Stephanie Ferris
Chief Executive Officer and President at Fidelity National Information Services
Thank you, George, and thank you everyone for joining us this morning.
FIS delivered another quarter of strong results with broad-based outperformance against our financial targets, sales momentum across the enterprise and success securing a number of strategic partnerships, strengthening our leading position across the money lifecycle. As our third quarter performance demonstrates, we are executing on our strategy to drive greater shareholder value.
Let me share some key financial results and operational highlights with you. Adjusted revenue grew 4% in the third quarter, fueled by a strong acceleration in recurring revenue growth. Adjusted EBITDA margin of 41.3% exceeded our outlook, with both operating segments posting year-over-year margin expansion. We also continue to focus on driving high-quality recurring sales, with cross-sell activity across the enterprise up over 20% year-to-date. Adjusted EPS of $1.40 increased 13% year-over-year on a normalized basis. And we returned a total of $700 million of capital to shareholders in the third quarter across both buybacks and dividends.
We also recently closed a small acquisition in the digital space, Dragonfly Technologies, as we make progress against our M&A goals. Our strong operational performance and disciplined capital allocation allow us to once again raise our outlook for 2024.
Now turning to Slide 6. The sales momentum we saw over the first half of the year continued through the third quarter with strong execution across the entire money lifecycle. Within Money at Rest, we continue to see solid demand across core banking and digital solutions. In core banking, we've already signed more core engagements through the first three quarters of 2024 than we did in all of 2023. During the quarter, we signed new deals across all three of our core platforms: IBS, Horizon, and Modern Banking Platform. And our pipeline of core opportunities continues to expand with strength in the community bank space.
Our digital business continues to see accelerating sales momentum with new sales nearly doubling year-over-year. We look forward to further capitalizing on this momentum with our recent acquisition of Dragonfly. Dragonfly complements our Digital One portfolio, expanding our digital offerings across large financial institutions, including some of the largest regional banks, for which we already have significant relationships. The company provides banks with a full suite of solutions to meet the needs of large, complex commercial customers, including managing liquidity, combating fraud and handling payments. Dragonfly also services a number of banks not currently using an FIS core, creating attractive cross-sell opportunities for us.
Within Money in Motion, our differentiated payment offerings, particularly our loyalty solutions, had a strong sales quarter as we signed several new marquee partners. We meaningfully expanded our premium payback ecosystem with key new partnerships across a number of sectors including leading technology companies, retailers and financial institutions. Our ability to partner with these market-leading companies underscores FIS's unique ability to unlock financial technology to the world.
We continue to execute across treasury and risk with solid sales and risk management and continued product innovation including soon to launch next generation treasury solutions in partnership with market leading AI companies. Across Money at Work, we recently launched our digital trading storefront and we continue to see very strong double-digit growth in commercial lending.
In summary, we're executing strongly across all growth vectors and are seeing continued new sales momentum across the enterprise.
Now turning to Slide 7. As discussed, we find a number of marquee client wins and secured several high-profile new partnerships during the quarter. Beginning with Money at Rest, we continue to see traction with banks below $10 billion in assets with a competitive win of a leading mutual bank, South Shore, who will be migrating to our IBS core. Additionally, we signed a license agreement with a leading global commercial bank in the APAC region for modern banking platform.
Digital had another strong sales quarter with a number of new engagements. One example is our expanded relationship with EverBank, a growing Southeast-based bank with nationwide deposit and lending capabilities, with over $35 billion in assets that opted for our Digital One teller solution. EverBank, as I will discuss shortly, is a leading example of our cross-sell flywheel at work, as the bank is both a Banking Solutions and Capital Markets customer, opting for new solutions across both segments this past quarter.
Turning to Money in Motion, our premium payback loyalty offering had a standout quarter, as we entered into new engagements with a number of leading companies across a wide spectrum of industries. Commerce Bank, a leading regional bank in the Midwest, has selected FIS to provide it with an end-to-end loyalty management platform, including leveraging our premium payback loyalty offering. We're excited Commerce Bank has selected FIS to help them differentiate their customer value proposition.
We're also working with Apple to bring additional payment options to Apple Pay users. In the future, U.S. users checking out with Apple Pay online and in apps on iPhone and iPad will be able to redeem rewards for purchases across eligible participating Apple Pay issuers with FIS.
In Capital Markets, our treasury risk solutions continue to resonate globally. In the quarter, we renewed and expanded our relationship with one of South Africa's largest financial services provider that relies on FIS's Enterprise Risk Suite to manage the risk exposure.
Within Money at Work, we continued to see strong demand for our commercial lending solutions. As I mentioned earlier, EverBank, a banking solutions client, selected FIS for their commercial loan origination needs, expanding our relationship across the bank. And similarly, Beal Bank, a large U.S.-based financial institution and banking solutions client, opted for Capital Markets commercial loan servicing and compliance solutions. This demonstrates the unique value proposition of one FIS, servicing the most complex clients across both our Banking and Capital Markets segments.
I'm also pleased to report that FIS has once again recognized as one of the world's best companies by Time Magazine. Also, a number of our solutions received accolades from leading expert advisory firms and prestigious industry journals, including IDC, naming Modern Banking Platform, as a leader in its recent North American digital core banking platforms report. In Chartis Research, a leading risk technology research firm, recognizing FIS in its inaugural AI 50 report, highlighting AI adoption in the financial industry. These awards reaffirm our leadership position across the money life cycle.
And before I turn it over to James, I want to thank all of our colleagues here at FIS for all of their hard work and welcome our new Dragonfly colleagues to the team. I also want to welcome our two newest board members, Nicole Anasenes and Courtney Gibson to the board.
And with that, James?