FIS Q2 Earnings Meet Estimates on Strong Banking Solutions Unit

Core Insights - Fidelity National Information Services, Inc. (FIS) reported Q2 2025 adjusted EPS of $1.36, aligning with estimates and within the projected range of $1.34-$1.38, maintaining year-over-year consistency [1][10] - Revenues reached $2.6 billion, a 5.2% year-over-year increase, exceeding management's expectations and consensus estimates [1][10] Financial Performance - The quarterly results were bolstered by strong performances in Banking Solutions and Capital Market Solutions, with robust recurring revenues and a decline in SG&A expenses [2] - Cost of revenues increased by 7.6% year over year to $1.7 billion, while SG&A expenses decreased by 6.1% to $572 million, although higher than estimates [3] - Adjusted EBITDA rose 4.7% year over year to $1 billion, with a stable margin of 39.8% [4][10] Segment Performance - Banking Solutions generated $1.8 billion in revenues, a 6% year-over-year growth, surpassing estimates, though adjusted EBITDA margin decreased by 70 basis points to 43.6% [5] - Capital Market Solutions saw revenues increase by 6% to $765 million, also exceeding estimates, with an adjusted EBITDA margin of 50.3%, down 53 basis points [6] - The Corporate and Other segment reported revenues of $43 million, a 25% year-over-year decline, but still beating estimates, with an adjusted EBITDA loss of $133 million [7] Financial Position - As of June 30, 2025, FIS had cash and cash equivalents of $581 million, down 30.3% from the end of 2024, with total assets decreasing to $33.4 billion [8] - Long-term debt, excluding the current portion, was $8.9 billion, down from $9.7 billion at the end of 2024, while total equity fell to $14.2 billion from $15.7 billion [9] Cash Flow and Shareholder Returns - Net cash from operations was $382 million, a 30% decline year over year, with adjusted free cash flows decreasing by 42.1% to $292 million [11] - FIS returned $459 million to shareholders through share buybacks of $246 million and dividends of $212 million, reaffirming a target of $1.2 billion in share buybacks for 2025 [12] Future Guidance - Management forecasts Q3 2025 revenues between $2.650 billion and $2.665 billion, with adjusted EBITDA projected at $1.105-$1.120 billion and adjusted EPS estimated between $1.46 and $1.50 [13] - For the full year 2025, revenues are expected to be in the range of $10.520-$10.570 billion, with adjusted EBITDA projected between $4.315 billion and $4.335 billion [14][15]