Fidelity National Information Services, Inc. (NYSE:FIS) Q3 2023 Earnings Call Transcript

Fidelity National Information Services, Inc. (NYSE:FIS) Q3 2023 Earnings Call Transcript November 7, 2023

Fidelity National Information Services, Inc. beats earnings expectations. Reported EPS is $1.65, expectations were $1.59.

Operator: Good day and welcome to the FIS third quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. After the speakers’ 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 then hear an automated message advising your hand is raised. To withdraw your question, please 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 today, George Mihalos, Head of Investor Relations. Please go ahead.

George Mihalos: Thank you Abigail. Good morning everyone and thank you for joining us today for the FIS third quarter 2023 earnings conference call. This call is being webcast. Today’s news release, corresponding presentation and webcast are available on our website at fisglobal.com. With me on the call this morning are Stephanie Ferris, our CEO and President, and James Kehoe, our CFO. Stephanie will lead the call with a strategic and operational update, followed by James reviewing our financial results and providing forward guidance. 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. Reconciliation of our non-GAAP information the GAAP financial information is presented in our earnings release. With that, I’ll turn the call over to Stephanie.

Stephanie Ferris: Thank you George, and thank you everyone for joining us this morning. Let me start by saying it’s an honor and a privilege to lead this very talented team, who are collectively building the future of FIS. I am pleased to report that we had another strong quarter executing on both our financial and operational commitments. This is our third straight quarter of solid financial results, once again meeting or exceeding the high end of our revenue and adjusted EBITDA outlook and delivering strong free cash flow conversion. We have taken decisive actions to transform FIS over the past year with growing predictability of meeting or exceeding our targets and expanding margins with measurable impact from our Future Forward program.

The Worldpay separation and our Future Forward execution repositions FIS into a company with a strong balance sheet, which enables us to both invest in growth and increase capital return to shareholders while at the same time reduces exposure to macro consumer trends. Post the Worldpay transaction, FIS will be a global enterprise software leader positioned for a resilient, recurring revenue growth aided by beneficial secular trends, a marquee set of global clients, and best-in-class products and solutions, which will all accelerate profitable revenue growth. The FIS of the future builds on our strong foundation, repositioning the company as a cloud-based enterprise software-as-a-service provider, servicing the world’s most complex financial institutions and capital markets participants.

This enables us to expand into new client segments as well as into new faster growing verticals. All of this leads to confidence in our current year outlook, our future prospects and our plan to drive long term shareholder value. Our confidence is further reinforced by positive momentum we are seeing across a number of key leading indicators. First, we continued to deliver steady recurring revenue growth, which extends our visibility and serves as a foundation for sustainable revenue growth. Second, our sales pipeline is robust and new customer engagement is strong. We are seeing an increase in sales force productivity, an increasing pipeline of high margin opportunities, and a strong transition from one-time to recurring revenue as we take advantage of both market demand as well as secular trends.

Finally, the traction that we are getting by bringing many of our clients live on our new platforms, like Modern Banking Platform, Digital One, and risk management solutions, is driving positive future momentum. Given our confidence in the business and the attractive valuation of our stock, we are resuming share repurchases in the fourth quarter, increasing our total share repurchase goal to at least $3.5 billion by year end 2024. Let’s turn now to a discussion of our quarterly results. Moving to Slide 6, we delivered another strong quarter of financial results with broad-based outperformance relative to our prior outlook. The outperformance was driven by strong organic revenue growth of 4% led by 7% recurring revenue growth in the combined banking and capital markets segment and from profitability improvements driven by our Future Forward program.

We continue to generate strong free cash flow and are on track to exceed our 2023 free cash flow conversion target of greater than 80% for the year. Year to date, free cash flow conversion is a very strong 94%. This is well ahead of our full year target as efficiency efforts related to Future Forward continued to cascade through the business. Our teams are continuing to move with quality, speed and a high sense of urgency, accelerating our path forward. Turning to Slide 7, we are making significant strides in transforming FIS. Our Worldpay separation remains on track to close in the first quarter of 2024. Since our last earnings call, FIS and Worldpay have achieved several important milestones necessary to advance the separation. We are very pleased with the success of the recent $8.7 billion Worldpay debt raise.

The strong demand evidenced by the upsizing of the debt offering at favorable rates secures the committed financing required to close the deal. Looking ahead, we are looking towards securing the necessary regulatory approvals to close the transaction and finalizing terms around commercial agreements. Moving to Future Forward, we are on track to deliver on all of our commitments, including $1 billion in total savings across the enterprise by year end 2024. The program is sharpening our focus on innovating and delivering best-in-class solutions and products to markets faster, simplifying our go-to-market approach, and improving client experiences. This in turn is driving improved new sales momentum. Turning to Slide 8, FIS is uniquely positioned as the leading software solutions provider to the most demanding and complex financial institutions globally, and while recognized as the provider of choice for large FIs and regional banks, our next generation offerings are increasingly resonating with a broader base of clients who have increased financial services needs.

This includes leading multi-national corporates, insurance companies, leading global fintechs and neo banks. We have developed a full suite of cloud-based, componentized enterprise solutions delivered via a SaaS offering. Over this past year, we’ve focused significant efforts on bringing these solutions to market across our four digital and issuing platforms. As a result, our next generation core banking solution, Modern Banking Platform, is now live with a number of Tier 1 financial institutions and fintechs. This includes a new digital savings platform for BMO in the U.S., a digital interest-bearing deposit account product for PayPal, and a deposit account for SMBC group member, Manufacturer Bank’s new digital banking division, Jenius Bank.

Looking ahead to 2024, we expect three more Tier 1 banks to go live with MBP offerings as part of a broader, multi-year core modernization effort. We are equally excited about the prospects for our Digital One and Payment One solutions, bringing enhanced front end digital experiences and complex issuer processing capabilities to the most demanding financial institutions. Our overall vision for our enterprise core platforms is to leverage the full value of our open architecture and robust APIs going forward, eliminating mass conversion complexity. This creates an open environment that speeds the FIS product and development flywheel to bring new capabilities to our clients with increased flexibility. In capital markets, we are seeing strong tailwinds across the business, a function of both increased wallet share and faster growth in non-traditional verticals.

As the leading global provider of treasury and risk solutions, capital markets is benefiting from several secular trends. These include increased regulatory mandates, climate and environmental risk demands in verticals such as insurance and asset management, and growth in lending from non-bank providers. Turning to Slide 9, I am very encouraged by our sales momentum during the third quarter and pleased to announce several marquee wins across our banking and capital markets segments. Beginning with the enterprise core platforms, FIS was selected by Provident Bank to drive the bank’s core modernization going forward. In digital, we had several wins in the quarter, including Origin Bank selecting our Digital One suite over the offerings of notable disruptors.

We also had a particularly strong quarter in payments and networks as money movement remains front and center for banks, fintechs and corporates. Sales of the NYCE network accelerated in the third quarter with notable signings of several leading retailers, restaurants and fintechs. Lastly, while still early days, we are encouraged by the interest we are seeing related to the roll-out of FedNow, where we currently have over 190 clients in our pipeline, up from 116 clients just last quarter. Moving to capital markets, during the quarter we had a number of impressive wins, including new or expanded engagements with some of the largest financial services providers in the world. We recently signed a long term extension for our industry-leading derivatives clearing solution with a top five U.S. financial institution.

We also signed our largest contract ever for our private equity fund accounting software to a leading global investor services company. Demand for risk tools was strong across all geographies and verticals. Our FIS enterprise risk suite continues to gain traction with global investment banks and broker dealers, especially in the growing insurance vertical with new sales to several leading U.S. and international clients. Overall, we are encouraged by the level and quality of engagement that we are seeing across the enterprise. Moving to Slide 10, during the third quarter, our differentiated solutions received a number of prominent industry accolades. First, leading research and advisory firm, Celent, recognized three of FIS’ core offerings with awards in advanced technology, customer base, and breadth of functionality.

Our industry-leading treasury solutions were recognized by leading advisory firm, IDC and several industry publications. We were delighted to see that our solutions are not only resonating with clients but also with leading experts and influential advisory firms in the industry. Turning to Slide 11, over the course of the year we have been moving with a high sense of urgency to improve the performance of the business, free cash flow, and capital allocation. We’ve set a new agenda to ensure that clients are at the center of everything that we do to innovate across our portfolio with next-gen solutions. We’ve made significant progress delivering our financial and strategic commitments to date. The separation of Worldpay affords us the benefit of substantial upfront proceeds, which creates immediate capital allocation flexibility for us to accelerate capital return to shareholders while investing in growth.

We’re excited about the outcome that this strategic transaction drives and remain confident in the underlying strength of our business and sustainable operating model going forward. We look forward to hosting all of you at our FIS investor day in the second quarter of 2024. With that, I’d like to introduce James Kehoe, our new CFO, who brings decades of experience navigating the dynamic financial environment and managing its aspects unique to large international organizations. I will now turn the call over to James.

James Kehoe: Thank you Stephanie, and good morning. I’m delighted to be here, and I look forward to meeting with all of you in the near future. As noted in our earnings release, as of the third quarter we have transitioned the Worldpay business into discontinued operations. Going forward, our ongoing FIS financials will be presented on a continuing operations basis; however, for this quarter we will also present some of our metrics on a total company basis, and this will allow you to compare to our prior total company outlook. Continuing operations now reflects two principal operating segments: banking and capital markets, as well as the corporate and other segment. As you review the split between continuing operations and discontinued operations, I would note that the continuing operations income statement understates the true earnings power of FIS.

For example, the continuing operations financial results do not yet include the EPS contribution from our 45% equity stake in Worldpay, nor does it include the significant EPS upside from the deployment of the Worldpay net cash proceeds, including the planned debt reduction of approximately $9 billion and share repurchases of at least $3.5 billion through 2024. Taken together, these items will have a meaningful impact on EPS and we estimate like-for-like earnings power of around $4.40 to $4.55 for 2023. Let’s now move to our third quarter results. As Stephanie mentioned in her prepared remarks, we are pleased with our performance in the third quarter, and it is the third consecutive quarter of meeting or exceeding the high end of our outlook.

Including Worldpay, total company revenue increased 2% on an organic basis to $3.7 billion, with an adjusted EBITDA margin of 44.2% and adjusted EPS of $1.65. The adjusted EBITDA margin expanded 50 basis points year-over-year, 20 basis points above the high end of our expectations driven by strong incremental margins on our recurring revenue and continued benefits from Future Forward. This marks the first year-over-year EBITDA margin improvement since the fourth quarter of 2021 and we expect continued year-over-year margin improvement in the fourth quarter. On a continuing operations basis, revenue increased 4% organically to $2.5 billion, led by strong growth in recurring revenue across both banking and capital markets. Adjusted EBITDA margin expanded 70 basis points year-over-year to 43%, led by strong margin gains in banking.

Adjusted EPS for continuing operations was $0.94 in the quarter, a decline of 7% compared to prior year, and this was entirely due to higher interest costs. For discontinued operations, which reflects our merchant segment, revenue decreased 1% organically to $1.2 billion, and this was broadly in line with our expectations for the quarter. Adjusted EBITDA margin expanded 30 basis points to 46.8%, reflecting continued Future Forward efficiencies, and adjusted EPS came in at $0.71. Moving now to cash flow and balance sheet metrics, we continue to drive improvements across multiple vectors. Capital expenditures were reduced 5% year-over-year to $298 million or 8% of revenue, as we continued to optimize and prioritize investments. We generated strong free cash flow of $907 million, resulting in a free cash flow conversion of 92% for the quarter and 94% year-to-date.

This compares very favorably to our prior target of greater than 80% free cash flow conversion. Lastly, we reduced our total debt by approximately $800 million to $18.7 billion, yielding a leverage ratio of three times while also returning over $300 million to shareholders. Turning now to our segment results on Slide 15, recurring revenue increased 7% with strength across both banking and capital markets, and this led to organic revenue growth of 4% for the quarter. Backlog was $22.5 billion, increasing 2% compared to the prior year, reflecting improved sales execution. Banking revenue grew 3% organically in the quarter and recurring revenue grew 7%, including a benefit of approximately 4 percentage points as a result of an outsized contribution from servicing federally funded pandemic relief programs.

Pandemic relief had little impact on the banking growth rates in the first half of 2023, but the third quarter results did exceed our expectations. As anticipated, we saw declines in professional services and other non-recurring revenue of 18% and 11% respectively. These declines reflected difficult year-over-year comparison in license revenue and lower customization projects in professional services. Banking EBITDA margin expanded 120 basis points to 44.6%, primarily driven by Future Forward cost initiatives. Capital markets revenue increased 6% organically, led by continued strong recurring revenue growth of 8%. Consistent with our year-to-date trend, professional services revenue decreased 8% as we continued to shift to recurring revenue engagement, while other non-recurring revenue increased 13% due to higher license revenue.

Capital markets adjusted EBITDA margin contracted 80 basis points to 49%, mostly reflecting the timing of operating expenses. Turning now to the outlook for 2023 on Slide 16, this chart provides an outlook for the total enterprise prior to implementing accounting for discontinued operations. We are raising our revenue and adjusted EBITDA outlook ranges to reflect continued strong operational results and good visibility around fourth quarter trends. Total company revenue is now projected at $14.6 billion to $14.65 billion, including an adverse currency impact of $25 million. On a constant currency basis, we are increasing the lower end of the range by $125 million and the higher end of the range by $44 million. As we close out the year, we are narrowing our ranges for segment growth.

In banking, we are narrowing our outlook to 1.3% to 1.7%, in line with our prior expectations. For capital markets, we now anticipate organic revenue growth of approximately 5% to 5.5%, primarily due to an expected shift in license fees into 2024. Lastly, we’ve improved our merchant segment outlook to account for recent performance. As expected, this implied a slight deceleration in organic revenue growth in the fourth quarter for both banking and capital markets, reflecting difficult year-over-year comparisons related to non-recurring revenue headwinds. As a reminder, in the fourth quarter, we anticipate a five-point headwind in capital markets as we lap a very strong year-ago quarter for license revenue. However, consistent with the trends we have seen all year, we do anticipate another solid quarter of recurring revenue growth with approximately 3% growth in banking and 7% growth in capital markets.

We are also increasing our adjusted EBITDA range to $6.1 billion to $6.15 billion, reflecting higher revenues and improved EBITDA margin. In summary, we are raising our full year outlook to reflect continued outperformance and a favorable future outlook. Turning now to Slide 17, where we are providing updated assumptions regarding the Worldpay transaction, we now anticipate net proceeds of more than $12 billion, an increase of approximately $300 million compared to our prior estimate. Obviously we will provide a final net proceeds number once the transaction closes. As previously disclosed, the proceeds will be used to transform our capital structure by significantly de-levering the balance sheet while simultaneously returning capital to shareholders.

Overall, we anticipate reducing gross debt to approximately $10 billion, leading to a significant reduction in interest costs post transaction. As we get more visibility into net cash proceeds and continue to deliver strong cash conversion, we are now comfortable reinstituting share repurchases of approximately $500 million by year end. Today, we are increasing the targeted share repurchases from $2.5 billion to at least $3.5 billion by the end of 2024, and we will continue to assess additional capacity throughout the year. We will accomplish this share repurchase goal while still remaining comfortably within our targeted leverage ratios. We expect full year 2023 D&A of approximately $1 billion on a continuing operations basis, and you should assume growth of 8% to 10% in 2024 as past capital investments flow through the income statement.

Some good news on tax rate – we now anticipate an effective tax rate of 17% to 18%, down 200 to 300 basis points compared to the 19% to 21% we communicated previously. We continue to expect incremental Future Forward savings of $215 million in 2024 and our forecast for adjusted EBITDA dis-synergies remains approximately $200 million in 2024. Finally, we can confirm that we will report the after-tax earnings from our 45% stake in Worldpay within our adjusted net earnings and adjusted EPS, and will include this in our 2024 outlook. Turning now to our outlook for continuing operations on Slide 18, the left-hand side of this chart lays out our 2023 outlook for continuing operations, excluding Worldpay. This results in an adjusted of $3.30 to $3.40; however, as I noted earlier, the 2023 continuing operations income statement does not accurately reflect the true earnings power of FIS.

A good example is interest expense – the continuing operations interest expense is burdened with the entire interest expense of FIS with no interest expense allocated to discontinued operations. This artificially depresses the earnings of continuing operations. Shifting to the right side of the chart, let’s discuss the earnings power of FIS. Worldpay NCI adds approximately $0.60 to $0.65 of adjusted EPS on a full year 2023 basis, and the deployment of the Worldpay transaction proceeds would add $0.65 as we meaningfully reduce interest expense and share count. These benefits are modestly offset by a higher tax rate. Overall, this leads to a normalized 2023 EPS of $4.40 to $4.55. We will provide our outlook for 2024 revenue and adjusted EBITDA during our fourth quarter earnings call.

Switching gears now to Future Forward, on a continuing operations basis, we delivered approximately $55 million of year-to-date savings. This year, we anticipate $100 million of in-period savings and expect to exit the year with run rate benefits of $200 million. This aligns with our expectation of $215 million of year-over-year benefit to 2024 adjusted EBITDA, and we will provide quarterly updates through the life of the program. Overall, we continue to anticipate $1 billion of total cash savings across all three categories of cash optimization. Moving now to our capital allocation priorities on Slide 20, post the Worldpay transaction, FIS will be in a very strong position with significant balance sheet flexibility and a balanced set of capital allocation priorities.

We will prioritize investments to accelerate revenue and EPS growth while returning ample capital to shareholders over time. We will target a strong balance sheet and maintain investment-grade credit ratings. Given our strong free cash flow generation and predictable revenue streams, we are reiterating our long term gross leverage range of 2.5 to 3 times adjusted EBITDA. We intend to maintain a competitive dividend and we will grow the dividend in line with adjusted net earnings. We will selectively invest in M&A, targeting smaller complementary but highly synergistic targets where we can leverage our tremendous scale and distribution to drive faster growth across strategic verticals. As mentioned earlier, we will deploy excess capital for share repurchases and, going forward, we anticipate that share repurchases will be a key element of our value proposition to shareholders.

We are convinced that this balanced capital allocation framework provides a robust value proposition for long term shareholder value creation. In closing, let me say again how excited I am to be joining the FIS team during this time of transformation. I believe we are on the right path to unlock meaningful shareholder value as we reposition the enterprise for long term success. As you have seen, this quarter marks the third consecutive quarter of delivering on our financial commitments with results at or above the high end of our outlook. As such, we are confident in increasing our total company outlook for the year. We have also introduced an outlook for 2023 continuing operations in line with our prior expectations, and lastly, given the confidence in how the business is performing, our improved financial flexibility and the attractive valuation of our stock, we are reinstituting share repurchases with approximately $500 million in the third quarter, and we are raising the total buyback to at least $3.5 billion through 2024.

With that, Operator, would you please open the line for questions?

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Q&A Session

Operator: Thank you. At this time we’ll conduct a question and answer session. [Operator instructions] Our first question comes from Ramsey El-Assal with Barclays. Your line is now open.

Ramsey El-Assal: Hi, good morning Stephanie, and welcome James. I wanted to ask about continuing operations adjusted EBITDA margins as we move past the Worldpay sale next year. The F23 outlook on Slide 18 shows lower EBITDA margins than we’ve seen year-to-date in banking and capital markets. I’m just wondering if you could help us think through what the normalized margins in the business will look like once we get past the sale.

James Kehoe: Yes, I think it’s fair that we really don’t want to get into giving any guidance for 2024 on this call; however, I would give you some information based on communications previously. One is Future Forward – this has been an incredible success year to date, and frankly, it’s just gaining momentum. You’ve seen $55 million of savings year-to-date ramping up to $100 million in the full year, so that’s the benefit in the current year, and the run rate exiting the year is $200 million, so I think you can be quite comfortable on margin improvements over time across the business on continuing operations. I did say in my prepared comments, maybe I’ll just re-emphasize that, I hope you noted from my comments that we said we will increase EBITDA margins on continuing ops in the fourth quarter.

Ramsey El-Assal: Got it, okay. A follow-up from me, you’ve increased your buyback target, it looks like capex as a percentage of revenues is trending in the right direction. Is there an opportunity to return additional capital beyond what you’ve already laid out?

James Kehoe: I think I’d wait until the year-end call, and as Stephanie said, we’re also going to do an investor day sometime in April. Between now and then, we’ll get more visibility on our 2024 plan and our long term plants. We have scenarios already, quite detailed ones. I think I would point to the way we laid this out – we said at least $3.5 billion, so the short answer to your question is there is probably more capacity based on the continued strength of free cash flow delivery, which is coming in well ahead of our expectations, so. In short, yes, but we’re going to monitor it and we’re not going to over-promise anything here.

Ramsey El-Assal: Got it. Thank you very much, appreciate it.

Operator: One moment for our next question. Our next question comes from Tien-Tsin Huang with JP Morgan. Your line is open.

Tien-Tsin Huang: Thanks so much, good morning. James, I’d love to hear a little bit more on what attracted you to join FIS, what your priorities and focus areas might be as you come in here, and how your prior experience can be leveraged here at FIS, what can we expect, that kind of thing. Thank you.

James Kehoe: Well, what I said internally, I joined for the three Ps because I like to keep things relatively simple. I think it was passion, so when Stephanie first interviewed me, I sensed the passion and the drive to really change the company. Two was the people I met in the interview process, the leadership team, these people that will drive the company to success, and then the last one was potential. I know you wanted, we definitely wanted the share price to increase, and I looked at it and I think the plans we have are incredibly compelling, and I joined for the potential of the future. What can I bring? Well, I tell you, I’m 10 weeks in and I’ve spent an awful lot of time in accounting, and I’m not actually an accountant, but I have gone through discontinued operations and I can tell you, this is absorbing an incredible amount of time, the Worldpay transaction, the accounting behind it.

I’ve put a lot of energy and focus into capital allocation priorities and how do we clarify a lot of the previous communication around Worldpay and around capital allocation priorities. But looking forward, I think just my personal goals are to engage more with the investor groups, and then too is the 2024 and beyond plans, what are the business plans, are they credible, how do we generate more cash from the business, and then how do we ensure that we have a balanced capital allocation framework, and that was the key word in what I present – it’s balance. I think we need this correct balance between how do you grow the business organically, inorganically, but also returning sufficient capital to shareholders, and I think the current set of communications achieves that.

Is there more we can do over the next 12 to 18 months? The answer is yes, and Stephanie and I are intensely focused on this.

Tien-Tsin Huang: Good, glad to hear, and welcome to the call. As my follow-up, I thought I’d ask just a little bit about–I think you both mentioned good visibility, so as we go into the fourth quarter, I know that sometimes [indiscernible] mixed with license sales, so just the danger of us using the fourth quarter outlook to inform our ’24 growth expectations. I know you’re not going to give us ’24 numbers per se, but I just wanted to separate the license from the recurring piece, so anything else to say there? I know the backlog was up 2%, but just want to make sure we’re getting all the puts and takes right.

Stephanie Ferris: Yes, thanks for the question, Tien-Tsin. I would say absolutely, if you think about the strength in what we continue to lean into all year, and as well in the fourth quarter, is the strength of recurring revenue both in banking solutions and capital markets. I think James mentioned in his prepared remarks, we’re expecting recurring revenue in banking in the fourth quarter to be 3%, capital markets 7%, so a lot of strong recurring revenue growth. We would expect to see that continue as you think about 2024. There is some lumpiness in the non-recurring lines – he mentioned, if you recall last year, capital markets had a very large one-time license renewal that drove a significant growth rate in the fourth quarter of last year, so we’re lapping that.

I agree – would not over-pivot in terms of reading the non-recurring headwinds in fourth quarter into 2024. I think as we think about 2024 and reflecting on 2023, we talked about strong recurring revenue growth but having some headwinds coming into 2023 around non-recurring. I would expect as we move into 2024, those headwinds to dissipate, and so to James’ point, while we won’t give 2024 guidance on this call, we will certainly look to it on the fourth quarter call. Do not see those headwinds recurring in 2024, so would really hope that everyone would lean into the strong recurring revenue growth trends we’re seeing across the board in banking and capital markets, and those would be the expected trends as we move into 2024 from a recurring standpoint.

Tien-Tsin Huang: Perfect, that’s useful. Thank you for that.

Operator: One moment for our next question. Our next question comes from James Faucette with Morgan Stanley. Your line is open.

James Faucette: Thank you very much. Just wanted to follow up on Tien-Tsin’s question there generally, and more specifically at capital markets – it was up 7%. Can you talk about what drove that specifically? Was it some of these non-recurring items? I’m just trying to get a handle on how we should think about growth in that segment on a go-forward basis.