Financial Data and Key Metrics Changes - Adjusted revenue grew by 6.3% to $2.7 billion, driven by strong performance in the banking business and recurring revenue growth across both segments [19][22] - Adjusted EBITDA increased by 7.1%, with margins expanding by more than 50 basis points [19] - Adjusted EPS rose by 7.9% to $1.51, reflecting strong operating growth [19] - Free cash flow was $800 million for the quarter, more than doubling year over year, with adjusted free cash flow at approximately $930 million and cash conversion exceeding 140% [20][21] Business Line Data and Key Metrics Changes - Banking segment revenue grew by 6.2%, exceeding expectations, with recurring revenue growth of 6% and strong transaction growth in payments [22] - Capital markets adjusted revenue growth was 6.4%, with recurring revenue growing by 7.6% due to a rebound in lending activity [23] - Non-recurring revenue in banking increased by 8%, primarily due to card personalization and deconversion fee timing [22] Market Data and Key Metrics Changes - Bank technology spending remains strong, with clients prioritizing investments in digital solutions, payments innovation, and lending modernization [7][8] - More than three out of four banks have launched or are piloting GenAI and Agentic solutions, indicating a significant increase in AI adoption [8] - Consumer spending patterns are resilient, with strong debit and credit card spending year to date [8] Company Strategy and Development Direction - The company is positioning itself as a technology leader in financial services, focusing on operational excellence, core and digital banking, and payments [11][12] - Strategic investments in AI are transforming operations, enhancing client support, risk management, and product development [12][66] - The acquisition of credit issuer solutions is expected to close in Q1 2026, enhancing the company's credit processing capabilities [17][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year 2025 financial goals and raised outlook for revenue, EBITDA, and cash conversion [7][27] - The operating environment for banks is improving, leading to increased investments and a favorable regulatory backdrop for M&A activity [9][10] - Management noted that the pricing environment remains stable, with net pricing contributing positively to growth [10][56] Other Important Information - The company returned $509 million to shareholders through share repurchases and dividends [7] - The sales pipeline annual contract value (ACV) has expanded by 13% annually since 2023, indicating strong sales performance [10] - The company is focused on enhancing its digital and payment solutions, with significant growth in user adoption across digital platforms [13][15] Q&A Session Summary Question: Insights on banking segment growth - Management noted strong technology spending in banking and expressed confidence in organic growth, although not ready to raise midterm guidance yet [30][32] Question: Revenue modeling for 2026 - Management indicated that banking is outperforming capital markets and expressed comfort with the revenue trajectory, highlighting a shift towards higher-margin recurring products [34][36] Question: Growth drivers in banking - Management emphasized the importance of net new sales and investments in digital capabilities, which are expected to support organic growth [40][42] Question: Free cash flow quality for next year - Management projected strong free cash flow growth, with expectations of 90% conversion driven by lower capital intensity and improved working capital [46][47] Question: Margin expansion dynamics - Management discussed the expected margin expansion due to improved revenue mix and cost-saving programs, with a focus on high-margin recurring revenue [50][54] Question: Competitive dynamics in core processing - Management acknowledged the bank modernization trend and expressed confidence in retaining clients while competing for new business [58][59] Question: EBT revenue pool impact - Management indicated that EBT revenue is not material to the company and does not expect significant impact from federal changes [60][61] Question: Confidence in investment strategy and AI integration - Management expressed satisfaction with the future forward strategy and highlighted AI's role in enhancing client experiences and operational efficiency [64][66]

Financial Data and Key Metrics Changes - The company reported adjusted revenue growth of 6.3%, reaching $2.7 billion, with adjusted EBITDA margins at 41.8% and adjusted EPS of $1.51, up 8% year-over-year [5][18] - Adjusted free cash flow conversion was 142%, with free cash flow at $800 million, more than doubling year-over-year [5][19] - The company returned $509 million to shareholders through share repurchases and dividends [6] Business Line Data and Key Metrics Changes - Banking segment revenue grew by 6.2%, driven by strong core growth and M&A contributions [21] - Capital markets adjusted revenue growth was 6.4%, with recurring revenue growth of 7.6% [22] - Non-recurring revenue in banking increased by 8%, primarily due to card personalization and deconversion fee timing [21] Market Data and Key Metrics Changes - Bank technology spending remains strong, with clients prioritizing investments in digital solutions, payments innovation, and lending modernization [6][7] - The U.S. total addressable market (TAM) for digital solutions is projected to grow at approximately 12% annually through 2028 [13] - The payments market is valued at $53 billion, growing at 5% annually, with strong performance in instant payments and digital currencies [15] Company Strategy and Development Direction - The company is focused on operational excellence, core and digital banking, and payments as strategic priorities for sustainable growth [10] - The acquisition of credit issuer solutions is expected to close in Q1 2026, enhancing the company's credit processing capabilities [17][27] - The company is leveraging AI to enhance client experiences and operational efficiencies, driving growth in high-margin products [66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the banking segment's growth, driven by strong technology spending and M&A activity [30][31] - The company raised its full-year outlook for revenue, EBITDA, and cash conversion based on strong performance and market visibility [6][24] - Management noted that the pricing environment remains stable, with net pricing contributing positively to growth [9] Other Important Information - The company is experiencing a significant increase in bank M&A activity, with the highest level of quarterly bank consolidation in four years [8] - The company is focused on enhancing its digital capabilities and has seen over 30% growth in users across its digital platforms [13][14] Q&A Session Summary Question: Outlook on banking segment growth - Management is optimistic about technology spending in banking and is currently outperforming previous organic growth targets, but is not ready to raise mid-term guidance yet [30][31] Question: Revenue modeling for 2026 - Management indicated that banking is outperforming capital markets, and while there may be some headwinds from acquisitions, overall revenue trajectory remains strong [33][34] Question: Organic banking revenue drivers - Management highlighted that net new sales are contributing significantly to organic growth, particularly in digital and payments [39][40] Question: Free cash flow quality for next year - Management expects strong free cash flow growth, driven by lower capital intensity and improved working capital management [41][45] Question: Margin expansion drivers - Management noted that margin expansion will benefit from improved revenue mix and cost-saving programs, with a focus on high-margin recurring revenue [47][50] Question: Competitive dynamics in core processing - Management acknowledged the bank modernization trend and the potential opportunities arising from competitors consolidating their core offerings [56][58] Question: EBT revenue pool impact - Management stated that EBT revenue is not material to the company and does not expect significant impacts from federal changes [60][61] Question: Confidence in investment strategy and AI integration - Management expressed confidence in the future forward strategy and highlighted the role of AI in enhancing client experiences and operational efficiencies [64][66]