Fiserv Inc., a global leader in payment and financial services technology solutions, has unveiled its highly anticipated financial results for the first quarter of 2024. The company’s adjusted earnings per share (EPS) have surged impressively by 19% year over year (YOY), reaching a substantial $1.88. This significant growth underscores Fiserv’s robust performance and sets a promising tone for its future financial outlook. Here is a complete analysis of Finserv’s Q1 2024 financial results.
The quarter witnessed a robust organic revenue growth of 20%, which was in line with expectations. This stellar performance has prompted Fiserv to revise its adjusted EPS outlook for the year to $8.60 to $8.75, and it anticipates an adjusted operating margin expansion of at least 125 basis points in 2024. As Fiserv approaches its 40th anniversary and its 5th year since merging with First Data, the company is steadfast in its confidence about its growth trajectory and its ability to achieve its 2026 targets.
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Finserv’s Q1 2024 Financial Results: Key Takeaways
- Substantial Revenue Growth and Margin Expansion: Fiserv’s Q1 2024 financial report showcases robust performance, with a 20% organic revenue growth and a significant expansion in operating margins, exemplified by a 180 basis points improvement to 35.8%. This growth is attributed to efficient operations, innovative product offerings, and cross-selling strategies across diverse customer segments.
- Segment-wise Performance: The report focuses on the performance of Fiserv’s different segments. The Merchant Solutions segment has shown a remarkable 36% increase in revenue and a 440 basis point rise in operating margin. In comparison, the Financial Solutions segment has experienced a 5% revenue growth and a 160 basis point improvement in operating margin. This highlights the company’s ability to effectively cater to various market needs.
- Adjusted EPS Increase and Financial Operations: Fiserv’s Q1 2024 adjusted earnings per share increased by 19% to $1.88, clearly indicating the company’s robust financial health and operational efficiency. Despite a decline in free cash flow compared to the previous year, Fiserv’s proactive financial management and investment strategies, such as share repurchases and debt issuances, demonstrate the company’s commitment to maintaining its financial stability and ensuring a secure investment environment for stakeholders.
- Looking Ahead: Fiserv has raised its adjusted EPS outlook for the year to a range of $8.60 to $8.75, projecting an organic revenue growth rate of 15% to 17% for 2024. This upward revision and positive outlook indicate the company’s strong belief in its growth trajectory. Fiserv’s steadfast commitment to sustainable expansion, operational excellence, and client focus further solidifies its position as a leading player in the payment and financial services technology solutions industry.
Fiserv’s First Quarter 2024 Performance Highlights Robust Revenue Growth and Margin Expansion
Fiserv Inc., a global provider of payment and financial services technology solutions, released its financial results for the first quarter of 2024 on Tuesday. The company reported a 7% increase in GAAP revenue and a 20% increase in organic revenue compared to the same quarter last year.
GAAP EPS reached $1.24 in Q1 of 2024, a 39% increase YOY. The GAAP operating margin was 24.2% in this quarter, compared to 20.5% in the same period in 2023. The Merchant Solutions segment achieved a GAAP operating margin of 34.1%, while the Financial Solutions segment achieved 44.1%, compared to 29.7% and 42.4% in the same period last year, respectively. Net cash provided by operating activities was $831 million in the first quarter of 2024, compared to $1.13 billion in the previous year’s Q1.
According to Frank Bisignano, the chairman, president, and CEO of Fiserv, the company has maintained robust revenue growth and margin expansion and is expected to continue to do so through 2024. In the first quarter, the company’s adjusted earnings per share increased by 19%. Bisignano emphasized that the company has achieved this by improving efficiency, providing innovative products and services, and cross-selling to its diverse and elite customer base, all while executing a solid business model.
As mentioned, in Q1 2024, Fiserv reported a 7% increase in adjusted revenue – reaching $4.54 billion compared to last year. Organic revenue growth for the quarter stood at 20%, driven by a significant 36% increase in the Merchant Solutions segment and a 5% increase in the Financial Solutions segment.
Adjusted EPS rose by 19% to $1.88 compared to the previous year’s quarter. The adjusted operating margin improved by 180 basis points to 35.8%, with Merchant Solutions seeing an increase of 440 basis points to 34.1% and Financial Solutions rising by 160 basis points to 44.1%. Free cash flow for the quarter was $454 million, a decline from $861 million in the previous year. The company repurchased 10.2 million shares of common stock for $1.5 billion and issued $2.0 billion in 3-year, 7-year, and 10-year senior notes with a weighted average interest rate of 5.313%.
Fiserv’s Strong Performance and Growth Outlook Highlight Commitment to Sustainable Expansion
Fiserv projects organic revenue growth of 15% to 17% for 2024 and raises its adjusted EPS outlook to $8.60 to $8.75, representing a 14% to 16% increase.
Bisignano reiterated Fiserv’s commitment to a virtuous cycle of investment, revenue growth, operating leverage, capital return, and reinvestment for further expansion. This cycle is fortified by a steadfast focus on clients, operational excellence, and maintaining a strong balance sheet. The company’s strong first-quarter results and proven model have led it to raise their adjusted EPS outlook for the full year, underscoring Fiserv’s commitment to sustainable expansion.
About Fiserv
Established in 1984, Fiserv is a global leader in payments and financial technology, providing services to thousands of financial institutions and millions of businesses across more than 100 countries. Their clientele spans banks, credit unions, thrifts, leasing and finance companies, securities broker-dealers, and retailers.
Fiserv’s innovative and excellence-driven approach includes digital banking solutions, account processing, network services, card issuer processing, payments, merchant acquiring, e-commerce, and the Clover cloud-based POS solution. Fiserv is listed on both the FORTUNE 500 and S&P 500 Index and has been recognized by FORTUNE as one of the World’s Most Admired Companies.
Conclusion
Fiserv’s first-quarter performance for 2024 underscores its robust growth trajectory and commitment to sustainable expansion. The company’s financial prowess is evident, with a 7% increase in GAAP revenue and a notable 20% surge in organic revenue, alongside a substantial rise in GAAP EPS and operating margins. CEO Frank Bisignano’s emphasis on efficiency, innovation, and customer-centric strategies has propelled Fiserv’s success.
Looking ahead, Fiserv anticipates continued growth, with projected organic revenue growth of 15% to 17% for the year and an adjusted EPS outlook of $8.60 to $8.75. By prioritizing investment, operational excellence, and maintaining a strong balance sheet, Fiserv remains poised for sustained expansion. As it approaches its 40th anniversary, Fiserv’s position as a global leader in payments and financial technology is firmly established, reflecting its status as one of the world’s most admired companies.
