Enterprise Value to FCFF (EV/FCFF)
Free Cash Flow to The Firm (FCFF)
Fidelity National Information Services Inc., FCFF calculation
US$ in millions
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).
- Operating Cash Flow
- There is a generally increasing trend in net cash provided by operating activities from 2018 to 2021, starting at 1,993 million USD in 2018 and rising to a peak of 4,810 million USD in 2021. This indicates strong growth in cash generated from core business operations during this period.
- However, in 2022, net cash provided by operating activities declined to 3,939 million USD, representing a notable decrease of approximately 18% from the prior year. Despite the decline, the cash flow remains significantly higher than the levels observed in 2018 and 2019.
- Free Cash Flow to the Firm (FCFF)
- Free cash flow to the firm also demonstrates an upward trajectory between 2018 and 2021, increasing from 1,613 million USD to 3,819 million USD. This trend aligns closely with the increase in operating cash flow and suggests rising capacity to generate cash after accounting for capital expenditures.
- In 2022, FCFF declined to 2,878 million USD, a decrease of about 25% from the previous year. This drop is proportionally larger than the decline in operating cash flow, potentially indicating an increase in capital expenditures or other cash outflows that reduce free cash available to stakeholders.
- Overall Observations
- The financial data suggests a period of strong cash generation growth from 2018 through 2021, followed by a discernible reduction in 2022. The reductions in both operating cash flow and FCFF in 2022 suggest potential challenges or increased investments impacting cash availability.
- Despite the decline observed in 2022, the company’s cash flow metrics remain at historically elevated levels relative to 2018 and 2019, pointing to an overall positive cash flow position over the five-year period.
Interest Paid, Net of Tax
Fidelity National Information Services Inc., interest paid, net of tax calculation
US$ in millions
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).
2 2022 Calculation
Cash paid for interest, tax = Cash paid for interest × EITR
= 417 × 21.00% = 88
- Effective Income Tax Rate (EITR)
- The effective income tax rate shows notable variability across the five-year period. Starting at 18.8% in 2018, it increased moderately to 24.2% in 2019, followed by a significant rise to 36% in 2020. The upward trend continued sharply into 2021, reaching a peak of 47%. However, in 2022, the rate decreased substantially to 21%, reverting closer to the levels observed early in the period. This pattern indicates fluctuating tax burdens, with a pronounced tax rate peak in 2021 before a considerable reduction in the subsequent year.
- Cash Paid for Interest, Net of Tax
- Cash payments for interest, net of tax, exhibited a generally increasing trend over the period. In 2018, interest payments amounted to $242 million, rising steadily to $252 million in 2019 and further to $274 million in 2020. There was a slight decline to $260 million in 2021, after which a significant increase occurred in 2022, reaching $329 million. This progression suggests growing financing costs or increased debt servicing requirements, with a minor dip in 2021 followed by a substantial rise in the final year.
Enterprise Value to FCFF Ratio, Current
Fidelity National Information Services Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 49,433) |
| Free cash flow to the firm (FCFF) | 2,878) |
| Valuation Ratio | |
| EV/FCFF | 17.17 |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Accenture PLC | 21.62 |
| Adobe Inc. | 19.86 |
| Cadence Design Systems Inc. | 77.27 |
| CrowdStrike Holdings Inc. | 114.77 |
| Fair Isaac Corp. | 69.39 |
| International Business Machines Corp. | 22.44 |
| Intuit Inc. | 45.77 |
| Microsoft Corp. | 58.14 |
| Oracle Corp. | 292.18 |
| Palantir Technologies Inc. | 273.34 |
| Palo Alto Networks Inc. | 42.82 |
| Salesforce Inc. | 20.21 |
| ServiceNow Inc. | 62.46 |
| Synopsys Inc. | 63.14 |
| Workday Inc. | 26.11 |
| EV/FCFF, Sector | |
| Software & Services | 57.69 |
| EV/FCFF, Industry | |
| Information Technology | 56.10 |
Based on: 10-K (reporting date: 2022-12-31).
1 Click competitor name to see calculations.
If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.
Enterprise Value to FCFF Ratio, Historical
Fidelity National Information Services Inc., historical EV/FCFF calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Enterprise value (EV)1 | 56,149) | 74,589) | 101,462) | 115,683) | 42,880) | |
| Free cash flow to the firm (FCFF)2 | 2,878) | 3,819) | 3,587) | 1,834) | 1,613) | |
| Valuation Ratio | ||||||
| EV/FCFF3 | 19.51 | 19.53 | 28.29 | 63.09 | 26.58 | |
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| Accenture PLC | 16.99 | 24.76 | 17.90 | 18.49 | — | |
| Adobe Inc. | 20.82 | 33.61 | 40.43 | 40.48 | — | |
| Cadence Design Systems Inc. | 44.54 | 35.05 | 44.13 | — | — | |
| CrowdStrike Holdings Inc. | 96.35 | 141.44 | 807.14 | — | — | |
| Fair Isaac Corp. | 23.33 | 26.12 | 37.52 | 38.81 | — | |
| International Business Machines Corp. | 16.47 | 13.10 | 9.35 | — | — | |
| Intuit Inc. | 32.85 | 48.64 | 37.90 | 33.30 | — | |
| Microsoft Corp. | 32.31 | 38.37 | 33.99 | 26.37 | — | |
| Oracle Corp. | 31.60 | 16.36 | 14.99 | — | — | |
| Palantir Technologies Inc. | 82.97 | 66.45 | — | — | — | |
| Palo Alto Networks Inc. | 29.30 | 32.74 | 26.50 | 20.44 | — | |
| Salesforce Inc. | 35.97 | 44.91 | 39.63 | — | — | |
| ServiceNow Inc. | 40.86 | 60.13 | 83.74 | — | — | |
| Synopsys Inc. | 30.82 | 38.59 | 42.88 | 33.32 | — | |
| Workday Inc. | 45.74 | 57.52 | 72.44 | — | — | |
| EV/FCFF, Sector | ||||||
| Software & Services | 29.81 | 32.52 | 28.14 | — | — | |
| EV/FCFF, Industry | ||||||
| Information Technology | 26.67 | 27.51 | 23.95 | — | — | |
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).
3 2022 Calculation
EV/FCFF = EV ÷ FCFF
= 56,149 ÷ 2,878 = 19.51
4 Click competitor name to see calculations.
The financial data indicates notable fluctuations in the enterprise value (EV) and free cash flow to the firm (FCFF) over the reviewed periods. The enterprise value exhibited a significant increase from 42,880 million USD in 2018 to a peak of 115,683 million USD in 2019, before experiencing a steady decline in subsequent years, reaching 56,149 million USD by the end of 2022.
Free cash flow to the firm demonstrated a generally upward trend from 2018 through 2021, rising from 1,613 million USD to 3,819 million USD. However, in 2022, FCFF decreased to 2,878 million USD, marking a notable reduction compared to the previous year but still higher than the initial value in 2018.
The EV/FCFF ratio reflects these dynamics and illustrates valuation changes in relation to cash generation capacity. The ratio surged dramatically in 2019 to 63.09, signaling a peak in enterprise value relative to free cash flow, which might suggest overvaluation or market optimism at that time. Following this, the ratio decreased markedly to around 19.5 by 2021 and 2022, indicating a more moderate valuation relative to cash flow. This reduction coincides with the decline in enterprise value and the more stable or increasing free cash flow observed in those years.
- Enterprise Value (EV)
- Peaked in 2019, followed by a consistent decline through 2022, ending significantly lower than the peak but still above the 2018 level.
- Free Cash Flow to the Firm (FCFF)
- Overall growth until 2021, with a decrease in 2022, but remaining above the level recorded in 2018.
- EV/FCFF Ratio
- Marked increase in 2019 indicating high valuation relative to cash flow, followed by a decline and stabilization around 19.5 in 2021-2022, indicating a more balanced valuation compared to cash generation.
These trends suggest that after a period of heightened valuation in 2019, the company’s market value adjusted downward in subsequent years while maintaining relatively strong cash flow generation. The decline in the ratio implies improved alignment between enterprise value and cash flow generation capacity, potentially offering a more reasonable investment valuation in recent periods. The drop in 2022 FCFF introduces a cautionary signal that could merit further analysis to understand underlying factors.