Banking Growth Outlook
Q: How confident are you in achieving Banking growth targets?
A: Management expressed high confidence in hitting full-year guidance for Banking growth, citing strong performance in Q1 and Q2, robust sales execution, and high visibility into Q3 and Q4 revenues. They anticipate at least 5% growth in Banking revenue in Q4, benefiting from strong sales in the back half of last year and an easier comparison over prior year where growth was flat.

EBITDA Margins and Cost Savings
Q: What's driving strong EBITDA margin expansion?
A: The company saw significant traction on cost savings initiatives, such as the Future Forward program, leading to strong margin growth in Q2. Margins grew due to visible cost management and favorable revenue mix with more profitable high license sales. Management remains confident in achieving annual margin enhancement of 40 to 60 basis points, with a runway of 24 months for further cost reductions, including resizing corporate expenses and leveraging automation and AI.

Worldpay EMI Contribution
Q: Why is Worldpay's EMI contribution increasing?
A: The increase in Worldpay's EMI contribution is driven equally by improvements in EBITDA and interest expense savings from recent refinancing. Worldpay is operating the business more effectively, with revenue growth of 3% year-over-year and improvements in margins, demonstrating good quality performance.

Capital Markets Performance
Q: What's driving growth in the Capital Markets segment?
A: Capital Markets experienced strong growth, particularly in nonrecurring revenues, which had the strongest growth since 2021. This was due to stabilized professional services, which shifted from negative 5% to positive 5% growth, and buoyant license sales, especially internationally. This contributed to both revenue growth and margin strength in Q2 and supports a positive outlook for Q3.

Consumer Spend Exposure
Q: How exposed is FIS to consumer spending trends?
A: FIS has limited exposure to consumer spending fluctuations. The Banking segment earns revenue primarily from transactions, not spending volume, and is insulated from inflation impacts. Even with slight decreases in consumer transactions, the effect on revenue is minimal. The business proved resilient even during periods of low consumer spending, such as in 2020 when revenue still grew around 3%.

Demand Environment and 2025 Growth
Q: How is demand in Banking, and when will new signings contribute?
A: The demand environment in Banking is stable, with consistent technology spending by growing banks, particularly in digital channels and payments. The company is on track for record core signings in 2024, which will contribute to growth in 2025 and beyond, giving confidence in meeting midterm guidance. Current contributions in 2023 are from last year's wins.

Free Cash Flow Outlook
Q: Why will free cash flow improve in the second half?
A: Free cash flow is expected to improve due to timing factors such as bonus payouts and interest payments, which skewed cash outflows to the first half. Management is confident in achieving the targeted 85% to 90% free cash flow conversion for the year, implying a higher conversion rate of over 100% in the second half.

Professional Services Acceleration
Q: What's causing the acceleration in Professional Services?
A: The expected pickup in Professional Services in the second half is linked to an increase in new sales implementations and an easier comparison over the prior year when professional services revenue had declined. Stabilization and growth in this area reflect strong new business conversion.

Share Repurchase Outlook
Q: Will you meet your $4 billion share repurchase target?
A: The company is on track to achieve the $4 billion share repurchase target for the year, having completed $2.5 billion year-to-date. The remaining $1.5 billion is expected to be executed in the second half, skewed towards Q4, depending on cash repatriation timings.

M&A Pipeline
Q: What's the status of your M&A pipeline?
A: The M&A pipeline is healthy, with the current economic environment creating opportunities as potential targets are more willing to sell at attractive prices. The company focuses on acquisitions that add product capabilities not developed organically, aiming for accretive revenue and margins. No acquisitions closed in Q2, but management is actively pursuing opportunities with a strict focus on return on invested capital.

Cross-Selling Progress
Q: How is cross-selling performing?
A: Cross-selling activities are robust, with a 15% increase in annual contract value from cross-sell in the first half of 2024. Significant traction is seen in Banking, cross-selling digital and payments into core clients, and leveraging products across Banking and Capital Markets. Management is pleased with the progress and expects continued opportunities.

Implementation Efficiency
Q: Are implementations improving in Banking?
A: Implementation processes are efficient, with a robust pipeline of conversions. While there's always room for increased efficiency, management is confident in their capacity to onboard new sales without adding costs, supporting revenue growth in the back half of 2024 and into 2025.

Card Processing Outlook
Q: How are you performing in card processing?
A: The company sees opportunities in card processing despite market changes and regulatory developments. They are focusing on winning new sales and leveraging competitive products integrated with core offerings. While nothing has accelerated markedly, the company is regaining focus in payments and beginning to see early wins in sales.

Market Volatility Impact
Q: How does market volatility affect Capital Markets?
A: The trading and processing business in Capital Markets continues to perform well, with no significant impact from market volatility. The company processes a high volume of transactions with stable platforms, and revenues are not significantly tied to assets under management.

Future Cost Savings Initiatives
Q: Are there ongoing cost-saving projects?
A: Beyond current cost savings, the company anticipates further opportunities over the next 24 months, including eliminating Transition Service Agreements, resizing corporate expenses, and applying automation and AI to improve efficiency and customer service, leading to additional cost reductions.