Chief Financial Officer at Fidelity National Information Services
Thanks, Stephanie. And thank you all for joining us. I'll begin with our fourth quarter and full year results then touch on our balance sheet, cash flow and 2022 guidance before taking you through our enhanced Merchant disclosures.
Starting with the fourth quarter on Slide 13. On a consolidated basis, revenue grew 11% and adjusted EBITDA margins expanded 120 basis points, generated adjusted EPS of $1.92 per share. Both Banking and Capital Markets revenue grew 8%, while Merchant revenue growth accelerated by 500 basis points sequentially to 19%. Banking's adjusted EBITDA margin expanded 30 basis points to 45%, primarily due to continued operating leverage. Merchant's adjusted EBITDA margin expanded 140 basis points to 52%, primarily due to revenue and cost synergies associated with the Worldpay acquisition. Capital Markets' adjusted EBITDA margin remained constant at 52%, primarily reflecting higher bonus expense related to strong revenue growth, which offset operating leverage from new wins.
Turning to full year results on Slide 14. On a consolidated basis, revenue grew 11%. Adjusted EBITDA margins were 44%, and adjusted EPS was $6.55 per share. Adjusted EBITDA margins expanded 220 basis points, primarily due to operating leverage and strong execution of revenue and cost synergies associated with the Worldpay acquisition.
In Banking, revenue growth accelerated to 8%, primarily due to strong new sales execution. Based on our large and growing backlog as well as our expanding pipeline of new opportunities, we expect Banking to continue to grow high-single-digits in the mid term. In 2022, Banking will grow 6% or more due to approximately 200 basis points in grow-overs. This is primarily due to lapping pandemic-related stimulus and expected lower termination fees.
Merchant revenue grew 19%. While new variants of COVID-19 are affecting near term results, our strong new sales gives us confidence that Merchant will grow low-double-digits in 2022 and beyond.
Capital Markets also continues to execute well with revenue growth of 8%. This segment is well-positioned to accelerate revenue growth to the mid-to-upper single-digits in 2022, driven by another strong year of new sales, cross-sell opportunities and recurring revenue growth.
Turning to Slide 15, I'll touch on the strength of our balance sheet and free cash flow. We generated $3.6 billion of free cash flow for the full year, which we used to buy back 15 million shares and we paid nearly $1 billion in dividends during 2021. During the fourth quarter, we generated approximately $850 million in free cash flow, which we primarily used to acquire Payrix. In addition, our Board of Directors recently increased our quarterly dividend by 21% to $0.47 per share. We intend to increase our dividend by approximately 20% per year. This will allow us to gradually grow our dividend payout ratio to approximately 35% of adjusted net income.
Turning to our guidance on Slide 16. In the first quarter, we expect organic revenue growth of 7% to 8%. We expect our adjusted EBITDA margin to increase by approximately 50 basis points to 41%. And lastly, we expect to generate adjusted EPS of $1.44 to $1.47 per share.
For the full year, we expect organic revenue growth of 7% to 9%. We expect our adjusted EBITDA margin to increase by 50 basis points to 100 basis points to approximately 45%. We expect to generate 150 basis points to 200 basis points of margin expansion from operating leverage and annualization of synergies. This will be partially offset by higher labor costs resulting in our guidance of 50 basis points to 100 basis points of margin expansion for the full year. As a result of our accelerating revenue growth and expanding margins, we expect adjusted EPS to grow 11% to 13% to a range of $7.25 to $7.37 per share for the full year 2022. We expect to generate free cash flow growth of approximately 15% and improved conversion of about 27% of revenue, which is approaching 95% of earnings for the full year. To start the year, we'll repay debt, reduce our leverage below 3 turns before we resume share repurchase. Our guidance then assumes share repurchase of approximately $3 billion mostly during the back half of 2022. Please note that we have provided our detailed assumptions for depreciation and amortization, tax rate and share counts within the appendix of this presentation on Slides 26 and 27.
Turning now to our enhanced Merchant disclosures on Slide 18. Our volume trends continue to track closely with the networks. As compared to 2020, global volume growth remained stable at 17%. As a reminder, the networks also experienced stable volume growth between the third and the fourth quarters. Our U.S. volume growth accelerated about 200 basis points to 19%. This trend is again consistent with the networks.
On Slide 19, we show volume growth trends as compared to 2019. Our global volume growth remained consistent at 23%, while the networks volumes accelerated modestly. This is due to our larger U.K. exposure where Omicron variant had a significant impact as I will show you in a few minutes. In the U.S., our volume accelerated by 100 basis points to 26%. We do not currently serve SMB eCom or platforms, which helped the networks to accelerate slightly more than us this quarter. We're looking to use Payrix as a first step to close this gap as Stephanie mentioned earlier.
As we begin 2022, our volume trends continue to be consistent with the networks in January. International volumes began to improve in January as new Omicron cases started to slow in the U.K. In the U.S., volume growth slowed modestly in January as we lapped last year's stimulus. As the Omicron variant recedes, we expect our volumes to continue to track closely with the networks.
Turning to Slide 20, we updated the detailed sub-segment data that we showed last quarter to include our fourth quarter results as compared to 2019. While all our sub-segments continue to grow well above 2019 levels, the Omicron variant impacted the fourth quarter. Omicron primarily affected revenue yield as compared to 2019 by reducing the mix of SMB, travel and international volumes for the quarter. On a more positive note, as compared to 2020, Merchant yield improved both sequentially and on a year-over-year basis, demonstrating our future revenue growth potential as high yielding segments recover from the pandemic.
Over the next few slides, I will talk you through the results of each sub-segment and how they contributed to our Merchant revenue growth. Global eCommerce generated $1.2 billion in revenue during 2021 as shown on Slide 21. During the fourth quarter, global eCom revenue grew 31% as compared to 2019, excluding travel and airlines. Even with these strong results, we saw the effects of Omicron in travel and airlines. The chart on the right shows our monthly travel volumes versus 2019. Travel accelerated through November, but then pulled back to May levels in December. The difference between same-store sales in our total volume growth is due to new client wins. As travel comes back and exciting new verticals like crypto continue to emerge, we see significant opportunity for future growth.
Turning to Slide 22. Enterprise generated $2 billion in revenue in 2021. During the fourth quarter, revenue grew 16% year-over-year and 8% over 2019. In the upper right hand corner, the impacts of Omicron on the U.K. are obvious where growth dropped to zero in December from mid-teen levels previously. Our U.S. enterprise business also saw some pullback in December but was not nearly as severe as in the U.K.
SMB revenue growth over 2019 decelerated to 11% in the fourth quarter as shown on Slide 23. This is clearly due to Omicron as the deceleration occurred in all verticals. As this variant recedes, we expect growth to reaccelerate. However, we are more excited by the opportunity to push into SMBs with eCommerce.
In summary, while we continue to see impacts from the pandemic in the short term, Merchant TAM is expected to grow 8% to 10% through the mid-term as shown on Slide 24. Further, as we continue to grow eCommerce as a larger and larger portion of our overall revenue mix, we're confident in our ability to outpace TAM growth and to generate low-double-digit Merchant revenue growth in 2022 and beyond. The combination of Merchant growth with our continued strength in Banking and Capital Markets gives us confidence in our 2022 outlook and in the future of FIS. I would like to thank our colleagues for their continued efforts in serving our clients and driving our business forward.
With that, I'd like to open the line for Q&A. Operator?