Technology solution provider FIS reported revenue that showed global transactions and volumes (as measured by the total dollar value of those transactions processed) exceeding pre-pandemic levels.
On a segment-by-segment basis, merchant solutions revenue grew 14% year-over-year to $1.16 billion. Banking solutions revenue increased 8% to $1.61 billion, and capital market solutions revenue increased 10% to $654 million.
In a little more detail, the company noted that during the quarter, global volume increased 17% to $530 billion and transactions increased 11% to $12 billion. Global volumes increased by 23%.
Review of pre-pandemic levels
Compared to the third quarter of 2019 – and therefore to pre-pandemic levels – global volume increased by 23% and transactions by 13%. Volume growth greater than deal growth reflects an increase in the average dollar value of each deal (or increase in average ticket) over the period, as stated in the company’s press release.
During the conference call with analysts, the CEO Gary Norcross said the company is focused on “the intersection of software payments and integrated finance”, and noted that key trends include “the electronicization of banking, enabling online electronic transactions at the point of sale and treasury and B2B automation.” He specifically pointed to gains related to its banking platform, where, for example, PayPal uses the platform to activate its recently announced high-yield savings account.
“These new contracts continue to demonstrate the versatility of our new cloud-native software,” said Norcross.
The company honored in its supplemental filings that the merchant business is responsible for 32% of its consolidated revenue, and double-digit percentage growth in that business bolstered the results. Pro forma merchant revenue growth from the third quarter of 2019 was 16%, the company said, and increased 9% sequentially.
With a nod to e-commerce, the company said its e-commerce revenue compared to pre-pandemic levels in the third quarter of 2019 was up 22%, including travel and airlines; Removing these verticals from the mix accelerates overall percentage gains to 34%. Management noted on the call that the travel industry is improving and is expected to continue to improve through 2022. Currently, according to feedback, FIS’s travel industry business is around 65% to 70% of 2019 levels.
Looking ahead, CFO James “Woody” Woodall noted that small and medium-sized enterprises (SMEs), which currently only represent a “small portion” of revenue, represent “a strategic opportunity” for FIS. .
Woodall added, “We have seen a significant recovery in every quarter of this year, with most of our verticals growing” by at least 20%.