GAAP revenue increased 10% in the quarter and 9% year to date;

GAAP EPS increased 64% in the quarter and 55% year to date;

Internal revenue growth was 10% in the quarter and 11% year to date;

Adjusted EPS increased 23% in the quarter and 29% year to date;

Company now expects 2021 internal revenue growth outlook of 11% and

improves adjusted EPS growth outlook to $5.55 to $5.60

Fiserv, Inc. (NASDAQ: FISV), a leading global provider of payments and financial services technology solutions, today reported financial results for the third quarter of 2021.

Third Quarter 2021 GAAP Results

GAAP revenue for the company increased 10% to $4.16 billion in the third quarter of 2021 compared to the prior year period, with 18% growth in the Acceptance segment, 5% growth in the Fintech segment and 6% growth in the Payments segment. GAAP revenue for the company increased 9% to $11.97 billion in the first nine months of 2021 compared to the prior year period, with 17% growth in the Acceptance segment, 4% growth in the Fintech segment and 5% growth in the Payments segment.

GAAP earnings per share was $0.64 in the third quarter and $1.49 in the first nine months of 2021, an increase of 64% and 55%, respectively, compared to the prior year periods. GAAP operating margin was 15.3% and 14.7% in the third quarter and first nine months of 2021, respectively, compared to 14.3% and 12.1% in the third quarter and first nine months of 2020, respectively. Net cash provided by operating activities was $2.69 billion in the first nine months of 2021 compared to $2.96 billion in the prior year period.

"We posted another strong quarter of double-digit adjusted revenue and adjusted EPS growth as we continue to invest in organic and inorganic growth and demonstrate unmatched execution," said Frank Bisignano, President and Chief Executive Officer of Fiserv.

Third Quarter 2021 Non-GAAP Results and Additional Information

• Adjusted revenue increased 10% to $3.96 billion in the third quarter and 11% to $11.37 billion in the first nine months of 2021 compared to the prior year periods.
• Internal revenue growth (organic, constant currency) was 10% in the third quarter of 2021, led by 18% growth in the Acceptance segment, 4% growth in the Fintech segment and 6% growth in the Payments segment.
• Internal revenue growth was 11% in the first nine months of 2021, led by 21% growth in the Acceptance segment, 4% growth in the Fintech segment and 5% growth in the Payments segment.
• Adjusted earnings per share increased 23% to $1.47 in the third quarter and 29% to $4.01 in the first nine months of 2021 compared to the prior year periods.
• Adjusted operating margin increased 130 basis points to 34.2% in the third quarter and 330 basis points to 33.2% in the first nine months of 2021 compared to the prior year periods.
• Free cash flow was $2.29 billion in the first nine months of 2021 compared to $2.59 billion in the prior year period.
• The company repurchased 3.2 million shares of common stock for $365 million in the third quarter and 13.4 million shares of common stock for $1.57 billion in the first nine months of 2021.
• In October 2021, the company entered into a definitive merger agreement to acquire BentoBox, a digital marketing and commerce platform for restaurants, to accelerate the omni-commerce capabilities of Clover^®. The company expects the transaction to close during the fourth quarter of 2021, subject to customary approvals and closing conditions.

   

Outlook for 2021

Fiserv tightens its full year outlook for internal revenue growth to 11% and improves its adjusted earnings per share outlook to a range of $5.55 to $5.60, representing growth of 26% to 27%, for 2021.

"Given our strong financial results year to date and increased visibility into the fourth quarter, we are tightening our internal revenue growth and adjusted EPS outlook," said Bisignano. "The strength of our assets, our agility and our new product launches continue to accelerate our growth."

Earnings Conference Call

The company will discuss its third quarter 2021 results in a live webcast at 7 a.m. CT on Wednesday, October 27, 2021. The webcast, along with supplemental financial information, can be accessed on the investor relations section of the Fiserv website at investors.fiserv.com. A replay will be available approximately one hour after the conclusion of the live webcast.

About Fiserv

Fiserv, Inc. (NASDAQ: FISV) aspires to move money and information in a way that moves the world. As a global leader in payments and financial technology, the company helps clients achieve best-in-class results through a commitment to innovation and excellence in areas including account processing and digital banking solutions; card issuer processing and network services; payments; e-commerce; merchant acquiring and processing; and the Clover^® cloud-based point-of-sale solution. Fiserv is a member of the S&P 500^® Index and the FORTUNE^® 500, and is among FORTUNE World's Most Admired Companies^®. Visit fiserv.com and follow on social media for more information and the latest company news.

Use of Non-GAAP Financial Measures

In this news release, the company supplements its reporting of information determined in accordance with generally accepted accounting principles ("GAAP"), such as revenue, operating income, operating margin, net income attributable to Fiserv, earnings per share and net cash provided by operating activities, with "adjusted revenue," "internal revenue," "internal revenue growth," "organic revenue" (which is calculated in the same manner as internal revenue; see page 4 of this release), "organic revenue growth," "adjusted operating income," "adjusted operating margin," "adjusted net income," "adjusted earnings per share," "adjusted earnings per share growth," and "free cash flow." Management believes that adjustments for certain non-cash or other items and the exclusion of certain pass-through revenue and expenses should enhance shareholders' ability to evaluate the company's performance, as such measures provide additional insights into the factors and trends affecting its business. Therefore, the company excludes these items from its GAAP financial measures to calculate these unaudited non-GAAP measures. The corresponding reconciliations of these unaudited non-GAAP financial measures to the most comparable GAAP measures are included in this news release, except for forward-looking measures where a reconciliation to the corresponding GAAP measures is not available due to the variability, complexity and limited visibility of the non-cash and other items described below that are excluded from the non-GAAP outlook measures. See page 15 for additional information regarding the company's forward-looking non-GAAP financial measures.

Examples of non-cash or other items may include, but are not limited to, non-cash deferred revenue adjustments arising from acquisitions; non-cash intangible asset amortization expense associated with acquisitions; non-cash impairment charges; restructuring costs; severance costs; net charges associated with debt financing activities; merger and integration costs; gains or losses from the sale of businesses or investments; and certain discrete tax benefits and expenses. The company excludes these items to more clearly focus on the factors management believes are pertinent to the company's operations, and management uses this information to make operating decisions, including the allocation of resources to the company's various businesses.

The company adjusts its non-GAAP results to exclude amortization of acquisition-related intangible assets as such amounts are inconsistent in amount and frequency and are significantly impacted by the timing and/or size of acquisitions. Management believes that the adjustment of acquisition-related intangible asset amortization supplements GAAP information with a measure that can be used to assess the comparability of operating performance. Although the company excludes amortization from acquisition-related intangible assets from its non-GAAP expenses, management believes that it is important for investors to understand that such intangible assets were recorded as part of purchase accounting and contribute to revenue generation.

Management believes internal revenue growth, also referred to as organic revenue growth, is useful because it presents adjusted revenue growth including deferred revenue purchase accounting adjustments and excluding the impact of foreign currency fluctuations, acquisitions, dispositions and the company's Output Solutions postage reimbursements. Management believes free cash flow is useful to measure the funds generated in a given period that are available for debt service requirements and strategic capital decisions. Management believes this supplemental information enhances shareholders' ability to evaluate and understand the company's core business performance.

These unaudited non-GAAP measures may not be comparable to similarly titled measures reported by other companies and should be considered in addition to, and not as a substitute for, revenue, operating income, operating margin, net income attributable to Fiserv, earnings per share and net cash provided by operating activities or any other amount determined in accordance with GAAP.

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding anticipated internal revenue growth, adjusted earnings per share, adjusted earnings per share growth and other statements regarding our future financial performance. Statements can generally be identified as forward-looking because they include words such as “believes,” “anticipates,” “expects,” “could,” “should,” or words of similar meaning. Statements that describe the company's future plans, objectives or goals are also forward-looking statements.

Forward-looking statements are subject to assumptions, risks and uncertainties that may cause actual results to differ materially from those contemplated by such forward-looking statements. The factors that could cause the company’s actual results to differ materially include, among others, the following, many of which are, and may continue to be, amplified by the COVID-19 pandemic: the duration and intensity of the COVID-19 pandemic, including how quickly the global economy recovers from the impact of the pandemic; governmental and private sector responses to the COVID-19 pandemic and the impact of such responses on the company; the impact of the COVID-19 pandemic on the company's employees, clients, vendors, supply chain, operations and sales; the possibility that the company may be unable to achieve expected synergies and operating efficiencies from the acquisition of First Data within the expected time frames or that the integration of First Data may be more difficult, time-consuming or costly than expected; the company's ability to compete effectively against new and existing competitors and to continue to introduce competitive new products and services on a timely, cost-effective basis; changes in customer demand for the company's products and services; the ability of the company's technology to keep pace with a rapidly evolving marketplace; the successful management of the company's merchant alliance program which involves several alliances not under its sole control; the impact of a security breach or operational failure on the company's business including disruptions caused by other participants in the global financial system; the failure of the company's vendors and merchants to satisfy their obligations; the successful management of credit and fraud risks in the company's business and merchant alliances; changes in local, regional, national and international economic or political conditions and the impact they may have on the company and its customers; the effect of proposed and enacted legislative and regulatory actions affecting the company or the financial services industry as a whole; the company's ability to comply with government regulations and applicable card association and network rules; the protection and validity of intellectual property rights; the outcome of pending and future litigation and governmental proceedings; the company's ability to successfully identify, complete and integrate acquisitions, and to realize the anticipated benefits associated with the same; the impact of the company's strategic initiatives; the company's ability to attract and retain key personnel; volatility and disruptions in financial markets that may impact the company's ability to access preferred sources of financing and the terms on which the company is able to obtain financing or increase its costs of borrowing; adverse impacts from currency exchange rates or currency controls; changes in corporate tax and interest rates; and other factors included in “Risk Factors” in the company's Annual Report on Form 10-K for the year ended December 31, 2020, and in other documents that the company files with the Securities and Exchange Commission, which are available at http://www.sec.gov. You should consider these factors carefully in evaluating forward-looking statements and are cautioned not to place undue reliance on such statements. The company assumes no obligation to update any forward-looking statements, which speak only as of the date of this news release.

Fiserv, Inc.

Full Year Forward-Looking Non-GAAP Financial Measures

Reconciliations of unaudited non-GAAP financial measures to the most comparable GAAP measures are included in this news release, except for forward-looking measures where a reconciliation to the corresponding GAAP measures is not available due to the variability, complexity and limited visibility of these items that are excluded from the non-GAAP outlook measures. The company’s forward-looking non-GAAP financial measures for 2021, including internal revenue growth, adjusted earnings per share and adjusted earnings per share growth, are designed to enhance shareholders’ ability to evaluate the company’s performance by excluding certain items to focus on factors and trends affecting its business.

Internal Revenue Growth - The company's internal revenue growth outlook for 2021 includes deferred revenue purchase accounting adjustments and excludes the impact of foreign currency fluctuations, acquisitions, dispositions and the impact of the company's Output Solutions postage reimbursements. These adjustments are subject to variability and are anticipated to negatively impact 2021 GAAP revenue growth by approximately 1% as compared to internal revenue growth, primarily due to the BAMS dissolution in the prior year.

Adjusted Earnings Per Share - The company's adjusted earnings per share outlook for 2021 excludes certain non-cash or other items such as non-cash intangible asset amortization expense associated with acquisitions; non-cash impairment charges; restructuring costs; merger and integration costs; severance costs; gains or losses from the sale of businesses and investments; and certain discrete tax benefits and expenses, and includes non-cash deferred revenue purchase accounting adjustments. The company estimates that amortization expense in 2021 with respect to acquired intangible assets will approximate the amount incurred in 2020. Other adjustments to the company’s financial measures that were incurred in 2020 and for the three and nine months ended September 30, 2021 are presented in this news release; however, they are not necessarily indicative of adjustments that may be incurred throughout 2021 or beyond. Estimates of these impacts and adjustments on a forward-looking basis are not available due to the variability, complexity and limited visibility of these items.

FISV-E

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