Fidelity National Information Services, Inc. FIS reported first-quarter 2025 adjusted earnings per share (EPS) of $1.21, which beat the Zacks Consensus Estimate by 0.8% and came within the management’s expected range of $1.17-$1.22. The bottom line advanced 11% year over year. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
Revenues amounted to $2.532 billion, which improved 3% year over year and surpassed management’s projected range of $2.485-$2.510 billion. The top line surpassed the consensus mark by 1.1%.
The quarterly results gained momentum from strength in the Capital Market Solutions segment, which posted 8% revenue growth and a 90-bps EBITDA margin improvement, driven by strong recurring revenues. A decline in selling, general and administrative (SG&A) expenses also contributed to the upside. However, the upside was partly offset by rising cost of revenues and pressure on the Banking Solutions unit due to incurrence of higher license and termination fee revenues in the prior-year quarter.
Fidelity National Information Services, Inc. Price, Consensus and EPS Surprise
Fidelity National Information Services, Inc. Price, Consensus and EPS Surprise
Fidelity National Information Services, Inc. price-consensus-eps-surprise-chart | Fidelity National Information Services, Inc. Quote
Q1 Performance
The cost of revenues increased 6% year over year to $1.7 billion in the quarter under review. SG&A expenses of $558 million declined 2.6% year over year but came higher than our estimate of $514.8 million. Net interest expenses of $80 million increased 3.9% year over year but was lower than our estimate of $85 million.
Adjusted EBITDA was $956 million, which tumbled 17.3% year over year but beat our estimate of $950.9 million. Adjusted EBITDA margin deteriorated 142 basis points (bps) year over year to 37.8%.
Segmental Update
Revenues from the Banking Solutions unit totaled $1.72 billion, which grew 2% year over year in the first quarter. The metric outpaced the Zacks Consensus Estimate of $1.71 billion and our estimate of $1.69 billion. The segment’s results were aided by higher recurring revenues, partially offset increased license and termination fee revenues in the prior-year quarter. Adjusted EBITDA margin deteriorated 379 bps year over year to 40.1%.
The Capital Market Solutions segment’s revenues advanced 8% year over year to $764 million, higher than the consensus mark of $756.4 million and our estimate of $755.4 million. Strong recurring and non-recurring revenue growth benefited the metric. Adjusted EBITDA margin of 48.3% improved 90 bps year over year on the back of improved operating leverage and high-margin license revenues.
The Corporate and Other segment recorded revenues of $50 million in the quarter under review, which dropped 36% year over year. The metric beat the Zacks Consensus Estimate of $49.6 million and matched our estimate. Adjusted EBITDA loss was $99 million.
Financial Update (As of March 31, 2025)
Fidelity National exited the first quarter with cash and cash equivalents of $805 million, which declined 3.5% from the 2024-end level. Total assets of $32.8 billion decreased 2.8% from the figure at 2024-end.
Long-term debt, excluding current portion, amounted to $8.7 billion. The figure dropped 10.6% from the figure as of Dec. 31, 2024. The current portion of long-term debt totaled $2.3 billion. Short-term borrowings amounted to $1.1 billion at the first-quarter end.
Total equity of $15.1 billion dropped 4% from the 2024-end level.
Fidelity National generated net cash from operations of $457 million in the first quarter, which more than doubled year over year. Adjusted free cash flows of $368 million increased nearly four-fold year over year.
Share Repurchase & Dividend Update
Fidelity National rewarded $670 million to its shareholders to the tune of share buybacks worth $450 million and dividends of $220 million in the first quarter.
Management reaffirmed its target of conducting share buybacks of around $1.2 billion in 2025. It intends to maintain quarterly dividend payments such that dividend per share growth stays in line with the growth in adjusted EPS.
2Q25 View
Management forecasts revenues to be between $2.560 billion and $2.585 billion. Adjusted EBITDA is projected to be in the range of $1.020-$1.035 billion. Adjusted EPS is estimated to be between $1.34 and $1.38. Adjusted EBITDA margin is projected within 39.8-40%.
2025 Guidance Reaffirmed
Revenues are expected to be within $10.435-$10.495 billion for 2025. Adjusted revenues are estimated to witness year-over-year growth of 4.6-5.2%. The Banking Solutions and Capital Market Solutions units are estimated to record year-over-year increases of 3.7-4.4% and 6.5-7%, respectively.
Adjusted EBITDA is projected to be between $4.305 billion and $4.335 billion in 2025, the mid-point of which implies 4.4% growth from the 2024 figure. Adjusted EBITDA margin is anticipated to be around 41.3%.
Adjusted EPS is expected to be between $5.70 and $5.80, the mid-point of which suggests 10.2% growth from the 2024 figure.
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.
Other Business Services Sector Releases
Of the other Business Services sector industry players that have reported March-quarter results so far, the bottom-line results of Mastercard Incorporated MA, The Western Union Company WU and Visa Inc. V beat the respective Zacks Consensus Estimate.
Mastercard reported first-quarter 2025 adjusted earnings of $3.73 per share, which surpassed the Zacks Consensus Estimate by 4.5%. The bottom line improved 13% year over year. Net revenues of the leading technology company in the global payments industry advanced 14% year over year to $7.3 billion. The top line beat the consensus mark by 1.8%. Gross dollar volume (representing the aggregated dollar amount of purchases made and cash disbursements obtained from Mastercard-branded cards) increased 9% on a local-currency basis to $2.4 trillion.
Cross-border volumes (a key measure that tracks spending on cards beyond the issuing country) rose 15% on a local currency basis. Switched transactions, which indicate the number of times a company’s products have been used to facilitate transactions, improved 9% year over year to 40.1 billion. Value-added services and solutions’ net revenues of $2.8 billion advanced 16% year over year. Mastercard’s clients issued 3.5 billion Mastercard and Maestro-branded cards as of March 31, 2025.
Western Union’s first-quarter 2025 adjusted EPS of 41 cents beat the Zacks Consensus Estimate by 2.5%. However, the bottom line declined 8.9% year over year. Total revenues were $983.6 million, which fell 6% on a reported basis. Additionally, the top line missed the Zacks Consensus Estimate by 0.8%. The adjusted operating margin decreased 100 bps year over year to 19% due to a fall in contributions from Iraq.
Operating income of $177.4 million declined 8% year over year and lagged our estimate of $185.2 million. The Consumer Money Transfer segment’s revenues fell 9% to $872.9 million. Operating income was $159.3 million, which fell 15% year over year and also missed the consensus estimate. Transactions within the CMT segment grew 3% year over year. Branded Digital revenues, which accounted for 28% of CMT’s first-quarter revenues, improved 7% on a reported basis and 8% on an adjusted basis.
Visa reported second-quarter fiscal 2025 EPS of $2.76, which outpaced the Zacks Consensus Estimate of $2.68 by 3%. The bottom line increased 10% year over year. Net revenues of $9.6 billion improved 9.3% year over year. The top line beat the consensus mark by 0.3%. Visa's payments volume increased 8% year over year on a constant-dollar basis in the fiscal second quarter. Processed transactions (implying transactions processed by Visa) grew 9% year over year to 60.7 billion.
On a constant-dollar basis, the cross-border volume of Visa rose 13% year over year. Excluding transactions within Europe, its cross-border volume (that boosts a company’s international transaction revenues) also jumped 13% year over year on a constant-dollar basis. Service revenues (depending on the payment volume in the previous quarter) increased 9% year over year to $4.4 billion in the March quarter. Data processing revenues of $4.7 billion grew 10.4% year over year.
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