FIS Reports Third Quarter 2022 Results
FIS reported a 3% revenue increase year-over-year, totaling $3.6 billion, with a diluted EPS of $0.41 for Q3 2022. Adjusted EPS rose 1% to $1.74, while adjusted net earnings fell 1% to $1.1 billion. The company returned $1.3 billion to shareholders through dividends and share repurchases. Despite challenges from macroeconomic conditions, FIS announced an Enterprise Transformation Program aiming for $500 million in cost savings. With a leadership transition set for January 2023, expectations for Q4 and full-year guidance were slightly adjusted due to market uncertainties.
- 3% revenue growth to $3.6 billion and 5% organic growth year-over-year.
- Returning $1.3 billion to shareholders through buybacks and dividends.
- Enterprise Transformation Program targeting $500 million in cash savings.
- Leadership transition to new CEO Stephanie Ferris expected to drive profitable growth.
- Adjusted EBITDA margin decreased by 150 basis points to 43.7%.
- Adjusted net earnings decreased by 1% compared to the previous year.
- Corporate revenue fell 13% due to divestiture and client attrition.
- Adjusted EBITDA margin contracted across business segments, indicating cost pressures.
-
Increased revenue
3% on a GAAP basis and5% on an organic basis to$3.6 billion -
Generated Diluted EPS of
$0.41 $1.74 -
Returned
$1.3 billion -
Announcing Enterprise Transformation Program targeting at least
$500 million
“Despite deteriorating macroeconomic conditions, FIS delivered third quarter revenue and earnings in-line with its prior outlook. We are taking actions to ensure the company is well positioned to drive profitable growth as we continue to face an uncertain macro-environment,” said
Third Quarter 2022
On a GAAP basis, revenue increased by approximately
On an organic basis, revenue increased
($ millions, except per share data, unaudited) |
|
Three Months Ended |
||||||||||||
|
|
|
|
|
|
% |
|
Constant |
|
Organic |
||||
|
|
2022 |
|
2021 |
|
Change |
|
Currency |
|
Growth |
||||
Revenue |
|
$ |
3,604 |
|
|
$ |
3,507 |
|
|
|
|
|
|
|
Banking Solutions |
|
1,680 |
|
|
1,610 |
|
|
|
|
|
|
|
||
Merchant Solutions |
|
1,180 |
|
|
1,161 |
|
|
|
|
|
|
|
||
Capital Market Solutions |
|
671 |
|
|
654 |
|
|
|
|
|
|
|
||
Corporate and Other |
|
|
73 |
|
|
|
82 |
|
|
(13)% |
|
(10)% |
|
|
Adjusted EBITDA |
|
$ |
1,575 |
|
|
$ |
1,585 |
|
|
(1)% |
|
|
|
|
Adjusted EBITDA Margin |
|
|
43.7 |
% |
|
|
45.2 |
% |
|
(150) bps |
|
|
|
|
Net earnings attributable to FIS common stockholders (GAAP) |
|
$ |
249 |
|
|
$ |
158 |
|
|
* |
|
|
|
|
Diluted EPS (GAAP) |
|
$ |
0.41 |
|
|
$ |
0.26 |
|
|
* |
|
|
|
|
Adjusted net earnings |
|
$ |
1,054 |
|
|
$ |
1,070 |
|
|
(1)% |
|
|
|
|
Adjusted EPS |
|
$ |
1.74 |
|
|
$ |
1.73 |
|
|
|
|
|
|
|
* Indicates comparison not meaningful |
||||||||||||||
Operating Segment Information
-
Banking Solutions:
Revenue increased by4% on a GAAP basis, and6% on an organic basis as compared to the prior-year period to$1.7 billion 42.9% primarily driven by ongoing cost inflation, a reduction in pandemic-related revenue as compared to the prior-year period, and recent onboarding of several large outsourcing contracts.
-
Merchant Solutions:
Revenue increased by2% on a GAAP basis,5% on an organic basis as compared to the prior-year period to$1.2 billion 47.4% primarily due to inflationary cost pressures and accelerated investment in e-commerce and Payrix sales channels to capitalize on developing secular growth trends. In the quarter, global volume increased3% on a reported basis and6% on a constant currency basis, as compared to the prior-year period to$544 billion 5% and transactions increased2% as compared to the prior-year period. Excluding the impact of a large PayFac client, global volume increased4% on a reported basis and8% on a constant currency basis, US volume increased7% , and transactions increased3% as compared to the prior-year period.
Additional Merchant Disclosure
|
|
Three Months Ended |
||||||||||
|
|
|
|
|
|
% |
|
Constant |
||||
|
|
2022 |
|
2021 |
|
Change |
|
Currency |
||||
Revenue ($M) |
|
$ |
1,180 |
|
|
$ |
1,161 |
|
|
|
|
|
Global Volume1 ($B) |
|
$ |
544 |
|
|
$ |
530 |
|
|
|
|
|
US Volume1 ($B) |
|
$ |
412 |
|
|
$ |
392 |
|
|
|
|
|
Transactions2 (B) |
|
|
12.2 |
|
|
|
12.0 |
|
|
|
|
|
1 Volume refers to the total dollar value of the transactions processed during the stated period. |
||||||||||||
2 Transaction refers to an instance of buying or selling a good or service in exchange for money. |
||||||||||||
-
Capital Market Solutions:
Revenue increased by3% on a GAAP basis and6% on an organic basis as compared to the prior-year period to$671 million 4% as compared to the prior-year period to$330 million 49.3% primarily due to continued expense management and operating leverage.
-
Corporate and Other:
Revenue decreased by (13)% as compared to the prior-year period to$73 million $36 million $58 million
Balance Sheet and Cash Flows
As of
CEO Succession
The Company announced on
Updates Fourth Quarter and Full-Year 2022 Guidance
The Company updated its fourth quarter and full-year 2022 guidance to align with changes in the macroeconomic environment, reduced visibility pertaining to non-recurring revenue streams, incremental costs associated with ongoing inflation, and new sales timing.
Fourth Quarter and Full-Year 2022 Guidance
($ millions, except share data) |
4Q 2022 |
|
FY 2022 |
Revenue |
|
|
|
Diluted EPS (GAAP) |
|
|
|
Adjusted EPS (Non-GAAP) |
|
|
|
Webcast
FIS will sponsor a live webcast of its earnings conference call with the investment community beginning at
About FIS
FIS is a leading provider of technology solutions for financial institutions and businesses of all sizes and across any industry globally. We enable the movement of commerce by unlocking the financial technology that powers the world’s economy. Our employees are dedicated to advancing the way the world pays, banks and invests through our trusted innovation, system performance and flexible architecture. We help our clients use technology in innovative ways to solve business-critical challenges and deliver superior experiences for their customers. Headquartered in
To learn more, visit www.fisglobal.com. Follow FIS on Facebook, LinkedIn and Twitter (@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
These non-GAAP measures include constant currency revenue, organic 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 and organic revenue growth measures adjust for the effects of exchange rate fluctuations, while organic revenue growth also adjusts for acquisitions and divestitures and 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 operating segment revenue excluding the impact of fluctuations in foreign currency exchange rates in the current period.
Organic revenue growth is constant currency revenue, as defined above, for the current period compared to an adjusted revenue base for the prior period, which is adjusted to add pre-acquisition revenue of acquired businesses for a portion of the prior year matching the portion of the current year for which the business was owned, and subtract pre-divestiture revenue for divested businesses for the portion of the prior year matching the portion of the current year for which the business was not owned, for any acquisitions or divestitures by FIS. When referring to organic revenue growth, revenues from our Corporate and Other segment, which is comprised of revenue from non-strategic businesses, are excluded.
Adjusted EBITDA reflects net earnings 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. It also excludes incremental and direct costs resulting from the COVID-19 pandemic. 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
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. It also excludes the impact of acquisition-related purchase accounting amortization and equity method investment earnings (loss), both of which are recurring. It also excludes incremental and direct costs resulting from the COVID-19 pandemic.
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, including incremental and direct costs resulting from the COVID-19 pandemic, less capital expenditures excluding capital expenditures related to the Company’s new headquarters. 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.
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 specific 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
Actual results, performance or achievement could differ materially from those contained in 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 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 outbreak or recurrence of the novel coronavirus and any related variants (“COVID-19”) and measures to reduce its spread, including the impact of governmental or voluntary actions such as business shutdowns and stay-at-home orders in certain geographies;
- the duration, including any recurrence, of the COVID-19 pandemic and its impacts, including reductions in consumer and business spending, and instability of the financial markets in heavily impacted areas across the globe;
- the economic and other impacts of COVID-19 on our clients which affect the sales of our solutions and services and the implementation of such solutions;
- the risk of losses in the event of defaults by merchants (or other parties) to which we extend credit in our card settlement operations or in respect of any chargeback liability, either of which could adversely impact liquidity and results of operations;
- 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;
- 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, the duration and impact of the COVID-19 pandemic, 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 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 reaction of current and potential customers to communications from us or regulators regarding information security, risk management, internal audit or other matters;
-
the risk that policies and resulting actions of the current administration in the
U.S. may result in additional regulations and executive orders, as well as additional regulatory and tax costs; -
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 merchants or bad actors; and
-
other risks detailed in the “Risk Factors” and other sections of our Annual Report on Form 10-K for the fiscal year ended
December 31, 2021 , in our quarterly reports on Form 10-Q and in our other filings with theSecurities 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.
Earnings Release Supplemental Financial Information
|
|
Exhibit A |
Condensed Consolidated Statements of Earnings - Unaudited for the three and nine months ended |
|
|
Exhibit B |
Condensed Consolidated Balance Sheets - Unaudited as of |
|
|
Exhibit C |
Condensed Consolidated Statements of Cash Flows - Unaudited for the nine months ended |
|
|
Exhibit D |
Supplemental Non-GAAP Financial Information - Unaudited for the three and nine months ended |
|
|
Exhibit E |
Supplemental GAAP to Non-GAAP Reconciliations - Unaudited for the three and nine months ended |
|
|
Exhibit F |
Supplemental GAAP to Non-GAAP Reconciliations on Guidance - Unaudited for the three months and full year ended |
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS — UNAUDITED (In millions, except per share amounts) |
|||||||||||||||
Exhibit A |
|||||||||||||||
|
|
|
|
|
|
|
|
||||||||
|
Three months ended |
|
Nine months ended |
||||||||||||
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Revenue |
$ |
3,604 |
|
|
$ |
3,507 |
|
|
$ |
10,814 |
|
|
$ |
10,205 |
|
Cost of revenue |
|
2,148 |
|
|
|
2,178 |
|
|
|
6,624 |
|
|
|
6,431 |
|
Gross profit |
|
1,456 |
|
|
|
1,329 |
|
|
|
4,190 |
|
|
|
3,774 |
|
Selling, general, and administrative expenses |
|
977 |
|
|
|
989 |
|
|
|
3,093 |
|
|
|
2,972 |
|
Asset impairments |
|
17 |
|
|
|
202 |
|
|
|
104 |
|
|
|
202 |
|
Operating income |
|
462 |
|
|
|
138 |
|
|
|
993 |
|
|
|
600 |
|
Other income (expense): |
|
|
|
|
|
|
|
||||||||
Interest expense, net |
|
(76 |
) |
|
|
(46 |
) |
|
|
(166 |
) |
|
|
(169 |
) |
Other income (expense), net |
|
(41 |
) |
|
|
110 |
|
|
|
51 |
|
|
|
(58 |
) |
Total other income (expense), net |
|
(117 |
) |
|
|
64 |
|
|
|
(115 |
) |
|
|
(227 |
) |
Earnings before income taxes and equity method investment earnings (loss) |
|
345 |
|
|
|
202 |
|
|
|
878 |
|
|
|
373 |
|
Provision (benefit) for income taxes |
|
91 |
|
|
|
41 |
|
|
|
223 |
|
|
|
246 |
|
Equity method investment earnings (loss) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
6 |
|
Net earnings |
|
254 |
|
|
|
161 |
|
|
|
655 |
|
|
|
133 |
|
Net (earnings) loss attributable to noncontrolling interest |
|
(5 |
) |
|
|
(3 |
) |
|
|
(9 |
) |
|
|
(7 |
) |
Net earnings attributable to FIS common stockholders |
$ |
249 |
|
|
$ |
158 |
|
|
$ |
646 |
|
|
$ |
126 |
|
|
|
|
|
|
|
|
|
||||||||
Net earnings per share-basic attributable to FIS common stockholders |
$ |
0.41 |
|
|
$ |
0.26 |
|
|
$ |
1.06 |
|
|
$ |
0.20 |
|
Weighted average shares outstanding-basic |
|
605 |
|
|
|
613 |
|
|
|
608 |
|
|
|
618 |
|
Net earnings per share-diluted attributable to FIS common stockholders |
$ |
0.41 |
|
|
$ |
0.26 |
|
|
$ |
1.06 |
|
|
$ |
0.20 |
|
Weighted average shares outstanding-diluted |
|
607 |
|
|
|
619 |
|
|
|
611 |
|
|
|
623 |
|
CONDENSED CONSOLIDATED BALANCE SHEETS — UNAUDITED (In millions, except per share amounts) |
|||||||
|
|
|
Exhibit B |
||||
|
|
|
|
||||
|
|
|
|
||||
ASSETS |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
1,932 |
|
|
$ |
2,010 |
|
Settlement assets |
|
4,359 |
|
|
|
4,020 |
|
Trade receivables, net |
|
3,373 |
|
|
|
3,772 |
|
Other receivables |
|
293 |
|
|
|
355 |
|
Prepaid expenses and other current assets |
|
636 |
|
|
|
551 |
|
Total current assets |
|
10,593 |
|
|
|
10,708 |
|
Property and equipment, net |
|
839 |
|
|
|
949 |
|
|
|
51,014 |
|
|
|
53,330 |
|
Intangible assets, net |
|
9,200 |
|
|
|
11,539 |
|
Software, net |
|
3,131 |
|
|
|
3,299 |
|
Other noncurrent assets |
|
2,549 |
|
|
|
2,137 |
|
Deferred contract costs, net |
|
991 |
|
|
|
969 |
|
Total assets |
$ |
78,317 |
|
|
$ |
82,931 |
|
|
|
|
|
||||
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND EQUITY |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable, accrued and other liabilities |
$ |
2,476 |
|
|
$ |
2,864 |
|
Settlement payables |
|
5,076 |
|
|
|
5,295 |
|
Deferred revenue |
|
712 |
|
|
|
779 |
|
Short-term borrowings |
|
2,422 |
|
|
|
3,911 |
|
Current portion of long-term debt |
|
2,985 |
|
|
|
1,617 |
|
Total current liabilities |
|
13,671 |
|
|
|
14,466 |
|
Long-term debt, excluding current portion |
|
13,509 |
|
|
|
14,825 |
|
Deferred income taxes |
|
3,691 |
|
|
|
4,193 |
|
Other noncurrent liabilities |
|
1,931 |
|
|
|
1,915 |
|
Total liabilities |
|
32,802 |
|
|
|
35,399 |
|
|
|
|
|
||||
Redeemable noncontrolling interest |
|
178 |
|
|
|
174 |
|
|
|
|
|
||||
Equity: |
|
|
|
||||
FIS stockholders’ equity: |
|
|
|
||||
Preferred stock |
|
— |
|
|
|
— |
|
Common stock |
|
6 |
|
|
|
6 |
|
Additional paid in capital |
|
46,726 |
|
|
|
46,466 |
|
Retained earnings |
|
2,673 |
|
|
|
2,889 |
|
Accumulated other comprehensive earnings (loss) |
|
(392 |
) |
|
|
252 |
|
|
|
(3,685 |
) |
|
|
(2,266 |
) |
Total FIS stockholders’ equity |
|
45,328 |
|
|
|
47,347 |
|
Noncontrolling interest |
|
9 |
|
|
|
11 |
|
Total equity |
|
45,337 |
|
|
|
47,358 |
|
Total liabilities, redeemable noncontrolling interest and equity |
$ |
78,317 |
|
|
$ |
82,931 |
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS — UNAUDITED (In millions) |
|||||||
|
|
|
Exhibit C |
||||
|
|
|
|
||||
|
Nine months ended |
||||||
|
|
2022 |
|
|
|
2021 |
|
Cash flows from operating activities: |
|
|
|
||||
Net earnings |
$ |
655 |
|
|
$ |
133 |
|
Adjustment to reconcile net earnings to net cash provided by operating activities: |
|
|
|
||||
Depreciation and amortization |
|
2,920 |
|
|
|
2,981 |
|
Amortization of debt issuance costs |
|
23 |
|
|
|
22 |
|
Asset impairments |
|
104 |
|
|
|
202 |
|
Loss (gain) on sale of businesses, investments and other |
|
(13 |
) |
|
|
(233 |
) |
Loss on extinguishment of debt |
|
— |
|
|
|
528 |
|
Stock-based compensation |
|
198 |
|
|
|
320 |
|
Deferred income taxes |
|
(519 |
) |
|
|
(35 |
) |
Net changes in assets and liabilities, net of effects from acquisitions and foreign currency: |
|
|
|
||||
Trade and other receivables |
|
161 |
|
|
|
(229 |
) |
Settlement activity |
|
(38 |
) |
|
|
575 |
|
Prepaid expenses and other assets |
|
(250 |
) |
|
|
(350 |
) |
Deferred contract costs |
|
(314 |
) |
|
|
(323 |
) |
Deferred revenue |
|
(59 |
) |
|
|
(12 |
) |
Accounts payable, accrued liabilities and other liabilities |
|
(70 |
) |
|
|
118 |
|
Net cash provided by operating activities |
|
2,798 |
|
|
|
3,697 |
|
|
|
|
|
||||
Cash flows from investing activities: |
|
|
|
||||
Additions to property and equipment |
|
(216 |
) |
|
|
(193 |
) |
Additions to software |
|
(867 |
) |
|
|
(684 |
) |
Settlement of net investment hedge cross-currency interest rate swaps |
|
684 |
|
|
|
(24 |
) |
Net proceeds from sale of businesses and investments |
|
12 |
|
|
|
370 |
|
Other investing activities, net |
|
219 |
|
|
|
(66 |
) |
Net cash provided by (used in) investing activities |
|
(168 |
) |
|
|
(597 |
) |
|
|
|
|
||||
Cash flows from financing activities: |
|
|
|
||||
Borrowings |
|
50,006 |
|
|
|
40,569 |
|
Repayment of borrowings and other financing obligations |
|
(49,349 |
) |
|
|
(40,644 |
) |
Debt issuance costs |
|
(23 |
) |
|
|
(74 |
) |
Net proceeds from stock issued under stock-based compensation plans |
|
53 |
|
|
|
87 |
|
|
|
(1,390 |
) |
|
|
(2,113 |
) |
Dividends paid |
|
(858 |
) |
|
|
(724 |
) |
Other financing activities, net |
|
(329 |
) |
|
|
(138 |
) |
Net cash provided by (used in) financing activities |
|
(1,890 |
) |
|
|
(3,037 |
) |
|
|
|
|
||||
Effect of foreign currency exchange rate changes on cash |
|
(782 |
) |
|
|
(57 |
) |
Net increase (decrease) in cash, cash equivalents and restricted cash |
|
(42 |
) |
|
|
6 |
|
Cash, cash equivalents and restricted cash, beginning of period |
|
4,283 |
|
|
|
4,030 |
|
Cash, cash equivalents and restricted cash, end of period |
$ |
4,241 |
|
|
$ |
4,036 |
|
SUPPLEMENTAL NON-GAAP ORGANIC REVENUE GROWTH — UNAUDITED (In millions) |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit D |
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Three months ended |
|||||||||||||||||||
|
2022 |
|
2021 |
|
||||||||||||||||
|
|
|
|
|
Constant |
|
|
|
Acquisition & |
|
|
|
|
|||||||
|
|
|
|
|
Currency |
|
|
|
Divestiture |
|
Adjusted |
|
Organic |
|||||||
|
Revenue |
|
FX |
|
Revenue |
|
Revenue |
|
Adjustment |
|
Base |
|
Growth |
|||||||
Banking Solutions |
$ |
1,680 |
|
$ |
21 |
|
$ |
1,702 |
|
$ |
1,610 |
|
$ |
— |
|
$ |
1,610 |
|
6 |
% |
Merchant Solutions |
|
1,180 |
|
|
49 |
|
|
1,230 |
|
|
1,161 |
|
|
16 |
|
|
1,176 |
|
5 |
% |
Capital Market Solutions |
|
671 |
|
|
20 |
|
|
691 |
|
|
654 |
|
|
— |
|
|
654 |
|
6 |
% |
Corporate and Other |
|
73 |
|
|
2 |
|
|
74 |
|
|
82 |
|
|
— |
|
|
83 |
|
N/A |
|
Total (1) |
$ |
3,604 |
|
$ |
92 |
|
$ |
3,696 |
|
$ |
3,507 |
|
$ |
16 |
|
$ |
3,523 |
|
5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Nine months ended |
|||||||||||||||||||
|
2022 |
|
2021 |
|
|
|||||||||||||||
|
|
|
|
|
Constant |
|
|
|
Acquisition & |
|
|
|
|
|||||||
|
|
|
|
|
Currency |
|
|
|
Divestiture |
|
Adjusted |
|
Organic |
|||||||
|
Revenue |
|
FX |
|
Revenue |
|
Revenue |
|
Adjustment |
|
Base |
|
Growth |
|||||||
Banking Solutions |
$ |
4,988 |
|
$ |
36 |
|
$ |
5,024 |
|
$ |
4,729 |
|
$ |
— |
|
$ |
4,729 |
|
6 |
% |
Merchant Solutions |
|
3,595 |
|
|
96 |
|
|
3,691 |
|
|
3,303 |
|
|
44 |
|
|
3,347 |
|
10 |
% |
Capital Market Solutions |
|
1,992 |
|
|
38 |
|
|
2,030 |
|
|
1,908 |
|
|
— |
|
|
1,908 |
|
6 |
% |
Corporate and Other |
|
239 |
|
|
5 |
|
|
244 |
|
|
265 |
|
|
— |
|
|
265 |
|
N/A |
|
Total (1) |
$ |
10,814 |
|
$ |
175 |
|
$ |
10,989 |
|
$ |
10,205 |
|
$ |
44 |
|
$ |
10,249 |
|
8 |
% |
Amounts in tables may not sum or calculate due to rounding. |
||||||||||||||||||||
(1) Total organic growth excludes Corporate and Other. |
||||||||||||||||||||
|
|||||||
SUPPLEMENTAL NON-GAAP CASH FLOW MEASURES — UNAUDITED (In millions) |
|||||||
Exhibit D (continued) |
|||||||
|
|
|
|
||||
|
Three months ended |
|
Nine months ended |
||||
|
|
|
|
||||
Net cash provided by operating activities |
$ |
878 |
|
|
$ |
2,798 |
|
Non-GAAP adjustments: |
|
|
|
||||
Acquisition, integration and other payments (1) |
|
187 |
|
|
|
469 |
|
Settlement activity |
|
(67 |
) |
|
|
38 |
|
Adjusted cash flows from operations |
|
998 |
|
|
|
3,305 |
|
Capital expenditures (2) |
|
(314 |
) |
|
|
(1,029 |
) |
Free cash flow |
$ |
684 |
|
|
$ |
2,276 |
|
|
Three months ended |
|
Nine months ended |
||||
|
|
|
|
||||
Net cash provided by operating activities |
$ |
1,833 |
|
|
$ |
3,697 |
|
Non-GAAP adjustments: |
|
|
|
||||
Acquisition, integration and other payments (1) |
|
117 |
|
|
|
383 |
|
Settlement activity |
|
(565 |
) |
|
|
(575 |
) |
Adjusted cash flows from operations |
|
1,385 |
|
|
|
3,505 |
|
Capital expenditures (2) |
|
(238 |
) |
|
|
(797 |
) |
Free cash flow |
$ |
1,147 |
|
|
$ |
2,708 |
|
Free cash flow reflects adjusted cash flows from operations less capital expenditures (additions to property and equipment and additions to software, excluding capital spend related to the construction of our new headquarters). 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. |
|
|
|
(1) |
Adjusted cash flows from operations and free cash flow for the three and nine months ended |
|
|
(2) |
Capital expenditures for free cash flow exclude capital spend related to the construction of our new headquarters totaling |
SUPPLEMENTAL GAAP TO NON-GAAP RECONCILIATIONS — UNAUDITED (In millions, except per share amounts) |
||||||||||||||||
Exhibit E |
||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
Net earnings attributable to FIS common stockholders |
|
$ |
249 |
|
$ |
158 |
|
|
$ |
646 |
|
|
$ |
126 |
||
Provision (benefit) for income taxes |
|
|
91 |
|
|
41 |
|
|
|
223 |
|
|
|
246 |
||
Interest expense, net |
|
|
76 |
|
|
46 |
|
|
|
166 |
|
|
|
169 |
||
Other, net |
|
|
46 |
|
|
(107 |
) |
|
|
(42 |
) |
|
|
59 |
||
|
|
|
|
|
|
|
|
|
||||||||
Operating income, as reported |
|
|
462 |
|
|
138 |
|
|
|
993 |
|
|
|
600 |
||
Depreciation and amortization, excluding purchase accounting amortization |
|
|
324 |
|
|
344 |
|
|
|
1,035 |
|
|
|
918 |
||
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
||||||||
Purchase accounting amortization (1) |
|
|
608 |
|
|
714 |
|
|
|
1,885 |
|
|
|
2,063 |
||
Acquisition, integration and other costs (2) |
|
|
164 |
|
|
187 |
|
|
|
574 |
|
|
|
629 |
||
Asset impairments (3) |
|
|
17 |
|
|
202 |
|
|
|
104 |
|
|
|
202 |
||
Adjusted EBITDA |
|
$ |
1,575 |
|
$ |
1,585 |
|
|
$ |
4,591 |
|
|
$ |
4,412 |
||
See Notes to Exhibit E. |
||||||||||||||||
SUPPLEMENTAL GAAP TO NON-GAAP RECONCILIATIONS — UNAUDITED (In millions, except per share amounts) |
||||||||||||||||
Exhibit E (continued) |
||||||||||||||||
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Earnings before income taxes and equity method investment earnings (loss) |
|
$ |
345 |
|
|
$ |
202 |
|
|
$ |
878 |
|
|
$ |
373 |
|
(Provision) benefit for income taxes |
|
|
(91 |
) |
|
|
(41 |
) |
|
|
(223 |
) |
|
|
(246 |
) |
Equity method investment earnings (loss) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
6 |
|
Net (earnings) loss attributable to noncontrolling interest |
|
|
(5 |
) |
|
|
(3 |
) |
|
|
(9 |
) |
|
|
(7 |
) |
Net earnings attributable to FIS common stockholders |
|
|
249 |
|
|
|
158 |
|
|
|
646 |
|
|
|
126 |
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
||||||||
Purchase accounting amortization (1) |
|
|
608 |
|
|
|
714 |
|
|
|
1,885 |
|
|
|
2,063 |
|
Acquisition, integration and other costs (2) |
|
|
194 |
|
|
|
247 |
|
|
|
698 |
|
|
|
689 |
|
Asset impairments (3) |
|
|
17 |
|
|
|
202 |
|
|
|
104 |
|
|
|
202 |
|
Non-operating (income) expense (4) |
|
|
41 |
|
|
|
(110 |
) |
|
|
(51 |
) |
|
|
58 |
|
Equity method investment (earnings) loss (5) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(6 |
) |
Tax rate change (6) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
178 |
|
(Provision) benefit for income taxes on non-GAAP adjustments |
|
|
(55 |
) |
|
|
(141 |
) |
|
|
(268 |
) |
|
|
(423 |
) |
Total non-GAAP adjustments |
|
|
805 |
|
|
|
912 |
|
|
|
2,368 |
|
|
|
2,761 |
|
Adjusted net earnings |
|
$ |
1,054 |
|
|
$ |
1,070 |
|
|
$ |
3,014 |
|
|
$ |
2,887 |
|
|
|
|
|
|
|
|
|
|
||||||||
Net earnings per share-diluted attributable to FIS common stockholders |
|
$ |
0.41 |
|
|
$ |
0.26 |
|
|
$ |
1.06 |
|
|
$ |
0.20 |
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
||||||||
Purchase accounting amortization (1) |
|
|
1.00 |
|
|
|
1.15 |
|
|
|
3.09 |
|
|
|
3.31 |
|
Acquisition, integration and other costs (2) |
|
|
0.32 |
|
|
|
0.40 |
|
|
|
1.14 |
|
|
|
1.11 |
|
Asset impairments (3) |
|
|
0.03 |
|
|
|
0.33 |
|
|
|
0.17 |
|
|
|
0.32 |
|
Non-operating (income) expense (4) |
|
|
0.07 |
|
|
|
(0.18 |
) |
|
|
(0.08 |
) |
|
|
0.09 |
|
Equity method investment (earnings) loss (5) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(0.01 |
) |
Tax rate change (6) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.29 |
|
(Provision) benefit for income taxes on non-GAAP adjustments |
|
|
(0.09 |
) |
|
|
(0.23 |
) |
|
|
(0.44 |
) |
|
|
(0.68 |
) |
Adjusted net earnings per share-diluted attributable to FIS common stockholders |
|
$ |
1.74 |
|
|
$ |
1.73 |
|
|
$ |
4.94 |
|
|
$ |
4.63 |
|
Weighted average shares outstanding-diluted |
|
|
607 |
|
|
|
619 |
|
|
|
611 |
|
|
|
623 |
|
Amounts in table may not sum or calculate due to rounding. |
||||||||||||||||
See Notes to Exhibit E. |
||||||||||||||||
SUPPLEMENTAL GAAP TO NON-GAAP RECONCILIATIONS — UNAUDITED (In millions, except per share amounts) |
|
Exhibit E (continued) |
|
Notes to Unaudited - Supplemental GAAP to Non-GAAP Reconciliations for the three and nine months ended |
|
The adjustments are as follows: |
|
|
|
(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. This item also includes |
|
|
(2) |
This item represents acquisition and integration costs primarily related to the acquisition of Worldpay as well as certain other costs, including |
|
|
(3) |
For the three months ended |
|
|
(4) |
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. This item includes the impact of changes in fair value of certain preferred stock assets and related liabilities owed to former legacy Worldpay owners, representing a net change of |
|
|
(5) |
This item represents our equity method investment earnings or loss and was predominantly due to our equity ownership interest in |
|
|
(6) |
This item represents the one-time net remeasurement of certain deferred tax liabilities due to the increase in the |
SUPPLEMENTAL GAAP TO NON-GAAP RECONCILIATIONS ON GUIDANCE — UNAUDITED (In millions, except per share amounts) |
|||||||||||
Exhibit F |
|||||||||||
|
Three months ended |
|
Year ended |
||||||||
|
|
|
|
||||||||
|
Low |
|
High |
|
Low |
|
High |
||||
|
|
|
|
|
|
|
|
||||
Net earnings per share-diluted attributable to FIS common stockholders |
$ |
0.39 |
|
$ |
0.49 |
|
$ |
1.45 |
|
$ |
1.55 |
|
|
|
|
|
|
|
|
||||
Estimated adjustments (1) |
|
1.27 |
|
|
1.23 |
|
|
5.15 |
|
|
5.11 |
|
|
|
|
|
|
|
|
||||
Adjusted net earnings per share-diluted attributable to FIS common stockholders |
$ |
1.66 |
|
$ |
1.72 |
|
$ |
6.60 |
|
$ |
6.66 |
(1) Estimated adjustments include purchase accounting amortization, acquisition, integration and other costs, and other items, net of tax impact. |
|||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20221103005464/en/
Chief Marketing Officer
Ellyn.Raftery@fisglobal.com
Senior Vice President
Head of Investor Relations
Georgios.Mihalos@fisglobal.com
Source: FIS
FAQ
What were FIS's revenue and earnings in Q3 2022?
How much capital did FIS return to shareholders in Q3 2022?
What is FIS's guidance for Q4 and full-year 2022?
What actions is FIS taking to improve financial performance?
Who will be the new CEO of FIS starting January 2023?
