First Data drives growth in revenues at Fiserv in Q3 2019

Maria Nikolova

GAAP revenue for Fiserv increased 122% to $3.13 billion in the third quarter of 2019 compared to the year-ago period, with $1.61 billion from the First Data segment.

Provider of financial services technology solutions Fiserv, Inc. (NASDAQ:FISV) has reported financial results for the third quarter of 2019, with revenues staging a significant rise on the back of recently acquired First Data Corporation.

On a GAAP basis, Fiserv’s revenue for increased 122% to $3.13 billion in the third quarter of 2019 compared to the prior year period, with $1.61 billion from the First Data segment, 10% growth in the Payments segment and 4% growth in the Financial segment.

GAAP earnings per share was $0.33 in the third quarter of 2019, decreasing 40% compared to the prior year period. GAAP earnings per share in the third quarter included transaction costs associated with the First Data acquisition and acquired intangible asset amortization from the application of purchase accounting.

Let’s note that merger and integration costs for the third quarter of 2019 amounted to $217 million. Merger and integration costs include $200 million and $280 million in the third quarter and first nine months of 2019, respectively, related to the acquisition of First Data and primarily consist of legal and other professional service fees and incremental share-based compensation associated with the fair value of stock awards assumed by Fiserv in connection with the First Data acquisition.

GAAP operating margin was 12% in the third quarter of 2019 compared to 25.2% in the third quarter of 2018. GAAP operating margin in the third quarter included the operating margin impacts from transaction costs and acquired intangible asset amortization associated with the acquisition of First Data.

In terms of outlook, Fiserv forecasts internal revenue growth of 6% for the full year and expects adjusted earnings per share in a range of $3.98 to $4.02, or growth of 16% to 17% for the period.

“We believe our financial performance along with early synergy benefits should translate to strong full year results and set a foundation for an even better 2020,” said Jeffery Yabuki, Chairman and Chief Executive Officer of Fiserv.

“We delivered strong financial and sales results in the third quarter while focusing on providing differentiated value for clients across the new Fiserv,” Mr Yabuki said. “Our primary market focus is to enhance the manner in which consumers and business engage in banking, commerce and financial services to produce meaningful value for all of our stakeholders.”

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