Good day, welcome to the FIS first quarter 2023 earnings call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will hear an automated message advising your hand is raised. To withdraw your question, press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Mr. George Mihalos, Head of Investor Relations. Please go ahead. Good morning, everyone, and thank you for joining us today for the FIS first quarter 2023 earnings conference call. This call is being webcasted. Today's news release, corresponding presentation, and webcast are all available on our website at fisglobal.com. With me on the call this morning are Stephanie Ferris, our CEO and President, and our CFO, Erik Hoag. Stephanie will lead the call with a strategic and operational update, followed by Erik reviewing our financial results and providing forward guidance. 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 adjusted free cash flow. These are important financial performance measures for the company, but are not financial measures as defined by GAAP. Reconciliation of our non-GAAP information to the GAAP financial information is presented in our earnings release. With that, I'll turn the call over to Stephanie. Thank you, George, and thanks to everyone for joining us this morning. I'm pleased to report that FIS is off to a very strong start in 2023. Our financial results exceeded our expectations on all key metrics: revenue, Adjusted EBITDA, and adjusted EPS. Organic revenue growth outperformed across all three of our operating segments. This outperformance was driven by a combination of both stronger execution as well as better than anticipated macroeconomic impacts, including consumer spending and higher levels of deposit account and transaction growth across the financial services sector. Heritage FIS, which includes our banking and capital markets businesses, posted strong recurring revenue growth of 6%. Merchant revenue grew 2%, driven by 15% organic growth in our e-commerce business well ahead of the broader market. We remain focused on improving cash flow and efficiency across the company and are on track to delivering on our greater than 80% free cash flow conversion target for the year. These are very strong results against our expectations and can be attributed to our leadership team and our colleagues across the globe all pulling together to build our Future Forward. I'm extremely proud of the team and am very excited about and confident in the future of FIS. As a result of our strong performance, I am pleased to announce we are raising our full-year outlook. First quarter results meaningfully exceeded our expectations, reflecting stronger revenue growth of 3% across the enterprise. Solid execution in a more favorable macro environment fueled this outperformance. Banking and capital markets recurring revenue growth of 6% exceeded our expectations, benefiting from elevated financial services activity, including higher levels of deposit account and transaction growth. Within the merchant segment, improved execution and stronger consumer spend drove most of the revenue upside. E-commerce had another very strong quarter with 18% organic growth, excluding the Russia-Ukraine impact in the quarter, contributing an 1 additional point of merchant revenue growth relative to our internal expectations. We are updating our second quarter and full-year guidance to reflect consistent trends from the first quarter to the second quarter with a very slight moderation in the high levels of trading volume experienced in Q1. Our outlook for the full year has strengthened relative to the outlook we provided in February across all of our operating segments. Given our overall strong results and improving operating performance, we are increasing our full-year 2023 outlook while continuing to account for risk associated with macroeconomic impacts to our merchant segment in the back half of the year. We understand the importance of delivering on our commitments and are confident in our recently raised outlook. We continue moving forward with a high sense of urgency and are making progress across our range of initiatives. The spinoff of Worldpay is on track. We are making meaningful progress both internally with the formation of our separation management office and externally with our regulators. Our Future Forward initiative, designed to drive greater efficiency, effectiveness, and growth, is off to an exceptional start. I am confident we will not only deliver on our 2023 cash savings target of $500 million, but achieve at least our $1.25 billion of cash savings target by year-end 2024. On the governance front, we've taken broad steps forward to align all management compensation with operating share price performance. These changes were made in order to further align our executive compensation programs with long-term shareholder interest. We've also reorientated our salesforce compensation plans to align to our stated goal of pursuing high quality, higher margin deals. We are driving a performance-based culture both tops down and bottoms up across the globe. We are making good progress preparing for the planned spin-off of the Worldpay business. This is a testament to the hard work, focus, and dedication of our FIS colleagues and business partners tasked with marshaling forward the separation quickly. We are making meaningful progress, having created a separation management office to work with both Charles Drucker and me. In addition to working towards securing required regulatory approvals, we are urgently negotiating commercial revenue and separation agreements across the two companies with an eye towards minimizing business disruption and dis-synergies. While we are not yet ready to provide formal dis-synergy estimates on this call, we are actively working to minimize the impact of any dis-synergies. I'd like to offer a framework for thinking through the potential impact, which we believe will be very manageable. Previously, the company disclosed that it achieved a total of $750 million in revenue synergies and $500 million of operating expense synergies post the Worldpay acquisition. We expect to maintain the majority of the $750 million revenue synergy achievement, with Worldpay continuing to act as an important distribution partner for FIS post-spin. We also expect to maintain a meaningful portion of FIS Worldpay operating expense integration savings. Additionally, my partnership with Charles Drucker is already bringing focus to the business and is driving meaningful results in key areas such as sales execution and maximizing pricing opportunities across all of FIS. As I mentioned earlier, our enterprise transformation program, Future Forward, is off to a great start. We are confident in not only achieving our targeted $500 million of cash savings in 2023, but have direct line of sight into executing on the additional $750 million of cash savings expected in 2024, while investing in improved client service and next-generation product development for our clients. As of first quarter of 2023, we've achieved a total cash savings on an annual run rate basis in excess of $210 million. We expect operating expense savings to accelerate over the course of the year. We are reiterating our Future Forward cash savings target of at least $1.25 billion by year-end 2024, the team is continuing to identify additional opportunities across the enterprise to unlock growth, efficiency, and effectiveness for FIS and our clients. We are confident the program will deliver meaningful cash savings for FIS, this will not come at the expense of clients who remain at the center of our decision-making. We believe our solid first quarter recurring revenue growth underscores the importance of our customers place on our offerings and services and our commitment to their own future. Given recent events across the global banking sector, we want to provide you with an update regarding trends across our banking segment. While recent developments have driven volatility in markets and across the banking sector, we do not expect this activity to impact us significantly in the near term and believe FIS is well-positioned to be a beneficiary of the recent disruption in the long term. Our confidence is underpinned both by current factors we are presently seeing in our business and historical precedent, which points to resilient bank IT spend following periods of financial duress. A recent study by Curinos, a leading provider of data, technology, and insights to financial institutions, noted recent events should have limited impact on near-term revenue for core processors as the current situation is impacting deposit balances, not accounts. Additionally, technology processing spend across the banking industry has also historically been resilient during prior challenging cycles of uncertainty. In line with Curinos' perspective, since the onset of the SVB fallout in early March, we have seen elevated increases in our accounts on file serviced across our core platforms, which is the primary driver of our banking revenue. The resilience in accounts on file is not surprising to us. It aligns with what the banking industry experienced during prior challenging periods, as the Curinos study noted, and supports our confidence in our outlook for the banking segment. As depositors disperse funds across multiple bank accounts, ultimately driving more account growth, FIS is well-positioned to benefit as a leading provider of core banking technology, particularly to large financial institutions, which is the primary base of our FI business. Additionally, to the extent the recent turbulence results in increased regulation, FIS is well-positioned to benefit across both the banking and capital markets segments. FIS boasts a highly diversified customer base with no one client accounting for more than 1% of company revenue. Given our skew towards somewhat larger banks, consolidation across the FI space should benefit us as we would expect these larger banks, many of which are FIS customers, to be the buyers of distressed financial institutions. This is exactly what we've seen play out thus far with respect to recently sold failed financial banks. Additionally, 60% of our revenue growth is predominantly tied to accounts and 40% to transactions. Since the SVB announcement, we've seen a modest acceleration in accounts on file, and transaction volumes remain steady. Given these dynamics, we do not anticipate a significant impact to our business associated with the recent events. Before turning it over to Erik Hoag, I'd like to close with a quick refresh of the new agenda we introduced just a few short months ago and the significant progress we are making executing against those goals. As you can see, we are moving urgently to put FIS on a path for sustained value creation for all stakeholders. The macroeconomic conditions, whether consumer or financial services-related, have positively impacted our results in the first quarter, and regardless of whether they remain or decline from this point forward, we are confident enough to raise our outlook for the year. The planned spin-off of Worldpay is on track, creating two world-class companies with a sharpened focus on their respective client bases. Our Future Forward initiative is progressing ahead of schedule, accelerating the transformation of FIS into a more agile and efficient company better positioned to drive innovation. Lastly, we're focused on returning Heritage FIS back to the compounder model of the past with a focus on steady revenue growth, margin expansion, improved free cash flow generation, and a sustainable double-digit total shareholder return. With that, let me turn it over to Erik, who will take you through the financials. Erik? Thanks, Stephanie, thank you all for joining us this morning. I'll begin on slide 14 with some additional detail on our financial results before moving into our increased guidance, Future Forward achievement, and capital allocation priorities for Heritage FIS. Our first quarter results exceeded our expectations across all financial metrics. Revenue increased 3% organically to $3.5 billion, with an Adjusted EBITDA margin of 38.7% and adjusted EPS of $1.29. Revenue growth came in 2 points above the high end of our outlook. As Stephanie mentioned, this outperformance was driven by a combination of both stronger operating performance as well as better-than-anticipated macroeconomic impacts, including consumer spending and higher levels of deposit account and transaction growth across the financial services sector. Adjusted EBITDA and adjusted EPS exceeded expectations through both operational strength and a benefit in net interest expense. Moving to cash flow and our balance sheet. Capital expenditures decreased 32% year-over-year to $279 million or 8% of revenue, reflecting the benefits of our Future Forward initiatives. We generated free cash flow of $641 million or 84% conversion and returned over $300 million to our shareholders through dividends. Lastly, we exited the quarter with $20 billion in total debt, yielding a leverage ratio of 3.2x at a weighted average interest rate of 3%. Turning to our Heritage FIS results on slide 15. We're pleased to report organic revenue growth of 4%, driven by 6% recurring revenue growth. Our backlog continues to be strong and durable, exiting the quarter at $22.5 billion. As previously mentioned, our sales teams are transitioning to target higher quality, more profitable new sales, which will drive sustainable high-margin growth. Because of this, we would anticipate some softness in backlog over the short term as the team aligns to these initiatives. This change in sales initiatives is fully incorporated into the increased outlook for the year. Ultimately, the result of this will be higher quality new sales, laying the foundation for sustainable growth in revenue, EBITDA, and cash flow while providing best-in-class capabilities for our clients, as well as emphasizing our high-margin, sticky recurring revenue offerings. Overall, this is a very strong start to the year for Heritage FIS segments as we saw stronger-than-anticipated operating performance driving results above our expectations. At the segment level, banking increased 2% organically in the quarter, which was 2 points above the high end of our outlook. This outlook was underpinned by recurring revenue growth of 4%, which exceeded our expectations. Strength in recurring revenue was driven by strong execution from our business in conjunction with elevated account and transaction growth during the quarter. As expected, Adjusted EBITDA margins contracted 250 basis points to 40.1%, primarily driven by a 23% reduction in termination fees and one-time license revenue. This performance in margin improved compared to our fourth quarter results. We continue to anticipate sequential margin improvement through 2023, leading to expansion in the back half of the year. For the second quarter, we are anticipating banking or organic revenue growth of 0%-2%, which incorporates a continued reduction in non-recurring revenue. We remain confident in meeting or exceeding our organic growth outlook for the year. Turning to our capital markets results and outlook on slide 17. Capital markets increased 7% organically in the quarter, exceeding the high end of our outlook by 2 points. The overperformance in the quarter was underpinned by 11% recurring revenue growth with a 4-point tailwind associated with elevated activity in the financial services industry. Adjusted EBITDA margin expanded 30 basis points to 48.2%. Margin expansion in the quarter was driven by high contribution margins on our revenue growth, as well as the underlying strength of the one-to-many operating model. We continue to see resilient strength in the operating performance of capital markets and believe our multiyear transition to SaaS-based engagements has laid the foundation for resilient growth. For the second quarter, we anticipate organic revenue growth of 4%-6%, primarily associated with an assumption of recurring revenue normalizing off the elevated growth seen in the first quarter. For the year, we're reiterating our outlook of 4%-6%, inclusive of a tough license compare in the fourth quarter. Turning to slide 18. Our merchant segment increased 2% organically, exceeding the high end of our outlook by 2 points as we saw better-than-expected consumer spending and accelerated growth in e-commerce. Broadly speaking, we're seeing continued strength in our e-commerce sub-segment, accelerating to 15% in the quarter with strong sales and exceptional growth in our Worldpay for Platforms offering. Worldpay for Platforms continues to benefit from our ongoing investments and renewed leadership structure. We continue to see a significant opportunity in this attractive vertical. Our SMB and enterprise subsegments saw trends similar to our fourth quarter 2022 results. Consistent with our guide, margins contracted 350 basis points to 43.5%, primarily due to unfavorable revenue mix. Global volume increased 9% on a constant currency basis to $551 billion. This acceleration was a result of stronger consumer spend across our enterprise and e-commerce subsegments. In the quarter, volume growth outpaced revenue growth as a result of higher spend in non-discretionary verticals, for example, grocery and drugstore, and market share gains within the PayFac vertical. Turning to slide 19 for a further review of Heritage Worldpay's outlook for the year. As we entered the year, we had anticipated organic revenue decline of 2%-4%. The guide reflected a 300 basis point headwind associated with attrition in the SMB sub-segment and further macro deterioration impacting growth by an additional 500 basis points. Our first quarter results outperformed our expectations by 2 points compared to the high end of our outlook. While the business continues to be impacted by the headwinds in the SMB sub-segment, consumer spending performed better than expected in the U.S. and the U.K. As a result, we're updating our second quarter and full year guidance to reflect relatively consistent trends from the first quarter to the second quarter and improved consumer spend in the back half of the year. Because of this, we now anticipate second quarter organic revenue growth of negative 1% to plus 1% and full year organic revenue growth of down 2% to 1%, a material improvement compared to initial expectations. This outlook for the second quarter assumes relatively similar trends across our sub-segments compared to the first quarter. On the margin front, we will continue to see improvements through the year, consistent with normal seasonality and further aided by our Future Forward initiatives. Turning to slide 20 for a review of our increased 2023 guidance. Given our strong start to the year, we're confidently increasing our full year 2023 outlook to incorporate the overperformance seen in the first quarter. Specifically, we're increasing our revenue and EBITDA ranges by $85 million and $35 million, respectively, accounting for a $0.06 increase in our adjusted earnings per share outlook for the year. This increase is aligned directly to our first quarter results compared to the high end of our prior guide. Our increased outlook over the remainder of the year has strengthened relative to the outlook we provided in February based on the current trends in our businesses. With that in mind, for the year, we now anticipate consolidated organic revenue growth of 0%-1%, Adjusted EBITDA margins of 41.5%-42.2%, and adjusted earnings per share of $5.76-$6.06. As I stated in our last earnings call, our philosophy continues to remain conservative in our forward projections as we continue to build credibility and deliver on our commitments. This increased outlook continues to account for risk associated with macroeconomic impact in our merchant segment, and we would anticipate further upside if macro trends remain stable. As previously mentioned, we continue to anticipate margin improvement over the course of 2023 as we ramp the benefits associated with Future Forward, and we're reiterating our outlook for free cash flow conversion of over 80%. Lastly, we provided additional assumptions for our guidance in the appendix, as well as a revised 2022 organic base to account for some small shifts in our operating segment roll-ups. Turning to slide 21 for a financial update on Future Forward. We remain committed to rightsizing our expense base while ensuring minimal impact to our clients or colleagues. Aligned to this commitment, Future Forward centers around investing in sales and support, automating and improving processes, and improving the ways we work. As Stephanie mentioned, we're reiterating our targets for operational expense savings of $300 million exiting 2023 and $600 million exiting 2024. We had a strong start to the year with annual run rate savings of over $100 million exiting the quarter with an in-quarter benefit of over $15 million. We continue to target a $200 million reduction in capital expenditures during 2023, with an incremental $100 million reduction in 2024. In the quarter, we achieved annualized CapEx savings of over $110 million as we executed rapidly on the Future Forward initiative. We're extremely pleased with our early progress and will continue to provide quarterly updates on achievement throughout the program. I'll conclude with a recap of our capital allocation priorities for Heritage FIS on slide 22. Following the successful execution of the spin, Heritage FIS will remain focused on reducing debt, increasing our dividend, and utilizing excess capital for share repurchase or tuck-in M&A. We continue to target a long-term leverage ratio of approximately 2.8x. To achieve this, we would anticipate reducing total debt while also benefiting from Adjusted EBITDA growth over a multi-year period. We remain committed to a 35% dividend payout ratio for Heritage FIS. Following these two pillars, we will utilize excess cash or debt capacity for share repurchase or optionality around tuck-in M&A opportunities. Our default use of excess capital will prioritize share repurchase at current valuations while we assess M&A opportunities and their risk-adjusted returns. This capital allocation strategy is conservative in nature while providing a robust value proposition for long-term shareholder value over a multi-year period. I'd like to thank everyone for their time this morning. Operator, would you please open the line for questions? Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Due to time restraints, we ask that you please limit yourself to one question and one follow-up question. Please stand by while we compile the Q&A roster. Today's first question will come from the line of Tien-Tsin Huang with J.P. Morgan. Your line is open. Great. Thank you so much and appreciate all the disclosure here and the good results. I wanted to dive in on the banking slides, which is really good to see. Just maybe Stephanie and Erik, just check your confidence in maintaining the 0% to 2% outlook here on banking. Because when I think about the inputs, I think about backlog conversion, attrition, pricing, and then you commented on the underlying recurring revenue growth through deposits. Is the formula different now than maybe what we saw with the banking turmoil and SVB, et cetera? Any thoughts there? Thanks, Tien-Tsin. Happy with the output for first quarter. Very confident in our guide for banking. I think what you've seen is as we came into this year, we had expected backlog growth to mute. That was in our guide, and we're not seeing any incremental impact from anything going on in the banking business. What we're seeing is organic growth, and you saw it come through in the first quarter as we benefit from, you know, accounts across the financial services landscape increasing broadly across our portfolio. We're seeing net new but deposit accounts and broadly net new financial services accounts across our entire portfolio. We feel really good about the organic growth. You can see it there in our first quarter, and we feel really good about the guide. Great. I appreciate all that, slide 11. It's really useful. Just on the on the merchants front with Erik Hoag, I think you talked about the spread there. Can you just maybe give a little bit more on what's driving that mix versus pricing? I know you'd mentioned the PayFac piece, but a little bit more would be great. Thank you. Yeah. Tien-Tsin, I'll take that and Erik- Sure. can add on if he likes to. look, we were really pleased with the volume growth. just kind of starting at the top, we saw really strong volume growth, that was driven by both our enterprise book, which performed a little bit better than we expected from a volume standpoint, and really strong e-commerce activity in the first quarter. as you come into the yield dynamic, there's really two pieces coming into impact the yield. The first is our nondiscretionary, so think in our enterprise book, think of like Kroger, and drugstore or grocery and drug. Those became a higher mix, and as you know, those are priced on transactions, not on volume. those drove a little bit of a lower yield off the higher volume. The second thing is we continue to take pretty significant market share gains in our PayFac business, which is very strategic for us, which as you know, is a lower yielding, higher volume piece of our business. Those two really drove the yield impact in the fourth quarter. We do expect to see sequential yield improvement each quarter throughout the rest of the year, as we continue to perform positively and the mix resets itself. Those are the two big reasons. Thank you. One moment for our next question. That will come from the line of James Faucette with Morgan Stanley. Your line is open. Thank you very much. wanted to talk a little bit just about your expectations for the macro environment generally. you know, obviously the first quarter came in a little bit stronger with better economic resilience than you anticipated in your original outlook. If we look at the magnitude of beat versus the guidance raise, it seems like that we're not increasing the guidance quite as much as the beat this quarter. Have you just anticipated that some of that weakness that you originally built in kind of pushed out, or can you just talk through the assumptions that leads you to that kind of current guidance outlook? Sure. M aybe I'll start with, so when we provided guidance a quarter ago, we provided 500 basis points of presumed headwind in the guide associated with merchant macro. The full year guide at the time was -2 to -4. We've increased the merchant guide from -1 to -2. The midpoint of the guide has improved by 150 basis points. I would think about the remaining residual merchant macro headwind at roughly 350 basis points. Got it. Got it. Thanks for that. As far as onto the work being done for the eventual split, et cetera, I know that you're kind of working through that. What's your sense in terms of, if there are any incremental changes that may be needed in interest expense, and how should we think about the timing of when we'll be able to start to look at what capital structure will look like? I think you've been very clear what particularly you want the Heritage FIS overall view to be. Just wondering how we should think about the timing and other factors that need to be taken into account besides just dis-synergies. James, we are diligently working. Hopefully everyone can see we're working at pace to try and get all of that nailed down. Don't have a good update for you right now, as you might expect, as we work through it. Charles is in here working with us very tightly in terms of thinking through all those pieces. I think as we get closer to the spin, we'll have a view of that. I can't really make a commitment in terms of next quarter, but you should know that we're working really tightly towards it. Until we have a much stronger view, can't really give you much of a guide there yet. Thank you. One moment for our next question. That will come from the line of Dave Koning with Baird. Your line is open. Yeah. Hey, guys, and great job. Thank you. Yeah, yeah. I guess my first question, capital markets. You mentioned something about some elevated activity creating kind of a 4% tailwind in the quarter. What was that? Is that some, you know, is that somewhat of a less recurring part that falls off a little in Q2? Yeah. Thanks for asking that question. Lots of trading volume, right, across all of our banking cores as well as across our capital markets business. We saw trading volume at a peak that, you know, we haven't seen since COVID. That business and the leader of that business did a fantastic job supporting all of that volume growth. That's what drove a couple percentage points of the beat in recurring revenue that we had that we had posted. As we come into the second quarter, we're slightly moderating that growth back down as we're starting to see people moderate in terms of transaction volume across those portfolios, but it's still pretty elevated. Gotcha. Thanks. Maybe just a follow-up question. In merchant, I think the first half, the way you're guiding is a little better than the back half. I think to Tien's question, you said the yield impact is, gets a little better through the course of the year. Does that mean volume decelerates a little bit through the year? I think that's a fair ask or a fair assumption as you think about it. We would think, you know, 9% volume in the first quarter was really strong. We think about it coming into the back half of the year, we think about a bit of moderation just on a conservative guide. Thank you. One moment for our next question. That will come from the line of Rayna Kumar with UBS. Your line is open. Good morning. Thanks for taking my question. I just want to ask about FedNow since it's going to be released in July. What will FIS's role be with that release and, do you view it as an opportunity here? Yeah. Thanks for the question. We're in very tight partnership with the Fed. We're in the process of enabling our financial institutions to roll out FedNow across our entire client base. We'll continue to play a major role in the adoption of the FedNow rails. For us, it's another, it's another payment medium coming to the market, which is what we specialize in terms of thinking about all the payment methods we enable globally across our distribution channels. We're pretty excited about the enablement of that on behalf of our financial institutions. It's definitely an opportunity for FIS, it's a little bit too early for us to see the size of the opportunity. We, you know, we're enabled and ready and as financial institutions adopt it, we're ready to help them, put it, make it come live. Got it. That's helpful. Then I just want to ask about Payrix. You've owned that for a year now. Can you talk about the progress of the acquisition and how it's altering your go-to-market strategy in the SMB space? Our Payrix acquisition is hitting on all cylinders. You can see it's a big part of the e-commerce growth story that we're seeing. As you know that we brought that capability in-house, which really helps solidify our Worldpay for Platforms offering, out to those software platforms that want to either integrate payments, embed payments, or become a PayFac. We have a full suite of offering now offered out the Worldpay for Platforms offering. It is growing significantly. The volume is growing significantly. We couldn't be more pleased with the success of it. Thank you. One moment for our next question. That will come from the line of Lisa Ellis with MoffettNathanson. Your line is open. Terrific. Thanks for taking my question. Stephanie, I was hoping maybe you could comment a little bit on initiatives you have underway on the talent side as you're going through the transformation at FIS. Just thinking about things like, you know, are you bringing in some external talent? What are you know, what are you doing around sort of retaining and making sure morale, you know, improved or maintained throughout this period? Thank you. Thanks for the question, Lisa. Yeah. Look, I stand on an amazing culture and talent here as I come into FIS. It's one of the reasons I came back to FIS, you know, and rejoining such a talented leadership team. As you might expect, there's some folks here who have wanted to move into retirement as Erik took on Woody's role as he moved into retirement. We are changing out the leadership team as those folks want to move on. I think, you know, we're really excited about we just recently brought on a new chief technology officer. We brought on a new president of platforms and enterprise products. Really looking at focusing on the product and technology and making sure that we can continue to deliver our best-in-class products and services out to our clients. Martin Boyd retired last year. We brought on a new head of banking solutions. Really focusing on balancing the great talent that's here, and bringing in some really impressive new talent and bringing them together as a team to work on, you know, bringing FIS Future Forward. Great. Thank you. This one may be well, it could be for either of you, I guess. Just to follow up on banking solutions, can you just remind us the mix within banking solutions of recurring versus non-recurring professional services, sort of how you think about that segmentation? Maybe elaborate a little bit on the comments around pivoting the sales team to focusing on, you know, a more kind of higher quality recurring revenues, kind of what's that change? Thank you. Hey, Lisa, its Erik. Thanks for the question. In the first quarter, you know, as I mentioned in my prepared remarks, we saw a significant decline in non-recurring revenue in banking. e.g., we're seeing an increase in recurring revenue. The split between recurring and non-recurring was roughly 86/14 in the first quarter. From a sales perspective, Stephanie, do you wanna? As I mentioned in the fourth quarter, we hired a new chief revenue officer, and we started pivoting the sales team to focus on higher margin, higher profitability products. We have an amazing set of products at FIS. Really spans the gamut in terms of everything that a financial services company would need, a payments company would need. We've done a great job on sales. You can see that from our backlog. As we come into 2023 and beyond, and we really focused on, you know, delivering below the line margin expansion, et cetera, we've re-pivoted them back to driving sales into the higher margin products, trying to get our margins back in line with expectations. As we did that, you're gonna see our backlog start to flatten. That was our expectation. We would expect to see that happen in the short term here. That was all baked into our original outlook. It's baked into our current outlook, and the transition is going well. Thank you. One moment for our next question. That will come from the line of Jason Kupferberg with Bank of America. Your line is open. Good morning, guys. I wanted to actually maybe pick up right there where you left off, Stephanie, just on banking and the backlog. Understanding it'll take some time to fully implement this updated go-to-market strategy, when do you think backlog growth starts to resume? What are the implications of the newer go-to-market strategy for your medium-term outlook on banking? Yeah. Great question, Jason. I think backlog expectations are gonna remain muted for the rest of the year as we reposition or the pipeline and put the higher margin products ahead of the lower margin products. On a short-term basis, I would expect it to be muted. I think as we come into 2024, though, I feel really good about where we're gonna end up in terms of new sales. Then we're also, you know, really focused on the other levers. If you think about, you know, focusing on attrition, compression, pricing, and new sales, as well as, you know, the positive organic we're seeing again in the business, we feel really good as we come into 2024 and 2025 that some of those levers we can pull on and bring us back to growth. If you remember, a lot of the reason in 2023 our growth was muted in the banking solutions business is because we're growing over a lot of termination and non-recurring fees, and we're really focusing the sales force on driving recurring revenue. As we just lap that in 2024, that'll drive a couple percentage points of growth for us. Yeah. Jason, maybe just to add on to that for a moment. You know, if you look at our first quarter results for recurring revenue in banking solutions, we did have 2% organic, but we did have 4% recurring revenue growth in the quarter. A little bit of a proof point through the lens of the normalized 3%-5% growth range that we talked about a quarter ago. Helpful. Yep, that's great data points. Maybe just switching gears to merchant for a second. What would you say is really driving the higher outlook for the year? I mean, which segment? Is it more on the enterprise side, the SMB, the e-com? Is it a little bit of all of the above? Just anything you might be able to share with respect to what you've seen in April in merchant. Yeah. volume and transaction trends. I think generally consumer spend across all of our segments and then better operating performance. It's really across all three. you know, we're very, very bullish on our e-commerce business. We continue to, you know, drive all of our investments in there. Payrix is in there. It's going very well. I would say it's really across the board. You know, we did see some moderation in recession in the UK. I'd say it's generally across the board. Thank you. One moment for our next question. That will come from the line of Darrin Peller with Wolfe Research. Your line is open. Thanks, guys. When we look at the banking and cap markets, effectively the remaining Corpco spin, just remind us, if you don't mind, the algorithm on that business you'd expect? I know obviously investment grade. Looking at the long-term targets, it would seem to be somewhere in the, call it 3%-6% if you look across banking and cap markets. Are you, strategically speaking in terms of banking first, are you still thinking about more of the singles and doubles, and are you incorporating a large bank in that, or a large win into that guide yet? More importantly, long term, can you just remind us on the bridge from where we're growing now to get back to that level? Yeah. I think we laid this out in our fourth quarter call, so happy to reiterate that. As you think about I think we said 3%-5%+ for Heritage FIS. As you think about that, banking should reaccelerate on its own given its organic growth components. As we grow over two things in 2024 or 2023 it's impacting. One is the large strategic sales, and we don't have any of those in our 2023 forecast, and we wouldn't expect to need them to hit our medium-term 3%-5% Heritage FIS growth. That would be incremental to that. If you recall, we are in 2023 growing over a lot of non-recurring. That is a 1 or 2% point lift as we grow over that in 2024. We feel really good about the midterm 3%-5% for Heritage FIS as we benefit from those two things. Okay. Just as a quick follow-up on the potential for the dis-synergies. I think you had mentioned or you alluded to on the prepared comments that you're doing everything you can to minimize that to almost nothing or no dis-synergies. Obviously, I know that's probably not gonna be zero, but it does sound like you're building confidence that it's not gonna be that much or maybe as much as some out there would have been saying. Can you give us a little more follow-up? I know we're not prepared for an exact number yet. Yeah, happy to. Look, I think what I said is if you thought about the revenue synergies, we would expect to retain the majority of those previously achieved. I mean, we feel really good about that. Worldpay will continue to be a distribution or partner for us, and we're in the process of building out a commercial partnership arrangement with them. Feel really good about that. On the operating expense side, I think I said that we would look to maintain a meaningful portion of those. Obviously we would look to manage anything that's left over. They're not gonna be zero. That's just not possible. We are looking to manage them and we're working very diligently. Thank you. One moment for our next question. That will come from the line of Vasu Govil with KBW. Your line is open. Hi. Thanks for taking my question, and congratulations on the strong quarter. Thank you. I guess, Stephanie, just starting on the banking side maybe, has the nature of your conversations with bank clients changed over the course of the last month given what's gone on in banking? Any insights on what they're thinking in terms of tech spend? Is there risk that current events will further elongate the new sales cycle? Let me start by saying we are seeing no elongation of a sales cycle. The majority of what's happening in the banking side is specific to certain banks. You can see that we're seeing net new accounts across the portfolio as consumers are spreading out their accounts across banks, which is generally net positive for most of the banks. I would say for us, you know, what's really important and continues to solidify our partnership and our importance in the ecosystem is, you know, as banks go through whatever volatility they're dealing with, we're very important to making sure that all those deposit accounts get opened, all those money market accounts get opened, and that we stand, our systems are very stable and up and running. We participate hand in glove with our financial institutions no matter what's going on. I would say through this quarter, I'm just incredibly proud of the team, because I could see again how important we are to the financial system ecosystem. We had a lot of our clients just thank us profusely in terms of whatever their activity was going, whether they had more accounts, whether some of their accounts they needed more reporting, and our systems remained up and stable. Couldn't thank my team more. That was a lot of our activity this quarter. What they're thinking, I think is really consistent with what they've been thinking, which is how do they continue to digitize and modernize the banking platforms? You know, it's impossible for these financial institutions not to continue to focus on the technology spend they need because, as you know, their consumers are still not coming back in branch. The need to deliver financial services and products to them digitally, omnichannel, et cetera, it's not stopping. In fact, it becomes even more important. We're not seeing any slowdown in backlog. We're not seeing any slowdown in conversations around needing those products and services that really help them garner more new business. I would say the environment remains positive and stable. Great. Thank you. A quick follow-up on the merchant segment. I sort of got the comment that you were expecting a slight deceleration in volumes in the second quarter. Anything specific you can talk about April relative to the first quarter? Any big differences you were seeing in the U.S. versus U.K.? Thank you. Sure. April trends are very consistent with March trends. Our first quarter trends were consistent with what everybody else has told you. January and February were elevated as everybody grew over COVID. March moderated slightly, but still very strong, and March and April are pretty consistent. Feel really good coming into the second quarter, but they do modestly decelerate as you think about January and February. U.S., U.K., U.S. consumer continues to be very strong. I think everybody saw in the first quarter it was stronger than we expected, coming out of the fourth quarter. Not seeing any decel there quite yet. The U.K. is moderating. I would say it's not starting to improve, but its decline is slightly moderating, so it did slightly better than we expected. It's gonna have easier grow overs as we go throughout the year, and we're anticipating that that environment gets a little bit more positive. I wouldn't call that yet in terms of improving. Thank you. One moment for our next question. That will come from the line of Dan Perlin with RBC Capital Markets. Your line is open. Thanks. Good morning, everyone. I wanted to ask a question around the Worldpay spin. I mean, we've had a lot of detail on the quarter here, but can you just remind us, Stephanie, when you're thinking about, you know, the acquisitions that you really need to target within that space, I would say a couple things. One is, you know, maybe offer up what you're thinking in terms of size of acquisitions that would be required to help, I guess, fix some of the degradation that you see in SMB. What do you see in the current environment? Like right now, do you see possible opportunities understanding that this is gonna take place late in 2023, maybe early 2024? I'm just trying to get a sense of, you know, your planning when you start to think about, you know, allocating to M&A for that. It's a great question, Dan. As you might expect, Charles and I have been very active in these conversations. Look, I think the great thing about Worldpay is it is a scaled platform with global distribution. You can see through even our Payrix asset, you can if you find the right product and the right distribution channel, put it on the platform and it will drive incremental revenue and incremental margin. I think it's really exciting in terms of where to go there. I think, you know, as we think about the merchant business, growing and getting it back to mid-single and then he'll wanna accelerate to upper single, I think the business he can get back on track in terms of mid-single, with higher execution, as he comes into 2024 and 2025. Then I think about acquisitions really delivering 1 or 2 percentage points of revenue growth for him. I think, you know, there's a lot of opportunities out there. I think we bring a lot of distribution scale to those types of companies. I suspect he'll wanna continue to drive the e-commerce business. As we've talked about strategically, we'd like to see that become 50% of the overall revenue of the company. Not quite prepared yet to talk about the who and the what, as he starts to strategically evolve that. As you know, I'm pretty bullish about our ability to do M&A in that segment and drive outsized revenue and even a margin growth given the scale and distribution of the platform. Yep. We're looking forward to it too. Just a quick one on banking. You know, with the expectation of all the regulations maybe getting elevated within the system and maybe in particular on smaller banks, like can you just remind us maybe specifically how you guys are positioned to benefit from that? Especially given the asset charts that you gave us, the new slide, it's obviously you do tilt towards larger financial institutions. Where, where would you see most of that regulation fall in your opinion? Thank you. Happy to. We absolutely think there'll be more regulation just like everybody else does. We deal with very complex regulation on the capital markets side. We have really good products that we use over there for financial institutions that are global in nature that are heavily regulated. Those products are very applicable as we think about bringing them into the banking solutions side of the house. My president of banking and president of capital markets and I are already in process of bringing those over, starting to educate our larger financial institutions about those, that product set. We're getting a very high interest rate. Those are things that help people manage liquidity, capital requirements, deposit flows, regulatory requirements, tier 1 capital ratios. We have a nice product set that we think we can leverage and bring over, and we think that's pretty differentiated. Thank you. One moment for our next question. That will come from the line of David Togut with Evercore ISI. Your line is open. Thank you and good morning. You called out continued market share gains in the e-com portion of Worldpay. Could you talk about, you know, what's actually driving the share gains in e-com? Is it within specific verticals? Is it more cross-border? Any detail would be appreciated. Sure. I think it's, you know, it's improved sales execution across e-commerce. As you guys know, you know, we're a global e-commerce shop. We serve a lot of verticals. We serve global multinational companies. One very strong beneficiary of the growth is Payrix, our Worldpay for Platforms. That's growing significantly year-over-year and contributing a high level of growth there, which as you know, is allowing us to access more of the SMB part of the e-commerce market through platforms. I would say generally, it's widespread, and it's doing very well in terms of operating performance and benefiting from obviously increased consumer spend broadly across the market. Understood. Just as a follow-up, in your prepared remarks, you underscored at least $1.25 billion in cash savings by year-end 2024. What's driving the at least? Do you have just increased conviction based on first quarter performance and cost takeout achievement? Yes. My... Look, my leadership team, led by my corporate performance officer, is doing an absolute fantastic job. Future Forward is hitting on all cylinders. We have over 1,000 initiatives going on throughout the company. Everyone sitting at my leadership table and the leadership team around the company is engaged. We're seeing really strong results. We're just feeling really confident. George really liked the at least words. That's why it's there. Our last question for today will come from the line of Ashwin Shirvaikar with Citi. Your line is open. Thanks, Stephanie. Hi, Erik. Maybe sticking with Future Forward, I was kinda hoping to understand better what's initially driving the savings with the efficiency side, effectiveness, growth. What sort of initiatives, and you know, what's dropping to the bottom line versus being reinvested? That's a question both on the OpEx side and the CapEx side, if you could kind of provide what the good go-forward assumption is. Yeah. Maybe I'll talk generally about the initiatives and investments, and then Erik can talk about how that comes in over the quarter. I would say initially, first of all, it's all dropping to the bottom line. We're not reinvesting any of those initiatives at this point. In terms of the initiatives that are driving it, you can clearly see we've reduced our TAI spend year-over-year, which is a notion of us winding down a bunch of programs that we didn't think were delivering returns. We reduced our capital expenditure as well year-over-year, again, going through the portfolio and really rationalizing projects based on returns and prioritizing projects around delivering products and services out to customers, as well as driving automation into a lot of our processes to improve client experience. I would say those are the big things. I think on the operating expense side, we've been very, very focused on making sure that we drive profitable revenue coming into the company, but also maintaining our expense base and trying to drive people into being much more productive. That's been the lion's share of it as we think about the first two quarters. I think as we go out, though, into 2023 and 2024, we're really focused on moving the flywheel faster around products and getting them out to market faster, getting implementations done faster, automating and through AI and other types of activities, making our client experience better and more efficient. You know, as I've talked about, you know, really focused on efficiency and effectiveness with the client at the center, and then making sure that if we are spending the capital and operating expense, are we helping our clients and the company grow? At a high level, those are the initiatives in the near term and long term, and I'll let Erik kinda walk through how you think about it over the- Yeah. quarters. From a financial perspective, we've got roughly $100 million reduction in capital expenditures in the first quarter. You can see that year-over-year. In the in-period OpEx savings, roughly $15 million in the first quarter. As you'd expect, Ashwin, this builds through the course of the year. As we look at margins for the balance of the year, you're gonna see sequential improvement in margins with Future Forward having a meaningful, really meaningful impact in the second half. Understood. Maybe I can end with a couple of numbers questions. you know, last time you explicitly indicated the 500 basis point macro impact. What's that now? Then interest expense, $137 versus, I think it's $20 million savings. What specifically happened in 1Q for the lower interest expense? Sure. Sure. On the macro merchant assumption, we had talked about 500 basis points, 5 points of headwind in our call a quarter ago. The midpoint of the merchant guide has improved by 150 basis points, Ashwin. I would say the macro assumption for merchants now 3.5 points. Interest expense, on your second question around interest expense, interest expense is down as we did an incremental revolving credit facility to deal with two maturing bonds this year where we had favorable pricing on the revolving credit facility. Okay. Thank you everyone for joining us this morning. 2023 is off to a strong start. The FIS team is making great strides towards moving the company forward. I couldn't be more confident in our future. We look forward to connecting with many of you over the coming weeks and further updating you on our progress. Have a great day. Thank you all for participating. This concludes today's program. You may now disconnect.