10-QPeriod: Q1 FY2021

FISERV INC Quarterly Report for Q1 Ended Mar 31, 2021

Filed April 28, 2021For Securities:FISV

Summary

Fiserv Inc. reported mixed financial results for the first quarter of 2021, with total revenue remaining relatively flat compared to the prior year, slightly decreasing by $14 million to $3.755 billion. This was primarily due to a decline in processing and services revenue, partially offset by growth in product revenue. Net income attributable to Fiserv, Inc. saw a significant decrease of 22% to $304 million, or $0.45 per diluted share, compared to $392 million, or $0.57 per diluted share, in the prior year. This decline was largely influenced by a significant gain on the sale of a business recorded in the first quarter of 2020, which boosted prior-year results, and increased expenses in the current period. Despite the net income decrease, the company's operating income within its key Acceptance and Fintech segments showed strong growth, indicating underlying business strength. The company also continued its strategic acquisitions, including the acquisition of Ondot Systems and Radius8, aiming to expand its digital capabilities and merchant transaction offerings.

Financial Highlights

49 data points
Beta

Revenue

$3.75B

Net Income

$304.00M

8.1% Net Margin

EPS (Diluted)

$0.45

Total Assets

$74.84B

Cash & Equivalents

$2.41B

Free Cash Flow

$718.00M

Financial Statements
Beta
Revenue$3.75B
SG&A Expenses$1.37B
Operating Expenses$3.28B
Operating Income$475.00M
Interest Expense$177.00M
Net Income$304.00M
EPS (Basic)$0.45
EPS (Diluted)$0.45
Shares Outstanding (Basic)668.60M
Shares Outstanding (Diluted)679.90M

Key Highlights

  • 1Total revenue for Q1 2021 was $3.755 billion, a slight decrease of 0.4% ($14 million) compared to $3.769 billion in Q1 2020.
  • 2Net income attributable to Fiserv, Inc. decreased by 22% to $304 million, down from $392 million in the prior year's quarter. Diluted EPS fell to $0.45 from $0.57.
  • 3Operating income in the Acceptance segment increased by 22% and the Fintech segment by 21%, demonstrating strong performance in these core areas.
  • 4The company completed two acquisitions: Ondot Systems for approximately $270 million and Radius8 for approximately $14 million, enhancing its digital capabilities and merchant transaction services.
  • 5Total expenses increased by 4% to $3.280 billion, primarily due to a significant gain on sale of business in the prior year's comparable quarter.
  • 6Operating cash flow increased by 7% to $952 million, indicating solid cash generation from operations.
  • 7Fiserv continues to manage its capital through share repurchases, spending $612 million in Q1 2021.

Frequently Asked Questions

Fiserv experienced a slight decrease in total revenue, down by 0.4% to $3.755 billion. However, net income attributable to Fiserv, Inc. saw a more significant decline of 22% to $304 million, or $0.45 per diluted share, compared to $392 million, or $0.57 per diluted share, in the prior year. This was influenced by a large gain on the sale of a business in Q1 2020 and increased operating expenses in Q1 2021.

The Acceptance segment saw a 22% increase in operating income and a 510 basis point improvement in operating margin. The Fintech segment also performed strongly with a 21% increase in operating income and a 510 basis point improvement in operating margin. The Payments segment showed a modest 2% increase in operating income with a 30 basis point improvement in operating margin. Corporate and Other experienced a significant increase in operating loss, largely due to a prior-year gain on asset sale.

Fiserv acquired Ondot Systems for approximately $270 million and Radius8 for approximately $14 million. These acquisitions are aimed at expanding the company's digital capabilities and merchant transaction services. No significant dispositions were noted in the current quarter.

Fiserv reported strong operating cash flow of $952 million, an increase of 7% year-over-year. The company has $831 million in cash and cash equivalents and $3.0 billion available under its revolving credit facility. Management believes it has adequate resources to meet its operational needs and debt obligations, though it acknowledges the ongoing uncertainty from the COVID-19 pandemic.