Question · Q3 2025
Darren Peller inquired about the building blocks supporting the mid to high-4% organic banking trends seen this quarter and embedded in the next quarter's guide. He requested more color on the specific growth drivers within issuing, digital, payments, and core, and asked about the sustainability of this trajectory. He also followed up on the adjusted free cash flow outlook for next year, asking how restructuring charges would be segmented and if the company could still achieve 80%+ conversion, focusing on the quality of free cash.
Answer
CEO Stephanie Ferris detailed that net new sales contribute about 100 basis points of annual growth, driven by investments in bank modernization, digital, and payments. She noted that organic growth from transactions and accounts typically adds 2-3 points per year, with net pricing contributing 0-50 basis points, supporting a 3.5%-4.5% range. CFO James Kehoe explained that the core business is expected to exit the year with 85% conversion, driven by lower capital intensity and normalized cash taxes, aiming for 90% in 2026. He added that the acquired business also has a similar conversion rate, leading to a substantial step-up in cash flow, despite needing to absorb one-time integration expenses.