Fidelity National Information Services(FIS) - 2025 Q3 - Quarterly Results

Financial Performance - Third quarter 2025 revenue increased by 6% year-over-year to approximately $2.7 billion[2] - Adjusted EBITDA rose by 7% to approximately $1.1 billion, with an adjusted EBITDA margin of 41.8%, up 53 basis points from the prior year[3] - Adjusted EPS increased by 8% year-over-year to $1.51 per diluted share[5] - Free cash flow surged by 101% to $798 million, while adjusted free cash flow increased by 75% to $929 million compared to the prior year[9] - The company raised its full-year 2025 revenue growth outlook to between 5.4% and 5.7%[12] - Revenue for Q3 2025 was $2,717 million, an increase of 5.7% compared to $2,570 million in Q3 2024[37] - Gross profit for Q3 2025 was $1,028 million, up from $977 million in Q3 2024, reflecting a gross margin of 37.9%[37] - Operating income for Q3 2025 was $457 million, compared to $490 million in Q3 2024, indicating a decrease of 6.7%[37] - Net earnings attributable to FIS for Q3 2025 were $264 million, compared to $224 million in Q3 2024, representing an increase of 17.9%[37] - For the nine months ended September 30, 2025, total revenue reached $7,865 million, a 4.5% increase from $7,528 million in the same period of 2024[48] - Recurring revenue for the nine months ended September 30, 2025, was $6,372 million, up from $6,086 million in 2024, reflecting a growth of 4.7%[48] Segment Performance - Banking Solutions revenue grew by 6% year-over-year to $1.9 billion, with adjusted EBITDA increasing by 8% to $868 million[6] - Capital Market Solutions revenue increased by 7% year-over-year to $783 million, with adjusted EBITDA rising by 9% to $396 million[7] - Banking Solutions revenue for the nine months ended September 30, 2025, was $5,420 million, up 5% from $5,174 million in 2024[42] - Capital Market Solutions revenue for the same period was $2,313 million, representing a 7% increase from $2,158 million in 2024[42] Cash Flow and Investments - Cash provided by operating activities from continuing operations increased to $1,850 million, compared to $1,393 million in the prior year[40] - The company reported a net cash used in investing activities from continuing operations of $(2,702) million, a significant decrease from $8,843 million in the previous year[40] - The company reported a total of $1,185 million in free cash flow for the nine months ended September 30, 2025, compared to $764 million in 2024, marking a 55.1% increase[51] - Adjusted free cash flow for the nine months ended September 30, 2025, was $1,589 million, up from $1,129 million in 2024, representing a 40.7% increase[51] Balance Sheet - Total assets as of September 30, 2025, were $33,042 million, down from $33,784 million as of December 31, 2024[39] - Total liabilities increased to $19,180 million as of September 30, 2025, compared to $18,084 million as of December 31, 2024[39] - Cash and cash equivalents decreased to $571 million as of September 30, 2025, from $834 million as of December 31, 2024[39] - Borrowings for the nine months ended September 30, 2025, totaled $38,159 million, compared to $15,776 million in 2024[40] - Cash, cash equivalents, and restricted cash at the end of the period were $571 million, down from $2,525 million at the end of September 2024[40] Earnings and Adjustments - The company reported a basic earnings per share of $0.51 for Q3 2025, compared to $0.41 for Q3 2024[37] - Earnings attributable to FIS from continuing operations for Q3 2025 were $0.50 per share, compared to $0.45 in Q3 2024, reflecting an increase of 11.1%[58] - Adjusted net earnings attributable to FIS from continuing operations, excluding equity method investment earnings, were $1.25 per share for Q3 2025, up from $1.14 in Q3 2024, representing a growth of 9.6%[58] - Total non-GAAP adjustments from continuing operations for Q3 2025 amounted to $0.70 per share, compared to $0.63 in Q3 2024, indicating an increase of 11.1%[58] - For the nine months ended September 30, 2025, FIS reported adjusted net earnings of $4.08 per share, compared to $4.06 for the same period in 2024, showing a slight increase of 0.5%[58] Acquisition and Integration - The Issuer Solutions acquisition is expected to close in Q1 2026, with an enterprise value of $13.5 billion[13] - The company expects pro forma gross leverage to be approximately 3.4x post-acquisition, targeting a reduction to 2.8x within 18 months[15] - The anticipated acquisition of Issuer Solutions may face integration challenges and is subject to completion risks[34] - The company incurred $197 million in acquisition and integration costs for Q3 2025, up from $137 million in Q3 2024, marking a rise of 43.9%[61] - The company reported a total of $523 million in acquisition, integration, and other costs for the nine months ended September 30, 2025, compared to $494 million for the same period in 2024, an increase of 5.9%[61] Other Financial Metrics - Non-operating income for Q3 2025 was $(16) million, a decrease from $47 million in Q3 2024, indicating a negative shift in non-operating performance[65] - The company recorded a $108 million write-down related to the Worldpay Minority Interest Sale agreement during the nine months ended September 30, 2025[66] - FIS completed the separation of Worldpay on January 31, 2024, retaining a non-controlling 45% ownership interest, which is now recorded under the equity method of accounting[66] - Interest expense for the three months ended September 30, 2025, was $148 million, compared to $146 million in 2024, showing a marginal increase of 1.4%[70] - The provision for income taxes for the three months ended September 30, 2025, was $2 million, a significant decrease from $60 million in the same period of 2024[70]