10-QPeriod: Q3 FY2021

FISERV INC Quarterly Report for Q3 Ended Sep 30, 2021

Filed October 28, 2021For Securities:FISV

Summary

Fiserv Inc. reported strong financial performance for the nine months ended September 30, 2021, with total revenue increasing by 9% to $11.97 billion and net income attributable to Fiserv, Inc. rising by 52% to $1.00 billion. This growth was driven by a 10% increase in revenue for the third quarter, largely due to the recovery of transaction volumes in its merchant acquiring and payment-related businesses following the impacts of the COVID-19 pandemic. The company also saw significant operating income growth across its segments, particularly in the Acceptance segment, indicating improved operational leverage and expense management. Acquisitions remain a key strategic initiative, with several notable purchases in 2021, including Pineapple Payments and Ondot, aimed at expanding digital capabilities and market reach. Fiserv also continued its share repurchase program, demonstrating a commitment to returning value to shareholders. The company maintained a strong liquidity position, with substantial operating cash flow and an available revolving credit facility, despite some increases in debt levels associated with its growth strategy.

Financial Statements
Beta
Revenue$4.16B
SG&A Expenses$1.48B
Operating Expenses$3.53B
Operating Income$636.00M
Interest Expense$173.00M
Net Income$428.00M
EPS (Basic)$0.65
EPS (Diluted)$0.64
Shares Outstanding (Basic)661.40M
Shares Outstanding (Diluted)669.70M

Key Highlights

  • 1Total revenue for the nine months ended September 30, 2021, increased by 9% to $11.97 billion, compared to $11.02 billion in the prior year period.
  • 2Net income attributable to Fiserv, Inc. for the nine months ended September 30, 2021, surged to $1.00 billion, a 52% increase from $658 million in the prior year.
  • 3The company completed several strategic acquisitions in 2021, including Pineapple Payments, Ondot, Spend Labs, and Radius8, to enhance its product and service offerings.
  • 4Operating income for the nine months increased by 31% to $1.76 billion, with significant growth in the Acceptance segment.
  • 5Diluted earnings per share for the nine months ended September 30, 2021, were $1.49, a substantial increase from $0.96 in the prior year.
  • 6Fiserv continued its share repurchase program, spending $1.57 billion on repurchases in the first nine months of 2021.
  • 7The company ended the period with a strong liquidity position, including $933 million in cash and cash equivalents and substantial availability under its revolving credit facility.

Frequently Asked Questions

Revenue growth was primarily driven by improved payment and transaction volumes in Fiserv's merchant acquiring and payment-related businesses, which had been adversely affected by the COVID-19 pandemic in the prior year. The Acceptance segment, in particular, saw significant revenue increases due to these recovering volumes.

Fiserv continues to actively pursue acquisitions to enhance its product offerings and market reach. In 2021, key acquisitions included Pineapple Payments (payment processing solutions), Ondot (digital experience platform), Spend Labs (commercial card payment solutions), and Radius8 (merchant transaction platform). The company also entered into an agreement to acquire BentoBox CMS, Inc., expected to close in Q4 2021.

Fiserv's capital allocation strategy prioritizes funding operations, debt repayment, share repurchases, and acquisitions. The company actively engages in share repurchases, having spent $1.57 billion in the first nine months of 2021, demonstrating a commitment to returning value to shareholders. They do not currently pay dividends.

Fiserv maintains a strong liquidity position with significant cash reserves and an available revolving credit facility. While debt levels have increased, partly due to acquisitions, the company has successfully managed its debt covenants and aims to refinance commercial paper on a long-term basis. The company reported being in compliance with all financial debt covenants for the first nine months of 2021.