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FIS’ Q3 Performance

The cost of revenues rose 28.8% year over year to $2.2 billion. Selling, general and administrative expenses increased 7.4% to $627 million. Net interest expenses climbed to $199 million from $90 million a year earlier.

Adjusted EBITDA advanced 30.5% to $1.5 billion. The adjusted EBITDA margin expanded 111 basis points year over year to 42.9%, aided by the higher-margin acquired business, favorable revenue mix and cost savings.

Q3 Segmental Update of Fidelity National

Revenues from the Banking Solutions segment totaled $2.5 billion, increasing 41% year over year and beating the Zacks Consensus Estimate by 0.3%. Adjusted EBITDA margin expanded 119 basis points to 47.4%, reflecting the acquisition of the high-margin Total Issuing Solutions business, a favorable revenue mix and effective cost management.

The Capital Market Solutions segment’s revenues advanced 3% year over year to $823 million, beating the Zacks Consensus Estimate by 0.9%. Growth in recurring revenues supported the performance. Adjusted EBITDA margin expanded 180 basis points year over year to 54%.

The Corporate and Other segment recorded revenues of $83 million, down 22% year over year, primarily due to the decline in non-strategic businesses. Adjusted EBITDA loss was $169 million, including $163 million of corporate expenses.

Fidelity National's Cash Flow and Balance Sheet

Fidelity National ended September 2026 with cash and cash equivalents of $740 million compared with $599 million as of 2025-end. Total assets increased to $43.7 billion from $33.5 billion. Long-term debt, excluding the current portion, was $15.1 billion compared with $9.1 billion at the end of 2025.

Operating cash flow totaled $976 million in the quarter. Free cash flow excluding cash transaction taxes on business dispositions reached $862 million, up 8% year over year. Total outstanding debt was $20.8 billion.

FIS’ Share Repurchase & Dividend Update

The company returned $248 million to shareholders, comprising $21 million of share repurchases and $227 million of dividends.

FIS Revises Its 2026 Outlook

FIS now expects full-year 2026 revenues between $13.445 billion and $13.505 billion, down from its earlier projection of $13.63-$13.70 billion. Adjusted EBITDA is forecasted to be in the band of $5.565-$5.605 billion compared with the prior $5.73-$5.79 billion projection. Adjusted earnings are anticipated at $5.82-$5.89 per share, reduced from $6.15-$6.24.

Management cited client-led banking conversion delays, consolidation impacts, reduced non-recurring revenue assumptions and increased technology and security spending. Nonetheless, the company maintained its free cash flow outlook of $2.15-$2.25 billion, representing growth of 33-39%.

Fidelity National's Portfolio and 2027 Priorities

FIS completed the divestiture of a non-core prepaid business in October 2026, generating more than $100 million in gross proceeds. It has temporarily curtailed buybacks and paused smaller acquisitions to reduce debt, targeting gross leverage of roughly 2.8 times before resuming meaningful repurchases.

For 2027, management outlined pro forma revenue growth ranging from a 0.5% decline to a 1% increase, with adjusted earnings expected to decline by a high-single-digit to low-double-digit percentage. Free cash flow is projected to remain flat as weaker non-recurring revenues offset underlying organic growth.

FIS’ Zacks Rank

Fidelity National currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

How Did Peers Perform?

Several companies in the business services space, including Marsh & McLennan Companies, Inc. (MRSH Quick QuoteMRSH - Free Report) , Visa Inc. (V Quick QuoteV - Free Report) and Mastercard Incorporated (MA Quick QuoteMA - Free Report) , have reported their financial results for the September quarter of 2026. Here’s how they have performed:

MRSH reported third-quarter 2026 adjusted earnings per share of $2.03, which surpassed the Zacks Consensus Estimate by 3.6%. The bottom line advanced 9.7% year over year. Consolidated revenues of $6.9 billion improved 8% year over year. The figure rose 5% on an underlying basis. The top line beat the consensus mark by 3.5%. The results benefited from solid revenue growth across Risk and Insurance Services and Consulting. However, Marsh’s higher operating expenses partially offset the positives.

Visa reported fourth-quarter fiscal 2026 adjusted earnings of $3.48 per share, up 17% year over year and beating the Zacks Consensus Estimate by 1.5%. Net revenues were $12.1 billion, rising 13% year over year. V’s quarterly results reflected higher payment volumes, robust cross-border activity and increased transaction processing. However, the upside was partly offset by increased operating expenses.

Mastercard reported third-quarter 2026 adjusted earnings of $5.31 per share, which topped the Zacks Consensus Estimate by 3.3%. The bottom line improved 21.2% year over year. Net revenues advanced 14% year over year to $9.8 billion. The top line surpassed the consensus mark by 1.8%. MA’s quarterly results benefited from higher cross-border volumes, increased gross dollar volume, strong demand for value-added services and pricing initiatives. However, higher network rebates and incentives, along with rising operating expenses, partly offset these gains.