Fidelity National Information Services Inc. (NYSE:FIS)

The financial data indicate significant fluctuations and notable trends in the components of goodwill, intangible assets, and software over the five-year period.

Goodwill

Goodwill experienced a marked increase from 13,545 million US dollars in 2018 to a peak of 53,330 million in 2021, followed by a substantial decline to 34,276 million in 2022. This indicates significant acquisition activity or revaluation between 2018 and 2021, with partial divestitures or write-downs occurring thereafter.

Customer Relationships

This asset category generally grew from 6,011 million in 2018 up to 18,586 million in 2020, remaining relatively stable through 2021 and slightly decreasing to 17,635 million in 2022. The stability suggests sustained value in established customer contracts despite some reduction in the latest year.

Trademarks and Other

Trademarks and other intangible assets showed moderate growth overall, increasing from 111 million in 2018 to 625 million in 2022, with minor fluctuations in between. This steady upward trend reflects ongoing investment or revaluation in brand-related assets.

Intangible Assets, Cost

The gross intangible assets value rose sharply between 2018 and 2019 (from 6,122 million to 18,564 million), then remained relatively flat through 2022, slightly declining to 18,260 million. This pattern corresponds with acquisition activity and stabilization in subsequent periods.

Accumulated Amortization on Intangible Assets

Accumulated amortization increased consistently in magnitude (negative values growing from -2,990 million in 2018 to -9,304 million in 2022), reflecting ongoing amortization charges reducing the net book value over time.

Intangible Assets, Net

Net intangible assets initially rose significantly to 15,798 million in 2019, then gradually decreased to 8,956 million in 2022. This decline is influenced by increased amortization and a stable or declining gross intangible asset base.

Software Components

Software from acquisitions steadily increased from 1,116 million in 2018 to around 2,100 million in 2022, indicating ongoing acquisition-related growth. Capitalized software development costs exhibited a continuous upward trend, growing from 1,624 million to 3,766 million, showing strong internal investment into software development. Purchased software values increased moderately until 2021 before a slight decline in 2022.

Software, Cost and Accumulated Amortization

The gross software cost rose steadily from 3,103 million in 2018 to 6,607 million in 2022, demonstrating expansion in software assets. Correspondingly, accumulated amortization increased from -1,308 million to -3,369 million, reflecting consistent amortization over the period.

Software, Net

Net software values increased substantially from 1,795 million in 2018 to 3,370 million in 2020, before declining slightly in the subsequent two years to 3,238 million in 2022, likely due to amortization outpacing cost additions in the later years.

Total Goodwill, Intangible Assets, and Software

The combined total of goodwill, intangible assets, and software expanded dramatically from 18,472 million in 2018 to a peak of 71,244 million in 2019, then decreased steadily over the following years to 46,470 million in 2022. This pattern highlights a cycle of rapid growth, potentially driven by acquisitions, followed by consolidation, amortization, and asset write-downs or disposals.

The financial data reveals notable volatility and significant adjustments between reported and goodwill-adjusted figures over the five-year period. The patterns and shifts in asset levels, equity, and net earnings provide insight into the company's financial dynamics, particularly concerning goodwill impairments or revaluations.

Total Assets

Reported total assets showed a dramatic increase from 2018 to 2019, rising from approximately $23.8 billion to $83.8 billion, followed by a relatively stable period through 2021 and a pronounced decline to around $63.3 billion in 2022. In contrast, adjusted total assets—presumably net of goodwill goodwill and other intangible asset adjustments—also increased substantially from 2018 to 2019 but by a lower magnitude, from about $10.2 billion to $31.6 billion. Subsequently, adjusted assets decreased gradually each year, reaching approximately $29.0 billion in 2022. This divergence signals the presence of substantial intangible assets or goodwill on the balance sheet that were subject to downward adjustments over time.

Stockholders’ Equity

The reported total stockholders’ equity mirrored the asset trends, escalating sharply from roughly $10.2 billion in 2018 to nearly $49.4 billion in 2019, remaining relatively stable through 2021, then falling sharply to approximately $27.2 billion by 2022. The adjusted stockholders’ equity figures, however, were negative throughout the period and increasingly so over time, declining from -$3.3 billion in 2018 to -$7.1 billion in 2022. This persistent negative adjusted equity highlights the significant impact of goodwill or intangible asset write-downs on the company’s net asset base, implying that the reported equity figures might be materially inflated by these items.

Net Earnings

Reported net earnings attributable to common stockholders showed volatility, commencing at $846 million in 2018 and decreasing to $158 million in 2020 before rebounding to $417 million in 2021. A sharp reported net loss of $16.7 billion occurred in 2022, likely reflecting an impairment or extraordinary charge. Conversely, the adjusted net earnings, which likely exclude such one-time goodwill impairments or non-recurring items, remained positive, though variable, ending at $868 million in 2022. The divergence between reported and adjusted earnings in 2022 suggests a significant non-operational charge affecting reported results.

Overall, the financial data indicates that the company experienced substantial asset growth primarily driven by intangible assets and goodwill recognized in or before 2019. However, over the subsequent years, particularly by 2022, these intangible assets were substantially impaired, leading to adjusted asset and equity reductions and large disparities between reported and adjusted metrics. The presence of significant non-cash charges in 2022 materially impacted reported earnings but did not affect adjusted earnings to the same degree. This pattern reflects underlying challenges related to asset valuation and profitability when excluding such accounting adjustments.

The financial data indicates notable fluctuations and divergent trends between reported and adjusted figures over the analyzed periods.

Net Profit Margin

The reported net profit margin exhibits a sharp decline from 10.04% in 2018 to a deeply negative value of -115.09% in 2022, indicating significant reported losses in the latest period. In contrast, the adjusted net profit margin remains positive in 2022 at 5.97%, despite earlier reductions between 2018 and 2020, suggesting that adjustments, possibly related to goodwill or non-recurring items, materially improve profitability assessments.

Total Asset Turnover

The reported total asset turnover ratio shows a low and relatively stable range from 0.12 to 0.35 over the years, with a moderate increase in 2022 (0.23). Adjusted figures are consistently higher and exhibit an improving trend from 0.33 in 2019 to 0.5 in 2022, indicating enhanced asset utilization efficiency once adjustments are made.

Financial Leverage

Reported financial leverage decreases from 2.33 in 2018 to a low of 1.7 in 2019 and 2020, before gradually increasing again to 2.32 in 2022. No adjusted leverage data is provided, limiting insight into leverage impact after adjustments.

Return on Equity (ROE)

Reported ROE demonstrates a significant decline, starting at 8.28% in 2018 and dropping sharply to -61.43% in 2022, aligning with the negative net profit margin and indicating severe erosion of shareholders’ equity returns. Adjusted ROE data are not available, which constrains further interpretation.

Return on Assets (ROA)

The reported ROA decreases markedly from 3.56% in 2018 to -26.42% in 2022, reflecting reduced efficiency in asset utilization to generate profits. Adjusted ROA, by contrast, remains positive throughout the period, improving from 8.27% in 2018 to 2.99% in 2022 after an initial decline, suggesting that asset-based profitability is considerably better when goodwill-related adjustments are factored in.

Overall, the reported metrics portray a company experiencing deteriorating profitability and returns in the latest period, with particularly steep declines reflected in margins and returns. Adjusted metrics, specifically for net profit margin, asset turnover, and ROA, present a more favorable view, highlighting the importance of adjustments for goodwill or similar factors in accurately assessing financial performance. The discrepancy between reported and adjusted results implies that non-operational or one-time factors significantly impact reported earnings and efficiency ratios.

The financial data reveals significant fluctuations in both reported and adjusted net earnings attributable to the common stockholders over the five-year period. Reported net earnings showed a marked decline from a positive US$846 million in 2018 to drastically negative US$16,720 million in 2022. In contrast, adjusted net earnings, which likely exclude extraordinary items or impairments such as goodwill write-downs, remained positive throughout the period, albeit with a considerable dip to US$158 million in 2020 before recovering to US$868 million in 2022.

The reported net profit margin follows a similar trend to the reported earnings, falling sharply from 10.04% in 2018 to a negative 115.09% in 2022. This steep negative margin in the latest year highlights significant losses compared to revenues. Meanwhile, the adjusted net profit margin, which removes specific non-recurring effects, presents a more stable pattern. It decreased from 10.04% in 2018 to a low point of 1.26% in 2020, then improved gradually to 5.97% by 2022.

Reported Net Earnings Trend

Substantial volatility is observed, with a notable decline culminating in a large loss in 2022, indicating the impact of significant non-operational expenses or impairments.

Adjusted Net Earnings Trend

Though reduced in 2020, adjusted earnings depict a recovery phase after that year, suggesting operational improvements excluding the effects causing the reported losses.

Reported Net Profit Margin Trend

The margin deteriorated progressively, particularly severe in 2022, indicating that operational losses significantly outweighed revenues during that year.

Adjusted Net Profit Margin Trend

The margin remains positive and shows recovery after 2020, reflecting improving profitability on an adjusted basis and potentially normalizing business performance.

Overall, the divergence between reported and adjusted figures in 2022 implies the presence of large one-time or non-cash charges, such as goodwill impairments, affecting net earnings and profitability. Adjusted metrics suggest the underlying business maintains profitability and is recovering after a low point in 2020. This pattern emphasizes the importance of considering adjusted results to assess ongoing operational performance accurately.

The analysis of the annual financial indicators reveals distinct trends in both reported and goodwill adjusted metrics over the five-year period.

Total Assets

The reported total assets exhibit a significant increase from 2018 to 2019, jumping from approximately 23.77 billion USD to 83.81 billion USD. This elevated level remains relatively stable through 2020 and 2021, with minor fluctuations, before declining to around 63.28 billion USD in 2022. In contrast, the adjusted total assets, which likely exclude goodwill, also increase markedly from 10.23 billion USD in 2018 to 31.56 billion USD in 2019 but then demonstrate a gradual decrease year over year through 2022, ending at approximately 29.00 billion USD. This suggests a large portion of the asset base increased in 2019 may be related to goodwill or intangible assets.

Total Asset Turnover

The reported total asset turnover ratio declines sharply from 0.35 in 2018 to 0.12 in 2019, then shows a gradual recovery through to 0.23 in 2022. This decline corresponds with the dramatic increase in reported assets, indicating that the company's sales relative to its asset base decreased substantially in 2019 and improved modestly thereafter.

Conversely, the adjusted total asset turnover ratio mirrors a similar initial decline from 0.82 in 2018 to 0.33 in 2019, but then follows a consistent upward trend through 2022, reaching 0.50. This suggests improvement in the efficiency of the core tangible asset base over time, despite the initial dip.

Overall, the data signals a significant asset base growth driven primarily by goodwill or intangible assets in 2019, followed by a stabilization and modest downward adjustment. The turnover ratios indicate that while the overall asset utilization declined sharply with the asset increase, the underlying operational asset efficiency, when adjusted for goodwill, has been recovering steadily since 2019.

The analysis of the financial data over the five-year period reveals several notable trends and shifts in the company's financial position, with particular emphasis on total assets, stockholders’ equity, and financial leverage, both reported and goodwill adjusted.

Total Assets

Reported total assets experienced a significant increase from 23,770 million USD in 2018 to a peak of approximately 83,842 million USD in 2020, remaining relatively stable through 2021 before declining to 63,278 million USD in 2022. In contrast, adjusted total assets, which exclude goodwill impacts, show a considerably lower base, rising from 10,225 million USD in 2018 to a high of 31,564 million USD in 2019, followed by a slight decline each subsequent year to 29,002 million USD in 2022. This pattern indicates substantial goodwill or intangible asset components influencing the reported totals, with underlying asset values appearing more stable but slightly decreasing post-2019.

Stockholders’ Equity

Reported stockholders’ equity mirrors the growth trend in total assets, increasing dramatically from 10,215 million USD in 2018 to around 49,440 million USD in 2019 and maintaining approximately this level through 2020, before gradually declining to 27,218 million USD by 2022. However, the adjusted stockholders' equity figures, accounting for goodwill impairment or adjustments, are negative throughout the period and show a deteriorating trend, declining from -3,330 million USD in 2018 to -7,058 million USD in 2022. This persistent negative equity on an adjusted basis suggests impairment or significant reductions in asset valuations not captured in the reported figures, reflecting potential underlying financial risks or asset quality concerns.

Financial Leverage

Reported financial leverage decreased from 2.33 in 2018 to 1.70 in 2019 and remained stable near this level through 2020, before a slight increase to 1.75 in 2021 and a more substantial rise to 2.32 in 2022. The absence of adjusted financial leverage data precludes a comprehensive analysis on this front; however, the reported ratio movement indicates an initial deleveraging followed by a return to higher leverage levels by 2022, consistent with the observed decline in equity and fluctuating asset levels.

Overall, the reported figures demonstrate considerable growth in asset base and equity through 2019 and 2020, followed by a correction phase marked by declines in both assets and equity by 2022. The adjusted data highlight persistent goodwill-related impairments or adjustments, leading to negative equity values and underscoring potential challenges in asset quality and capital structure stability. The financial leverage trend suggests a period of deleveraging followed by increased leverage exposure in the latest year, warranting careful monitoring of the company’s financial risk profile going forward.

Reported Net Earnings (Loss) Attributable to FIS Common Stockholders

There is a notable decline in reported net earnings from 2018 to 2020, dropping from 846 million USD in 2018 to 158 million USD in 2020. A partial recovery is observed in 2021, with earnings increasing to 417 million USD. However, 2022 shows a significant loss, with net earnings reaching negative 16,720 million USD, indicating a drastic downturn in that year.

Adjusted Net Earnings (Loss) Attributable to FIS Common Stockholders

Adjusted net earnings follow a similar initial trend with the same values as reported earnings until 2021. In 2022, adjusted net earnings are reported at 868 million USD, which contrasts sharply with the substantial reported loss the same year, suggesting that adjustments have a significant positive effect on the reported results for 2022.

Reported Total FIS Stockholders’ Equity

The reported total stockholders' equity shows a significant increase from 10,215 million USD in 2018 to 49,440 million USD in 2019. From 2019 through 2021, equity remains relatively stable, with a slight decline to 47,347 million USD in 2021. However, there is a marked decrease in 2022, with equity falling to 27,218 million USD, indicating a substantial reduction in shareholder value during that year.

Adjusted Total FIS Stockholders’ Equity

Adjusted equity figures are consistently negative across all years, ranging from -3,330 million USD in 2018 to a low of -7,058 million USD in 2022. The negative and worsening adjusted equity values indicate adjustments that reduce reported equity significantly, with a downward trend over the period.

Reported Return on Equity (ROE)

The reported ROE declines sharply from 8.28% in 2018 to 0.32% in 2020, reflecting reduced profitability relative to equity. A slight recovery to 0.88% occurs in 2021, but 2022 shows a dramatic downturn with ROE plunging to -61.43%, consistent with the substantial reported net loss and reduction in equity for that year.

Adjusted Return on Equity (ROE)

There is no reported data on adjusted ROE for any of the years, making it not possible to assess profitability on an adjusted basis relative to equity.

The data reveals significant fluctuations in both reported and adjusted financial metrics over the five-year period from 2018 to 2022. There is a marked divergence between reported and adjusted figures, which is particularly evident in net earnings and return on assets (ROA).

Net Earnings (Loss) Attributable to Common Stockholders

Reported net earnings demonstrate considerable volatility, starting at $846 million in 2018, sharply dropping to $298 million in 2019 and further declining to $158 million in 2020. A rebound occurs in 2021 with earnings rising to $417 million, followed by a dramatic and substantial loss of $16,720 million in 2022. Conversely, adjusted net earnings follow a smoother trend, mirroring the initial decreases through 2020, then moderately recovering in 2021 to $417 million and continuing upward to $868 million in 2022, indicating adjustment factors have a significant impact on the reported results, especially in the last year.

Total Assets

Reported total assets exhibit a volatile trend with an initial value of $23,770 million in 2018, followed by a marked increase to $83,806 million in 2019 and remaining relatively stable through 2021 before declining to $63,278 million in 2022. Adjusted total assets present a different pattern, starting substantially lower at $10,225 million in 2018, increasing consistently to approximately $31,564 million in 2019 and slightly decreasing thereafter to $29,002 million in 2022. This indicates that adjustments related to asset valuation or classification materially affect reported asset figures.

Return on Assets (ROA)

Reported ROA percentages decline sharply from 3.56% in 2018 to 0.36% in 2019 and further to 0.19% in 2020, followed by a modest increase to 0.5% in 2021, turning significantly negative to -26.42% in 2022. In contrast, adjusted ROA follows a more stable and positive trajectory despite volatility, with 8.27% in 2018 decreasing to 0.94% in 2019 and 0.52% in 2020, then improving to 1.41% in 2021 and rising notably to 2.99% in 2022. The adjusted ROA indicates operational profitability remains positive when excluding certain items accounted for in the reported figures.

Overall, the data suggests that reported financial results are heavily influenced by exceptional or non-recurring items, particularly in 2022, which cause significant negative distortions in profitability and asset valuation. Adjusted figures provide a more consistent picture of operational performance, demonstrating resilience and gradual recovery in profitability and asset utilization over the analyzed period.