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Fidelity (FIS) Q3 Earnings Top Estimates, Revenues Rise Y/Y
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Fidelity National Information Services, Inc. (FIS - Free Report) has reported third-quarter 2021 adjusted earnings per share of $1.73, surpassing the Zacks Consensus Estimate of $1.68. Also, the bottom line compared favorably with the year-ago quarter figure of $1.42.
Notable increases in margin and organic revenue growth were positives. The robust activities in terms of new sales and the continued recovery in the global economy from the ongoing pandemic also supported the performance.
Strong cash flow fostered accelerated share buyback ability in the third quarter. Despite achieving annual run-rate revenue synergies and operational expense synergies of around $600 million and $475 million, respectively, a rise in selling, general, and administrative expenses was a hurdle.
On a GAAP basis, the company reported net earnings attributable to common stockholders of $158 million or 26 cents per share compared with $20 million or 3 cents per share in the prior-year quarter.
Organic Revenues Rise, Expenses Increase
Revenues in the quarter were $3.51 billion, up 10% year over year. However, the top line lagged the Zacks Consensus Estimate of $3.52 billion. Organic revenues increased 10% in the quarter on higher growth across three operating segments.
Segment-wise, Merchant Solutions’ revenues climbed 14% to $1.16 billion. Revenues from Banking Solutions rose 8% to $1.61 million. Capital Market Solutions’ revenues jumped 10% to $654 million, while Corporate and Other segment revenues declined 21% to $82 million.
Selling, general and administrative expenses were $989 million, up 14.7% year over year.
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) increased 17% to $1.59 billion from the year-ago quarter. The adjusted EBITDA margin expanded 270 basis points to 45.2%.
Balance Sheet & Cash Flow
As of Sep 30, 2021, cash and cash equivalents were $1.39 billion compared with $1.96 billion as of Dec 31, 2020. The debt outstanding was $19.8 billion.
In the third quarter, net cash provided by operations was $1.8 billion. The company reported a free cash flow of $1.1 billion.
It paid out dividends worth $238 million in the reported quarter and $1.2 billion in share repurchases.
Yearly Guidance (GAAP Basis)
For 2021, GAAP revenues are projected to be between $13.9 billion and $14 billion. The company expects to report earnings per share of 70-80 cents.
Our Viewpoint
Fidelity’s better-than-expected third-quarter results were supported by higher revenue growth across all three operating segments.The company remains well-poised for growth, backed by its attractive core business, with many ongoing initiatives and a broad customer base.
With strong cash flows, the company’s accelerated pace of share repurchases is likely to be sustainable. Also, higher investments in mobile banking and innovative products are expected to support Fidelity's growth over the long term.
Fidelity National Information Services, Inc. Price, Consensus and EPS Surprise
Envestnet, Inc. (ENV - Free Report) , Flywire Corporation (FLYW - Free Report) and Shift4 Payments (FOUR - Free Report) are scheduled to report quarterly numbers on Nov 8, Nov 9 and Nov 10, respectively.
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Fidelity (FIS) Q3 Earnings Top Estimates, Revenues Rise Y/Y
Fidelity National Information Services, Inc. (FIS - Free Report) has reported third-quarter 2021 adjusted earnings per share of $1.73, surpassing the Zacks Consensus Estimate of $1.68. Also, the bottom line compared favorably with the year-ago quarter figure of $1.42.
Notable increases in margin and organic revenue growth were positives. The robust activities in terms of new sales and the continued recovery in the global economy from the ongoing pandemic also supported the performance.
Strong cash flow fostered accelerated share buyback ability in the third quarter. Despite achieving annual run-rate revenue synergies and operational expense synergies of around $600 million and $475 million, respectively, a rise in selling, general, and administrative expenses was a hurdle.
On a GAAP basis, the company reported net earnings attributable to common stockholders of $158 million or 26 cents per share compared with $20 million or 3 cents per share in the prior-year quarter.
Organic Revenues Rise, Expenses Increase
Revenues in the quarter were $3.51 billion, up 10% year over year. However, the top line lagged the Zacks Consensus Estimate of $3.52 billion. Organic revenues increased 10% in the quarter on higher growth across three operating segments.
Segment-wise, Merchant Solutions’ revenues climbed 14% to $1.16 billion. Revenues from Banking Solutions rose 8% to $1.61 million. Capital Market Solutions’ revenues jumped 10% to $654 million, while Corporate and Other segment revenues declined 21% to $82 million.
Selling, general and administrative expenses were $989 million, up 14.7% year over year.
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) increased 17% to $1.59 billion from the year-ago quarter. The adjusted EBITDA margin expanded 270 basis points to 45.2%.
Balance Sheet & Cash Flow
As of Sep 30, 2021, cash and cash equivalents were $1.39 billion compared with $1.96 billion as of Dec 31, 2020. The debt outstanding was $19.8 billion.
In the third quarter, net cash provided by operations was $1.8 billion. The company reported a free cash flow of $1.1 billion.
It paid out dividends worth $238 million in the reported quarter and $1.2 billion in share repurchases.
Yearly Guidance (GAAP Basis)
For 2021, GAAP revenues are projected to be between $13.9 billion and $14 billion. The company expects to report earnings per share of 70-80 cents.
Our Viewpoint
Fidelity’s better-than-expected third-quarter results were supported by higher revenue growth across all three operating segments.The company remains well-poised for growth, backed by its attractive core business, with many ongoing initiatives and a broad customer base.
With strong cash flows, the company’s accelerated pace of share repurchases is likely to be sustainable. Also, higher investments in mobile banking and innovative products are expected to support Fidelity's growth over the long term.
Fidelity National Information Services, Inc. Price, Consensus and EPS Surprise
Fidelity National Information Services, Inc. price-consensus-eps-surprise-chart | Fidelity National Information Services, Inc. Quote
The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Release Dates of Other Companies
Envestnet, Inc. (ENV - Free Report) , Flywire Corporation (FLYW - Free Report) and Shift4 Payments (FOUR - Free Report) are scheduled to report quarterly numbers on Nov 8, Nov 9 and Nov 10, respectively.