01—Abstract
Summary
Summary of the 10-K filed February 26, 2016. Cited figures are marked; the original filing is the authoritative source.
Fidelity National Information Services, Inc. (FIS) reported strong revenue growth in 2015, driven significantly by the acquisition of SunGard, which closed in November 2015.
This strategic move expanded FIS's offerings into capital markets, asset management, and insurance, significantly broadening its global reach and service portfolio. The company reorganized into three reporting segments: Integrated Financial Solutions (IFS), Global Financial Solutions (GFS), and Corporate and Other, with SunGard's operations being integrated into the GFS segment. While the company experienced revenue increases, it also incurred substantial integration and transaction costs related to the SunGard acquisition.
Management anticipates significant cost savings and synergies from this integration, targeting $200 milliona in annual synergy run-rate savings by the end of 2017. Despite a challenging economic environment impacting professional services, FIS demonstrated resilience, particularly in its recurring revenue streams from processing services, and maintained its commitment to shareholder returns through dividends and share repurchases.
02—Key points
Key Highlights
- Completed the significant acquisition of SunGard on November 30, 2015, substantially expanding its service offerings and global presence.
- Reported consolidated revenues of $6.595 billion for 2015, an increase of 2.8% over 2014, largely due to acquisitions.
- Integrated SunGard's operations into the Global Financial Solutions (GFS) segment, reflecting a strategic alignment.
- Experienced operating income of $1.1 billion, though impacted by $171.3 million in transaction and integration costs related to acquisitions in 2015.
- Maintained strong gross margins, with the IFS segment showing a 34.2% operating margin and GFS showing a 16.5% operating margin in 2015.
- Continued to return value to shareholders through quarterly dividends ($0.26 per share) and an active share repurchase program, with $1.22 billion capacity remaining as of December 31, 2015.
- Anticipates $200 million in annual synergy run-rate savings by the end of 2017 from the SunGard integration.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2015, Fidelity National Information Services, Inc. kept $0.10.
- Revenue$6.60B100.0%
- Cost of revenue−$4.39B66.6%
- Gross profit$2.20B33.4%
- Operating costs−$1.10B16.7%
- Operating income$1.10B16.7%
- Interest, other & tax−$467.0M7.1%
- Net income$632.0M9.6%
Where FY2015 revenue went
$6.60B- Cost of revenue: $4.39B, 67% of revenue
- SG&A: $1.10B, 17% of revenue
- Net income: $632.0M, 9.6% of revenue
- Interest, other & tax: $467.0M, 7.1% of revenue
Kept 9.6% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2015filed February 26, 2016Financial Statements
FY2015 against FY2014
| Line item | FY2015FY2014 | Change |
|---|---|---|
| Revenue | $6.60B$6.41B | +2.9% |
| Gross Profit | $2.20B$2.09B | +5.5% |
| SG&A Expenses | $1.10B$815.00M | +35.2% |
| Operating Expenses | $5.50B$5.14B | +6.9% |
| Operating Income | $1.10B$1.27B | −13.5% |
| Interest Expense | $199.00M$173.00M | +15.0% |
| Net Income | $632.00M$679.00M | −6.9% |
| EPS (Basic) | $2.22$2.38 | −6.7% |
| EPS (Diluted) | $2.19$2.35 | −6.8% |
| Shares Outstanding (Basic) | 285.00M285.00M | 0.0% |
| Shares Outstanding (Diluted) | 289.00M289.00M | 0.0% |
05—Questions
Frequently Asked Questions
What was the primary driver of FIS's revenue growth in 2015?
The primary driver of FIS's revenue growth in 2015 was the acquisition of SunGard, which closed on November 30, 2015. This acquisition significantly expanded the company's service offerings and market reach, contributing to a 2.8% overall revenue increase to $6.595 billion.
What are the main segments FIS operates in following its reorganization?
Following a reorganization in 2015, FIS reports its financial performance across three main segments: Integrated Financial Solutions (IFS), Global Financial Solutions (GFS), and Corporate and Other. SunGard's operations were integrated into the GFS segment.
What is FIS's strategy regarding the SunGard acquisition?
FIS's strategy involves integrating SunGard's operations to leverage complementary technology solutions and achieve economies of scale. The company anticipates significant cost savings and synergies, targeting $200 million in annual run-rate savings by the end of 2017. The acquisition aims to broaden FIS's portfolio and enhance its competitive position.
How did the SunGard acquisition impact FIS's financial performance in 2015?
The SunGard acquisition significantly boosted revenues and assets but also led to substantial transaction and integration costs in 2015, impacting operating income. While the full benefits of synergies are expected over time, the immediate financial results reflect the costs associated with this large strategic move.
06—Continue