Dive Brief:

• Fidelity National Information Services, better known as FIS, expects revenue growth of between 4% and 4.5% this year, with the rate climbing to between 4.5% and 5.5% for 2025 and the following year, the company said in a slide presentation for an investor day presentation last week.
• The company, which operates two major business segments, expects annual revenue for its banking services division to expand by 3.5% to 4.5% by 2026, according to the presentation, with “underlying growth” tied to recurring revenue rising 3%; core, digital and payments revenue increasing 1.5% to 2.5%, with an assist from “tuck-in” acquisitions; and non-recurring revenue declining 1%.
• The smaller, higher-margin capital markets services division is expected to grow at a faster clip too, jumping between 7.5% and 8.5% next year, also with small acquisitions, according to the May 7 slide presentation posted online along with a webcast.

Dive Insight:

FIS is gaining its footing now as a smaller company after having completed the sale of a 55% stake in the Worldpay business to Chicago private equity firm GTCR earlier this year.

FIS has indicated previously that it may make smaller acquisitions now to keep building its remaining banking and capital market businesses. The presentation last week made clear that it’s counting on those acquisitions to boost growth. The business will expand as the total addressable markets for each segment increases, the company’s executives told analysts gathered for the investor day.

When asked to describe that revenue growth potential for the banking division, FIS CEO Stephanie Ferris pointed to the sale of digital products, especially to community banks, as well as the increased sale of payments services to the banking industry, including its NYCE card network services.

“We don't have to invent anything,” Ferris said specifically of FIS’s payments services pitch. “We have all these products. We need to execute better. We need to focus, and we need to drive delivery. And I think, if we continue to do that, we can push and drive accelerated revenue growth in banking.”

Overall, the company posted revenue of $9.8 billion last year, including $6.7 billion from its division selling to the banking industry and $2.8 billion in sales for its division that caters to the capital markets industry. 

When asked about mergers and acquisitions, Ferris cited the digital, payments and commercial lending areas as targets for potential acquisitions.

“Fundamentally, we're looking at buying products or capabilities we can put on our technology and distribute through our global sales and relationship management team,” she said.

The banking division logged a 1.6% rise in revenue last year over 2022, and that growth rate is expected to edge up this year to 3.3%, with an estimated $6.9 billion in annual revenue, the presentation said.

Meanwhile, the capital markets division’s growth rate in the past was about 2.6% in 2020 and revved up last year to 5.2%. For this year, it’s expected to accelerate to between 6.5% and 7%, the presentation showed.