Fidelity National Information Services NYSE: FIS reported a stronger-than-expected first quarter for 2026, with management pointing to broad financial outperformance, improving margins and accelerating sales momentum across its banking and capital markets businesses.
Chief Executive Officer and President Stephanie Ferris said on the company’s earnings call that 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.” She said revenue was ahead of expectations, margins expanded and free cash flow more than doubled from the prior year.
FIS reported 6.5% pro forma revenue growth in the quarter. Adjusted EBITDA margin was 39.6%, up 87 basis points year over year, while adjusted earnings per share rose 12.4% to $1.36. Free cash flow increased 111% to $474 million.
Sales Momentum Builds Across Key Verticals
Ferris highlighted recurring annual contract value, or ACV, as one of the quarter’s most important indicators. Recurring ACV increased 24% year over year, with Banking recurring ACV up 13% and Capital Markets recurring ACV up 45%.
FIS also saw strong demand in several growth areas. Ferris said Money Movement Hub ACV tripled, lending ACV rose 63% and digital ACV increased 25%. She described ACV as “a leading indicator of our future revenue” and said the company’s commercial momentum should translate into “durable, predictable revenue growth and margin expansion in the quarters ahead.”
Chief Financial Officer James Kehoe said the company’s first-quarter performance exceeded its outlook across all metrics. He said adjusted EBITDA grew 9.4% on a pro forma basis, with margin gains driven by favorable mix and continued cost optimization. FIS ended the quarter with total debt of $21 billion and a leverage ratio of 3.6x. The company returned $260 million to shareholders, primarily through dividends.
Banking Solutions Leads Segment Growth
Banking Solutions delivered pro forma revenue growth of 7.7%, with banking revenue up 10% and payments revenue up 5.9%. Recurring revenue grew 5.2% and represented 85% of segment revenue. Non-recurring revenue rose 58%, which Kehoe attributed to strong license activity tied to new distribution agreements with two technology partners.
Banking Solutions EBITDA increased 15% on a pro forma basis, and margins expanded 240 basis points. Kehoe said the gains reflected favorable mix and cost savings.
Capital Markets revenue rose 2.9%, above the high end of FIS’s outlook, aided by a 125 basis point timing benefit from a license sale that closed earlier than expected. Kehoe said that excluding the timing benefit, revenue was broadly in line with expectations. Recurring revenue increased 3.6%, but was affected by softness in lending tied to macro volatility.
Ferris said during the question-and-answer session that the lending pressure was concentrated in loan syndication and related to lower debt issuance activity. Kehoe said the issue was not product-related, noting that recurring ACV in lending was up about 60% in both the fourth quarter and first quarter.
Anthropic Agreement Highlights AI Strategy
A central focus of the call was FIS’s recently announced agreement with Anthropic. Ferris described the arrangement as “first of its kind in financial services” and said it would support the development of AI agents for regulated banking use cases.
The first planned agent will focus on financial crimes investigations. Ferris said the agent will combine Anthropic’s frontier AI capabilities with FIS’s scale, data and regulatory expertise. BMO and Amalgamated Bank are design partners for the first agent, which Ferris said is intended to automate evidence gathering and analysis and reduce investigation time “from days to minutes.”
Ferris emphasized that FIS will own the agent, the intellectual property and the client distribution, while Anthropic provides the underlying large language model and is paid based on token usage. She said the agents are expected to reach the market in the second half of 2026, but no revenue contribution from the Anthropic engagement is included in FIS’s 2026 outlook. Revenue is expected to “really take shape” in 2027, she said.
Ferris said the collaboration reflects FIS’s broader “orchestrated intelligence” approach, which she described as connecting AI models with system-of-record data, compliance infrastructure and banking workflows. She said future agents could address credit decisioning, deposit retention, customer onboarding and fraud prevention.
Digital Assets and Project Keystone
FIS also discussed Project Keystone, a tokenized deposit bank-owned network that includes five U.S. banks. Ferris said the initiative uses FIS’s digital asset platform, Lyriq, and is designed to help banks participate in digital asset capabilities in a regulated and compliant way.
In response to an analyst question, Ferris said banks are interested in stablecoin-related capabilities but are looking for practical use cases. She described tokenized deposits as a starting point that “makes a ton of sense” for banks and said demand following the announcement had been strong.
Ferris also said FIS is not seeking to compete with its bank customers by issuing its own stablecoin. Instead, she framed Project Keystone as an enablement strategy, saying FIS can provide the digital asset platform and help build tokenized deposit capabilities.
Outlook Reiterated
FIS reiterated its full-year outlook across key metrics. The company continues to expect pro forma revenue growth of 5.1% to 5.7%, including 5% to 5.5% growth in Banking and 5.5% to 6.5% growth in Capital Markets. Kehoe said Banking, which now accounts for 75% of total revenue, is tracking closer to the upper end of its full-year range, while Capital Markets is tracking closer to the lower end due to a more conservative view of lending activity.
The company continues to expect pro forma margin expansion of 95 to 110 basis points and adjusted EPS growth of 8% to 10%. FIS also reaffirmed its full-year free cash flow target of $2.1 billion and said it remains confident in reaching more than $3 billion in free cash flow by 2028.
For the second quarter, FIS expects pro forma revenue growth of 4.9% to 5.5%, with Banking projected to grow 5.5% to 6% and Capital Markets expected to grow 3% to 4%. Adjusted EPS is expected to rise 7% to 10%.
Ferris said banking industry fundamentals remain strong, with healthy liquidity and capital levels among clients. She said technology budgets appear strong, particularly in digital banking, payments, money movement, digital currency and AI. She also said bank merger-and-acquisition activity remains a tailwind for the industry and for FIS.
About Fidelity National Information Services NYSE: FIS
Fidelity National Information Services NYSE: FIS is a global provider of financial technology solutions and services for banks, capital markets firms, merchants and corporations. The company develops and delivers software, processing, and outsourcing services that support core banking, payments and merchant acquiring, wealth and retirement platforms, risk and compliance, and trading and capital markets operations. Its offerings include cloud-based and on-premises core banking systems, card processing and gateway services, e-commerce and point-of-sale payment solutions, and a range of back-office and advisory services designed to automate and modernize financial operations.
FIS serves a broad international client base across North America, Europe, Latin America, and the Asia-Pacific region through a combination of direct clients and partner channels.
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