Fidelity National Information Services, Inc. Q2 FY2025 Earnings Call

Thank you, Shereen. Good morning, everyone. Thank you for joining us today for the FIS Second Quarter 2025 Earnings Conference Call. The call is being webcasted. Today's news release, corresponding presentation and webcast are all available on our website at fisglobal.com. Joining me on the call this morning are Stephanie Ferris, our CEO and President; and James Kehoe, CFO. Stephanie will lead the call with a strategic and operational update, followed by James who will review our financial results. Turning to Slide 3. 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 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 they 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. And with that, I'll turn the call over to Stephanie.

Thank you, George, and good morning, everyone. I'm excited to share our second quarter results, which highlight the benefits of transforming FIS into a stronger and highly focused company. Let me start with the headline. We delivered a strong quarter, led by momentum in our Banking business. We are executing on our Future Forward strategy centered around client centricity, operational simplification and innovation, creating greater value for both our shareholders and our clients. The numbers tell the story. We delivered strong 5% revenue growth, accelerating from 4% in the first quarter fueled by our increasing momentum in Banking. Second quarter adjusted EBITDA exceeded our outlook with margins improving 200 basis points sequentially. And adjusted EPS of $1.36 met our expectations. In April, we announced the strategic acquisition of Global Payments Issuer business and the sale of our minority Worldpay stake, transactions that align with our operational simplification strategy while strengthening our financial profile and significantly improving our free cash flow generation. We returned $460 million to shareholders through share repurchases and dividends in the second quarter, and we remain on track to meet our $1.2 billion target for the year. Our strong first half results and implementation pipeline leave us increasingly confident in achieving our increased full year outlook. Now let's turn to Slide 6 for a discussion on the momentum we are seeing in the market. Our strategic execution is translating into marketplace success across the complete money life cycle with several prestigious new engagements, including competitive takeaways. Beginning with Money at rest, we secured a major consolidation win with 2 premier Northeast financial institutions coming together to form a $25 billion regional banking leader. They selected us as their core provider after a highly competitive evaluation, further validating our position as the partner of choice for bank consolidation. Our digital solutions continued their strong sales momentum with double-digit ACV growth in the quarter. A top 20 U.S. bank selected our Digital One offering to assist in streamlining and enhancing its operations. And our Digital One commercial offering was selected by the U.S. subsidiary of a large Asian bank. Moving to Money in motion. Our Office of the CFO capabilities are resonating across a diverse range of clients. In the second quarter, one of the world's leading energy technology companies selected our award-winning treasury solution for global cash and risk management needs. Additionally, multiple European banks chose our risk and reporting solutions, including Balance Sheet Manager, for regulatory and compliance needs. Our payments capabilities are also in demand globally. For example, a leading South Asia-based bank selected us for its long-term debit processing needs. And lastly, in Money at work, we expanded our relationship with a leading financial services technology company through a multiyear commitment on our private equity platform. Our capability in this domain continued to gain momentum across the trading and asset industry where we are taking our SaaS go-to-market strategy and taking share. Now let's turn to Slide 7 for an update on the product innovation we are driving across FIS. Accelerating the product flywheel through our build, buy, partner strategy is strengthening our competitive position. We build what differentiates us and buy and partner what accelerates that. And our buy strategy is delivering. The Issuer acquisition and Worldpay sale received U.S. regulatory clearance, eliminating any prospect of a lengthy secondary request. We continue to work with international regulators and the acquisition close remains on schedule. This transaction adds best-in-class credit issuing solutions to our end-to-end banking offerings, creating immediate cross-sell opportunity and complements our broad suite of best-in-class solutions, strengthening our position as the partner of choice with unmatched capabilities across both banking and payments. Additionally, we recently acquired Everlink, a leading provider of integrated payment solutions to Canadian financial institutions, further executing on our international expansion strategy. We have a robust pipeline of M&A opportunities across our key growth vectors with additional acquisitions expected shortly. Our build-and-partner strategy is accelerating innovation. In May, we launched our Money Movement Hub, our solution that simplifies payment acceptance and management for banks of all sizes through a universal API, allowing banks to seamlessly integrate with payment networks and manage multiple payment types. Last week, we announced we're expanding Money Movement Hub capabilities to include digital assets through our partnership with Circle Internet Group, enabling banks to transact in USDC for both domestic and cross-border payments. This perfectly illustrates how our build-and-partner strategy is aligned to enhance the entire money life cycle and position us to expand into digital currency. We are driving AI innovation throughout the enterprise. Building on the success of TreasuryGPT, we are on track to launch our Banker Assist solution by year-end, the agentic AI platform for commercial banking that embeds intelligent, voice-powered assistance directly into client interaction. The response at our Emerald conference was tremendous, with significant customer interest and pipeline validating this AI investment. In July, we upgraded our TreasuryGPT offering with enhanced risk reporting and liquidity management tools. We now have multiple AI pilots across Banking and Capital Markets with additional product announcements coming throughout the year. Our build, buy, partner strategy is accelerating innovation, strengthening our market position and expanding our capabilities across the complete money life cycle. In summary, our strategy is working and our clients are responding. We're confident in our ability to deliver sustained growth, enhanced profitability and increasing shareholder returns. James will now take you through our financials and increased outlook.

Thank you, Stephanie, and good morning. I'll begin on Slide 9 with an overview of our second quarter results. Revenue grew 5% to $2.6 billion, exceeding our outlook, thanks to outperformance from our Banking business. Adjusted EBITDA also grew 5% and exceeded the top end of our outlook range. EBITDA margin was flat year-over-year, but improved sequentially by approximately 200 basis points. Adjusted EPS of $1.36 came in at the midpoint of our range as operational strength was partly offset by higher D&A. Free cash flow was $292 million with a cash conversion rate of 52%. Cash tax payments were much higher this year, resulting in a 23-point headwind. On a year-to-date basis, cash conversion was 61% compared to 53% in the prior year period as our working capital improvement programs are starting to drive benefits. As a reminder, cash flow is seasonally stronger in the second half of the year as first half cash flow includes outflows for bonus and higher tax payments. Importantly, we are reiterating our full year cash conversion target of 82% to 85%. Capital expenditures were $218 million in the quarter, 8% of revenue and in line with our expectations. Leverage increased modestly quarter-over-quarter to 3x. Excluding the impact of currency fluctuations, the leverage ratio was 2.9x. And we continue to target a long-term ratio of 2.8x. Lastly, we returned $460 million to shareholders, including $246 million of share repurchases. And we're reaffirming our $1.2 billion annual target for share repurchases. Turning now to the segment results on Slide 10. Adjusted revenue growth of 5% was driven by recurring revenue growth of 6% with recurring revenue at 81% of total revenue. Banking grew 6% in the quarter, coming in above the high end of our outlook range. The accelerated growth is primarily driven by an improvement in commercial excellence, including the implementation of previously signed deals and continued strong client retention. The result also includes a 1 percentage point benefit from the shift of some EBT revenue from the third quarter to the second. Recurring revenue growth continued to outpace adjusted revenue, posting a strong growth of 7%. And nonrecurring revenue increased 5%, reflecting growth in license revenue. Banking EBITDA margin contracted by 70 basis points, primarily due to a bad debt charge in the quarter. We anticipate a return to margin expansion in the third quarter with further improvement in the fourth quarter, reflecting an easier comparison. Turning now to Capital Markets. Adjusted revenue growth came in at 5%, slightly below our expectations, with recurring revenue growth of 5%. Recurring revenue was negatively impacted by a temporary slowdown in our Lending business as we faced lower loan syndication activity as a result of macroeconomic uncertainty. The good news is that we have seen a rebound in July with lending activity returning more in line with the strong pace we experienced in the first quarter. Capital Markets adjusted EBITDA margin contracted 50 basis points, primarily reflecting temporary margin dilution from a prior year acquisition. We are projecting a return to margin expansion in the third quarter. Moving now to our year-to-date results on Slide 11. We are pleased with our first half financial results. Year-to-date, we have delivered steady and consistent results with both adjusted revenue and recurring revenue growing 5%. Banking growth of 4% is in line with our full year expectation, and we are confident in delivering accelerating revenue growth over the second half of the year. In Capital Markets, we are pleased with the strong first half growth of 7% and anticipate a step-up in recurring revenue growth to underpin the second half performance. Turning now to our full year outlook on Slide 12. We are raising our full year outlook ranges for revenue, adjusted EBITDA and adjusted EPS to reflect a strong second quarter, our recently closed acquisition and the favorable impact of currencies. We are raising our revenue target by $75 million to $85 million, resulting in adjusted revenue growth of 4.8% to 5.3%. We now anticipate Banking revenue growth of 4% to 4.5%, an increase from 3.7% to 4.4% previously. For Capital Markets, we are reaffirming our outlook of 6.5% to 7% consistent with the performance we have seen in the first half of the year. Moving on to adjusted EBITDA. We are raising the low end of our full year EBITDA outlook by $10 million to reflect the second quarter beat. We now expect full year margin expansion of approximately 20 basis points, reflecting the margin dilutive impact of updated currency assumptions. While currencies had a favorable impact on revenue of about $60 million, the EBITDA impact was neutral and this creates a margin headwind of 25 basis points. As such, on a constant currency basis, we are tracking in line with our prior margin expansion goal of 40 to 45 basis points while also absorbing some dilution from closed M&A. We are increasing the low end of our EPS range by $0.02 and this leads to double-digit EPS growth of 10% to 11%. Consistent with prior quarters, we have provided updated modeling assumptions in the appendix. One item of note is that we have updated our estimate for non-GAAP cash expenses. The increased outlook reflects $75 million of expense related to the Issuer acquisition, as well as an additional $45 million of severance expense as we advance rightsizing initiatives in anticipation of the deal close. Importantly, a higher non-GAAP cash expense will have no impact on our previously communicated capital return targets. Let's now discuss our third quarter expectations on Slide 13. For the third quarter, we anticipate revenue growth of 3.8% to 4.4% with Banking at 3% to 3.5% and Capital Markets at 5.5% to 6.5%. For Banking, we are projecting moderating growth entirely due to the 100 basis point shift in revenue from the third quarter into the second. This implies a sequential acceleration in fourth quarter revenue growth. But you will recall that we are lapping 200 basis points of negative onetime items and our commercial excellence initiatives continue to drive improved outcomes. For Capital Markets, we are projecting third quarter growth of 5.5% to 6.5% with the high end reflecting current lending volumes and the lower end conservatively assuming a return to second quarter levels. We are projecting adjusted EBITDA margin expansion of 45 to 80 basis points, and this is fully underpinned by cost actions, which have already been executed, and this gives us a high level of confidence. Lastly, we anticipate adjusted EPS of $1.46 to $1.50, representing growth of 4% to 7%, driven entirely by EBITDA growth. I'll conclude on Slide 14. In summary, our second quarter results were ahead of expectations, thanks to a strong operational performance from Banking. Looking forward, we are confident in our second half projections for revenue growth and margin expansion. And we have increased our total shareholder return goal to 12% to 13%. Capital returns were $460 million in the quarter, and we are on track to achieve our $2 billion annual target. And lastly, the acquisition of the Issuer Solutions business remains on track. With that, operator, could you please open the line for questions.

Nice results. If we set aside the slight pull-forward dynamic, the recurring Banking trends are looking strong. Can you help us understand the key drivers? How confident are you about the core platforms showing sustainability, and what is driving growth and acceleration as we exit the year beyond just comparisons? Also, could you provide more details about the tuck-in, specifically regarding sizing and its impact on guidance? It would be helpful to understand the key drivers behind the business in the Banking segment.

Yes. Darrin, thank you. I'll take both of them and then I'll have James add on to the specific dollar amount on the acquisition. You're right, we're very pleased with the recurring growth in Banking. I think we've been consistent as we came into the fourth quarter and first quarter that 2025 was going to be the pivotal year where we saw a step-up in the recurring Banking growth. I would really attribute it to the focus in our commercial excellence pillar in our Future Forward strategy. So think about net new sales. So we are selling more than we have been over the last couple of years and the quality of those sales is strong. So we talked about a couple of years ago selling not just professional services and license, but really focusing on selling higher-margin products so think digital, think payments, think software that is recurring and that really focusing the business on those new sales. And as a result, seeing a mix out of PS and license into recurring. And we're seeing the benefits of that new sales activity really land in '25 and then will continue in '26. That's one piece of net new sales. The other piece is really focused on retention and high, high levels of retention and making sure that our retention and our compression metrics all stay in line. And I'm just extraordinarily pleased with how well that's going. So you think about higher-quality new sales into recurring and then doing a much better job in terms of focusing on high levels of client retention, and you start to really see the momentum we are seeing in Banking. And as you know, our sales cycles are fairly long. So we have a lot of visibility into the rest of the year. And we are starting to have a high level of visibility in the first half of 2026. So we really like where recurring is going in Banking. We're pleased with it. It's exactly where we expected to be. I do think there was some pull forward in the second quarter, as James recommended, but broadly, overall, very happy with where recurring is going. In terms of the tuck-in, maybe I'll just talk about the strategic value and James can give you the dollar amount. Again, we remain very committed to our buy, build, partner strategy. It's executing very well for us both in terms of taking advantage of our global distribution and our marquee client set as we bring different products into the portfolio and lean into them to help us drive growth. So very pleased with the acquisition announcement of Everlink. We think it fits very nicely into our payments portfolio. And they're also very excited to be part of the FIS umbrella. We think we can really add distribution and scale for them. In terms of the guidance and the numbers included there, I'll send it over to James.

Yes, Darrin. We anticipate a full year contribution of approximately 20 to 25 basis points, which translates to around $20 million. To follow up on what Stephanie mentioned, at the start of the year, we projected that commercial excellence would contribute about 150 basis points year-over-year, with approximately equal shares coming from new sales and a substantial increase in retention from last year into this year. Both areas are progressing well, with retention likely exceeding our expectations.

Stephanie, I'm interested to know if you've noticed any changes in client decision-making during your conversations, whether due to macroeconomic factors or the discussions surrounding stablecoin and AI. Are you observing any changes in spending behavior?

Yes, great question. I think it's definitely we view it as an opportunity. Our clients are very interested in it. I think everybody is looking in terms of the use cases. But certainly, every single financial institution is looking at how they serve their clients and make it available. So I would say demand is much higher. TBD in terms of which use cases take effect. But for us, as we think about FIS, our job is to provide the capabilities out to our clients. And that's why, for us in terms of whether it's a digital currency or ACH or wire or real-time payments, all of that is good for us because we enable all of that. I do see a lot of interest and there's a focus in terms of making sure that financial institutions don't fall behind in terms of offerings, large and small. TBD in terms of how much ultimate demand from the end businesses and consumers. But no bank wants to be left behind in terms of not having a capability.

Great results as always. I have a quick question and then a follow-up. We noticed a significant acceleration in the Worldpay growth. I want to ensure we have a clear understanding of how much of this growth is organic. Then I have a brief follow-up.

Yes. Thanks, Dan. Appreciate it. So on Worldpay, they were very pleased with their performance. A couple of things if you think about their growth rates. They're growing over a fairly soft quarter in the second quarter, and so I think it was 2%. So year-over-year, they had an easy comp. But all hats off to them, quite frankly. They have a couple of things going on. One, there's a bit of seasonality in the business because they do some tax processing payments in the second quarter. But I would say more meaningfully is really them boarding some pretty big e-com clients that for them is driving some pretty significant growth. So I think they're very pleased, we're very pleased with their outcomes. I do think it's a seasonally high quarter for them, but they are stepping up their expectations in terms of revenue, and I know we're very pleased with it.

Great. I wanted to go back to margins, James. I think the call-out you'd made on Banking this quarter, there was a bad debt charge. If you could quantify that? And then even with the lower full year guide, the 20 basis points, it still implies you need margins to be up, I think, just under 150 bps in Q4. Just how we bridge to that, the level of visibility there? I know you mentioned some onetime headwinds on the revenue side, but any more help there would be great.

Yes, the bad debt was around $8 million, which accounts for approximately 45 basis points out of the 70 basis points year-on-year. Additionally, there were a couple of allocation changes we didn't mention on the call. The positive aspect of the Banking sector in the second quarter was that, unlike in the first quarter where we faced an adverse mix due to license comparisons, the mix in Banking in the second quarter was favorable. This was somewhat offset by various fluctuations in operating expenses. We're genuinely pleased with the shift in performance from Q1 to Q2 in Banking, and we're moving forward confidently. As for the broader company, we previously noted that many of our cost reduction initiatives are scheduled for the second half, and we're accelerating some of our organizational restructuring, as indicated by our comments about one-time expenses. We have strong visibility regarding our cost management efforts moving forward, and we feel positive about that. To address your question about Q4, yes, I believe the projected margin increase is approximately 200 basis points. In the previous year, we had a true-up related to a termination charge and other items totaling $33 million. We're comparing against an easier comp in the fourth quarter, which contributes 100 basis points of that increase. If we exclude the easier comp from last year, our implied margin for the fourth quarter is about 100 basis points. We also have cost management initiatives lined up that could potentially exceed that 100 basis point run rate, giving us significant flexibility in the second half. I want to emphasize that we're closely reviewing the Q4 margin guidance and feel very comfortable with our current cost reduction strategy.

I wanted to ask on Capital Markets. So just a little bit slower growth in the quarter, but you mentioned, I think it was slower lending syndication and a recovery, I guess, in July. Just how much visibility do you have to the acceleration in the second half? Just talk about conviction in that re-accel, what might preclude a recurrence in slower lending syndication? I'm just trying to get a sense of the confidence there as you're forecasting the second half.

Yes, thank you, Bryan. I'm happy to address that. We have been very satisfied with Capital Markets, and the first half was particularly strong. Looking at the year-to-date performance, there were some fluctuations. In the first quarter, a significant license renewal boosted our nonrecurring revenue. However, in the second quarter, we experienced temporary softness in our Lending business, mainly due to a slowdown in loan syndication activity from large financial institutions, which was connected to macroeconomic uncertainties. This slowdown contributed to the decline in recurring revenue from the first to the second quarter. The positive news is that starting in July and continuing into August, we've observed a substantial rebound in syndication activity, returning to levels seen in the first quarter. Additionally, we are witnessing strong new sales in our Lending business. Although we encountered a downturn in the second quarter, we attribute it to macro uncertainty, but we're now seeing a recovery. This trend gives us confidence as we approach the third and fourth quarters regarding Capital Markets.

Yes. To provide you with the statistics, both businesses experienced positive net pricing. In the quarter, Banking saw a slight increase, and Capital Markets followed historic trends with net pricing of around 1% to 2% after compression. There has been no significant change in the overall direction of either business.

I want to follow up on Vasu's question or basic question, particularly as it relates to pipeline, et cetera. Wondering if we're seeing banks kind of evolve their road map or what they're looking for from FIS. I think one of the things that's always striking about the banking industry is that, for a variety of reasons, we haven't seen the move to cloud and public cloud-type solutions. Is that something your customers are beginning to talk to you about? And what are the hurdles that we could see or you think we can clear to start to evolve some of the product portfolio even faster on a go-forward rate, especially given all the changes and new technologies that people are bringing to market and talking about?

Yes, it's a great question. I would say it depends on the size of bank. So let's start with the smaller banks. So in the smaller bank standpoint, I don't see road map evolution per se, meaning they're looking for FIS to provide them with their modernization journey. We've already put all of our clients generally in the cloud. So that's generally done for us. And then as we think about modernizing them, which modernization generally is about componentization of the core. So pulling out different pieces of the core and hollowing it out is the way banks generally look at it. I think there's been a desire to do that for over the last 7, 10 years. I do think the market is moving whereby they don't want to do a big bang approach, and this is more larger financial institutions. And in the larger financial institution standpoint, there is a desire to do more componentized and come out with products and solutions and deliver value more quickly than a big bang core conversion. So I do think that the large institution business is evolving even from 5 years ago where they wanted to move everything at once. They want to move things more in pieces and parts and deliver value out to their customer set in smaller chunks. So I think the buying pattern is changing. With respect to FIS, as you know, we have a very significant large financial institution base and so we have the benefit of working with them very directly and understanding as they change their road maps from whether it's one single move to componentization. And our job and where we feel really good about our core strategy is that is overall driving our product road map. So we do have the ability and the majority of our clients on MBP have different capabilities on MBP, whether it's digital banking, whether it is a checking account, a money movement account, a CD account, we are seeing banks move in this direction and our core capabilities have the ability to do that. It's obviously all cloud generated. I do think the new technology coming in is super interesting. I'm not sure that it's really interesting with respect to how these banks want to move. But more importantly, maybe more around how they serve their clients with GenAI, thinking about digital banking, etc. But that's probably a conversation for another day. So I guess, great question. I think the pipeline remains strong, like I said, which is really helping us drive the momentum in Banking. I think the large financial institution base is taking a different approach. I think our core modernization and banking modernization strategy is delivering on that and continues to give us a bunch of opportunity as we think about '26 and '27.

Maybe just one on, I guess, Capital Markets. I mean, I heard the lower loan syndication activity, but it looks like the organic growth slowed, I think it was like 3 to 4 percentage points. So I was just curious like how much of the slowdown was due to the lower loan activity versus other factors? It just seems like a pretty big driver there, big business overall, if it was 3 to 4 points of slowdown. And then just on the 200 basis points of onetime items, I think that was in Banking revenue growth in the prior year. Just trying to understand what that was.

Yes. I will begin with Capital Markets and then let James add to it. Regarding Capital Markets, if you examine the growth from Q1 to Q2 and focus on recurring revenue first, there was about a 100 basis point slowdown mainly due to the loan syndication activity we mentioned, which was influenced by macro conditions. The encouraging news is that this activity is picking up again, and we anticipate a return to recurring growth in the latter half of the year. The remainder of the difference stems from licensing activities within Capital Markets. In the first quarter, we had a substantial license renewal that boosted our nonrecurring revenue significantly. In the second quarter, however, we experienced some temporary softness in our Lending business, primarily linked to the decrease in loan syndication activity among large financial institutions, driven by macroeconomic uncertainty. This slowdown contributed to the recurring revenue decrease from the first quarter to the second quarter. The good news is that in July and into August, we have observed a substantial rebound in syndication activity, which has returned to first quarter levels. Additionally, we continue to see robust new sales activity in our Lending business. While we did experience a decline in the second quarter, we believe it is closely tied to macro uncertainty. We are now seeing improvements, which gives us confidence as we progress into Q3 and Q4 regarding Capital Markets.

In the fourth quarter, there were two items that we are comparing against. One was a termination fee reversal amounting to $20 million, and the other was an adjustment related to customer contracts totaling $13 million. This brings the total to $33 million. When considering the fourth quarter, this equates to a 200 basis point positive impact on revenue and a 105 basis point impact on margins. Both of these items have a 100% margin.

Stephanie, you mentioned the Everlink acquisition. Can you just give us an update on the international strategy?

Sure. That's a great point. So Everlink, obviously, is a natural extension for us in payments right in line with what we do in Canada. I think as you think about our international strategy, there's really 2 things that are going to significantly continue to advance it. One is the Everlink acquisition, but then also as you think about the Issuer acquisition from Global Payments. Both are quite international and will advance our international footprint in specifically adding payments capabilities internationally. So that's really good for us as we think about broadening out and building momentum in our payments business, both in terms of the U.S., but also rest of world where we continue to see a lot of momentum, a lot of demand and where we're not nearly as concentrated. And so both of these, again, are great products and solutions that can come in and really take advantage of our really scaled distribution channel. So very excited about both.

I just wanted to go back to the Capital Markets question a bit just in light of the weaker loan syndication activity impacting recurring revenue growth. Could you guys remind us, right, of the revenue drivers there whether it's based on loan activity, whether it's SaaS related and whether it's based on, say, the level of AUM? Just a reminder of what's driving revenue growth would be helpful.

There is no AUM involved here at all. The bulk of the revenue growth comes from new sales each year, which is recurring revenue adjusted for very low attrition in Capital Markets. Additionally, there is net pricing, which has been consistently favorable, as James mentioned. There has been some license activity, but there's not a substantial amount of what we would classify as transaction or organic growth; it has been around 100 basis points. Whether from transactions or similar sources, it's not related to AUM. However, there was a notable shift due to macroeconomic uncertainty, evidenced by comments from large financial institutions regarding an increase in loan syndication. There is some organic growth we receive from transactions, but it's typically not significant. When the trend shifts from generally positive to nearly negative or zero, it can have an impact on us. Fortunately, as James pointed out, things improved in July and August, and we are optimistic about recurring growth returning to the 6% range. Overall, this business does not involve any AUM and lacks a substantial amount of transaction activity, just around 100 basis points. James, do you have anything to add?

No, this business has been performing very strongly. To provide some context, we were seeing low teens growth in the first quarter, but then there was a 35% decline. Since then, performance has improved and is actually above the first quarter levels. There was a market decrease in loan syndication activity during the quarter, but for the last 7 or 8 weeks, it's been increasing compared to last year. This is one of the few areas within the Capital Markets portfolio that can be affected by loan activity. The impact on our $3 billion business was $6 million, which affected our recurring revenue for the quarter, but we anticipate a strong rebound in the second half.

Ladies and gentlemen, thank you all for participating. This concludes today's program. You may now disconnect.