10-KPeriod: FY2015

FISERV INC Annual Report, Year Ended Dec 31, 2015

Filed February 19, 2016For Securities:FISV

Summary

Fiserv Inc. (FISV) reported solid financial performance for the fiscal year ending December 31, 2015, demonstrating consistent revenue growth and operational efficiency. Total revenue reached $5.3 billion, a 4% increase year-over-year, driven by the company's core processing and services segments. Operating income grew by 8% to $1.3 billion, reflecting improved operating margins due to scale efficiencies and expense management. The company maintained a strong cash flow from operations of $1.35 billion, underscoring its ability to fund ongoing operations, debt obligations, and strategic investments. Fiserv's business is diversified across two main segments: Payments and Financial. The Payments segment, which accounts for a significant portion of revenue, saw growth driven by card services, bill payment, and digital channel solutions. The Financial segment also exhibited growth, supported by account processing and lending businesses. The company continues to focus on innovation, client relationship value, and operational effectiveness as key enterprise priorities. Despite facing a competitive landscape and evolving market dynamics, Fiserv's recurring revenue model and essential services provide a stable foundation for future growth. The company also actively manages its capital structure, including share repurchases and debt management, indicating a commitment to enhancing shareholder value.

Financial Statements
Beta
Revenue$5.25B
Cost of Revenue$731.00M
Gross Profit$4.52B
SG&A Expenses$1.03B
Operating Expenses$3.94B
Operating Income$1.31B
Interest Expense$170.00M
Net Income$712.00M
EPS (Basic)$1.52
EPS (Diluted)$1.50
Shares Outstanding (Basic)467.80M
Shares Outstanding (Diluted)476.00M

Key Highlights

  • 1Total revenue for 2015 was $5.3 billion, a 4% increase from the prior year, indicating sustained top-line growth.
  • 2Operating income grew by 8% to $1.3 billion, with operating margins improving to 24.9%, demonstrating enhanced profitability and efficiency.
  • 3Net cash provided by operating activities was $1.35 billion, showcasing strong operational cash generation and financial health.
  • 4The company repurchased approximately $1.47 billion of its common stock in 2015, signaling confidence and a commitment to returning capital to shareholders.
  • 5Fiserv operates in two primary segments: Payments and Financial, both contributing to revenue growth, with the Payments segment showing particular strength in card services and digital solutions.
  • 6The company's strategy emphasizes active portfolio management, client relationship value, operational effectiveness, capital discipline, and innovation.
  • 7Significant long-term debt of $4.3 billion exists, though the company reports compliance with all debt covenants and has a revolving credit facility in place.

Frequently Asked Questions

Fiserv's primary revenue drivers in 2015 were its processing and services segment, which constituted 84% of total revenue, and its product segment, which made up 16%. Growth in the Payments segment was driven by card services, bill payment, and digital channels, while the Financial segment saw increases from account processing and lending businesses.

Fiserv had approximately $4.3 billion in long-term debt as of December 31, 2015. The company actively managed its capital structure by repurchasing $1.47 billion of its common stock and refinancing its debt, including redeeming senior notes and amending its revolving credit facility. It reported compliance with all financial debt covenants.

Fiserv's key enterprise priorities for 2016 include building high-quality revenue while meeting earnings goals, enhancing client relationships with a focus on digital and payment solutions, and delivering innovation and integration to provide differentiated value to clients.

Key risks highlighted by Fiserv include intense competition, the need to adapt to technological changes, the potential for market and economic downturns affecting the financial services industry, security breaches and cyber-attacks, operational failures, difficulties in integrating acquisitions, and the impact of regulations like the Dodd-Frank Act.