Fidelity National Information Services, Inc. (NYSE:FIS) shares are tanking on Wednesday after the company cut its 2026 guidance and announced a CFO transition, despite reporting broadly in-line third-quarter results.
FIS announced that CFO James Kehoe will step down effective Nov. 5, with Alexandra Brooks appointed as interim CFO.
• Fidelity National Info shares are approaching critical lows. Why is FIS stock at lows?
Earnings Snapshot
Adjusted EPS came in at $1.61, exceeding the analyst estimate of $1.60, while sales totaled $3.454 billion, beating expectations of $3.432 billion.
FIS reported 3.7% year-over-year pro forma revenue growth, with recurring revenue up 2.5%.
Adjusted EBITDA margin expanded 94 basis points to 42.9% in the quarter.
Year-to-date free cash flow increased 57% to $1.9 billion from $1.2 billion.
Recurring annual contract value (ACV) sales rose 26% sequentially from the second quarter, with improvements in Capital Markets.
Business Highlights
Commercial banking cross-selling increased 76% year over year, while fintech client wins rose 23%. Distribution partners contribute 5%-10% of new sales.
FIS is prioritizing subscription-based and SaaS offerings as clients move away from traditional software licenses, a shift weighing on near-term non-recurring revenue. Management expects license revenue to remain flat to moderately higher.
The company divested a non-core prepaid asset and expects to provide an update on strategic alternatives in early 2027. License revenue from strategic distribution agreements signed in 2026 is not expected to repeat in 2027, while 72% of Total Issuing Solutions revenue is under contract through 2029 and beyond.
FIS expanded its account-management teams by 15%, helping reduce service incidents by 40% and client notification times by nearly 90%.
Recurring ACV renewal rates reached the high 90% range, improving more than 100 basis points year over year, while banking clients increasingly adopted higher-margin products.
AI and Product Innovation
The company launched 10 AI-native products, including an AML Investigation agent, and joined Anthropic’s Project Glasswing to address AI-related cybersecurity risks.
Its AgentIQ Banking platform is gaining traction as clients increasingly seek secure, cloud-based solutions.
2026 Guidance Cut
The company lowered its full-year 2026 adjusted EPS guidance to $5.82-$5.89 from the previous range of $6.15-$6.24, compared with the analyst estimate of $6.19.
FIS also reduced its FY2026 sales outlook to $13.445 billion-$13.505 billion from $13.630 billion-$13.695 billion, below the consensus estimate of $13.664 billion.
Management attributed the weaker outlook to client-driven implementation delays, lower software license demand and higher technology and cybersecurity investments.
Delayed projects have been rescheduled rather than canceled, while bank consolidation activity involving Huntington, Cadence, Fifth Third and Comerica has added pressure.
FIS expects most headwinds to ease by 2028, supporting a return to normalized growth.
FIS Stock Price Activity: Fidelity National shares were down 23.72% at $29.74 at the time of publication Wednesday.
Photo via Shutterstock
See More:
Top Momentum Stocks
