Fidelity National Q3 Earnings Beat Estimates, Ignites $500M Buyback Countdown For Q4

Fidelity National Information Services FIS reported third-quarter (Q3) revenue of $2.489 billion, which increased 3% on a GAAP basis and 4% on an organic basis.

Q3 adjusted EPS of $1.65 beat the street view of $1.58.

The company presented the operating results of the Worldpay Merchant Solutions business as discontinued operations.

The pending Worldpay transaction is on track for an expected close date in Q1 2024.

Banking Solutions Q3 revenue increased by 3% on a GAAP basis and 3% on an organic basis as compared to the prior-year period to $1.8 billion.

Capital Market Solutions Q3 revenue increased by 7% on a GAAP basis and 6% on an organic basis as compared to the prior-year period to $677 million.

Corporate and Other revenue in Q3 decreased by 29% as compared to the prior-year period to $56 million.

Q3 continuing operations adjusted EBITDA margin expanded 70 basis points (bps) to 43.0%.

Adjusted net earnings for continuing operations were approximately $560 million. 

However, including discontinued operations, adjusted net earnings were approximately $982 million.

As of Sept. 30, debt outstanding totaled $18.7 billion. The company exited the quarter with cash and equivalents worth $466 million.

Guidance: The company expects FY23 revenue in the range of $9.81 billion to $9.84 billion (excluding the impact from discontinued operations). From a total company perspective prior to reflecting this change, the company has raised its revenue outlook in the range of $14.60 billion-$14.65 billion (Prior View: $14.50 billion-$14.631 billion). The street view stands at $14.63 billion.

FIS announced plans to repurchase approximately $500 million of shares in Q4 as part of a broader goal to repurchase at least $3.5 billion of shares by year-end 2024.

Price Action: FIS shares are trading lower by 2.26% to $50.56 on the last check Tuesday.