Fiserv Inc. (NASDAQ:FISV)

The analysis of the quarterly financial ratios reveals several notable trends over the observed periods. The net fixed asset turnover ratio, which measures how efficiently fixed assets generate revenue, showed a declining trend from early 2018 through the first half of 2019, dropping from approximately 15.31 to 14.3. This was followed by a sharp decrease to lower values around the end of 2019, with figures falling below 7. However, from early 2020 onwards, the ratio demonstrated a consistent recovery and stabilization, gradually increasing to approximately 9.61 by the first quarter of 2022. Despite this recovery, the ratio remains significantly below the levels observed at the beginning of the period.

The total asset turnover ratio, an indicator of overall asset utilization efficiency, exhibited a downward trend starting in early 2018 from roughly 0.56 to 0.5 by the first quarter of 2019. This was followed by a steep decline into late 2019, hitting lows near 0.1 to 0.13. From 2020, the ratio experienced a gradual improvement, reaching around 0.22 by the first quarter of 2022. Nevertheless, the ratio's improvement is modest compared to the initial levels, suggesting challenges in asset utilization efficiency over the long term.

The equity turnover ratio, which indicates how effectively the company uses shareholder equity to generate revenue, initially increased from about 1.93 in early 2018 to a peak of approximately 2.54 by the end of 2018. However, a pronounced decline occurred throughout 2019, with values dropping sharply to below 0.5. Since early 2020, the ratio has shown a steady upward trend, improving incrementally to approximately 0.53 by early 2022. Despite this recovery, the ratio remains considerably lower than its pre-2019 peak, reflecting a diminished return on equity during the later periods.

Overall, the data indicates that the company experienced a period of declining operational efficiency and asset utilization through 2019, followed by gradual recovery from 2020 onward. While improvements are evident across all three turnover ratios, none have yet returned to the higher levels observed in the earlier years, suggesting ongoing efforts may be needed to restore prior efficiency levels fully.

Revenue Trends

Revenue exhibited moderate fluctuations from March 2018 to June 2019, remaining mostly stable in the range of approximately $1.4 billion to $1.5 billion quarterly. A significant increase occurred in the third and fourth quarters of 2019, with revenue surging to $3.1 billion and $4.0 billion respectively, suggesting a notable event or acquisition impacting sales. Following this spike, revenue stabilized between $3.4 billion and $4.3 billion through the first quarter of 2022, with a slight upward trajectory observed in 2021 and early 2022.

Property and Equipment, Net

Net property and equipment values maintained a steady growth trend from $375 million in the first quarter of 2018 to $418 million by mid-2019. This was followed by a pronounced increase coinciding with the revenue jump in late 2019, peaking at approximately $1.6 billion by year-end 2019. From 2020 onwards, the net property and equipment values showed relative consistency, fluctuating slightly around the $1.6 billion to $1.7 billion range, with a modest upward movement into early 2022.

Net Fixed Asset Turnover

The net fixed asset turnover ratio was notably high during the early periods (2018 to mid-2019), averaging around 14 to 15 times, indicating efficient use of fixed assets relative to revenue. However, following the asset base expansion in late 2019, the ratio sharply decreased to below 7, reflecting the increased asset base denominator. Subsequently, there was a gradual improvement in turnover efficiency post-2020, with the ratio climbing from approximately 7.3 to 9.6 times by the first quarter of 2022, signaling progressive enhancement in asset utilization, although not reaching the earlier peak levels.

Overall Insights

The data reveals a strategic shift around the third quarter of 2019 leading to substantial growth in both revenue and asset investment. The immediate effect was a decline in asset turnover efficiency, which has been partially recovered in the subsequent years. The consistent growth in revenue combined with stable property and equipment levels post-2019 suggests a phase of operational consolidation and improved asset management. The trends imply a significant investment event that expanded capacity, with ongoing efforts to optimize asset use and support steady revenue growth.

Revenue Trends

Revenue showed a general upward trajectory from March 2018 through March 2022, increasing from $1,440 million to $4,138 million. This growth was characterized by a significant jump in the middle of 2019, notably in the third and fourth quarters of 2019, where revenue surged to $3,128 million and $4,045 million respectively. After reaching a peak in early 2021 at $4,163 million and further increasing to $4,257 million by the end of 2021, revenue experienced a slight decline in the first quarter of 2022 to $4,138 million. The data suggest steady revenue growth punctuated by a few periods of rapid expansion.

Total Assets Trends

Total assets steadily increased from approximately $10,167 million at the end of the first quarter of 2018 to a sharp rise of $77,864 million by the third quarter of 2019. After this peak, total assets fluctuated slightly but sustained a high level, hovering around $75,000 million through March 2022. The dramatic increase in mid-2019 indicates a major acquisition or asset revaluation event, after which asset levels stabilized at this higher range.

Total Asset Turnover Trends

The total asset turnover ratio showed a declining trend from 0.56 in March 2018 to a low of around 0.1 in September 2019, reflecting the sharp increase in total assets without a proportionate increase in revenue at that point. Following this decline, the ratio gradually improved to 0.22 by March 2022, suggesting better utilization of assets in generating revenue over time. However, the turnover ratio remains substantially lower than earlier levels, indicating that the increase in asset base has not been matched fully by revenue growth in efficiency terms.

Overall Analysis

The financial data indicates a period of significant transformation between mid-2018 and late 2019, marked by a substantial increase in asset base and revenue. Although revenue continued to grow steadily post-2019, asset growth plateaued at a high level, resulting in initially reduced asset turnover ratios. Recent quarters show signs of improving asset efficiency, though not returning to the initial higher turnover levels. This pattern may reflect strategic investments or acquisitions leading to a larger asset base aimed at supporting future growth, with operational improvements gradually enhancing asset use.

The financial data reveals several noteworthy trends over the observed periods.

Revenue

Revenue initially shows modest fluctuations around the 1400-1550 million US dollars range from early 2018 to early 2019. This changes significantly in mid to late 2019, where revenue experiences a sharp increase, culminating in peak quarterly revenue of over 4000 million US dollars by the end of 2019 and early 2020. Subsequently, revenue stabilizes somewhat but remains elevated compared to the earlier periods, consistently hovering between approximately 3400 and 4300 million dollars through 2021 and early 2022. This pattern indicates a period of substantial growth beginning in mid-2019, maintaining higher revenue levels thereafter.

Total Fiserv, Inc. Shareholders’ Equity

Equity figures show a declining trend from 2018 through the first quarter of 2019, decreasing from nearly 3000 million to approximately 2300 million US dollars. However, a dramatic increase is observed at mid-2019, where equity surges to above 32000 million US dollars and remains relatively stable around that level through early 2020. From mid-2020 to early 2022, shareholders’ equity gradually decreases from roughly 32300 million to around 31200 million US dollars. This suggests a significant capital event or restructuring in 2019, resulting in a large increase in equity base, followed by mild declines in subsequent quarters.

Equity Turnover Ratio

The equity turnover ratio shows a moderate increasing trend from 1.93 to 2.54 between early 2018 and year-end 2018, implying improving revenue generation efficiency relative to equity. This ratio then markedly declines to low levels ranging from 0.24 to 0.53 starting mid-2019 through early 2022, coinciding with the surge in equity figures during the same period. Although this ratio recovers gradually after the steep decline, it does not approach its pre-2019 levels, indicating that despite higher revenues, the relative efficiency of equity use was significantly impacted by the increase in equity, leading to lower turnover values overall.

In summary, the data reflects a substantial increase in both revenue and shareholders’ equity beginning in mid-2019, likely associated with a major corporate event affecting financial structure. Despite the growth in revenue, the equity turnover ratio decreases sharply, highlighting a reduction in revenue generated per unit of equity. After this fundamental shift, revenues remain elevated while shareholders’ equity shows a gradual decline, and equity turnover ratio shows slight improvement but remains well below historical peaks.