Fidelity National Information Services, Inc. FIS reported second-quarter 2026 adjusted earnings per share (EPS) of $1.48, which beat the Zacks Consensus Estimate by 0.7%. The bottom line advanced 8.8% year over year.
Revenues amounted to $3.4 billion, which improved 29% year over year. The top line missed the consensus mark by 0.2%.
The quarterly earnings were driven by strong growth in the Banking Solutions segment and steady performance in the Capital Market Solutions segment, supported by recurring revenue growth, margin expansion and acquisition benefits. However, the upside was partly offset by a higher cost of revenues and increased selling, general and administrative expenses.
Fidelity National Information Services, Inc. Price, Consensus and EPS Surprise
FIS’ Q2 Performance
The cost of revenues increased 32.4% year over year to $2.2 billion in the second quarter. SG&A expenses of $684 million rose 19.6% year over year. Net interest expenses of $200 million increased 81.8% from the prior-year quarter’s figure.
Adjusted EBITDA was $1.4 billion, up 35% year over year. Adjusted EBITDA margin increased 193 basis points year over year to 41.7%, primarily driven by acquisitions, a favorable business mix and cost savings initiatives.
Q2 Segmental Update of Fidelity National
Revenues from the Banking Solutions segment totaled $2.5 billion, increasing 44% year over year and matching the Zacks Consensus Estimate. The segmental results benefited from solid margin expansion. Adjusted EBITDA margin improved 179 bps year over year to 45.8%, supported by cost management and a favorable revenue mix.
The Capital Market Solutions segment’s revenues advanced 3.5% year over year to $810 million, marginally missing the Zacks Consensus Estimate by 0.2%. Strong recurring revenue growth benefited the metric. Adjusted EBITDA margin of 51.9% contracted 32 bps year over year.
The Corporate and Other segment recorded revenues of $84 million, down 26% year over year. Adjusted EBITDA loss was $147 million.
FIS’ Q2 Financial Update
Fidelity National exited the second quarter of 2026 with cash and cash equivalents of $744 million, up from $599 million as of 2025-end. Total assets of $44.1 billion increased from $33.5 billion at the end of 2025.
Long-term debt, excluding the current portion, amounted to $15.4 billion, up from $9.1 billion as of Dec. 31, 2025. The current portion of long-term debt totaled $1.5 billion. Short-term borrowings totaled $4.2 billion at the end of the reported quarter.
Total equity of $16 billion increased from $13.9 billion at 2025-end.
Fidelity National generated $493 million in net cash from operations, representing a 29.1% year-over-year increase. Adjusted free cash flow totaled $525 million, up 220% year over year.
FIS’ Share Repurchase & Dividend Update
The company returned $270 million to shareholders, including $42 million through share repurchases and $228 million in dividend payments.
FIS’ Key Expectations for Q3’26
Management forecasts revenues between $3.415 billion and $3.445 billion. Adjusted EBITDA is projected to be in the range of $1,460-$1,480 million. Adjusted EPS is estimated to be between $1.58 and $1.62.
FIS Updates 2026 Guidance
Revenues are now expected to be $13.63-$13.70 billion, down from the prior guidance of $13.77-$13.85 billion, implying 29-30% adjusted revenue growth.
Adjusted EBITDA is projected to be $5.73-$5.79 billion compared to the earlier outlook of $5.80-$5.86 billion. Adjusted EBITDA margin is anticipated to be in the range of 41.8-42.4% (previously 42.1-42.3%).
Adjusted EPS is forecast in the range of $6.15-$6.24, lowered from the prior guidance of $6.22-$6.32. The midpoint implies about 11.2% year-over-year growth from $5.57 reported in 2025.
Free cash flow guidance has been raised to $2.15-$2.25 billion from the previous $2.05-$2.15 billion. The company now expects free cash flow growth of 33-39% year over year.
FIS’ Zacks Rank
Fidelity National currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
How Did Peers Perform?
Several companies in the business services space, including Marsh & McLennan Companies, Inc. MRSH, Visa Inc. V and Mastercard Incorporated MA, have reported their financial results for the June quarter of 2026. Here’s how they have performed:
MRSH reported second-quarter 2026 adjusted earnings per share of $2.96, which surpassed the Zacks Consensus Estimate by 2.8%. The bottom line advanced 8.8% year over year. Consolidated revenues of $7.4 billion improved 6.2% year over year. The figure rose 5% on an underlying basis. The top line beat the consensus mark by 2%. Marsh’s quarterly results benefited from solid growth in the Risk and Insurance Services and Consulting units. However, the upside was partially offset by elevated operating expenses, primarily due to increased compensation and benefits.
Visa delivered third-quarter fiscal 2026 adjusted earnings of $3.32 per share, which rose 11% year over year and beat the Zacks Consensus Estimate by 2.8%. Net revenues were $11.63 billion, rising 14% year over year. Visa’s quarterly results reflected resilient spending trends, higher cross-border volumes and solid network activity, including a 10% year-over-year increase in payments volume on a constant-dollar basis. However, the upside was partly offset by increased operating expenses.
Mastercard reported second-quarter 2026 adjusted earnings of $5.04 per share, which topped the Zacks Consensus Estimate by 5.7%. The bottom line improved 21.4% year over year. Net revenues advanced 14.1% year over year to $9.3 billion. The top line beat the consensus mark by 2.4%. Mastercard’s quarterly results benefited from strong cross-border volume growth, increased switched transactions and robust demand for value-added services. However, the upside was partly offset by higher payment network rebates from renewed deals and an escalating operating expense level.
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Fidelity National Information Services, Inc. (FIS): Free Stock Analysis Report
Mastercard Incorporated (MA): Free Stock Analysis Report
Visa Inc. (V): Free Stock Analysis Report
Marsh (MRSH): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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