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Stock Analysis on Net

Fidelity National Information Services Inc. (NYSE:FIS)

This company has been moved to the archive! The financial data has not been updated since May 2, 2023.

Common-Size Income Statement

Fidelity National Information Services Inc., common-size consolidated income statement

Microsoft Excel
12 months ended: Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
Revenue 100.00 100.00 100.00 100.00 100.00
Cost of revenue -60.71 -62.56 -66.51 -63.97 -66.12
Gross profit 39.29% 37.44% 33.49% 36.03% 33.88%
Selling, general and administrative expenses -28.35 -28.38 -28.01 -25.81 -15.45
Asset impairments -121.90 -1.46 -1.08 -0.84 -1.13
Operating income (loss) -110.95% 7.60% 4.40% 9.38% 17.31%
Interest income 0.17 0.01 0.04 0.50 0.20
Interest expense -2.06 -1.56 -2.70 -3.76 -3.73
Other income (expense), net 0.43 -0.37 0.38 -2.12 -0.68
Other expense, net -1.46% -1.92% -2.28% -5.38% -4.20%
Earnings (loss) before income taxes and equity method investment earnings (loss) -112.41% 5.69% 2.12% 4.00% 13.11%
Provision for income taxes -2.59 -2.67 -0.76 -0.97 -2.47
Equity method investment earnings (loss) 0.00 0.04 -0.05 -0.10 -0.18
Net earnings (loss) -115.01% 3.06% 1.31% 2.93% 10.46%
Net earnings attributable to noncontrolling interest -0.08 -0.05 -0.05 -0.05 -0.42
Net earnings (loss) attributable to FIS common stockholders -115.09% 3.00% 1.26% 2.88% 10.04%

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

The financial performance over the five-year period is characterized by a steady improvement in gross margins offset by rising operational overhead and a catastrophic asset impairment in the final year. While the core business demonstrated an ability to optimize cost of revenue, these gains were largely neutralized by increased selling, general, and administrative expenses and a singular, massive non-cash charge in 2022.

Gross Profitability Trends
A consistent upward trajectory in gross profit margin is observed, rising from 33.88% in 2018 to 39.29% in 2022. This improvement is driven by a gradual reduction in the cost of revenue, which decreased from 66.12% to 60.71% over the period, indicating enhanced efficiency in direct service delivery or a shift toward higher-margin revenue streams.
Operating Expense Analysis
Selling, general and administrative expenses experienced a sharp increase between 2018 and 2019, jumping from 15.45% to 25.81% of revenue. This expense level remained relatively stagnant between 2019 and 2022, hovering around 28%. The expansion of these overhead costs significantly eroded the gains achieved at the gross profit level, contributing to a decline in operating income from 17.31% in 2018 to 7.60% in 2021.
Impact of Asset Impairments
The most significant volatility in the financial data occurs in 2022, where asset impairments surged to 121.90% of revenue. In previous years, impairments were negligible, ranging between 0.84% and 1.46%. This extraordinary charge resulted in a shift from a positive operating income of 7.60% in 2021 to an operating loss of 110.95% in 2022.
Net Earnings and Bottom Line Performance
Net earnings attributable to common stockholders showed a downward trend from 10.04% in 2018 to a low of 1.26% in 2020, before a slight recovery to 3.00% in 2021. The 2022 fiscal year saw a complete collapse in profitability, resulting in a net loss of 115.09% of revenue. This loss was driven almost entirely by the aforementioned asset impairments, as interest expenses as a percentage of revenue actually trended downward from 3.73% in 2018 to 2.06% in 2022.

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