10-QPeriod: Q3 FY2023

FISERV INC Quarterly Report for Q3 Ended Sep 30, 2023

Filed October 25, 2023For Securities:FISV

Summary

Fiserv Inc. reported a strong third quarter of 2023, with total revenue increasing by 8% year-over-year to $4.87 billion. This growth was driven by robust performance across its segments, particularly in the Acceptance segment, which saw a 12% revenue increase due to higher global merchant acquiring payment volumes. Profitability also saw a significant improvement, with operating income surging by 76% to $1.5 billion and net income attributable to Fiserv, Inc. nearly doubling to $952 million. This enhanced profitability was supported by effective expense management, operating leverage, and a notable pre-tax gain of $177 million from the sale of its financial reconciliation business. The company also demonstrated strong operational cash flow, which increased by 19% year-over-year for the first nine months of 2023.

Financial Highlights

49 data points
Beta

Revenue

$4.87B

Net Income

$952.00M

19.5% Net Margin

EPS (Diluted)

$1.56

Total Assets

$84.15B

Cash & Equivalents

$1.35B

Free Cash Flow

$1.20B

Financial Statements
Beta
Revenue$4.87B
SG&A Expenses$1.65B
Operating Expenses$3.37B
Operating Income$1.50B
Interest Expense$268.00M
Net Income$952.00M
EPS (Basic)$1.57
EPS (Diluted)$1.56
Shares Outstanding (Basic)606.20M
Shares Outstanding (Diluted)610.30M

Key Highlights

  • 1Total revenue grew 8% to $4.87 billion in Q3 2023.
  • 2Operating income increased substantially by 76% to $1.5 billion in Q3 2023.
  • 3Net income attributable to Fiserv, Inc. rose by 98% to $952 million in Q3 2023.
  • 4Acceptance segment revenue grew 12% driven by international merchant acquiring volumes.
  • 5Company realized a $177 million pre-tax gain from the sale of its financial reconciliation business.
  • 6Operating cash flow increased 19% for the first nine months of 2023.
  • 7Diluted EPS increased to $1.56 in Q3 2023 from $0.75 in Q3 2022.

Frequently Asked Questions

Revenue growth was primarily driven by higher global processing revenue and strong performance in the Acceptance segment, which experienced a 12% increase due to higher global merchant acquiring payment volumes, particularly in international operations.

Profitability significantly improved. Operating income increased by 76% to $1.5 billion, and net income attributable to Fiserv, Inc. nearly doubled to $952 million. This was due to a combination of revenue growth, effective expense management, operating leverage, and a gain from the sale of a business segment.

Fiserv has a substantial amount of long-term debt, primarily consisting of senior notes. In Q3 2023, the company issued new senior notes totaling $1.8 billion and 800 million Euros. The company reported that it was in compliance with all financial debt covenants and expects to remain so, supported by its earnings and cash flow generation.

The sale of the financial reconciliation business on July 25, 2023, resulted in a pre-tax gain of $177 million, which positively impacted the company's operating income and net income for the third quarter and first nine months of 2023. Net proceeds from the sale were used to pay down indebtedness and repurchase shares.