Company provides preliminary 2024 outlook of
11% to 13% organic revenue growth
and adjusted EPS growth of 13% to 17%;
Company expects medium term organic revenue
growth of 9% to 12%
and adjusted EPS growth of 14% to 18%;
Company affirms 2023 financial outlook
Fiserv, Inc. (NYSE: FI), a leading global provider of payments
and financial services technology solutions, will host its Investor
Conference today beginning at 8:30 a.m. ET. The event will feature
presentations from Fiserv senior management and will include an
overview of its strategic and growth plans for the next several
years. In conjunction with the event, the company is providing
preliminary 2024 financial outlook and expectations for outlook for
the medium term horizon (2025 and 2026).
"We believe our performance since our last investor conference
in 2020 demonstrated our ability to deliver consistently at a high
level, through an uncertain macroeconomic environment," said Frank
Bisignano, Chairman, President and Chief Executive Officer of
Fiserv. "We expect our leading client franchise, combined with our
broad distribution capability, extensive geographic reach and
expansive product portfolio, will enable us to continue to be a
leader in the fintech and payment space."
Outlook for 2023
The company affirms its 2023 outlook for organic revenue growth
of 11% and adjusted earnings per share growth of 15% to 16%, a
range of $7.47 to $7.52 per share.
Preliminary 2024 Outlook
Fiserv expects organic revenue growth of 11% to 13% for 2024.
The company also expects adjusted earnings per share to grow in a
range of 13% to 17% over adjusted earnings per share for 2023. The
company will provide its 2024 outlook with its fourth quarter
earnings update.
Medium Term Outlook
Fiserv expects organic revenue growth of 9% to 12% annually for
the years 2025 and 2026. The company also expects annual adjusted
earnings per share growth of 14% to 18% over this timeframe.
2023 Investor Conference Webcast
You can attend the 2023 Investor Conference via webcast
beginning at 8:30 a.m. ET on Wednesday, November 15, 2023. There
will be a one-hour break for lunch from approximately 12:00 to 1:00
p.m. ET, after which the webcast will resume with a financial
outlook and a Q&A session. The event will conclude around 2:00
p.m. ET. The webcast 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. (NYSE: FI), a Fortune 500™ company, 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 and business management
platform. Fiserv is a member of the S&P 500® Index and one of
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, net income
attributable to Fiserv and diluted earnings per share, with
“adjusted revenue,” “adjusted revenue growth,” “organic revenue,”
“organic revenue growth,” “adjusted net income,” “adjusted earnings
per share” and “adjusted earnings per share growth.” 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 pages 5-7 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 intangible asset amortization expense
associated with acquisitions; non-cash impairment charges;
severance costs; net charges associated with debt financing
activities; merger and integration costs; gains or losses from the
sale of businesses, certain assets or investments; certain discrete
tax benefits and expenses; and non-cash deferred revenue
adjustments relating to the 2019 acquisition of First Data
Corporation. 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 organic revenue growth is useful because it
presents adjusted revenue growth excluding the impact of foreign
currency fluctuations, acquisitions, dispositions and the company’s
Output Solutions postage reimbursements and including deferred
revenue purchase accounting adjustments. 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,
net income attributable to Fiserv and diluted earnings per share 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 organic 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, outlook, 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: 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
success of the company’s merchant alliances, some of which are not
controlled by the company; 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; losses due to chargebacks, refunds or returns as a result
of fraud or the failure of the company’s vendors and merchants to
satisfy their obligations; changes in local, regional, national and
international economic or political conditions, including those
resulting from heightened inflation, rising interest rates, a
recession, bank failures, or intensified international hostilities,
and the impact they may have on the company and its employees,
clients, vendors, supply chain, operations and sales; 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, 2022, and in other documents that the company files with the
Securities and Exchange Commission, which are available at
http://www.sec.gov. The preliminary 2024 outlook and medium term
outlook for 2025 and 2026 reflect the anticipated financial results
of the company in each year based on its current and expected
assets, businesses and operations. The estimates assume no material
acquisitions or dispositions and that there are no other factors,
including those described above in this release, materially
impacting the operations of the company.
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, including organic
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.
Organic Revenue Growth - The company's organic revenue growth
outlook excludes the impact of foreign currency fluctuations,
acquisitions, dispositions and the impact of the company's Output
Solutions postage reimbursements. The currency impact is measured
as the increase or decrease in the expected adjusted revenue for
the period by applying prior period foreign currency exchange rates
to present a constant currency comparison to prior periods.
2023 Growth
Preliminary 2024
Growth
Revenue
7.5%
6.5% - 8.5%
Output Solutions postage
reimbursements
(0.5)%
(0.5)%
Adjusted revenue
7%
6% - 8%
Currency impact
3.5%
4.5%
Acquisition adjustments
(0.5)%
0.0%
Divestiture adjustments
1%
0.5%
Organic revenue
11%
11% - 13%
Adjusted Earnings Per Share - The company's adjusted earnings
per share outlook excludes certain non-cash or other items such as
non-cash intangible asset amortization expense associated with
acquisitions; non-cash impairment charges; merger and integration
costs; severance costs; gains or losses from the sale of
businesses, certain assets and investments; and certain discrete
tax benefits and expenses. The company estimates that amortization
expense in 2023 with respect to acquired intangible assets will
decrease approximately 10% compared to the amount incurred in
2022.
Other adjustments to the company’s financial measures that were
incurred in 2022 are presented on page 6 of this news release;
however, they are not necessarily indicative of adjustments that
may be incurred in the remainder of 2023 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.
Fiserv, Inc. Full Year
Forward-Looking Non-GAAP Financial Measures (cont.)
The company's adjusted earnings per share growth outlook for
2023 is based on 2022 adjusted earnings per share performance. The
company's preliminary adjusted earnings per share growth outlook
for 2024 is based on the midpoint of its 2023 adjusted earnings per
share outlook.
2022 GAAP net income attributable to
Fiserv
$
2,530
Adjustments:
Merger and integration costs 1
173
Severance costs
209
Amortization of acquisition-related
intangible assets 2
1,814
Non wholly-owned entity activities 3
9
Net gain on sale of businesses and other
assets 4
(54
)
Tax impact of adjustments 5
(476
)
2022 adjusted net income
$
4,205
Weighted average common shares outstanding
- diluted
647.9
2022 GAAP earnings per share attributable
to Fiserv - diluted
$
3.91
Adjustments - net of income taxes:
Merger and integration costs 1
0.21
Severance costs
0.25
Amortization of acquisition-related
intangible assets 2
2.21
Non wholly-owned entity activities 3
(0.02
)
Net gain on sale of businesses and other
assets 4
(0.06
)
2022 adjusted earnings per share
$
6.49
2023 adjusted earnings per share
outlook
$7.47 - $7.52
2023 adjusted earnings per share growth
outlook
15% - 16%
2024 adjusted earnings per share growth
outlook
13% - 17%
In millions, except per share amounts,
unaudited. Earnings per share is calculated using actual, unrounded
amounts.
See pages 2-3 for disclosures related to
the use of non-GAAP financial measures.
Fiserv, Inc.
Full Year Forward-Looking
Non-GAAP Financial Measures (cont.)
1
Represents acquisition and related
integration costs incurred in connection with various acquisitions.
Merger and integration costs associated with integration activities
primarily include share-based compensation and third-party
professional service fees.
2
Represents amortization of intangible
assets acquired through various acquisitions, including customer
relationships, software/technology and trade names. This adjustment
does not exclude the amortization of other intangible assets such
as contract costs (sales commissions and deferred conversion
costs), capitalized and purchased software, financing costs and
debt discounts.
3
Represents the company’s share of
amortization of acquisition-related intangible assets at its
unconsolidated affiliates, as well as the minority interest share
of amortization of acquisition-related intangible assets at its
subsidiaries in which the company holds a controlling financial
interest. This adjustment also includes gains totaling $201 million
related to certain equity investment transactions and other net
expense of $43 million associated with joint venture debt
guarantees.
4
Represents an aggregate net gain on the
sale of Fiserv Costa Rica, S.A., the company’s Systems Integration
Services operations, the company’s Korea operations and certain
merchant contracts in conjunction with the mutual termination of
one of the company’s merchant alliance joint ventures.
5
The tax impact of adjustments is
calculated using a tax rate of 21%, which approximates the
company's annual effective tax rate, exclusive of the $16 million
actual tax impacts associated with the net gain on sale of
businesses, other assets and certain equity investment
transactions.
FISV-E
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version on businesswire.com: https://www.businesswire.com/news/home/20231115047241/en/
Media Relations: Britt Zarling Corporate Communications
Fiserv, Inc. 414-526-3107 britt.zarling@fiserv.com Investor
Relations: Julie Chariell Investor Relations Fiserv, Inc.
212-515-0278 julie.chariell@fiserv.com
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