10-QPeriod: Q2 FY2023

FISERV INC Quarterly Report for Q2 Ended Jun 30, 2023

Filed July 27, 2023For Securities:FISV

Summary

Fiserv, Inc. (FISV) reported solid financial results for the second quarter and first six months of 2023, demonstrating revenue growth and improved operating income. Total revenue increased by 7% to $4.76 billion for the quarter and 8% to $9.30 billion for the six months, driven by growth across its Acceptance and Payments segments, with Fintech showing slight headwinds in the quarter. Profitability saw a significant boost, with operating income up 32% for the quarter and 21% for the six months, leading to a substantial improvement in operating margins across all segments. Diluted EPS also saw a healthy increase, reflecting the strong operational performance. The company continues to manage its debt effectively, issuing new notes and utilizing its revolving credit facility. Despite macroeconomic uncertainties, Fiserv's diversified business model and strategic focus on innovation and operational excellence position it to navigate the evolving payments landscape.

Financial Highlights

49 data points
Beta

Revenue

$4.76B

Net Income

$683.00M

14.4% Net Margin

EPS (Diluted)

$1.10

Total Assets

$77.60B

Cash & Equivalents

$1.08B

Free Cash Flow

$538.00M

Financial Statements
Beta
Revenue$4.76B
SG&A Expenses$1.70B
Operating Expenses$3.63B
Operating Income$1.13B
Interest Expense$237.00M
Net Income$683.00M
EPS (Basic)$1.11
EPS (Diluted)$1.10
Shares Outstanding (Basic)615.40M
Shares Outstanding (Diluted)619.20M

Key Highlights

  • 1Total revenue increased by 7% to $4.76 billion for Q2 2023 and 8% to $9.30 billion for the first six months of 2023, compared to the prior year periods.
  • 2Operating income showed strong growth, up 32% to $1.13 billion for Q2 2023 and 21% to $2.07 billion for the first six months of 2023.
  • 3Operating margins improved significantly across all segments, with total operating margin increasing 450 basis points to 23.8% in Q2 2023.
  • 4Diluted Earnings Per Share (EPS) increased to $1.10 for Q2 2023 and $1.99 for the first six months of 2023, up from $0.92 and $1.94 respectively in the prior year.
  • 5The company executed significant debt management activities, issuing new senior notes and utilizing commercial paper programs.
  • 6Acceptance and Payments segments were key drivers of revenue growth, while Fintech experienced a slight decline in Q2 revenue.
  • 7Fiserv returned capital to shareholders through significant share repurchases totaling $2.5 billion in the first six months of 2023.

Frequently Asked Questions

Fiserv's revenue growth in Q2 2023 was primarily driven by higher global processing volumes in its Acceptance segment, particularly in Latin America, and contributions from its Clover and Carat operating systems. The Payments segment also saw growth due to increased debit and credit processing volumes and new business onboarding.

Fiserv actively managed its debt by issuing new senior notes totaling $1.8 billion in March 2023 and 800 million Euros in May 2023. Proceeds were used for general corporate purposes, including repaying commercial paper and other indebtedness. The company also maintained its revolving credit facility and commercial paper programs.

The Acceptance and Payments segments are showing strong growth momentum, driven by increasing transaction volumes and expanding merchant relationships. While the Fintech segment experienced a slight revenue decrease in Q2 2023 primarily due to lower termination fee revenue, it continues to be a significant contributor to overall operating income with healthy margins. The company's diversified business model provides resilience.

Fiserv is monitoring global macroeconomic conditions, including rising interest rates and inflation. While recent bank failures did not materially impact its operating results, the company acknowledges potential future impacts. Fiserv is focused on managing its business actively, leveraging its scalable revenue growth, operational efficiency, and strong cash flow generation to navigate these uncertainties.