Summary
Fidelity National Information Services, Inc. (FIS) reported its third-quarter 2017 financial results, showing a mixed performance with declining revenues but improved profitability on a year-over-year basis for the nine-month period. The company completed several divestitures, including its PS&E business and consulting businesses (Capco, risk and compliance), which impacted reported revenue figures. Despite the revenue dip, cost management initiatives and the realization of expense synergies from the SunGard acquisition contributed to an increase in operating income and Adjusted EBITDA for the nine-month period, particularly within the Global Financial Solutions segment. FIS continues to navigate a dynamic financial technology landscape, with a strategic focus on digital banking, evolving payment solutions, and cybersecurity. The company highlighted its ongoing integration of SunGard, aiming for significant cost savings, and its commitment to innovation in areas like EMV card solutions. Management expects cash flow from operations, combined with existing cash reserves, to be sufficient for upcoming operational needs, debt service, and shareholder returns, including anticipated quarterly dividends and a substantial share repurchase program. Investors should note the impact of divestitures on revenue growth and the company's focus on margin improvement and synergy realization.
Financial Highlights
54 data points| Revenue | $2.20B |
| Cost of Revenue | $1.39B |
| Gross Profit | $710.00M |
| SG&A Expenses | $325.00M |
| Operating Expenses | $1.81B |
| Operating Income | $385.00M |
| Net Income | $59.00M |
| EPS (Basic) | $0.18 |
| EPS (Diluted) | $0.18 |
| Shares Outstanding (Basic) | 331.00M |
| Shares Outstanding (Diluted) | 336.00M |
Key Highlights
- 1Total revenues for the three months ended September 30, 2017, decreased by 4.8% to $2,198 million compared to $2,309 million in the prior year, largely due to divestitures of PS&E and consulting businesses.
- 2For the nine-month period ended September 30, 2017, revenues remained flat at $6,794 million compared to $6,795 million in the prior year, also impacted by divestitures.
- 3Operating income for the nine-month period increased by 16.4% to $1,007 million, driven by cost management and synergy realization, despite lower revenues in the three-month period.
- 4Adjusted EBITDA for the Integrated Financial Solutions (IFS) segment increased by 1.1% to $458 million for the three months and 3.3% to $1,369 million for the nine months, with improved margins.
- 5Adjusted EBITDA for the Global Financial Solutions (GFS) segment increased by 4.7% to $359 million for the three months and 10.6% to $973 million for the nine months, with significant margin expansion.
- 6The company sold a majority interest in certain consulting businesses (Capco, risk and compliance) on July 31, 2017, and its PS&E business on February 1, 2017, impacting segment revenues and expenses.
- 7FIS repurchased approximately $2,000 million of debt securities, incurring pre-tax charges of $167 million for tender premiums and write-offs of debt issuance costs.