01—Abstract
Summary
Summary of the 10-K filed February 20, 2020. Cited figures are marked; the original filing is the authoritative source.
Fidelity National Information Services, Inc. (FIS) reported strong revenue growth in 2019, largely driven by the significant acquisition of Worldpay.
This strategic move positioned FIS as a global leader in financial technology, expanding its merchant solutions capabilities and global reach. The company's diversified revenue streams across Merchant, Banking, and Capital Markets segments provide a degree of stability, though the report highlights ongoing industry consolidation and evolving technological demands. While the Worldpay acquisition has boosted revenue, it also brought substantial integration costs and increased debt levels.
Management is focused on integrating Worldpay, realizing synergies, and managing the combined entity effectively. Investors should monitor FIS's ability to leverage its scale and expertise to drive profitable growth, manage its debt, and adapt to the dynamic fintech landscape. The company's competitive strengths lie in its global distribution, deep domain expertise, and strong customer relationships, which are crucial for navigating the competitive environment and capitalizing on future opportunities.
02—Key points
Key Highlights
- Completed the significant acquisition of Worldpay on July 31, 2019, transforming FIS into a global leader in financial technology and expanding its merchant solutions capabilities.
- Reported a substantial increase in total revenue to $10.333 billion in 2019, up from $8.423 billion in 2018, primarily driven by the Worldpay acquisition.
- Reorganized into three primary reportable segments: Merchant Solutions, Banking Solutions, and Capital Market Solutions, reflecting the integrated business post-Worldpay acquisition.
- Demonstrated strong Adjusted EBITDA margins across its segments, particularly in Merchant Solutions (49.4%) and Capital Market Solutions (46.1%) for 2019.
- Maintains a robust competitive position due to its global distribution and scale, extensive domain expertise, and strong, long-term customer relationships.
- Successfully managed integration synergies and expense reductions ahead of schedule following the Worldpay acquisition.
- Managed a significant debt load of $20.2 billion at year-end 2019, a result of financing the Worldpay acquisition, while also having $1.2 billion in cash and cash equivalents.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2019, Fidelity National Information Services, Inc. kept $0.03.
- Revenue$10.33B100.0%
- Cost of revenue−$6.61B64.0%
- Gross profit$3.72B36.0%
- Operating costs−$2.75B26.7%
- Operating income$969.0M9.4%
- Interest, other & tax−$671.0M6.5%
- Net income$298.0M2.9%
Where FY2019 revenue went
$10.33B- Cost of revenue: $6.61B, 64% of revenue
- SG&A: $2.67B, 26% of revenue
- Net income: $298.0M, 2.9% of revenue
- Other operating costs: $87.0M, 0.8% of revenue
- Interest, other & tax: $671.0M, 6.5% of revenue
Kept 2.9% as net incomeNet income $298.0M · 2.9%Other operating costs $87.0M · 0.8%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2019filed February 20, 2020Financial Statements
FY2019 against FY2018
| Line item | FY2019FY2018 | Change |
|---|---|---|
| Revenue | $10.33B$8.42B | +22.7% |
| Cost of Revenue | $6.61B$5.57B | +18.7% |
| Gross Profit | $3.72B$2.85B | +30.4% |
| SG&A Expenses | $2.67B$1.30B | +105.0% |
| Operating Income | $969.00M$1.46B | −33.5% |
| Interest Expense | $389.00M$314.00M | +23.9% |
| Net Income | $298.00M$846.00M | −64.8% |
| EPS (Basic) | $0.67$2.58 | −74.0% |
| EPS (Diluted) | $0.66$2.55 | −74.1% |
| Shares Outstanding (Basic) | 445.00M328.00M | +35.7% |
| Shares Outstanding (Diluted) | 451.00M332.00M | +35.8% |
05—Questions
Frequently Asked Questions
What was the primary driver of FIS's revenue growth in 2019?
The primary driver of FIS's revenue growth in 2019 was the significant acquisition of Worldpay, which closed on July 31, 2019. This acquisition substantially increased FIS's total revenue and expanded its global footprint, particularly in merchant solutions.
How did the Worldpay acquisition impact FIS's financial structure?
The Worldpay acquisition significantly increased FIS's revenue and operational scale. However, it also resulted in a substantial increase in total debt to $20.2 billion by the end of 2019, largely to finance the transaction. The company is focused on integrating Worldpay and realizing expected synergies to manage this increased leverage.
What are FIS's key business segments, and how did they perform in 2019?
Following the Worldpay acquisition, FIS reorganized into three main segments: Merchant Solutions, Banking Solutions, and Capital Market Solutions. In 2019, Merchant Solutions saw a dramatic revenue increase due to Worldpay, Banking Solutions showed steady revenue growth, and Capital Market Solutions experienced modest revenue growth. The company also maintains a 'Corporate and Other' segment for overhead and non-strategic businesses.
What are the main risks or challenges facing FIS following the Worldpay acquisition?
Key challenges include the successful integration of Worldpay's operations and technology, managing the significant increase in debt, realizing anticipated synergies, and navigating a highly competitive and rapidly evolving fintech landscape. The company also faces risks related to cybersecurity, data privacy, and regulatory changes.
06—Continue