Jacksonville-based Fidelity National Information Services [NYSE: FIS] beat analyst expectations Wednesday, as it posted $3.7 billion in revenue.
The fintech and data analytics company also revised its guidance for the rest of the year, raising expectations.
“We are very pleased with the solid business performance we delivered by exceeding our financial targets for the second quarter, raising our full-year guidance, and accelerating our previously announced separation plan to create two highly focused global companies with greater strategic flexibility,” FIS CEO and President Stephanie Ferris said. “These positive results are reflective of both continued operational execution by the business, as well as the success of our Future Forward enterprise transformation program."
For FIS, revenue in merchant solutions business stood at $1.31 billion, up 1% on a GAAP basis and 1% on an organic basis as compared to the prior-year period, in the second quarter ended June 30, due to ongoing eCommerce strength and increased volumes, the company said in a statement. Analysts expected this unit revenue to be about $1.295 billion, according to Refinitiv IBES data.
On an adjusted basis, the company reported a profit of $921 million, or $1.55 per share, beating analyst expectations of $1.48 per share.
As of June 30, 2023, debt outstanding totaled $19.5 billion. Second quarter net cash provided by operating activities was $1.1 billion, and free cash flow was $953 million.
Last month FIS announced an acceleration of its previously announced separation plan to spinoff Worldpay.
FIS signed a definitive agreement to sell a 55% stake in its Worldpay Merchant Solutions business to private equity funds managed by GTCR in a transaction valuing Worldpay at up to $18.5 billion, including $1.0 billion of consideration contingent on the returns realized by GTCR exceeding certain thresholds. Based on the valuation, including estimated selling price adjustments and fair value of contingent consideration, FIS incurred a non-cash goodwill impairment charge of $6.8 billion related to the Merchant Solutions reporting unit due to its estimated fair value being less than its carrying value.
The Worldpay transaction is expected to close by Q1 2024, subject to regulatory approvals and other customary closing conditions.
Looking ahead, FIS said it now expects third-quarter revenue in the range of $3.64 billion to $3.69 billion, higher than analysts' average estimate of $3.58 billion.
"As we enter the next chapter of FIS, I'm excited for us to drive greater focus on delivering innovative, next-generation financial technology and software solutions to our clients, and a more simplified, streamlined operational focus for our colleagues and shareholders,” Ferris said in a statement.
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