Fidelity National Information Services, Inc.

Good morning, ladies and gentlemen, and welcome to the FIS First Quarter 2021 Earnings Call. At this time, all the participants are in a listen-only mode. Later, we will conduct a question and answer session, and instructions will follow at that time. If anyone should require assistance during the conference, please press star, then zero on your touchtone telephone. As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Nate Rozov, corporate finance investor relations.

Good morning, and thank you for joining us today for the FIS first quarter 2021 earnings conference call. This call is being webcasted. Today's news release, corresponding presentation, and webcasts are all available on our website at FISglobal.com. Gary Norcross, our chairman and CEO, will discuss our operating performance and review our strategy to continue accelerating revenue growth and maximizing shareholder value. Woody Woodall, our Chief Financial Officer, will then review our financial results and provide updated forward guidance. Bruce Lothers, President of FIS, will also be joining the call for the Q&A portion. Turning to slide three, today's remarks will contain forward-looking statements. These statements are subject to risks and uncertainties as described in the press release and other filings with the SEC. The company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Please refer to the Safe Harbor language. Also, throughout this conference call, we will be presenting non-GAAP information, including adjusted EBITDA, adjusted net earnings, adjusted net earnings per share, and free cash flow. These are important financial performance measures for the company, but are not financial measures as defined by GAAP. Reconciliations of our non-GAAP information to the GAAP financial information are presented in our earnings police. With that, I'll turn the call over to Gary who will begin his remarks on slide five.

Thank you, Nate. Good morning and thank you for joining us. We achieved very strong start to the year, exceeding our expectations across the board in the first quarter. As shown on slide five, we realized accelerating revenue growth, exceptionally strong new sales, and significantly expanded margins across all our operating segments. Our WorldPay revenue synergies are also accelerating through increased cross-selling as well as ramping volumes on prior synergistic sales. As a result, we are increasing our 2021 and 2022 revenue synergy targets to $600 million and $700 million, respectively. During the quarter, we leveraged our continually strong free cash flow to begin buying back stock, fund our increased dividend, and make strategic investments in intriguing new companies that are accelerating new capabilities and pushing the boundaries of financial technology. I'm also pleased to share that we divested our remaining minority position in Capco in April, netting a very positive return for our shareholders and over $350 million in proceeds for our remaining stake. These exceptional results demonstrate the strength of our business model, the success of our client-centric focus, and our disciplined capital allocation strategy. Given that focus, we consistently invest in platform and solution innovation in the areas of greatest demand, As a result, FIS is the most modern scale provider in market with a unique suite of solutions that enable our clients to transform their environments, grow their businesses, and engage with their customers in dynamic new ways. We're quickly becoming one of only eight companies in the S&P 500 with revenues approaching $14 billion, growing more than 7% with an already high and expanding mid-40s EBITDA margins. We believe there is no one in our industry better positioned. With our strong start to the year, we expect accelerating organic revenue growth and strong earnings throughout 2021, giving us the confidence to raise our full-year guidance. Turning to slide six. In banking, new sales grew 17 percent year-over-year, reflecting a 24 percent CAGR since the first quarter of 2019, as our investments in new solutions continue to yield impressive results, not only in our traditional business, but in emerging areas as well. For example, Green Dot, the world's largest prepaid debit card company with over $58 billion in annual volume, chose to expand our relationship this quarter to now include one of our B2B solutions to support their commercial customers, as well as our online chat and social media solution for customer care to serve their mobile digital bank. In addition, we are helping large financial institutions upgrade their legacy technology by moving to our next-generation cloud-based solutions. BMO Harris selected the modern banking platform this quarter, making them our 11th large win, and I'm pleased to share that 40% of our earlier wins are already live due to our software's elegant and modular design. This rapid onboarding continues to give us confidence in our accelerated revenue growth outlook for the remainder of the year. BMO chose to partner with us because of our open, cloud-native, and scalable platform. which will help them modernize the services they provide to their customers, speed new products to market, and increase their operational efficiency. Vietnam's largest bank, BIDV, also chose FIS to upgrade their core banking software to harness the power of our global reach and world-class scale. With this win, we are now the core processor of Vietnam's two largest banks. As we think about continuing to increase our growth, we have several new solutions in our banking segment that we've launched recently and more in the pipeline to be released later this year. To highlight a few examples, PaymentsOne is the newest and most modern card issuing platform in the market, delivering an agile and frictionless payments experience across all card types on one unified platform. We spent the past year migrating more than 1,000 of our issuing clients to this platform and have also seen strong demand from new clients where we've already installed more than 300 new financial institutions since the launch of this solution. RealNet is another innovative new solution being launched, which enables account-to-account transactions over real-time payment networks across the globe. This cloud-native SaaS platform will function as a network of networks, allowing our clients to seamlessly leverage multiple payment types to transact effortlessly around the world and across borders in real time. RealNet is proof of our strategy to support the global movement of money across the entire financial ecosystem for our clients in banking, merchant, and capital markets. We've also launched an industry-first crypto banking solution, which we created in partnership with NYDIG. Traditionally, consumers and corporations had to go outside of their existing banking relationships to acquire Bitcoin. Once an FIS Core banking client enables this capability, their customers will be able to view and transact their Bitcoin holdings alongside their traditional accounts in a single view. Our new solution taps into the advanced functionality of Digital One to provide consumers with a user-friendly in-app experience. It will also allow our banking clients to grow their businesses through a new source of income by providing Bitcoin services through a seamless, easy-to-use digital experience. Each of these new launches reflect the power of our technology innovation and deep domain expertise. Turning to Merchant on slide 7. We revamped our go-to-market strategy, significantly improving new sales results as evidenced by our exceptional 76% growth. Our new sales success doesn't just reflect easy comps. New sales were up 39% over the first quarter of 2019, translating to an 18% CAGR over the past two years. We continue to successfully expand our financial institution partner program to serve SMBs. As an example, we formed an exclusive merchant referral partnership with CIT Bank this quarter. In this strategic takeaway, we will cross-sell merchant processing to CIT's over 45,000 customers expanding on an already successful relationship with our banking segment. We also continue to expand our leading ISV partner network, adding 20 new ISVs in the UK this quarter, as well as several more in the US and Canada that span a diverse range of verticals from retail, hospitality, salons and spas, to event ticketing, education, property management, and many others. As we look at large enterprise and leading global brands, we are the provider of choice due to our unique omnichannel capabilities, expansive global reach, and best-in-class authorization rates. As an example, we won 80 new global e-commerce clients this quarter, more than doubling our new sales from last year. To keep pace with the demand, we are investing to grow our sales force by over 300 more professionals this year. During the quarter, for example, we won impressive new clients like HelloFresh, the well-known meal kit delivery company, and Didi, which is the Uber of China. We also want a diverse set of marquee clients, such as Intercontinental Exchange, Betbull, a premier online sports betting company, and the Nature Conservancy, a preeminent global conservation organization. We continue to consistently win share in travel and airlines, including Norwegian Cruise Lines this quarter, and expect leading companies like this to accelerate rapidly as the industry recovers. As we think about newly formed high-growth sectors, FIS is the leading acquirer for cryptocurrency, with revenue from this vertical growing by five times over last year. OKCoin, a leading cryptocurrency exchange, selected FIS this quarter to help them grow their business. We serve five of the top ten digital asset exchanges and brokerages globally, including innovators like Coinbase and BitPay. The results of our investment in new and modernized merchant technology is certainly showing in our sales success throughout our various merchant verticals. During the quarter, we successfully completed the final client migrations to our next generation acquiring platform, also known as NAP, which enables us to offer a more agile experience and modular offering while still providing tailored solutions for our clients. We processed over 1.8 billion transactions on NAP during the first quarter and continue to expect accelerating growth now that we are aggressively selling in market. In addition to our new fully launched acquiring platform, we have seen tremendous success with the launch of our new gateway. Through our new simple APIs, merchants can go live on our platform faster while still benefiting from our full global breadth and sophisticated solutions. Our new APIs provide a seamless, easy-to-integrate single point of access for our clients, and transactions are ramping exponentially, ending the first quarter at more than 4 million transactions per day. This represents more scale than all but two of our largest e-com competitors in less than two years post-launch. All of this shows that FIS is increasingly differentiated by our ability to bring innovation at scale that is enterprise-ready from day one in a way that few can claim or offer today. In addition to leveraging our innovative portfolio of technology assets, our clients are also relying on us to support their expansion into new geographic markets. This quarter, we expanded our services into South Africa, Nigeria, and Malaysia, and we plan to bring online several more countries later this year. Since the combination with WorldPay, FIS has now brought acquiring to nine new countries. Turning to slide eight. In capital markets, we've made remarkable progress since acquiring SunGarden in 2015. We completely changed the revenue growth profile from persistent declines to accelerating top-line growth. And I'm pleased to say that we are now consistently growing faster than our peers. We simultaneously improved margins and moved the business to over 70% reoccurring revenue. During the first quarter, average deal size increased 36%, with new logos representing 30% of new sales. clearly showing that we are winning share. New sales of our SaaS-based reoccurring revenue solutions are also very strong, increasing by 57% this quarter. For example, our differentiated solutions and deep treasury expertise are motivating leading corporates like GlaxoSmithKline to select FIS to power their treasury management systems. In addition, our comprehensive suite of solutions, strong track record and speed of implementations is very attractive to emerging fintechs like Acorns and Robinhood. These two fintechs are utilizing our solutions to further drive financial inclusion. As another example, Futu is a next-generation online broker-dealer who selected FIS this quarter to help power their growth in securities, finance, and trading. Securian Financial is a great example of a diversified financial services company who partnered with us this quarter to deliver a leading cloud-based risk modeling and management platform. They selected FIS because they needed a partner who could support their growth and scale, while at the same time being nimble enough to help them quickly respond to changing regulatory requirements. I'd like to conclude my prepared remarks on slide nine before handing the call to Woody. The consistent execution of our strategy is driving our success. Ongoing investments in new solutions, advanced technology, and expanding distribution are generating strong new sales and competitive takeaways while accelerating revenue growth across all our operating segments. Our relentless focus on achieving efficiency and scalability through automation and integration continues to enhance our profitability and margin profile. Lastly, we see our exceptional free cash flow generation as a competitive advantage. It allows us to consistently invest for growth and to generate superior shareholder returns through return of capital and M&A. In summary, Our strategy is continuous transformation, pivoting to growth while simultaneously driving efficiency and scale through the strategic allocation of capital. I will now turn the call over to Woody to discuss our financial results and forward guidance. Woody?