Latest quarter
FIS reported Q2 FY2026 revenue of $3.4 billion, up 29.1% from Q2 FY2025. The company’s revenue was $3.4 billion as the consensus counts it, versus consensus revenue of $3.4 billion, and was 0.23% below the consensus. FIS reported adjusted EPS of $1.48 as the consensus counts it, compared with consensus adjusted EPS of $1.47, or 0.68% above the consensus.
The filing says revenue increased primarily because the Issuer Solutions Business, acquired on January 9, 2026, generated revenue during the period. Banking revenue increased 44%, principally due to that acquisition; excluding it, the filing says Banking revenue grew 6%, driven by recurring revenue and software-license revenue. Capital Markets revenue increased 3%, led by recurring revenue, while Corporate and Other revenue decreased 26% because certain non-strategic businesses ran off.
FIS reported gross margin of 34.8%, down 1.6 percentage points, and operating margin of 15.0%, down 0.6 percentage points. The filing attributes the gross-margin change to the dilutive effect of Issuer Solutions, including acquired-intangible amortization. FIS reported free cash flow of $238.0 million, up 45.1% from Q2 FY2025.
| Q2 FY2026 | Q2 FY2025 | Change | |
|---|---|---|---|
| Revenue | $3.4 billion | $2.6 billion | 29.1% |
| Diluted EPS | $0.45 | −$0.90 | — |
| Gross margin | 34.8% | 36.4% | −1.6 percentage points |
| Operating margin | 15.0% | 15.6% | −0.6 percentage points |
| Free cash flow | $238.0 million | $164.0 million | 45.1% |
| Against the consensus | Reported | Consensus | Result |
|---|---|---|---|
| Adjusted EPS | $1.48 | $1.47 | Beat by 0.68% |
| Revenue | $3.4 billion | $3.4 billion | In line |
Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.
What management said on the call
Chief Executive Officer Stephanie Ferris said Banking grew at the high end of FIS’s outlook, supported by Banking and Payments, while Capital Markets grew at the low end of its outlook. Chief Financial Officer James Kehoe said Banking’s adjusted EBITDA margin expansion reflected favorable product mix, cost savings and integration synergies.
Ferris said Banking demand remained strong across payments, fraud and data, lending, modernization and cyber capabilities, and that FIS was not seeing banks delay decisions in the areas where it operates. The filing says FIS has faced vendor cost increases that market conditions limit it from fully offsetting through pricing actions; in Capital Markets, the filing says favorable pricing contributed to recurring-revenue growth.
Ferris said the Total Issuing Solutions acquisition was producing client wins, renewals and cross-selling across the FIS ecosystem. When asked about competition in issuing, she said FIS’s win rate for opportunities involving U.S. banks with 1 million accounts or more exceeded 85%, and said management did not provide a Payments outlook. Kehoe said Total Issuing was tracking near the high end of its $30 million to $40 million 2026 cost-savings target.
Management said FIS had 10 AI products in market, 200 customers live on those products and more than 500 opportunities in its pipeline. Ferris said engineering teams were seeing 1.5 to 2x throughput and 30% fewer defects, while servicing programs had reduced manual tickets and triage time. She said FIS expected AI to support productivity, client experience and product delivery.
Analysts asked about the reduced Capital Markets outlook. Ferris said the professional-services miss was operational rather than market-driven, while Kehoe said sales were behind plan and the conversion of backlog was slower than targeted. Ferris said FIS was evaluating strategic alternatives for select Capital Markets products that may not fit its strategic profile. Kehoe said FIS projected Q3 FY2026 pro forma revenue growth of 2.9% to 3.7%, including Banking growth of 3.0% to 4.0% and Capital Markets growth of 2.5% to 3.0%.
Guidance
FIS reduced its FY2026 adjusted revenue-growth outlook to 4.5% to 5.0% from 5.1% to 5.7% previously. Kehoe said the company reduced its FY2026 Capital Markets revenue-growth outlook to 3.0% to 3.5% from 5.5% previously. FIS reduced its FY2026 EBITDA-margin-expansion outlook to 85 to 105 basis points from 95 to 110 basis points. The company raised its FY2026 free-cash-flow outlook by $100 million to $2.15 billion to $2.25 billion.
| Metric | For | Guide | Previous guide | Change |
|---|---|---|---|---|
| EPS, non-GAAP | FY2026 | $6.15–$6.24 | — | — |
| EPS, non-GAAP | Q3 FY2026 | $1.58–$1.62 | — | — |
| Free cash flow | FY2026 | $2.2 billion–$2.3 billion | — | New |
| EBITDA, Total Issuing Solutions | FY2028 | $150.0 million | — | New |
| EPS growth | Q3 FY2026 | $0.05–$0.07 | — | New |
| Revenue growth, Capital Markets | Q3 FY2026 | 2.50%–3.00% | — | New |
| Revenue growth, Banking | Q3 FY2026 | 3.00%–4.00% | — | New |
| Revenue growth | Q3 FY2026 | 2.90%–3.70% | — | New |
| Free cash flow | FY2028 | $3.0 billion | — | New |
| EPS growth | FY2026 | $0.07–$0.09 | — | New |
| Revenue growth, Capital Markets | FY2026 | 3.00%–3.50% | — | New |
| Revenue growth | FY2026 | 4.50%–5.00% | — | New |