Fiserv reports first quarter 2018 results
GAAP revenue growth and internal revenue growth of 3 percent; GAAP EPS increase of 79 percent and adjusted EPS increase of 23 percent; Full year 2018 guidance affirmed
BROOKFIELD, WI (May 2, 2018) — Fiserv, Inc. (NASDAQ: FISV), a leading global provider of financial services technology solutions, today reported financial results for the first quarter of 2018. The company completed a two-for-one stock split in the first quarter of 2018. Accordingly, all share data and per share amounts are presented on a split-adjusted basis.
First Quarter 2018 GAAP Results
GAAP revenue for the company increased 3 percent to $1.44 billion in the first quarter of 2018 compared to the first quarter of 2017, with 6 percent growth in the Payments segment and 1 percent decline in the Financial segment.
GAAP earnings per share was $1.00 in the first quarter of 2018, increasing 79 percent compared to the first quarter of 2017. GAAP earnings per share in the first quarter of 2018 included a gain of $0.37 per share on the sale of a 55 percent interest of the company’s Lending Solutions business (the “Lending Transaction”). GAAP earnings per share in the first quarter of 2017 included a $0.04 per share gain on the sale of a business at StoneRiver Group, L.P. (“StoneRiver“), a joint venture in which the company owns a 49 percent interest.
GAAP operating margin increased to 42.2 percent in the first quarter of 2018, compared to 26.2 percent in the first quarter of 2017. GAAP operating margin in the first quarter of 2018 included a $232 million gain resulting from the Lending Transaction.
Net cash provided by operating activities was $372 million in the first quarter of 2018, which excluded $419 million of sale proceeds from the Lending Transaction. Net cash provided by operating activities was $463 million in the first quarter of 2017, which included cash distributions from StoneRiver of $31 million.
“Our first quarter performance is consistent with our expectations for the full year,” said Jeffery Yabuki, President and Chief Executive Officer of Fiserv. “Results in the quarter were punctuated by a 23 percent increase in adjusted earnings per share and double-digit sales growth.”
First Quarter 2018 Non-GAAP Results and Additional Information
- Adjusted revenue increased 4 percent to $1.37 billion in the quarter compared to the prior year period.
- Internal revenue growth for the company was 3 percent, with 5 percent growth in the Payments segment and 1 percent growth in the Financial segment, for the quarter.
- Adjusted earnings per share increased 23 percent to $0.76 in the quarter compared to the prior year period.
- Adjusted operating margin was 32.5 percent in the quarter, consistent with the prior year period.
- Free cash flow was $316 million in the quarter compared to $366 million in the prior year period.
- Sales results were up 12 percent in the quarter compared to the prior year period.
- The company repurchased 5.7 million shares of common stock for $398 million in the first quarter. As of March 31, 2018, the company had 15.8 million remaining shares authorized for repurchase.
- The company sold a 55 percent interest of its Lending Solutions business to funds affiliated with Warburg Pincus LLC, retaining a 45 percent interest. The company received total sale proceeds of $419 million from the transaction in the quarter.
- In January 2018, the company completed the sale of the retail voucher business, which was acquired as part of the 2017 Monitise acquisition, for $50 million.
- The company completed a two-for-one stock split on March 19, 2018.
Outlook for 2018
Fiserv continues to expect internal revenue growth of at least 4.5 percent for the year. The company also expects adjusted earnings per share in a split-adjusted range of $3.02 to $3.15, which represents growth of 22 to 27 percent over 2017 as adjusted for the Lending Transaction.
“We are on track to achieve our financial commitments, which includes an increase in our internal revenue growth rate for the year,” said Yabuki.
Earnings Conference Call
The company will discuss its first quarter 2018 results on a conference call and webcast at 4 p.m. CT on Tuesday, May 1, 2018. To register for the event, go to Fiserv.com and click on the Q1 Earnings webcast link. Supplemental materials will be available in the “Investor Relations” section of the website.
Fiserv, Inc. (NYSE: FI), a Fortune 500 company, aspires to move money and information in a way that moves the world. As a global leader in payments and financial technology, the company helps clients achieve best-in-class results through a commitment to innovation and excellence in areas including account processing and digital banking solutions; card issuer processing and network services; payments; e-commerce; merchant acquiring and processing; and the Clover® cloud-based point-of-sale and business management platform. Fiserv is a member of the S&P 500® Index and one of Fortune® World’s Most Admired Companies™. Visit fiserv.com and follow on social media for more information and the latest company news.