or credit we use the same set of vendors think about vendors alike.

John Davis: So that was a timing related benefit in the first quarter. We saw it there their recurring revenue first quarter second quarter is very consistent and then that the license them the license and the renewal activity goes back to more of a normalized so they were benefiting in the first quarter from that and so you see our second quarter Guy.

Unknown Executive: Thank you so much.

Speaker Change: Technology software fraud vendors et cetera. So we think there is quite a bit there I mean, you would expect us to pull those very quickly. We also anticipate back office optimization. So when you think about whether you're producing a debit card or credit card, we have consistent card production.

John Davis: Being very consistent with first quarter, excluding that renew all timing.

Stephanie Ferris: I don't think we're going to go any further than what we said on the transaction call. We're very happy that it's immediately accretive. And as I said, what will happen is it's immediately accretive, but it's transformational at the same time. So the EPS accretion, I think, is the least important number because we're losing a fairly very accretive world pay stake that also gave us tax benefits. But we're replacing it with a boost to our banking revenue at 35%. More importantly, our cash flow will go up 35%. So the construction of the company is completely different.

John Davis: Okay, Great and then just thinking about the banking segment on a pro forma basis can you help us what percentage of that banking segment will now be the combined debit issuing business that you have plus cheeses and just maybe a rough sense of what is kind of an account on file versus a per transaction fee. Just so we can get a sense of any sort of cyclic.

Speaker Change: <unk> capabilities, we have print mail capabilities those can be optimized and you can imagine that the T society is bigger than our side, but we don't need all of them and so you would expect us to have back office optimization, there and then to the extent we have operational capabilities that we think we can.

John Davis: <unk>, what's with the slowdown from a macro perspective.

John Davis: Well those are great questions. John I don't think I have all that at my Fingertips I think you heard this morning from the teaser skies on their call that they have are seeing consistent and strong account on file growth and they're even you know they had positive spend they are in transaction growth and so a little bit.

Speaker Change: Bring together and quite frankly use that thesis expertise because it's much larger than ours on the credit side, we think we could see opportunities. There in terms of cost synergies you should expect to see us get out the gate very quickly with those there are obviously the lower hanging fruit.

James Kehoe: The scale is flowing through to cash as opposed to EPS. That's the part I would point to more than anything else. The margins are boosted as well, which strengthens our banking business. The specific EPS accretion is not the most attractive part of the deal. It is solidifying the strength of the banking business and call it fortifying our banking business going forward, driving enhanced scale on the total company. But where it really plays out for me is on the cash line, which is adding $700 million when the reality is our current cash flow is in the region of $2 billion on an adjusted basis.

John Davis: Muted commercial from our side of the house debit just like you would expect from a consumer spend standpoint, we were seeing consumer spend on debit continuing to be consistent with what youre hearing from everybody else. We don't see a slowdown it's also a very resilient part.

Speaker Change: And so we will use the timeframe between now and signing to get very organized around that I don't know that what cadence James we gave a view towards the revenue and EBITDA synergies. What we said was if you look at the total synergies of 150, we said split it evenly over year, two and year three but while we will get some cost synergies in the first.

John Davis: Part of the business for us.

John Davis: We're seeing very strong debit transaction growth our credit portfolio is not very big but we arent seeing any slow down there. So.

John Davis: Hopefully that's helpful. I don't have the numbers in front of me in terms of accounts on file our transactions yeah. The only thing we've highlighted on the call. It was just we're running $2 5 billion to our banking business. This roughly seven so the scaling banking goes up but I think it's about 35%. So it's a nine point for revenue.

Stephanie Ferris: Soon we will have some TSA is from global in the first period. So we will get our arms around it but as Stephanie said will go really quickly on cost synergies.

Stephanie Ferris: So that's an incredible boost. And I think you look at the revenue synergies longer term and that can only be additive to the attractive financial profile of the company. Thank you. Well said on the cash flow and strategic benefits. I appreciate that. Yeah.

Stephanie Ferris: I think the upside is bigger than the 150 longer term what we did say on the call was that only included $45 million of revenue synergies.

John Davis: $9 4 billion of revenue then we said that overall, the it's additive to margins by about 80 basis points.

Stephanie Ferris: In the first three years, but we did highlight the long term potential on revenue synergies of 125. So that 150 will build as you look for further Walter in the period.

John Davis: We didn't give any specifics here, except that we did point out to the strong position in the market.

Stephanie Ferris: If you could just talk about a little more detail, the sales motion with cross-selling, credit issuance processing. I assume often with large FIs, you're talking at enterprise level, so that part of the business can be pulled in. But just curious, just maybe a process question in how you go about the cross-sell motion. Thanks a lot. So The reason why this transaction makes just so much sense is the amount of clients that we both support. So on our side, we could be doing core and network and debit, as well as trading and lending when you think about these large financial institutions.

Stephanie Ferris: Take a 50 50 over year, two and year, three and you won't be too far along.

John Davis: They have.

John Davis: The beauty of the business. The average tenure of the clients is 25 years. So it's highly durable revenue, which is very consistent with our core banking business. So it is.

Speaker Change: Great. Thanks, that's all for me congrats on the quarter.

Stephanie Ferris: Thank you.

Andrew Schmidt: Your next question comes from the line of Andrew Schmidt with Citi. Please go ahead.

John Davis: 80% recurring revenue with margins in the <unk>.

Andrew Schmidt: Hi, Stephanie Hi, James Thanks for taking my questions. This morning.

John Davis: Low to mid forties.

Andrew Schmidt: I know you mentioned that the issuer solutions transaction will be accretive in the first 12 months.

John Davis: Yes, I think the other thing is it supports what we said at Investor day in terms of ability to continue to grow payments.

John Davis: And a very large scaled and durable way, so debit and credit and it also gives us an opportunity with clients to do more bundling as we think about that cross sell whether we have debit and they have credit or they have credit and we have debit which is pretty significant.

Andrew Schmidt: But I'm wondering if you could just comment on the level of accretion that you expect we get to low single digit 12.

Andrew Schmidt: 12 months, and then higher in maybe mid single, but in 24 months, obviously theres probably.

Andrew Schmidt: Some upside to that depending on timing and favorability and things like that but any comments there would be helpful. Thank you so much.

Stephanie Ferris: So we already have that cross-sell motion going between the banking and capital markets business and offer out a bundled solution set there. The opportunity has always been not having the credit capabilities upmarket. So when you think about an ability and an opportunity to add credit now to credit and debit as well as core network lending and trading, we think we're uniquely positioned because we think we're the only player that has that cross-section of product sets. And we already have the motion in play. We also think just relationship-wise, if you think about where we play typically with the banking and capital market solution sets, typically back office.

Andrew Schmidt: I think we're going to go any further than what we said on the transaction call.

John Davis: Your next question comes from the line of then Dolan with Mizuho. Please go ahead.

Andrew Schmidt: We're very happy that it's immediately accretive.

Dolan: Hey, guys great results, there really nice to see that.

Andrew Schmidt: And as I said, the what will happen is it's immediately accretive but it's transformational at the same time so.

Speaker Change: Kevin can you maybe give us a sense of how youre feeling about the world.

Speaker Change: Outlook and how does revenue growth has been tracking relative to your expectations. Thank you.

Speaker Change: The EPS accretion I think is the least important number because we are losing.

Speaker Change: Yeah, Thanks, Dan so.

Speaker Change: A fairly a very accretive we'll pay stake that also gave us tax benefits, but we're replacing it with a boost to our banking revenue was 35% more importantly, our cash flow will go up 35%. So the the construction of the company is completely different.

Speaker Change: The scale is flowing through to cash as opposed to EPS.

Stephanie Ferris: So when you think about who we're interacting with, chief technology officers, CIOs, when you start to talk about credit issuing, we're now in the front part of the bank because of how much revenue generating capabilities it is. So for us, we really think about this as a big unlock of incremental market for us in a large financial institution space whereby we are already have existing relationships, have cross-sell motion, and now we're adding a product set and a set of a team that has significant relationships. So win, win, win there and very excited about it. And then, as I mentioned to Tingen in the very beginning of the call, hearing from clients, just really positives around both the T-SYS product set and teams over there in terms of customer service, but also that they like the benefits of dealing with FIS altogether.

Speaker Change: Revenue growth and I think Cameron gave some updates as well on the call. This morning, we're really pleased to see the acceleration of revenue in world pay last year separating it was clearly the right decision in bringing back Charles and having growth in focus there and investment they've really.

Speaker Change: That's the part I would.

Speaker Change: Two more than anything else the margins were boosted as well, which strengthens our banking business.

Speaker Change: The specific EPS accretion is not the most attractive part of the deal it is solidifying Lee.

Speaker Change: The strength of the banking business.

Speaker Change: Been able to turn that business around you're seeing the revenue growth in the fourth quarter and then into the first quarter. They obviously have a lapping of Easter and leap day like everybody else, but their revenue growth continues to be consistent with the market and they're feeling really good about where they are taking it and and you know taking it problems.

Speaker Change: Call it four to find our banking business going forward driving enhanced scale on the total company.

Speaker Change: You know we're really plays out for me is on the cash cost line, which is adding $700 million when the reality is our current cash flow.

Speaker Change: As in the region of 2 billion on an adjusted basis. So that's an incredible boost.

Speaker Change: You know when we had it really is a low single digit grower to back up to mid to upper so feeling really good about the performance there they're highly focused on execution.

Speaker Change: I think I think we're you look at the revenue synergies longer term and that can only be additive to the attractive financial profile of the company.

Speaker Change: I think it'll be a great a great asset for global payments.

Speaker Change: Thank you and just as a quick follow up can you give us a sense of the EBITDA margin cadence given the timing of investments in the first quarter.

Speaker Change: Thank you both and on the cash flow of strategic strategic benefits I appreciate that.

Stephanie Ferris: As you think about one provider serving them across their ecosystem, makes it easier for them from a regulatory standpoint and overall from getting the best optimized metrics for them. So that's been very positive as well.

Speaker Change: If you could just talk about a little more detail the sales motion with cross selling credit issuance processing.

Speaker Change: Four eat for World pay.

Speaker Change: I assume often with large with large fi as youre talking an enterprise level. So that part of the business can be pulled in but just curious just maybe a process question in how you go about the cross sell motion. Thanks a lot.

Speaker Change: For yes.

Speaker Change: The EBITDA margin cadence for we're paying I don't think we externally talk about that I think all we can show you technically as revenue and EMI.

Jason Kupferberg: Next question comes from the line of Jason Kupferberg with Bank of America, please go ahead. Good morning, guys. Thank you. I wanted to start on the banking side. It looks like based on the Q2 guide, we'll need maybe 200 basis points of acceleration in the second half to get to the midpoint of the full year. And I know that's pretty consistent with what you originally anticipated.

Speaker Change: You would expect though that they are making investments in the business. They had some benefits any M. I you saw last year, because the investments were a little bit slower to get started they're fully ramping those so no change from what we've said historically.

Speaker Change: So.

Speaker Change: The reason why this transaction makes just so much sense and the amount of clients that we both support so on our side, we could be doing core and network.

Speaker Change: Your next question comes from the line of for Mcl FL with Barclays. Please go ahead.

James Kehoe: Now that we're a third of the way through the year, can you hone in on the specific drivers there? I don't know if it's mostly just the ramp of the three delayed implementations and just your overall visibility and confidence level on that acceleration. I think as you think about margins for us, it's really two things going into second quarter and the back half of the year. The first one is just overall mix. So, you know, as we talked about, you know, the sales and high levels of revenue retention, when we did our guide in the fourth quarter into 2025, we talked about the mix of, you know, less lower margin and more higher margin and not really taking hold in the back half of 2025.

Speaker Change: And debit as well as trading and lending when you think about these large financial institution. So we already have that cross sell motion going between the banking and capital markets business and offer out a bundled solution set there the opportunity has always been.

Speaker Change: Yeah.

Ryan: Hi, This is Ryan on for Ramsey, Thanks for taking our question today.

Speaker Change: We start to think about the pro forma business, what would you consider the lowest hanging fruit from a cost synergy standpoint, and any additional color you can provide on that.

Speaker Change: The rate in which you expect to realize these synergies would be helpful. Thank you.

Speaker Change: <unk> dot, having not having the credit capabilities upmarket.

Speaker Change: Sure maybe I'll take the the types of cost synergies and all default over to James in terms of rate, but I think what we shared was we think the biggest amount of cost synergies and just as a reminder, we talked about $125 million would be rationalizing duplicate vendor costs.

Speaker Change: So when you think about an ability and an opportunity to add credit now to credit and debit as well as core network lending and trading we think where we're uniquely positioned them. Because we think we're the only player that has that cross section of product sets and we already have the motion.

Speaker Change: So when you think about bringing the both card businesses together, whether it's debit or credit we use the same set of vendors.

Speaker Change: Play. We also think just the relationship wise, if you think about where we play typically with the banking and capital market solution sets typically back office. So when you think about who we're interacting with chief Technology Officer of Cio's. When you start to talk about credit issuing we're now in a.

James Kehoe: So we think from a margin standpoint, what we would expect and, you know, as you can know, as you can see, we now have really strong visibility to a positive mix driver for that in the back half of this year. In addition to that, we, as you know, have been executing against all of our future forward cost programs and continue to significantly ramp those. And so as we sit here today in May, feel very confident about the activities we've already done and what yet to be done as we think about going into the rest of the year.

Speaker Change: About vendors alike technology software fraud vendors et cetera. So we think there is quite a bit there I mean, you would expect us to pull those very quickly. We also anticipate back office optimization. So when you think about whether you're producing a debit card or credit card we.

Speaker Change: Front part of the bank because of how much revenue generating capability as it is so for US we really think about this as a big unlock of incremental market for us and a large financial institution space, whereby we are already have existing relationships have cross sell mode.

Speaker Change: Consistent card production capabilities.

Speaker Change: Capabilities, we have print mail capabilities those can be optimized and you can imagine that the T society is bigger than our side, but we don't need all of them and so you would expect us to have back office optimization, there and then to the extent we have operational capabilities that we think we can bring together and quite.

James Kehoe: We have a lot of muscle around this. We have a lot of programmatic focus on this and have been doing it since the end of 2023. And then probably the last thing I would say is we just have an easier comp as we go into the second half, if you look at the year over year. So, you know, really focusing on mix, continued of our operating expense programs, which we think we're really good at at this point, and an easier makes it where we feel really confident around the margin expansions.

Speaker Change: And and now we're adding a product set and a set of a team that has significant relationships so win win win.

Speaker Change: There and very excited about it and then as I mentioned to Tianjin in the very beginning of the call hearing from clients. You know just really positives around both the T cell product sat and and teams over there in terms of customer service, but also that they like the benefits of dealing with F.

Speaker Change: Frankly use the T cell expertise because it's much larger than ours on the credit side, we think we could see opportunities. There in terms of cost synergies you should expect to see us get out the gate very quickly with those there are obviously, the lower hanging fruit and so we will use the timeframe between now and signing too.

James Kehoe: I don't know, James, if you want to talk about anything else? No, I would say it. This is, I would say the way it's playing out is very much as we predicted when we put our plans in place at the end of last year. You'll recall back as far as investor day, we said we would do roughly annually 175 bits of cost reduction. We're actually running ahead of that. The only thing is, last year, the first half had the highest proportion of cost reduction relative to the total year. And this year, the back half has a higher proportion of the total cost reduction.

Speaker Change: US all together as you think about one provider serving them across their ecosystem makes it easier for them from a regulatory standpoint, and overall from getting the best optimize metrics for them. So that's been very positive as well.

Speaker Change: Get very organized around that I don't know that what cadence James we gave a view towards the revenue and EBITDA Center. What we said was if you look at the total synergies of 150, we said split it evenly over year, two and year three.

Speaker Change: We will get some cost synergies in the first year.

Speaker Change: We'll have some TSA from global in the first period. So we will get our arms around it but it's definitely will go really quickly on cost synergies I think the upside is bigger than the 150 longer term. What we did say on the call was that only included $45 million of revenue synergies.

Speaker Change: Next question comes from the line of Jason Kupferberg with Bank of America. Please go ahead.

Jason Kupferberg: Good morning, guys. Thank you I wanted to start on the banking side. It looks like based on the Q2 guide will need maybe 200 basis points of acceleration in the second half to get to the midpoint of the full year and I know thats pretty consistent with what you originally anticipated now that we're a third of the way through the year can you hone in on the specific drivers there.

James Kehoe: I would say our visibility to the cost reduction initiatives is excellent. I don't think it could be any higher. All of the initiatives are in full half doing slightly better. So we're actually very, very comfortable in the first half, second half split. Maybe we didn't telegraph it well enough to the market. But as Stephanie said, there's two things happening, and I'll double down on this. One is mix. And the mix is basically a first quarter story is that we're lapping these exceptionally high margins in the first quarter of last year. That's done. It's behind us.

Speaker Change: In the first three years, but we did highlight the long term potential on revenue synergies of 125. So that 150 will build as you look for further Walter in the period.

Jason Kupferberg: I don't know if it's mostly just the ramp of the three delayed implementations and just your overall visibility and confidence level on that acceleration.

Speaker Change: Take a 50 50 over year, two and year, three and you won't be too far along.

Speaker Change: Great. Thanks, that's all for me congrats on the quarter.

And the more numeric I think as you think about margins for us, it's really two things going into second quarter and the back half of the year. The first one is just overall mix. So you know as we talked about you know the sales and high levels of revenue retention when we did.

Speaker Change: Thank you.

Speaker Change: Your next question comes from the line of Andrew Schmidt with Citi. Please go ahead.

Speaker Change: Hi, Stephanie Hi, James Thanks for taking my questions. This morning.

Speaker Change: I know you mentioned that the issuer solutions transaction will be accretive in the first 12 months.

James Kehoe: There's none of this on a go forward basis. So the revenue mix contribution improves in the latter three quarters. And then, as I said, on the cost side, we could not, I just want to be clear on this, we could not have better visibility to the cost programs. These are just managed extremely tightly. And we got no surprises in the first quarter whatsoever. So fully, fully on track.

Jason Kupferberg: Our guide in the fourth quarter into 2025, we talked about the mix up of less lower margin in hot and more higher margin and not really taking hold in the back half of 2025. So we think from a margin standpoint, where we would expect and you know as you can know as you can see we now have.

Speaker Change: But I'm wondering if you could just comment on the level of accretion that you expect we get to low single digit 12.

Speaker Change: 12 months, and then higher maybe mid single, but in 24 months, obviously, there's probably.

Speaker Change: Some upside to that depending on timing and favorability and things like that but with any comments there would be helpful. Thank you so much.

Jason Kupferberg: Really strong visibility to a positive mix driver for the Dod in the back half of this year. In addition to that we as you know have been executing against.

Speaker Change: I think we're going to go any further than what we said on the transaction call.

James Kehoe: Okay, so comps, mix, and costs, very clear there. So maybe just on the revenue side of banking, that too, I know the expectation was to be kind of second half loaded. How are you feeling about the visibility there when you've got the three implementations that are now live? But I don't know to what extent you're, depending on kind of new sales, kind of formulating and ramping in the latter part of the year, just kind of give us some color on the drivers there, because I think we need, you know, maybe a couple of points of second half, first half acceleration to get to the midpoint on the full year.

Speaker Change: We're very happy that it's immediately accretive.

Speaker Change: And as I said, the what will happen is it's immediately accretive but it's transformational at the same time so.

Jason Kupferberg: All of our future forward cost programs and continue to significantly ramp those and so as we sit here today and may feel very confident about the activities. We've already done and what are yet to be done as we think about going into the rest of the year. We have a lot of muscle around this we have a lot of programmatic.

Speaker Change: The EPS accretion I think is the least important number because we are losing.

Speaker Change: Clearly a very accretive we'll pay stake that also gave us tax benefits, but we're replacing that with a boost to our banking revenue of 35% more importantly, our cash flow will go up 35%. So.

Jason Kupferberg: Focus on this and have been doing it since the end of 2023, and then probably the last thing I would say is we just have an easier comp as we go into the second half. If you look at the year over year, So really focusing on mix continued of our operating expense programs, which we think were really good.

James Kehoe: Thanks. Yeah, I think though, I think I'd point out first that, you know, the comfort at which we're confirming the second quarter should not be lost on you. You know, we call this out three months ago, when we gave the full year guide on the second quarter, and we still have just as strong conviction, if not even higher. So we've great visibility in for the second quarter. What we said on the full year guide is there's one big driver in the banking acceleration. It's 150 basis points that's coming from commercial excellence. And this is, as you said correctly on the call, you said it's essentially it's new sales, but any new sales you have in the second half is not going to impact your second half performance.

Speaker Change: The construction of the company is completely different.

Speaker Change: The scale is flowing through to cash as opposed to EPS.

Speaker Change: That's the part I would.

Speaker Change: Two more than anything else the margins are booster as well, which strengthens our banking business.

Speaker Change: At this point and an easier comp makes it where we feel really confident around the margin expansion I don't know James if you want to talk about anything else no I would say if this is I would say the way its playing out is very much as we predicted when we put our plans in place at the end of last year.

Speaker Change: The specific EPS accretion is not the most attractive part of the deal it is solidifying the.

Speaker Change: Strength of the banking business and call it call. It four to find our banking business going forward driving enhanced scale on the total company.

Speaker Change: You'll recall back as far as Investor Day, We said, we would do roughly annually of 175 bps of cost reduction, we're actually running ahead of that.

Speaker Change: You know we're really plays out for me is on the Kush Kush line, which is adding $700 million when the reality is our current cash flow.

James Kehoe: What I mean, any new ACV you get in the second half has no impact on second half. This is all stuff that's already been sold. And most of it was sold in 2024, which was a very strong year for the banking business. And I think we said the total was up 12, I think it was 11, 12% on banking. So all of that, you see it flowing in. The other part that we called out was the incredibly high retention rates that we're seeing, particularly on the banking business. It's actually across the entire business, but banking compared to the past is, you know, it's a very, very strong number in the high 90s.

Speaker Change: The only thing is last year the firm.

Speaker Change: First half had the highest proportion of cost reduction relative to the total year and this year the back half as the higher proportion of the total cost reduction I would say our visibility to the cost reduction initiatives is excellent I don't think it could be any higher all of the initiatives are in.

Speaker Change: As in the region of $2 billion on an adjusted basis. So that's an incredible boost.

Speaker Change: I think I think we're you look at the revenue synergies longer term and that can only be additive to the attractive financial profile of the company.

Speaker Change: Thank you both and on the cash flow of strategic strategic benefits I appreciate that.

Speaker Change: Full swing.

Speaker Change: We actually are probably in the first half doing slightly better.

If you could just talk about a little more detail the sales motion with cross selling credit issuance processing.

Speaker Change: So we're actually very very comfortable in the first half second half split maybe we didn't telegraph well enough to the market.

Speaker Change: I assume often with large with large <unk> youre talking an enterprise level. So that part of the business can be pulled in.

Speaker Change: But as Stephanie said, there's two things happening.

James Kehoe: So when you've got this retention and you've had a strong sales year in the prior year, that's what's driving the step up of the 150 basis points. So I actually, you know, funnily enough, our conviction is extremely high just because it's work that's already done and dusted. And I'll just add on, you know, last year was a record year for Coral Winds as well. So we had almost, and then digital was up 50%. We gave all these data points before. The second half build is stuff that has already been put in place, and now it's just selling, it's just recognizing it as revenue in the second half.

Speaker Change: Double down on this one is mix.

Speaker Change: Just curious just maybe a process question and how you go about the cross sell motion. Thanks a lot.

Speaker Change: The mix is basically a first quarter story is that we're lapping these.

Speaker Change: These exceptionally high margins in the first quarter of last year. That's done it's behind US. There is none of this on a go forward basis. So the revenue mix contribution improves.

So.

Speaker Change: The reason why this transaction makes just so much sense and.

Speaker Change: The amount of clients that we both support so on our side, we could be doing core and network.

Speaker Change: The latter three quarters and then as I said on the cost side, we could not I just wanted to be clear on this we could not have better visibility to the cost programs.

Speaker Change:

Speaker Change: These are just managed extremely tightly and we got no surprises in the first quarter whatsoever, so fully fully on track.

James Kehoe: So we have a high level of comfort on the full year, guys.

Speaker Change: Okay, so comps mix and cost very clear there. So maybe just on the revenue side of banking that too I know the expectation was to be kind of second half loaded how are you feeling about the visibility there when you've got the three implementations that are now alive, but I don't know to what extent, you're depending on kind of new sales kind of form.

Speaker Change: Having the credit capabilities upmarket. So when you think about an ability and an opportunity to add credit now to credit and debit as well as core network lending and trading we think where we're uniquely positioned them. Because we think we're the only player that has that cross section.

Brian Bergin: The next question comes from the line of Brian Bergin with TD Cowen. Please go ahead. Hi, guys. Good morning. Thank you.

James Kehoe: I wanted to start on free cash flow. Could you just comment on further progress in the networking capital optimization initiative you have? And then, as you think about combining with issuer solutions, appreciate the OpEx leverage commentary you shared earlier. From a CapEx standpoint, may a broader scale give you added flexibility there to drive more favorable terms in areas like infrastructure? Questions. You know, the thing we're really pleased, you know, we did say it on the last call, we were rolling out working capital initiatives. And we said we weren't going to stare at the problem. We're going to move pretty quickly.

Speaker Change: <unk> and ramping in the latter part of the year, just just kind of give us some color on the drivers there because I think we need maybe a couple of points of second half versus first half acceleration to get to the midpoint on the full year.

Speaker Change: Of product sets.

Speaker Change: And we already have the motion in play. We also think just the relationship wise. If you think about where we play typically with the banking and capital market solution sets typically back office. So when you think about who we're interacting with chief Technology Officer of Cio's. When you start to talk about credit issue.

Speaker Change: I think though I think I'd point out first.

Speaker Change: The comfort of which we're confirming the second quarter should not be lost on you.

We call this out three months ago. When we gave the full year guide on the on the second quarter and we still have justice wrong strong conviction, if not even higher so we have great visibility into the second quarter. What we said on a full year guide is there is one big driver in the banking deceleration of its 100.

Speaker Change: <unk>, we're now in the front part of the bank because of how much revenue generating capability as it is so for US we really think about this as a big unlock of incremental market for us and a large financial institution space, whereby we are already have existing relationships.

James Kehoe: So most of the cash flow improvement versus prior year is coming from net working capital. And if you split that in two, last year was a rocky first quarter and there were some one time items. I would say of the total improvement year on year from 18% to 71, half of it is coming from a bad year last year. And a slightly more than half is coming from initiatives put in place. I give you examples, the procurement organization has worked on the top 50 customers and taking them to, sorry, vendors and taking them to 90 day terms. We're not all the way there yet.

Speaker Change: 50 basis points, that's coming from commercial excellence and this is as you said correctly on the call you said it it's essentially it's new sales, but any new sales you have in the second half is not going to impact your second half performance, what I mean, any new ACC you get in the second half has no impact on the second half.

Speaker Change: Have cross sell motion and now we're adding our product set and a set of a team that has significant relationships so win win win.

Speaker Change: This is all stuff that's already being sold and most of it was sold in 2024, which was a very strong year for the banking business. So I think we said the total was up 12, I think it was 11% 12% on banking so all of that Youll see it flowing in the other part that we called out was the incredibly high ROI.

James Kehoe: But we've already locked in a large number for the current year. And we're working now on tier two suppliers. So that's actively in motion. And then increased governance around the extension of terms to clients. And sometimes it's the simple stuff that gives you the biggest benefits. What I'm really happy about is we're seeing it early in the year. And we don't have, you know, a show me story in the second half. And just to emphasize this, the Q1 is historically an incredibly low quarter. So Q1 of 2023, I think was 40%. Q1 of 2024 was 18%.

Speaker Change: Tension rates.

Speaker Change: US all together as you think about one provider serving them across their ecosystem makes it easier for them from a regulatory standpoint.

Speaker Change: We're seeing particularly on the banking business, it's actually across the entire business blood banking compared to the past is.

Speaker Change: And overall from getting the best optimize metrics for them. So that's been very positive as well.

Speaker Change: A very very strong number in the high Ninety's. So when you've got this retention and you had a strong sales zero in the prior year, that's what's driving the step up of the 150 basis points. So I actually.

Speaker Change: Next question comes from the line of Jason Kupferberg with Bank of America. Please go ahead.

Speaker Change: Tell me enough our conviction is extremely high just because it's work that's already done and dusted and I'll just add on you know last year was a record year for core wins as well. So we have almost no digital was up from 50%. We gave all these data points before the second half filled is stuff that is all.

James Kehoe: And this year is 71. This is, you know, a great start out of the gate. That really makes us comfortable on the full year cash guide. So I'm feeling good about that. Your point on CapEx, if I get my numbers right, I think the issuer business is running at about 8% of revenue. And we are, we're at nine this year with a long term outlook of eight. I think you're right. We will be looking, as Stephanie said earlier, one of the synergy opportunities is, you know, we are, we have bigger scale with our vendors and suppliers.

Speaker Change: <unk> been put in place and now it's just it's.

Jason Kupferberg: I don't know if it's mostly just the ramp of the three delayed implementations and just your overall visibility and confidence level on that acceleration.

Speaker Change: It's just worth.

Speaker Change: Recognizing it as revenue in the second half so we have a high level of comfort comfort on the full year guidance.

Speaker Change: I don't think I could say it any better than that well done. Thank you yeah, you're welcome [laughter].

Jason Kupferberg: I don't more numeric I think as you think about margins for us, it's really two things going into second quarter and the back half of the year. The first one is just overall mix. So you know as we talked about you know the sales and high levels of revenue retention when we.

Speaker Change: The next question comes from the line of Bryan Bergin with TD Cowen. Please go ahead.

Stephanie Ferris: And we would be expecting more attractive terms. And you're exactly right. You would expect to see a benefit in the P&L in terms of lower OpEx. And you would expect to see a benefit in terms of lower CapEx. But we still got to prove all this stuff out. And, you know, it's well in front of us, but your point is not as well taken. It is. The only thing I would add is just to be a little bit cautious on that.

Bryan Bergin: Hi, guys. Good morning, Thank you.

Bryan Bergin: Wanted to start on free cash flow could you just comment on further progress in our networking capital optimization initiatives you have and then as you think about combining with issuer solutions. Appreciate the Opex leverage comments are you shared earlier from a capex standpoint may may have broader scale give you added flexibility there to drive more favorable terms and areas.

James Kehoe: Remember, TSIS is in the middle of a modernization program. So while we would look to definitely get savings from joint vendors, we also don't want to take away and continue to have in our model, consistent with their model, the work we need to do to continue their modernization efforts. So that could be what would keep us at higher levels of capital while we finish out that program with them. Well, yeah, I think we said on the transaction call, actually, we said that we would anticipate a continued raise at about 8% for the foreseeable future because of exactly what Stephanie just said.

Bryan Bergin: Infrastructure.

Jason Kupferberg: Really strong visibility to a positive mix driver for the Dod in the back half of this year. In addition to that we as you know have been executing against all of our future forward cost programs and continue to significantly ramp those and so as we sit here today.

Bryan Bergin: Questions.

Bryan Bergin: The thing we're really pleased we did say on the last call we were rolling our working capital initiatives.

Bryan Bergin: We said we want to understand what the problem is we're going to move pretty quickly.

Bryan Bergin: So most of the cash flow improvement versus prior year is coming from.

Bryan Bergin: Net working capital and if you split that into last year was a rocky first quarter and there were some one time items I would say of the total improvement year on year from 18% to 71 half of it is coming from about <unk> last year.

Jason Kupferberg: And may feel very confident about the activities, we've already done and what are yet to be done as we think about going into the rest of the year. We have a lot of muscle around this we have a lot of programmatic I'm focused on this and have been doing it since the end of 2023, and then probably the last thing I would say is we just have an easier.

James Kehoe: So I wouldn't go building in any major changes in trajectory until we're well past the modernization of systems. All right, that's clear.

Bryan Bergin: Slightly more than half is coming from initiatives put in place.

Bryan Bergin: I'll give you examples.

Jason Kupferberg: Comp as we go into the second half if you look at the year over year, So really focusing on mix continued of our operating expense programs, which we think we're really going out at this point and an easier comp makes it.

Bryan Bergin: Procurement organization as is has worked on the top 50 customers and taking them to sorry vendors and taken them to 90 day terms, we're not all the way there yet, but we've already locked in a large number for the current year and we're working now on tier two suppliers. So that's actively.

Stephanie Ferris: On the capital market side, you just comment on how sales are progressing in both your traditional and non-traditional verticals. So I think we mentioned, as we mentioned on the call, and let's start with the nontraditional, very excited about things that we are seeing as opportunities both in the pipeline as well as closing on nontraditional private credit hedge funds using our capabilities as we see the markets merge across traditional and nontraditional. In addition to that, on the traditional side, continue to see a lot of opportunities in trading and processing, especially as we bring in capabilities and add additional capabilities like Demica, Torstone, and Crossell, those products into our existing base.

James Kehoe: Where we feel really confident around the margin expansion I don't know James if you want to talk about anything else no I would just say it. This is I would say the way it's playing out very much as we predicted when we put our plans in place at the end of last year.

Bryan Bergin: In motion and then increased governance around around the extension of terms to clients and sometimes it's the simple stuff that gives you the biggest benefits.

Speaker Change: You'll recall, Doug as far as Investor Day, We said, we would do roughly annually of 175 bps of cost reduction.

Bryan Bergin: What I'm really happy about is we're seeing it early in the year and we don't have.

Speaker Change: Actually running ahead of that I'm. The only thing is last year. The first half had the highest proportion of cost reduction relative to the total year.

Bryan Bergin: A show me story in the second half and just to emphasize this the two one is historically and incredibly low quarter. So Q1 of 2023 I think was 40% Q1 of 2024 was 18% this year.

Speaker Change: This year the back half is a higher proportion of the total cost reduction I would say our visibility to the cost reduction initiatives is excellent I don't think it could be on the higher all of the initiatives are in full swing.

Stephanie Ferris: So capital markets continues to execute at very high levels. The products they continue to bring to market are driving a lot of increased pipeline and ultimate sales. And we're not slowing down in terms of both the as well as that pipeline and closed sales. So feeling really good about both traditional and our opportunity in the nontraditional.

Bryan Bergin: Here was 71. This is this is.

Bryan Bergin: Great start out of the gate that really makes us comfortable on the full year guide so I'm feeling good about the Youre point on Capex.

Speaker Change: We actually are probably in the first half doing slightly better.

Bryan Bergin: I bet, if I got my numbers right I think the issuer business is running at about 8% of revenue and we were up nine this year with a long term outlook of age I think youre right, we will be looking as Stephanie said earlier.

Speaker Change: So we're actually very very comfortable in the first half second half split maybe we didn't telegraph well enough to the market.

Stephanie Ferris: But as Stephanie said, there's two things happening.

Stephanie Ferris: Double down on this one is mix.

Bryan Bergin: One of the synergy opportunities is.

Rayna Kumar: Your next question comes from the line of Rayna Kumar with Oppenheimer. Please go ahead. Hi, good morning.

Stephanie Ferris: The mix is basically a first quarter story is that we're lapping these.

Bryan Bergin: We are we have bigger scale with with our vendors and suppliers and we would be expecting more attractive terms and you're exactly right. You would expect to see a benefit in the P&L in terms of lower Opex and you would expect to see a benefit in terms of lower capex, but we still got approval this stuff out.

Stephanie Ferris: These exceptionally high margins in the first quarter of last year. That's done it's behind US. There is none of this on a go forward basis. So the revenue mix contribution improves.

Stephanie Ferris: Can you talk a little bit about any potential dis-synergies that may be tied to the sale of your Worldpay business and, you know, any potential offsets to it? Thank you. I don't we don't have any dissynergies from the world pay business. I mean, I think we already took all that as we separated the 55%. So there, there aren't any Understood. Thank you.

Stephanie Ferris: A lesser three quarters, and then as I said on the cost side, we could not just wanted to be clear on this we could not have better visibility to the cost programs.

Bryan Bergin: It's well in front of us, but your point is well taken it is the only thing I would add is just to be a little bit cautious on that remember <unk> is in the middle of our modernization program. So while we would look to definitely get savings from joint vendors. We also don't want to take away and continue to have in our model.

Stephanie Ferris: These are just managed extremely tightly and we got no surprises in the first quarter whatsoever, so fully fully on truck.

Nasser Govil: Your next question comes from the line of Nasser Govil with KBW. Please go ahead. Hi, thank you for taking my question. Apologies if I missed this in the prepared remarks, Stephanie, but can you comment on the ACB growth this quarter? I know historically you've given us that number. I don't think we've historically given the number. I think we talked about it for a full year basis. I think we feel good about ACV coming into the year. First quarter is typically our lowest quarter in terms of sales, and that's consistent year over year. See very strong growth across the business in cores, digital, consistent with the way we talked about it on a year over year basis.

Speaker Change: Okay, so comps mixing costs very clear there. So maybe just on the revenue side of banking that too I know the expectation was to be kind of second half loaded how are you feeling about the visibility there when you've got the three implementations that are now alive, but I don't know to what extent, you're depending on kind of new sales kind of form.

Bryan Bergin: All consistent with their model the the work we need to do to continue their monetization efforts, so that could be what would keep us at higher levels of capital.

Bryan Bergin: While we finish out that program with them I think we said on the on the transaction call actually we said that we would anticipate.

Speaker Change: The waiting and ramping in the latter part of the year, just just kind of give us some color on the drivers there because I think we need maybe a couple of points of second half versus first path acceleration to get to the midpoint on the full year.

Stephanie Ferris: Nude race at about 8% for the foreseeable future because of exactly what Stephanie just said so I wouldn't go building in any major changes changes in trajectory until we're well past the.

Speaker Change: I think I'd think I'd point out first.

Stephanie Ferris: As James mentioned, our products continue to drive increased ACV in sales, but we also are seeing the incremental benefits of the product investments in high levels of revenue retention. We talked about as we come into the fourth quarter, our level of confidence, and then James just reiterated in the first quarter, in both sales that we saw at the end of the fourth quarter and in the first quarter, as well as high levels of revenue retention. Both of those were part of the commercial excellence program I put in place since I started as CEO, because as James mentioned, it's not just about new.

Speaker Change: The comfort of which we're confirming the second quarter should not be lost on you.

Bryan Bergin: The modernization of systems.

Bryan Bergin: Alright, thats clear on the <unk>.

Speaker Change: We call this out three months ago. When we gave the full year guide on the on the second quarter and we still have just as wrong strong conviction, if not even higher so we have great visibility into the second quarter, while we sit on the full year Guide is there is one big driver in the banking acceleration of its 100.

Speaker Change: Capital market side can you just comment on how sales are progressing in both your traditional and non traditional verticals.

Speaker Change: Yeah. So I think we mentioned as we mentioned on the call and let's start with the nontraditional very excited about things that we are seeing is opportunities both in the pipeline as well as clothing on nontraditional private credit.

Speaker Change: 50 basis points, that's coming from commercial excellence and this is as you said correctly on the call you said it it's essentially it's new sales, but honey new sales you have in the second half is not going to impact your second half performance, what I mean, any new HCV you get in the second half has no impact on the second half.

Speaker Change: Hedge funds using our capabilities as we see the markets emerge across traditional and nontraditional. In addition to that on the traditional side continuing to see a lot of opportunities and trading and processing, especially as we bring in capabilities.

Stephanie Ferris: It's about making sure we can cross on to the existing base and that we have high levels of renewal rates. We think that's significantly as well, underpinning the confidence we have as we go into the back half of the year. Then we'll continue that program as we think about continuing to activate sales, as well as recurring revenue or high renewal rates into 2026. Feel very good about the activity, but as I mentioned, first quarter always is our lowest quarter, but things continue to go well.

Speaker Change: This is all stuff that's already being sold and most of it was sold in 2024, which was a very strong year for the banking business. So I think we said the total was up 12, I think it was 11% 12% on banking so all of that you'll see it flow and then the other part that we called out was the incredibly high.

Speaker Change: And add additional capabilities like D'amico tour stone in and cross sell those products into our existing base. So capital markets continues to execute at very high levels that products. They continue to bring to market are driving a lot of increased pipeline and ultimate light.

Speaker Change: <unk> rates.

Speaker Change: Ultimate sales and we're not slowing down in terms of both the increased number of products that are being brought to market as well as that pipeline in closed sales. So feeling really good about both traditional and our opportunity and.

Speaker Change: We're seeing particularly on the banking business, it's actually across the entire business blood banking compared to the past is.

Stephanie Ferris: Thank you for that color. And I know you alluded to this a little bit before, but with the Gap One and Discover deal now approved, just curious if that unlocks any additional opportunities for you in addition to what you've already implemented for both of them and like the timeline we should look for to hear any such announcements. Thank you. Yeah, so we, as I mentioned, we are on both sides of that transaction, very excited to partner with Capital One and help them meet all of their expectations as they look to to close on that transaction.

Speaker Change: It's a very very strong number in the high ninety's. So when you've got this retention and you had a strong sales zero in the prior year, that's what's driving the step up of the 150 basis points. So I actually.

Speaker Change: The non traditional.

Speaker Change: Your next question comes from the line of Freenet Kumar with Oppenheimer. Please go ahead.

Freenet Kumar: Hi, Good morning can you talk a little bit about any potential dis synergies that may be tied to the sale of your royalty business and you know any potential off that's correct. Thank you.

Speaker Change: Me enough our conviction is extremely high just because it's work that's already done and dusted and I'll just add on you know last year was a record year for core wins as well. So we have almost no digital was up from 50%. We gave all these data points before the second half filled is stuff that is already.

Speaker Change: I don't we don't have any dis synergies from the world pay business I mean, I think we already took all of that as we separated the 55%. So there there aren't any.

Stephanie Ferris: It's always an opportunity for us, I think, as we think about being a good partner to them in terms of whatever they want to do. It would be part of our, you know, sales goals for the year. And obviously, that getting closed is important to us like it is important to them. I don't know that materially moves the needle for us, as we think about what we need to do for them, but it's a very active and very important relationship.

Speaker Change: <unk> been put in place and now it's just so.

Speaker Change: It's just worth.

Freenet Kumar: Understood. Thank you.

Speaker Change: Recognizing it as revenue in the second half so we have a high level of comfort comfort on the full year guide.

Speaker Change: Your next question comes from the line of ethical Viliki VW. Please go ahead.

Speaker Change: I don't think I could say it any better than that well done. Thank you. Yeah you are welcome.

Speaker Change: Hi, Thank you for taking my question.

Speaker Change: Policies, if I missed this in the prepared remarks, Stephanie but can you comment on the ACB growth this quarter I know historically, you've given us that number.

Speaker Change: [laughter].

Speaker Change: The next question comes from velocity, Bryan Bergin with TD Kelvin. Please go ahead.

Unknown Executive: Ladies and gentlemen, that concludes today's question-and-answer session in today's conference call. You may disconnect your lines at this time. Thank you for your participation.

Speaker Change: I don't think we've historically given that number I think we talked about it for a full year basis I think we feel good about ACD coming into the year first quarter is typically our lowest quarter in terms of sales and that's consistent year over year see very strong growth across the business and core and digital all consistent with the.

Bryan Bergin: Hi, guys. Good morning, Thank you.

Speaker Change: Way, we talked about it on a year over year basis as James mentioned, our products continue to drive increased a C D and sales, but we also are seeing the incremental benefits of the product investments and high levels of revenue retention.

Bryan Bergin: Infrastructure.

Bryan Bergin: Questions.

Bryan Bergin: The thing we're really pleased with.

Bryan Bergin: Did say on the last call we were rolling our working capital initiatives and we said, we werent going to stare at the problem isn't going to move pretty quickly.

Speaker Change: You know, we talked about as we come into the fourth quarter, our level of confidence and then James just reiterated in the first quarter in both sales that we saw at the end of the fourth quarter and in the first quarter as well as high levels of revenue retention. Both of those were part of the commercial excellence program.

Bryan Bergin: So most of the cash flow improvement versus prior year is coming from that.

Speaker Change: I've put in place since I started as CEO because as James mentioned, it's not just about new it's about making sure. We can cross sell into the existing base and that we have high levels of renewal rates are and we think that's significantly as well underpinning the confidence we have as we go into the back half of the year and then we'll continue to do that.

Bryan Bergin: Slightly more than half is coming from initiatives put in place.

Bryan Bergin: I'll give you examples.

Bryan Bergin: The Chairman's organization as is has worked on the top 50 customers and taking them to sorry vendors and taken them to 90 day terms, we're not all the way there yet, but we've already locked in a large number for the current year and we're working now on to two suppliers. So that's actively.

Speaker Change: Program as we think about them continuing to activate sales as well as recurring revenue our high renewal rates into 2026, so feel very good about the activity, but as I mentioned first quarter always is our lowest quarter, but things continue to go well.

Bryan Bergin: Motion and then increased governance.

Bryan Bergin: Around the extension of terms to clients.

Bryan Bergin: That's the simple stuff that gives you the biggest benefits what I'm really happy about is we're seeing that early in the year and we don't have.

Speaker Change: Thank you for that color and I know you've alluded to this a little bit before but with the cap one and discover now approved just curious if that unlocks any additional opportunities for you. In addition to what you've already implemented for both of them in like the timeline, we should look for to hear any such announcements. Thank you.

Bryan Bergin: A show me story in the second half.

Bryan Bergin: Just to emphasize this the two one is historically and incredibly low quarter. So Q1 of 2023, I think was 40% Q1 of 2024 was 18%.

Speaker Change: Yeah. So we as I mentioned, we are on both sides of that transaction very excited to partner with capital one and help them that meet all of their expectations as they look to to close on that transaction. It's always an opportunity for us I think as we think about being a good partner to them in terms of whatever they want to do.

Bryan Bergin: She was 71. This is this is al.

Bryan Bergin: Great start out of the gate that really makes us comfortable on the full year Kush. Good so I'm feeling good about the your point on Capex.

Speaker Change: I believe if I got my numbers right I think the issuer business is running at about 8% of revenue and we were up nine this year with a long term outlook of age I think youre right. We will be looking as Stephanie said earlier, one of the synergy opportunities as you know we are we have bigger scale with.

Speaker Change: It would be part of our sales goals for the year end and obviously that getting close is important to us like it is important to them I don't know that materially moves the needle for us as we think about what we need to do for them, but it's a very active and very important relationship.

Speaker Change: With our vendors and suppliers and we would be expecting more attractive terms and you're exactly right. You would expect to see a benefit in the P&L in terms of lower Opex and you would expect to see a benefit in terms of lower capex, but we still got approval this stuff up.

Speaker Change: Okay.

Speaker Change: Ladies and gentlemen that concludes today's question and answer session and today's conference call. You may disconnect. Your lines at this time. Thank you for your participation.

Speaker Change: It's well in front of us, but your point is well taken and it is the only thing I would add is just to be a little bit cautious on that remember T systems in the middle of our modernization program. So while we would look to definitely get savings from joint vendors. We also don't want to take away and continue to have in our model.

Speaker Change: All consistent with their model the the work we need to do to continue their modernization efforts, so that could be what would keep us at higher levels of capital.

Speaker Change: While we finish out that program with them I think we said on the on the transaction call actually we said that we would anticipate.

Speaker Change: Nude race at about 8% for the foreseeable future because of exactly what Stephanie just said so I wouldn't go building in any major changes changes in trajectory until we're well past the.

Speaker Change: The modernization of systems.

Speaker Change: Alright, thats clear on the <unk>.

Speaker Change: Capital market side can you just comment on how sales are progressing in both your traditional and non traditional verticals.

Speaker Change: And add additional capabilities like <unk> tour stone in and cross sell those products into our existing base. So you know capital markets continues to execute at very high levels that products. They continue to bring to market are driving a lot of increased pipeline and ultimate slates.

Freenet Kumar: Your next question comes from the line of Freenet Kumar with Oppenheimer. Please go ahead.

Freenet Kumar: Hi, Good morning can you talk a little bit about any potential dis synergies that may be tied to the sale of our royalty business and.

Freenet Kumar: Any potential offsets to it thank you.

Freenet Kumar: I know you don't have any dis synergies from the world pay business I mean, I think we already took all of that as we separated the 55%. So there there aren't any.

Freenet Kumar: Understood. Thank you.

Speaker Change: Your next question comes from the line of ethical Viliki VW. Please go ahead.

Speaker Change: Hi, Thank you for taking my question apologies if I missed this in the prepared remarks, Stephanie but can you comment on the ACB growth this quarter I know historically, you've given us that number.

Speaker Change: I don't think we've historically given the number I think we talked about it for a full year basis I think we feel good about ACD coming into the year first quarter is typically our lowest quarter in terms of sales and that's consistent year over year see very strong growth across the business and core and digital all consistent with the way.

Speaker Change: We talked about it on a year over year basis as James mentioned, our products continue to drive increased a C D and sales, but we also.

Speaker Change: Are seeing the incremental benefits of the product investments and high levels of revenue retention you know, we talked about as we come into the fourth quarter our level of confidence and then James just reiterated in the first quarter in both sales that we saw at the end of the fourth quarter and in the first quarter.

Speaker Change: As well as high levels of revenue retention both of those were part of the commercial excellence program I've put in place since I started as CEO.

Speaker Change: Because as James mentioned, it's not just about new it's about making sure we can cross sell into the existing base and that we have high levels of renewal rates and we think that's significantly as well underpinning the confidence we have as we go into the back half of the year and then well continue that program as we think about them continuing to activate <unk>.

Speaker Change: <unk> as well as recurring revenue our high renewal rates into 2026, so feel very good about the activity, but as I mentioned first quarter always is our lowest quarter, but things continue to go well.

Speaker Change: Thank you for that color and I know you've alluded to this a little bit before but with the cap one and discover deals now approved just curious if that unlocks any additional opportunities for you. In addition to what you've already implemented for both of them in like the timeline, we should look for to hear any such announcements. Thank you.

Speaker Change: Yeah. So we as I mentioned, we are on both sides of that transaction very excited to partner with capital one and help them meet all of their expectations as they look to to close on that transaction. It's always an opportunity for us I think as we think about being a good partner to them in terms of whatever they want to do.

Speaker Change: Okay.

Speaker Change: Ladies and gentlemen that concludes today's question and answer session and today's conference call. You may disconnect. Your lines at this time. Thank you for your participation.

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