Fidelity National Information Services, Inc.

What does it do?

FIS builds the invisible plumbing that keeps banks running. When you deposit a cheque, get a fraud alert, or your bank processes thousands of trades in milliseconds, there is a good chance FIS software is doing the heavy lifting behind the scenes. They serve over 20,000 clients including banks, credit unions, and investment firms across more than 130 countries. Think of them as the operating system that financial institutions run on — banks rarely build this stuff themselves, they just pay FIS to handle it.

How does it make money?

FIS makes money by charging banks and financial firms recurring fees — essentially software subscriptions — to use its core banking, fraud detection, payments, and capital markets technology. Its Banking Solutions segment, which serves everyday retail and commercial banks, is the largest revenue driver. Revenue grew from $10.1 billion to $10.7 billion in the latest year, a roughly 6% increase, while net income came in at around $400 million. Most of its revenue is recurring, meaning clients pay year after year rather than in one-off deals, which gives FIS relatively predictable cash flow.

Why do investors care?

The bull case for FIS centres on its sticky customer relationships and the growing digitalisation of banking worldwide — more digital banking means more demand for the software FIS sells. After spinning off its Worldpay merchant payments business in 2023, FIS is now a more focused, leaner company, and management has promised to use the proceeds to pay down debt and buy back shares (which means each remaining share becomes a slightly bigger slice of the pie). For the story to work, FIS needs to prove it can grow revenues at a faster rate than before, expand profit margins, and convince investors that the restructuring was worth it.