UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________________________________

Form 10-Q

_______________________________________________

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

Or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File No. 001-16427

_______________________________________________

Fidelity National Information Services, Inc.

(Exact name of registrant as specified in its charter)

Georgia		37-1490331
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
601 Riverside Avenue
Jacksonville	Florida	32204
(Address of principal executive offices)		(Zip Code)

(904) 438-6000

(Registrant’s telephone number, including area code)

(Former Name or Former Address, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:
	Trading	Name of each exchange
Title of each class	Symbol(s)	on which registered
Common Stock, par value $0.01 per share	FIS	New York Stock Exchange
0.125% Senior Notes due 2022	FIS22C	New York Stock Exchange
0.750% Senior Notes due 2023	FIS23A	New York Stock Exchange
1.100% Senior Notes due 2024	FIS24A	New York Stock Exchange
0.625% Senior Notes due 2025	FIS25B	New York Stock Exchange
1.500% Senior Notes due 2027	FIS27	New York Stock Exchange
1.000% Senior Notes due 2028	FIS28	New York Stock Exchange
2.250% Senior Notes due 2029	FIS29	New York Stock Exchange
2.000% Senior Notes due 2030	FIS30	New York Stock Exchange
3.360% Senior Notes due 2031	FIS31	New York Stock Exchange
2.950% Senior Notes due 2039	FIS39	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) YES ☐ NO ☒

As of August 3, 2022, 607,978,556 shares of the Registrant’s Common Stock were outstanding.

FORM 10-Q

QUARTERLY REPORT

Quarter Ended June 30, 2022

INDEX

	Page
Part I: FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets	2
Condensed Consolidated Statements of Earnings (Loss)	3
Condensed Consolidated Statements of Comprehensive Earnings (Loss)	4
Condensed Consolidated Statements of Equity	5
Condensed Consolidated Statements of Cash Flows	7
Notes to Condensed Consolidated Financial Statements	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3. Quantitative and Qualitative Disclosure About Market Risks	32
Item 4. Controls and Procedures	34
Part II: OTHER INFORMATION
Item 1A. Risk Factors	34
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	34
Item 5. Other Information	35
Item 6. Exhibits	37
Signatures	38

1

FIDELITY NATIONAL INFORMATION SERVICES, INC.

AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In millions, except per share amounts)

(Unaudited)

	June 30, 2022		December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	1,688	$	2,010
Settlement assets	4,334		4,020
Trade receivables, net of allowance for credit losses of $99 and $76, respectively	3,520		3,772
Other receivables	251		355
Prepaid expenses and other current assets	913		551
Total current assets	10,706		10,708
Property and equipment, net	881		949
Goodwill	52,004		53,330
Intangible assets, net	10,018		11,539
Software, net	3,176		3,299
Other noncurrent assets	1,876		2,137
Deferred contract costs, net	959		969
Total assets	$	79,620	$	82,931
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND EQUITY
Current liabilities:
Accounts payable, accrued and other liabilities	$	2,856	$	2,864
Settlement payables	5,154		5,295
Deferred revenue	728		779
Short-term borrowings	3,642		3,911
Current portion of long-term debt	3,148		1,617
Total current liabilities	15,528		14,466
Long-term debt, excluding current portion	11,755		14,825
Deferred income taxes	3,786		4,193
Other noncurrent liabilities	1,861		1,915
Total liabilities	32,930		35,399
Redeemable noncontrolling interest	175		174
Equity:
FIS stockholders’ equity:
Preferred stock $0.01 par value; 200 shares authorized, none issued and outstanding as of June 30, 2022, and December 31, 2021	—		—
Common stock $0.01 par value, 750 shares authorized, 628 and 625 shares issued as of June 30, 2022, and December 31, 2021, respectively	6		6
Additional paid in capital	46,634		46,466
Retained earnings	2,709		2,889
Accumulated other comprehensive earnings (loss)	(200)		252
Treasury stock, $0.01 par value, 20 and 16 common shares as of June 30, 2022, and December 31, 2021, respectively, at cost	(2,643)		(2,266)
Total FIS stockholders’ equity	46,506		47,347
Noncontrolling interest	9		11
Total equity	46,515		47,358
Total liabilities, redeemable noncontrolling interest and equity	$	79,620	$	82,931

See accompanying notes, which are an integral part of these unaudited condensed consolidated financial statements.

2

FIDELITY NATIONAL INFORMATION SERVICES, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Earnings (Loss)

(In millions, except per share amounts)

(Unaudited)

	Three months ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Revenue	$	3,719	$	3,475	$	7,210	$	6,699
Cost of revenue	2,234		2,135		4,475		4,253
Gross profit	1,485		1,340		2,735		2,446
Selling, general, and administrative expenses	1,082		977		2,117		1,983
Asset impairments	29		—		87		—
Operating income	374		363		531		463
Other income (expense):
Interest expense, net	(47)		(48)		(90)		(122)
Other income (expense), net	30		324		92		(170)
Total other income (expense), net	(17)		276		2		(292)
Earnings (loss) before income taxes and equity method investment earnings (loss)	357		639		533		171
Provision (benefit) for income taxes	77		302		132		205
Equity method investment earnings (loss)	—		5		—		6
Net earnings (loss)	280		342		401		(28)
Net (earnings) loss attributable to noncontrolling interest	(3)		(1)		(4)		(4)
Net earnings (loss) attributable to FIS common stockholders	$	277	$	341	$	397	$	(32)
Net earnings (loss) per share-basic attributable to FIS common stockholders	$	0.46	$	0.55	$	0.65	$	(0.05)
Weighted average shares outstanding-basic	608		619		609		620
Net earnings (loss) per share-diluted attributable to FIS common stockholders	$	0.45	$	0.55	$	0.65	$	(0.05)
Weighted average shares outstanding-diluted	611		624		612		620

See accompanying notes, which are an integral part of these unaudited condensed consolidated financial statements.

3

FIDELITY NATIONAL INFORMATION SERVICES, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Earnings (Loss)

(In millions)

(Unaudited)

	Three months ended June 30,								Six months ended June 30,
	2022				2021				2022				2021
Net earnings (loss)			$	280			$	342			$	401			$	(28)
Other comprehensive earnings (loss), before tax:
Unrealized gain (loss) on derivatives	$	—			$	—			$	—			$	9
Foreign currency translation adjustments	(229)				130				(373)				315
Other adjustments	1				1				5				1
Other comprehensive earnings (loss), before tax	(228)				131				(368)				325
Provision for income tax (expense) benefit related to items of other comprehensive earnings	(78)				(6)				(84)				(133)
Other comprehensive earnings (loss), net of tax	$	(306)	(306)		$	125	125		$	(452)	(452)		$	192	192
Comprehensive earnings (loss)			(26)				467				(51)				164
Net (earnings) loss attributable to noncontrolling interest			(3)				(1)				(4)				(4)
Comprehensive earnings (loss) attributable to FIS common stockholders			$	(29)			$	466			$	(55)			$	160

See accompanying notes, which are an integral part of these unaudited condensed consolidated financial statements.

4

FIDELITY NATIONAL INFORMATION SERVICES, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Equity

Three and six months ended June 30, 2022

(In millions, except per share amounts)

(Unaudited)

			Amount
			FIS Stockholders
									Accumulated
	Number of shares				Additional				other
	Common	Treasury	Common		paid in		Retained		comprehensive		Treasury		Noncontrolling		Total
	shares	shares	stock		capital		earnings		earnings (loss)		stock		interest (1)		equity
Balances, March 31, 2022	628	(17)	$	6	$	46,536	$	2,721	$	106	$	(2,343)	$	10	$	47,036
Exercise of stock options	—	—	—		10		—		—		—		—		10
Purchases of treasury stock	—	(3)	—		—		—		—		(300)		—		(300)
Stock-based compensation	—	—	—		88		—		—		—		—		88
Cash dividends declared ($0.47 per share per quarter) and other distributions	—	—	—		—		(289)		—		—		(3)		(292)
Net earnings (loss)	—	—	—		—		277		—		—		2		279
Other comprehensive earnings (loss), net of tax	—	—	—		—		—		(306)		—		—		(306)
Balances, June 30, 2022	628	(20)	$	6	$	46,634	$	2,709	$	(200)	$	(2,643)	$	9	$	46,515

			Amount
			FIS Stockholders
									Accumulated
	Number of shares				Additional				other
	Common	Treasury	Common		paid in		Retained		comprehensive		Treasury		Noncontrolling		Total
	shares	shares	stock		capital		earnings		earnings (loss)		stock		interest (1)		equity
Balances, December 31, 2021	625	(16)	$	6	$	46,466	$	2,889	$	252	$	(2,266)	$	11	$	47,358
Issuance of restricted stock	3	—	—		—		—		—		—		—		—
Exercise of stock options	—	—	—		18		—		—		—		—		18
Purchases of treasury stock	—	(3)	—		—		—		—		(300)		—		(300)
Treasury shares held for taxes due upon exercise of stock awards	—	(1)	—		—		—		—		(77)		—		(77)
Stock-based compensation	—	—	—		145		—		—		—		—		145
Cash dividends declared ($0.47 per share per quarter) and other distributions	—	—	—		5		(577)		—		—		(5)		(577)
Net earnings (loss)	—	—	—		—		397		—		—		3		400
Other comprehensive earnings (loss), net of tax	—	—	—		—		—		(452)		—		—		(452)
Balances, June 30, 2022	628	(20)	6		46,634		2,709		(200)		(2,643)		9		46,515

(1)Excludes redeemable noncontrolling interest that is not considered equity.

See accompanying notes, which are an integral part of these unaudited condensed consolidated financial statements.

5

FIDELITY NATIONAL INFORMATION SERVICES, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Equity

Three and six months ended June 30, 2021

(In millions, except per share amounts)

(Unaudited)

			Amount
			FIS Stockholders
									Accumulated
	Number of shares				Additional				other
	Common	Treasury	Common		paid in		Retained		comprehensive		Treasury		Noncontrolling		Total
	shares	shares	stock		capital		earnings		earnings (loss)		stock		interest (1)		equity
Balances, March 31, 2021	624	(4)	$	6	$	46,152	$	2,823	$	124	$	(645)	$	14	$	48,474
Issuance of restricted stock	1	—	—		—		—		—		—		—		—
Exercise of stock options	—	—	—		38		—		—		—		—		38
Purchases of treasury stock	—	(3)	—		—		—		—		(400)		—		(400)
Treasury shares held for taxes due upon exercise of stock awards	—	—	—		—		—		—		(13)		—		(13)
Stock-based compensation	—	—	—		84		—		—		—		—		84
Cash dividends declared ($0.39 per share per quarter) and other distributions	—	—	—		—		(243)		—		—		(3)		(246)
Net earnings	—	—	—		—		341		—		—		1		342
Other comprehensive earnings (loss), net of tax	—	—	—		—		—		125		—		—		125
Balances, June 30, 2021	625	(7)	$	6	$	46,274	$	2,921	$	249	$	(1,058)	$	12	$	48,404

			Amount
			FIS Stockholders
									Accumulated
	Number of shares				Additional				other
	Common	Treasury	Common		paid in		Retained		comprehensive		Treasury		Noncontrolling		Total
	shares	shares	stock		capital		earnings		earnings (loss)		stock		interest (1)		equity
Balances, December 31, 2020	621	(1)	$	6	$	45,947	$	3,440	$	57	$	(150)	$	13	$	49,313
Issuance of restricted stock	4	—	—		1		—		—		—		—		1
Exercise of stock options	—	—	—		85		—		—		—		—		85
Purchases of treasury stock	—	(6)	—		—		—		—		(800)		—		(800)
Treasury shares held for taxes due upon exercise of stock awards	—	—	—		—		—		—		(108)		—		(108)
Stock-based compensation	—	—	—		241		—		—		—		—		241
Cash dividends declared ($0.39 per share per quarter) and other distributions	—	—	—		—		(487)		—		—		(4)		(491)
Net earnings (loss)	—	—	—		—		(32)		—		—		3		(29)
Other comprehensive earnings (loss), net of tax	—	—	—		—		—		192		—		—		192
Balances, June 30, 2021	625	(7)	$	6	$	46,274	$	2,921	$	249	$	(1,058)	$	12	$	48,404

(1)Excludes redeemable noncontrolling interest that is not considered equity.

See accompanying notes, which are an integral part of these unaudited condensed consolidated financial statements.

6

FIDELITY NATIONAL INFORMATION SERVICES, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In millions)

(Unaudited)

	Six months ended June 30,
	2022		2021
Cash flows from operating activities:
Net earnings (loss)	$	401	$	(28)
Adjustment to reconcile net earnings (loss) to net cash provided by operating activities:
Depreciation and amortization	1,988		1,924
Amortization of debt issuance costs	15		15
Asset impairments	87		—
Loss (gain) on sale of businesses, investments and other	(5)		(230)
Loss on extinguishment of debt	—		528
Stock-based compensation	145		241
Deferred income taxes	(386)		87
Net changes in assets and liabilities, net of effects from acquisitions and foreign currency:
Trade and other receivables	114		(171)
Settlement activity	(106)		10
Prepaid expenses and other assets	(250)		(308)
Deferred contract costs	(190)		(212)
Deferred revenue	(30)		35
Accounts payable, accrued liabilities and other liabilities	137		(27)
Net cash provided by operating activities	1,920		1,864
Cash flows from investing activities:
Additions to property and equipment	(173)		(143)
Additions to software	(579)		(470)
Settlement of net investment hedge cross-currency interest rate swaps	645		(17)
Net proceeds from sale of businesses and investments	—		367
Other investing activities, net	(22)		(60)
Net cash provided by (used in) investing activities	(129)		(323)
Cash flows from financing activities:
Borrowings	30,789		26,969
Repayment of borrowings and other financing obligations	(31,358)		(27,696)
Debt issuance costs	—		(74)
Net proceeds from stock issued under stock-based compensation plans	15		76
Treasury stock activity	(378)		(908)
Dividends paid	(574)		(486)
Other financing activities, net	(96)		(136)
Net cash provided by (used in) financing activities	(1,602)		(2,255)
Effect of foreign currency exchange rate changes on cash	(392)		(31)
Net increase (decrease) in cash, cash equivalents and restricted cash	(203)		(745)
Cash, cash equivalents and restricted cash, beginning of period	4,283		4,030
Cash, cash equivalents and restricted cash, end of period	$	4,080	$	3,285
Supplemental cash flow information:
Cash paid for interest	$	241	$	287
Cash paid for income taxes	$	323	$	170

See accompanying notes, which are an integral part of these unaudited condensed consolidated financial statements.

7

FIDELITY NATIONAL INFORMATION SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Unless stated otherwise or the context otherwise requires, all references to "FIS," "we," "our," "us," the "Company" or the "registrant" are to Fidelity National Information Services, Inc., a Georgia corporation, and its subsidiaries.

(1)       Basis of Presentation

The unaudited financial information included in this report includes the accounts of FIS and its subsidiaries prepared in accordance with U.S. generally accepted accounting principles and the instructions to Form 10-Q and Article 10 of Regulation S-X. All adjustments considered necessary for a fair presentation have been included. This report should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2021.

The preparation of these consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reported periods. The inputs into management's critical and significant accounting estimates consider the economic impact of the outbreak of the novel coronavirus ("COVID-19") and the subsequently declared COVID-19 pandemic ("the pandemic") by the World Health Organization on March 11, 2020. The extent to which the pandemic further affects our results of operations and financial position will depend on future developments, which are highly uncertain and are difficult to predict, including, but not limited to, the duration and spread of the pandemic and any recurrence or new strain of COVID-19, its severity, the success of vaccines or other actions to contain the virus or treat its impact, and how quickly and to what extent normal economic and operating conditions can resume. Accordingly, our future results could be materially affected by changes in our estimates.

Certain reclassifications have been made in the 2021 consolidated financial statements to conform to the classifications used in 2022. Amounts in tables in the financial statements and accompanying footnotes may not sum or calculate due to rounding.

(2)       Acquisitions

Payrix Acquisition

On December 23, 2021, FIS acquired 100% of the equity of Payrix Holdings, LLC, and subsidiaries ("Payrix"), previously a privately held fintech company that specializes in embedding and monetizing payments in SaaS platforms to serve the eCommerce needs of small- to medium-sized businesses through a global card-not-present offering. The acquisition was accounted for as a business combination. We recorded a provisional allocation of the $777 million purchase price, primarily paid in cash, to tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values, consisting primarily of $131 million in software assets. We also recorded adjustments to our provisional allocation of the purchase price as of March 31, 2022, resulting in $631 million in total goodwill. Our purchase price allocation is provisional as of June 30, 2022, and we expect to finalize as soon as practicable but no later than one year from the date of acquisition.

(3)       Revenue

Disaggregation of Revenue

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.

8

FIDELITY NATIONAL INFORMATION SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

For the three months ended June 30, 2022 (in millions):

	Reportable Segments
					Capital
	Merchant		Banking		Market		Corporate
	Solutions		Solutions		Solutions		and Other		Total
Primary Geographical Markets:
North America	$	955	$	1,427	$	388	$	64	$	2,834
All others	347		236		275		27		885
Total	$	1,302	$	1,663	$	663	$	91	$	3,719
Type of Revenue:
Recurring revenue:
Transaction processing and services	$	1,276	$	1,247	$	326	$	78	$	2,927
Software maintenance	1		86		128		—		215
Other recurring	23		51		25		—		99
Total recurring