James Woodall
Chief Financial Officer at Fidelity National Information Services
Thanks, Stephanie, and thank you all for joining us today. I will begin with our financial results on slide 13, then I'll touch on our balance sheet and cash flow before taking you through our guidance. We're very pleased with our 9% organic revenue performance and the strong results achieved across all of our operating segments. We maintained consistent margins year over year as we were able to successfully offset wage inflation and difficult comparisons, including last year's stimulus related revenue. This translated to 13% adjusted EPS growth, which is consistent with the high end of our full year guidance range.
Turning to our segments. Banking revenue grew 7% on an organic basis, primarily due to continued client demand. Adjusted EBITDA margins contracted 90 basis points to 42%. The Banking segment is where we experienced the majority of our margin headwind as it directly benefited from the Paycheck Protection Program or PPP revenue in the prior year and was impacted by higher labor costs. Merchant revenue grew 15% on an organic basis, reflecting strong results across all three subsegments, as Stephanie mentioned. Merchant adjusted EBITDA margin expanded 30 basis points to 47%, primarily due to high contribution margins on new revenue growth. Capital Markets revenue grew 6% on an organic basis, primarily due to continued strong new sales and the transition to SaaS, driving higher recurring revenue.
Capital Markets' adjusted EBITDA margin expanded 60 basis points to 47%, primarily due to its continued operating leverage. Turning to slide 14. We generated $786 million of free cash flow during the first quarter. Free cash flow increased by 41% year over year. We have invested heavily in innovation over the past five years, spending over $5 billion in capex over that time. We believe that this investment has peaked as a percentage of revenue and expect it to come down gradually over the next several years to approximately 6% to 7% of revenue. As a result, we expect free cash flow conversion to expand in subsequent quarters, and we remain on track to expand our free cash flow conversion towards 95% of adjusted net earnings for the full year.
We increased our quarterly dividend by 21% to $0.47 per share, and we returned a total of $287 million in dividends to shareholders this quarter. As a reminder, we plan to increase our dividend by approximately 20% per year in order to gradually grow our dividend payout ratio over the next several years to approximately 35% of adjusted net income. In addition, we reduced debt by $1.2 billion, including repayment and foreign exchange benefit, ending the first quarter at three times leverage, which was a full 90 days ahead of schedule. We expect to maintain our leverage below three times, and we'll resume share repurchase in the second quarter. At current valuation levels, we believe share repurchase is the best use of excess free cash flow. We expect to buy back approximately $3 billion in shares during 2022.
We also anticipate utilizing excess free cash flow in 2023 to buy back shares. At current course and speed, this will be approximately $6 billion in share repurchases during 2023. Combined, this represents approximately 15% of our current market cap. Turning to slide 15 to review our guidance. There is no change to our full year outlook. We achieved a strong start to the year and remain on track to deliver 7% to 9% organic revenue growth, 50 to 100 basis points of adjusted EBITDA margin expansion and 11% to 13% adjusted EPS growth for a range of $7.25 to $7.37 per share. The primary risk and opportunities to our forward guidance include the impact of foreign exchange rates, geopolitical risk and the pace of pandemic recovery. Combined with the upside we delivered in the first quarter, we believe that this supports maintaining our outlook for the full year. For the second quarter, we expect organic revenue growth of 6% to 7%, consistent with revenue of $3.65 billion to $3.685 billion.
We expect adjusted EBITDA margins of approximately 44%, resulting in adjusted EPS of $1.72 to $1.75 per share. Given the unusual puts and takes that are affecting organic growth rates for Banking and Merchant, I would like to provide you with some more color on our segment assumptions for the second quarter. In Banking, we currently expect organic revenue growth to be in the mid single digit range for the second quarter. This is primarily due to the difficult compares created by the termination fees and pandemic related revenue that we generated last year. We anticipate a similar growth profile of mid single digits for our Capital Markets segment in the second quarter.
For Merchant, we currently expect organic revenue growth of approximately 9% to 10% in the second quarter. This equates to strong sequential growth of approximately 15% for Merchant. In addition, we expect adjusted EBITDA margins to step up each quarter throughout the year. Lastly, we include assumptions for FX, corporate and other and several below the line items within the Opinion section of our earnings presentation. In conclusion, I would like to thank our colleagues for their continued efforts and perseverance through the pandemic. You continue to execute at a high level and generate strong financial results.
Operator, would you please open the line for questions?