Fidelity National Information Services Reports 3% Revenue Growth, Notable Profitability Recovery in Q3 2024

Fidelity National Information Services, Inc. (FIS) reported its financial results for the third quarter and nine months ended September 30, 2024, showcasing a notable recovery in profitability and revenue growth compared to the previous fiscal period. Total revenue for the third quarter reached $2,570 million, a 3% increase from $2,492 million in the same period of 2023. For the nine months, revenue rose to $7,528 million, up from $7,318 million, reflecting a similar 3% growth.

The company's gross profit for the third quarter was $977 million, slightly higher than $961 million in the prior year, while operating income improved to $490 million from $470 million. However, net earnings from continuing operations were $247 million, down from $249 million in the previous year. Notably, FIS reported net earnings of $225 million for the third quarter of 2024, a significant turnaround from a net loss of $459 million in the same quarter of 2023.

FIS's financial position showed a decrease in total assets, which fell to $34,347 million from $54,973 million at the end of 2023, primarily due to the sale of its Worldpay Merchant Solutions business. The sale, completed on January 31, 2024, generated over $12 billion in net cash proceeds, which FIS utilized to reduce debt and fund operations. As of September 30, 2024, total long-term debt decreased to $10,808 million from $14,318 million at the end of 2023.

The company’s strategic focus has shifted following the Worldpay sale, with FIS now reporting based on three segments: Banking Solutions, Capital Market Solutions, and Corporate and Other. The Banking Solutions segment generated $730 million in revenue for the third quarter, up from $677 million, while Capital Market Solutions saw an 8% increase to $1,779 million. The Corporate and Other segment, however, experienced a decline in revenue, dropping to $61 million from $83 million.

FIS also reported a tax benefit of $991 million related to the Worldpay sale, primarily from the release of U.S. deferred tax liabilities not transferred in the transaction. The company continues to invest in technology and innovation, particularly through its Digital One platform aimed at enhancing integrated banking experiences.

In terms of operational efficiency, FIS's cash flow from operations for the nine months ended September 30, 2024, was $1,393 million, an increase from $1,301 million in the same period of 2023. The company has also initiated a share repurchase program, authorizing the repurchase of up to $3 billion in shares, with approximately 13 million shares remaining available under the previous program.

Overall, FIS's financial results reflect a strategic pivot post-Worldpay sale, with a focus on enhancing profitability and operational efficiency amid challenging market conditions.