01—Abstract
Summary
Summary of the 10-K filed February 27, 2015. Cited figures are marked; the original filing is the authoritative source.
Fidelity National Information Services (FIS) reported robust revenue growth in 2014, reaching $6.41 billiona, a 5.8% increase year-over-year, driven by strong performance in consulting and professional services, particularly within its Financial Solutions Group (FSG) and International Solutions Group (ISG), alongside contributions from recent acquisitions.
The company continues to benefit from the industry trend of financial institutions outsourcing technology and processing needs, which provides a stable, recurring revenue stream. Operating income saw a significant increase to $1.27 billionb, reflecting improved operational efficiencies and revenue growth, although the operating margin slightly decreased due to a shift towards lower-margin consulting services. FIS also demonstrated a commitment to shareholder returns through consistent dividend payments and significant share repurchases, with approximately $1.52 billion remaining under its authorization as of year-end 2014.
02—Key points
Key Highlights
- Revenue grew 5.8% to $6.41 billion in 2014, driven by consulting, professional services, and acquisitions.
- Operating income increased by 19.5% to $1.27 billion, showcasing improved profitability.
- The company operates through four segments: Financial Solutions Group (FSG), Payment Solutions Group (PSG), International Solutions Group (ISG), and Corporate and Other.
- FIS continues to benefit from the trend of financial institutions outsourcing technology and processing, providing stable recurring revenue.
- Shareholder returns were supported by consistent dividend payments and active share repurchases.
- The company made several strategic acquisitions in 2014, including Clear2Pay and Reliance Financial Corporation, to expand its service offerings.
- Despite a strong revenue performance, the operating margin saw a slight decrease due to a growing proportion of lower-margin consulting services.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2014, Fidelity National Information Services, Inc. kept $0.11.
- Revenue$6.41B100.0%
- Cost of revenue−$4.33B67.5%
- Gross profit$2.09B32.5%
- Operating costs−$815.0M12.7%
- Operating income$1.27B19.8%
- Interest, other & tax−$592.0M9.2%
- Net income$679.0M10.6%
Where FY2014 revenue went
$6.41B- Cost of revenue: $4.33B, 67% of revenue
- SG&A: $815.0M, 13% of revenue
- Net income: $679.0M, 11% of revenue
- Interest, other & tax: $592.0M, 9.2% of revenue
Kept 11% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2014filed February 27, 2015Financial Statements
FY2014 against FY2013
| Line item | FY2014FY2013 | Change |
|---|---|---|
| Revenue | $6.41B$6.06B | +5.8% |
| Gross Profit | $2.09B$1.97B | +5.9% |
| SG&A Expenses | $815.00M$907.80M | −10.2% |
| Operating Expenses | $5.14B$5.01B | +2.7% |
| Operating Income | $1.27B$1.06B | +19.6% |
| Interest Expense | $173.00M$198.60M | −12.9% |
| Net Income | $679.00M$493.10M | +37.7% |
| EPS (Basic) | $2.38$1.70 | +40.0% |
| EPS (Diluted) | $2.35$1.68 | +39.9% |
| Shares Outstanding (Basic) | 285.00M289.70M | −1.6% |
| Shares Outstanding (Diluted) | 289.00M294.20M | −1.8% |
05—Questions
Frequently Asked Questions
What were the main drivers of revenue growth for FIS in 2014?
Revenue growth in 2014 was primarily driven by increased demand for consulting and professional services, incremental revenues from acquisitions made in 2013 and 2014 (such as Reliance), and growth in international operations, particularly in Europe and Asia.
How did FIS manage its debt and capital structure in 2014?
FIS actively managed its debt through refinancing activities in 2013 and 2014, which led to lower borrowing rates and a decrease in interest expense. The company also maintained a significant share repurchase program, indicating a focus on returning capital to shareholders.
What is the company's strategy regarding acquisitions and organic growth?
FIS' strategy involves both organic growth through internal product development and market expansion, and strategic acquisitions to complement or enhance existing offerings and diversify revenues. The company continues to invest in innovation and cross-selling opportunities.
What are the key risks highlighted in the filing that could impact FIS' future performance?
Key risks include intense competition, the potential for consolidation in the financial services industry to reduce the client base, the need to adapt to technological changes and innovate services, global economic conditions affecting client spending, and cybersecurity threats.
06—Continue