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Fidelity National (FIS) Q2 Revenue Up 5%
The Motley Fool· 2025-08-06 02:27
Core Insights - Fidelity National Information Services (FIS) reported Q2 FY2025 earnings with revenue of $2.60 billion (non-GAAP), exceeding consensus estimates, while adjusted EPS was $1.36, meeting expectations [1][2] - The company experienced a GAAP net loss of $470 million due to a one-time, non-cash tax impact related to the Worldpay asset sale, despite solid revenue growth and stable operating margins [1][9] Financial Performance - Q2 2025 revenue reached $2.62 billion (GAAP), a 5.2% increase year-over-year, with adjusted EBITDA at $1.04 billion, reflecting a 4.8% rise from the previous year [2][5] - Adjusted free cash flow decreased to $292 million, down 42.1% from $504 million in Q2 2024, attributed to working capital timing and transaction-related expenses [2][10] - Recurring revenue constituted approximately 81% of total revenue, with a 6% growth in recurring revenue during Q2 2025 [5][8] Business Overview and Strategy - FIS provides software and processing solutions for banking, payments, and capital markets, serving banks, credit unions, and other financial institutions [3] - The company is focusing on growing recurring revenue through internal product development and strategic transactions, including the planned acquisition of Global Payments' Issuer Solutions [4] Segment Performance - Banking Solutions revenue increased by 6% year-over-year to $1.81 billion, with recurring revenue up 7%, although profitability was impacted by higher bad debt expenses [6] - Capital Market Solutions reported a 6% revenue growth to $765 million, but the adjusted EBITDA margin decreased by 53 basis points to 50.3% due to integration costs from a recent acquisition [7] Future Outlook - Management raised the full-year 2025 revenue growth target to 4.8% to 5.3% and adjusted EPS growth to 10% to 11% following Q2 results [13] - For Q3 2025, projected revenue is between $2.65 billion and $2.67 billion, with adjusted EPS forecasted at $1.46 to $1.50 [13] - The company plans to maintain its shareholder return policy, with dividends expected to grow in line with adjusted EPS [14]