Summary
Fidelity National Information Services, Inc. (FIS) reported solid performance for the third quarter and the first nine months of 2021, reflecting a continued global economic recovery and the effectiveness of its strategic initiatives. Revenue saw a significant increase of 10% year-over-year for both periods, driven by strong performance across all three core segments: Merchant, Banking, and Capital Markets. Key drivers for revenue growth include increased merchant transaction volumes as economies reopened, robust demand for new Banking solutions, and growth in Capital Markets' managed services and recurring revenues. The company also benefited from favorable foreign currency impacts. Despite some increased expenses related to compensation and platform modernization, including asset impairments and accelerated amortization, the company demonstrated improved profitability, with notable increases in gross profit margin and Adjusted EBITDA across its segments. FIS remains committed to deleveraging following the Worldpay acquisition and expects to reach its target leverage by year-end 2021, while also signaling a commitment to increasing shareholder returns through dividends.
Financial Highlights
56 data points| Revenue | $3.51B |
| Cost of Revenue | $2.18B |
| Gross Profit | $1.33B |
| SG&A Expenses | $989.00M |
| Operating Expenses | $3.37B |
| Operating Income | $138.00M |
| Net Income | $158.00M |
| EPS (Basic) | $0.26 |
| EPS (Diluted) | $0.26 |
| Shares Outstanding (Basic) | 613.00M |
| Shares Outstanding (Diluted) | 619.00M |
Key Highlights
- 1Total revenue increased by 10% year-over-year for both the three and nine months ended September 30, 2021, reaching $3.5 billion and $10.2 billion, respectively.
- 2Merchant Solutions revenue grew 14% in Q3 and 20% year-to-date, driven by increased card-present and card-not-present volumes as lockdown restrictions eased.
- 3Banking Solutions revenue increased by 8% for both the three and nine-month periods, supported by recurring revenues from new sales and increased volumes.
- 4Capital Markets Solutions revenue saw an 11% increase in Q3 and 7% year-to-date, driven by strong new sales in outsourced solutions and services.
- 5Adjusted EBITDA margins improved across all three segments (Merchant, Banking, Capital Markets) compared to the prior year, indicating enhanced operational efficiency and profitability.
- 6The company is on track to meet or exceed revenue synergy targets from the Worldpay acquisition and has exceeded expense synergy targets.
- 7FIS ended the quarter with $3.38 billion in available liquidity, including $1.39 billion in cash and cash equivalents, and remains committed to reaching its target leverage ratio by the end of 2021.