Fidelity National Information Services, Inc.

FIS reported second-quarter revenue of $3.4 billion, up 5.3% on a pro forma basis. Adjusted EBITDA increased 7.4% with margins up 113 basis points, and adjusted EPS increased 8.8% to 9% depending on the rounding used on the call. Free cash flow more than tripled year over year to $525 million, helped by lower cash taxes and lower one-time cash expenses. Banking pro forma revenue rose 6.1% and Capital Markets revenue rose 3.2%. For full year 2026, management lowered adjusted revenue growth guidance to 4.5% to 5% from 5.1% to 5.7%, reduced Capital Markets growth guidance to 3% to 3.5%, and kept Banking outlook unchanged. Full-year adjusted EPS is now expected to grow 7% to 8.5%, EBITDA margin expansion is guided to 85 to 105 basis points, and free cash flow outlook was raised to $2.15 billion to $2.25 billion, up $100 million. For Q3, pro forma revenue growth is guided to 2.9% to 3.7%, company EBITDA margin expansion to 80 to 100 basis points, and adjusted EPS growth to 4.6% to 7.3%.

Stephanie Ferris framed the quarter as evidence that FIS’s multiyear repositioning is working, pointing to stronger growth in Banking and Payments, margin expansion, and much higher cash generation. She highlighted Total Issuing as validating the acquisition thesis, citing new large bank wins, higher contract coverage through 2029 and beyond, and increasing cross-sell across Banking, Payments and Capital Markets. At the same time, she was explicit that Capital Markets underperformed expectations and said the company is taking further actions, including a review of select products that do not fit the strategic profile.

James Kehoe emphasized that the quarter was strong financially, with revenue up 5.3%, EBITDA up 7.4%, margins up 113 basis points, and free cash flow of $525 million. He said margin expansion came from favorable product mix, cost savings, and integration synergies, and noted leverage fell to 3.5x while FIS returned $270 million to shareholders, primarily via dividends. He also raised the full-year free cash flow outlook by $100 million to $2.15 billion to $2.25 billion, cut cash cost guidance by $70 million to $730 million at the midpoint, and reiterated Total Issuing synergy targets of more than $150 million in EBITDA benefit by 2028.

Analysts focused heavily on why Capital Markets guidance came down, especially the weaker professional services performance and whether clients were delaying projects or shifting demand. Management said the shortfall was largely operational and “on us,” not a market trend, and Kehoe said the main issue was lower ACV sales in professional services plus slower-than-expected conversion of backlog. Questions also centered on the strategic review in Capital Markets, with management saying it involves select products, not a segment sale, and on competition from Visa Pismo, which Ferris said is aimed at smaller banks and fintechs rather than the large institutions where FIS operates.