GAAP revenue growth of 7% both in the quarter
and year to date; GAAP EPS decreased 37% in the quarter and
increased 6% year to date; Operating cash flow increased 24% to
$4.41 billion year to date; Organic revenue growth of 15% in the
quarter and 17% year to date; Adjusted EPS increased 17% in the
quarter and 18% year to date; Free cash flow increased 23% to $3.34
billion year to date; Company raises 2024 organic revenue growth
outlook to 16% to 17% and adjusted EPS outlook to $8.73 to
$8.80
Fiserv, Inc. (NYSE: FI), a leading global provider of payments
and financial services technology solutions, today reported
financial results for the third quarter of 2024.
Third Quarter 2024 GAAP Results
GAAP revenue for the company increased 7% to $5.22 billion in
the third quarter of 2024 compared to the prior year period, with
9% growth in the Merchant Solutions segment and 5% growth in the
Financial Solutions segment. GAAP revenue for the company increased
7% to $15.21 billion in the first nine months of 2024 compared to
the prior year period, with 10% growth in the Merchant Solutions
segment and 5% growth in the Financial Solutions segment.
GAAP earnings per share decreased 37% to $0.98 in the third
quarter of 2024 and increased 6% to $3.74 in the first nine months
of 2024 compared to the prior year periods. The third quarter and
first nine months of 2024 included a $570 million non-cash
impairment charge related to one of the company’s equity method
investments. The third quarter and first nine months of 2023
included a $177 million pre-tax gain related to the sale of the
company’s financial reconciliation business.
GAAP operating margin was 30.7% and 27.7% in the third quarter
and first nine months of 2024 compared to 30.8% and 25.2% in the
third quarter and first nine months of 2023. GAAP operating margin
in the Merchant Solutions segment was 37.7% and 36.2% in the third
quarter and first nine months of 2024 compared to 34.8% and 32.9%
in the third quarter and first nine months of 2023. GAAP operating
margin in the Financial Solutions segment was 47.4% and 45.8% in
the third quarter and first nine months of 2024 compared to 46.9%
and 45.1% in the third quarter and first nine months of 2023. Net
cash provided by operating activities increased 24% to $4.41
billion in the first nine months of 2024 compared to $3.57 billion
in the prior year period.
“We are pleased with our third quarter performance, which
showcases strength across both our Merchant and Financial Solutions
segments and several significant new wins,” said Frank Bisignano,
Chairman, President and Chief Executive Officer of Fiserv. “This
performance is anchored in the privileged position we hold at the
crossroads of two ecosystems – merchants and financial institutions
– which are increasingly interconnected.”
Third Quarter 2024 Non-GAAP Results and Additional
Information
- Adjusted revenue increased 7% to $4.88 billion in the third
quarter and 7% to $14.22 billion in the first nine months of 2024
compared to the prior year periods.
- Organic revenue growth was 15% in the third quarter of 2024,
led by 24% growth in the Merchant Solutions segment and 6% growth
in the Financial Solutions segment.
- Organic revenue growth was 17% in the first nine months of
2024, led by 29% growth in the Merchant Solutions segment and 6%
growth in the Financial Solutions segment.
- Adjusted earnings per share increased 17% to $2.30 in the third
quarter and 18% to $6.29 in the first nine months of 2024 compared
to the prior year periods.
- Adjusted operating margin increased 170 basis points to 40.2%
in the third quarter and 170 basis points to 38.2% in the first
nine months of 2024 compared to the prior year periods.
- Adjusted operating margin increased 290 basis points to 37.7%
in the Merchant Solutions segment and increased 40 basis points to
47.4% in the Financial Solutions segment in the third quarter of
2024, compared to the prior year period.
- Adjusted operating margin increased 330 basis points to 36.2%
in the Merchant Solutions segment and 60 basis points to 45.8% in
the Financial Solutions segment in the first nine months of 2024,
compared to the prior year period.
- Free cash flow increased 23% to $3.34 billion in the first nine
months of 2024 compared to $2.72 billion in the prior year
period.
- The company repurchased 7.6 million shares of common stock for
$1.3 billion in the third quarter and 27.8 million shares of common
stock for $4.3 billion in the first nine months of 2024.
- Fiserv was named as the #1 global financial technology provider
on the 2024 International Data Corporation (IDC) FinTech Top 100
Rankings for the second consecutive year.
Outlook for 2024
Fiserv raises organic revenue growth outlook to 16% to 17% and
adjusted earnings per share outlook to $8.73 to $8.80, representing
growth of 16% to 17%, for 2024.
“Fiserv continues to demonstrate consistency and sustainability
in our top-line growth and margin improvement, leading us to raise
the outlook on our 2024 financial commitments,” said Bisignano.
“Our unparalleled track record remains intact as we move closer to
achieving our 39th consecutive year of double-digit adjusted
earnings per share growth.”
Segment Realignment
The company realigned its reportable segments during the first
quarter of 2024 to correspond with changes in its business designed
to further enhance operational performance in the delivery of its
integrated portfolio of products and solutions to its financial
institution clients (“Segment Realignment”). The company’s new
reportable segments are Merchant Solutions and Financial Solutions.
Segment results for the three and nine months ended September 30,
2023 have been recast to reflect the Segment Realignment.
Earnings Conference Call
The company will discuss its third quarter 2024 results in a
live webcast at 7 a.m. CT on Tuesday, October 22, 2024. The
webcast, along with supplemental financial information, can be
accessed on the investor relations section of the Fiserv website at
investors.fiserv.com. A replay will be available approximately one
hour after the conclusion of the live webcast.
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.
Use of Non-GAAP Financial Measures
In this news release, the company supplements its reporting of
information determined in accordance with generally accepted
accounting principles (“GAAP”), such as revenue, operating income,
operating margin, net income attributable to Fiserv, diluted
earnings per share and net cash provided by operating activities,
with “adjusted revenue,” “adjusted revenue growth,” “organic
revenue,” “organic revenue growth,” “adjusted operating income,”
“adjusted operating margin,” “adjusted net income,” “adjusted
earnings per share,” “adjusted earnings per share growth,” and
“free cash flow.” Management believes that adjustments for certain
non-cash or other items and the exclusion of certain pass-through
revenue and expenses should enhance shareholders' ability to
evaluate the company’s performance, as such measures provide
additional insights into the factors and trends affecting its
business. Therefore, the company excludes these items from its GAAP
financial measures to calculate these unaudited non-GAAP measures.
The corresponding reconciliations of these unaudited non-GAAP
financial measures to the most comparable GAAP measures are
included in this news release, except for forward-looking measures
where a reconciliation to the corresponding GAAP measures is not
available due to the variability, complexity and limited visibility
of the non-cash and other items described below that are excluded
from the non-GAAP outlook measures. See pages 15-17 for additional
information regarding the company’s forward-looking non-GAAP
financial measures.
Examples of non-cash or other items may include, but are not
limited to, non-cash intangible asset amortization expense
associated with acquisitions; non-cash impairment charges;
severance costs; merger and integration costs; gains or losses from
the sale of businesses, certain assets or investments; and certain
discrete tax benefits and expenses. The company excludes these
items to more clearly focus on the factors management believes are
pertinent to the company’s operations, and management uses this
information to make operating decisions, including the allocation
of resources to the company’s various businesses.
The company adjusts its non-GAAP results to exclude amortization
of acquisition-related intangible assets as such amounts are
inconsistent in amount and frequency and are significantly impacted
by the timing and/or size of acquisitions. Management believes that
the adjustment of acquisition-related intangible asset amortization
supplements GAAP information with a measure that can be used to
assess the comparability of operating performance. Although the
company excludes amortization from acquisition-related intangible
assets from its non-GAAP expenses, management believes that it is
important for investors to understand that such intangible assets
were recorded as part of purchase accounting and contribute to
revenue generation.
Management believes organic revenue growth is useful because it
presents adjusted revenue growth excluding the impact of foreign
currency fluctuations, acquisitions and dispositions. Management
believes free cash flow is useful to measure the funds generated in
a given period that are available for debt service requirements and
strategic capital decisions. Management believes this supplemental
information enhances shareholders’ ability to evaluate and
understand the company’s core business performance.
These unaudited non-GAAP measures may not be comparable to
similarly titled measures reported by other companies and should be
considered in addition to, and not as a substitute for, revenue,
operating income, operating margin, net income attributable to
Fiserv, diluted earnings per share and net cash provided by
operating activities or any other amount determined in accordance
with GAAP.
Forward-Looking Statements
This news release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
including statements regarding anticipated organic revenue growth,
adjusted earnings per share, adjusted earnings per share growth and
other statements regarding our future financial performance.
Statements can generally be identified as forward-looking because
they include words such as “believes,” “anticipates,” “expects,”
“could,” “should,” “confident,” “likely,” “plan,” or words of
similar meaning. Statements that describe the company’s future
plans, outlook, objectives or goals are also forward-looking
statements.
Forward-looking statements are subject to assumptions, risks and
uncertainties that may cause actual results to differ materially
from those contemplated by such forward-looking statements. The
factors that could cause the company’s actual results to differ
materially include, among others, the following: the company’s
ability to compete effectively against new and existing competitors
and to continue to introduce competitive new products and services
on a timely, cost-effective basis; changes in customer demand for
the company’s products and services; the ability of the company’s
technology to keep pace with a rapidly evolving marketplace; the
success of the company’s merchant alliances, some of which are not
controlled by the company; the impact of a security breach or
operational failure in the company’s business, including
disruptions caused by other participants in the global financial
system; losses due to chargebacks, refunds or returns as a result
of fraud or the failure of the company’s vendors and merchants to
satisfy their obligations; changes in local, regional, national and
international economic or political conditions, including those
resulting from heightened inflation, rising interest rates, a
recession, bank failures, or intensified international hostilities,
and the impact they may have on the company and its employees,
clients, vendors, supply chain, operations and sales; the effect of
proposed and enacted legislative and regulatory actions affecting
the company or the financial services industry as a whole; the
company’s ability to comply with government regulations and
applicable card association and network rules; the protection and
validity of intellectual property rights; the outcome of pending
and future litigation and governmental proceedings; the company’s
ability to successfully identify, complete and integrate
acquisitions, and to realize the anticipated benefits associated
with the same; the impact of the company’s strategic initiatives;
the company’s ability to attract and retain key personnel;
volatility and disruptions in financial markets that may impact the
company’s ability to access preferred sources of financing and the
terms on which the company is able to obtain financing or increase
its costs of borrowing; adverse impacts from currency exchange
rates or currency controls; changes in corporate tax and interest
rates; and other factors included in “Risk Factors” in the
company’s Annual Report on Form 10-K for the year ended December
31, 2023, and in other documents that the company files with the
Securities and Exchange Commission, which are available at
http://www.sec.gov. You should consider these factors carefully in
evaluating forward-looking statements and are cautioned not to
place undue reliance on such statements. The company assumes no
obligation to update any forward-looking statements, which speak
only as of the date of this news release.
Fiserv, Inc.
Condensed Consolidated
Statements of Income
(In millions, except per share
amounts, unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
Revenue
Processing and services
$
4,237
$
4,008
$
12,377
$
11,605
Product
978
865
2,828
2,571
Total revenue
5,215
4,873
15,205
14,176
Expenses
Cost of processing and services
1,346
1,311
4,043
4,067
Cost of product
661
583
1,951
1,761
Selling, general and administrative
1,606
1,652
5,000
4,952
Net gain on sale of businesses and other
assets
—
(176
)
—
(172
)
Total expenses
3,613
3,370
10,994
10,608
Operating income
1,602
1,503
4,211
3,568
Interest expense, net
(326
)
(258
)
(872
)
(692
)
Other expense, net
(5
)
(35
)
(17
)
(81
)
Income before income taxes and loss
from investments in unconsolidated affiliates
1,271
1,210
3,322
2,795
Income tax provision
(74
)
(239
)
(448
)
(544
)
Loss from investments in unconsolidated
affiliates
(626
)
(2
)
(642
)
(11
)
Net income
571
969
2,232
2,240
Less: net income attributable to
noncontrolling interests
7
17
39
42
Net income attributable to
Fiserv
$
564
$
952
$
2,193
$
2,198
GAAP earnings per share attributable to
Fiserv — diluted
$
0.98
$
1.56
$
3.74
$
3.54
Diluted shares used in computing
earnings per share attributable to Fiserv
576.9
610.3
585.7
620.3
Earnings per share is calculated using
actual, unrounded amounts.
Fiserv, Inc.
Reconciliation of GAAP
to
Adjusted Net Income and
Adjusted Earnings Per Share
(In millions, except per share
amounts, unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
GAAP net income attributable to
Fiserv
$
564
$
952
$
2,193
$
2,198
Adjustments:
Merger and integration costs 1
—
30
59
120
Severance costs
14
15
77
52
Amortization of acquisition-related
intangible assets 2
346
388
1,085
1,245
Non wholly-owned entity activities 3
24
31
78
102
Impairment of equity method investments
4
610
—
610
—
Net gain on sale of businesses and other
assets 5
—
(176
)
—
(172
)
Canadian tax law change 6
—
—
—
27
Tax impact of adjustments 7
(233
)
(44
)
(416
)
(261
)
Adjusted net income
$
1,325
$
1,196
$
3,686
$
3,311
GAAP earnings per share attributable to
Fiserv - diluted
$
0.98
$
1.56
$
3.74
$
3.54
Adjustments - net of income taxes:
Merger and integration costs 1
—
0.04
0.08
0.15
Severance costs
0.02
0.02
0.10
0.07
Amortization of acquisition-related
intangible assets 2
0.48
0.51
1.48
1.60
Non wholly-owned entity activities 3
0.03
0.04
0.11
0.13
Impairment of equity method investments
4
0.79
—
0.78
—
Net gain on sale of businesses and other
assets 5
—
(0.21
)
—
(0.20
)
Canadian tax law change 6
—
—
—
0.03
Adjusted earnings per share
$
2.30
$
1.96
$
6.29
$
5.34
GAAP earnings per share attributable to
Fiserv growth
(37
)%
6
%
Adjusted earnings per share growth
17
%
18
%
See pages 3-4 for disclosures related to
the use of non-GAAP financial measures.
Earnings per share is calculated using
actual, unrounded amounts.
1
Represents acquisition and related
integration costs incurred in connection with acquisitions. Merger
and integration costs associated with integration activities in the
first nine months of 2024 primarily include $13 million of
third-party professional service fees and $22 million of
share-based compensation and associated taxes. Merger and
integration costs associated with integration activities in the
third quarter and first nine months of 2023 primarily include $19
million and $52 million of third-party professional service fees,
respectively, as well as $39 million of share-based compensation in
the first nine months of 2023.
2
Represents amortization of intangible
assets acquired through acquisition, including customer
relationships, software/technology and trade names. This adjustment
does not exclude the amortization of other intangible assets such
as contract costs (sales commissions and deferred conversion
costs), capitalized and purchased software, financing costs and
debt discounts. See additional information on page 14 for an
analysis of the company's amortization expense.
3
Represents the company’s share of
amortization of acquisition-related intangible assets at its
unconsolidated affiliates, as well as the minority interest share
of amortization of acquisition-related intangible assets at its
subsidiaries in which the company holds a controlling financial
interest.
4
Represents a non-cash impairment of
certain equity method investments during the third quarter of 2024,
primarily related to the company’s Wells Fargo Merchant Services
joint venture, recorded within loss from investments in
unconsolidated affiliates in the consolidated statement of
income.
5
Represents a net gain primarily associated
with the sale of the company’s financial reconciliation business
during the third quarter of 2023.
6
Represents the impact of a multi-year
retroactive Canadian tax law change, enacted in June 2023, related
to the Goods and Services Tax / Harmonized Sales Tax (GST/HST)
treatment of payment card services.
7
The tax impact of adjustments is
calculated using a tax rate of 20% in both the first nine months of
2024 and 2023, which approximates the company’s anticipated annual
effective tax rate, exclusive of actual tax impacts of a $156
million benefit associated with the impairment of certain equity
method investments during the first nine months of 2024 and a $49
million provision associated with the net gain on sale of
businesses during the first nine months of 2023.
Fiserv, Inc.
Financial Results by
Segment
(In millions, unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
Total Company
Revenue
$
5,215
$
4,873
$
15,205
$
14,176
Adjustments:
Postage reimbursements
(331
)
(307
)
(984
)
(927
)
Deferred revenue purchase accounting
adjustments
—
5
—
16
Adjusted revenue
$
4,884
$
4,571
$
14,221
$
13,265
Operating income
$
1,602
$
1,503
$
4,211
$
3,568
Adjustments:
Merger and integration costs 1
—
30
59
120
Severance costs
14
15
77
52
Amortization of acquisition-related
intangible assets
346
388
1,085
1,245
Net gain on sale of businesses and other
assets
—
(176
)
—
(172
)
Canadian tax law change
—
—
—
27
Adjusted operating income
$
1,962
$
1,760
$
5,432
$
4,840
Operating margin
30.7
%
30.8
%
27.7
%
25.2
%
Adjusted operating margin
40.2
%
38.5
%
38.2
%
36.5
%
Merchant Solutions (“Merchant”)
2
Revenue
$
2,469
$
2,259
$
7,132
$
6,461
Operating income
$
931
$
786
$
2,582
$
2,123
Operating margin
37.7
%
34.8
%
36.2
%
32.9
%
Financial Solutions
(“Financial”)
Revenue
$
2,412
$
2,302
$
7,076
$
6,770
Adjustments:
Deferred revenue purchase accounting
adjustments
—
5
—
16
Adjusted revenue
$
2,412
$
2,307
$
7,076
$
6,786
Operating income
$
1,143
$
1,079
$
3,244
$
3,050
Adjustments:
Deferred revenue purchase accounting
adjustments
—
5
—
16
Adjusted operating income
$
1,143
$
1,084
$
3,244
$
3,066
Operating margin
47.4
%
46.9
%
45.8
%
45.1
%
Adjusted operating margin
47.4
%
47.0
%
45.8
%
45.2
%
Fiserv, Inc.
Financial Results by Segment
(cont.)
(In millions, unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
Corporate and Other
Revenue
$
334
$
312
$
997
$
945
Adjustments:
Postage reimbursements
(331
)
(307
)
(984
)
(927
)
Adjusted revenue
$
3
$
5
$
13
$
18
Operating loss
$
(472
)
$
(362
)
$
(1,615
)
$
(1,605
)
Adjustments:
Merger and integration costs
—
25
59
104
Severance costs
14
15
77
52
Amortization of acquisition-related
intangible assets
346
388
1,085
1,245
Net gain on sale of businesses and other
assets
—
(176
)
—
(172
)
Canadian tax law change
—
—
—
27
Adjusted operating loss
$
(112
)
$
(110
)
$
(394
)
$
(349
)
See pages 3-4 for disclosures related to
the use of non-GAAP financial measures.
Operating margin percentages are
calculated using actual, unrounded amounts.
1
Includes deferred revenue purchase
accounting adjustments within the Financial segment related to the
2019 acquisition of First Data Corporation. Adjustments for this
residual activity concluded as of December 31, 2023.
2
For all periods presented in the Merchant
segment, there were no adjustments to GAAP measures presented and
thus the adjusted measures are equal to the GAAP measures
presented.
Fiserv, Inc.
Condensed Consolidated
Statements of Cash Flows
(In millions, unaudited)
Nine Months Ended September
30,
2024
2023
Cash flows from operating
activities
Net income
$
2,232
$
2,240
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and other amortization
1,248
1,093
Amortization of acquisition-related
intangible assets
1,089
1,261
Amortization of financing costs and debt
discounts
33
30
Share-based compensation
273
275
Deferred income taxes
(539
)
(344
)
Net gain on sale of businesses and other
assets
—
(172
)
Loss from investments in unconsolidated
affiliates
642
11
Distributions from unconsolidated
affiliates
29
42
Non-cash impairment charges
14
—
Other operating activities
79
(2
)
Changes in assets and liabilities, net of
effects from acquisitions and dispositions:
Trade accounts receivable
(136
)
119
Prepaid expenses and other assets
(503
)
(506
)
Contract costs
(189
)
(180
)
Accounts payable and other liabilities
134
(303
)
Contract liabilities
4
3
Net cash provided by operating
activities
4,410
3,567
Cash flows from investing
activities
Capital expenditures, including
capitalized software and other intangibles
(1,170
)
(1,034
)
Net proceeds from sale of businesses and
other assets
—
232
Merchant cash advances, net
(645
)
—
Distributions from unconsolidated
affiliates
59
110
Purchases of investments
(37
)
(15
)
Proceeds from sale of investments
53
—
Other investing activities
—
(3
)
Net cash used in investing
activities
(1,740
)
(710
)
Cash flows from financing
activities
Debt proceeds
6,141
5,188
Debt repayments
(4,665
)
(1,652
)
Net borrowings from (repayments of)
commercial paper and short-term borrowings
345
(2,032
)
Payments of debt financing costs
(28
)
(38
)
Proceeds from issuance of treasury
stock
79
68
Purchases of treasury stock, including
employee shares withheld for tax obligations
(4,491
)
(3,790
)
Settlement activity, net
487
(630
)
Distributions paid to noncontrolling
interests and redeemable noncontrolling interest
(48
)
(22
)
Payment to acquire noncontrolling interest
of consolidated subsidiary
—
(56
)
Payments of acquisition-related contingent
consideration
(3
)
(33
)
Other financing activities
(2
)
(39
)
Net cash used in financing
activities
(2,185
)
(3,036
)
Effect of exchange rate changes on cash
and cash equivalents
25
(8
)
Net change in cash and cash
equivalents
510
(187
)
Cash and cash equivalents, beginning
balance
2,963
3,192
Cash and cash equivalents, ending
balance
$
3,473
$
3,005
Fiserv, Inc.
Condensed Consolidated Balance
Sheets
(In millions, unaudited)
September 30,
December 31,
2024
2023
Assets
Cash and cash equivalents
$
1,228
$
1,204
Trade accounts receivable – net
3,714
3,582
Prepaid expenses and other current
assets
2,749
2,344
Settlement assets
17,434
27,681
Total current assets
25,125
34,811
Property and equipment – net
2,377
2,161
Customer relationships – net
6,218
7,075
Other intangible assets – net
4,104
4,135
Goodwill
37,133
37,205
Contract costs – net
985
968
Investments in unconsolidated
affiliates
1,585
2,262
Other long-term assets
2,265
2,273
Total assets
$
79,792
$
90,890
Liabilities and Equity
Accounts payable and other current
liabilities
$
4,161
$
4,355
Short-term and current maturities of
long-term debt
1,200
755
Contract liabilities
770
761
Settlement obligations
17,434
27,681
Total current liabilities
23,565
33,552
Long-term debt
24,085
22,363
Deferred income taxes
2,526
3,078
Long-term contract liabilities
255
250
Other long-term liabilities
958
978
Total liabilities
51,389
60,221
Redeemable noncontrolling interest
—
161
Fiserv shareholders' equity
27,751
29,857
Noncontrolling interests
652
651
Total equity
28,403
30,508
Total liabilities and equity
$
79,792
$
90,890
Fiserv, Inc.
Selected Non-GAAP Financial
Measures and Additional Information
(In millions, unaudited)
Organic Revenue Growth 1
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
Growth
2024
2023
Growth
Total Company
Adjusted revenue
$
4,884
$
4,571
$
14,221
$
13,265
Currency impact 2
371
—
1,327
—
Acquisition adjustments
(3
)
—
(9
)
—
Divestiture adjustments
(3
)
(7
)
(13
)
(41
)
Organic revenue
$
5,249
$
4,564
15%
$
15,526
$
13,224
17%
Merchant
Adjusted revenue
$
2,469
$
2,259
$
7,132
$
6,461
Currency impact 2
344
—
1,225
—
Acquisition adjustments
(3
)
—
(9
)
—
Organic revenue
$
2,810
$
2,259
24%
$
8,348
$
6,461
29%
Financial
Adjusted revenue
$
2,412
$
2,307
$
7,076
$
6,786
Currency impact 2
27
—
102
—
Divestiture adjustments
—
(2
)
—
(23
)
Organic revenue
$
2,439
$
2,305
6%
$
7,178
$
6,763
6%
Corporate and Other
Adjusted revenue
$
3
$
5
$
13
$
18
Divestiture adjustments
(3
)
(5
)
(13
)
(18
)
Organic revenue
$
—
$
—
$
—
$
—
See pages 3-4 for disclosures related to
the use of non-GAAP financial measures.
Organic revenue growth is calculated using
actual, unrounded amounts.
1
Organic revenue growth is measured as the
change in adjusted revenue (see pages 9-10) for the current period
excluding the impact of foreign currency fluctuations and revenue
attributable to acquisitions and dispositions, divided by adjusted
revenue from the prior period excluding revenue attributable to
dispositions.
2
Currency impact is measured as the
increase or decrease in adjusted revenue for the current period by
applying prior period foreign currency exchange rates to present a
constant currency comparison to prior periods.
Fiserv, Inc.
Selected Non-GAAP Financial
Measures and Additional Information (cont.)
(In millions, unaudited)
Free Cash Flow
Nine Months Ended September
30,
2024
2023
Net cash provided by operating
activities
$
4,410
$
3,567
Capital expenditures
(1,170
)
(1,034
)
Adjustments:
Distributions paid to noncontrolling
interests and redeemable noncontrolling interest
(48
)
(22
)
Distributions from unconsolidated
affiliates included in cash flows from investing activities
59
110
Severance, merger and integration
payments
116
121
Tax payments on adjustments
(23
)
(24
)
Other
—
5
Free cash flow
$
3,344
$
2,723
Total Amortization 1
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
Acquisition-related intangible assets
$
345
$
393
$
1,089
$
1,261
Capitalized software and other
intangibles
164
133
464
360
Purchased software
57
53
175
167
Financing costs and debt discounts
11
10
33
30
Sales commissions
29
28
84
83
Deferred conversion costs
33
21
82
61
Total amortization
$
639
$
638
$
1,927
$
1,962
See pages 3-4 for disclosures related to
the use of non-GAAP financial measures.
1
The company adjusts its non-GAAP results
to exclude amortization of acquisition-related intangible assets as
such amounts are inconsistent in amount and frequency and are
significantly impacted by the timing and/or size of acquisitions.
Management believes that the adjustment of acquisition-related
intangible asset amortization supplements the GAAP information with
a measure that can be used to assess the comparability of operating
performance. Although the company excludes amortization from
acquisition-related intangible assets from its non-GAAP expenses,
management believes that it is important for investors to
understand that such intangible assets were recorded as part of
purchase accounting and contribute to revenue generation.
Amortization of intangible assets that relate to past acquisitions
will recur in future periods until such intangible assets have been
fully amortized. Any future acquisitions may result in the
amortization of additional intangible assets.
Fiserv, Inc.
Full Year Forward-Looking
Non-GAAP Financial Measures
Reconciliations of unaudited non-GAAP
financial measures to the most comparable GAAP measures are
included in this news release, except for forward-looking measures
where a reconciliation to the corresponding GAAP measures is not
available due to the variability, complexity and limited visibility
of these items that are excluded from the non-GAAP outlook
measures. The company’s forward-looking non-GAAP financial measures
for 2024, including organic revenue growth, adjusted earnings per
share and adjusted earnings per share growth, are designed to
enhance shareholders’ ability to evaluate the company’s performance
by excluding certain items to focus on factors and trends affecting
its business.
Organic Revenue Growth - The company's
organic revenue growth outlook for 2024 excludes the impact of
foreign currency fluctuations, acquisitions, dispositions and the
impact of the company's postage reimbursements. The currency impact
is measured as the increase or decrease in the expected adjusted
revenue for the period by applying prior period foreign currency
exchange rates to present a constant currency comparison to prior
periods.
Growth
2024 Revenue
7.5% - 8.5%
Postage reimbursements
(0.5)%
2024 Adjusted revenue
7% - 8%
Currency impact
8.5%
Acquisition adjustments
0.0%
Divestiture adjustments
0.5%
2024 Organic revenue
16% - 17%
Adjusted Earnings Per Share - The
company's adjusted earnings per share outlook for 2024 excludes
certain non-cash or other items such as non-cash intangible asset
amortization expense associated with acquisitions; non-cash
impairment charges; non-cash pension plan termination charges;
merger and integration costs; severance costs; gains or losses from
the sale of businesses, certain assets and investments; and certain
discrete tax benefits and expenses. The company estimates that
amortization expense in 2024 with respect to acquired intangible
assets will decrease approximately 15% compared to the amount
incurred in 2023.
Other adjustments to the company’s
financial measures that were incurred in 2023 and for the three and
nine months ended September 30, 2024 are presented in this news
release; however, they are not necessarily indicative of
adjustments that may be incurred throughout the remainder of 2024
or beyond. Estimates of these impacts and adjustments on a
forward-looking basis are not available due to the variability,
complexity and limited visibility of these items.
Fiserv, Inc.
Full Year Forward-Looking
Non-GAAP Financial Measures (cont.)
The company's adjusted earnings per share
growth outlook for 2024 is based on 2023 adjusted earnings per
share performance.
2023 GAAP net income attributable to
Fiserv
$
3,068
Adjustments:
Merger and integration costs 1
158
Severance costs
74
Amortization of acquisition-related
intangible assets 2
1,623
Non wholly-owned entity activities 3
133
Net gain on sale of businesses and other
assets 4
(167
)
Canadian tax law change 5
27
Tax impact of adjustments 6
(355
)
Argentine Peso devaluation 7
71
2023 adjusted net income
$
4,632
Weighted average common shares outstanding
- diluted
615.9
2023 GAAP earnings per share attributable
to Fiserv - diluted
$
4.98
Adjustments - net of income taxes:
Merger and integration costs 1
0.21
Severance costs
0.10
Amortization of acquisition-related
intangible assets 2
2.11
Non wholly-owned entity activities 3
0.17
Net gain on sale of businesses and other
assets 4
(0.19
)
Canadian tax law change 5
0.04
Argentine Peso devaluation 7
0.12
2023 adjusted earnings per share
$
7.52
2024 adjusted earnings per share
outlook
$8.73 - $8.80
2024 adjusted earnings per share growth
outlook
16% - 17%
In millions, except per share amounts,
unaudited. Earnings per share is calculated using actual, unrounded
amounts.
See pages 3-4 for disclosures related to
the use of non-GAAP financial measures.
Fiserv, Inc.
Full Year Forward-Looking
Non-GAAP Financial Measures (cont.)
1
Represents acquisition and related
integration costs incurred in connection with acquisitions. Merger
and integration costs associated with integration activities
primarily include $35 million of share-based compensation and $70
million of third-party professional service fees.
2
Represents amortization of intangible
assets acquired through acquisition, including customer
relationships, software/technology and trade names. This adjustment
does not exclude the amortization of other intangible assets such
as contract costs (sales commissions and deferred conversion
costs), capitalized and purchased software, financing costs and
debt discounts.
3
Represents the company’s share of
amortization of acquisition-related intangible assets at its
unconsolidated affiliates, as well as the minority interest share
of amortization of acquisition-related intangible assets at its
subsidiaries in which the company holds a controlling financial
interest.
4
Represents a net gain primarily associated
with the sale of the company’s financial reconciliation
business.
5
Represents the impact of a multi-year
retroactive Canadian tax law change, enacted in June 2023, related
to the Goods and Services Tax / Harmonized Sales Tax (GST/HST)
treatment of payment card services.
6
The tax impact of adjustments is
calculated using a tax rate of 20%, which approximates the
company's annual effective tax rate, exclusive of actual tax
impacts of $48 million associated with the net gain on sale of
businesses.
7
On December 12, 2023, the Argentina
government announced economic reforms, including a significant
devaluation of the Argentine Peso. This adjustment represents the
corresponding one-day foreign currency exchange loss from the
remeasurement of the company’s Argentina subsidiary’s monetary
assets and liabilities in Argentina’s highly inflationary
economy.
FI-G
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241022343630/en/
Media Relations: Sophia Marshall Head of Communications
Fiserv, Inc. 470-351-9908 sophia.marshall@fiserv.com
Investor Relations: Julie Chariell Head of Investor
Relations Fiserv, Inc. 212-515-0278 julie.chariell@fiserv.com
Fiserv (NYSE:FI)
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Fiserv (NYSE:FI)
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