Core Insights - Fidelity National Information Services, Inc. (FIS) has been selected by ATLAS SP Partners to implement its Commercial Loan Servicing solution, aimed at improving loan lifecycle management processes [1][8] - The FIS solution enhances automation, adaptability, and risk management, thereby improving service standards for borrowers and investors while increasing operational efficiency and transparency [2][4] Company Overview - The FIS solution is part of a comprehensive Commercial Lending Suite that provides lenders with optimized decision-making, high-quality data, and advanced analytics, supporting all stages of the commercial loan lifecycle [3] - The solution features integrated workflows, customizable processes, and strong security measures tailored for small and mid-sized borrowers [3] Market Dynamics - The timing of this partnership is strategic, as there is a growing demand for innovative lending technologies that offer operational transparency and efficiency, particularly as banks collaborate with non-bank lenders [4] - FIS aims to capitalize on this demand through its Commercial Loan Servicing solution, which is expected to drive revenue growth for the company [5] Technological Advancements - FIS is committed to investing in cutting-edge technologies and developing new solutions to enhance payment infrastructure, allowing for cross-selling opportunities and attracting new clients [6] - The company collaborates with other organizations to provide integrated, end-to-end solutions to its customers [6] Financial Performance - FIS shares have increased by 15% over the past three months, significantly outperforming the industry average growth of 0.5% [7]

Group 1 - Fidelity National Information Services (NYSE: FIS) shares have experienced significant volatility over the past year, with mixed financial results and substantial mergers and acquisitions impacting stock performance [1] - The stock is currently trading flat compared to its position a year ago, indicating a lack of significant movement despite the underlying financial activities [1] Group 2 - The company has over fifteen years of experience in making contrarian investment decisions based on macroeconomic views and specific stock turnaround stories, aiming for high returns with a favorable risk/reward profile [1]

Summary of Fidelity National Information Services (FIS) FY Conference Call Company Overview - **Company**: Fidelity National Information Services (FIS) - **Date of Conference**: May 14, 2025 - **Key Speaker**: James Kehoe, CFO Key Points and Arguments Financial Performance - FIS reported a strong start to revenue, particularly in the banking business, with a notable increase in free cash flow [4][5] - The banking midpoint guidance for the quarter was initially set at 1%, but actual results exceeded 2% [5] - Recurring revenue growth was reported at 3%, with expectations for a significant increase in the second quarter [6][11] - The first quarter saw weak margins in banking, but capital markets improved by 90 basis points [8][11] - FIS is confident in achieving full-year margin and EBITDA targets despite current investor concerns [9][10] Revenue Drivers - The company expects a significant acceleration in recurring revenue driven by higher annual contract value (ACV) sales and improved retention rates, which are now in the high 90s [16][17] - 83% of banking revenue is recurring, with only 17% subject to volatility [19] - The company has a strong pipeline for licenses, which is expected to support revenue targets [20][22] Market Position and Strategy - FIS is transitioning from a focus on debit to enhancing its credit processing capabilities through the acquisition of TSYS, which is known for its strong credit processing services [41][44] - The acquisition of TSYS is expected to provide significant cross-sell opportunities and enhance FIS's position in serving large financial institutions [47][48] - The company aims to maintain a conservative approach to revenue and margin projections post-acquisition, with a focus on operational leverage [65][67] Cost Management and Synergies - FIS is targeting $125 million in cost synergies from the TSYS acquisition, with a focus on maintaining high margins [64][66] - The company plans to leverage technology, including AI and machine learning, to improve operational efficiency and reduce manual work [89][90] - FIS is committed to returning capital to shareholders and maintaining a stable dividend policy, even in the face of potential earnings fluctuations [80][79] Future Outlook - The company anticipates a shift in revenue composition, with a greater emphasis on recurring revenue in the second half of the year, which should positively impact margins [36][37] - FIS is focused on enhancing customer experience and product excellence as key priorities for growth [97] Additional Important Insights - The company has made significant changes in its sales leadership to improve pipeline building and customer engagement [22][24] - FIS is confident in the resilience of its business model, which is less exposed to economic downturns due to its focus on debit transactions [28][30] - The management emphasized the importance of maintaining a strong product offering and customer satisfaction to drive retention and growth [56][97]

Core Viewpoint - Fidelity National Information Services (FIS) has been upgraded to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][4]. Earnings Estimates and Ratings - The Zacks rating system is based solely on a company's changing earnings picture, tracking the Zacks Consensus Estimate for EPS from sell-side analysts [2]. - The Zacks rating upgrade for Fidelity National reflects a positive outlook on its earnings, likely leading to favorable stock price movements [4][6]. Impact of Earnings Estimates on Stock Prices - Changes in a company's future earnings potential, as indicated by earnings estimate revisions, are strongly correlated with near-term stock price movements [5]. - Institutional investors often adjust their valuations based on earnings estimates, which can lead to significant stock price changes [5]. Recent Performance of Fidelity National - Fidelity National is projected to earn $5.75 per share for the fiscal year ending December 2025, representing a year-over-year increase of 10.2% [9]. - Over the past three months, the Zacks Consensus Estimate for Fidelity National has increased by 0.4% [9]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have generated an average annual return of +25% since 1988 [8]. - The upgrade to Zacks Rank 2 places Fidelity National in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [11].

Core Insights - Fidelity National Information Services (FIS) reported revenue of $2.53 billion for the quarter ended March 2025, reflecting a year-over-year increase of 2.6% [1] - Earnings per share (EPS) for the quarter was $1.21, up from $1.10 in the same quarter last year, indicating a positive trend in profitability [1] - The reported revenue exceeded the Zacks Consensus Estimate of $2.5 billion by 1.10%, and the EPS also surpassed the consensus estimate of $1.20 by 0.83% [1] Revenue Breakdown - Banking Solutions revenue was $1.72 billion, slightly above the average estimate of $1.71 billion, with a year-over-year increase of 2% [4] - Corporate and Other revenue was reported at $50 million, compared to the average estimate of $49.64 million, showing a significant year-over-year decline of 35.1% [4] - Capital Market Solutions revenue reached $764 million, exceeding the average estimate of $756.36 million, with a year-over-year growth of 8.2% [4] Adjusted EBITDA Analysis - Adjusted EBITDA for Banking Solutions was $688 million, below the average estimate of $720.66 million [4] - Adjusted EBITDA for Corporate and Other was -$99 million, better than the estimated -$129.07 million [4] - Adjusted EBITDA for Capital Market Solutions was $369 million, slightly above the average estimate of $360.18 million [4] Stock Performance - Fidelity National's shares have returned +14% over the past month, outperforming the Zacks S&P 500 composite's +11.5% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Part I [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) Unaudited Q1 2025 consolidated financial statements detail financial position, earnings, and cash flows, post-Worldpay sale [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) March 31, 2025 balance sheet reflects asset, liability, and equity changes, driven by Worldpay divestiture Condensed Consolidated Balance Sheet Highlights (in millions) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$32,841** | **$33,784** | | Current assets held for sale | $— | $1,115 | | Goodwill | $17,328 | $17,260 | | Equity method investment | $3,795 | $3,858 | | **Total Liabilities** | **$17,773** | **$18,084** | | Long-term debt, excluding current portion | $8,658 | $9,686 | | **Total Equity** | **$15,068** | **$15,700** | [Condensed Consolidated Statements of Earnings (Loss)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Earnings%20(Loss)) Q1 2025 revenue grew 3% to **$2.53 billion**, but net earnings decreased due to prior year's discontinued ops gain Q1 Earnings Comparison (in millions, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $2,532 | $2,468 | | Gross Profit | $879 | $909 | | Operating Income | $347 | $355 | | Net Earnings (loss) from Continuing Operations | $78 | $0 | | Earnings (loss) from Discontinued Operations, net of tax | $— | $707 | | **Net Earnings (loss) attributable to FIS** | **$77** | **$706** | | **Diluted EPS** | **$0.15** | **$1.22** | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Q1 2025 net cash from continuing operations improved to **$457 million**, investing activities used **$1.68 billion** Cash Flow Summary (in millions) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities from continuing operations | $457 | $206 | | Net cash provided by (used in) investing activities from continuing operations | $(1,676) | $9,381 | | Net cash provided by (used in) financing activities from continuing operations | $(265) | $(9,446) | | Net cash provided by (used in) discontinued operations | $303 | $(345) | | **Net (decrease) in cash** | **$(1,141)** | **$(246)** | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail corporate actions: Worldpay divestiture and pending Global Payments Issuer Solutions acquisition - On Jan 31, 2024, FIS completed the sale of a **55%** equity interest in its Worldpay Merchant Solutions business, now presented as discontinued operations, with FIS retaining a **45%** non-controlling equity method interest[25](index=25&type=chunk)[26](index=26&type=chunk) - On April 17, 2025, FIS agreed to acquire Global Payments' Issuer Solutions business for **$13.5 billion** and sell its remaining Worldpay interest to Global Payments for **$6.6 billion**, expected to close by H1 2026[104](index=104&type=chunk) - Due to the pending Worldpay stake sale, FIS no longer expects to receive **$1.0 billion** in contingent consideration from the original 2024 Worldpay sale and anticipates a non-cash loss of **$108 million** in Q2 2025[82](index=82&type=chunk)[108](index=108&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025 financial performance, revenue growth, strategic shifts, and pending Global Payments deal [Consolidated Results of Operations](index=34&type=section&id=Consolidated%20Results%20of%20Operations) Q1 2025 revenue grew 3% to **$2.53 billion**, but gross profit and operating income slightly declined Consolidated Results of Operations (in millions) | Metric | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenue | $2,532 | $2,468 | 3% | | Gross Profit | $879 | $909 | (3)% | | Operating Income | $347 | $355 | (2)% | | Total other income (expense), net | $(117) | $(249) | NM | - The decrease in Other income (expense) in Q1 2025 compared to Q1 2024 is mainly due to a **$174 million** loss on extinguishment of debt recorded in the prior-year period[146](index=146&type=chunk) [Segment Results of Operations](index=36&type=section&id=Segment%20Results%20of%20Operations) Q1 2025: Banking Solutions revenue up 2% with margin decline; Capital Market Solutions up 8% with improved margin Banking Solutions Performance (in millions) | Metric | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenue | $1,718 | $1,685 | 2% | | Adjusted EBITDA | $688 | $739 | (7)% | | Adjusted EBITDA Margin | 40.1% | 43.9% | (380) bps | Capital Market Solutions Performance (in millions) | Metric | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenue | $764 | $706 | 8% | | Adjusted EBITDA | $369 | $335 | 10% | | Adjusted EBITDA Margin | 48.3% | 47.4% | 90 bps | [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2025, FIS maintained **$4.0 billion** liquidity and **$12.0 billion** total debt, continuing capital return - The company has **$4.0 billion** of available liquidity as of March 31, 2025, including **$0.8 billion** in cash and **$3.2 billion** of available capacity under its Revolving Credit Facility[163](index=163&type=chunk) - In Q1 2025, the company repurchased a total of **6.2 million** shares for approximately **$450.3 million**, with approximately **$2.7 billion** remaining available for repurchase under the August 2024 authorization[92](index=92&type=chunk)[166](index=166&type=chunk)[186](index=186&type=chunk) - A regular quarterly dividend of **$0.40** per common share was declared, payable on June 24, 2025[165](index=165&type=chunk) [Item 3. Quantitative and Qualitative Disclosure About Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosure%20About%20Market%20Risks) FIS faces market risks from interest rates and foreign currency, with **89%** fixed-rate debt mitigating volatility - As of March 31, 2025, **89%** of the company's debt was fixed-rate, and a **100 basis-point** increase in variable-rate debt would increase annual interest expense by **$13 million**[178](index=178&type=chunk)[179](index=179&type=chunk) - A hypothetical **10%** adverse movement in foreign exchange rates would have resulted in a **$26 million** change in reported revenue for the three months ended March 31, 2025[181](index=181&type=chunk) [Item 4. Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of March 31, 2025, with no material internal control changes - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of the end of the period[183](index=183&type=chunk) - No changes in internal control over financial reporting occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, internal controls[184](index=184&type=chunk) Part II [Item 1A. Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors were reported compared to the Annual Report on Form 10-K - No material changes in risk factors were reported compared to the Form 10-K for the year ended December 31, 2024[185](index=185&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=42&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q1 2025, FIS repurchased **6.2 million** shares for **$450.3 million**, with **$2.7 billion** remaining for repurchase Share Repurchases for Q1 2025 | Authorization | Shares Purchased (millions) | Total Cost (millions) | | :--- | :--- | :--- | | January 2021 | 1.4 | $110.3 | | August 2024 | 4.8 | $339.8 | | **Total** | **6.2** | **$450.1** | [Item 5. Other Information](index=42&type=section&id=Item%205.%20Other%20Information) No directors or executive officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements in Q1 2025 - No directors or executive officers adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the reporting period[187](index=187&type=chunk) [Item 6. Exhibits](index=43&type=section&id=Item%206.%20Exhibits) This section lists various exhibits filed or furnished, including management certifications, compensatory arrangements, and XBRL data

Core Viewpoint - Fidelity National Information Services, Inc. (FIS) reported strong first-quarter 2025 results, with adjusted earnings per share (EPS) of $1.21, exceeding estimates and showing an 11% year-over-year increase [1]. Financial Performance - Revenues reached $2.532 billion, a 3% year-over-year improvement, surpassing management's expectations [1]. - Adjusted EBITDA was $956 million, down 17.3% year over year, but still above estimates [4]. - The adjusted EBITDA margin decreased by 142 basis points to 37.8% [4]. Segment Performance - The Capital Market Solutions segment saw an 8% revenue growth to $764 million, with an adjusted EBITDA margin improvement of 90 basis points to 48.3% [6]. - The Banking Solutions unit generated $1.72 billion in revenue, growing 2% year over year, but the adjusted EBITDA margin fell by 379 basis points to 40.1% [5]. - The Corporate and Other segment's revenues dropped 36% year over year to $50 million, with an adjusted EBITDA loss of $99 million [7]. Cost and Expenses - Cost of revenues increased by 6% year over year to $1.7 billion [3]. - Selling, general and administrative (SG&A) expenses decreased by 2.6% to $558 million, although this was higher than estimates [3]. - Net interest expenses rose by 3.9% year over year to $80 million, but were lower than estimates [3]. Cash Flow and Equity - The company ended the quarter with cash and cash equivalents of $805 million, a 3.5% decline from the previous year [8]. - Total equity decreased by 4% to $15.1 billion [9]. - Net cash from operations was $457 million, more than doubling year over year, while adjusted free cash flows increased nearly four-fold to $368 million [9]. Shareholder Returns - Fidelity National returned $670 million to shareholders through share buybacks of $450 million and dividends of $220 million [11]. - Management aims for share buybacks of around $1.2 billion in 2025 and plans to align dividend growth with adjusted EPS growth [11]. Future Guidance - For Q2 2025, management forecasts revenues between $2.560 billion and $2.585 billion, with adjusted EBITDA projected at $1.020-$1.035 billion [12]. - For the full year 2025, revenues are expected to be between $10.435 billion and $10.495 billion, with adjusted EPS anticipated between $5.70 and $5.80, indicating a 10.2% growth from 2024 [13][14].

Core Insights - FIS reported strong demand for core banking solutions, leading to recurring revenue growth and positive pipeline momentum [1][2] - The acquisition of Global Payments' issuing business (TSYS) is a strategic move that will enhance FIS' capabilities and cross-selling opportunities [1][6] Financial Performance - Recurring revenue growth accelerated to 4% in Q1 from 2%, with recurring revenue making up 81% of total sales [3] - Banking solutions segment revenues increased by 2% to $1.7 billion, while capital markets segment revenues grew by 9% to $764 million [3] Strategic Initiatives - The "Money at Rest" strategy remains strong, with expectations for solid sales growth driven by financial services consolidation [4] - The digital solutions segment is gaining traction as banks modernize their technologies, contributing to growth in the "Money in Motion" efforts [5] Future Outlook - FIS anticipates adjusted revenue growth of 4.2% to 5% in Q2, with banking revenue growth projected at 3.7% to 4.4% [7] - The acquisition of TSYS is expected to add $2.5 billion to operations, increasing annualized sales to a total of $9.4 billion on a pro forma basis [9] Market Positioning - FIS is uniquely positioned in the market with a comprehensive product suite that includes credit capabilities, enhancing cross-selling potential [6][11] - The company is not observing any slowdown in client spending, indicating robust market demand [8]

Fidelity National Information Services (FIS) came out with quarterly earnings of $1.21 per share, beating the Zacks Consensus Estimate of $1.20 per share. This compares to earnings of $1.10 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 0.83%. A quarter ago, it was expected that this banking and payment technologies company would post earnings of $1.35 per share when it actually produced earnings of $1.40, delivering a surpri ...

Financial Data and Key Metrics Changes - The company reported adjusted revenue growth of 4% in Q1 2025, exceeding expectations [7][16] - Adjusted EBITDA was $958 million, leading to an EBITDA margin of 37.8% [16][17] - Adjusted EPS grew 11% to $1.21, at the upper end of the outlook [8][17] - Free cash flow conversion exceeded 70%, with free cash flow of $368 million compared to $95 million last year [17][18] - The company returned $670 million to shareholders through share repurchases and dividends [8][19] Business Line Data and Key Metrics Changes - Banking segment revenue grew 2%, with recurring revenue growth at 3% [20][21] - Capital Markets segment saw adjusted revenue growth of 9%, with recurring revenue growth of 6% [21][22] - Non-recurring revenue in Capital Markets advanced 47%, driven by strong license renewals [21][22] Market Data and Key Metrics Changes - The company signed several new marquee engagements across various sectors, indicating strong demand for core solutions [8][9] - The digital solutions segment gained traction, with a Midwest community bank selecting the Digital One product [10] - The company expanded its relationship with a multinational engineering firm, enhancing its Office of the CFO capabilities [11] Company Strategy and Development Direction - The strategic acquisition of the Issuer Solutions business and the sale of the Worldpay stake are aimed at strengthening the company's financial profile and value proposition [6][14][15] - The company is focused on driving commercial excellence and simplifying its portfolio to deliver consistent financial results [6][7] - The acquisition is expected to be accretive to adjusted EPS and enhance recurring revenue streams [15][70] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the pipeline and noted no negative impacts from macro factors on client spending [32][33] - The company reaffirmed its full-year outlook, anticipating continued strength in recurring revenue growth [8][24] - Management highlighted strong visibility into cost reduction initiatives and margin improvement for the second half of the year [81][84] Other Important Information - The company is targeting adjusted revenue growth of 4.2% to 5% for Q2 2025, with banking revenue growth projected at 3.7% to 4.4% [24][26] - The company expects to achieve a total shareholder return of 11% to 13% for the year [26] Q&A Session Summary Question: Feedback on client decision-making pipeline and Issuer Solutions business - Management reported positive feedback on client conversions and an increasing pipeline, indicating strong demand for services [31][32] Question: Insights on Capital Markets Q2 guidance - Management noted that the first quarter had a high non-recurring benefit, and the second quarter guidance reflects a return to normalized levels [40][41] Question: Banking segment performance and drivers for acceleration - Management emphasized strong visibility into banking revenue growth driven by high retention rates and a strong sales year in 2024 [88][90] Question: Free cash flow and net working capital optimization - Management highlighted significant improvements in cash flow driven by net working capital initiatives and procurement strategies [97][98] Question: Potential dis-synergies from Worldpay sale - Management confirmed there are no dis-synergies from the Worldpay business as all impacts were accounted for during the separation [108] Question: ACV growth in Q1 - Management indicated strong growth in ACV across the business, consistent with historical trends [113][114]