Fidelity National Q4 Earnings Miss Estimates on Increasing Expenses

Core Insights - Fidelity National Information Services, Inc. (FIS) reported Q4 2025 adjusted EPS of $1.68, missing the Zacks Consensus Estimate by 0.7%, but showing a 20% year-over-year increase [1] - Revenues reached $2.8 billion, reflecting an 8.2% year-over-year growth and surpassing the consensus estimate by 2.6% [1] Financial Performance - The cost of revenues increased by 7% year over year to $1.7 billion, while SG&A expenses rose by 13.7% to $549 million [5] - Net interest expenses surged by 31.3% year over year to $88 million [5] - Adjusted EBITDA was $1.2 billion, up 7% year over year, but the adjusted EBITDA margin contracted by 36 basis points to 42.5% due to higher corporate expenses [6] Full-Year Update - For the full year 2025, adjusted EPS improved by 6.7% to $5.57, with total revenues increasing by 5.4% to $10.7 billion [7] - Adjusted EBITDA for the year rose by 4.7% to $4.3 billion [7] Segment Performance - Banking Solutions revenue grew by 9% year over year to $1.9 billion, exceeding the consensus estimate by 2.2%, with an adjusted EBITDA margin improvement of 132 basis points to 43.9% [10] - Capital Market Solutions segment revenues increased by 8% year over year to $883 million, beating the consensus estimate by 1%, with an adjusted EBITDA margin of 57.4%, up 227 basis points [11] - The Corporate and Other segment reported revenues of $63 million, a 3% increase year over year, but recorded an adjusted EBITDA loss of $130 million [11] Cash Flow and Equity - As of December 31, 2025, FIS had cash and cash equivalents of $599 million, down from $834 million at the end of 2024 [12] - Total equity decreased to $13.9 billion from $15.7 billion at the end of 2024, while net cash from operations increased by 19.9% year over year to $2.6 billion [13] Shareholder Returns - In Q4 2025, FIS repurchased $291 million of shares, and for the full year, returned $2.1 billion to shareholders through buybacks and dividends [14] - The quarterly dividend was raised by 10% to 44 cents per share [14] Guidance - For Q1 2026, management forecasts revenues between $3.27 billion and $3.29 billion, with adjusted EPS estimated between $1.26 and $1.30 [15] - For 2026, revenues are expected to be in the range of $13.77 billion to $13.85 billion, indicating a 30-31% growth, with adjusted EPS projected between $6.22 and $6.32 [16]