FIS to Report Fourth Quarter Earnings: What Investors Need to Know

As FIS (NYSE: FIS), a global leader in financial services technology, prepares to announce its fourth quarter 2024 financial results on February 11, 2025, investors are eager to understand the company's performance and growth prospects. Here's what you need to know before the earnings call.

Strong Performance in 2024

FIS has had a strong year in 2024, with revenue increasing by 4.50% compared to the previous year. The company's earnings per share (EPS) also improved significantly, from -$11.26 in 2023 to $5.24 in 2024. This strong performance has been driven by FIS's focus on innovation and growth in its core financial technology and software solutions business.

Key Financial Metrics to Watch

Investors should pay close attention to the following key financial metrics when analyzing FIS's fourth quarter earnings:

1. Revenue Growth: FIS's revenue growth has been a key indicator of the company's ability to grow its top line. In the fourth quarter of 2024, investors should look for continued growth in revenue, with a focus on the year-over-year (YoY) change.
2. Earnings per Share (EPS): EPS is a crucial metric for evaluating a company's profitability. In the fourth quarter of 2024, investors should expect FIS to maintain or improve its EPS compared to the previous year.
3. Profit Margin: Profit margin, or the percentage of revenue that translates into profit, is an important indicator of a company's operational efficiency. FIS's profit margin in the fourth quarter of 2024 should reflect the company's ability to manage costs and maintain profitability.
4. Cash Flow from Operations (CFO): CFO is a measure of the cash generated by a company's core business operations. In the fourth quarter of 2024, investors should look for strong CFO, indicating FIS's ability to generate cash and invest in growth opportunities.

Business Segments to Focus On

FIS operates through three main business segments: Banking Solutions, Capital Market Solutions, and Corporate and Other. Investors should pay close attention to the performance of each segment, as well as the company's overall financial performance.

Strategic Initiatives and Growth Prospects

FIS's strategic initiatives, such as the Worldpay sale and the acceleration of its separation plan, have had a significant impact on its financial performance and growth prospects. By selling a majority stake in its Worldpay Merchant Solutions business to private equity funds managed by GTCR, FIS secured upfront proceeds of approximately $11.7 billion, which it used to pay down debt, return additional capital to shareholders, and maintain a strong investment grade credit rating. This transaction also allowed FIS to focus on its core financial technology and software solutions business, while Worldpay benefited from the resources and expertise of GTCR to pursue inorganic growth opportunities.

The Worldpay sale has enabled FIS to simplify its operations and drive greater focus on delivering innovative financial technology solutions. As a result of these strategic initiatives, FIS has reported strong financial performance, with revenue increasing 3% on a GAAP basis and 4% on an adjusted basis to $2.6 billion in the third quarter of 2024. Additionally, FIS's adjusted EPS increased by 49% as compared to the prior-year period to $1.40 per diluted share.

FIS's strategic initiatives have also positioned the company for long-term growth. The upfront cash proceeds from the Worldpay sale have provided FIS with capital allocation flexibility, allowing it to invest in new growth opportunities and maintain a strong balance sheet. Furthermore, the retention of a non-controlling 45% ownership interest in Worldpay has allowed FIS to continue its strong commercial partnership with Worldpay and benefit from continued upside in the business.

In summary, FIS's strategic initiatives, such as the Worldpay sale and the acceleration of its separation plan, have enabled the company to secure significant upfront proceeds, simplify its operations, and drive strong financial performance. These initiatives have also positioned FIS for long-term growth by providing capital allocation flexibility and maintaining a strong balance sheet.

As FIS prepares to report its fourth quarter earnings, investors should pay close attention to the company's key financial metrics and business segments. By focusing on these areas, investors can gain a comprehensive understanding of FIS's financial performance and make informed decisions about the company's future prospects. With its strong performance in 2024 and strategic initiatives driving growth, FIS is well-positioned to continue its momentum in 2025 and beyond.