10-QPeriod: Q3 FY2024

FISERV INC Quarterly Report for Q3 Ended Sep 30, 2024

Filed October 23, 2024For Securities:FISV

Summary

Fiserv, Inc. (FISV) reported a 7% increase in total revenue for both the three and nine months ended September 30, 2024, reaching $5.2 billion and $15.2 billion, respectively. This growth was primarily driven by increased processing and services revenue across its Merchant and Financial segments, with notable contributions from the Small Business and Digital Payments sub-segments. Despite revenue growth, net income attributable to Fiserv, Inc. decreased by 41% to $564 million for the third quarter, largely impacted by a significant $570 million non-cash impairment charge related to an equity method investment in the Wells Fargo Merchant Services alliance, which has announced its non-renewal. Operating income showed resilience, increasing by 7% in the third quarter and a strong 18% year-to-date, reflecting effective cost management and operating leverage. The company continued its strategic capital allocation, repurchasing approximately $4.3 billion of its common stock year-to-date, underscoring a focus on shareholder returns. The company's liquidity remains robust, supported by substantial operating cash flow and an undrawn revolving credit facility.

Financial Highlights

49 data points
Beta

Revenue

$5.21B

Net Income

$564.00M

10.8% Net Margin

EPS (Diluted)

$0.98

Total Assets

$79.79B

Cash & Equivalents

$1.23B

Free Cash Flow

$1.84B

Financial Statements
Beta
Revenue$5.21B
SG&A Expenses$1.61B
Operating Expenses$3.61B
Operating Income$1.60B
Interest Expense$339.00M
Net Income$564.00M
EPS (Basic)$0.98
EPS (Diluted)$0.98
Shares Outstanding (Basic)573.70M
Shares Outstanding (Diluted)576.90M

Key Highlights

  • 1Total revenue grew 7% to $5.2 billion for Q3 2024 and 7% to $15.2 billion for the first nine months of 2024.
  • 2Net income attributable to Fiserv, Inc. decreased significantly by 41% to $564 million in Q3 2024, primarily due to a $570 million non-cash impairment on an equity method investment.
  • 3Operating income increased by 7% to $1.6 billion for Q3 2024 and by 18% to $4.2 billion for the first nine months of 2024, indicating strong operational performance.
  • 4The company repurchased approximately $4.3 billion of common stock year-to-date, demonstrating a commitment to shareholder value.
  • 5Interest expense, net, increased by 26% for both Q3 and the first nine months of 2024, driven by higher outstanding borrowings from recent debt issuances.
  • 6A significant $570 million non-cash impairment charge was recognized in Q3 2024 related to the Wells Fargo Merchant Services alliance, which will expire in April 2025.
  • 7The company's operating cash flow increased by 24% to $4.4 billion for the first nine months of 2024, indicating improved cash generation.

Frequently Asked Questions

The primary driver for the 41% decrease in net income attributable to Fiserv, Inc. to $564 million in the third quarter of 2024 was a substantial $570 million non-cash impairment charge. This impairment was recognized due to an other-than-temporary decline in the carrying value of the company's equity method investment in the Wells Fargo Merchant Services alliance, which is set to expire in April 2025.

Fiserv reported solid revenue growth, with total revenue increasing by 7% to $5.2 billion for the three months ended September 30, 2024, and by 7% to $15.2 billion for the nine months ended September 30, 2024. This growth was primarily fueled by an increase in processing and services revenue across both the Merchant and Financial segments, with notable contributions from the Small Business and Digital Payments sub-segments.

Fiserv continues to actively engage in share repurchases as part of its capital allocation strategy. Year-to-date, the company has repurchased approximately $4.3 billion of its common stock. The board of directors has an ongoing authorization for share repurchases, with approximately 24.2 million shares remaining under this program as of September 30, 2024.

Interest expense, net, increased by 26% for both the third quarter and the first nine months of 2024 compared to the prior year. This increase is attributed to higher outstanding borrowings, including the proceeds from the issuance of $2.0 billion and $1.75 billion of senior notes in March and August 2024, respectively, as well as increased variable rate borrowings related to the company's settlement advance cash program in Latin America.