- First quarter GAAP Diluted Earnings (Loss) Per Share for
continuing operations of $0.03 and Adjusted EPS of $1.10
- Including discontinued operations, first quarter GAAP Diluted
Earnings (Loss) Per Share of $1.25 and Adjusted EPS of $1.33
- Continuing operations revenue increased 3% on a GAAP basis and
3% on an adjusted basis to $2.5 billion
- Continuing operations adjusted EBITDA margin expanded 200 basis
points (bps) to 39.5%
- Announces $500 million increase to 2024 share repurchase goal;
targeting $4.0 billion of repurchases for the year
- Reaffirms full-year revenue and adjusted EBITDA outlook and
raises full-year adjusted EPS outlook by $0.22
- The Company will host an Investor Day on May 7, 2024
FIS® (NYSE:FIS), a global leader in financial technology, today
reported its first quarter 2024 results.
“We are off to a very strong start in 2024. This marks the fifth
straight quarter of exceeding our financial outlook, and we are
pleased with the continued new sales momentum we are seeing across
the business,” said FIS CEO and President Stephanie Ferris. “We are
confident in our ability to deliver on our full-year outlook, as
the Future Forward strategy we put in place last year is delivering
improved operational and financial outcomes. We look forward to
updating you on FIS’ corporate strategy and medium-term financial
targets at tomorrow’s Investor Day.”
Financial Reporting Considerations for
Completed Worldpay Sale
On July 6, 2023, the Company announced an acceleration of its
previously announced separation plan to create two highly focused
global companies with greater strategic flexibility. FIS signed a
definitive agreement to sell a 55% stake in its Worldpay Merchant
Solutions business to private equity funds managed by GTCR (the
"Worldpay Sale"). The Worldpay Sale was completed on January 31,
2024.
Unless otherwise noted, all results are presented on a
continuing operations basis and exclude the results of the Worldpay
Merchant Solutions business that was classified as discontinued
operations as of the third quarter of 2023.
Following the close of the Worldpay Sale on January 31, 2024,
FIS retains a non-controlling 45% ownership interest in a new
standalone joint venture, Worldpay Holdco, LLC ("Worldpay"), and
records its proportionate share of Worldpay's earnings (loss) in
the "Equity method investment earnings (loss), net of tax" (EMI)
line of the income statement, which for the first quarter of 2024
consists of the two-month period from February 1 to March 31,
2024.
Capital Allocation
Update
The Company remains committed to shareholder returns and is
increasing its goal to repurchase approximately $4.0 billion of
shares in 2024, up from the previous goal of at least $3.5 billion.
The Company repurchased $1.4 billion of shares in the first
quarter. Additionally, the Company continues to target a dividend
payout ratio of 35% of adjusted net earnings, excluding EMI.
Investor Day
FIS will sponsor a live webcast of its Investor Day with the
investment community beginning at 8:30 a.m. (EDT) on Tuesday, May
7, 2024. At the conference, FIS' executive leadership team will be
providing an update to the company’s corporate strategy and a
medium-term financial outlook. To access the webcast, go to the
Investor Relations section of FIS’ homepage, www.fisglobal.com. A
replay will be available after the conclusion of the live
webcast.
First Quarter 2024 Financial
Results
On a GAAP basis, excluding $403 million of revenue classified as
discontinued operations, revenue increased 3% as compared to the
prior-year period to approximately $2.5 billion. GAAP net earnings
(loss) attributable to common stockholders for continuing
operations were $17 million or $0.03 per diluted share. Including
discontinued operations, GAAP net earnings (loss) attributable to
common stockholders were $724 million or $1.25 per diluted
share.
On an adjusted basis, revenue increased 3% as compared to the
prior-year period driven by 5% adjusted recurring revenue growth,
offset by a 10% decline in professional services adjusted revenue.
Adjusted EBITDA margin expanded by 200 basis points (bps) over the
prior-year period to 39.5% primarily driven by cost saving
initiatives. Adjusted net earnings for continuing operations were
approximately $635 million, and adjusted EPS increased by 53% as
compared to the prior-year period to $1.10 per diluted share.
Including discontinued operations, adjusted net earnings were
approximately $768 million and adjusted EPS increased 3% as
compared to the prior-year period to $1.33 per diluted share
reflecting one month of discontinued operations contribution in the
first quarter of 2024 as compared to three months in the prior
year.
($ millions, except per share data,
unaudited)
Three Months Ended March
31,
%
Adjusted
Continuing
Operations
2024
2023
Change
Growth
Banking Solutions Revenue
1,684
1,646
2%
2%
Capital Market Solutions Revenue
706
663
7%
6%
Operating Segment Total Revenue
$
2,390
$
2,309
4%
3%
Corporate and Other Revenue
77
88
(12)%
-
Consolidated FIS Revenue
$
2,467
$
2,397
3%
-
Adjusted EBITDA
$
975
$
900
8%
Adjusted EBITDA Margin
39.5
%
37.5
%
200 bps
Net Earnings (Loss) (GAAP)
$
17
$
96
*
Diluted Earnings (Loss) Per Common Share
(GAAP)
$
0.03
$
0.16
*
Adjusted Net Earnings
$
635
$
426
49%
Adjusted EPS
$
1.10
$
0.72
53%
($ millions, except per share data,
unaudited)
Three Months Ended March
31,
%
Adjusted
Total FIS
(Including Discontinued Operations)
2024
2023
Change
Growth
Net Earnings (Loss) (GAAP)
$
724
$
140
*
Diluted Earnings (Loss) Per Common Share
(GAAP)
$
1.25
$
0.24
*
Adjusted Net Earnings
$
768
$
767
0%
Adjusted EPS
$
1.33
$
1.29
3%
*Indicates comparison not meaningful
Segment Information
- Banking Solutions: First quarter revenue increased 2% on
a GAAP basis and 2% on an adjusted basis as compared to the
prior-year period to $1.7 billion, including adjusted recurring
revenue growth of 4%. Adjusted EBITDA margin expanded by 350 basis
points as compared to the prior-year period to 44.3% primarily
driven by cost saving initiatives and a favorable revenue mix
compared to the prior year, including an increase in high-margin
license revenue.
- Capital Market Solutions: First quarter revenue
increased by 7% on a GAAP basis and 6% on an adjusted basis as
compared to the prior-year period to $706 million reflecting
adjusted recurring revenue growth of 9%. Adjusted EBITDA margin
contracted by 80 basis points over the prior-year period to 47.4%
primarily due to revenue mix.
- Corporate and Other: First quarter revenue
decreased by 12% as compared to the prior-year period to $77
million. Adjusted EBITDA loss was $105 million, including $117
million of corporate expenses.
Discontinued Operations (Worldpay
Merchant Solutions)
For the month of January, discontinued operations revenue was
$403 million. Adjusted EBITDA was $187 million, and Adjusted EBITDA
margin was 46.4%. Having completed the Worldpay Sale on January 31,
2024, year-over-year growth comparisons are not meaningful.
Balance Sheet and Cash
Flows
As of March 31, 2024, debt outstanding totaled $11.2 billion.
First quarter net cash provided by operating activities for
continuing operations was $206 million, and free cash flow for
continuing operations was approximately $95 million. Free cash flow
in the quarter was negatively impacted by approximately $195
million of transitory impacts. In the quarter, the Company returned
$1.6 billion of capital to shareholders through $1.4 billion of
share repurchases and $209 million of dividends paid.
Second Quarter and Full-Year 2024
Outlook
The Company is introducing its second quarter outlook and, for
the full-year, is reaffirming its outlook for revenue and adjusted
EBITDA and is increasing its outlook for adjusted EPS by $0.22
compared to the prior outlook. The adjusted EPS outlook reflects 11
months of EMI contribution for the full-year.
Following the close of the Worldpay Sale on January 31, 2024,
FIS retains a non-controlling 45% ownership interest in a new
standalone joint venture, Worldpay Holdco, LLC ("Worldpay"), and
records its proportionate share of Worldpay's earnings (loss) in
the EMI line of the income statement, which for the first quarter
of 2024 consists of the two-month period from February 1 to March
31, 2024.
($ millions, except share data)
2Q 2024
FY 2024
Revenue
$2,465 - $2,490
$10,100 - $10,150
Adjusted EBITDA (Non-GAAP)1
$980 - $995
$4,100 - $4,140
Adjusted EPS (Non-GAAP)1
$1.21 - $1.25
$4.88 - $4.98
1The Company does not provide a
reconciliation for non-GAAP estimates on a forward-looking basis
where it is unable to provide a meaningful or accurate calculation
or estimation of reconciling items and the information is not
available without unreasonable effort. The Company is unable to
address the probable significance of the unavailable
information.
Webcast
FIS will host a recorded webcast of its earnings conference call
with the investment community beginning at 4:30 p.m. (EDT) on
Monday, May 6, 2024. To access the webcast, go to the Investor
Relations section of FIS’ homepage, www.fisglobal.com. A replay
will be available after the conclusion of the live webcast.
About FIS
FIS is a financial technology company providing solutions to
financial institutions, businesses and developers. We unlock
financial technology that underpins the world’s financial system.
Our people are dedicated to advancing the way the world pays, banks
and invests, by helping our client’s confidently run, grow and
protect their businesses. Our expertise comes from decades of
experience helping financial institutions and businesses adapt to
meet the needs of their customers by harnessing the power that
comes when reliability meets innovation in financial technology.
Headquartered in Jacksonville, Florida, FIS is a member of the
Fortune 500® and the Standard & Poor’s 500® Index. To learn
more, visit www.FISglobal.com. Follow FIS on Facebook, LinkedIn and
X (@FISglobal).
FIS Use of Non-GAAP Financial
Information
Generally Accepted Accounting Principles (GAAP) is the term used
to refer to the standard framework of guidelines for financial
accounting in the United States. GAAP includes the standards,
conventions, and rules accountants follow in recording and
summarizing transactions and in the preparation of financial
statements. In addition to reporting financial results in
accordance with GAAP, we have provided certain non-GAAP financial
measures.
These non-GAAP measures include constant currency revenue,
adjusted revenue growth, adjusted EBITDA, adjusted EBITDA margin,
adjusted net earnings, adjusted EPS, and free cash flow. These
non-GAAP measures may be used in this release and/or in the
attached supplemental financial information.
We believe these non-GAAP measures help investors better
understand the underlying fundamentals of our business. As further
described below, the non-GAAP revenue and earnings measures
presented eliminate items management believes are not indicative of
FIS’ operating performance. The constant currency revenue and
adjusted revenue growth measures adjust for the effects of exchange
rate fluctuations and exclude discontinued operations, while
adjusted revenue growth also excludes revenue from Corporate and
Other, giving investors further insight into our performance.
Finally, free cash flow provides further information about the
ability of our business to generate cash. For these reasons,
management also uses these non-GAAP measures in its assessment and
management of FIS’ performance.
Constant currency revenue represents reported segment
revenue excluding the impact of fluctuations in foreign currency
exchange rates in the current period.
Adjusted revenue growth reflects the percentage change in
constant currency revenue for the current period as compared to the
prior period. When referring to adjusted revenue growth, revenue
from our Corporate and Other segment is excluded.
Adjusted EBITDA reflects net earnings (loss) before
interest, other income (expense), taxes, equity method investment
earnings (loss), and depreciation and amortization, and excludes
certain costs and other transactions that management deems
non-operational in nature, or that otherwise improve the
comparability of operating results across reporting periods by
their exclusion. This measure is reported to the chief operating
decision maker for purposes of making decisions about allocating
resources to the segments and assessing their performance. For this
reason, adjusted EBITDA, as it relates to our segments, is
presented in conformity with Accounting Standards Codification 280,
Segment Reporting, and is excluded from the definition of non-GAAP
financial measures under the Securities and Exchange Commission's
Regulation G and Item 10(e) of Regulation S-K.
Adjusted EBITDA margin reflects adjusted EBITDA, as
defined above, divided by revenue.
Adjusted net earnings excludes the impact of certain
costs and other transactions which management deems non-operational
in nature or that otherwise improve the comparability of operating
results across reporting periods by their exclusion. These include,
among others, the impact of acquisition-related purchase accounting
amortization which is recurring. For purposes of calculating
Adjusted net earnings, our equity method investment earnings (loss)
(EMI) from Worldpay is also adjusted to exclude certain costs and
other transactions in a similar manner.
Adjusted EPS reflects adjusted net earnings, as defined
above, divided by weighted average diluted shares outstanding.
Free cash flow reflects net cash provided by operating
activities, adjusted for the net change in settlement assets and
obligations and excluding certain transactions that are closely
associated with non-operating activities or are otherwise
non-operational in nature and not indicative of future operating
cash flows, less capital expenditures. Free cash flow does not
represent our residual cash flow available for discretionary
expenditures since we have mandatory debt service requirements and
other non-discretionary expenditures that are not deducted from the
measure. Free cash flow as presented in this earnings release
excludes cash flow from discontinued operations, which our
management will not be able to freely access following the Worldpay
separation.
Any non-GAAP measures should be considered in context with the
GAAP financial presentation and should not be considered in
isolation or as a substitute for GAAP measures. Further, FIS’
non-GAAP measures may be calculated differently from similarly
titled measures of other companies. Reconciliations of these
non-GAAP measures to related GAAP measures, including footnotes
describing the adjustments, are provided in the attached schedules
and in the Investor Relations section of the FIS website,
www.fisglobal.com.
Forward-Looking
Statements
This earnings release and today’s webcast contain
“forward-looking statements” within the meaning of the U.S. federal
securities laws. Statements that are not historical facts, as well
as other statements about our expectations, beliefs, intentions, or
strategies regarding the future, or other characterizations of
future events or circumstances, are forward-looking statements.
Forward-looking statements include statements about anticipated
financial outcomes, including any earnings outlook or projections,
projected revenue or expense synergies or dis-synergies, business
and market conditions, outlook, foreign currency exchange rates,
deleveraging plans, expected dividends and share repurchases of the
Company, the Company’s sales pipeline and anticipated profitability
and growth, plans, strategies and objectives for future operations,
strategic value creation, risk profile and investment strategies,
any statements regarding future economic conditions or performance
and any statements with respect to the future impacts of the
Worldpay Sale or any agreements or arrangements entered into in
connection with such transaction, the expected financial and
operational results of the Company, and expectations regarding the
Company’s business or organization after the separation of the
Worldpay Merchant Solutions business. These statements may be
identified by words such as “expect,” “anticipate,” “intend,”
“plan,” “believe,” “will,” “should,” “could,” “would,” “project,”
“continue,” “likely,” and similar expressions, and include
statements reflecting future results, statements of outlook and
various accruals and estimates. These statements relate to future
events and our future results and involve a number of risks and
uncertainties. Forward-looking statements are based on management’s
beliefs as well as assumptions made by, and information currently
available to, management.
Actual results, performance or achievement could differ
materially from these forward-looking statements. The risks and
uncertainties to which forward-looking statements are subject
include the following, without limitation:
- changes in general economic, business and political conditions,
including those resulting from COVID-19 or other pandemics, a
recession, intensified or expanded international hostilities, acts
of terrorism, increased rates of inflation or interest, changes in
either or both the United States and international lending, capital
and financial markets or currency fluctuations;
- the risk that acquired businesses will not be integrated
successfully or that the integration will be more costly or more
time-consuming and complex than anticipated;
- the risk that cost savings and synergies anticipated to be
realized from acquisitions may not be fully realized or may take
longer to realize than expected or that costs may be greater than
anticipated;
- the risks of doing business internationally;
- the effect of legislative initiatives or proposals, statutory
changes, governmental or applicable regulations and/or changes in
industry requirements, including privacy and cybersecurity laws and
regulations;
- the risks of reduction in revenue from the elimination of
existing and potential customers due to consolidation in, or new
laws or regulations affecting, the banking, retail and financial
services industries or due to financial failures or other setbacks
suffered by firms in those industries;
- changes in the growth rates of the markets for our
solutions;
- the amount, declaration and payment of future dividends is at
the discretion of our Board of Directors and depends on, among
other things, our investment opportunities, results of operations,
financial condition, cash requirements, future prospects, and other
factors that may be considered relevant by our Board of Directors,
including legal and contractual restrictions;
- the amount and timing of any future share repurchases is
subject to, among other things, our share price, our other
investment opportunities and cash requirements, our results of
operations and financial condition, our future prospects and other
factors that may be considered relevant by our Board of Directors
and management;
- failures to adapt our solutions to changes in technology or in
the marketplace;
- internal or external security or privacy breaches of our
systems, including those relating to unauthorized access, theft,
corruption or loss of personal information and computer viruses and
other malware affecting our software or platforms, and the
reactions of customers, card associations, government regulators
and others to any such events;
- the risk that implementation of software, including software
updates, for customers or at customer locations or employee error
in monitoring our software and platforms may result in the
corruption or loss of data or customer information, interruption of
business operations, outages, exposure to liability claims or loss
of customers;
- the risk that partners and third parties may fail to satisfy
their legal obligations to us;
- risks associated with managing pension cost, cybersecurity
issues, IT outages and data privacy;
- the reaction of current and potential customers to
communications from us or regulators regarding information
security, risk management, internal audit or other matters;
- risks associated with the expected benefits and costs of the
separation of the Worldpay Merchant Solutions business, including
the risk that the expected benefits of the transaction or any
contingent purchase price will not be realized within the expected
timeframe, in full or at all, or that dis-synergies may be greater
than anticipated;
- the risk that the costs of restructuring transactions and other
costs incurred in connection with the separation of the Worldpay
business will exceed our estimates or otherwise adversely affect
our business or operations;
- the impact of the separation of Worldpay on our businesses,
including the impact on relationships with customers, governmental
authorities, suppliers, employees and other business
counterparties;
- the risk that the earnings from our minority stake in the
Worldpay business will be less than we anticipate;
- competitive pressures on pricing related to the decreasing
number of community banks in the U.S., the development of new
disruptive technologies competing with one or more of our
solutions, increasing presence of international competitors in the
U.S. market and the entry into the market by global banks and
global companies with respect to certain competitive solutions,
each of which may have the impact of unbundling individual
solutions from a comprehensive suite of solutions we provide to
many of our customers;
- the failure to innovate in order to keep up with new emerging
technologies, which could impact our solutions and our ability to
attract new, or retain existing, customers;
- an operational or natural disaster at one of our major
operations centers;
- failure to comply with applicable requirements of payment
networks or changes in those requirements;
- fraud by bad actors; and
- other risks detailed elsewhere in the “Risk Factors” and other
sections of our Annual Report on Form 10-K for the fiscal year
ended December 31, 2023, and in our other filings with the
Securities and Exchange Commission.
Other unknown or unpredictable factors also could have a
material adverse effect on our business, financial condition,
results of operations and prospects. Accordingly, readers should
not place undue reliance on these forward-looking statements. These
forward-looking statements are inherently subject to uncertainties,
risks and changes in circumstances that are difficult to predict.
Except as required by applicable law or regulation, we do not
undertake (and expressly disclaim) any obligation and do not intend
to publicly update or review any of these forward-looking
statements, whether as a result of new information, future events
or otherwise.
Fidelity National Information Services, Inc.
Earnings Release Supplemental Financial Information May 6, 2024
Exhibit A
Condensed Consolidated Statements
of Earnings (Loss) - Unaudited for the three months ended March 31,
2024 and 2023
Exhibit B
Condensed Consolidated Balance
Sheets - Unaudited as of March 31, 2024, and December 31, 2023
Exhibit C
Condensed Consolidated Statements
of Cash Flows - Unaudited for the three months ended March 31, 2024
and 2023
Exhibit D
Supplemental Non-GAAP Adjusted
Revenue Growth - Unaudited for the three months ended March 31,
2024 and 2023
Exhibit E
Supplemental Disaggregation of
Revenue - Recast and Unaudited for the three months ended March 31,
2024 and 2023
Exhibit F
Supplemental Non-GAAP Financial
Information - Recast and Unaudited for the three months ended March
31, 2024 and 2023
Exhibit G
Supplemental Non-GAAP Cash flow
Measures - Unaudited for the three months ended March 31, 2024 and
2023
Exhibit H
Supplemental GAAP to Non-GAAP
Reconciliations - Unaudited for the three months ended March 31,
2024 and 2023
Exhibit I
Supplemental Financial
Information of Worldpay - Unaudited for the two months ended March
31, 2024
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF EARNINGS (LOSS)— UNAUDITED
(In millions, except per share
amounts)
Exhibit A
Three months ended March 31,
2024
2023
Revenue
$
2,467
$
2,397
Cost of revenue
1,552
1,569
Gross profit
915
828
Selling, general, and administrative
expenses
573
517
Asset impairments
14
—
Other operating (income) expense, net -
related party
(33
)
—
Operating income (loss)
361
311
Other income (expense):
Interest expense, net
(77
)
(142
)
Other income (expense), net
(154
)
(36
)
Total other income (expense), net
(231
)
(178
)
Earnings (loss) before income taxes and
equity method investment earnings (loss)
130
133
Provision (benefit) for income taxes
26
37
Equity method investment earnings (loss),
net of tax
(86
)
—
Net earnings (loss) from continuing
operations
18
96
Earnings (loss) from discontinued
operations, net of tax
707
45
Net earnings (loss)
725
141
Net (earnings) loss attributable to
noncontrolling interest from continuing operations
(1
)
—
Net (earnings) loss attributable to
noncontrolling interest from discontinued operations
—
(1
)
Net earnings (loss) attributable to FIS
common stockholders
$
724
$
140
Net earnings (loss) attributable to
FIS:
Continuing operations
$
17
$
96
Discontinued operations
707
44
Total
$
724
$
140
Basic earnings (loss) per common
share attributable to FIS:
Continuing operations
$
0.03
$
0.16
Discontinued operations
1.23
0.07
Total
$
1.26
$
0.24
Diluted earnings (loss) per common
share attributable to FIS:
Continuing operations
$
0.03
$
0.16
Discontinued operations
1.22
0.07
Total
$
1.25
$
0.24
Weighted average common shares
outstanding:
Basic
576
592
Diluted
578
593
Amounts in table may not sum or calculate
due to rounding.
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS — UNAUDITED
(In millions, except per share
amounts)
Exhibit B
March 31, 2024
December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
3,329
$
440
Settlement assets
585
617
Trade receivables, net
1,685
1,730
Other receivables
321
287
Receivable from related party
153
—
Prepaid expenses and other current
assets
623
603
Current assets held for sale
942
10,111
Total current assets
7,638
13,788
Property and equipment, net
668
695
Goodwill
16,974
16,971
Intangible assets, net
1,682
1,823
Software, net
2,133
2,115
Equity method investment
4,131
—
Other noncurrent assets
1,521
1,528
Deferred contract costs, net
1,105
1,076
Noncurrent assets held for sale
19
17,109
Total assets
$
35,871
$
55,105
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable, accrued and other
liabilities
$
2,036
$
1,859
Settlement payables
607
635
Deferred revenue
906
832
Short-term borrowings
—
4,760
Current portion of long-term debt
587
1,348
Current liabilities held for sale
894
8,884
Total current liabilities
5,030
18,318
Long-term debt, excluding current
portion
10,607
12,970
Deferred income taxes
877
2,179
Other noncurrent liabilities
1,332
1,446
Noncurrent liabilities held for sale
—
1,093
Total liabilities
17,846
36,006
Equity:
FIS stockholders' equity:
Preferred stock $0.01 par value
—
—
Common stock $0.01 par value
6
6
Additional paid in capital
46,968
46,935
(Accumulated deficit) retained
earnings
(22,347
)
(22,864
)
Accumulated other comprehensive earnings
(loss)
(432
)
(260
)
Treasury stock, at cost
(6,174
)
(4,724
)
Total FIS stockholders' equity
18,021
19,093
Noncontrolling interest
4
6
Total equity
18,025
19,099
Total liabilities and equity
$
35,871
$
55,105
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS — UNAUDITED
(In millions)
Exhibit C
Three months ended March 31,
2024
2023
Cash flows from operating
activities:
Net earnings (loss)
$
725
$
141
Less earnings (loss) from discontinued
operations, net of tax
707
45
Net earnings (loss) from continuing
operations
18
96
Adjustment to reconcile net earnings
(loss) from continuing operations to net cash provided by operating
activities:
Depreciation and amortization
428
447
Amortization of debt issuance costs
6
8
Asset impairments
14
—
Loss on extinguishment of debt
174
—
Loss (gain) on sale of businesses,
investments and other
14
—
Stock-based compensation
31
13
Loss from equity method investment
86
—
Deferred income taxes
(64
)
(10
)
Net changes in assets and liabilities, net
of effects from acquisitions and foreign currency:
Trade and other receivables
133
125
Receivable from related party
(153
)
—
Settlement activity
12
4
Prepaid expenses and other assets
(116
)
(163
)
Deferred contract costs
(115
)
(102
)
Deferred revenue
45
58
Accounts payable, accrued liabilities and
other liabilities
(307
)
(185
)
Net cash provided by operating activities
from continuing operations
206
291
Cash flows from investing
activities:
Additions to property and equipment
(27
)
(39
)
Additions to software
(175
)
(154
)
Settlement of net investment hedge
cross-currency interest rate swaps
5
(10
)
Net proceeds from sale of businesses and
investments
12,795
—
Cash divested from sale of business
(3,137
)
—
Acquisitions, net of cash acquired
(56
)
—
Other investing activities, net
(24
)
(4
)
Net cash provided by (used in) investing
activities
9,381
(207
)
Cash flows from financing activities
from continuing operations:
Borrowings
13,441
20,233
Repayment of borrowings and other
financing obligations
(21,379
)
(20,538
)
Debt issuance costs
—
(2
)
Net proceeds from stock issued under
stock-based compensation plans
—
47
Treasury stock activity
(1,342
)
(14
)
Dividends paid
(209
)
(309
)
Purchase of noncontrolling interest
—
(173
)
Other financing activities, net
43
(1
)
Net cash provided by (used in) financing
activities from continuing operations
(9,446
)
(757
)
Discontinued operations
Net cash provided by (used in) operating
activities
(241
)
341
Net cash provided by (used in) investing
activities
(39
)
(86
)
Net cash provided by (used in) financing
activities
(65
)
(139
)
Net cash provided by (used in)
discontinued operations
(345
)
116
Effect of foreign currency exchange rate
changes on cash from continuing operations
(17
)
9
Effect of foreign currency exchange rate
changes on cash from discontinued operations
(25
)
77
Net increase (decrease) in cash, cash
equivalents and restricted cash
(246
)
(471
)
Cash, cash equivalents and restricted
cash, beginning of period
4,414
4,813
Cash, cash equivalents and restricted
cash, end of period
$
4,168
$
4,342
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
SUPPLEMENTAL NON-GAAP ORGANIC
REVENUE GROWTH — UNAUDITED
(In millions)
Exhibit D
Three months ended March 31,
2024
2023
Revenue
FX
Constant Currency Revenue
Revenue
Adjusted
Growth (1)
Banking Solutions
$
1,684
$
(1
)
$
1,683
$
1,646
2
%
Capital Market Solutions
706
(3
)
703
663
6
%
Operating segment total
2,390
(4
)
2,386
2,309
3
%
Corporate and Other
77
(1
)
76
88
Consolidated FIS
$
2,467
$
(5
)
$
2,462
$
2,397
Amounts in table may not sum or calculate
due to rounding.
(1)
Adjusted growth excludes Corporate and
Other.
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
SUPPLEMENTAL DISAGGREGATION OF
REVENUE — RECAST AND UNAUDITED
(In millions)
Exhibit E
In the following tables, revenue is
disaggregated by primary geographical market and type of revenue.
The tables also include a reconciliation of the disaggregated
revenue with the Company's reportable segments.
For the three months ended March
31, 2024 (in millions):
Banking
Solutions
Capital Market
Solutions
Corporate and Other
Total
Primary Geographical Markets:
North America
$
1,431
$
445
$
41
$
1,917
All others
253
261
36
550
Total
$
1,684
$
706
$
77
$
2,467
Type of Revenue:
Recurring revenue:
Transaction processing and services
(1)
$
1,264
$
371
$
47
$
1,682
Software maintenance
91
143
—
234
Other recurring
64
22
10
96
Total recurring
1,419
536
57
2,012
Software license
50
74
—
124
Professional services
132
96
1
229
Other non-recurring (1)
83
—
19
102
Total
$
1,684
$
706
$
77
$
2,467
For the three months ended March 31, 2023
(in millions):
Banking
Solutions
Capital Market
Solutions
Corporate and Other
Total
Primary Geographical Markets:
North America
$
1,420
$
425
$
47
$
1,892
All others
226
238
41
505
Total
$
1,646
$
663
$
88
$
2,397
Type of Revenue:
Recurring revenue:
Transaction processing and services
(1)
$
1,225
$
342
$
67
$
1,634
Software maintenance
90
129
—
219
Other recurring
54
19
10
83
Total recurring
1,369
490
77
1,936
Software license
12
73
—
85
Professional services
154
100
2
256
Other non-recurring (1)
111
—
9
120
Total
$
1,646
$
663
$
88
$
2,397
(1)
December 31, 2023, was the final
deadline for states to complete all benefit issuance under
federally funded pandemic relief programs. Accordingly, revenue
associated with services the Company provided related to these
programs has been classified as Other non-recurring commencing in
the fourth quarter of 2023, and related prior-period amounts have
been reclassified from Transaction processing and services to Other
non-recurring for comparability.
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
SUPPLEMENTAL NON-GAAP
FINANCIAL INFORMATION — RECAST AND UNAUDITED
(In millions)
Exhibit F
As a result of our ongoing portfolio
assessments, the Company reclassified certain non-strategic
operations from Banking Solutions to Corporate and Other during the
fourth quarter of 2023. Revenue during the year ended December 31,
2023, from the operations reclassified during the fourth quarter of
2023 represented approximately 1% of consolidated revenue for the
year ended December 31, 2023. During the quarter ended December 31,
2023, the Company also reclassified revenue associated with
federally funded pandemic relief programs from recurring to
non-recurring based on the publicly announced termination of
benefits under these programs. The following tables recast 2023 and
2022 quarterly and full-year revenue to reflect the impact of these
reclassifications.
Fiscal year 2023
Banking Solutions Revenue
Q1
Q2
Q3
Q4
Full Year
Recurring revenue
$
1,369
$
1,388
$
1,391
$
1,423
$
5,572
Professional services revenue
154
156
125
126
562
Other non-recurring revenue
123
121
213
142
599
Banking Solutions revenue
$
1,646
$
1,666
$
1,730
$
1,692
$
6,733
Fiscal year 2022
Banking Solutions Revenue
Q1
Q2
Q3
Q4
Full Year
Recurring revenue
$
1,331
$
1,352
$
1,340
$
1,330
$
5,353
Professional services revenue
144
154
153
181
632
Other non-recurring revenue
150
135
172
183
639
Banking Solutions revenue
$
1,625
$
1,641
$
1,664
$
1,694
$
6,624
Amounts in table may not sum or calculate
due to rounding.
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
SUPPLEMENTAL NON-GAAP CASH
FLOW MEASURES — UNAUDITED
(In millions)
Exhibit G
Three months ended March 31,
2024
2023
Net cash provided by operating
activities
$
206
$
291
Non-GAAP adjustments:
Acquisition, integration and other
payments (1)
103
78
Settlement activity
(12
)
(4
)
Adjusted cash flows from operations
297
365
Capital expenditures
(202
)
(193
)
Free cash flow
$
95
$
172
Free cash flow reflects adjusted cash
flows from operations less capital expenditures (additions to
property and equipment and additions to software). Free cash flow
does not represent our residual cash flows available for
discretionary expenditures, since we have mandatory debt service
requirements and other non-discretionary expenditures that are not
deducted from the measure. Free cash flow as presented in this
earnings release excludes cash flows from discontinued
operations.
(1)
Adjusted cash flows from
operations and free cash flow for the three months ended March 31,
2024 and 2023, exclude cash payments for certain acquisition,
integration and other costs (see Note 2 to Exhibit H), net of
related tax impact. The related tax impact totaled $18 million and
$14 million for the three months ended March 31, 2024 and 2023,
respectively.
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
SUPPLEMENTAL GAAP TO NON-GAAP
RECONCILIATIONS — UNAUDITED
(In millions, except per share
amounts)
Exhibit H
Three months ended March 31,
2024
2023
Net earnings (loss) attributable to FIS
from continuing operations
$
17
$
96
Provision (benefit) for income taxes
26
37
Interest expense, net
77
142
Equity method investment (earnings) loss,
net of tax
86
—
Other, net
155
36
Operating income (loss), as reported
361
311
Depreciation and amortization, excluding
purchase accounting amortization
263
271
Non-GAAP adjustments:
Purchase accounting amortization (1)
165
176
Acquisition, integration and other costs
(2)
158
100
Asset impairments (3)
14
—
Indirect Worldpay business support costs
(4)
14
42
Adjusted EBITDA from continuing
operations
$
975
$
900
Net earnings (loss) attributable to FIS
from discontinued operations
$
707
$
44
Provision (benefit) for income taxes
(991
)
11
Interest expense, net
(1
)
(5
)
Other, net
470
(24
)
Operating income (loss)
185
26
Depreciation and amortization, excluding
purchase accounting amortization
3
76
Non-GAAP adjustments:
Purchase accounting amortization (1)
—
372
Acquisition, integration and other costs
(2)
13
27
Indirect Worldpay business support costs
(4)
(14
)
(42
)
Adjusted EBITDA from discontinued
operations
$
187
$
459
Adjusted EBITDA
$
1,162
$
1,359
See Notes to Exhibit H.
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
SUPPLEMENTAL GAAP TO NON-GAAP
RECONCILIATIONS — UNAUDITED
(In millions, except per share
amounts)
Exhibit H (continued)
Three months ended March 31,
2024
2023
Earnings (loss) attributable to FIS from
continuing operations
$
17
$
96
Equity method investment (earnings) loss,
net of tax
86
—
Earnings (loss) attributable to FIS from
continuing operations, excluding equity method investment earnings
(loss)
103
96
Non-GAAP adjustments from continuing
operations:
Purchase accounting amortization (1)
165
176
Acquisition, integration and other costs
(2)
158
110
Asset impairments (3)
14
—
Indirect Worldpay business support costs
(4)
14
42
Non-operating (income) expense (5)
154
36
Non-GAAP tax (provision) benefit (6)
(65
)
(34
)
Total non-GAAP adjustments from continuing
operations
440
330
Adjusted net earnings attributable to FIS
from continuing operations, excluding equity method investment
earnings (loss)
543
426
Equity method investment earnings (loss),
net of tax (7)
(86
)
—
Non-GAAP adjustments on equity method
investment earnings (loss), net of related (provision) benefit for
income taxes (7) (8)
178
—
Adjusted equity method investment earnings
(loss) (7)
92
—
Adjusted net earnings attributable to FIS
from continuing operations
$
635
$
426
Earnings (loss) attributable to FIS from
discontinued operations, net of tax
$
707
$
44
Non-GAAP adjustments from discontinued
operations:
Purchase accounting amortization (1)
—
372
Acquisition, integration and other costs
(2)
13
36
Indirect Worldpay business support costs
(4)
(14
)
(42
)
Amortization on long-lived assets held for
sale (9)
(30
)
—
Non-operating (income) expense (5)
6
(25
)
Loss on sale of disposal group (10)
466
—
Non-GAAP tax (provision) benefit (6)
(1,015
)
(44
)
Total non-GAAP adjustments from
discontinued operations
(574
)
297
Adjusted net earnings attributable to FIS
from discontinued operations
$
133
$
341
Adjusted net earnings attributable to FIS
common stockholders
$
768
$
767
See Notes to Exhibit H.
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
SUPPLEMENTAL GAAP TO NON-GAAP
RECONCILIATIONS — UNAUDITED
(In millions, except per share
amounts)
Exhibit H (continued)
Three months ended March 31,
2024
2023
Earnings (loss) attributable to FIS from
continuing operations
$
0.03
$
0.16
Equity method investment (earnings) loss,
net of tax
0.15
—
Earnings (loss) attributable to FIS from
continuing operations, excluding equity method investment earnings
(loss)
0.18
0.16
Non-GAAP adjustments from continuing
operations:
Purchase accounting amortization (1)
0.29
0.30
Acquisition, integration and other costs
(2)
0.27
0.19
Asset impairments (3)
0.02
—
Indirect Worldpay business support costs
(4)
0.02
0.07
Non-operating (income) expense (5)
0.27
0.06
Non-GAAP tax (provision) benefit (6)
(0.11
)
(0.06
)
Total non-GAAP adjustments from continuing
operations
0.76
0.56
Adjusted net earnings attributable to FIS
from continuing operations, excluding equity method investment
earnings (loss)
0.94
0.72
Equity method investment earnings (loss)
(7)
(0.15
)
—
Non-GAAP adjustments on Equity method
investment earnings (loss), net of related (provision) benefit for
income taxes (7) (8)
0.31
$
—
Adjusted equity method investment earnings
(loss) (7)
0.16
—
Adjusted net earnings attributable to FIS
from continuing operations
$
1.10
$
0.72
Earnings (loss) attributable to FIS from
discontinued operations, net of tax
$
1.22
$
0.07
Non-GAAP adjustments from discontinued
operations:
Purchase accounting amortization (1)
—
0.63
Acquisition, integration and other costs
(2)
0.02
0.06
Indirect Worldpay business support costs
(4)
(0.02
)
(0.07
)
Amortization on long-lived assets held for
sale (9)
(0.05
)
—
Non-operating (income) expense (5)
0.01
(0.04
)
Loss on sale of disposal group (10)
0.81
—
Non-GAAP tax (provision) benefit (6)
(1.76
)
(0.07
)
Total non-GAAP adjustments from
discontinued operations
(0.99
)
0.51
Adjusted net earnings attributable to FIS
from discontinued operations
$
0.23
$
0.58
Adjusted net earnings attributable to FIS
common stockholders
$
1.33
$
1.29
Weighted average shares
outstanding-diluted
578
593
Amounts in table may not sum or calculate
due to rounding.
See Notes to Exhibit H.
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
SUPPLEMENTAL GAAP TO NON-GAAP
RECONCILIATIONS — UNAUDITED
(In millions, except per share
amounts)
Exhibit H (continued)
Notes to Unaudited - Supplemental GAAP
to Non-GAAP Reconciliations for the three months ended March 31,
2024 and 2023.
(1)
This item represents purchase
price amortization expense on all intangible assets acquired
through various Company acquisitions, including customer
relationships, contract value, technology assets, trademarks and
trade names. The Company has excluded the impact of purchase price
amortization expense as such amounts can be significantly impacted
by the timing and/or size of acquisitions. Although the Company
excludes these amounts from its non-GAAP expenses, the Company
believes that it is important for investors to understand that such
intangible assets contribute to revenue generation. Amortization of
assets that relate to past acquisitions will recur in future
periods until such assets have been fully amortized. Any future
acquisitions may result in the amortization of future assets.
(2)
This item represents costs
comprised of the following:
Three months ended
March 31,
2024
2023
Continuing operations:
Acquisition and integration
$
24
$
6
Enterprise transformation, including
Future Forward and platform modernization
73
71
Severance and other termination
expenses
18
23
Separation of the Worldpay Merchant
Solutions business
30
—
Incremental stock compensation directly
attributable to specific programs
11
—
Other, including divestiture-related
expenses and enterprise cost control and other initiatives
2
—
Subtotal
158
100
Accelerated amortization (a)
—
10
Total from continuing operations
$
158
$
110
Discontinued operations:
Acquisition and integration
$
—
$
3
Enterprise transformation, including
Future Forward and platform modernization
1
5
Severance and other termination
expenses
1
5
Separation of the Worldpay Merchant
Solutions business
8
11
Incremental stock compensation directly
attributable to specific programs
—
—
Other, including divestiture-related
expenses and enterprise cost control and other initiatives
3
3
Subtotal
13
27
Accelerated amortization (a)
—
9
Total from discontinued operations
$
13
$
36
Total consolidated
$
171
$
146
Amounts in table may not sum due to
rounding.
(a)
For purposes of calculating
Adjusted net earnings, this item includes incremental amortization
expense associated with shortened estimated useful lives and
accelerated amortization methods for certain software and deferred
contract cost assets driven by the Company's platform
modernization. The incremental amortization expenses are included
in the Depreciation and amortization, excluding purchase accounting
amortization line item within the Adjusted EBITDA
reconciliation.
(3)
For the three months ended March 31, 2024, this item includes
impairments primarily related to the termination of certain
internally developed software projects.
(4)
This item represents costs that were incurred in support of the
Worldpay Merchant Solutions business prior to the separation but
are not directly attributable to it and thus were not recorded in
discontinued operations. The Company expects that it will be
reimbursed for these expenses as part of Transition Services
Agreements with the purchaser or eliminate them post separation;
therefore, the expenses have been adjusted out of continuing
operations and added to discontinued operations.
(5)
Non-operating (income) expense primarily consists of other income
and expense items outside of the Company's operating activities,
including fair value adjustments on certain non-operating assets
and liabilities and foreign currency transaction remeasurement
gains and losses. For the three months ended March 31, 2024, this
item also includes loss on extinguishment of debt of approximately
$174 million relating to tender discounts and fees; the write-off
of unamortized bond discounts, debt issuance costs and fair value
basis adjustments; and gains on related derivative instruments.
(6)
This adjustment is based on a normalized adjusted earnings tax rate
of 14.5% and 14.0% for the periods ended March 31, 2024 and 2023,
respectively. For the three months ended March 31, 2024, the
Company recorded a tax benefit of $991 million in its earnings from
discontinued operations primarily from the write-off of U.S.
deferred tax liabilities that were not transferred in the Worldpay
Sale, net of the estimated current U.S. tax cost that the Company
expects to incur as a result of the Worldpay Sale. This adjustment
includes the removal of the impact of the tax benefit of these
items from our earnings for this period.
(7)
FIS completed the separation of Worldpay on January 31, 2024,
retaining a non-controlling 45% ownership interest that is recorded
under the equity method of accounting. FIS' share of Worldpay's
results for the first quarter of 2024 under the equity method of
accounting reflects activity for the two-month period beginning on
February 1, 2024.
(8)
This item represents FIS' proportionate share of Worldpay's
non-GAAP adjustments on its earnings (loss) consistent with FIS'
non-GAAP measures and is comprised of the following:
Two months ended March 31,
2024
FIS' share of Worldpay's purchase
accounting amortization
$
135
FIS' share of Worldpay's acquisition,
integration and other costs (a)
85
FIS' share of Worldpay's non-operating
(income) expense
(8
)
Non-GAAP tax (provision) benefit
(34
)
Non-GAAP adjustments on Equity method
investment earnings (loss), net of related (provision) benefit for
income taxes
$
178
Amounts in table may not sum due to
rounding.
(a)
Worldpay acquisition,
integration, and other costs for the two months ended March 31,
2024, consist primarily of transaction costs related to the
separation from FIS.
(9)
The Company stopped recording depreciation and amortization on the
long-lived assets classified as held for sale beginning July 5,
2023. The amount of depreciation and amortization that would have
been recorded in discontinued operations had these assets not been
classified as held for sale has been deducted from adjusted net
earnings for comparability purposes.
(10)
We closed the sale of Worldpay on January 31, 2024. Loss on sale of
disposal group of $466 million reflects the impact of the excess of
the carrying value of the disposal group to the estimated fair
value less estimated cost to sell.
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
SUPPLEMENTAL FINANCIAL
INFORMATION — UNAUDITED
(In millions)
Exhibit I
The Company completed the Worldpay Sale on
January 31, 2024. The results of the Worldpay Merchant Solutions
business prior to the completion of the Worldpay Sale have been
presented as discontinued operations. The following table
represents a reconciliation of the major components of Earnings
(loss) from discontinued operations, net of tax, presented in the
consolidated statements of earnings (loss), reflecting activity
through January 31, 2024 (the date the Worldpay Sale closed) (in
millions). The Company's presentation of earnings (loss) from
discontinued operations excludes general corporate overhead costs
that were historically allocated to the Worldpay Merchant Solutions
business. Additionally, beginning on July 5, 2023, the Company
stopped amortization of long-lived assets held for sale in
accordance with ASC 360.
One month
Three months
ended
ended
January 31, 2024
March 31, 2023
Major components of earnings (loss) from
discontinued operations before income taxes:
Revenue
$
403
$
1,113
Cost of revenue
(63
)
(600
)
Selling, general, and administrative
expenses
(155
)
(487
)
Interest income (expense), net
1
5
Other, net
(4
)
24
Earnings (loss) from discontinued
operations related to major components of pretax earnings
(loss)
182
55
Loss on sale of disposal group (1)
(466
)
—
Earnings (loss) from discontinued
operations
(284
)
55
Provision (benefit) for income taxes
(2)
(991
)
11
Earnings (loss) from discontinued
operations, net of tax
$
707
$
44
(1)
Loss on sale of disposal group of
$466 million reflects the impact of the excess of the carrying
value of the disposal group over the estimated fair value less cost
to sell.
(2)
The Company recorded a tax
benefit of $991 million primarily from the write-off of U.S.
deferred tax liabilities that were not transferred in the Worldpay
Sale, net of the estimated current U.S. tax cost that the Company
expects to incur as a result of the Worldpay Sale and which was
recorded based on available data and management determinations as
of March 31, 2024. Post-closing selling price adjustments and
completion of other purchase agreement provisions in connection
with the Worldpay Sale could result in further adjustments to the
loss on sale amount and the estimated tax impact.
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
SUPPLEMENTAL FINANCIAL
INFORMATION OF WORLDPAY HOLDCO, LLC — UNAUDITED
(In millions)
Exhibit J
Summary Worldpay Holdco, LLC
financial information is as follows:
Two months ended March 31, 2024
(1)
Revenue
$
832
Gross profit
$
385
Earnings (loss) before income taxes
$
(230
)
Net earnings (loss) attributable to
Worldpay Holdco, LLC
$
(243
)
FIS share of net earnings (loss)
attributable to Worldpay Holdco, LLC, net of tax (2)
$
(86
)
The following is a GAAP to Non-GAAP
reconciliation of Adjusted EBITDA for Worldpay Holdco LLC.
Two months ended March 31, 2024
(1)
Net earnings (loss) attributable to
Worldpay Holdco, LLC
$
(243
)
Provision (benefit) for income taxes
12
Interest expense, net
116
Other, net
(17
)
Operating income (loss)
(132
)
Depreciation and amortization, excluding
purchase accounting amortization
10
Non-GAAP adjustments:
Purchase accounting amortization
300
Transition, acquisition, integration and
other costs (3)
188
Adjusted EBITDA
$
366
(1)
FIS completed the separation of
Worldpay on January 31, 2024. Accordingly, Worldpay's results for
the first quarter of 2024 reflect activity for the two-month period
beginning on February 1, 2024.
(2)
Amount includes our share of the
net income attributable to Worldpay and our investor-level tax
benefit of $23 million and is reported as Equity method investment
earnings (loss), net of tax on our consolidated statement of
earnings.
(3)
This item represents primarily
transaction costs associated with the separation of Worldpay from
FIS.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240506854589/en/
Ellyn Raftery, 904.438.6083 Chief Marketing & Communications
Officer FIS Global Marketing & Corporate Communications
Ellyn.Raftery@fisglobal.com
George Mihalos, 904.438.6438 Senior Vice President FIS Investor
Relations Georgios.Mihalos@fisglobal.com
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