Summary
Fiserv, Inc. (FISV) reported strong top-line growth in the third quarter and first nine months of 2013, with total revenue increasing by 8% year-over-year in both periods. This growth was primarily driven by the Financial segment, significantly boosted by the acquisition of Open Solutions Inc. in January 2013. The Payments segment also demonstrated solid growth, particularly in its recurring revenue businesses. Despite an 8% increase in total expenses, largely due to integration costs and a non-cash impairment charge related to the Open Solutions acquisition, operating income saw a moderate increase of 6% for the quarter and was relatively flat year-to-date. Financially, Fiserv strengthened its balance sheet with new debt financing, including a $900 million term loan and an amendment extending the maturity of its revolving credit facility. Operating cash flow improved significantly, driven by lower tax and interest payments and the absence of a large hedge settlement expense seen in the prior year. Investors should note the impact of acquisition-related expenses on profitability metrics, as management continues to integrate Open Solutions and focus on innovation and revenue growth.
Financial Highlights
50 data points| Revenue | $1.20B |
| Cost of Revenue | $164.00M |
| Gross Profit | $1.04B |
| SG&A Expenses | $237.00M |
| Operating Expenses | $921.00M |
| Operating Income | $280.00M |
| Interest Expense | $41.00M |
| Net Income | $159.00M |
| EPS (Basic) | $0.30 |
| EPS (Diluted) | $0.30 |
| Shares Outstanding (Basic) | 519.80M |
| Shares Outstanding (Diluted) | 527.40M |
Key Highlights
- 1Total revenue increased by 8% to $1.201 billion for the three months ended September 30, 2013, and by 8% to $3.551 billion for the nine months ended September 30, 2013.
- 2The acquisition of Open Solutions Inc. on January 14, 2013, significantly contributed to revenue growth, adding $69 million in Q3 and $204 million year-to-date to the Financial segment.
- 3Operating income increased by 6% to $280 million for the three months ended September 30, 2013, and remained relatively flat at $764 million for the nine months ended September 30, 2013.
- 4Total expenses rose by 9% in Q3 and 10% year-to-date, impacted by merger and integration costs, including a $30 million non-cash impairment charge.
- 5Net cash provided by operating activities from continuing operations increased by 26% to $681 million for the nine months ended September 30, 2013.
- 6Long-term debt increased, with $1.0 billion borrowed under the revolving credit facility related to the Open Solutions acquisition, and subsequently refinanced and amended with a new term loan and extended credit facility.
- 7Discontinued operations revenue and results were reported separately, with the sale of the club solutions business completed in March 2013.