Fidelity National Information Services (NYSE: FIS) reported second-quarter 2026 revenue of $3.377 billion, up 29% from $2.616 billion a year earlier, while GAAP diluted EPS was $0.45 versus a loss of $0.90. Adjusted EBITDA rose 35% and free cash flow increased 220%, with Total Issuing Solutions, favorable revenue mix, and cost savings supporting margin expansion; however, pro forma growth was considerably lower than reported growth.
Core financial results
FIS’s reported revenue increase reflected a larger business perimeter following the Total Issuing Solutions acquisition. Operating segment revenue increased 31% on an adjusted basis, while pro forma combined revenue—which assumes the acquired business was included in both periods—grew 5.3%. Pro forma recurring revenue increased 5.1%.
Adjusted profitability grew faster than revenue on a comparable basis. Adjusted EBITDA margin expanded 193 basis points as reported and 113 basis points on a pro forma basis. The company attributed the improvement to the acquired business’s higher margin, favorable mix, and cost savings.
| Metric | Q2 2026 | Q2 2025 | Year-over-year change |
|---|---|---|---|
| Revenue | $3,377 million | $2,616 million | +29% |
| Gross profit | $1,174 million | $952 million | Approx. +23% |
| Operating income | $507 million | $408 million | Approx. +24% |
| Net earnings attributable to FIS | $231 million | $(470) million | Turned positive |
| GAAP diluted EPS | $0.45 | $(0.90) | Turned positive |
| Adjusted EBITDA / margin | $1,409 million / 41.7% | $1,041 million / 39.8% | +35% / +193 bps |
| Adjusted net earnings | $763 million | $716 million | +6.6% |
| Adjusted EPS | $1.48 | $1.36 | +8.8% |
| Free cash flow | $525 million | $164 million | +220% |
The improvement in GAAP net earnings was not solely an operating change. The prior-year quarter included a $598 million after-tax equity-method investment loss, compared with no such loss in Q2 2026.
Business and segment performance
Banking Solutions was the primary source of reported growth. Revenue increased 44% to $2.483 billion, but pro forma growth was 6.1%, including 5.0% recurring revenue growth. Adjusted EBITDA rose 50% to approximately $1.1 billion, and margin expanded 179 basis points to 45.8%, reflecting Total Issuing Solutions, favorable mix, and continued cost management.
Capital Market Solutions revenue increased 3.5% on a reported basis and 3.2% on an adjusted basis to $810 million. Recurring revenue grew 5.3%, but adjusted EBITDA increased only 2.8% to $420 million. Margin contracted 32 basis points to 51.9% because of higher labor costs and the timing of certain customer-related expenses.
Corporate and Other revenue fell 26% to $84 million, primarily because of declining non-strategic businesses. The unit recorded a $147 million adjusted EBITDA loss, including $148 million of corporate expenses.
Profitability, cash flow, and the balance sheet
Although operating income increased, net interest expense rose to $200 million from $110 million, partially offsetting the operating improvement. FIS generated $493 million of operating cash flow and reported $525 million of non-GAAP free cash flow, up from $164 million.
The company returned $270 million to shareholders during the quarter, consisting of $42 million of share repurchases and $228 million of dividends. Debt outstanding totaled $21.2 billion as of June 30, 2026.
Total Issuing Solutions lifts scale but increases the focus on deleveraging
The acquisition explains both the large gap between reported and pro forma growth and part of the adjusted margin expansion. Management said Total Issuing Solutions was performing ahead of plan, but the pro forma figures remain the more comparable measure of the combined company’s underlying growth.
The transaction also changed near-term capital allocation. FIS has temporarily curtailed share repurchases and paused tuck-in acquisitions to accelerate debt reduction. It expects to resume meaningful repurchases after reaching its target gross leverage of approximately 2.8 times.
Earnings guidance
FIS updated its full-year outlook in two directions. It projected adjusted revenue growth of 29% to 30%, adjusted EBITDA growth of 32% to 34%, and adjusted EPS growth of 7.0% to 8.5%. At the same time, it lowered its pro forma revenue and adjusted EBITDA growth ranges while raising its free cash flow target by $100 million.
| Metric | Latest guidance | Previous guidance | Change |
|---|---|---|---|
| Q3 2026 revenue | $3.415-$3.445 billion | Not provided | New quarterly outlook |
| Q3 2026 adjusted EBITDA | $1.460-$1.480 billion | Not provided | New quarterly outlook |
| Q3 2026 adjusted EPS | $1.58-$1.62 | Not provided | New quarterly outlook |
| FY2026 revenue | $13.630-$13.695 billion | Not provided | Updated |
| FY2026 adjusted EBITDA | $5.730-$5.785 billion | Not provided | Updated |
| FY2026 adjusted EPS | $6.15-$6.24 | Not provided | Updated |
| FY2026 pro forma revenue growth | 4.5%-5.0% | 5.1%-5.7% | Lowered |
| FY2026 pro forma adjusted EBITDA growth | 5.9%-6.9% | 7.2%-8.4% | Lowered |
| FY2026 free cash flow | $2.15-$2.25 billion | Approx. $2.05-$2.15 billion | Raised by $100 million |
The free cash flow outlook excludes cash transaction taxes related to the Worldpay sale. FIS does not provide forward-looking GAAP reconciliations for these non-GAAP measures when the required adjustments cannot be estimated without unreasonable effort.
Management perspective
CEO and President Stephanie Ferris said banks are investing in modernization and artificial intelligence and are selecting FIS as a technology partner. Management also emphasized recurring growth, margin expansion, faster cash generation, and progress integrating Total Issuing Solutions, though it did not quantify the revenue contribution from AI-related demand.
Risks investors need to monitor
- Lower comparable-growth guidance: The reduced pro forma revenue and EBITDA growth ranges indicate a slower expected trajectory for the combined business than previously projected.
- Acquisition integration and leverage: Total Issuing Solutions is supporting revenue and margins, but FIS must sustain the expected benefits while reducing $21.2 billion of debt. Deleveraging has temporarily limited buybacks and tuck-in M&A.
- Capital Market Solutions costs: Higher labor costs and customer-expense timing already reduced the segment’s margin despite recurring revenue growth.
- Non-strategic business contraction: The 26% decline in Corporate and Other revenue remains a drag on consolidated results.
Summary
FIS’s Q2 2026 results combined acquisition-driven scale with improved adjusted margins and cash generation. Total Issuing Solutions strengthened Banking Solutions and contributed to the sharp reported growth, while pro forma results showed a more moderate underlying pace. The main issues to monitor are the lowered pro forma outlook, acquisition integration, debt reduction, and whether Capital Market Solutions can contain its cost pressure.
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