
FIS dropped 24% after earnings. I think there's more to it than just the guidance cut.
Was going through FIS's earnings yesterday after the stock dropped almost 24%, and something about their revenue numbers caught my attention. Q3 itself wasn't even that bad. Adjusted EPS was $1.61 compared to $1.51 last year, EBITDA margins were 42.9%, and they generated $862M in free cash flow. The problem was the guidance. They cut 2026 banking revenue growth expectations from 5-5.5% to 3.5-4%, and adjusted EPS guidance is now $5.82-5.89. But what I found more interesting was the explanation behind it. FIS makes money from termination fees when banking clients get acquired and exit their contracts. With all the bank mergers happening recently, they've been collecting quite a bit of this revenue. Management said they're reducing their assumptions for non-recurring revenue by over $100M. And for 2027, they're expecting roughly $100M less in termination fees compared to 2026, along with another $140M in strategic distribution partnership revenue that won't repeat. So even though they're






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