Fidelity National Information Services, Inc. reports 25.8% EBITDA growth in 2020 and 21.5% Revenue growth
02/09/2021 • About Fidelity National Information Services, Inc. (
$FIS) • By InTwits
Fidelity National Information Services, Inc. reported 2020 financial results today. Here are the key drivers of the company's long term financial model:
- Fidelity National Information Services, Inc. is a growth stock: 2020 revenue growth was 21.5%, 5 year revenue CAGR was 13.7% at 2020 ROIC 0.77%
- EBITDA Margin is expanding: 35.7% in 2020 vs. 34.4% in 2019 vs. 27.0% in 2016
- Fidelity National Information Services, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.8%. At the same time it's in pair with industry average of 7.3%
- CAPEX is quite volatile: $489m in FY2020, $600m in FY2019, $593m in FY2018, $176m in FY2017, $86m in FY2016
- In the last 5 years the company invested considerably less than D&A: $880m vs. $3,939m
- The company has potentially unprofitable business model: ROIC is 0.8%
- It operates with high leverage: Net Debt/EBITDA is 4.2x while industry average is 1.7x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Fidelity National Information Services, Inc.'s Revenue jumped on 21.5%. Revenue growth showed slowdown in 20Q4 - it was -0.7% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.7 pp from 1.4% to 4.1% in 2020. EBITDA Margin stuck to a growing trend at 2.0 pp per annum in the last 5 years.
Gross Margin decreased on 2.5 pp from 36.0% to 33.5% in 2020. SG&A as a % of Revenue increased on 2.2 pp from 25.8% to 28.0% in 2020. During 2016-2020 SG&A as a % of Revenue bottomed in 2018 at 15.4% and was growing since that time.
Net Income margin decreased slightly on 1.6 pp from 2.9% to 1.3% in 2020. During 2016-2020 Net Income margin topped in 2017 at 14.5% and was declining since that time.
Investments (CAPEX, working capital and M&A)
Fidelity National Information Services, Inc.'s CAPEX/Revenue was 2.1% in 2020. The company showed almost no change in CAPEX/Revenue from 2017 to 2020. Average CAPEX/Revenue for the last three years was 1.8%.
Return on investment
The company operates at low ROIC (0.8%) and ROE (0.3%). ROIC decreased slightly on 1.3 pp from 2.1% to 0.77% in 2020. ROE decreased slightly on 0.68 pp from 1.00% to 0.32% in 2020. During the last 5 years ROIC topped in 2018 at 7.0% and was declining since that time. During the last 5 years ROE topped in 2017 at 12.3% and was declining since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is 4.2x and Debt / EBITDA is 4.6x. Net Debt / EBITDA dropped on 1.3x from 5.5x to 4.2x in 2020. Debt decreased slightly on 0.80% while cash jumped on 70.1%.
Fidelity National Information Services, Inc. has short term refinancing risk: cash is only 46.5% of short term debt.
Valuation and dividends
Fidelity National Information Services, Inc.'s trades at EV/EBITDA 22.6x and P/E 522.3x.
Management team
Gary A Norcross is a the company's CEO. Gary A Norcross has spent 6 years with the company. James W Woodall "Woody" is a Fidelity National Information Services, Inc.'s CFO. James W Woodall "Woody" has spent 11 years at the company.
Financial and operational results
FY ended 12/31/2020
Fidelity National Information Services, Inc. ($FIS) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 8,831 | 8,668 | 8,423 | 10,333 | 12,552 | 21.5% |
| Gross Profit | 2,936 | 2,874 | 2,854 | 3,723 | 4,204 | 12.9% |
| SG&A | 1,707 | 1,442 | 1,301 | 2,667 | 3,516 | 31.8% |
| EBITDA | 2,382 | 2,798 | 2,878 | 3,558 | 4,476 | 25.8% |
| EBIT | 1,229 | 1,432 | 1,458 | | | |
| Tax | 291 | -321 | 208 | | | |
| Net Income | 525 | 1,261 | 846 | 298 | 158 | -47.0% |
| Stock Based Compensation | 105 | 107 | 84 | | | |
Balance Sheet
|
|---|
| Cash | 683 | 665 | 703 | 1,152 | 1,959 | 70.1% |
| Accounts Receivable | 1,639 | 1,624 | 1,472 | | | |
| Short Term Debt | 332 | 1,045 | 315 | 3,092 | 4,216 | 36.4% |
| Long Term Debt | 10,146 | 7,718 | 8,670 | 17,695 | 16,404 | -7.3% |
Cash flow
|
|---|
| Capex | 145 | 145 | 127 | 200 | 263 | 31.5% |
| Dividends | 341 | 385 | 421 | | | |
Ratios
|
|---|
| Revenue growth | 33.9% | -1.8% | -2.8% | 22.7% | 21.5% | |
| EBITDA growth | 34.7% | 17.5% | 2.9% | 23.6% | 25.8% | |
|
|---|
| Gross Margin | 33.2% | 33.2% | 33.9% | 36.0% | 33.5% | -2.5% |
| EBITDA Margin | 27.0% | 32.3% | 34.2% | 34.4% | 35.7% | 1.2% |
| EBIT Margin | 13.9% | 16.5% | 17.3% | | |
| SG&A, % of revenue | 19.3% | 16.6% | 15.4% | 25.8% | 28.0% | 2.2% |
| SBC, % of revenue | 1.2% | 1.2% | 1.0% | | |
| Net Income Margin | 5.9% | 14.5% | 10.0% | 2.9% | 1.3% | -1.6% |
| CAPEX, % of revenue | 1.6% | 1.7% | 1.5% | 1.9% | 2.1% | 0.2% |
|
|---|
| ROIC | 5.3% | 6.5% | 7.0% | 2.1% | 0.8% | -1.3% |
| ROE | 5.5% | 12.3% | 8.1% | 1.0% | 0.3% | -0.7% |
| Net Debt/EBITDA | 4.1x | 2.9x | 2.9x | 5.5x | 4.2x | -1.3x |
People
|
|---|
| Insider ownership | 0.3% | 0.3% | 0.3% | | | |
| Employees | 55,000 | 53,000 | 47,000 | | | |
| Revenue/Employee, th. $ | 161 | 164 | 179 | | | |
Fidelity National Information Services, Inc. ($FIS) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 3,078 | 2,962 | 3,197 | 3,316 | | 49.6% | 40.2% | 13.3% | -0.7% |
| EBITDA | 1,022 | 962 | 1,161 | 1,121 | | 43.1% | 21.5% | 24.7% | 0.0% |
| Net Income | 15 | 19 | 20 | 103 | | -89.9% | -87.7% | -87.0% | - |
Balance Sheet
|
|---|
| Cash | 1,373 | 1,183 | 1,826 | 1,959 | | 138.4% | -87.9% | 39.9% | 70.1% |
| Short Term Debt | 1,395 | 4,994 | 4,976 | 4,216 | | 83.1% | 199.9% | 47.3% | 36.4% |
| Long Term Debt | 18,982 | 14,874 | 15,213 | 16,404 | | 113.3% | -12.5% | -12.4% | -7.3% |
Ratios
|
|---|
| Gross Margin | 32.1% | 30.9% | 34.2% | 36.4% | | -0.7% | -2.6% | -0.7% | -4.2% |
| EBITDA Margin | 33.2% | 32.5% | 36.3% | 33.8% | | -1.5% | -5.0% | 3.3% | 0.3% |
| Net Income Margin | 0.5% | 0.6% | 0.6% | 3.1% | | -6.7% | -6.7% | -4.8% | 7.8% |
Peers in Data Processing & Outsourced Services
Below you can find Fidelity National Information Services, Inc. benchmarking vs. other companies in Data Processing & Outsourced Services industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Square, Inc. ($SQ) | - | 29.6% | 49.0% | 42.9% | 101.5% |
| Global Payments Inc. ($GPN) | - | 37.2% | -15.3% | 45.9% | 51.1% |
| Fiserv, Inc. ($FISV) | - | 3.5% | 2.2% | 74.9% | 45.8% |
| NIC Inc. ($EGOV) | - | 5.8% | 2.5% | 2.7% | 30.0% |
| StoneCo Ltd ($STNE) | - | 74.3% | 106.0% | 63.1% | 28.9% |
| |
|---|
| Median (39 companies) | 6.7% | 11.8% | 7.5% | 8.9% | -3.3% |
|---|
| Fidelity National Information Services, Inc. ($FIS) | - | -1.8% | -2.8% | 22.7% | 21.5% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Verra Mobility Corp ($VRRM) | - | 97.4% | 97.5% | 95.7% | 91.5% |
| EVO Payments, Inc. ($EVOP) | - | - | - | 80.2% | 80.8% |
| StoneCo Ltd ($STNE) | 69.7% | 70.8% | 79.5% | 83.4% | 76.8% |
| WEX Inc. ($WEX) | 54.7% | 58.8% | 63.3% | 61.7% | 56.8% |
| Sabre Corporation ($SABR) | 32.2% | 30.1% | 27.8% | 56.6% | 56.6% |
| |
|---|
| Median (31 companies) | 39.5% | 39.5% | 41.0% | 41.7% | 36.7% |
|---|
| Fidelity National Information Services, Inc. ($FIS) | 33.2% | 33.2% | 33.9% | 36.0% | 33.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Visa Inc. ($V) | 55.6% | 69.2% | 65.8% | 68.1% | 68.5% |
| Mastercard Incorporated ($MA) | 56.9% | 56.5% | 51.8% | 60.9% | 56.6% |
| FleetCor Technologies, Inc. ($FLT) | 52.0% | 50.8% | 55.9% | 57.6% | 52.2% |
| StoneCo Ltd ($STNE) | 31.4% | 26.0% | 53.0% | 62.4% | 52.1% |
| Black Knight, Inc. ($BKI) | 43.0% | 44.6% | 43.3% | 46.0% | 44.9% |
| |
|---|
| Median (38 companies) | 21.2% | 20.6% | 19.2% | 21.7% | 18.2% |
|---|
| Fidelity National Information Services, Inc. ($FIS) | 27.0% | 32.3% | 34.2% | 34.4% | 35.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| PagSeguro Digital Ltd. ($PAGS) | 6.4% | 4.3% | 1.4% | 5.8% | 22.3% |
| StoneCo Ltd ($STNE) | 7.2% | 18.4% | 8.9% | 12.9% | 11.2% |
| Cardtronics plc ($CATM) | 9.9% | 9.6% | 8.0% | 9.3% | 8.3% |
| Verra Mobility Corp ($VRRM) | - | 11.5% | 7.2% | 6.6% | 6.2% |
| Fiserv, Inc. ($FISV) | 5.3% | 5.0% | 6.2% | 7.1% | 6.1% |
| |
|---|
| Median (38 companies) | 3.2% | 2.9% | 3.2% | 3.3% | 3.1% |
|---|
| Fidelity National Information Services, Inc. ($FIS) | 1.6% | 1.7% | 1.5% | 1.9% | 2.1% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Mastercard Incorporated ($MA) | 57.5% | 60.6% | 64.7% | 72.7% | 47.6% |
| International Money Express, Inc. ($IMXI) | -1.3% | -1.4% | 12.1% | 36.0% | 31.4% |
| NIC Inc. ($EGOV) | 63.1% | 52.1% | 39.3% | 26.5% | 30.8% |
| Visa Inc. ($V) | 18.1% | 21.9% | 23.0% | 27.2% | 23.2% |
| Western Union Company (The) ($WU) | 10.7% | 11.9% | 27.8% | 21.5% | 22.1% |
| |
|---|
| Median (39 companies) | 11.7% | 10.7% | 12.1% | 8.3% | 6.4% |
|---|
| Fidelity National Information Services, Inc. ($FIS) | 5.3% | 6.5% | 7.0% | 2.1% | 0.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| WEX Inc. ($WEX) | 6.7x | 4.4x | 3.1x | 3.4x | 12.1x |
| Exela Technologies Inc ($XELAU) | 8.1x | - | 9.7x | - | 10.7x |
| Alliance Data Systems Corporation ($ADS) | 10.7x | 10.1x | 9.0x | 11.7x | 9.2x |
| Verra Mobility Corp ($VRRM) | - | 10.7x | 6.9x | 3.5x | 4.7x |
| GreenSky, Inc. ($GSKY) | -1.5x | -1.5x | 0.5x | 1.5x | 4.6x |
| |
|---|
| Median (35 companies) | 1.3x | 2.3x | 2.0x | 2.1x | 1.9x |
|---|
| Fidelity National Information Services, Inc. ($FIS) | 4.1x | 2.9x | 2.9x | 5.5x | 4.2x |
