Fiserv, Inc. (NASDAQ: FISV), a leading global provider of financial services technology solutions, today reported financial results for the second quarter of 2016.
Second Quarter 2016 GAAP Results
GAAP revenue for the company increased 5 percent in the second quarter to $1.36 billion, with 9 percent growth in the Payments segment and 1 percent growth in the Financial segment, compared to the second quarter of 2015. GAAP revenue for the company increased 5 percent in the first six months of 2016 to $2.69 billion, with 8 percent growth in the Payments segment and 1 percent growth in the Financial segment, compared to the prior year period.
GAAP earnings per share was $0.94 in the second quarter and $2.21 in the first six months of 2016, increasing 77 percent and 75 percent, respectively, compared to the prior year periods. GAAP earnings per share included a net investment gain of $0.39 per share in both the first quarter and first six months of 2016 driven by a sale of a business interest at StoneRiver Group, L.P. ("StoneRiver"), a joint venture in which the company owns a 49% interest, and debt extinguishment and refinancing costs of $0.25 per share in both the second quarter and first six months of 2015.
GAAP operating margin was 26.6 percent in the second quarter and 26.0 percent in the first six months of 2016, increasing 150 basis points and 110 basis points, respectively, compared to the prior year periods.
Net cash provided by operating activities was $687 million in the first six months of 2016 compared with $600 millionin the prior year period, an increase of 15 percent.
"Our second quarter results were highlighted by strong growth in the Payments segment leading to double-digit gains in adjusted EPS," said Jeffery Yabuki, President and Chief Executive Officer of Fiserv. "Strong sales results in the quarter should add to our momentum in the second half of the year."
Second Quarter 2016 Non-GAAP Results and Additional Information
- Adjusted revenue increased 6 percent in the second quarter to $1.29 billion and 5 percent in the first six months to $2.55 billion, compared to the prior year periods.
- Internal revenue growth in the quarter was 4 percent for the company, driven by 6 percent growth in the Payments segment and 1 percent growth in the Financial segment.
- Internal revenue growth was 4 percent in the first six months of 2016, led by 7 percent growth in the Payments segment and 1 percent growth in the Financial segment.
- Adjusted earnings per share increased 14 percent in the second quarter to $1.08 and increased 17 percent in the first six months of 2016 to $2.14 compared to the prior year periods.
- Adjusted operating margin increased 10 basis points to 31.9 percent in the quarter and increased 40 basis points to 31.9 percent in the first six months compared to the prior year periods.
- Free cash flow was $442 million in the first six months of 2016 compared to $439 million in the prior year period. Cash distributions of $140 million in the first half of 2016 from StoneRiver related to the sale of a business interest have been excluded from the company's free cash flow results.
- The company repurchased 2.8 million shares of common stock for $283 million in the second quarter and 6.2 million shares of common stock for $604 million in the first six months of 2016. As of June 30, 2016, the company had 11.2 million remaining shares authorized for repurchase.
Outlook for 2016
Fiserv continues to expect 2016 internal revenue growth in a range of 5 to 6 percent. The company now expects 2016 adjusted earnings per share to be in a range of $4.38 to $4.45, which represents growth of 13 to 15 percent over $3.87 in 2015.
"We are on-track to achieve our full year outlook including internal revenue growth acceleration in the second half of the year," said Yabuki.
Earnings Conference Call
The company will discuss its second quarter 2016 results on a conference call and webcast at 4 p.m. CT on Tuesday, August 2, 2016. To register for the event, go to www.fiserv.com and click on the Q2 Earnings webcast link. Supplemental materials will be available in the "Investor Relations" section of the website.