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Fidelity National Information Services, Inc. (NYSE: FIS), a prominent player in the financial technology sector, has reported impressive results for the third quarter of 2024. The company achieved a 7% increase in GAAP Diluted EPS, reaching $0.45, while adjusted EPS saw a significant 49% rise to $1.40 compared to the prior-year period. This surge in earnings was accompanied by a 3% increase in GAAP revenue, totaling approximately $2.6 billion, with adjusted revenue growth slightly higher at 4%.
FIS’s performance was driven by the robust growth in its Banking Solutions and Capital Market Solutions segments. Banking Solutions revenue increased by 3% on both GAAP and adjusted bases, reaching $1.8 billion, with a notable 6% growth in adjusted recurring revenue.
Meanwhile, Capital Market Solutions revenue grew by 8% on a GAAP basis and 7% on an adjusted basis, totaling $730 million. The company’s strategic initiatives, including cost-saving measures and operating leverage, contributed to these positive outcomes.
The company also demonstrated strong shareholder returns, repurchasing $500 million worth of shares in the third quarter and $3.0 billion year-to-date in 2024. FIS continues to target a dividend payout ratio of 35% of adjusted net earnings, excluding equity method investment earnings. This commitment to shareholder value is reflected in the company’s overall financial strategy.
FIS Outperforms Expectations in the Third Quarter of 2024
FIS’s third-quarter performance exceeded market expectations, showcasing its ability to outperform in a challenging economic environment. The company reported an adjusted EPS of $1.40, surpassing the expected $1.29, and revenue of $2.6 billion, slightly above the anticipated $2.56 billion. These results highlight FIS’s strong execution against its strategic goals and its ability to adapt to market dynamics.
The company’s adjusted EBITDA remained stable at approximately $1.1 billion, with an adjusted EBITDA margin of 41.3%. Despite a contraction of 140 basis points in the margin due to increased corporate expenses, FIS managed to maintain its profitability. This resilience is attributed to the company’s focus on cost control and operational efficiency.
FIS’s strategic decision to sell a 55% stake in its Worldpay Merchant Solutions business earlier in the year has provided greater strategic flexibility and contributed to the company’s current success. The sale, completed on January 31, 2024, allowed FIS to focus on its core operations while retaining a 45% non-controlling interest in Worldpay Holdco, LLC. This move has positively impacted the company’s financial performance, as reflected in the current quarter’s results.
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FIS Raises Low End of Full Year Revenue and Adjusted EBITDA Outlook
Looking ahead, FIS has raised the low end of its full-year revenue and adjusted EBITDA outlook, reflecting its confidence in continued growth. The company now anticipates revenue in the range of $10.14 billion to $10.17 billion for the full year, with adjusted EBITDA expected to be between $4.125 billion and $4.140 billion. This upward revision underscores FIS’s strong market position and ability to capitalize on emerging opportunities.
FIS also increased its full-year adjusted EPS outlook by approximately 2%, projecting a range of $5.15 to $5.20. This guidance reflects the company’s positive momentum and the anticipated benefits from its strategic initiatives. The adjusted EPS outlook includes 11 months of equity method investment earnings contribution from Worldpay, further enhancing FIS’s financial outlook.
The company’s CEO, Stephanie Ferris, emphasized the strength of FIS’s partnerships and new business signings, which underpin the company’s strategy to unlock financial technology across the money lifecycle. This strategic focus positions FIS to continue delivering value to its shareholders and stakeholders in the coming quarters.
Disclaimer: The author does not hold or have a position in any securities discussed in the article.
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