01—Abstract
Summary
Summary of the 10-K filed February 18, 2021. Cited figures are marked; the original filing is the authoritative source.
Fidelity National Information Services, Inc. (FIS) reported solid revenue growth in its 2020 10-K, driven significantly by the acquisition of Worldpay.
Total revenue reached $12.55 billiona, up from $10.33 billion in 2019, reflecting a 21% increase, largely attributed to the integration of Worldpay's merchant solutions. Despite this top-line growth, the company faced challenges stemming from the COVID-19 pandemic, which impacted payment processing volumes, particularly in sectors like travel and hospitality, leading to a decrease in gross profit margin. However, FIS demonstrated resilience through effective cost management and synergy realization from the Worldpay integration, exceeding expense synergy targets.
The company's strategic priorities for 2020 focused on building upon its core strengths in Merchant, Banking, and Capital Markets solutions. FIS continued to invest in technology modernization and innovation, aiming to drive efficiency and scalability across its operations.
The company also managed its debt prudently, working to reduce leverage incurred from the Worldpay acquisition, and maintained a strong liquidity position. The report highlights a continued commitment to returning capital to shareholders through dividends and share repurchases, underscoring a stable financial outlook despite the prevailing economic uncertainties.
02—Key points
Key Highlights
- Total revenue increased by 21% to $12.55 billion in 2020, primarily due to the Worldpay acquisition.
- The company experienced a decrease in gross profit margin from 36% to 33% in 2020, attributed to higher acquired intangible asset amortization and the impact of COVID-19 on high-margin services.
- Selling, general, and administrative expenses rose significantly, by 32%, largely driven by Worldpay integration costs.
- Operating income saw a substantial decrease of 43% from $969 million in 2019 to $552 million in 2020.
- FIS reported a net earning of $158 million for 2020, a decrease from $298 million in 2019, with EPS also declining.
- The company maintained a strong liquidity position with $4.6 billion in available liquidity as of December 31, 2020.
- FIS is focused on reducing leverage incurred from the Worldpay acquisition and expects to reach its target leverage in 2021.
- The company's Merchant Solutions segment, heavily impacted by COVID-19, saw revenue surge by 94% year-over-year due to Worldpay, but adjusted EBITDA margin decreased.
- Banking Solutions revenue grew 6% year-over-year, with flat adjusted EBITDA margins.
- Capital Market Solutions revenue increased 5% year-over-year, with improved adjusted EBITDA margins.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2020, Fidelity National Information Services, Inc. kept $0.01.
- Revenue$12.55B100.0%
- Cost of revenue−$8.35B66.5%
- Gross profit$4.20B33.5%
- Operating costs−$3.65B29.1%
- Operating income$552.0M4.4%
- Interest, other & tax−$394.0M3.1%
- Net income$158.0M1.3%
Where FY2020 revenue went
$12.55B- Cost of revenue: $8.35B, 67% of revenue
- SG&A: $3.52B, 28% of revenue
- Net income: $158.0M, 1.3% of revenue
- Other operating costs: $136.0M, 1.1% of revenue
- Interest, other & tax: $394.0M, 3.1% of revenue
Kept 1.3% as net incomeNet income $158.0M · 1.3%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2020filed February 18, 2021Financial Statements
FY2020 against FY2019
| Line item | FY2020FY2019 | Change |
|---|---|---|
| Revenue | $12.55B$10.33B | +21.5% |
| Cost of Revenue | $8.35B$6.61B | +26.3% |
| Gross Profit | $4.20B$3.72B | +12.9% |
| SG&A Expenses | $3.52B$2.67B | +31.8% |
| Operating Income | $552.00M$969.00M | −43.0% |
| Interest Expense | $339.00M$389.00M | −12.9% |
| Net Income | $158.00M$298.00M | −47.0% |
| EPS (Basic) | $0.26$0.67 | −61.2% |
| EPS (Diluted) | $0.25$0.66 | −62.1% |
| Shares Outstanding (Basic) | 619.00M445.00M | +39.1% |
| Shares Outstanding (Diluted) | 627.00M451.00M | +39.0% |
05—Questions
Frequently Asked Questions
What was the primary driver of FIS's revenue growth in 2020?
The primary driver of FIS's revenue growth in 2020 was the acquisition of Worldpay, Inc., which significantly expanded its Merchant Solutions segment and contributed substantially to the overall revenue increase.
How did the COVID-19 pandemic impact FIS's financial performance in 2020?
The COVID-19 pandemic adversely impacted FIS's financial performance, particularly in its Merchant Solutions segment, by reducing payment processing volumes in discretionary spending areas like travel and restaurants. This led to a decrease in gross profit margin and operating income. However, the company implemented cost-saving measures and managed its operations effectively to mitigate some of these impacts.
What is FIS's strategy regarding its debt levels following the Worldpay acquisition?
Following the Worldpay acquisition, FIS incurred substantial debt. The company is committed to reducing its leverage and expects to reach its target leverage levels in 2021. This focus on deleveraging is a key part of its financial strategy.
How is FIS managing its technology and innovation investments?
FIS continues to invest in modernizing its core systems and developing next-generation digital solutions across its Banking, Merchant, and Capital Markets segments. These investments are aimed at enhancing capabilities, improving efficiency, and responding to evolving market demands and technological trends, including cloud adoption and AI.
06—Continue