Q2 2026 Fidelity National Information Services Inc Earnings Call Transcript
Key Points
- Banking Solutions revenue grew 6.1% in Q2, at the high end of the outlook, with strong performance in both banking and payments.
- Adjusted EBITDA margins expanded by 113 basis points, driven by favorable product mix and cost savings.
- Free cash flow more than tripled year-over-year to $525 million, leading to a raised full-year free cash flow outlook of $2.2 billion.
- Total Issuing Solutions acquisition thesis is playing out as expected, with new client wins (top 10 banks in Latin America and India) and 72% of the portfolio under contract through 2029 and beyond.
- AI initiatives are gaining traction, with 10 AI products in market, 200 customers live, and a pipeline of over 500 opportunities, contributing to productivity gains and client outcomes.
- Recurring revenue grew 5% across both segments, and recurring sales grew 14%, indicating a durable revenue base.
- The company is on track to deliver over $150 million in EBITDA synergies by 2028 from the Total Issuing Solutions acquisition.
- Leverage ratio decreased to 3.5 times, and the company returned $270 million to shareholders through dividends.
- Capital Markets revenue growth was at the low end of the outlook at 3.2%, with professional services declining 17% due to lower sales and slower backlog conversion.
- The company reduced its full-year Capital Markets revenue growth outlook to 3% to 3.5%, a 225 basis point reduction from prior guidance.
- Capital Markets recurring revenue growth is now expected to be mid-single-digit, down from the prior mid-to-high single-digit expectation, due to lower sales and slower conversion.
- The UBS-Credit Suisse attrition is impacting 2026 Capital Markets revenue growth by approximately 1 percentage point, concentrated in trading and asset services.
- Lending business organic growth did not materialize as expected, creating a modest drag on Capital Markets recurring revenue growth.
- The company is evaluating strategic alternatives for select Capital Markets products that may not fit its strategic profile, indicating potential portfolio rationalization.
- Professional services sales in Capital Markets missed expectations in the first half, with a disproportionate impact on the P&L due to the timing of revenue conversion.
- The company expects Capital Markets license and professional services revenue to decline as it transitions to a recurring revenue model, which may pressure near-term growth.
Good day, and thank you for standing by. Welcome to the FIS second quarter 2026 earnings call. (Operator Instructions) Please be advised that today's conference is being recorded. (Operator Instructions)
I would now like to hand the conference over to your speaker today, George Mihalos, Head of Investor Relations.
Thank you, operator. Good morning, everyone. Thank you for joining us today for the FIS second quarter 2026 earnings conference call. This call is being webcasted. Today's news release, corresponding presentation and webcast are all available on our website at fisglobal.com.
On the call with me this morning is our CEO and President, Stephanie Ferris; and our CFO, James Kehoe. Stephanie will begin the call with a strategic and operational update, followed by James, who will review our financial results. Turning to slide 3. Today's remarks will contain forward-looking statements. These statements are subject to risks and
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