10-KPeriod: FY2018

Fidelity National Information Services, Inc. Annual Report, Year Ended Dec 31, 2018

Filed February 21, 2019For Securities:FIS

Summary

Fidelity National Information Services, Inc. (FIS) reported total consolidated revenues of $8.423 billion for the year ended December 31, 2018, a slight decrease from $8.668 billion in 2017. This decrease was primarily attributed to the divestiture of certain businesses, including Capco and Public Sector & Education. The company operates across three segments: Integrated Financial Solutions (IFS), Global Financial Solutions (GFS), and Corporate and Other. IFS saw revenue growth of 3.3% driven by banking, wealth, and retail payment solutions, while GFS revenue declined by 8.2%, largely due to divestitures and unfavorable foreign currency impacts. FIS maintains a strong market position in financial services technology, offering a broad suite of solutions to clients globally. The company's strategy focuses on organic growth, strategic acquisitions, and innovation to enhance its offerings and expand its client base. Despite revenue headwinds from divestitures, FIS demonstrated improved operating margins in 2018 due to cost management and strategic efficiencies. The company's financial health remains solid, supported by consistent operational cash flows and a strong focus on strategic investments in technology and modernization.

Financial Highlights

56 data points
Beta

Revenue

$8.42B

33.9% Gross Margin

Net Income

$846.00M

10.0% Net Margin

EPS (Diluted)

$2.55

Total Assets

$23.77B

Cash & Equivalents

$703.00M

Free Cash Flow

$1.87B

Financial Statements
Beta
Revenue$8.42B
Cost of Revenue$5.57B
Gross Profit$2.85B
SG&A Expenses$1.30B
Operating Income$1.46B
Interest Expense$314.00M
Net Income$846.00M
EPS (Basic)$2.58
EPS (Diluted)$2.55
Shares Outstanding (Basic)328.00M
Shares Outstanding (Diluted)332.00M

Key Highlights

  • 1Total consolidated revenue for 2018 was $8.423 billion, a slight decrease from $8.668 billion in 2017, primarily due to divestitures.
  • 2Integrated Financial Solutions (IFS) segment revenue grew 3.3% in 2018, driven by banking, wealth, and retail payment solutions.
  • 3Global Financial Solutions (GFS) segment revenue declined 8.2% in 2018, impacted by divestitures (Capco) and foreign currency headwinds.
  • 4Operating income increased to $1.458 billion in 2018, with operating margins improving to 17.3% from 16.5% in 2017, reflecting cost management and strategic efficiencies.
  • 5The company continues to invest in technology modernization and digital solutions, including a cloud migration strategy and the 'Digital One' platform.
  • 6FIS generated robust operating cash flow of $1.993 billion in 2018.
  • 7The company repurchased approximately $1.2 billion in common stock during 2018.

Frequently Asked Questions

In 2018, FIS reported total consolidated revenues of $8.423 billion, a decrease of 2.8% from $8.668 billion in 2017. This decline was largely due to the sale of several business units, including the Certegy Check Services business unit, the Capco consulting business, and the Public Sector and Education business. Despite the revenue dip, operating income saw an increase to $1.458 billion, and operating margins improved to 17.3% due to effective cost management and strategic initiatives.

FIS operates in three segments: Integrated Financial Solutions (IFS), Global Financial Solutions (GFS), and Corporate and Other. The IFS segment showed positive momentum, with revenue increasing by 3.3% driven by growth in banking, wealth, and retail payment solutions. Conversely, the GFS segment experienced an 8.2% revenue decrease, primarily due to the divestiture of its Capco consulting business and an unfavorable impact from foreign currency translation. The Corporate and Other segment also saw a revenue decline, mainly due to prior divestitures.

FIS's strategy revolves around building, buying, or partnering to add solutions that can be cross-sold to existing clients and attract new ones. The company emphasizes supporting clients through innovation, continually improving operations to drive margin expansion, expanding client relationships through multi-solution offerings, and building global diversification. Key investments are focused on modernizing platforms, enhancing digital capabilities like the 'Digital One' platform, and improving its outsourcing infrastructure, including a significant cloud migration effort.

FIS continues to pay quarterly dividends, with a regular quarterly dividend of $0.35 per common share declared for March 2019. Additionally, the company has an active share repurchase program, having repurchased approximately $1.2 billion of its common stock in 2018, with $2.7 billion of authorization capacity remaining as of December 31, 2018. This indicates a commitment to returning capital to shareholders.