Summary
Fidelity National Information Services, Inc. (FIS) reported strong revenue and earnings growth for the nine months ended September 30, 2010, primarily driven by the successful integration of the Metavante Acquisition completed in October 2009. Consolidated revenue increased by 59.5% to $3.9 billion, with significant contributions from the Financial Solutions Group (FSG) and Payment Solutions Group (PSG) segments. This growth was bolstered by recurring revenue streams from multi-year agreements, increased transaction volumes, and a favorable foreign currency impact. Despite facing some headwinds in paper-based check businesses and one-time impairment charges related to the Brazilian venture, the company demonstrated improved operating margins, particularly in its core segments, reflecting effective synergy initiatives and cost management. The company's financial position shows robust cash flow from operations, which increased by $280.9 million year-over-year, largely due to the Metavante acquisition. FIS maintains a substantial debt load, with $5.1 billion in debt at quarter-end, following a leveraged recapitalization and the issuance of new senior notes. Management expects operating cash flows to be sufficient for operating needs and debt service. The company also reaffirmed its quarterly dividend of $0.05 per common share. Investors should note the significant impact of the Metavante acquisition, the ongoing integration efforts, the company's leverage profile, and the potential effects of evolving regulatory landscapes like the Dodd-Frank Act.
Financial Highlights
55 data points| Revenue | $1.37B |
| Gross Profit | $469.90M |
| SG&A Expenses | $138.90M |
| Operating Expenses | $1.19B |
| Operating Income | $176.10M |
| Interest Expense | $60.90M |
| Net Income | $110.40M |
| EPS (Basic) | $0.33 |
| EPS (Diluted) | $0.33 |
| Shares Outstanding (Basic) | 332.20M |
| Shares Outstanding (Diluted) | 339.20M |
Key Highlights
- 1Total revenue for the nine months ended September 30, 2010, surged by 59.5% to $3.9 billion, largely attributable to the Metavante acquisition and a termination fee from the Brazilian card processing venture.
- 2Net earnings attributable to FIS common stockholders increased significantly to $293.9 million for the nine-month period, up from $159.8 million in the prior year.
- 3Operating income grew substantially, reaching $547.6 million for the nine-month period, reflecting strong performance in the Financial Solutions Group (FSG) and Payment Solutions Group (PSG) segments.
- 4Gross margin improved considerably, rising from 25.0% to 30.8% for the nine-month period, driven by Metavante synergies and the termination fee.
- 5The company completed a significant leveraged recapitalization, including a $2.5 billion stock repurchase program and the issuance of $1.1 billion in senior notes, alongside adding $1.5 billion in Term Loan B.
- 6Cash flow from operations increased by $280.9 million to $785.9 million for the nine-month period, primarily due to incremental earnings from the Metavante acquisition.
- 7Despite a $154.9 million impairment charge related to the Brazilian venture, the company's core business segments demonstrated resilience and growth.