Fidelity National Information Services, Inc.

What they do

FIS provides technology and processing solutions, transaction processing fees, professional services and software license fees to financial institutions, businesses and developers. Revenue is reported in two segments, Banking Solutions and Capital Market Solutions, plus a Corporate and Other category. The majority of revenue is generated by U.S. clients, with international revenue concentrated in the United Kingdom, Germany, Canada, Australia, Switzerland, France, South Africa, the Netherlands and India. Much of the revenue is recurring under multi-year Banking and Capital Markets contracts.

Revenue drivers

• Banking Solutions — Largest segment; second quarter 2026 revenue was $2.483 billion, up 44% GAAP and adjusted, or 6.1% pro forma, driven mainly by the acquired Total Issuing Solutions business.
• Capital Market Solutions — Second quarter 2026 revenue was $810 million, up 3.5% GAAP and 3.2% adjusted, with recurring revenue growth of 5.3%.
• Corporate and Other — Second quarter 2026 revenue was $84 million, down 26% from $113 million, and is excluded from operating segment totals.
• Recurring/processing revenue — Revenue is primarily technology and processing solutions, transaction processing fees, professional services and software licenses; professional services and license revenue are typically non-recurring and licenses are less predictable.

Recent performance

Second quarter 2026 GAAP revenue rose 29% to approximately $3.4 billion, with GAAP net earnings attributable to FIS of $231 million, or $0.45 per diluted share. Adjusted revenue rose 31%, adjusted EBITDA rose 35% to about $1.4 billion, and adjusted EPS rose 8.8% to $1.48. On a pro forma basis, revenue rose 5.3% and recurring revenue rose 5.1%. First half 2026 GAAP net earnings attributable to FIS were $2.598 billion, or $5.03 per diluted share, including $2.214 billion of equity method investment earnings, net of tax, in the six-month period. Free cash flow was $525 million, up 220%, and operating cash flow was $493 million.

Strategy

FIS completed the Issuer Solutions Acquisition and the sale of its remaining Worldpay equity interest on January 9, 2026, funding the acquisition with approximately $7.7 billion of new debt and the Worldpay minority interest sale. The company is embedding AI across its solutions and operations and has shifted to a functional operating model. It continues to pursue strategic acquisitions and partnerships, and is reallocating resources toward integrated client experiences and modernized technology infrastructure. Management describes the integration of Total Issuing Solutions as ahead of plan.

Risks

• Cybersecurity and data privacy — FIS processes sensitive consumer data including names, addresses, Social Security Numbers, driver's license numbers, financial account numbers and cardholder data, and a breach could disrupt services, trigger regulatory action or breach client contracts.
• Interest expense from new debt — FIS incurred approximately $7.7 billion of new debt to fund the Issuer Solutions Acquisition, which management says will increase interest expense in 2026; second quarter 2026 interest expense, net was $200 million versus $110 million a year earlier.
• Cost inflation and pricing limits — Management states it continues to experience significant cost increases from vendors and that market conditions limit its ability to fully offset these increases through pricing actions.
• Integration and acquisition risk — The Issuer Solutions Acquisition added substantial goodwill and intangibles, with goodwill rising to $25.026 billion and intangibles to $4.314 billion at June 30, 2026, from $17.762 billion and $959 million at December 31, 2025.

Outlook

Management raised its full-year 2026 outlook to adjusted revenue growth of 29-30%, adjusted EBITDA growth of 32-34%, adjusted EPS growth of 7.0-8.5%, and free cash flow growth of 33-39% to $2.15-$2.25 billion. It reduced its pro forma revenue growth outlook to 4.5-5.0% from 5.1-5.7%, and pro forma adjusted EBITDA growth to 5.9-6.9% from 7.2-8.4%. The company expects to recognize an estimated pre-tax gain of $2.2 billion in the first quarter of 2026 from the 2026 Worldpay Minority Interest Sale.