FIS Q3 2026 Earnings: Total Issuing Acquisition Drives 27% Revenue Growth

FIS (NYSE: FIS) reported Q3 2026 revenue of $3.454 billion, up 27% from $2.717 billion, while GAAP diluted EPS was $0.69 versus $0.50 and adjusted EPS increased 6.6% to $1.61. The Total Issuing Solutions acquisition drove much of the headline expansion; pro forma revenue grew 3.7%, while adjusted EBITDA margin widened 111 basis points to 42.9% and free cash flow rose 8% to $862 million.

Core Financial Results

For the quarter ended September 30, 2026, GAAP operating income increased to $660 million from $457 million. Net earnings attributable to FIS were $356 million, compared with $264 million a year earlier.

Adjusted EBITDA grew faster than adjusted EPS. One factor limiting the conversion of operating growth into bottom-line earnings was net interest expense, which increased to $199 million from $90 million.

Adjusted EBITDA, adjusted EPS, and free cash flow are non-GAAP measures. FIS defines free cash flow as operating cash flow from continuing operations less capital expenditures, excluding cash transaction taxes on business dispositions, primarily the Worldpay sale.

Business and Segment Performance

Banking Solutions generated $2.548 billion of revenue, up 41% on both a reported and adjusted basis. The increase was largely acquisition-driven: pro forma revenue growth was 3.9%, including recurring revenue growth of 2.4%. Adjusted EBITDA rose 44% to approximately $1.2 billion, and the margin expanded 119 basis points to 47.4% as the acquired high-margin Total Issuing Solutions business, favorable mix, and cost management supported profitability.

Capital Market Solutions revenue increased 3% to $823 million, with recurring revenue also growing 3%. Adjusted EBITDA increased 6.5% to $444 million, while the margin widened 180 basis points to 54.0% because of favorable revenue mix and cost management.

Corporate and Other revenue fell 22% to $83 million, primarily because of declines in non-strategic businesses. The unit recorded an adjusted EBITDA loss of $169 million, including $163 million of corporate expenses.

Reported Growth Is Acquisition-Led, but Pro Forma Margins Also Improved

The difference between reported and pro forma results is the quarter’s central issue. Consolidated GAAP revenue grew 27%, and adjusted revenue increased 29%, but pro forma revenue—treating Total Issuing Solutions as if it had been owned since January 1, 2025—grew 3.7%. Recurring pro forma revenue increased 2.5%.

The same pattern appeared in profitability: adjusted EBITDA increased 31%, compared with pro forma adjusted EBITDA growth of 5.2%. Total Issuing Solutions therefore contributed substantially to FIS’s increased scale. However, the 94-basis-point expansion in pro forma adjusted EBITDA margin indicates that favorable mix and cost savings also improved the combined business’s underlying profitability.

Profitability, Cash Flow, and Balance Sheet

GAAP gross profit increased about 24%, slightly slower than revenue, resulting in an approximate gross margin of 37.0% versus 37.8% a year earlier. Selling, general, and administrative expenses increased by only about 7% to $627 million, substantially below revenue growth. This operating leverage helped lift the GAAP operating margin to approximately 19.1% from 16.8%.

Operating cash flow was $976 million, and free cash flow reached $862 million. FIS returned $248 million to shareholders during the quarter, consisting of $227 million in dividends and $21 million of share repurchases.

Debt totaled $20.8 billion at September 30. Following the Total Issuing Solutions transaction, FIS temporarily curtailed repurchases and paused tuck-in acquisitions to accelerate deleveraging. The company plans to resume meaningful buybacks after reaching its target gross leverage of approximately 2.8 times.

As part of its ongoing portfolio review, FIS sold a non-core prepaid business on October 20, after the quarter ended, generating more than $100 million in gross proceeds.

Full-Year 2026 Outlook

FIS updated its full-year outlook for revenue, adjusted EBITDA, adjusted EPS, and pro forma growth. It maintained its free cash flow target of $2.15 billion to $2.25 billion. The release did not provide the previous ranges for the updated earnings metrics, so the direction of those revisions cannot be determined from the supplied information.

The pro forma ranges provide a clearer view of expected growth after adjusting for the timing of the Total Issuing Solutions acquisition. The free cash flow outlook excludes cash transaction taxes on business dispositions, primarily the Worldpay sale.

Management’s View

CEO and President Stephanie Ferris said client demand remained strong. Management is directing investment toward security and innovation, with the objective of developing a more recurring and predictable revenue base and strengthening long-term client relationships.

FIS also continues to simplify its portfolio while prioritizing debt reduction. Near-term capital allocation will therefore emphasize dividends and deleveraging rather than significant share repurchases or tuck-in acquisitions.

Recent Insider Transactions

The itemized insider transaction records supplied for FIS list three purchases during 2026. These transactions are presented without inferring any view on the company’s valuation or outlook.

Risks Investors Should Watch

• Underlying growth is much slower than reported growth. Pro forma revenue increased 3.7%, compared with 27% GAAP growth, making continued organic and recurring revenue expansion an important measure of post-acquisition performance.
• Acquisition execution remains important. Banking Solutions’ growth and margin expansion benefited materially from Total Issuing Solutions. Delays in integration, cost savings, or expected benefits could affect future profitability.
• Leverage is constraining capital allocation. With $20.8 billion of debt, FIS has curtailed repurchases and paused tuck-in acquisitions until it makes further progress toward its leverage target.
• Non-strategic operations remain a revenue drag. Corporate and Other revenue declined 22%, and continued portfolio simplification or weakness in these businesses could reduce reported revenue.

Summary

FIS’s Q3 2026 results reflect the substantial impact of Total Issuing Solutions, which lifted reported revenue and adjusted EBITDA while improving the company’s business mix. Pro forma growth remained in the low- to mid-single digits, but margin expansion and higher free cash flow showed progress in cost management and operating execution. The main issues to monitor are pro forma recurring growth, successful acquisition integration, portfolio simplification, and debt reduction before meaningful share repurchases resume.