FIS revenue jumps 27% but pro forma growth is much slower (NYSE: FIS)

What happened

Fidelity National Information Services, Inc. (NYSE: FIS) reported third-quarter revenue up 27% to $3.5 billion, but pro forma growth was only 3.7%.

Pro forma figures treat the purchase of the issuer processing business, now called FIS Total Issuing Solutions, as if it had closed on Jan. 1, 2025. The gap between the two rates comes from the acquisition. The pro forma rate is the closer read on underlying growth.

Adjusted revenue, which removes currency effects and the Corporate and Other segment, rose 29%. CEO Stephanie Ferris said the company's investments in security and innovation "will build a more recurring, predictable revenue base for FIS."

Key numbers

Metric	Latest	Change	Source
GAAP revenue, Q3 2026	$3.5 billion	from $2.72 billion, +27%	SEC 8-K Exhibit 99.1
Pro forma revenue growth	3.7%		SEC 8-K Exhibit 99.1
Adjusted EPS	$1.61	from $1.51, +6.6%	SEC 8-K Exhibit 99.1
Adjusted EBITDA margin	42.9%	from 41.8%, +111 basis points	SEC 8-K Exhibit 99.1
Free cash flow excluding cash taxes on dispositions	$862 million	from $798 million, +8.0%	SEC 8-K Exhibit 99.1
Debt outstanding, Sept. 30, 2026	$20.8 billion		SEC 8-K Exhibit 99.1

Read more: Fidelity National Information Services (FIS) company research

Where the growth came from

Banking Solutions revenue rose 41% to $2.5 billion. Pro forma growth in the segment was 3.9%, with recurring revenue up 2.4%. Capital Market Solutions revenue grew 3% to $823 million, with recurring growth of 3.0%.

Across the company, pro forma recurring revenue grew 2.5%. Corporate and Other revenue fell 22% to $83 million, which the release blames mainly on the decline of non-strategic businesses.

Adjusted EBITDA rose 31% to about $1.5 billion. Its margin widened to 42.9% from 41.8% a year earlier. The release credits the high-margin Total Issuing Solutions business, favorable mix and cost savings. On a pro forma basis, EBITDA grew 5.2% and margin widened 94 basis points, on mix and cost savings.

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Earnings, cash and debt

Adjusted EPS rose 6.6% to $1.61, far behind the EBITDA gain. GAAP diluted EPS was $0.69 against $0.50 a year earlier. Net interest expense was $199 million, up from $90 million. Last year's $789 million of adjusted net earnings included $135 million from the equity method investment, the release's reconciliation shows.

Net cash from operating activities was $976 million, below $1.01 billion a year earlier. Free cash flow excluding cash taxes on dispositions rose 8.0% to $862 million from $798 million. After $167 million of cash taxes on the Worldpay sale, free cash flow was $695 million.

Debt outstanding totaled $20.8 billion on Sept. 30. Long-term debt excluding the current portion was $15.13 billion, against $9.07 billion at Dec. 31, 2025.

FIS returned $248 million to shareholders in the quarter, $227 million in dividends and $21 million in buybacks. It has curtailed repurchases and paused tuck-in acquisitions to pay down debt faster. It expects to resume meaningful buybacks at target gross leverage of approximately 2.8x. On Oct. 20 it sold a non-core prepaid business in Banking Solutions for gross proceeds of over $100 million.

The full-year outlook

FIS updated its 2026 outlook to adjusted revenue growth of 28% to 29% and adjusted EBITDA growth of 29% to 30%. Adjusted EPS growth is projected at 1.2% to 2.4%, far below the revenue and EBITDA ranges.

On a pro forma basis, revenue is projected to grow 3.1% to 3.6% and adjusted EBITDA 2.9% to 3.6%. The free cash flow target of $2.15 billion to $2.25 billion, growth of 33% to 39%, was maintained.

Why it matters

OptimistFi has argued that FIS works if its banking and capital-markets processing relationships keep turning modernization demand into recurring revenue and cash, without the acquisition adding debt faster than growth. Recurring growth in both segments, wider margins and higher free cash flow support the first half of that view.

The debt figure tests the second half. Reported growth outran pro forma growth by a wide margin. Buybacks stay curtailed until leverage reaches its target. The free cash flow measure excludes Worldpay cash taxes. The release also lists the risk that FIS Total Issuing Solutions will not be integrated on schedule.

What's next

FIS hosts a live webcast of its earnings call at 8:30 a.m. EST on Nov. 4, with a replay on its investor relations site. Management's comments on the pace of deleveraging are the first check on the plan.

A restart of meaningful buybacks would signal the leverage target has been reached. Pro forma recurring revenue growth below this quarter's 2.5% would weaken the case.

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