Fidelity National Information Services Inc.

Overview Key strengths Key risks Good position in mission-critical banking software with majority share of large and regional banks. Leverage at high end of 2.0x-3.0x range for the rating. Large, stable recurring revenue streams, and monetary upside potential from remaining 45% stake in Worldpay merchant business. Highly competitive industry conditions and ongoing pricing pressure in banking. Strong margins, liquidity, and free cash flows. Still recovering from operating missteps during Worldpay integration. At its investor day in May 2024, the company outlined growth and capital allocation targets, including a run-rate gross leverage target of 2.8x. This is at the high end of our 2x-3x range for FIS at the ?BBB? rating and would leave little cushion for an economic downturn or

...We now expect Fidelity National Information Services Inc. (FIS) to manage leverage at the high end of our range for our `###' rating. At its investor day in May 2024, the company outlined growth and capital allocation targets, including a run-rate gross leverage target of 2.8x. This is at the high end of our 2x-3x range for FIS at the `###' rating and would leave little cushion for an economic downturn or other adverse events. However, FIS intends to spend up to $1 billion each for acquisitions and share repurchases annually. Since FIS could reallocate this $2 billion of discretionary spending, it has flexibility to keep leverage beneath our downgrade threshold even if it faces a downturn or unexpected operating challenges....

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