FIS raises full-year outlook after increased Q2 earnings (Courtesy of the Jacksonville Business Journal) –Jacksonville-based FIS, a global fin tech leader, reported a positive second quarter earnings report on Aug. 6, resulting in a raise to its 2024 revenue forecast.
The fin tech firm’s continued international strategy to provide financial technology across the transactional lifecycle has achieved a 3% revenue rise year-over-year to approximately $2.5 billion on a GAAP basis.
“We are excited by the new sales momentum we are seeing across the business,” FIS CEO and President Stephanie Ferris said in statement. “We are confident in our ability to deliver on our full-year outlook and committed to delivering double-digit total return to our shareholders.”
The company also asserted an expected continued revenue growth across verticals including banking and insurance through Q3 and Q4 during an earnings presentation on Tuesday.
“We’re executing strongly across all growth sectors and are seeing strong momentum across the business,” Ferris said during the presentation.
Driven by a 4% adjusted recurring revenue growth, revenue increased 4% as compared to the prior-year period. Primarily driven by FIS cost saving initiatives and higher-margin revenue, adjusted EBITDA margin expanded by 110 basis points over the prior-year period to 40.1%.
Adjusted net earnings for continuing operations were approximately $754 million, and adjusted EPS increased by 79% as compared to Q2 2023 to $1.36 per diluted share. An increase in revenue also resulted in $242 GAAP net earnings — $0.43 per diluted share — attributable to common stockholders for continuing operations.
Elevated revenue accelerated FIS’ third quarter outlook for adjusted EPS to $5.03 – $5.11, up approximately 3% as compared to the prior outlook.
Ferris credited a continuing partnership growth for this revenue growth. This includes a recent team-up with Curinos, a global data intelligence company that can provide FIS core banking clients with access to cure notices, proprietary data and analytics, which can help to optimize deposit gathering strategies and improve institutional profitability.
FIS also partnered with Lendio, a leading small business financial solutions tech platform to streamline loan processing.
Within capital markets, FIS also launched a climate risk financial modeler, a SaaS-based solution designed to help corporations, insurance companies and financial institutions assess and quantify climate risk across their portfolios.
In Q2, FIS also repurchased $1.1 billion of shares in the second quarter bringing total repurchased shares to $2.5 billion, more than halfway to its goal to repurchase approximately $4.0 billion of shares in 2024. On Aug. 1, the company’s board of directors approved an additional $3 billion share repurchase in addition to the current outstanding share repurchase authorization.
Additionally, FIS said it will continue to target a dividend payout ratio of 35% of adjusted net earnings.