Fidelity National Information Services (NYSE:FIS) reported a stronger-than-expected first quarter for 2026, with 6.5% pro forma revenue growth and a free cash flow that more than doubled, signaling that its strategic pivot to core banking and capital markets is delivering results.
"The quarter was strong not just in terms of our financial performance, but in terms of what the performance signals about the trajectory of our business,” Chief Executive Officer Stephanie Ferris said on the company’s earnings call. She said the results show the company’s commercial momentum should translate into “durable, predictable revenue growth and margin expansion in the quarters ahead.”
The financial technology giant posted adjusted earnings per share of $1.36, a 12.4% year-over-year increase, while free cash flow surged 111% to $474 million. Adjusted EBITDA margin expanded 87 basis points to 39.6%, driven by a favorable revenue mix and cost optimization efforts. The results reflect the first full quarter after FIS completed the acquisition of the Issuer Solutions business from Global Payments and the sale of its remaining stake in Worldpay.
The strong performance underscores a successful strategic reset for FIS, which is now more tightly focused on its core financial institution clients. The accelerating sales and improving cash flow suggest the company is gaining traction in high-growth areas like digital banking and money movement, while new ventures in artificial intelligence and digital assets position it for future growth.
Sales Momentum Builds
A key indicator of future performance, recurring annual contract value (ACV), increased 24% year over year. The growth was broad-based, with Banking recurring ACV up 13% and Capital Markets recurring ACV climbing 45%.
The Banking Solutions segment was the standout performer, delivering pro forma revenue growth of 7.7%. The division saw strong demand for its Money Movement Hub, where ACV tripled, as well as for its lending and digital solutions, where ACV rose 63% and 25%, respectively. Capital Markets revenue grew 2.9%, a figure that was aided by the early closing of a license sale but pressured by softer activity in the loan syndication market.
AI and Digital Assets Take Center Stage
Management dedicated significant time on the call to new growth initiatives, particularly a new agreement with AI firm Anthropic. Ferris described the deal as the first of its kind in financial services, aimed at building AI agents for regulated banking use cases. The first agent will target financial crimes investigations, with BMO and Amalgamated Bank signed on as design partners.
Ferris clarified that FIS will own the intellectual property and client distribution, with Anthropic providing the underlying large language model. The agents are expected to launch in the second half of 2026, with meaningful revenue contributions anticipated in 2027.
The company also provided an update on Project Keystone, its tokenized deposit network that includes five U.S. banks. The project uses FIS's digital asset platform and is designed to help banks explore stablecoin-related capabilities within a regulated framework.
Outlook and Financial Position
FIS reiterated its full-year outlook, which calls for pro forma revenue growth of 5.1% to 5.7% and adjusted EPS growth of 8% to 10%. The company continues to target $2.1 billion in free cash flow for 2026.
The company ended the quarter with total debt of $21 billion and a leverage ratio of 3.6x. It returned $260 million to shareholders during the quarter, primarily through dividends.
This article is for informational purposes only and does not constitute investment advice.
