Ahead of Investor Day, FIS Sees Steady Growth in Banking

We’ll know more detail when Fidelity National Information Systems (FIS) holds its investor day on Tuesday (May 7).

But ahead of that event, the company’s first quarter earnings, and management commentary, took note of growth in key banking and capital markets solutions. 

During the Monday (May 6) conference call, sans Q+A, CEO Stephanie Ferris said that the company was “experiencing solid new sales momentum” and stated that “momentum is building across our new sales pipeline, as our solutions continue to resonate with clients.”

CFO James Kehoe said on the call that adjusted revenue growth was up 3% to $2.5 billion, “in line with our expectations, and recurring revenue growth was a steady 5%.”

The banking segment’s  adjusted revenue growth was “at the high end of our outlook range,” to $2.4 billion, the CFO said, and accelerated to 2% in the quarter compared to flat in the fourth quarter of 2323.  “Banking recurring revenue grew a healthy 4%,” he said.

Capital markets recurring revenue grew by a strong 9% in the quarter, Kehoe said. 

Looking ahead through fiscal year 2024, the company expects the banking segment to grow between 3 to 3.5% and the anticipated capital markets revenue growth should be 6.5 to 7%. In the current, second quarter, the CFO said, banking solutions revenues should grow by 2% to 2.5% and capital markets-related growth should be in the range of 7% to 8%.

“We expect banking revenue growth to accelerate over the course of the year, reflecting easier year over year revenue comparisons and the favorable impact from stronger new sales over the second half of 2023,” Kehoe said.

The first quarter results, with its somewhat truncated earnings call, came on the heels of fourth quarter results that marked further positive movement from the capital markets segment, which recorded 1% revenue growth and notched 7% recurring revenues. For the full year, banking solutions revenues were up 2%, and capital markets revenues gained 5%. The company has retained a minority stake in Worldpay Merchant Solutions, having sold 55% of its holdings to private equity firm GTCR.  

Ferris had said during the fourth quarter results that “the strategic go-to-market partnership we established with Worldpay through our commercial agreements preserves the key value positions for clients of both companies.”

The CEO noted that for enterprise core platforms, the company is seeing increased demand from regional community banks for bundled offerings of core digital payments functionality.

“These banks have all deployed solutions from our digital suite, which offers deeper personalization capabilities in support of their deposit growth, product cross-sell and customer experience improvement objectives,” Ferris said at the time.

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