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Second quarter GAAP Diluted EPS of $(0.90) Adjusted EPS of $1.36 increased 1% over the prior-year period Revenue increased 5% on a GAAP basis and 5% on an adjusted basis to $2.6 billion Repurchased $246 million of shares in the second quarter; reiterates goal to repurchase $1.2 billion of shares in 2025 Raises full-year 2025 outlook for Revenue, Adjusted EBITDA and Adjusted EPS1 JACKSONVILLE, Fla., August 05, 2025--(BUSINESS WIRE)--FIS® (NYSE:FIS), a global leader in financial technology, today reported its second quarter 2025 results. "Our results reflect the continued positive momentum of the business as we delivered another quarter of financial outperformance driven by our Banking segment. As a result, we are raising our full-year outlook," said FIS CEO and President Stephanie Ferris. "We are excited by the positive outcomes we are driving for our clients as our commercial excellence initiatives are resonating in the market. As the only fintech provider able to address the complexity of managing transactions across the full money lifecycle, FIS is uniquely positioned to help our clients enhance their competitive edge." Second Quarter 2025 Financial Results On a GAAP basis, revenue increased 5% as compared to the prior-year period to approximately $2.6 billion. GAAP net earnings attributable to common stockholders from continuing operations were $(470) million or $(0.90) per diluted share, including $(539) million of non-cash expense to reflect an increase in our deferred tax liability arising from our agreement to sell our remaining interest in Worldpay. On an adjusted basis, revenue increased 5% as compared to the prior-year period reflecting recurring revenue growth of 6%. Adjusted EBITDA increased 5% to approximately $1.0 billion, and Adjusted EBITDA margin was relatively flat as compared to the prior-year period at 39.8%. Adjusted net earnings from continuing operations were $716 million, and Adjusted EPS increased by 1% as compared to the prior-year period to $1.36 per diluted share. ($ millions, except per share data, unaudited) Three Months Ended June 30, % Adjusted Continuing Operations 2025 2024 Change Growth Banking Solutions Revenue 1,808 1,711 6% 6% Capital Market Solutions Revenue 765 722 6% 5% Operating Segment Total Revenue $ 2,573 $ 2,433 6% 5% Corporate and Other Revenue 43 57 (25)% - Consolidated FIS Revenue $ 2,616 $ 2,490 5% - Adjusted EBITDA $ 1,041 $ 992 5% Adjusted EBITDA Margin 39.8 % 39.8 % (3) bps Net Earnings (Loss) (GAAP) $ (470 ) $ 237 * Diluted Earnings (Loss) Per Common Share (GAAP) $ (0.90 ) $ 0.43 * Adjusted Net Earnings $ 716 $ 748 (4)% Adjusted EPS $ 1.36 $ 1.34 1% *Indicates comparison not meaningful Segment Information Banking Solutions:Second quarter revenue increased 6% on a GAAP basis and 6% on an adjusted basis as compared to the prior-year period to $1.8 billion, including recurring revenue growth of 7%. Adjusted EBITDA margin contracted by 70 basis points as compared to the prior-year period to 43.6%, primarily due to bad debt expense. Capital Market Solutions:Second quarter revenue increased by 6% on a GAAP basis and 5% on an adjusted basis as compared to the prior-year period to $765 million, reflecting recurring revenue growth of 5%. Adjusted EBITDA margin contracted by 53 basis points as compared to the prior-year period to 50.3%, reflecting the dilutive impact of a prior-year acquisition. Corporate and Other:Second quarter revenue decreased by 25% as compared to the prior-year period to $43 million. Adjusted EBITDA loss was $133 million, including $150 million of corporate expenses. Balance Sheet and Cash Flows As of June 30, 2025, debt outstanding totaled $12.9 billion. Second quarter net cash provided by operating activities was $382 million, and adjusted free cash flow was $292 million. In the second quarter, the Company returned $459 million of capital to shareholders through $246 million of share repurchases and $212 million of dividends paid. Capital Allocation Update The Company repurchased $246 million of shares in the second quarter and is reiterating its goal to repurchase approximately $1.2 billion of shares in 2025. Additionally, the Company will continue to pay quarterly dividends targeting dividend per share growth in line with Adjusted EPS growth. Third Quarter and Full-Year 2025 Outlook The Company is introducing its third quarter outlook and is raising its full-year outlook for revenue growth to 4.8 to 5.3% and Adjusted EPS growth to 10 to 11%. ($ millions, except share data) 3Q 2025 FY 2025 Revenue $2,650 - $2,665 $10,520 - $10,570 Adjusted EBITDA (Non-GAAP)1 $1,105 - $1,120 $4,315 - $4,335 Adjusted EPS (Non-GAAP)1 $1.46 - $1.50 $5.72 - $5.80 1The Company does not provide a reconciliation for non-GAAP estimates on a forward-looking basis where it is unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. Update on Pending Strategic Transactions On April 17, 2025, FIS entered into definitive agreements to (i) buy the Issuer Solutions business from Global Payments Inc. ("Global Payments") for an enterprise value of $13.5 billion, inclusive of $1.5 billion of anticipated net present value of tax assets, or a net purchase price of $12.0 billion, subject to customary adjustments (the "Issuer Solutions Acquisition") and (ii) sell its remaining equity interest in Worldpay to Global Payments for a pre-tax value of $6.6 billion net of transaction fees and other costs (the "Worldpay Minority Interest Sale"). As noted in our July 21, 2025 8-K, the completion of the transaction is conditioned upon (among other things) the expiration or termination of the waiting period applicable to the Transactions under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The HSR waiting period expired as of July 18, 2025. FIS expects to fund the Issuer Solutions Acquisition through a combination of approximately $8 billion of new debt and the after-tax proceeds from the Worldpay Minority Interest Sale. Following the closing of the transactions, the Company expects pro forma gross leverage to be approximately 3.4x, deleveraging to its target gross leverage of 2.8x within 18 months. The transactions are expected to close simultaneously in the first half of 2026, subject to regulatory approvals and other customary closing conditions. Webcast FIS will host a live webcast of its earnings conference call with the investment community beginning at 8:30 a.m. (EDT) on Tuesday, August 5, 2025. To access the webcast, go to the Investor Relations section of FIS' homepage, A replay will be available after the conclusion of the live webcast. About FIS FIS is a financial technology company providing solutions to financial institutions, businesses and developers. We unlock financial technology to the world across the money lifecycle underpinning the world's financial system. Our people are dedicated to advancing the way the world pays, banks and invests, by helping our clients to confidently run, grow and protect their businesses. Our expertise comes from decades of experience helping financial institutions and businesses of all sizes adapt to meet the needs of their customers by harnessing where reliability meets innovation in financial technology. Headquartered in Jacksonville, Florida, FIS is a member of the Fortune 500® and the Standard & Poor's 500® Index. To learn more, visit Follow FIS on LinkedIn, Facebook and X. FIS Use of Non-GAAP Financial Information Generally Accepted Accounting Principles (GAAP) is the term used to refer to the standard framework of guidelines for financial accounting in the United States. GAAP includes the standards, conventions, and rules accountants follow in recording and summarizing transactions and in the preparation of financial statements. In addition to reporting financial results in accordance with GAAP, we have provided certain non-GAAP financial measures. These non-GAAP measures include constant currency revenue, Adjusted revenue growth, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted net earnings, Adjusted EPS, and Adjusted free cash flow. These non-GAAP measures may be used in this release and/or in the attached supplemental financial information. We believe these non-GAAP measures help investors better understand the underlying fundamentals of our business. As further described below, the non-GAAP revenue and earnings measures presented eliminate items management believes are not indicative of FIS' operating performance. The constant currency revenue and Adjusted revenue growth measures adjust for the effects of exchange rate fluctuations and exclude discontinued operations, while Adjusted revenue growth also excludes revenue from Corporate and Other, giving investors further insight into our performance. Finally, Adjusted free cash flow provides further information about the ability of our business to generate cash. For these reasons, management also uses these non-GAAP measures in its assessment and management of FIS' performance. Constant currency revenue represents reported segment revenue excluding the impact of fluctuations in foreign currency exchange rates in the current period. Adjusted revenue growth reflects the percentage change in constant currency revenue for the current period as compared to the prior period. Constant currency revenue is calculated by applying prior-year period foreign currency exchange rates to current-period revenue. When referring to Adjusted revenue growth, revenue from our Corporate and Other segment is excluded. Adjusted EBITDA reflects net earnings (loss) before interest, other income (expense), taxes, equity method investment earnings (loss), and depreciation and amortization, and excludes certain costs that do not constitute normal, recurring, cash operating expenses necessary to operate our business. These excluded costs generally include purchase price amortization of acquired intangible assets, as well as acquisition, integration and certain other costs and asset impairments. These excluded costs are recorded in the Corporate and Other segment. Adjusted EBITDA for the respective segments excludes the foregoing items. This measure is reported to the chief operating decision maker, the Company's Chief Executive Officer and President, who utilizes the measure for purposes of making decisions about allocating resources to the segments and assessing their performance. For this reason, Adjusted EBITDA, as it relates to our segments, is presented in conformity with FASB ASC Topic 280, Segment Reporting. Adjusted EBITDA margin reflects Adjusted EBITDA, as defined above, divided by revenue. Adjusted net earnings excludes the effect of purchase price amortization, as well as certain costs that do not constitute normal, recurring, cash operating expenses necessary to operate our business. For purposes of calculating Adjusted net earnings, our equity method investment earnings (loss) ("EMI") from Worldpay is also adjusted to exclude certain costs and other transactions in a similar manner. Adjusted EPS reflects Adjusted net earnings, as defined above, divided by weighted average diluted shares outstanding. Adjusted free cash flow reflects net cash provided by operating activities, adjusted for the net change in settlement assets and obligations and excluding certain transactions that are closely associated with non-operating activities or are otherwise non-operational in nature and not indicative of future operating cash flows, less capital expenditures. Adjusted free cash flow does not represent our residual cash flow available for discretionary expenditures since we have mandatory debt service requirements and other non-discretionary expenditures that are not deducted from the measure. Adjusted free cash flow as presented in this earnings release excludes cash flow from discontinued operations, which our management cannot freely access following the Worldpay separation. Any non-GAAP measures should be considered in context with the GAAP financial presentation and should not be considered in isolation or as a substitute for GAAP measures. Further, FIS' non-GAAP measures may be calculated differently from similarly titled measures of other companies. Reconciliations of these non-GAAP measures to related GAAP measures, including footnotes describing the adjustments, are provided in the attached schedules and in the Investor Relations section of the FIS website, Forward-Looking Statements This earnings release and today's webcast contain "forward-looking statements" within the meaning of the U.S. federal securities laws. Statements that are not historical facts, as well as other statements about our expectations, beliefs, intentions, or strategies regarding the future, or other characterizations of future events or circumstances, are forward-looking statements. Forward-looking statements include statements about anticipated financial outcomes, including any earnings outlook or projections, projected revenue or expense synergies or dis-synergies, business and market conditions, outlook, foreign currency exchange rates, deleveraging plans, expected dividends and share repurchases of the Company, the Company's sales pipeline and anticipated profitability and growth, plans, strategies and objectives for future operations, strategic value creation, risk profile and investment strategies, any statements regarding future economic conditions or performance and any statements with respect to the future impacts of the pending acquisition of Global Payments' Issuer Solutions business ("Issuer Solutions") and the pending sale of our remaining equity interest in Worldpay. These statements may be identified by words such as "expect," "anticipate," "intend," "plan," "believe," "will," "should," "could," "would," "project," "continue," "likely," and similar expressions, and include statements reflecting future results or outlook, statements of outlook and various accruals and estimates. These statements relate to future events and our future results and involve a number of risks and uncertainties. Forward-looking statements are based on management's beliefs as well as assumptions made by, and information currently available to, management. Actual results, performance or achievement could differ materially from these forward-looking statements. The risks and uncertainties to which forward-looking statements are subject include the following, without limitation: changes in general economic, business and political conditions, a recession, intensified or expanded international hostilities, acts of terrorism, increased rates of inflation or interest, effects of announced or future tariff increases and any resulting regulatory changes in global trade relations, changes in consumer or business confidence; changes in either or both the United States and international lending, capital and financial markets or currency fluctuations; the risk that acquired businesses will not be integrated successfully or that the integration will be more costly or more time-consuming and complex than anticipated; the risk that cost savings and synergies anticipated to be realized from acquisitions may not be fully realized or may take longer to realize than expected or that costs may be greater than anticipated; the risks of doing business internationally; the effect of legislative initiatives or proposals, statutory changes, governmental or applicable regulations and/or changes in industry requirements, including privacy, data protection, cybersecurity, cyber resilience and AI laws and regulations; our ability to comply with climate change legal and regulatory requirements and to maintain practices that meet our stakeholders' evolving expectations; the risks of reduction in revenue from the elimination of existing and potential customers due to consolidation in, or new laws or regulations affecting, the banking, retail and financial services industries or due to financial failures or other setbacks suffered by firms in those industries; changes in the growth rates of the markets for our solutions; the amount, declaration and payment of future dividends is at the discretion of our Board of Directors and depends on, among other things, our investment opportunities, results of operations, financial condition, cash requirements, future prospects, and other factors that may be considered relevant by our Board of Directors, including legal and contractual restrictions; the amount and timing of any future share repurchases is subject to, among other things, our share price, our other investment opportunities and cash requirements, our results of operations and financial condition, our future prospects and other factors that may be considered relevant by our Board of Directors and management; failures to adapt our solutions to changes in technology or in the marketplace; internal or external security or privacy breaches of our systems, including those relating to unauthorized access, theft, corruption or loss of personal information and computer viruses and other malware affecting our software or platforms, and the reactions of customers, card associations, government regulators and others to any such events; the risk that implementation of software, including software updates, for customers or at customer locations or employee error in monitoring our software and platforms may result in the corruption or loss of data or customer information, interruption of business operations, outages, exposure to liability claims or loss of customers; the risk that partners and third parties may fail to satisfy their legal obligations to us; risks associated with managing pension cost, cybersecurity issues, IT outages and data privacy; our ability to navigate the opportunities and risks associated with using and/or incorporating AI technologies into our business; the reaction of current and potential customers to communications from us or regulators regarding information security, risk management, internal audit or other matters; the risk that the pending acquisition of Issuer Solutions will not be completed or will not provide the expected benefits, including the anticipated cost or revenue synergies, within the expected timeframe, in full or at all; the risk that the integration of Issuer Solutions will be more difficult, time-consuming or expensive than anticipated; competitive pressures on pricing related to the decreasing number of community banks in the U.S., the development of new disruptive technologies competing with one or more of our solutions, increasing presence of international competitors in the U.S. market and the entry into the market by global banks and global companies with respect to certain competitive solutions, each of which may have the impact of unbundling individual solutions from a comprehensive suite of solutions we provide to many of our customers; the failure to innovate in order to keep up with new emerging technologies, which could impact our solutions and our ability to attract new, or retain existing, customers; an operational or natural disaster at one of our major operations centers; failure to comply with applicable requirements of payment networks or changes in those requirements; fraud by bad actors; and other risks detailed elsewhere in the "Risk Factors" section and other sections of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, and in our other filings with the Securities and Exchange Commission. Other unknown or unpredictable factors also could have a material adverse effect on our business, financial condition, results of operations and prospects. Accordingly, readers should not place undue reliance on these forward-looking statements. These forward-looking statements are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. Except as required by applicable law or regulation, we do not undertake (and expressly disclaim) any obligation and do not intend to publicly update or review any of these forward-looking statements, whether as a result of new information, future events or otherwise. Fidelity National Information Services, Inc. Earnings Release Supplemental Financial Information August 5, 2025 Exhibit A Condensed Consolidated Statements of Earnings (Loss) - Unaudited for the three and six months ended June 30, 2025 and 2024 Exhibit B Condensed Consolidated Balance Sheets - Unaudited as of June 30, 2025, and December 31, 2024 Exhibit C Condensed Consolidated Statements of Cash Flows - Unaudited for the six months ended June 30, 2025 and 2024 Exhibit D Supplemental Non-GAAP Adjusted Revenue Growth - Unaudited for the three and six months ended June 30, 2025 and 2024 Exhibit E Supplemental Disaggregation of Revenue - Recast and Unaudited for the three and six months ended June 30, 2025 and 2024 Exhibit F Supplemental Non-GAAP Adjusted Free Cash Flow Measures - Unaudited for the three and six months ended June 30, 2025 and 2024 Exhibit G Supplemental GAAP to Non-GAAP Reconciliations - Unaudited for the three and six months ended June 30, 2025 and 2024 Exhibit H Supplemental Financial Information of Worldpay Holdco, LLC - Unaudited for the three months ended June 30, 2025 and 2024, six months ended June 30, 2025, and five months ended June 30, 2024 FIDELITY NATIONAL INFORMATION SERVICES, INC. CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)— UNAUDITED (In millions, except per share amounts) Exhibit A Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 Revenue $ 2,616 $ 2,490 $ 5,148 $ 4,958 Cost of revenue 1,664 1,546 3,317 3,106 Gross profit 952 944 1,831 1,852 Selling, general, and administrative expenses 572 609 1,130 1,182 Asset impairments — 4 2 18 Other operating (income) expense, net - related party (28 ) (40 ) (56 ) (73 ) Operating income 408 371 755 725 Other income (expense): Interest expense, net (110 ) (43 ) (190 ) (120 ) Other income (expense), net (159 ) (13 ) (195 ) (184 ) Total other income (expense), net (269 ) (56 ) (385 ) (304 ) Earnings (loss) before income taxes and equity method investment earnings (loss) 139 315 370 421 Provision (benefit) for income taxes 10 87 93 108 Equity method investment earnings (loss), net of tax (598 ) 10 (669 ) (76 ) Net earnings (loss) from continuing operations (469 ) 238 (392 ) 237 Earnings (loss) from discontinued operations, net of tax — 1 — 709 Net earnings (loss) (469 ) 239 (392 ) 946 Net (earnings) loss attributable to noncontrolling interest from continuing operations (1 ) (1 ) (1 ) (1 ) Net earnings (loss) attributable to FIS $ (470 ) $ 238 $ (393 ) $ 945 Net earnings (loss) attributable to FIS: Continuing operations $ (470 ) $ 237 $ (393 ) $ 236 Discontinued operations — 1 — 709 Total $ (470 ) $ 238 $ (393 ) $ 945 Basic earnings (loss) per common share attributable to FIS: Continuing operations $ (0.90 ) $ 0.43 $ (0.75 ) $ 0.42 Discontinued operations — — — 1.25 Total $ (0.90 ) $ 0.43 $ (0.75 ) $ 1.67 Diluted earnings (loss) per common share attributable to FIS: Continuing operations $ (0.90 ) $ 0.43 $ (0.75 ) $ 0.42 Discontinued operations — — — 1.25 Total $ (0.90 ) $ 0.43 $ (0.75 ) $ 1.67 Weighted average common shares outstanding: Basic 525 554 527 565 Diluted 525 557 527 567 Prior-year 2024 amounts have been revised to correct certain immaterial misstatements. For more information, see footnote 24 to the Company's Annual Report for the year ended December 31, 2024, filed with the SEC on Form 10-K on February 13, 2025. Amounts in table may not sum or calculate due to rounding. FIDELITY NATIONAL INFORMATION SERVICES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS — UNAUDITED (In millions, except per share amounts) Exhibit B June 30,2025 December 31,2024 ASSETS Current assets: Cash and cash equivalents $ 581 $ 834 Settlement assets 774 479 Trade receivables, net 2,075 1,876 Other receivables 128 160 Receivable from related party 43 84 Prepaid expenses and other current assets 769 638 Current assets held for sale — 1,115 Total current assets 4,370 5,186 Property and equipment, net 692 646 Goodwill 17,577 17,260 Intangible assets, net 1,172 1,318 Software, net 2,639 2,526 Equity method investment 3,873 3,858 Other noncurrent assets 1,805 1,749 Deferred contract costs, net 1,245 1,241 Total assets $ 33,373 $ 33,784 LIABILITIES AND EQUITY Current liabilities: Accounts payable, accrued and other liabilities $ 1,698 $ 1,994 Settlement payables 795 500 Deferred revenue 918 902 Short-term borrowings 1,719 636 Current portion of long-term debt 2,318 968 Current liabilities held for sale — 1,094 Total current liabilities 7,448 6,094 Long-term debt, excluding current portion 8,868 9,686 Deferred income taxes 1,203 863 Other noncurrent liabilities 1,682 1,441 Total liabilities 19,201 18,084 Equity: FIS stockholders' equity: Preferred stock $0.01 par value — — Common stock $0.01 par value 6 6 Additional paid in capital 47,229 47,129 (Accumulated deficit) retained earnings (23,075 ) (22,257 ) Accumulated other comprehensive earnings (loss) (399 ) (364 ) Treasury stock, at cost (9,593 ) (8,816 ) Total FIS stockholders' equity 14,168 15,698 Noncontrolling interest 4 2 Total equity 14,172 15,700 Total liabilities and equity $ 33,373 $ 33,784 Prior-year 2024 amounts have been revised to correct certain immaterial misstatements. For more information, see footnote 24 to the Company's Annual Report for the year ended December 31, 2024, filed with the SEC on Form 10-K on February 13, 2025. Amounts in table may not sum or calculate due to rounding. FIDELITY NATIONAL INFORMATION SERVICES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS — UNAUDITED (In millions) Exhibit C Six months ended June 30, 2025 2024 Cash flows from operating activities from continuing operations: Net earnings (loss) $ (392 ) $ 946 Less earnings (loss) from discontinued operations, net of tax — 709 Net earnings (loss) from continuing operations (392 ) 237 Adjustment to reconcile net earnings (loss) from continuing operations to net cash provided by operating activities: Depreciation and amortization 936 859 Amortization of debt issuance costs 29 11 Asset impairments 2 18 Loss on extinguishment of debt — 174 Loss (gain) on sale of businesses, investments and other 100 32 Stock-based compensation 96 87 Loss from equity method investment 669 76 Deferred income taxes (42 ) (118 ) Net changes in assets and liabilities, net of effects from acquisitions and foreign currency: Trade and other receivables (142 ) 126 Receivable from related party 40 (169 ) Settlement activity 1 (3 ) Prepaid expenses and other assets 65 (122 ) Deferred contract costs (180 ) (234 ) Deferred revenue 5 (6 ) Accounts payable, accrued liabilities and other liabilities (348 ) (216 ) Net cash provided by operating activities from continuing operations 839 752 Cash flows from investing activities from continuing operations: Additions to property and equipment (76 ) (43 ) Additions to software (375 ) (342 ) Settlement of net investment hedge cross-currency interest rate swaps — (8 ) Net proceeds from sale of businesses and investments — 12,796 Cash divested from sale of business (1,417 ) (3,137 ) Acquisitions, net of cash acquired (197 ) (56 ) Coupon payments on interest rate swaps (64 ) (54 ) Distributions from equity method investments 66 29 Other investing activities, net (63 ) (17 ) Net cash provided by (used in) investing activities from continuing operations (2,126 ) 9,168 Cash flows from financing activities from continuing operations: Borrowings 24,757 13,441 Repayment of borrowings and other financing arrangements (23,832 ) (21,396 ) Debt issuance costs (27 ) — Net proceeds from stock issued under stock-based compensation plans 8 1 Treasury stock activity (824 ) (2,522 ) Dividends paid (432 ) (409 ) Other financing activities, net — 40 Net cash provided by (used in) financing activities from continuing operations (350 ) (10,845 ) Cash flows from discontinued operations: Net cash provided by (used in) operating activities 208 (345 ) Net cash provided by (used in) investing activities — (39 ) Net cash provided by (used in) financing activities — (65 ) Net cash provided by (used in) discontinued operations 208 (449 ) Effect of foreign currency exchange rate changes on cash from continuing operations 64 (19 ) Effect of foreign currency exchange rate changes on cash from discontinued operations — (26 ) Net increase (decrease) in cash, cash equivalents and restricted cash (1,365 ) (1,419 ) Cash, cash equivalents and restricted cash, beginning of period 1,946 4,414 Cash, cash equivalents and restricted cash, end of period $ 581 $ 2,995 FIDELITY NATIONAL INFORMATION SERVICES, INC. SUPPLEMENTAL NON-GAAP ADJUSTED REVENUE GROWTH — UNAUDITED (In millions) Exhibit D Three months ended June 30, 2025 2024 Constant Currency Adjusted Revenue FX Revenue Revenue Growth (1) Banking Solutions $ 1,808 $ (2 ) $ 1,806 $ 1,711 6 % Capital Market Solutions 765 (8 ) 757 722 5 % Operating segment total 2,573 (10 ) 2,563 2,433 5 % Corporate and Other 43 (1 ) 42 57 Consolidated FIS $ 2,616 $ (11 ) $ 2,605 $ 2,490 Six months ended June 30, 2025 2024 Constant Currency Adjusted Revenue FX Revenue Revenue Growth (1) Banking Solutions $ 3,526 $ 4 $ 3,530 $ 3,395 4 % Capital Market Solutions 1,529 (6 ) 1,523 1,428 7 % Operating segment total 5,055 (2 ) 5,053 4,823 5 % Corporate and Other 93 1 94 135 Consolidated FIS $ 5,148 $ (1 ) $ 5,147 $ 4,958 Prior-year 2024 amounts have been revised to correct certain immaterial misstatements. For more information, see footnote 24 to the Company's Annual Report for the year ended December 31, 2024, filed with the SEC on Form 10-K on February 13, 2025. Amounts in table may not sum or calculate due to rounding. (1) Adjusted growth excludes Corporate and Other. The Corporate and Other segment includes certain non-strategic businesses that we plan to wind down or sell. FIDELITY NATIONAL INFORMATION SERVICES, INC. SUPPLEMENTAL DISAGGREGATION OF REVENUE — UNAUDITED (In millions) Exhibit E In the following tables, revenue is disaggregated by primary geographical market and type of revenue. The tables also include a reconciliation of the disaggregated revenue with the Company's reportable segments. For the three months ended June 30, 2025 (in millions): Banking Solutions Capital Market Solutions Corporate and Other Total Primary Geographical Markets: North America $ 1,564 $ 452 $ 23 $ 2,039 All others 244 313 20 577 Total $ 1,808 $ 765 $ 43 $ 2,616 Type of Revenue: Recurring revenue: Transaction processing and services $ 1,351 $ 390 $ 35 $ 1,776 Software maintenance 98 150 — 248 Other recurring 74 21 1 96 Total recurring 1,523 561 36 2,120 Software license 48 96 — 144 Professional services 128 102 1 231 Other non-recurring 109 6 6 121 Total $ 1,808 $ 765 $ 43 $ 2,616 For the three months ended June 30, 2024 (in millions): Banking Solutions Capital Market Solutions Corporate and Other Total Primary Geographical Markets: North America $ 1,471 $ 452 $ 23 $ 1,946 All others 240 270 34 544 Total $ 1,711 $ 722 $ 57 $ 2,490 Type of Revenue: Recurring revenue: Transaction processing and services (1) $ 1,273 $ 373 $ 51 $ 1,697 Software maintenance 90 143 1 234 Other recurring (1) 63 15 1 79 Total recurring 1,426 531 53 2,010 Software license 37 91 — 128 Professional services 136 99 1 236 Other non-recurring 112 1 3 116 Total $ 1,711 $ 722 $ 57 $ 2,490 (1) Revenue related primarily to software licenses requiring frequent, integral updates has been classified as Transaction processing and services revenue commencing in the quarter ended December 31, 2024, and related prior-period amounts have been reclassified from Other recurring revenue to Transaction processing and services for comparability. Revenue reclassified for the three months ended June 30, 2024, was $5 million, $7 million and $9 million within Banking, Capital Markets and Corporate and Other, respectively. Prior-year 2024 amounts have been revised to correct certain immaterial misstatements. For more information, see footnote 24 to the Company's Annual Report for the year ended December 31, 2024, filed with the SEC on Form 10-K on February 13, 2025. Amounts in table may not sum or calculate due to rounding. Exhibit E (continued) FIDELITY NATIONAL INFORMATION SERVICES, INC. SUPPLEMENTAL DISAGGREGATION OF REVENUE — UNAUDITED (In millions) For the six months ended June 30, 2025 (in millions): Banking Solutions Capital Market Solutions Corporate and Other Total Primary Geographical Markets: North America $ 3,056 $ 927 $ 44 $ 4,027 All others 470 602 49 1,121 Total $ 3,526 $ 1,529 $ 93 $ 5,148 Type of Revenue: Recurring revenue: Transaction processing and services $ 2,641 $ 783 $ 78 $ 3,502 Software maintenance 193 298 1 492 Other recurring 143 45 2 190 Total recurring 2,977 1,126 81 4,184 Software license 75 198 — 273 Professional services 252 193 2 447 Other non-recurring 222 12 10 244 Total $ 3,526 $ 1,529 $ 93 $ 5,148 For the six months ended June 30, 2024 (in millions): Banking Solutions Capital Market Solutions Corporate and Other Total Primary Geographical Markets: North America $ 2,903 $ 897 $ 64 $ 3,864 All others 492 531 71 1,094 Total $ 3,395 $ 1,428 $ 135 $ 4,958 Type of Revenue: Recurring revenue: Transaction processing and services (1) $ 2,539 $ 751 $ 107 $ 3,397 Software maintenance 180 286 1 467 Other recurring (1) 123 30 2 155 Total recurring 2,842 1,067 110 4,019 Software license 87 165 — 252 Professional services 268 195 2 465 Other non-recurring 198 1 23 222 Total $ 3,395 $ 1,428 $ 135 $ 4,958 (1) Revenue related primarily to software licenses requiring frequent, integral updates has been classified as Transaction processing and services revenue commencing in the quarter ended December 31, 2024, and related prior-period amounts have been reclassified from Other recurring revenue to Transaction processing and services for comparability. Revenue reclassified for the six months ended June 30, 2024, was $9 million, $14 million and $18 million within Banking, Capital Markets and Corporate and Other, respectively. Prior-year 2024 amounts have been revised to correct certain immaterial misstatements. For more information, see footnote 24 to the Company's Annual Report for the year ended December 31, 2024, filed with the SEC on Form 10-K on February 13, 2025. Amounts in table may not sum or calculate due to rounding. FIDELITY NATIONAL INFORMATION SERVICES, INC. SUPPLEMENTAL NON-GAAP CASH FLOW MEASURES — UNAUDITED (In millions) Exhibit F Three months ended Six months ended June 30, 2025 June 30, 2025 Net cash provided by operating activities $ 382 $ 839 Non-GAAP adjustments: Acquisition, integration and other payments (1) 139 273 Settlement activity (11 ) (1 ) Adjusted cash flows from operations 510 1,111 Capital expenditures (218 ) (451 ) Adjusted free cash flow $ 292 $ 660 Three months ended Six months ended June 30, 2024 June 30, 2024 Net cash provided by operating activities $ 546 $ 752 Non-GAAP adjustments: Acquisition, integration and other payments (1) 126 230 Settlement activity 15 3 Adjusted cash flows from operations 687 985 Capital expenditures (183 ) (385 ) Adjusted free cash flow $ 504 $ 600 Adjusted free cash flow reflects adjusted cash flows from operations less capital expenditures (additions to property and equipment and additions to software from the statement of cash flows). Adjusted free cash flow does not represent our residual cash flows available for discretionary expenditures, since we have mandatory debt service requirements and other non-discretionary expenditures that are not deducted from the measure. Adjusted free cash flow as presented in this earnings release excludes cash flows from discontinued operations. (1) Adjusted cash flows from operations and adjusted free cash flow for the three and six months ended June 30, 2025 and 2024, exclude cash payments for certain acquisition, integration and other costs (see Note 2 to Exhibit G), net of related tax impact. The related tax impact totaled $19 million and $21 million for the three months and $37 million and $39 million for the six months ended June 30, 2025 and 2024, respectively. FIDELITY NATIONAL INFORMATION SERVICES, INC. SUPPLEMENTAL GAAP TO NON-GAAP RECONCILIATIONS — UNAUDITED (In millions, except per share amounts) Exhibit G Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 Net earnings (loss) attributable to FIS from continuing operations $ (470 ) $ 237 $ (393 ) $ 236 Provision (benefit) for income taxes 10 87 93 108 Interest expense, net 110 43 190 120 Equity method investment (earnings) loss, net of tax 598 (10 ) 669 76 Other, net 160 14 196 185 Operating income (loss), as reported 408 371 755 725 Depreciation and amortization, excluding purchase accounting amortization 309 263 596 525 Non-GAAP adjustments: Purchase accounting amortization (1) 172 168 340 334 Acquisition, integration and other costs (2) 152 186 306 344 Asset impairments (3) — 4 2 18 Indirect Worldpay business support costs (4) — — — 14 Adjusted EBITDA from continuing operations $ 1,041 $ 992 $ 1,999 $ 1,960 Net earnings (loss) attributable to FIS from discontinued operations $ — $ 1 $ — $ 709 Provision (benefit) for income taxes — — — (991 ) Interest expense, net — — (1 ) (1 ) Other, net — 1 (1 ) 470 Operating income (loss) — 2 (2 ) 187 Depreciation and amortization, excluding purchase accounting amortization — — — 1 Non-GAAP adjustments: Acquisition, integration and other costs (2) — — — 13 Indirect Worldpay business support costs (4) — — — (14 ) Adjusted EBITDA from discontinued operations $ — $ 2 $ (2 ) $ 187 Adjusted EBITDA $ 1,041 $ 994 $ 1,997 $ 2,147 See Notes to Exhibit G. Prior-year 2024 amounts have been revised to correct certain immaterial misstatements. For more information, see footnote 24 to the Company's Annual Report for the year ended December 31, 2024, filed with the SEC on Form 10-K on February 13, 2025. Amounts in table may not sum or calculate due to rounding. FIDELITY NATIONAL INFORMATION SERVICES, INC. SUPPLEMENTAL GAAP TO NON-GAAP RECONCILIATIONS — UNAUDITED (In millions, except per share amounts) Exhibit G (continued) Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 Earnings (loss) attributable to FIS from continuing operations $ (470 ) $ 237 $ (393 ) $ 236 Equity method investment (earnings) loss, net of tax 598 (10 ) 669 76 Earnings (loss) attributable to FIS from continuing operations, excluding equity method investment earnings (loss) 128 227 276 312 Non-GAAP adjustments from continuing operations: Purchase accounting amortization (1) 172 168 340 334 Acquisition, integration and other costs (2) 172 186 326 344 Asset impairments (3) — 4 2 18 Indirect Worldpay business support costs (4) — — — 14 Non-operating (income) expense (5) 159 13 195 184 Non-GAAP tax (provision) benefit (6) (67 ) (12 ) (54 ) (83 ) Total non-GAAP adjustments from continuing operations 436 359 809 811 Adjusted net earnings attributable to FIS from continuing operations, excluding equity method investment earnings (loss) 564 586 1,085 1,123 Equity method investment earnings (loss), net of tax (7) (598 ) 10 (669 ) (76 ) Non-GAAP adjustments on equity method investment earnings (loss), net of related (provision) benefit for income taxes (7) (8) 750 152 944 331 Adjusted equity method investment earnings (loss) (7) 152 162 275 255 Adjusted net earnings attributable to FIS from continuing operations $ 716 $ 748 $ 1,360 $ 1,378 Earnings (loss) attributable to FIS from discontinued operations, net of tax $ — $ 1 $ — $ 709 Non-GAAP adjustments from discontinued operations: Acquisition, integration and other costs (2) — — — 13 Loss on sale of disposal group (10) — — — 466 Indirect Worldpay business support costs (4) — — — (14 ) Amortization on long-lived assets held for sale (9) — — — (30 ) Non-operating (income) expense (5) — 1 — 7 Non-GAAP tax (provision) benefit (6) — — — (1,015 ) Total non-GAAP adjustments from discontinued operations — 1 — (573 ) Adjusted net earnings attributable to FIS from discontinued operations $ — $ 2 $ — $ 136 Adjusted net earnings attributable to FIS common stockholders $ 716 $ 750 $ 1,360 $ 1,514 See Notes to Exhibit G. Prior-year 2024 amounts have been revised to correct certain immaterial misstatements. For more information, see footnote 24 to the Company's Annual Report for the year ended December 31, 2024, filed with the SEC on Form 10-K on February 13, 2025. Amounts in table may not sum or calculate due to rounding. FIDELITY NATIONAL INFORMATION SERVICES, INC. SUPPLEMENTAL GAAP TO NON-GAAP RECONCILIATIONS — UNAUDITED (In millions, except per share amounts) Exhibit G (continued) Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 Earnings (loss) attributable to FIS from continuing operations $ (0.89 ) $ 0.43 $ (0.74 ) $ 0.42 Equity method investment (earnings) loss, net of tax 1.13 (0.02 ) 1.26 0.13 Earnings (loss) attributable to FIS from continuing operations, excluding equity method investment earnings (loss) 0.24 0.41 0.52 0.55 Non-GAAP adjustments from continuing operations: Purchase accounting amortization (1) 0.33 0.30 0.64 0.59 Acquisition, integration and other costs (2) 0.33 0.33 0.62 0.61 Asset impairments (3) — 0.01 — 0.03 Indirect Worldpay business support costs (4) — — — 0.02 Non-operating (income) expense (5) 0.30 0.02 0.37 0.32 Non-GAAP tax (provision) benefit (6) (0.13 ) (0.02 ) (0.10 ) (0.15 ) Total non-GAAP adjustments from continuing operations 0.83 0.64 1.53 1.43 Adjusted net earnings attributable to FIS from continuing operations, excluding equity method investment earnings (loss) 1.07 1.05 2.05 1.98 Equity method investment earnings (loss) (7) (1.13 ) 0.02 (1.26 ) (0.13 ) Non-GAAP adjustments on equity method investment earnings (loss), net of related (provision) benefit for income taxes (7) (8) 1.42 0.27 1.78 0.58 Adjusted equity method investment earnings (loss) (7) 0.29 0.29 0.52 0.45 Adjusted net earnings attributable to FIS from continuing operations $ 1.36 $ 1.34 $ 2.57 $ 2.43 Earnings (loss) attributable to FIS from discontinued operations, net of tax $ — $ — $ — $ 1.25 Non-GAAP adjustments from discontinued operations: Acquisition, integration and other costs (2) — — — 0.02 Loss on sale of disposal group (10) — — — 0.82 Indirect Worldpay business support costs (4) — — — (0.02 ) Amortization on long-lived assets held for sale (9) — — — (0.05 ) Non-operating (income) expense (5) — — — 0.01 Non-GAAP tax (provision) benefit (6) — — — (1.79 ) Total non-GAAP adjustments from discontinued operations — — — (1.01 ) Adjusted net earnings attributable to FIS from discontinued operations $ — $ — $ — $ 0.24 Adjusted net earnings attributable to FIS common stockholders $ 1.36 $ 1.34 $ 2.57 $ 2.67 Weighted average shares outstanding-diluted (11) 527 557 529 567 See Notes to Exhibit G. Prior-year 2024 amounts have been revised to correct certain immaterial misstatements. For more information, see footnote 24 to the Company's Annual Report for the year ended December 31, 2024, filed with the SEC on Form 10-K on February 13, 2025. Amounts in table may not sum or calculate due to rounding. FIDELITY NATIONAL INFORMATION SERVICES, INC. SUPPLEMENTAL GAAP TO NON-GAAP RECONCILIATIONS — UNAUDITED (In millions, except per share amounts) Exhibit G (continued) Notes to Unaudited - Supplemental GAAP to Non-GAAP Reconciliations for the three and six months ended June 30, 2025 and 2024. (1) This item represents purchase price amortization expense on all intangible assets acquired through various Company acquisitions, including customer relationships, contract value, technology assets, trademarks and trade names. The Company has excluded the impact of purchase price amortization expense as such amounts can be significantly impacted by the timing and/or size of acquisitions. Although the Company excludes these amounts from its non-GAAP expenses, the Company believes that it is important for investors to understand that such intangible assets contribute to revenue generation. Amortization of assets that relate to past acquisitions will recur in future periods until such assets have been fully amortized. Any future acquisitions may result in the amortization of future assets. (2) This item represents costs comprised of the following: Three months ended Six months ended June 30, June 30, 2025 2024 2025 2024 Continuing operations: Acquisition and integration $ 43 $ 24 $ 51 $ 49 Enterprise transformation, including Future Forward and platform modernization 10 56 56 129 Severance and other termination expenses 46 9 105 27 Separation of the Worldpay Merchant Solutions business 21 80 42 109 Incremental stock compensation directly attributable to specific programs 14 15 24 26 Other, including divestiture-related expenses and enterprise cost control and other initiatives 18 2 28 4 Subtotal 152 186 306 344 Financing fees - Issuer Solutions acquisition (a) 20 — 20 — Total 172 186 326 344 Discontinued operations: Acquisition and integration $ — $ — $ — $ — Enterprise transformation, including Future Forward and platform modernization — — — 1 Severance and other termination expenses — — — 1 Separation of the Worldpay Merchant Solutions business — — — 8 Other, including divestiture-related expenses and enterprise cost control and other initiatives — — — 3 Total from discontinued operations — — $ — $ 13 Total consolidated $ 172 $ 186 $ 326 $ 357 (a) This item represents bridge facility fees incurred to secure funding for the pending Issuer Solutions business acquisition from Global Payments. These fees are recorded as a component of Interest expense, net on our consolidated statements of earnings (loss). Accordingly, this item is included in Acquisition, integration and other costs for purposes of calculating Adjusted net earnings but not Adjusted EBITDA. Amounts in table may not sum due to rounding. (3) For the three and six months ended June 30, 2024, this item includes impairments primarily related to the termination of certain internally developed software projects. (4) For the six months ended June 30, 2024, this item represents costs that were incurred in support of the Worldpay Merchant Solutions business prior to the separation but are not directly attributable to it and thus were not recorded in discontinued operations. The Company is being reimbursed for these expenses as part of Transition Services Agreements with the buyer and/or eliminated them post separation; therefore, the expenses have been adjusted out of continuing operations and added to discontinued operations. (5) Non-operating (income) expense primarily consists of other income and expense items outside of the Company's operating activities, including fair value adjustments on certain non-operating assets and liabilities and foreign currency transaction remeasurement gains and losses. For the three and six months ended June 30, 2025, earnings from continuing operations also includes a $108 million write down, triggered by the Worldpay Minority Interest Sale agreement, of the contingent consideration included as part of the 2024 sale of a 55% ownership interest in its Worldpay Merchant Solutions business (the "2024 Worldpay Sale"). For the six months ended June 30, 2024, earnings from continuing operations also includes loss on extinguishment of debt of approximately $174 million relating to tender discounts and fees; the write-off of unamortized bond discounts, debt issuance costs and fair value basis adjustments; and gains on related derivative instruments. (6) This adjustment is based on an adjusted effective tax rate of 12.0% and 14.5% for the periods ended June 30, 2025 and 2024, respectively, which reflects adjustments to our GAAP effective tax rate to take into account primarily certain cash tax benefits from our equity method investment in Worldpay. For the six months ended June 30, 2024, the Company recorded a tax benefit of $991 million in its earnings from discontinued operations primarily from the write-off of U.S. deferred tax liabilities that were not transferred in the 2024 Worldpay Sale, net of the estimated U.S. tax cost that the Company expects to incur as a result of the 2024 Worldpay Sale. This adjustment includes the removal of the impact of this tax benefit from our earnings from discontinued operations for this period. (7) FIS completed the separation of Worldpay on January 31, 2024, retaining a non-controlling 45% ownership interest that is recorded under the equity method of accounting, net of investor-level tax. FIS' share of Worldpay's results under the equity method of accounting reflects activity beginning on February 1, 2024. For the three and six months ended June 30, 2025, our investor-level tax includes $539 million of expense to reflect an increase in our deferred tax liability arising from our agreement to sell our remaining interest in Worldpay, which represented a change in our intent to hold the investment long term. (8) This item represents FIS' proportionate share of Worldpay's non-GAAP adjustments on its earnings (loss) consistent with FIS' non-GAAP measures and is comprised of the following: Three months ended June 30, Six months ended June 30, Five months ended June 30, 2025 2024 2025 2024 FIS' share of Worldpay: Purchase accounting amortization $ 158 $ 174 $ 316 $ 309 Acquisition, integration and other costs (a) 36 26 85 111 Non-operating (income) expense 35 (11 ) 46 (19 ) Non-GAAP tax (provision) benefit 521 (37 ) 497 (70 ) Non-GAAP adjustments on equity method investment earnings (loss), net of related (provision) benefit for income taxes $ 750 $ 152 $ 944 $ 331 (a) Worldpay acquisition, integration, and other costs for the three and six months ended June 30, 2025 and 2024, consist primarily of transaction and transition costs related to the separation from FIS. Amounts in table may not sum due to rounding. (9) The Company stopped recording depreciation and amortization on the long-lived assets classified as held for sale beginning July 5, 2023. The amount of depreciation and amortization that would have been recorded in discontinued operations had these assets not been classified as held for sale has been deducted from adjusted net earnings for the three and six months ended June 30, 2024, for comparability purposes. (10) During the six months ended June 30, 2024, an initial loss on sale of disposal group of $466 million was recorded upon closing of the 2024 Worldpay Sale to reflect the impact of the excess of the carrying value of the disposal group over the estimated fair value less cost to sell. (11) For the three and six months ended June 30, 2025, Adjusted net earnings is a gain, while the corresponding GAAP amount for this period is a loss. As a result, in calculating Adjusted net earnings per share-diluted for this period, the weighted average shares outstanding-diluted amount of approximately 527 million and 529 million used in the calculation includes approximately 2 million and 2 million shares for the three and six months ended June 30, 2025, respectively, that in accordance with GAAP are excluded from the calculation of the GAAP Net loss per share-diluted for the periods, due to their anti-dilutive impact. FIDELITY NATIONAL INFORMATION SERVICES, INC. SUPPLEMENTAL FINANCIAL INFORMATION OF WORLDPAY HOLDCO, LLC — UNAUDITED (In millions) Exhibit H Summary Worldpay Holdco, LLC financial information is as follows: Three months ended June 30, Six months ended June 30, Five months ended June 30, 2025 2024 2025 2024 (1) Revenue $ 1,487 $ 1,349 $ 2,768 $ 2,181 Gross profit $ 721 $ 668 $ 1,333 $ 1,053 Earnings (loss) before income taxes $ (119 ) $ 3 $ (300 ) $ (227 ) Net earnings (loss) attributable to Worldpay Holdco, LLC $ (140 ) $ (28 ) $ (357 ) $ (271 ) FIS share of net earnings (loss) attributable to Worldpay Holdco, LLC, net of tax (2) $ (598 ) $ 10 $ (669 ) $ (76 ) The following is a GAAP to Non-GAAP reconciliation of Adjusted EBITDA for Worldpay Holdco LLC. Three months ended June 30, Six months ended June 30, Five months ended June 30, 2025 2024 2025 2024 (1) Net earnings (loss) attributable to Worldpay Holdco, LLC $ (140 ) $ (28 ) $ (357 ) $ (271 ) Provision (benefit) for income taxes 21 30 57 42 Interest expense, net 146 148 290 264 Other, net 71 (24 ) 102 (41 ) Operating income (loss) 98 126 92 (6 ) Depreciation and amortization, excluding purchase accounting amortization 51 19 98 29 Non-GAAP adjustments: Purchase accounting amortization 351 386 702 687 Transition, acquisition, integration and other costs (3) 81 58 189 246 Adjusted EBITDA $ 581 $ 589 $ 1,081 $ 956 (1) FIS completed the separation of Worldpay on January 31, 2024. Accordingly, Worldpay's results reflect activity beginning on February 1, 2024. (2) Amounts include our share of the net income attributable to Worldpay and our investor-level tax (expense) benefit of $(533) million and $22 million for the three months ended June 30, 2025 and 2024, and $(511) million and $45 million for the six months ended June 30, 2025 and five months ended June 30, 2024, respectively, as well as, intra-entity eliminations, and is reported as equity method investment earnings (loss), net of tax on our consolidated statements of earnings (loss). For the three and six months ended June 30, 2025, our investor-level tax includes $539 million of expense to reflect an increase in our deferred tax liability arising from our agreement to sell our remaining interest in Worldpay, which represented a change in our intent to hold the investment long term. (3) This item represents primarily transaction and transition costs associated with the separation of Worldpay from FIS. View source version on Contacts For More Information Ellyn Raftery, 904.438.6083Chief Marketing & Communications OfficerFIS Global Marketing & Corporate George Mihalos, 904.438.6438Senior Vice PresidentFIS Investor Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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CareCloud Reports Second Quarter 2025 Results
Delivers first quarter of positive GAAP EPS in Company's history since going public, announces initial results from AI Initiative SOMERSET, N.J., Aug. 05, 2025 (GLOBE NEWSWIRE) -- CareCloud, Inc. (Nasdaq: CCLD, CCLDO) ('CareCloud' or the 'Company'), a leader in healthcare technology and generative AI solutions, today announced strong financial results for the quarter ended June 30, 2025. CareCloud's strategic execution, AI-driven innovation, and disciplined financial management has positioned the Company for sustained profitability and long-term growth. Management will discuss these results and the Company's 2025 growth strategies in a live conference call today at 8:30 a.m. ET. Second Quarter 2025 Highlights ● GAAP net income of $2.9 million, compared to $1.7 million in Q2 2024, an increase of 73% ● Positive GAAP EPS of $0.04 per share, compared to negative GAAP EPS of ($0.14) per share in Q2 of 2024 ● Adjusted net income of $3.3 million, or $0.07 per share, compared to $3.0 million in Q2 2024 ● Adjusted EBITDA of $6.5 million, compared to $6.4 million in Q2 2024 ● Revenue of $27.4 million, compared to $28.1 million in Q2 2024 Year-to-date 2025 Highlights ● GAAP net income of $4.9 million, compared to $1.4 million in the same period last year, an increase of 238% ● Positive GAAP EPS of $0.02 per share, compared to a negative GAAP EPS of ($0.24) per share in the same period last year ● Adjusted net income of $5.6 million, or $0.13 per share, compared to $3.2 million in the same period last year ● Adjusted EBITDA of $12.1 million, compared to $10.1 million in the same period last year, an increase of 20% ● Free cash flow of $9.0 million, compared to $4.9 million in the same period last year, an increase of 85% ● Revenue of $55.0 million, compared to $54.1 million in the same period last year Recent Strategic Updates ● Financial Achievement: First quarter of positive GAAP EPS in CareCloud's history since going public in 2014 ● AI Center of Excellence: Now live and scaling to 500 team members by year-end, with dedicated teams driving product innovation ● Acquisition Strategy Reignited: Completed two acquisitions so far this year, with additional acquisition opportunities actively under evaluation Management Commentary: 'The launch of our AI Center of Excellence marks a pivotal moment in CareCloud's evolution,' said A. Hadi Chaudhry, Co-CEO of CareCloud. 'By building one of the largest dedicated healthcare AI teams globally, we are creating real-world solutions to automate clinical workflows, optimize revenue cycle management, and improve patient outcomes. This initiative is intended to accelerate our operational efficiency as well as positioning CareCloud at the forefront of intelligent healthcare transformation, driving sustainable profitability and long-term growth for ourselves and the healthcare providers who use our services. We are already using AI to enhance product development, including deploying specialty-specific versions of our EHR, to allow our providers to improve their productivity with cirrusAI Notes, and to automate some follow-up tasks which would otherwise require additional members of our operations team.' 'After record profits and a successful turnaround in 2024, we are excited to announce continued momentum and financial strength as demonstrated by achieving positive GAAP EPS in this quarter, the first time in the Company's history since going public in 2014,' said Co-CEO Stephen Snyder. 'With two recent acquisitions and the launch of our AI Center of Excellence, CareCloud is not just responding to the market shift — we are leading it.' 'We are pleased to announce our fifth consecutive quarter of positive GAAP net income and an increase in year-to-date revenue, adjusted EBITDA and free cash flow year-over-year,' said Norman Roth, Interim CFO and Corporate Controller of CareCloud. 'We continue to pay our preferred stock dividends monthly out of internally generated free cash flow, while generating additional profits and cash flow which we are reinvesting for future growth. We have declared and paid preferred stock dividends every month during 2025.'On June 30, 2025, the Company had 984,530 shares of Series A Preferred Stock and 1,511,372 shares of non-convertible Series B Preferred Stock outstanding. As of June 30, 2025, the Series A and B shares both accrued dividends at the rate of 8.75% per annum, based on the $25.00 per share liquidation preference (equivalent to $2.1875 annually per share), and they are redeemable at the Company's option once the preferred stock dividends are brought current. Also as of June 30, 2025, the Company had 42,322,039 shares of common stock outstanding. 2025 Guidance: Poised for Growth CareCloud is reconfirming its earnings guidance for 2025, expecting: For the Fiscal Year Ending December 31, 2025 Forward-Looking Guidance Revenue $111 – $114 million Adjusted EBITDA $26 – $28 million GAAP Net Income Per Share (EPS) $0.10 – $0.13 The Company continues to anticipate full year 2025 revenue of approximately $111 to $114 million. Revenue guidance is based on management's expectations regarding revenue from existing clients, organic growth in new client additions and anticipated number of small tuck-in acquisitions. Adjusted EBITDA is expected to be $26 to $28 million for the full year 2025 and reflects improvements from the Company's cost reduction efforts. GAAP EPS is expected to be $0.10 to $0.13 for the full year 2025. Conference Call Information CareCloud management will host a conference call today at 8:30 a.m. Eastern Time to discuss the first half of 2025 results. The live webcast of the conference call and related presentation slides can be accessed at An audio-only option is available by dialing 201-389-0920 and referencing 'CareCloud Second Quarter 2025 Results Conference Call.' Investors who opt for audio-only will need to download the related slides at A replay of the conference call and related presentation slides will be available approximately three hours after conclusion of the call at the same link. An audio-only option can also be accessed by dialing 412-317-6671 and providing the access code 13754330. Use of Non-GAAP Financial Measures In our earnings releases, prepared remarks, conference calls, slide presentations, and webcasts, we use and discuss non-GAAP financial measures, as defined by SEC Regulation G. The GAAP financial measure most directly comparable to each non-GAAP financial measure used or discussed, and a reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure, are included in this press release after the condensed consolidated financial statements. Our earnings press releases containing such non-GAAP reconciliations can be found in the Investor Relations section of our web site at Forward-Looking Statements This press release contains various forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements relate to anticipated future events, future results of operations or future financial performance. In some cases, you can identify forward-looking statements by terminology such as 'may,' 'might,' 'will,' 'shall,' 'should,' 'could,' 'intends,' 'expects,' 'plans,' 'goals,' 'projects,' 'anticipates,' 'believes,' 'seeks,' 'estimates,' 'forecasts,' 'predicts,' 'possible,' 'potential,' 'target,' or 'continue' or the negative of these terms or other comparable terminology. Our operations involve risks and uncertainties, many of which are outside our control, and any one of which, or a combination of which, could materially affect our results of operations and whether the forward-looking statements ultimately prove to be correct. Forward-looking statements in this press release include, without limitation, statements reflecting management's expectations for future financial performance and operating expenditures, expected growth, profitability and business outlook, the impact of pandemics on our financial performance and business activities, and the expected results from the integration of our acquisitions. These forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are only predictions, are uncertain and involve substantial known and unknown risks, uncertainties and other factors which may cause our (or our industry's) actual results, levels of activity or performance to be materially different from any future results, levels of activity or performance expressed or implied by these forward-looking statements. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all of the risks and uncertainties that could have an impact on the forward-looking statements, including without limitation, risks and uncertainties relating to the Company's ability to manage growth, migrate newly acquired customers and retain new and existing customers, maintain cost-effective global operations, increase operational efficiency and reduce operating costs, predict and properly adjust to changes in reimbursement and other industry regulations and trends, retain the services of key personnel, develop new technologies, upgrade and adapt legacy and acquired technologies to work with evolving industry standards, compete with other companies' products and services competitive with ours, manage and keep our information systems secure and other important risks and uncertainties referenced and discussed under the heading titled 'Risk Factors' in the Company's filings with the Securities and Exchange Commission. The statements in this press release are made as of the date of this press release, even if subsequently made available by the Company on its website or otherwise. The Company does not assume any obligations to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made. About CareCloud CareCloud (Nasdaq: CCLD, CCLDO) brings disciplined innovation and generative AI solutions to the business of healthcare. Our suite of technology-enabled solutions helps clients increase financial and operational performance, streamline clinical workflows and improve the patient experience. More than 40,000 providers count on CareCloud to help them improve patient care while reducing administrative burdens and operating costs. Learn more about our products and services, including revenue cycle management (RCM), practice management (PM), electronic health records (EHR), artificial intelligence (AI), business intelligence (BI), patient experience management (PXM) and digital health, at Follow CareCloud on LinkedIn, X and Facebook. For additional information, please visit our website at To listen to video presentations by CareCloud's management team, read recent press releases and view the latest investor presentation, please visit SOURCE CareCloud Company Contact: Norman RothInterim Chief Financial Officer and Corporate ControllerCareCloud, Investor Contact: Stephen SnyderCo-Chief Executive OfficerCareCloud, CARECLOUD, CONSOLIDATED BALANCE SHEETS($ in thousands, except share and per share amounts) June 30, December 31, 2025 2024 (Unaudited) ASSETS Current assets: Cash $ 10,440 $ 5,145 Accounts receivable - net 13,563 12,774 Contract asset 3,955 4,334 Inventory 523 574 Current assets - related party 16 16 Prepaid expenses and other current assets 2,593 1,957 Total current assets 31,090 24,800 Property and equipment - net 5,828 5,290 Operating lease right-of-use assets 3,058 3,133 Intangible assets - net 15,512 18,698 Goodwill 19,192 19,186 Other assets 564 507 TOTAL ASSETS $ 75,244 $ 71,614 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 4,215 $ 4,565 Accrued compensation 3,324 1,817 Accrued expenses 4,909 4,951 Operating lease liability (current portion) 1,294 1,287 Deferred revenue (current portion) 1,232 1,212 Notes payable (current portion) 222 310 Contingent consideration (current portion) 330 - Dividend payable 714 5,438 Total current liabilities 16,240 19,580 Notes payable 86 26 Contingent consideration 426 - Operating lease liability 1,785 1,847 Deferred revenue 631 387 Total liabilities 19,168 21,840 COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY: Preferred stock, $0.001 par value - authorized 7,000,000 shares. Series A, issued and outstanding 984,530 and 4,526,231 shares at June 30, 2025 and December 31, 2024, respectively. Series B, issued and outstanding 1,511,372 shares at June 30, 2025 and December 31, 2024. 2 6 Common stock, $0.001 par value - authorized 85,000,000 shares. Issued 43,062,838 and 16,997,035 shares at June 30, 2025 and December 31, 2024, respectively. Outstanding 42,322,039 and 16,256,236 shares at June 30, 2025 and December 31, 2024, respectively 43 17 Additional paid-in capital 122,635 121,046 Accumulated deficit (61,780 ) (66,630 ) Accumulated other comprehensive loss (4,162 ) (4,003 ) Less: 740,799 common shares held in treasury, at cost at June 30, 2025 and December 31, 2024 (662 ) (662 ) Total shareholders' equity 56,076 49,774 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 75,244 $ 71,614 CARECLOUD, CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)($ in thousands, except share and per share amounts) Three Months Ended Six Months Ended June 30, June 30, 2025 2024 2025 2024 NET REVENUE $ 27,377 $ 28,090 $ 55,009 $ 54,052 OPERATING EXPENSES: Direct operating costs 14,480 15,242 29,944 30,419 Selling and marketing 1,118 1,664 2,249 3,434 General and administrative 4,358 4,028 8,690 7,749 Research and development 1,020 1,055 2,255 1,968 Depreciation and amortization 3,382 3,714 6,719 7,644 Restructuring costs 23 116 137 438 Total operating expenses 24,381 25,819 49,994 51,652 OPERATING INCOME 2,996 2,271 5,015 2,400 OTHER: Interest income 51 24 93 51 Interest expense (68 ) (288 ) (126 ) (653 ) Other expense - net (35 ) (294 ) (49 ) (287 ) INCOME BEFORE PROVISION FOR INCOME TAXES 2,944 1,713 4,933 1,511 Income tax provision 42 39 83 78 NET INCOME $ 2,902 $ 1,674 $ 4,850 $ 1,433 Preferred stock dividend 1,365 3,923 4,176 5,235 NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS $ 1,537 $ (2,249 ) $ 674 $ (3,802 ) Net income (loss) per common share: basic and diluted $ 0.04 $ (0.14 ) $ 0.02 $ (0.24 ) Weighted-average common shares used to compute basic and diluted loss per share 42,321,629 16,132,420 33,118,912 16,073,364 CARECLOUD, CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)FOR THE SIX MONTHS ENDED JUNE 30, 2025 AND 2024($ in thousands) 2025 2024 OPERATING ACTIVITIES: Net income $ 4,850 $ 1,433 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 6,855 7,818 Lease amortization 901 1,008 Deferred revenue 264 (22 ) Provision for expected credit losses 169 123 Foreign exchange loss (gain) 1 (57 ) Interest accretion 219 321 Stock-based compensation expense (benefit) 219 (443 ) Changes in operating assets and liabilities: Accounts receivable (958 ) (1,314 ) Contract asset 411 294 Inventory 51 (32 ) Other assets (838 ) (825 ) Accounts payable and other liabilities 377 41 Net cash provided by operating activities 12,521 8,345 INVESTING ACTIVITIES: Purchases of property and equipment (1,786 ) (425 ) Capitalized software and other intangible assets (1,677 ) (3,046 ) Initial payment for acquisition (40 ) - Net cash used in investing activities (3,503 ) (3,471 ) FINANCING ACTIVITIES: Preferred stock dividends paid (3,317 ) - Settlement of tax withholding obligations on stock issued to employees (22 ) (184 ) Repayments of notes payable (355 ) (328 ) Repayment of line of credit - (5,000 ) Net cash used in financing activities (3,694 ) (5,512 ) EFFECT OF EXCHANGE RATE CHANGES ON CASH (29 ) (76 ) NET INCREASE (DECREASE) IN CASH 5,295 (714 ) CASH - Beginning of the period 5,145 3,331 CASH - End of the period $ 10,440 $ 2,617 SUPPLEMENTAL NONCASH INVESTING AND FINANCING ACTIVITIES: Conversion of preferred stock and accrued dividends to common stock $ 2,435 $ - Dividends declared, not paid $ 714 $ 5 Purchase of prepaid insurance with assumption of note $ - $ 96 Reclass of deposits for property and equipment placed in service $ - $ 296 SUPPLEMENTAL INFORMATION - Cash paid during the period for: Income taxes $ 144 $ 122 Interest $ 44 $ 527 RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO COMPARABLE GAAP MEASURES (UNAUDITED) The following is a reconciliation of the non-GAAP financial measures used by us to describe our financial results determined in accordance with accounting principles generally accepted in the United States of America ('GAAP'). An explanation of these measures is also included below under the heading 'Explanation of Non-GAAP Financial Measures.' While management believes that these non-GAAP financial measures provide useful supplemental information to investors regarding the underlying performance of our business operations, investors are reminded to consider these non-GAAP measures in addition to, and not as a substitute for, financial performance measures prepared in accordance with GAAP. In addition, it should be noted that these non-GAAP financial measures may be different from non-GAAP measures used by other companies, and management may utilize other measures to illustrate performance in the future. Non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP. Adjusted EBITDA to GAAP Net Income Set forth below is a reconciliation of our 'adjusted EBITDA' to our GAAP net income. Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 ($ in thousands) Net revenue $ 27,377 $ 28,090 $ 55,009 $ 54,052 GAAP net income 2,902 1,674 4,850 1,433 Provision for income taxes 42 39 83 78 Net interest expense 17 264 33 602 Foreign exchange loss / other expense 41 306 60 301 Stock-based compensation expense (benefit) 111 265 219 (443 ) Depreciation and amortization 3,382 3,714 6,719 7,644 Transaction and integration costs 11 11 23 23 Restructuring costs 23 116 137 438 Adjusted EBITDA $ 6,529 $ 6,389 $ 12,124 $ 10,076 Non-GAAP Adjusted Operating Income to GAAP Operating Income Set forth below is a reconciliation of our non-GAAP 'adjusted operating income' and non-GAAP 'adjusted operating margin' to our GAAP operating income and GAAP operating margin. Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 ($ in thousands) Net revenue $ 27,377 $ 28,090 $ 55,009 $ 54,052 GAAP net income 2,902 1,674 4,850 1,433 Provision for income taxes 42 39 83 78 Net interest expense 17 264 33 602 Other expense - net 35 294 49 287 GAAP operating income 2,996 2,271 5,015 2,400 GAAP operating margin 10.9 % 8.1 % 9.1 % 4.4 % Stock-based compensation expense (benefit) 111 265 219 (443 ) Amortization of purchased intangible assets 193 586 282 1,426 Transaction and integration costs 11 11 23 23 Restructuring costs 23 116 137 438 Non-GAAP adjusted operating income $ 3,334 $ 3,249 $ 5,676 $ 3,844 Non-GAAP adjusted operating margin 12.2 % 11.6 % 10.3 % 7.1 % Non-GAAP Adjusted Net Income to GAAP Net Income Set forth below is a reconciliation of our non-GAAP 'adjusted net income' and non-GAAP 'adjusted net income per share' to our GAAP net income and GAAP net income per share. Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 ($ in thousands) GAAP net income $ 2,902 $ 1,674 $ 4,850 $ 1,433 Foreign exchange loss / other expense 41 306 60 301 Stock-based compensation expense (benefit) 111 265 219 (443 ) Amortization of purchased intangible assets 193 586 282 1,426 Transaction and integration costs 11 11 23 23 Restructuring costs 23 116 137 438 Non-GAAP adjusted net income $ 3,281 $ 2,958 $ 5,571 $ 3,178 For purposes of determining non-GAAP adjusted net income per share, we used the number of common shares outstanding as of June 30, 2025 and 2024. Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 GAAP net income (loss) attributable to common shareholders, per share $ 0.04 $ (0.14 ) $ 0.02 $ (0.24 ) Impact of preferred stock dividend 0.03 0.24 0.09 0.33 Net income per end-of-period share 0.07 0.10 0.11 0.09 Foreign exchange loss / other expense 0.00 0.02 0.00 0.02 Stock-based compensation expense (benefit) 0.00 0.01 0.01 (0.03 ) Amortization of purchased intangible assets 0.00 0.04 0.01 0.09 Transaction and integration costs 0.00 0.00 0.00 0.00 Restructuring costs 0.00 0.01 0.00 0.03 Non-GAAP adjusted earnings per share $ 0.07 $ 0.18 $ 0.13 $ 0.20 Net cash provided by operating activities to free cash flow Set forth below is a reconciliation of our non-GAAP 'free cash flow' to our GAAP net cash provided by operating activities. Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 ($ in thousands) Net cash provided by operating activities $ 7,408 $ 4,279 $ 12,521 $ 8,345 Purchases of property and equipment (1,162 ) (127 ) (1,786 ) (425 ) Capitalized software and other intangible assets (831 ) (1,476 ) (1,677 ) (3,046 ) Initial payment for acquisition - - (40 ) - Free cash flow $ 5,415 $ 2,676 $ 9,018 $ 4,874 Net cash used in investing activities 1 $ (1,993 ) $ (1,603 ) $ (3,503 ) $ (3,471 ) Net cash used in financing activities $ (1,762 ) $ (4,138 ) $ (3,694 ) $ (5,512 ) 1 Net cash used in investing activities includes purchases of property and equipment and capitalized software and other intangible assets, which are also included in our computation of free cash flow. Explanation of Non-GAAP Financial Measures We report our financial results in accordance with accounting principles generally accepted in the United States of America, or GAAP. However, management believes that, in order to properly understand our short-term and long-term financial and operational trends, investors may wish to consider the impact of certain non-cash or non-recurring items, when used as a supplement to financial performance measures in accordance with GAAP. These items result from facts and circumstances that vary in frequency and impact on continuing operations. Management also uses results of operations before such items to evaluate the operating performance of CareCloud and compare it against past periods, make operating decisions, and serve as a basis for strategic planning. These non-GAAP financial measures provide management with additional means to understand and evaluate the operating results and trends in our ongoing business by eliminating certain non-cash expenses and other items that management believes might otherwise make comparisons of our ongoing business with prior periods more difficult, obscure trends in ongoing operations, or reduce management's ability to make useful forecasts. Management believes that these non-GAAP financial measures provide additional means of evaluating period-over-period operating performance. In addition, management understands that some investors and financial analysts find this information helpful in analyzing our financial and operational performance and comparing this performance to our peers and competitors. Management uses adjusted EBITDA, adjusted operating income, adjusted operating margin, and non-GAAP adjusted net income to provide an understanding of aspects of operating results before the impact of investing and financing charges and income taxes. Adjusted EBITDA may be useful to an investor in evaluating our operating performance and liquidity because this measure excludes non-cash expenses as well as expenses pertaining to investing or financing transactions. Management defines 'adjusted EBITDA' as the sum of GAAP net income (loss) before provision for (benefit from) income taxes, net interest expense, other (income) expense, stock-based compensation expense, depreciation and amortization, integration costs, transaction costs, impairment charges and changes in contingent consideration. Management defines 'non-GAAP adjusted operating income' as the sum of GAAP operating income (loss) before stock-based compensation expense, amortization of purchased intangible assets, integration costs, transaction costs, impairment charges and changes in contingent consideration, and 'non-GAAP adjusted operating margin' as non-GAAP adjusted operating income divided by net revenue. Management defines 'non-GAAP adjusted net income' as the sum of GAAP net income (loss) before stock-based compensation expense, amortization of purchased intangible assets, other (income) expense, integration costs, transaction costs, impairment charges, changes in contingent consideration, any tax impact related to these preceding items and income tax expense related to goodwill, and 'non-GAAP adjusted net income per share' as non-GAAP adjusted net income divided by common shares outstanding at the end of the period, including the shares which were issued but are subject to forfeiture and considered contingent consideration. Management considers all of these non-GAAP financial measures to be important indicators of our operational strength and performance of our business and a good measure of our historical operating trends, in particular the extent to which ongoing operations impact our overall financial performance. In addition to items routinely excluded from non-GAAP EBITDA, management excludes or adjusts each of the items identified below from the applicable non-GAAP financial measure referenced above for the reasons set forth with respect to that excluded item: Foreign exchange loss/other expense. Other expense is excluded because foreign currency gains and losses and other non-operating expenses are expenditures that management does not consider part of ongoing operating results when assessing the performance of our business, and also because the total amount of the expense is partially outside of our control. Foreign currency gains and losses are based on global market factors which are unrelated to our performance during the period in which the gains and losses are recorded. Stock-based compensation expense (benefit). Stock-based compensation expense (benefit) is excluded because this is primarily a non-cash expenditure that management does not consider part of ongoing operating results when assessing the performance of our business, and also because the total amount of the expenditure is partially outside of our control because it is based on factors such as stock price, volatility, and interest rates, which may be unrelated to our performance during the period in which the expenses are incurred. Stock-based compensation expense includes cash-settled awards based on changes in the stock price. Amortization of purchased intangible assets. Purchased intangible assets are amortized over their estimated useful lives and generally cannot be changed or influenced by management after the acquisition. Accordingly, this item is not considered by management in making operating decisions. Management does not believe such charges accurately reflect the performance of our ongoing operations for the period in which such charges are recorded. Transaction costs. Transaction costs are upfront costs related to acquisitions and related transactions, such as brokerage fees, pre-acquisition accounting costs and legal fees, and other upfront costs related to specific transactions. Management believes that such expenses do not have a direct correlation to future business operations, and therefore, these costs are not considered by management in making operating decisions. Management does not believe such charges accurately reflect the performance of our ongoing operations for the period in which such charges are incurred. Integration costs. Integration costs are severance payments for certain employees relating to our acquisitions and exit costs related to terminating leases and other contractual agreements. Accordingly, management believes that such expenses do not have a direct correlation to future business operations, and therefore, these costs are not considered by management in making operating decisions. Management does not believe such charges accurately reflect the performance of our ongoing operations for the period in which such charges are incurred. Restructuring costs. Restructuring costs primarily consist of severance and separation costs associated with the optimization of the Company's operations and profitability improvements. Management believes that such expenses do not have a direct correlation to future business operations, and therefore, these costs are not considered by management in making operating decisions. Management does not believe such charges accurately reflect the performance of our ongoing operations for the period in which such charges are incurred. Free cash flow. Management believes that free cash flow, which measures our ability to generate additional cash from our business operations, is an important financial measure for use in evaluating the Company's financial performance. Free cash flow should be considered in addition to, rather than as a substitute for, consolidated net operating results as a measure of our performance and net cash provided by operating activities as a measure of our liquidity. Additionally, the Company's definition of free cash flow is limited, in that it does not represent residual cash flows available for discretionary expenditures, due to the fact that the measure does not deduct the payments required for debt service and other contractual obligations or payments made for business acquisitions. Therefore, we believe it is important to view free cash flow as a measure that provides supplemental information to our condensed consolidated statements of cash in to access your portfolio
