Summary of Fidelity National Information Services (FIS) 2025 Conference Company Overview - **Company**: Fidelity National Information Services (FIS) - **CEO**: Stephanie Farris, who has extensive experience in payment and technology platforms, digital transformation, and financial leadership [4][5] Industry Insights - **Macro Environment**: Despite global uncertainties, sales pipelines in banking and capital markets remain robust, indicating a focus on business growth [8][9] - **Banking Sector**: FIS's banking business is centered on digital banking, payments, and core banking technology, which are essential for growth and operational efficiency [11][12] - **Consumer Spending**: Consumer spending remains stable, with transaction growth consistent across the industry, despite inflation and unemployment concerns [14][15][16] Key Business Developments - **AI Initiatives**: FIS is actively integrating Generative AI into its products, enhancing operational efficiency and customer service through various applications, including Treasury Chat GPT [19][20][21][22] - **Capital Markets**: FIS's revenue model is based on software as a service, which is not directly impacted by trading activity levels, allowing for stable revenue despite market volatility [26][27][28] - **Pricing Environment**: The capital markets side has seen positive pricing adjustments, while banking has faced challenges due to inflation, but opportunities for revenue growth remain [29][30] Strategic Transactions - **Worldpay Sale**: FIS is selling its remaining stake in Worldpay to Global Payments, allowing both companies to focus on their core strengths [31][32] - **TSYS Acquisition**: The acquisition of TSYS enhances FIS's capabilities in credit card processing for large financial institutions, complementing its existing product suite [33][34][35] - **M&A Strategy**: FIS plans to allocate approximately $1 billion for M&A activities, focusing on small product add-ons that align with its growth strategy [42][43][64][65] Financial Outlook - **Revenue Synergies**: FIS anticipates significant revenue synergies from the TSYS acquisition, with conservative estimates of $45 million in the short term and $125 million in the long term [54][55] - **Capital Allocation**: Post-acquisition, FIS aims to maintain its capital allocation strategy, focusing on share repurchases, dividends, and further M&A opportunities [59][60] Regulatory Considerations - **Regulatory Approvals**: Both the Worldpay sale and TSYS acquisition are undergoing regulatory scrutiny, but FIS does not foresee significant issues in obtaining approvals [48][49][50] Conclusion - **Future Focus**: FIS is committed to leveraging its acquisitions to enhance product offerings and drive revenue growth while maintaining a strong focus on operational efficiency and customer satisfaction [66]

Core Viewpoint - Fidelity National Information Services (FIS) has seen a 6.4% increase in share price over the past month, outperforming the S&P 500, but there are concerns about whether this positive trend will continue leading up to the next earnings release [1] Estimates Movement - Estimates for Fidelity National have trended downward over the past month, indicating a negative shift in expectations [2] VGM Scores - Fidelity National has a subpar Growth Score of D and a Momentum Score of F, while it holds a middle-tier Value Score of C, resulting in an overall VGM Score of D [3] Outlook - The downward trend in estimates suggests a cautious outlook for Fidelity National, which currently holds a Zacks Rank 3 (Hold), indicating an expectation of in-line returns in the coming months [4] Industry Performance - Within the Financial Transaction Services industry, Paypal (PYPL) has gained 6% over the past month, reporting revenues of $7.79 billion for the last quarter, reflecting a year-over-year increase of 1.2% [5] - For the current quarter, Paypal is expected to report earnings of $1.28 per share, a 7.6% increase from the previous year, with a Zacks Consensus Estimate showing a slight upward revision of 0.2% [6]

Industry Overview - The Financial Transaction Services industry is part of the FinTech space, encompassing card and payment processing, ATM services, money remittance, and investment solutions for financial advisors [2] - The industry operates proprietary global payment networks that facilitate transactions in multiple currencies, benefiting from ongoing digitization accelerated by the pandemic [2] Key Trends - Digital transformation is driving the adoption of contactless payment methods, cryptocurrencies, biometric authentication, and BNPL services, enhancing market reach and revenue diversification [3] - Increased cross-border transactions are supported by rising international trade and travel, with advanced payment platforms enabling efficient currency exchange [4] - Resilient consumer spending is contributing to higher transaction volumes, although inflationary pressures may impact future spending patterns [5] - Companies are leveraging mergers and acquisitions to build comprehensive digital ecosystems, enhancing service portfolios and expanding international presence [6] Performance Metrics - The Zacks Financial Transaction Services industry has outperformed the Business Services sector and the S&P 500, growing 26.3% over the past year compared to 8.6% and 11.4% respectively [10] - The industry currently trades at a trailing 12-month Price/Earnings ratio of 27.28X, slightly above the S&P 500's 24.14X and the sector's 27.38X [13] Company Highlights - **Visa**: A leading global digital payments company, expanding through strategic alliances and acquisitions, with a focus on technology investments [15] - **Mastercard**: Maintains a strong position through collaborations and strategic investments, with a 15% year-over-year increase in cross-border volumes [20] - **Fiserv**: Offers a broad suite of solutions with a focus on recurring revenue streams and strong margins, aiming for exceptional performance through client acquisition [22] - **Fidelity National**: Achieving revenue growth from its Banking Solutions and Capital Market Solutions divisions, with a strategic presence in international markets [26] - **Global Payments**: Positioned for growth with solid performances in Merchant and Issuer Solutions, supported by strategic acquisitions and technology investments [29]

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].