Fidelity National Information Services [NYSE: FIS] beat analyst expectations by bringing in $3.72 billion in revenue for the second quarter.
That led to second-quarter adjusted earnings per share growing to $1.73 from $1.61 in Q2 2021, a 7% increase. Both figures are adjusted for non-recurring items.
Overall revenue for the quarter increased $240 million, about half of which came from the Jacksonville-based fintech giant’s surging merchant solutions business, which grew 11% to $1.30 billion from $1.18 billion a year ago. Banking solutions grew 5% to $1.66 billion, and capital market solutions grew 5% to $663 million.
FIS anticipates third-quarter revenue to drop slightly to somewhere between $3.58 billion and $3.635 billion, with adjusted EPS between $1.74 and $1.78.
The third-quarter figures will be impacted by a large termination fee expected in the third quarter getting pushed later in the year, the company said.
Overall, FIS anticipates revenue between $14.615 billion and $14.7 billion for 2022, compared to $13.9 billion in 2021 and $12.6 billion in 2020. This is lower than what FIS said it anticipated in its Q1 2022 earnings call in May, when it projected full-year revenue between $14.78 billion and $14.925 billion. Adjusted EPS for the year is now expected to come in at between $7 and $7.10, lower than the $7.25 to $7.37 range given in May.
Full-year guidance has changed because the macro environment has changed, CFO Woody Woodall said.
“This year, the macro environment also changed by another two vectors that our initial guidance cannot absorb: foreign exchange and interest rates,” Woodall said, adding that the US dollar appreciating to multi-decade highs relative to the pound sterling and euro impacts full-year EPS guidance, as do rising interest rates, which impact FIS’s net interest costs.
Over the course of the second quarter, FIS signed up ANZ, the second-largest bank in Australia and New Zealand and the first large bank outside the U.S. to be signed by FIS. The fintech company also signed Tacoma, Washington-based Columbia Bank after that bank acquired Portland, Oregon-based Umpqua Bank. Columbia historically worked with a competitor of FIS, but decided to consolidate the merger on FIS’s platform.
FIS President Stephanie Ferris attributed the rapid growth in merchant solutions to the company’s diversified e-commerce client base, its February 2022 acquisition of embedded payment company Payrix, and its rolling out of new solutions, like Guaranteed Payments, which it released in June and which increases purchase authorization rates for e-commerce merchants while indemnifying them from the financial liability of fraudulent purchases.
FIS stock fell after the morning’s earning release, dropping from $104.18 at the previous day’s market close to $100.40 at market open and then trading for under $97 a share for most of the day.
