Fiserv Inc. (NASDAQ:FISV)

The financial data exhibits notable trends in profitability and efficiency ratios over the five-year period ending December 31, 2021.

Gross Profit Margin

The gross profit margin maintained a generally positive trend, increasing from 46.91% in 2017 to 49.91% in 2021. Despite a slight dip in 2020 compared to 2019, the overall trend shows improvement, indicating enhanced ability to manage production costs relative to revenue.

Operating Profit Margin

The operating profit margin displayed significant volatility. It peaked at 30.1% in 2018, but sharply declined to 15.79% in 2019 and further dropped to 12.47% in 2020. A modest recovery to 14.1% occurred in 2021. This variation suggests increased operating expenses or other operational challenges impacting profitability.

Net Profit Margin

The net profit margin showed a consistent downward trend from 21.88% in 2017 to a low of 6.45% in 2020, before a slight rebound to 8.22% in 2021. This decreasing margin points to diminished overall profitability possibly due to higher expenses, taxes, or other non-operating factors affecting net income.

Return on Equity (ROE)

ROE experienced a dramatic decline from a high of 51.77% in 2018 to below 5% in the subsequent years, with values at 2.71% in 2019, 2.96% in 2020, and 4.31% in 2021. This significant reduction indicates a considerable drop in the company’s capacity to generate earnings from shareholders’ equity.

Return on Assets (ROA)

ROA mirrored the ROE pattern, decreasing from 12.11% in 2017 and 10.54% in 2018 to much lower levels of 1.15% in 2019, 1.28% in 2020, and 1.75% in 2021. This reduction suggests a decline in how effectively the company utilized its assets to generate profits over the latter part of the period.

In summary, while the company improved its gross profit margin, indicating better cost control or pricing strategies, operating and net profit margins as well as returns on equity and assets declined markedly after 2018. These trends imply growing operational and financial challenges, leading to reduced profitability and efficiency in the recent years analyzed.

The financial data indicates a consistent growth trend in both revenue and gross profit over the five-year period analyzed.

Revenue

Revenue increased steadily from $5,696 million in 2017 to $16,226 million in 2021. This represents nearly a threefold increase, demonstrating strong expansion in the company's sales or service activities over the period.

Gross Profit

Gross profit also showed a robust upward trajectory, rising from $2,672 million in 2017 to $8,098 million in 2021. The absolute increase aligns with the revenue growth, indicating that the company has been able to scale operations while maintaining or improving profitability at the gross margin level.

Gross Profit Margin

The gross profit margin exhibited a generally positive trend, starting at 46.91% in 2017 and increasing to 49.91% in 2021. While there was some fluctuation—such as a slight dip from 47.88% in 2019 to 47.4% in 2020—the margin ultimately improved by 3 percentage points over the five years, suggesting enhanced operational efficiency or a more favorable product/service mix.

Overall, the data reflects strong financial performance characterized by significant revenue growth, expanding gross profit, and an improving gross profit margin. This combination points to effective management of costs relative to sales and the successful scaling of business activities.

The financial data reveals several notable trends over the five-year period ending December 31, 2021. Revenue experienced substantial growth, increasing from $5,696 million in 2017 to $16,226 million in 2021, which represents nearly a threefold increase. This upward trajectory is particularly pronounced starting in 2019, with revenue rising sharply each year through 2021.

Operating income also generally increased during this period, moving from $1,532 million in 2017 to $2,288 million in 2021. However, this growth was not linear; operating income peaked in 2018 at $1,753 million, dropped slightly in 2019 to $1,609 million, and then rose consistently in subsequent years, reaching its highest level in 2021.

The operating profit margin, expressed as a percentage, exhibited considerable fluctuations. Initially, the margin improved from 26.9% in 2017 to 30.1% in 2018, indicating increased operational efficiency or profitability relative to revenue. However, from 2019 onwards, the margin declined significantly to 15.79% in 2019, further declining to 12.47% in 2020, before showing a modest recovery to 14.1% in 2021. This decline suggests that while revenue and operating income were growing, the proportion of income relative to sales was diminishing, possibly due to increasing costs or pricing pressures.

In summary, the data indicates strong revenue growth accompanied by increased operating income, although the operating profit margin experienced volatility and a downward trend after 2018. This pattern points to expanding scale but potentially decreasing operational efficiency or higher expenses impacting profitability ratios.

Revenue Trends

Steady growth with a significant increase beginning in 2019, reaching nearly three times the 2017 level by 2021.

Operating Income Trends

Overall increase over five years, with a dip in 2019, followed by recovery and growth to a peak in 2021.

Operating Profit Margin Trends

Improved in 2018, but then declined sharply through 2020, with some recovery in 2021, indicating reduced profitability relative to revenue despite growth in absolute figures.

Net income attributable to the company

The net income showed variability over the period from 2017 to 2021. It initially decreased from 1246 million USD in 2017 to 893 million USD in 2019, indicating a downward trend in profitability. Subsequently, there was a recovery in net income, reaching 1334 million USD in 2021, which surpassed the initial 2017 level. This suggests a rebound in earnings after a period of decline.

Revenue

Revenue exhibited a strong upward trend throughout the five-year period. It increased steadily from 5696 million USD in 2017 to 16226 million USD in 2021. The largest growth occurred between 2018 and 2019, suggesting possible expansion through business activities such as acquisitions or organic growth. This persistent increase indicates a significant enhancement in the company's top line performance.

Net profit margin

The net profit margin experienced a notable decline from 21.88% in 2017 to a low of 6.45% in 2020. Although there was a slight recovery to 8.22% in 2021, the margin remained markedly lower than the initial years. This declining trend in profitability ratio, despite increasing revenues, may reflect rising costs, margin compression, or investments affecting short-term profitability.

Overall Analysis

The company demonstrated robust revenue growth over the period analyzed, indicating successful expansion efforts. However, net income did not increase proportionally, showing an initial decline before rebounding to higher levels. The net profit margin's decline suggests pressure on profitability, which might be due to increased operating expenses or other factors diminishing earnings efficiency. The recovery in net income towards the end of the period could indicate effective cost management or improved operational performance mitigating earlier margin declines.

Net Income

The net income attributable to the company showed fluctuations over the five-year period. Starting at $1,246 million in 2017, it decreased to $1,187 million in 2018, followed by a more significant drop to $893 million in 2019. However, the net income somewhat recovered in 2020 to $958 million and then increased substantially to $1,334 million in 2021. This indicates a volatile profitability trend with a notable rebound in the most recent year.

Total Shareholders’ Equity

There was a substantial increase in total shareholders’ equity from 2018 to 2019, rising dramatically from approximately $2,293 million to $32,979 million. This elevated level was maintained through 2020 and 2021, with slight declines observed between years 2019 and 2021. Such a significant equity increase suggests a major corporate event or revaluation occurred between 2018 and 2019, followed by relative stabilization in the subsequent periods.

Return on Equity (ROE)

The ROE exhibited a declining trend up to 2019, dropping sharply from 45.62% in 2017 and 51.77% in 2018 to just 2.71% in 2019. Although a minor recovery is noted in 2020 and 2021, with ROE at 2.96% and 4.31% respectively, the values remain substantially lower than the initial years. This decline in ROE corresponds with the large increase in shareholders’ equity, diluting the returns relative to equity despite the recovery in net income.

Overall Insights

The data reflects a period of significant change, characterized by a major increase in equity and a concurrent drop in ROE, likely influenced by strategic decisions or one-time events around 2019. Despite net income fluctuations, the recent rebound in profitability suggests improved operational performance. Nevertheless, the low ROE in the latter years points to less efficient utilization of equity capital compared to the earlier period.

Net Income Attributable to Fiserv, Inc.

The net income displayed a decreasing trend from 2017 to 2019, declining from $1,246 million to $893 million. In 2020, there was a slight recovery to $958 million, followed by a notable increase in 2021 reaching $1,334 million, surpassing the 2017 level. This suggests a period of challenge and subsequent recovery, culminating in improved profitability by the end of the period.

Total Assets

There was a significant increase in total assets from 2018 to 2019, surging from $11,262 million to $77,539 million. However, total assets slightly decreased in 2020 to $74,619 million, then showed a modest increase in 2021 to $76,249 million. The sharp rise in 2019 indicates a major acquisition or asset revaluation event, leading to a substantial change in asset base.

Return on Assets (ROA)

The return on assets exhibited a downward trend from a high 12.11% in 2017 to a very low 1.15% in 2019, corresponding with the sharp increase in total assets during this period. ROA slightly improved to 1.28% in 2020 and further to 1.75% in 2021, indicating gradual enhancement in asset utilization and profitability but remaining significantly below the levels observed in 2017 and 2018.

Overall Analysis

The data reflects a period of major asset growth around 2019 that considerably diluted return on assets, suggesting integration challenges or transitional impacts on profitability. Despite this, net income showed resilience with recovery and growth in the final years. Improving ROA alongside increasing net income in 2021 points to improving efficiency and potentially successful leveraging of the expanded asset base.