Fiserv reports second quarter 2017 results
GAAP revenue growth of 2 percent and internal revenue growth of 3 percent; GAAP EPS increase of 9 percent and adjusted EPS increase of 10 percent; Operating cash flow up 1 percent and free cash flow increase of 26 percent year to date; Full year 2017 outlook affirmed
BROOKFIELD, WI (August 1, 2017) — Fiserv, Inc. (NASDAQ: FISV), a leading global provider of financial services technology solutions, today reported financial results for the second quarter of 2017.
Second Quarter 2017 GAAP Results
GAAP revenue for the company increased 2 percent in the second quarter compared to the prior year period to $1.39 billion, with 2 percent growth in both the Payments and Financial segments. For the first six months of 2017, GAAP revenue increased 3 percent versus the same period last year to $2.78 billion, with 4 percent growth in the Payments segment and 3 percent growth in the Financial segment. GAAP revenue in the second quarter of 2017 reflects the divestiture of the company’s Australian item processing business which closed in May.
GAAP earnings per share increased 9 percent to $1.02 in the second quarter and decreased 3 percent to $2.15 in the first six months of 2017, compared to the prior year periods. GAAP earnings per share included net investment gains of $0.08 per share and $0.39 per share in the first six months of 2017 and 2016, respectively, driven by the disposition of a business and a business interest at StoneRiver Group, L.P. (“StoneRiver“), a joint venture in which the company owns a 49% interest. GAAP earnings per share in the first six months of 2017 included a benefit related to the adoption of the new accounting standard for excess tax benefits from share-based compensation awards.
GAAP operating margin was 26.8 percent in the second quarter and 26.5 percent in the first six months of 2017, increasing 20 basis points and 50 basis points, respectively, compared to the prior year periods.
Net cash provided by operating activities was $691 million in the first six months of 2017 compared with $687 million in the prior year period. Net cash provided by operating activities included cash distributions from StoneRiver of $31 million and $140 million in the first six months of 2017 and 2016, respectively.
“We delivered solid financial results in the quarter consistent with our expectations,” said Jeffery Yabuki, President and Chief Executive Officer of Fiserv. “Our focus on client success continues to drive market momentum.”
Second Quarter 2017 Non-GAAP Results and Additional Information
- Adjusted revenue increased 2 percent in the second quarter to $1.32 billion and 4 percent in the first six months of 2017 to $2.64 billion, compared to the prior year periods.
- Internal revenue growth for the company was 3 percent in the second quarter, with 3 percent growth in both the Payments segment and Financial segment.
- Internal revenue growth for the company was 4 percent in the first six months of 2017, with 4 percent growth in the Payments segment and 3 percent growth in the Financial segment.
- Adjusted earnings per share increased 10 percent in the second quarter to $1.19 and increased 14 percent in the first six months of 2017 to$2.43 compared to the prior year periods.
- Adjusted operating margin increased 10 basis points to 32.0 percent in the second quarter and expanded 40 basis points to 32.3 percent in the first six months of 2017 compared to the prior year periods.
- Free cash flow increased 26 percent to $555 million in the first six months of 2017 compared to the prior year period. A cash distribution from StoneRiver of $31 million related to the sale of a business has been excluded from the company’s free cash flow results for the first six months of 2017.
- The company repurchased 2.5 million shares of common stock for $295 million in the second quarter and 5.9 million shares of common stock for $684 million in the first six months of 2017. As of June 30, 2017, the company had 14.6 million remaining shares authorized for repurchase.
- In June 2017, the company made a recommended cash offer to acquire Monitise plc for approximately £70 million ($89 million). The transaction is subject to certain conditions including Monitise shareholder approval (full details of the offer can be found on our website, Fiserv.com).
Outlook for 2017
Fiserv continues to expect 2017 internal revenue growth in a range of 4 to 5 percent and adjusted earnings per share in a range of $5.03 to $5.17, which represents growth of 14 to 17 percent over $4.43 in 2016.
“We remain on-track to achieve our full-year financial objectives which anticipate stronger results in the second half of the year,” said Yabuki.
Earnings Conference Call
The company will discuss its second quarter 2017 results on a conference call and webcast at 4 p.m. CT on Tuesday, August 1, 2017. To register for the event, go to Fiserv.com and click on the Q2 Earnings webcast link. Supplemental materials will be available in the “Investor Relations” section of the website.
About Fiserv
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 has been recognized as one of Fortune® World’s Most Admired Companies™ for 9 of the last 10 years. Visit fiserv.com and follow on social media for more information and the latest company news.
