Fidelity National Information Services Inc. (NYSE:FIS)

The financial data reveals several notable trends over the five-year period ending December 31, 2022. Revenue remained stable, consistently representing 100% across all years. However, the composition and profitability indicators showed significant variations.

Cost of Revenue and Gross Profit

The cost of revenue decreased as a percentage of revenue from 66.12% in 2018 to 60.71% in 2022, indicating improved cost efficiency. Correspondingly, gross profit margin improved from 33.88% to 39.29%, reflecting better overall profitability before operating expenses.

Selling, General, and Administrative Expenses (SG&A)

SG&A expenses showed an increasing trend from -15.45% in 2018 to peak around -28.38% in 2021, before slightly easing to -28.35% in 2022. This upward trend suggests that the company increased its spending on selling and administrative functions relative to revenue, which may have impacted overall profitability.

Asset Impairments

Asset impairments fluctuated mildly around -1% of revenue from 2018 to 2021 but spiked dramatically to -121.9% in 2022. This large impairment charge in 2022 indicates a substantial write-down of assets, significantly impacting profitability and balance sheet strength for that year.

Operating Income (Loss)

Operating income decreased substantially from 17.31% in 2018 to a low of 4.4% in 2020, saw a partial recovery to 7.6% in 2021, before plunging to a negative margin of -110.95% in 2022. The 2022 figure is consistent with the large asset impairment noted, revealing operational challenges amidst extraordinary losses.

Interest Income and Expense

Interest income remained low and largely stable, peaking at 0.5% in 2019 and minimal values thereafter. Interest expenses declined steadily from -3.73% in 2018 to -1.56% in 2021 but ticked up modestly to -2.06% in 2022, reflecting perhaps changing financing costs or debt levels.

Other Income and Expense

Other income (expense), net, showed volatility but minor overall impact, with a notable dip in 2019 (-2.12%) and modest positive figures in 2020 and 2022. Other expense, net consistently decreased their negative impact from -4.2% in 2018 to -1.46% in 2022, indicating improved management of miscellaneous expenses.

Earnings Before Taxes and Equity Method Investments

There was a downward trend in earnings before taxes and equity method investment earnings, falling from 13.11% in 2018 to 2.12% in 2020 before partial recovery to 5.69% in 2021, and then a steep decline to -112.41% in 2022, largely owing to the impairment noted earlier.

Provision for Income Taxes

Tax provisions remained relatively small and stable, fluctuating between -0.76% and -2.67%, aligning with variations in pretax earnings.

Equity Method Investment Earnings (Loss)

These earnings were marginally negative from 2018 to 2020, turning slightly positive in 2021 and having no reported value in 2022, suggesting limited impact on overall results.

Net Earnings (Loss)

Net earnings attributable to common stockholders showed a decline from 10.04% in 2018 to a low of 1.26% in 2020, a minor recovery to 3% in 2021, followed by a sharp loss of -115.09% in 2022. This reflects the severe impact of asset impairments and other operational challenges in the final year.

Net Earnings Attributable to Noncontrolling Interest

This figure remained relatively small and stable, varying slightly around -0.05% to -0.08%, indicating limited influence on net earnings from noncontrolling interests.

In summary, while the company demonstrated improving gross margins and cost efficiencies prior to 2022, escalating SG&A expenses and substantial asset impairments heavily eroded profitability, particularly in 2022. The impairment charge was a critical factor in the operational and net losses recorded in the latest year. Interest costs decreased over time but had a minor overall influence. The overall financial performance shows significant volatility, highlighting the impact of extraordinary items and expenses on earnings quality toward the end of the period.