A month has gone by since the last earnings report for Fidelity National Information Services (FIS). Shares have added about 1.4% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Fidelity National due for a pullback? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent catalysts for Fidelity National Information Services, Inc. before we dive into how investors and analysts have reacted as of late.
FIS Q3 Earnings Beat Estimates on Strong Capital Market Solutions Unit
Fidelity National reported third-quarter 2025 adjusted earnings per share (EPS) of $1.51, which beat the Zacks Consensus Estimate by 2% and came higher than management’s expected range of $1.46-$1.50. The bottom line advanced 8% year over year.
Revenues amounted to $2.7 billion, which improved 6% year over year and surpassed management’s projected range of $2.650-$2.665 billion. The top line beat the consensus mark by 2.2%.
The strong quarterly results were aided by strong performances in the Banking Solutions and Capital Market Solutions segments, supported by robust recurring revenues. However, the upside was partly offset by the rising cost of revenues.
FIS’ Q3 Performance
The cost of revenues increased 6% year over year to $1.7 billion in the quarter under review. SG&A expenses of $584 million rose 12.1% year over year and came higher than our estimate of $527 million. Net interest expenses of $90 million increased significantly from the prior-year quarter’s figure of $64 million, in line with our estimate.
Adjusted EBITDA was $1.1 billion, which rose 7% year over year and beat our estimate by 1.7%. Adjusted EBITDA margin improved 53 basis points year over year at 41.8%.
Q3 Segmental Update by Fidelity National
Revenues from the Banking Solutions unit totaled $1.9 billion, which grew 6% year over year in the third quarter. The metric surpassed the Zacks Consensus Estimate by 2.8% and our estimate by 2.9%. The segment’s results were aided by higher recurring revenues. Adjusted EBITDA margin improved 68 bps year over year to 45.8%.
The Capital Market Solutions segment’s revenues advanced 7% year over year to $783 million, beating our estimate of $775.2 million. Strong recurring revenue growth benefited the metric. Adjusted EBITDA margin of 50.5% improved 60 bps year over year.
The Corporate and Other segment recorded revenues of $40 million in the quarter under review, which dropped 34% year over year. The metric was in line with our estimate. Adjusted EBITDA loss was $129 million.
Financial Update (As of Sept. 30, 2025)
Fidelity National exited the third quarter with cash and cash equivalents of $571 million, which declined 31.5% from the 2024-end level. Total assets of $33 billion decreased from the figure at 2024-end of $33.8 billion.
Long-term debt, excluding the current portion, amounted to $8.9 billion. The figure dropped from the figure of $9.7 billion as of Dec. 31, 2024. The current portion of long-term debt totaled $2 billion. Short-term borrowings amounted to $2.1 billion at the third-quarter end.
Total equity of $14 billion dropped from the 2024-end level of $15.7 billion.
Fidelity National generated net cash from operations of $1 billion in the third quarter, which rose 57.9% year over year. Adjusted free cash flows of $929 million increased 75.3% year over year.
Share Repurchase & Dividend Update
Fidelity National rewarded its shareholders $509 million, to the tune of share buybacks worth $301 million and dividends of $208 million in the third quarter.
Management raised its target of conducting share buybacks to around $1.3 billion in 2025. It intends to maintain quarterly dividend payments such that the dividend per share increases in line with the growth in adjusted EPS.
FIS’ 2025 Guidance
Revenues are now expected to be within $10.595-$10.625 billion, higher than the earlier estimated range of $10.520-$10.570 billion for 2025. Adjusted revenues are now estimated to witness year-over-year growth of 5.4-5.7%. The Banking Solutions unit is now expected to record a year-over-year increase of 4.9-5.3%, higher than the earlier expected range of 4-4.5%. The Capital Market Solutions unit is estimated to record a year-over-year increase of around 6.5%.
Adjusted EBITDA is now projected to be between $4.330 billion and $4.345 billion in 2025. Adjusted EBITDA margin is now anticipated to be around 40.9%.
Adjusted EPS is now expected to be between $5.74 and $5.78, compared to the earlier anticipated band of $5.72-$5.80.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
VGM Scores
Currently, Fidelity National has a average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock has a score of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Fidelity National has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Fidelity National is part of the Zacks Financial Transaction Services industry. Over the past month, Paymentus (PAY), a stock from the same industry, has gained 1%. The company reported its results for the quarter ended September 2025 more than a month ago.
Paymentus reported revenues of $310.74 million in the last reported quarter, representing a year-over-year change of +34.2%. EPS of $0.17 for the same period compares with $0.15 a year ago.
Paymentus is expected to post earnings of $0.18 per share for the current quarter, representing a year-over-year change of +38.5%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
Paymentus has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
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Fidelity National Information Services, Inc. (FIS): Free Stock Analysis Report Paymentus Holdings, Inc. (PAY): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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