Fidelity National Information Services (NYSE:FIS) 2025 Conference Transcript

Summary of Fidelity National Information Services (FIS) Conference Call Company Overview - Company: Fidelity National Information Services (NYSE: FIS) - Date: December 02, 2025 - Key Speakers: Stephanie Ferris (President and CEO), James Kehoe (CFO), George Mihalos (Head of Investor Relations) Industry Insights - Segments Discussed: Banking and Capital Markets - Growth Projections: - Banking segment expected to grow adjusted revenue organically by just north of 3% - Capital markets segment expected to grow adjusted revenue organically by just north of 6% [4][5][6] Key Points and Arguments Banking Segment - Performance: Banking growth is better than expected due to a focus on commercial excellence, existing clients, new sales, and cross-sells [5][6] - Recurring Revenue: Significant organic growth in recurring revenue is anticipated as 2025 concludes and into 2026 [6] - Core Banking: - Core banking conversions are sticky, with limited switching among banks [7][9] - FIS serves larger banks (assets over $5 billion), benefiting from market consolidation [9][10] - Core products include Horizon for smaller banks and IBS for larger commercial banks [12][13][14] Capital Markets Segment - Impact of Tariffs: Loan syndication market was impacted by tariffs in Q2 but has since recovered in Q3 and Q4 [6][22] - Revenue Growth: Anticipation of capital markets segment revenue growth returning to 6-7% organic range in the next year [22][23] Financial Metrics - Margin Expansion: Expected margin expansion of 60 basis points for the next year, with a reversal of M&A headwinds from the current year [26][31] - Free Cash Flow: Projected free cash flow conversion greater than 90% for the next year, driven by lower capital intensity and working capital benefits [37][40] TSYS Acquisition - Strategic Importance: The acquisition of TSYS is expected to enhance credit card processing capabilities, filling a significant product gap for FIS [18][45] - EPS Impact: TSYS acquisition expected to be slightly accretive to EPS in the first year [45][48] Tax Rate - Current Rate: Estimated tax rate of 13.5% for the next eight years, with current operations at 12% [50][52] Additional Insights - Government Shutdown: No impact observed on banking or capital markets businesses due to the recent government shutdown [25] - Market Positioning: FIS is focused on enhancing capabilities for smaller financial institutions to compete against larger banks and fintechs [21] Conclusion Fidelity National Information Services is positioned for growth in both its banking and capital markets segments, with a strong focus on recurring revenue and strategic acquisitions. The company is optimistic about its financial metrics, including margin expansion and free cash flow conversion, while maintaining a sustainable tax rate.