Summary
Fidelity National Information Services, Inc. (FIS) reported significant revenue growth of 35.4% in the third quarter of 2019, largely driven by the completed acquisition of Worldpay on July 31, 2019. This transformative acquisition positions FIS as a global leader in financial technology, particularly in the payments sector, integrating Worldpay's extensive payment processing capabilities and global reach. Despite the substantial revenue uplift, the company experienced a decline in operating income and EPS for both the three- and nine-month periods compared to the prior year. This is primarily attributable to increased selling, general, and administrative expenses associated with the Worldpay integration, including acquisition and restructuring costs, and higher interest expenses due to increased debt levels from the acquisition. Investors should closely monitor the successful integration of Worldpay and the realization of anticipated synergies, as well as the company's deleveraging strategy.
Financial Highlights
56 data points| Revenue | $2.82B |
| Cost of Revenue | $1.84B |
| Gross Profit | $984.00M |
| SG&A Expenses | $757.00M |
| Operating Expenses | $2.68B |
| Operating Income | $140.00M |
| Net Income | $154.00M |
| EPS (Basic) | $0.30 |
| EPS (Diluted) | $0.29 |
| Shares Outstanding (Basic) | 516.00M |
| Shares Outstanding (Diluted) | 524.00M |
Key Highlights
- 1Revenue surged by 35.4% to $2.82 billion in Q3 2019, primarily due to the acquisition of Worldpay, which closed on July 31, 2019.
- 2The integration of Worldpay has reshaped FIS into a global fintech leader, significantly enhancing its Merchant Solutions segment, which saw revenue jump from $50 million to $720 million year-over-year for the quarter.
- 3Operating income declined significantly by 59.1% in Q3 2019 to $140 million, and by 14.5% year-to-date to $846 million, impacted by substantial acquisition, integration, and interest expenses.
- 4Diluted EPS decreased to $0.29 in Q3 2019 from $0.47 in Q3 2018, and year-to-date EPS fell to $1.15 from $1.65, reflecting the impact of increased expenses and debt.
- 5Total debt increased to $20.2 billion as of September 30, 2019, primarily due to financing the Worldpay acquisition, leading to higher interest expenses.
- 6The company continues to invest in modernization and innovation, including cloud migration and data center consolidation, aiming for cost savings and enhanced service delivery.
- 7Despite revenue growth, the company faces integration risks associated with Worldpay and potential headwinds from economic and geopolitical uncertainties, including Brexit.