Fidelity National Information Services, Inc. (NYSE:FIS) Q2 2020 Earnings Conference Call - Final Transcript

Aug 04, 2020 • 08:30 am ET

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Fidelity National Information Services, Inc. (NYSE:FIS) Q2 2020 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

Thank you. [Operator Instructions] Your first question comes from the line of Jason Kupferberg from Bank of America. Please go ahead.

Analyst
Jason Kupferberg

Hey, good morning, guys. Nice results here. I wanted to start with a top-line related question. You've now secured seven large next gen core banking wins over the past three quarters. So I wanted to see if you can help us roughly size how much revenue they could contribute in aggregate next year as they start to go live. And maybe as part of that, can you just comment on the 7% to 9% organic revenue growth target you guys had pre-COVID and your confidence level in that range as we move into 2021 and 2022?

Executive
James "Woody" Woodall

Thanks, Jason. If you step back about a year ago, one of the things we talked about was Banking being able to accelerate its revenue growth profile to get us into that 7% to 9% zone of growth. I think these MBP wins and the timing of the revenue that will come on will certainly give us more confidence, if you will, and that being able to drive into that 7% to 9% range in a pre-COVID world or a post-COVID world is where we are today. The revenue comes out of these MBP clients about a year after the signing. So as we've talked about in the last couple of quarters, we should start seeing some revenue very late in 2020, but really more of that revenue starting to flow into 2021. I don't think we're going to give a dollar amount of where those MBP revenues are at this point, but certainly gives us incremental confidence in being able to deliver 7% to 9% on a go-forward basis.

Executive
Gary Norcross

Yeah, let me just add a little color to that. When you look at the size in these contracts, compared to our traditional core banking deals down across community banks' order of magnitude, these are hands down very, very significant and large contracts compared to anything else you would do in core banking. The other thing that's important to know, not only have we signed seven as we described, but keep in mind, in the Modern Banking Platform wins, those are really deposits-only at this point. So we have an opportunity, as we launch their deposit portfolios and bring their deposit products online in this newer technology, then to move in to their lending portfolios and other areas of the traditional core bank. So we're real excited about this potential.

I mean, not only is -- we've talked about for years, penetrating the Top 30 with really transformation on core, we've got an opportunity to grow these core relationships with successful launches on deposits. So it's a really good indicator, as Woody said, to push that Banking business above mid-single-digits into a more upper-single-digit kind of growth rate over time and it makes us very confident to the 7% to 9% as we discussed earlier.

Analyst
Jason Kupferberg

Terrific. Maybe just another question on the margin front.