Fiserv, Inc. (FI - Free Report) reported impressive third-quarter 2023 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate.
Adjusted earnings per share (excluding 40 cents from non-recurring items) of $1.96 exceeded the consensus mark by 1% and increased 20% year over year. Adjusted revenues of $4.62 billion surpassed the consensus estimate by 0.53% and rose 8.2% year over year.
Organic revenue growth was 12% in the quarter, driven by 20% and 6% growth in the Acceptance and Payments segments, respectively.
Other Quarterly Details
Processing and services’ revenues of $4 billion increased 8.7% year over year and beat our estimate by 2.3%. Revenues in the Product segment were $865 million, up 3% year over year but missing our estimated $901.6 million.
Revenues from Merchant Acceptance were $2.11 billion, up 12.2% from the year-ago figure, beating our estimate by 4.5%. The Fintech segment reported revenues of $795 million, indicating a 3.8% rise from our estimate. The Payments segment reported revenues of $1.71 billion, reflecting growth of 5.6%. The figure compares with our estimated $1.7 billion.
The operating margin from the Merchant acceptance segment was 35.9%, up from the yea-r-ago figure of 32.4% and our estimated 35.2%. Adjusted operating margin from the Payments segment was 48.6% compared with the year-ago figure of 45.9% and surpassed our estimated 42%. Operating margin from the Fintech segment was 36.7%, up 260 basis points from the year-ago figure.
Balance Sheet and Cash Flow
Fiserv exited the third quarter of 2023 with cash and cash equivalents of $1.35 billion. Long-term debt was $21.9 billion. FISV generated $1.55 billion in net cash from operating activities, while free cash flow was $1.25 billion. Capital expenditures were $355 million. The company repurchased 9.6 million shares for $1.2 billion in the quarter.
2023 Guidance
Adjusted earnings per share are anticipated to be in the range of $7.47-$7.52, raised from prior guidance of EPS of $7.4-$7.5. The Zacks Consensus Estimate of earnings is pegged at $7.45 per share, lower than the guided range. The company anticipates the EPS growth to be in the band of 15-16%. FI expects total revenues to grow by 7.5% while organic revenues are expected to grow 11% year over year.
Fiserv currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Snapshot of Peers
The Interpublic Group of Companies, Inc.’s (IPG - Free Report) third-quarter 2023 earnings and revenues missed the Zacks Consensus Estimate. Adjusted earnings (considering 7 cents from non-recurring items) were 70 cents per share, which lagged the consensus estimate by 6.7%, but increased 11.1% on a year-over-year basis. Net revenues of $2.31 billion missed the consensus estimate by 3.3%. In the year-ago quarter, IPG’s net revenues were $2.3 billion. Total revenues of $2.68 billion increased 1.5% year over year.
Equifax Inc. (EFX - Free Report) reported lower-than-expected third-quarter 2023 results. Adjusted earnings (excluding 45 cents from non-recurring items) were $1.76 per share, missing the Zacks Consensus Estimate by 1.1%, but increasing 1.7% from the year-ago figure. Total revenues of $1.32 billion missed the consensus estimate by 0.7% and increased 6% from the year-ago figure on a reported basis and 6.5% on a local-currency basis.
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Fiserv, Inc. (FI - Free Report) reported impressive third-quarter 2023 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate.
Adjusted earnings per share (excluding 40 cents from non-recurring items) of $1.96 exceeded the consensus mark by 1% and increased 20% year over year. Adjusted revenues of $4.62 billion surpassed the consensus estimate by 0.53% and rose 8.2% year over year.
Organic revenue growth was 12% in the quarter, driven by 20% and 6% growth in the Acceptance and Payments segments, respectively.
Other Quarterly Details
Processing and services’ revenues of $4 billion increased 8.7% year over year and beat our estimate by 2.3%. Revenues in the Product segment were $865 million, up 3% year over year but missing our estimated $901.6 million.
Revenues from Merchant Acceptance were $2.11 billion, up 12.2% from the year-ago figure, beating our estimate by 4.5%. The Fintech segment reported revenues of $795 million, indicating a 3.8% rise from our estimate. The Payments segment reported revenues of $1.71 billion, reflecting growth of 5.6%. The figure compares with our estimated $1.7 billion.
The operating margin from the Merchant acceptance segment was 35.9%, up from the yea-r-ago figure of 32.4% and our estimated 35.2%. Adjusted operating margin from the Payments segment was 48.6% compared with the year-ago figure of 45.9% and surpassed our estimated 42%. Operating margin from the Fintech segment was 36.7%, up 260 basis points from the year-ago figure.
Balance Sheet and Cash Flow
Fiserv exited the third quarter of 2023 with cash and cash equivalents of $1.35 billion. Long-term debt was $21.9 billion. FISV generated $1.55 billion in net cash from operating activities, while free cash flow was $1.25 billion. Capital expenditures were $355 million. The company repurchased 9.6 million shares for $1.2 billion in the quarter.
2023 Guidance
Adjusted earnings per share are anticipated to be in the range of $7.47-$7.52, raised from prior guidance of EPS of $7.4-$7.5. The Zacks Consensus Estimate of earnings is pegged at $7.45 per share, lower than the guided range. The company anticipates the EPS growth to be in the band of 15-16%. FI expects total revenues to grow by 7.5% while organic revenues are expected to grow 11% year over year.
Fiserv currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Snapshot of Peers
The Interpublic Group of Companies, Inc.’s (IPG - Free Report) third-quarter 2023 earnings and revenues missed the Zacks Consensus Estimate. Adjusted earnings (considering 7 cents from non-recurring items) were 70 cents per share, which lagged the consensus estimate by 6.7%, but increased 11.1% on a year-over-year basis. Net revenues of $2.31 billion missed the consensus estimate by 3.3%. In the year-ago quarter, IPG’s net revenues were $2.3 billion. Total revenues of $2.68 billion increased 1.5% year over year.
Equifax Inc. (EFX - Free Report) reported lower-than-expected third-quarter 2023 results. Adjusted earnings (excluding 45 cents from non-recurring items) were $1.76 per share, missing the Zacks Consensus Estimate by 1.1%, but increasing 1.7% from the year-ago figure. Total revenues of $1.32 billion missed the consensus estimate by 0.7% and increased 6% from the year-ago figure on a reported basis and 6.5% on a local-currency basis.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners Up
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