Fidelity National Information Services, Inc. (FIS) Q2 2025 Earnings Summary

Executive Summary

Q2 2025 delivered 5% GAAP revenue growth to $2.616B and adjusted EBITDA of $1.041B with margin flat YoY at 39.8%; adjusted EPS was $1.36 while GAAP EPS was $(0.90) due to a $539M investor-level tax expense tied to the pending sale of the remaining Worldpay stake .
Banking led outperformance: segment revenue +6% YoY to $1.808B on 7% recurring revenue growth; Capital Markets +6% GAAP/+5% adjusted to $765M; corporate revenue fell 25% to $43M .
Management raised FY 2025 ranges: revenue to $10.520–$10.570B, adjusted EBITDA to $4.315–$4.335B, and adjusted EPS to $5.72–$5.80; introduced Q3 guidance with revenue $2.650–$2.665B and adjusted EPS $1.46–$1.50 .
Strategic and product catalysts: execution on Future Forward (commercial excellence, working capital), digital assets via Circle/USDC integration, and AI roadmap (Treasury GPT upgrades; Banker Assist by YE) reinforced multi-segment momentum .
Capital returns and balance sheet: $246M buybacks and $212M dividends in Q2 (total $459M); reiterated $1.2B buyback goal and declared $0.40 quarterly dividend payable Sept 24, 2025; debt outstanding $12.9B at quarter-end .

What Went Well and What Went Wrong

What Went Well
- Banking momentum: “We delivered a strong quarter led by momentum in our banking business” and raised full-year outlook on segment strength .
- Recurring revenue and implementation: 81% of total revenue was recurring; implementations drove growth with sequential margin improvement of ~200 bps .
- Product and innovation pipeline: Money Movement Hub expansion to USDC via Circle; AI initiatives (Treasury GPT upgrades; Banker Assist targeted by YE) garnered strong client interest and pipeline validation .
What Went Wrong
- GAAP earnings hit by Worldpay tax: GAAP diluted EPS of $(0.90) driven by $539M investor-level tax expense from change in intent to sell remaining Worldpay interest .
- Banking margin pressure: segment adjusted EBITDA margin contracted 70 bps YoY to 43.6% due to an ~$8M bad-debt charge and cost allocation noise; management expects margin expansion to resume in Q3/Q4 .
- Capital Markets softness: temporary slowdown in lending syndication activity weighed on recurring growth in Q2, though July/August volumes rebounded to Q1 levels .

Financial Results

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue ($USD Billions)	$2.599	$2.532	$2.616
Adjusted EBITDA ($USD Billions)	$1.115	$0.958	$1.041
Adjusted EBITDA Margin (%)	42.9%	37.8%	39.8%
Adjusted EPS ($)	$1.40	$1.21	$1.36
GAAP Diluted EPS ($)	$0.56	$0.15	$(0.90)
Adjusted Free Cash Flow ($USD Millions)	$702	$368	$292
Recurring Revenue (% of Total)	—	81%	81%

Segment	Q4 2024 Revenue ($MM)	Q1 2025 Revenue ($MM)	Q2 2025 Revenue ($MM)	Q4 2024 Adj. EBITDA Margin (%)	Q1 2025 Adj. EBITDA Margin (%)	Q2 2025 Adj. EBITDA Margin (%)
Banking Solutions	$1,717	$1,718	$1,808	42.6%	40.1%	43.6%
Capital Market Solutions	$821	$764	$765	55.1%	48.3%	50.3%
Corporate & Other	$61	$50	$43	Adj. EBITDA loss $69MM	Adj. EBITDA loss $99MM	Adj. EBITDA loss $133MM

KPI	Q4 2024	Q1 2025	Q2 2025
Recurring Revenue Growth (YoY, Company)	4%	4%	6%
Capital Returned ($MM)	$1,192 (buybacks + dividends)	$670	$459
Debt Outstanding ($MM)	$11,300	$12,000	$12,900

Note: Wall Street consensus via S&P Global was unavailable for Q2/Q3 2025 despite attempts to retrieve (“Primary EPS Consensus Mean”, “Revenue Consensus Mean”, “EBITDA Consensus Mean”); beat/miss vs consensus cannot be assessed.

Guidance Changes

Metric	Period	Previous Guidance (May 6, 2025)	Current Guidance (Aug 5, 2025)	Change
Revenue ($USD Billions)	FY 2025	$10.435 – $10.495	$10.520 – $10.570	Raised
Adjusted EBITDA ($USD Billions)	FY 2025	$4.305 – $4.335	$4.315 – $4.335	Raised low-end
Adjusted EPS ($)	FY 2025	$5.70 – $5.80	$5.72 – $5.80	Raised low-end
Revenue ($USD Billions)	Q3 2025	—	$2.650 – $2.665	New
Adjusted EBITDA ($USD Billions)	Q3 2025	—	$1.105 – $1.120	New
Adjusted EPS ($)	Q3 2025	—	$1.46 – $1.50	New
Banking Segment Revenue Growth (%)	FY 2025	3.7% – 4.4% (prior)	4.0% – 4.5% (current)	Raised
Capital Markets Revenue Growth (%)	FY 2025	6.5% – 7.0%	6.5% – 7.0%	Maintained
Dividend per Share ($)	Quarterly	$0.40 declared for Sep 24 payment	$0.40 payable Sept 24, 2025	Maintained
Buybacks ($)	FY 2025	~$1.2B target	~$1.2B target (reiterated)	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024, Q1 2025)	Current Period (Q2 2025)	Trend
AI initiatives	Strategy emphasis; build/partner model; no specific AI timelines in Q4 PR	Treasury GPT upgraded; Banker Assist agentic AI targeted by YE; strong conference feedback and pilots	Expanding execution
Digital assets/stablecoin	No specific stablecoin updates in Q1 PR; payments modernization ongoing	Circle partnership integrates USDC into Money Movement Hub; aligned with new U.S. stablecoin legislation	New capability/catalyst
Banking commercial excellence	Record core wins in 2024; 150 bps banking acceleration tied to sales/retention in 2025	Banking +6% revenue; recurring +7%; margin contraction driven by ~$8M bad-debt; margin expansion expected H2	Improving growth; margins recover H2
Capital Markets lending	Q1 had outsized license renewal (nonrecurring +47%)	Q2 recurring softened on loan syndication slowdown; July/August rebounded to Q1 pace	Normalizing higher
Pricing/macro	Pricing discipline; durable recurring revenue noted	Positive net pricing in both segments; no material change; competitive landscape manageable	Stable
Working capital/cash conversion	Q1 conversion 71%; WCap initiatives (supplier terms, governance)	Q2 conversion 52%; reiterates 82–85% FY target	On track for FY
M&A/regulatory	Announced Issuer Solutions acquisition and Worldpay stake sale (HSR clearance later)	HSR period expired; deal on track; leverage ~3.0x; target 2.8x LT	Advancing to close

Management Commentary

Stephanie Ferris (CEO): “We delivered a strong quarter led by momentum in our banking business… We are raising our full-year outlook” .
Ferris on innovation: “We are driving AI innovation… on track to launch our Banker Assist solution by year end… Treasury GPT… multiple AI pilots” .
James Kehoe (CFO): “Revenue grew 5% to $2.6 billion exceeding our outlook… EBITDA margin improved ~200 bps sequentially… adjusted EPS of $1.36” .
Kehoe on guidance: “We are raising our full year ranges for revenue, adjusted EBITDA and adjusted EPS… increasing the low end of our EPS range by $0.02, to 10–11% growth” .

Q&A Highlights

Banking drivers: Higher-quality new recurring sales and improved retention underpin acceleration; Everlink tuck-in adds ~$20M full-year revenue (20–25 bps) .
Bad-debt charge: ~$8M in Banking (~45 bps of ~70 bps YoY margin contraction); margins expected to expand in Q3/Q4 with cost programs and easier comps .
Capital Markets: Lending syndication slowdown impacted recurring growth; July/August rebound above prior year; visibility supports H2 acceleration .
Pricing: Both segments posted positive net pricing; industry pressure not materially impacting FIS due to scale/product quality .
Stablecoin/AI demand: Broad client interest in capabilities; FIS enabling institutions across payment types to avoid lagging offerings .

Estimates Context

Wall Street consensus via S&P Global for Q2 2025 EPS/revenue/EBITDA was unavailable; comparative beat/miss analysis to consensus cannot be provided. Management stated revenue and adjusted EBITDA exceeded their own outlook and adjusted EPS landed at the midpoint, signaling operational outperformance vs company guidance .

Key Takeaways for Investors

Banking momentum plus commercial excellence are driving sustained recurring growth; expect H2 margin expansion as bad-debt noise fades and cost programs stack—positioning for operating leverage into year-end .
Capital Markets’ lending-driven dip appears transitory with activity normalizing; underlying license/professional services pipeline supports full-year segment outlook .
Guidance raised on revenue, adjusted EBITDA, and adjusted EPS; introduced Q3 guide with sequential growth—watch delivery vs tighter ranges and FX margin headwinds (~25 bps) highlighted by CFO .
Strategic portfolio reshaping (Issuer Solutions acquisition; sale of Worldpay minority stake) advances simplification and cash flow accretion, with leverage trending toward 2.8x in ~18 months post close .
Product catalysts: Circle/USDC integration and AI roadmap (Banker Assist, Treasury GPT) can enhance competitive differentiation and cross-sell across large FI relationships .
Capital returns remain robust: $459M in Q2, $1.2B buyback target reiterated, and $0.40 quarterly dividend declared—supportive for TSR targets of ~12–13% .
Risk watch: GAAP results influenced by equity-method and investor-level tax impacts from Worldpay; macro-sensitive lending syndication and FX can create near-term volatility even as adjusted metrics remain steady .