FIS registers slight decrease in revenues in Q4 2020
Fidelity National Information Servcs Inc (NYSE:FIS) today posted its financial results for the final quarter and full-year 2020.
On a GAAP basis, consolidated revenue decreased 1% to $3,316 million in the fourth quarter of 2020, primarily due to negative consumer spending trends associated with the ongoing COVID-19 pandemic. Net earnings attributable to common stockholders were $103 million or $0.16 per diluted share.
On an organic basis, revenue was flat as compared to the prior year period. Adjusted EBITDA margin expanded by 60 basis points (bps) over the prior year period to 45.2%, reflecting short-term cost actions and the achievement of cost synergies associated with the July 31, 2019 acquisition of Worldpay, Inc. Adjusted net earnings were $1,016 million or $1.62 per diluted share.
For the full-year 2020, on a GAAP basis, revenue increased 21% to $12,552 million as compared to the prior year, primarily due to the acquisition of Worldpay. Net earnings attributable to common stockholders was $158 million or $0.25 per diluted share.
On an organic basis, revenue decreased 1% as compared to the prior year period, primarily due to negative consumer spending trends associated with the ongoing COVID-19 pandemic. Adjusted EBITDA margin expanded by 120 basis points (bps) over the prior year period to 41.9%, thanks to the achievement of Worldpay cost synergies. Adjusted net earnings were $3,423 million or $5.46 per diluted share.
- Merchant Solutions saw fourth quarter revenue decrease 8% to $1,003 million. On an organic basis, revenue decreased 9% compared to the prior year period.
- Banking Solutions marked fourth quarter revenue of $1,551 million, up 5% from the year-ago period.
- Capital Market Solutions registered fourth quarter revenue of $663 million, up 6% from a year earlier.
- Corporate and Other saw fourth quarter revenue decrease 32% to $99 million. Adjusted EBITDA loss was $48 million, including $78 million of corporate expenses.
FIS achieved annual run-rate synergies related to the Worldpay acquisition, exiting the fourth quarter of 2020 as follows:
- Revenue synergies in excess of $200 million on an annual run-rate basis, including ongoing execution of Premium Payback distribution, bank referral agreements, geographic expansion and broad-based cross-selling initiatives. Revenue synergies are expected to continue to increase and reach approximately $400 million on an annual run-rate basis by the end of 2021 and remain on track to exceed $550 million on an annual run-rate basis exiting 2022.
- Expense synergies in excess of $750 million on an annual run-rate basis, including $400 million of operating expense savings. The Company originally targeted $400 million in expense synergies by the end of 2022 and exceeded this target more than two years early. Operating expense synergies are expected to continue to increase and reach approximately $500 million on an annual run-rate basis exiting 2021.
FIS paid dividends of $218 million during the quarter and $868 million for the full year.
The company also recently announced an 11% increase to its annual dividend and a share repurchase authorization for 100 million shares in order to enable ongoing return of capital to its shareholders.