Fidelity National Information Services Inc. (NYSE:FIS)

The financial data reveals several trends and notable changes in profitability and returns over the examined periods.

Gross Profit Margin

The gross profit margin exhibited a generally upward trajectory from March 31, 2018, through March 31, 2023. Starting around 33.88%, it gradually increased, reaching nearly 40% by the latest period. This steady rise suggests an improvement in cost management or pricing power, enhancing the efficiency of generating gross profit relative to revenue.

Operating Profit Margin

The operating profit margin showed more variability compared to gross margin. After a strong performance near 17%-18% in 2018 and early 2019, there was a significant decline beginning in late 2019 and continuing through 2020, with margins falling to single digits and even negative values at the end of the period examined. Although some recovery is observed in early 2022, the margins ultimately plunged drastically by March 2023 to severe negative values, indicating operational challenges or extraordinary expenses impacting core business profitability.

Net Profit Margin

Net profit margin followed a similar volatile pattern as the operating margin. Initial levels near 9-10% in 2018 decreased progressively, with particularly sharp dips below zero in late 2020 and mid-2021, reflecting periods of net losses. Partial recovery is visible thereafter, with the margin rising to low positive percentages through early 2023, before collapsing again into deeply negative territory by the end of the period. This suggests significant fluctuations in bottom-line results likely driven by non-operating factors or financial costs alongside operating issues.

Return on Equity (ROE)

ROE declined considerably from approximately 8% in 2018 to near zero and negative figures starting in late 2019. While there was minimal recovery in 2021 and 2022 with ROE reaching positive but still low single-digit percentages, it sharply decreased once more by March 2023, indicating diminished returns for shareholders and potentially erosion of equity value during certain periods.

Return on Assets (ROA)

ROA exhibited a pattern consistent with ROE, declining from above 3% to marginally positive or negative figures during the years affected by declining profitability. Modest improvement was recorded in 2022, reaching just over 1%, before a pronounced drop at the latest date observed. The fluctuations in ROA highlight variability in asset utilization effectiveness and overall profitability on the asset base.

Overall, the data illustrates a company that managed to improve its gross profit efficiency steadily but faced significant operational and net profitability pressures beginning around 2019 and particularly intensified in 2020-2023. While there were attempts at financial recovery, the sharp margin contractions and negative returns in the most recent periods call attention to substantial challenges affecting profitability, operations, and return to investors.

Over the analyzed period, revenue exhibited considerable fluctuations with an overall upward trend. Starting at approximately 2,066 million US dollars in the first quarter of 2018, revenue increased moderately and then experienced a notable surge in the latter half of 2019, reaching a peak near 3,342 million US dollars by December 2019. Thereafter, revenue showed some volatility but generally maintained a level above 3,000 million US dollars in subsequent quarters, peaking again in the fourth quarter of 2021 at roughly 3,672 million US dollars. By the first quarter of 2023, revenue retreated slightly to about 3,510 million US dollars from the prior quarter.

Gross profit mirrored the upward trajectory observed in revenue, with significant growth particularly observable from mid-2019 onward. Initially around 652 million US dollars in the first quarter of 2018, gross profit climbed steadily, reaching a high of approximately 1,421 million US dollars by the end of 2021. Despite some quarter-to-quarter fluctuations, gross profit sustained elevated levels into 2022 and early 2023, peaking at close to 1,517 million US dollars during the fourth quarter of 2022 before declining somewhat to 1,341 million US dollars in the first quarter of 2023.

Analyzing gross profit margin offers insight into profitability trends independent of scale. Data from the end of 2018 onwards reveal a progressive increase in gross profit margin, starting around 33.88% in late 2018 and climbing consistently each quarter, reaching near 39.87% by the first quarter of 2023. This steady expansion suggests improved operational efficiency or favorable pricing dynamics enabling the company to retain a larger portion of revenue as gross profit over time.

The combination of rising gross profit margins and generally increasing gross profit levels indicates enhanced profitability potential even in periods where revenue experienced minor declines or plateaued. This pattern points to effective cost management or value-added services contributing positively to the gross margin. However, the fluctuations in revenue and gross profit in late 2022 and early 2023 signal some degree of volatility or external factors impacting business volume, although the relatively high gross profit margin supports resilience in profit retention.

In summary, the financial data portray a strong growth phase in revenue and gross profit through 2019 to 2021, with continued profitability improvements as evidenced by the rising gross profit margin. The slight softening in top-line metrics toward early 2023 indicates the need for monitoring potential challenges, while the robust margin profile underscores a firm foundation for sustaining profitability.

Operating Income (Loss)

The operating income shows significant volatility across the periods. From March 2018 through December 2019, the figures fluctuate but generally remain positive, ranging approximately between 100 million and 470 million USD, with a notable peak in December 2018 at 469 million USD and a low in December 2019 at 123 million USD. Starting in 2020, a decline is observed, with operating income dipping to lower levels, hitting a very low point in the first quarter of 2023 with a sharp negative value of -17,112 million USD. This could indicate a substantial loss during that quarter, deviating markedly from the general positive trend in prior years. Despite some recovery attempts visible in other quarters, the overall trend from 2020 onwards suggests increased instability in operating income.

Revenue

Revenue demonstrates a generally upward trend over the reported periods. Beginning at just above 2 billion USD in early 2018, revenue increases steadily reaching over 3.5 billion USD by the end of 2021. Revenue peaks in June 2022 at approximately 3.7 billion USD but subsequently shows some fluctuations, with a slight decline towards the first quarter of 2023 at around 3.5 billion USD. This steady growth in revenue indicates an expanding business volume despite the fluctuations in operating income.

Operating Profit Margin

The operating profit margin reflects a varied pattern with some clear points of change. Although data is missing for early 2018 periods, the quarters from March 2019 onward show margin percentages generally in the range of about 3.4% to 18%. A peak occurs around mid-2019 with margins near 18%, followed by a noticeable decline in 2020, dropping to levels around 3.4% to 4.4%. Gradual improvement is seen in 2021 and 2022, with margins increasing back up to around 10%. However, the sharp negative values in 2023 (-110.95% and -109.58%) align with the operating loss, indicating exceptionally poor profitability during this timeframe.

Summary of Trends and Insights

Overall, revenue growth is consistent and positive over the evaluated period, suggesting increasing sales or service volumes. Nevertheless, operating income and operating profit margin reveal increasing volatility and periods of significant losses, particularly in 2023. The dramatic negative operating income and margins in early 2023 indicate unusual or extraordinary circumstances impacting profitability. This disparity between revenue growth and operating income stability may warrant further investigation into cost structures, operational efficiency, or external factors adversely affecting earnings in recent periods.

Net Earnings (Loss) Attributable to Common Stockholders

The net earnings exhibit significant volatility across the observed periods. Initially, earnings show moderate fluctuations, with a notable dip to a negative value in December 2019 (-$158 million). This loss is followed by a gradual recovery up to December 2020, peaking at $104 million. However, the following year exhibits pronounced variability, particularly a sharp decline to -$373 million in March 2021, a subsequent rebound to positive territory through the remainder of 2021 and early 2022, and a steep collapse culminating in an extreme loss of -$17,366 million in December 2022. The final quarter, March 2023, shows a partial recovery with earnings of $140 million. This pattern indicates exposure to episodic large-scale losses interspersed with recovery phases.

Revenue

Revenue demonstrates a generally upward trend over the period, despite some fluctuations. Starting at approximately $2.07 billion in early 2018, revenues increase gradually with a substantial jump in the second half of 2019, peaking at over $3.3 billion by year-end 2019. There is a slight decline during the mid-2020 quarters but revenue continues to remain robust, stabilizing around the $3.2 to $3.7 billion range through 2021 and into early 2023. Despite minor short-term declines, the overall revenue trajectory maintains an upward momentum, suggesting growth in business activity.

Net Profit Margin

The net profit margin data begins with missing values but reveals a pattern of decrease after the initial available values in 2018 and early 2019, dropping from around 10% to below zero in late 2020, indicating periods of unprofitability. From 2021 onwards, margins fluctuate modestly but remain generally low in the range of 0.7% to 6.47%, interrupted by negative spikes coinciding with large losses, particularly the extreme negative margins recorded in late 2022, matching the large loss in net earnings. This pattern highlights significant pressure on profitability despite revenue gains, likely due to large expense items or one-time charges.

Net Earnings (Loss) Attributable to Common Stockholders

The net earnings demonstrate significant volatility over the analyzed period. Beginning in early 2018, earnings fluctuated moderately with values mainly staying positive but showing variability quarter to quarter. Notable declines occurred at the end of 2019, where earnings turned negative to -158 million, followed by recovery back to positive figures through 2020 and 2021. The most pronounced change appears at the close of the dataset (March 31, 2023), where an extreme loss of -17,366 million was recorded, marking a significant outlier compared to prior periods. Apart from this drastic fluctuation, periodic net earnings remained generally positive with intermittent modest gains and losses.

Total Stockholders' Equity

Stockholders' equity values show a relatively stable range for most quarters, generally lingering around 10,000 million at the start of the period. A conspicuous jump occurs in the third quarter of 2019, where equity surges dramatically to approximately 49,195 million and remains near this elevated level through 2022. Subsequently, towards the end of the timeline, equity declines sharply back down to nearly 27,000 million. The initial jump suggests a significant capital event such as a revaluation, acquisition, or restructuring, whereas the drop towards the end likely reflects the large net loss or other substantial capital adjustments.

Return on Equity (ROE)

ROE figures, available starting March 31, 2019, depict moderate performance averaging below 10% initially, fluctuating mostly between 0.06% and 8.28%. During 2020 and early 2021, ROE remains near zero or slightly negative, indicating minimal profitability relative to equity. Some improvement is observable from mid-2021 through 2022, with values rising to slightly over 2%. However, in the last quarter recorded, ROE exhibits a drastic negative spike exceeding -60%, closely mirroring the substantial net loss and equity reduction observed simultaneously. This indicates a severe erosion of shareholder returns associated with that period's financial impairments.

The financial performance demonstrates considerable volatility in net earnings over the observed periods. Initially, net earnings fluctuated moderately in 2018, with a notable peak in the final quarter of that year. In 2019, earnings were generally stable but showed a sharp decline in the last quarter, resulting in a negative figure. The year 2020 began with minimal positive net earnings, culminating in a significant increase in the last quarter, indicating some recovery or operational improvement. The pattern in 2021 is marked by a steep drop to large negative net earnings in the first quarter, followed by a strong rebound through the remainder of the year. However, the first quarter of 2022 again reflects negative earnings, with subsequent quarters showing improvement and a return to positive figures by the end of the year and into early 2023. The extremely large negative earnings reported in the first quarter of 2023 stands out as an extraordinary event, affecting overall annual performance.

Total assets exhibit a generally upward trend from early 2018 through 2019, with a sharp increase between the first and third quarters of 2019. This surge in assets may be indicative of acquisitions, investments, or other strategic expansions. Post-2019, total assets maintain a high level but with a slight declining tendency through 2020 and 2021. From 2022 onwards, a more pronounced decrease in total assets is noticeable, especially by the first quarter of 2023, suggesting divestitures, asset sales, or balance sheet optimization activities.

Return on Assets (ROA) data starts from March 31, 2018, showing a decline from a solid 3.56% to 0.9% by the end of 2018, indicating a reduction in profitability relative to asset base. Throughout 2019 and 2020, ROA remains low and even dips into negative territory in the final quarter of 2020, reflecting challenges in earning efficient returns on assets during this period. In 2021, ROA fluctuates modestly, experiencing slight improvements but remaining close to zero or negative. Early quarters of 2022 show a steady recovery in ROA, achieving values above 1% by the end of the year, signaling improved asset utilization and profitability. The sharp negative ROA values in the first two quarters of 2023, concurrently with the extreme negative net earnings, underscore a severe downturn impacting asset returns negatively.

In summary, the company’s financials reveal cyclical volatility in earnings with occasional significant negative spikes, asset growth followed by contraction, and a profitability measure (ROA) that closely mirrors net earnings patterns. The data suggests periods of operational challenge interspersed with recovery phases, as well as notable changes in asset management strategies over the five-year horizon.