Fidelity National Information Services (NYSE:FIS) reported what executives described as a strong finish to 2025 and laid out expectations for faster cash flow growth and margin expansion in 2026, following two major portfolio moves: the full divestiture of its merchant-focused business and the acquisition of Total Issuing Solutions.
Management highlights strategic shift and 2025 execution
CEO and President Stephanie Ferris said 2025 was “full of change and complexity,” but that the company remained focused on customers and execution. Ferris said FIS met or exceeded its key financial commitments for the year, while advancing a portfolio strategy centered on serving financial institutions and investing in high-growth areas such as payments, digital, and lending.
2025 results: revenue growth, EPS expansion, and shareholder returns
CFO James Kehoe said fourth-quarter revenue growth accelerated to 7.4%, with adjusted EBITDA up 7.3% and adjusted EPS up 20% year-over-year. For the full year, Kehoe reported:
- Revenue: up 5.8% to $10.7 billion
- Adjusted EBITDA: up 4.7%, with margins down 28 basis points
- Adjusted EPS: up 10.2% to $5.75
- Free cash flow: up 19% to $1.6 billion
Kehoe attributed the margin profile to multiple moving pieces, saying cost-saving programs “almost entirely offset” a 45-basis-point dilutive impact from acquisitions and a 70-basis-point headwind from declining TSA (transition services agreement) income. Excluding those two factors, he said underlying margins would have increased by about 90 basis points.
Kehoe also said capital expenditures were 9.3% of revenue and cash conversion was 88%, ahead of expectations. The company returned $2.1 billion to shareholders in 2025, exceeding its capital allocation commitments, and the board increased the annual dividend by 10%.
Segment performance: banking strength and capital markets margin expansion
In the fourth quarter, banking adjusted revenue grew 8.3%, with recurring revenue up 8.8%. Kehoe said digital and payments were areas of strength, and that revenue growth benefited from M&A contribution of 130 basis points and an easier year-over-year comparison of roughly 190 basis points. Non-recurring revenue rose 28%, while professional services declined 16% as FIS prioritized recurring revenue sales. Banking EBITDA margin expanded 132 basis points, which Kehoe said reflected cost management, favorable product mix, and an easier comparison.
Capital markets adjusted revenue increased 5.6% in the quarter, with recurring revenue up 5.3%. Non-recurring revenue grew 13.7% due to license sales, while professional services fell 6.9% amid a shift toward recurring revenue. Capital markets EBITDA margin expanded by more than 200 basis points, which Kehoe attributed to cost optimization, operating leverage, and revenue mix.
For the full year, banking adjusted revenue grew 5.6% (recurring up 6%), while capital markets adjusted revenue grew 6.3% (recurring up 5.8%).
Total Issuing Solutions: integration, renewals, and synergy targets
Ferris said the Total Issuing Solutions acquisition strengthens FIS’s position with large financial institutions and supports every major theme shaping banking and payments, including real-time payments, digital currency, and AI-powered fraud and risk management. She said FIS has expanded relationships with 14 of the top 25 U.S. large financial institutions across banking and capital markets.
Ferris highlighted renewal activity as a “client validation” point, saying FIS renewed or extended relationships representing about 30% of Total Issuing’s revenue over the past 12 months and has no large renewals pending in 2026.
Management reiterated its synergy targets from April 2025, stating confidence in achieving $45 million of revenue synergies and $125 million of expense synergies over three years. Kehoe later said 2026 expectations include $30 million to $40 million of synergies (about 20 to 30 basis points of margin enhancement) for the year.
2026 outlook: pro forma growth, margin expansion, and free cash flow step-up
Kehoe said FIS will include Total Issuing Solutions in the banking solutions segment and will begin reporting two divisions within banking solutions—payments and banking. He also noted certain businesses were shifted across segments to align with strategy, including moving Automated Finance from banking to capital markets. He said these changes were immaterial to historical segment growth rates.
For 2026, FIS provided guidance on both an adjusted and pro forma basis. Kehoe said the company refined expectations for minor perimeter changes and reclassified certain non-GAAP expenses to operating expenses; compared with original assumptions at the time of announcement, these changes reduce pre-tax earnings by $40 million and adjusted EPS by $0.07.
Key elements of the 2026 outlook included:
- Pro forma revenue growth: 5.1% to 5.7%
- Pro forma EBITDA growth: 7.2% to 8.4%
- Pro forma margin expansion: 95 to 110 basis points
- Adjusted EPS: $6.22 to $6.32 (up 8% to 10%)
- Free cash flow: over $2 billion (up 27% to 33%), excluding cash taxes on the Worldpay sale payable in 2026
Kehoe said share repurchases are not included in the outlook because buybacks have been temporarily paused to prioritize deleveraging after the deal close. Ferris echoed that the company is “really happy” with the portfolio and said investors should not expect announcements around large asset sales as management focuses on integrating Total Issuing Solutions and paying down debt.
On segment expectations, Kehoe said banking pro forma revenue is expected to rise 5% to 5.5%, while capital markets revenue is projected to increase 5.5% to 6.5%, with the capital markets outlook reflecting a lower level of M&A activity and a shift toward “higher quality recurring revenue.”
Kehoe also outlined a longer-term cash flow objective, saying FIS expects to double free cash flow to over $3 billion by 2028, citing declining capital intensity, working capital optimization, and reductions in one-time transformation and integration costs—including about $200 million of cash integration costs related to the credit issuer business in 2026 that are expected to roll off by 2028.
In Q&A, Ferris emphasized that FIS views AI as a “strategic accelerant” rather than a replacement threat to its systems of record, and described customer demand for AI across bank sizes—ranging from data access for large banks building their own capabilities to embedded workflow automation for smaller institutions. She also said bank M&A is not baked into guidance beyond known deals, characterizing incremental M&A as potential upside or downside depending on outcomes and timing.
About Fidelity National Information Services (NYSE:FIS)
Fidelity National Information Services (NYSE: FIS) is a global provider of financial technology solutions and services for banks, capital markets firms, merchants and corporations. The company develops and delivers software, processing, and outsourcing services that support core banking, payments and merchant acquiring, wealth and retirement platforms, risk and compliance, and trading and capital markets operations. Its offerings include cloud-based and on-premises core banking systems, card processing and gateway services, e-commerce and point-of-sale payment solutions, and a range of back-office and advisory services designed to automate and modernize financial operations.
FIS serves a broad international client base across North America, Europe, Latin America, and the Asia-Pacific region through a combination of direct clients and partner channels.
