Fiserv reports third quarter 2017 results
BROOKFIELD, WI (November 1, 2017) — Fiserv, Inc. (NASDAQ: FISV), a leading global provider of financial services technology solutions, today reported financial results for the third quarter of 2017.
Third Quarter 2017 GAAP Results
GAAP revenue for the company increased 1 percent to $1.40 billion in the third quarter compared to the prior year period, with 3 percent growth in the Payments segment and 1 percent decline in the Financial segment. For the first nine months of 2017, GAAP revenue increased 3 percent to $4.18 billion versus the same period last year, with 4 percent growth in the Payments segment and 2 percent growth in the Financial segment. GAAP revenue growth in 2017 included the effects of acquisitions and the divestiture of the company’s Australian item processing business in May.
GAAP earnings per share was $1.08 in the third quarter and $3.23 in the first nine months of 2017, increasing 13 percent and 2 percent, respectively, compared to the prior year periods. GAAP earnings per share included net investment gains of $0.09 per share and $0.39 per share in the first nine 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 percent interest. GAAP earnings per share in 2017 included a benefit related to excess tax benefits recorded from the exercise of share-based compensation awards.
GAAP operating margin was 26.5 percent in both the third quarter and first nine months of 2017, decreasing 30 basis points and increasing 20 basis points, respectively, compared to the prior year periods.
Net cash provided by operating activities was $1.02 billion in the first nine months of 2017 compared with $1.04 billion in the prior year period. Net cash provided by operating activities included cash distributions from StoneRiver of $44 million and $140 million in the first nine months of 2017 and 2016, respectively.
“Fiserv continued to execute well, delivering double-digit adjusted earnings per share growth despite pressure from lower periodic revenue in the quarter,” said Jeffery Yabuki, President and Chief Executive Officer of Fiserv. “Sales were solid in the quarter, providing momentum for a strong close to the year.”
Third Quarter 2017 Non-GAAP Results and Additional Information
- Adjusted revenue increased 2 percent to $1.34 billion in the third quarter and 3 percent to $3.98 billion in the first nine months of 2017 compared to the prior year periods.
- Internal revenue growth for the company was 2 percent in the third quarter, driven by 3 percent growth in the Payments segment. Financial segment internal revenue growth in the quarter was flat compared to the prior year period.
- Internal revenue growth for the company was 3 percent in the first nine months of 2017, with 4 percent growth in the Payments segment and 2 percent growth in the Financial segment.
- Adjusted earnings per share increased 11 percent to $1.27 in the third quarter and 13 percent to $3.71 in the first nine months of 2017 compared to the prior year periods.
- Adjusted operating margin decreased 20 basis points to 32.6 percent in the third quarter and increased 20 basis points to 32.4 percent in the first nine months of 2017 compared to the prior year periods.
- Free cash flow increased 10 percent to $819 million in the first nine months of 2017 compared to the prior year period. Cash distributions from StoneRiver of $44 million were not included in the company’s free cash flow results for the first nine months of 2017.
- The company repurchased 2.4 million shares of common stock for $298 million in the third quarter and 8.3 million shares of common stock for $983 million in the first nine months of 2017. As of September 30, 2017, the company had 12.2 million remaining shares authorized for repurchase.
- The company completed three acquisitions during the quarter:
- In July, the company acquired the assets of PCLender, LLC, a leader in next-generation internet-based mortgage software and mortgage lending technology solutions, to enhance the company’s suite of mortgage origination services.
- In August, the company acquired Dovetail Group Limited, a leading provider of bank payments and liquidity management solutions, to further enable the company to help financial institutions around the world transform their payments infrastructure.
- In September, to expand its digital leadership, the company completed its acquisition of Monitise plc, a provider of digital solutions that enable innovative digital banking experiences for leading financial institutions worldwide.
Outlook for 2017
For the full year, Fiserv expects internal revenue growth of 4 percent and adjusted earnings per share in a range of $5.05 to $5.12, which represents growth of 14 to 16 percent over adjusted earnings per share of $4.43 in 2016.
“We expect to achieve our full-year financial outlook which includes strong fourth quarter revenue growth leading to internal revenue growth acceleration in 2018,” said Yabuki.
Earnings Conference Call
The company will discuss its third quarter 2017 results on a conference call and webcast at 4 p.m. CT on Tuesday, October 31, 2017. To register for the event, go to Fiserv.com and click on the Q3 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.
