01—Abstract
Summary
Summary of the 10-K filed February 28, 2014. Cited figures are marked; the original filing is the authoritative source.
Fidelity National Information Services, Inc. (FIS) reported strong revenue growth in its 2013 10-K filing, reaching $6.07 billiona, an increase of 4.5% year-over-year, driven by transaction growth and demand for professional and consulting services.
The company highlighted its leadership in banking and payments technologies, serving over 14,000 institutions globally across its four segments: Financial Solutions Group (FSG), Payment Solutions Group (PSG), International Solutions Group (ISG), and Corporate and Other. PSG demonstrated particularly strong performance with a notable increase in operating margin to 39.0%b. FIS continues to focus on expanding client relationships, investing in new solutions through acquisitions and development, supporting client transformations, driving margin expansion, and building global diversification.
The company's strategy emphasizes recurring revenue streams from multi-year contracts. Key risks identified include competition, technological changes, customer consolidation, and regulatory environments. FIS also reported substantial goodwill and intangible assets, indicating a history of strategic acquisitions to broaden its offerings and scale.
02—Key points
Key Highlights
- Total revenues increased by 4.5% to $6.07 billion in 2013, driven by growth across its segments, particularly in professional and consulting services.
- The Payment Solutions Group (PSG) showed robust performance, with revenues growing and operating margin expanding significantly to 39.0% in 2013.
- The company continues to prioritize expanding client relationships and cross-selling opportunities through acquisitions and product development.
- FIS maintains a strong global presence, serving over 14,000 institutions in more than 100 countries, with international operations contributing approximately 21% of total revenue in 2013.
- The company actively repurchased shares, returning capital to shareholders, with $475.9 million spent on share repurchases in 2013.
- FIS is navigating a competitive landscape with significant players such as Fiserv and Jack Henry, and is adapting to technological changes and evolving market demands.
- The company is subject to various governmental regulations in the financial services sector, including those related to privacy, money transfer, and consumer protection, with a focus on compliance.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2013, Fidelity National Information Services, Inc. kept $0.08.
- Revenue$6.06B100.0%
- Cost of revenue−$4.09B67.5%
- Gross profit$1.97B32.5%
- Operating costs−$907.8M15.0%
- Operating income$1.06B17.5%
- Interest, other & tax−$569.8M9.4%
- Net income$493.1M8.1%
Where FY2013 revenue went
$6.06B- Cost of revenue: $4.09B, 67% of revenue
- SG&A: $907.8M, 15% of revenue
- Net income: $493.1M, 8.1% of revenue
- Interest, other & tax: $569.8M, 9.4% of revenue
Kept 8.1% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2013filed February 28, 2014Financial Statements
FY2013 against FY2012
| Line item | FY2013FY2012 | Change |
|---|---|---|
| Revenue | $6.06B$5.80B | +4.6% |
| Gross Profit | $1.97B$1.84B | +7.1% |
| SG&A Expenses | $907.80M$763.30M | +18.9% |
| Operating Expenses | $5.01B$4.73B | +5.9% |
| Operating Income | $1.06B$1.08B | −1.2% |
| Interest Expense | $198.60M$231.30M | −14.1% |
| Net Income | $493.10M$461.20M | +6.9% |
| EPS (Basic) | $1.70$1.58 | +7.6% |
| EPS (Diluted) | $1.68$1.55 | +8.4% |
| Shares Outstanding (Basic) | 289.70M291.80M | −0.7% |
| Shares Outstanding (Diluted) | 294.20M297.50M | −1.1% |
05—Questions
Frequently Asked Questions
What were the main drivers of FIS's revenue growth in 2013?
FIS's revenue growth in 2013 was primarily driven by an increase in transaction volumes, demand for professional and consulting services, incremental revenues from acquisitions made in 2012 and 2013, and higher termination fees. Growth in mobile and e-banking solutions also contributed positively.
How did FIS's different operating segments perform in 2013?
FIS operates through four segments: Financial Solutions Group (FSG), Payment Solutions Group (PSG), International Solutions Group (ISG), and Corporate and Other. FSG saw revenue growth of 4.4%, PSG grew revenue and expanded its operating margin to 39.0%, and ISG experienced revenue growth when adjusted for foreign currency impacts. Corporate and Other includes unallocated corporate expenses.
What are the key risks highlighted by FIS in its 2013 10-K filing?
Key risks identified include intense competition in the financial services technology market, the impact of rapid technological changes, potential adverse effects from consolidation within the banking and financial services industry (leading to fewer customers), global economic and political conditions impacting customer spending, and the complex and evolving regulatory landscape.
What is FIS's strategy for future growth?
FIS's strategy is built on expanding client relationships, acquiring or developing new solutions to cross-sell, supporting clients through technological and business transformations, driving margin expansion through operational efficiencies, and increasing global diversification. The company also continues to invest in innovation, particularly in mobile banking and payment solutions.
06—Continue