GAAP revenue growth of 10% and organic revenue
growth of 13%;
GAAP EPS decreased 13% and adjusted EPS
increased 13%;
Company raises 2023 organic revenue growth
outlook to 8% to 9% and adjusted EPS outlook to $7.30 to $7.40
Fiserv, Inc. (NASDAQ: FISV), a leading global provider of
payments and financial services technology solutions, today
reported financial results for the first quarter of 2023.
First Quarter 2023 GAAP Results
GAAP revenue for the company increased 10% to $4.55 billion in
the first quarter of 2023 compared to the prior year period, with
12% growth in the Acceptance segment, 2% growth in the Fintech
segment and 11% growth in the Payments segment.
GAAP earnings per share was $0.89 in the first quarter of 2023,
a decrease of 13% compared to the prior year period. The first
quarter of 2022 included a $91 million pre-tax net gain related to
certain equity investment transactions. GAAP operating margin was
20.5% in both the first quarter of 2023 and 2022. Net cash provided
by operating activities was $1.13 billion in the first quarter of
2023 compared to $815 million in the prior year period.
“Our strong first quarter results reflect our leadership
position and focused execution in an uncertain economic
environment,” said Frank Bisignano, Chairman, President and Chief
Executive Officer of Fiserv. “Our Merchant business continued to
outperform, while our Payments and Fintech segments demonstrated
the depth of our financial institution client partnerships, as we
provided support and innovation through a volatile period.”
First Quarter 2023 Non-GAAP Results and Additional
Information
- Adjusted revenue increased 10% to $4.28 billion in the first
quarter of 2023 compared to the prior year period.
- Organic revenue growth was 13% in the first quarter of 2023,
led by 18% growth in the Acceptance segment, 3% growth in the
Fintech segment and 13% growth in the Payments segment.
- Adjusted earnings per share increased 13% to $1.58 in the first
quarter of 2023 compared to the prior year period.
- Adjusted operating margin increased 160 basis points to 33.6%
in the first quarter of 2023 compared to the prior year
period.
- Free cash flow was $861 million in the first quarter of 2023
compared to $603 million in the prior year period.
- The company repurchased 13.3 million shares of common stock for
$1.5 billion in the first quarter of 2023.
- The company completed a public offering of $1.8 billion of
5-year and 10-year senior notes with a weighted average coupon rate
of 5.525%.
- Fiserv was named to Fortune® America’s Most Innovative
Companies and Forbes list of America’s Best Large
Employers.
Outlook for 2023
Fiserv raises full year 2023 outlook and now expects organic
revenue growth of 8% to 9% and adjusted earnings per share of $7.30
to $7.40, representing growth of 12% to 14%.
“We raised our 2023 organic revenue and adjusted EPS guidance
based on our strong first quarter results. Our guidance for the
year is tempered only by the potential for a weaker, second-half
economy,” said Bisignano. “We are proud of the recognition we
received as a leading innovator and employer in the first quarter,
and remain focused on our clients, pursuing operational excellence,
and continuing to innovate.”
Earnings Conference Call
The company will discuss its first quarter 2023 results in a
live webcast at 7 a.m. CT on Tuesday, April 25, 2023. 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 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, operating income,
operating margin, net income attributable to Fiserv, diluted
earnings per share and net cash provided by operating activities,
with “adjusted revenue,” “adjusted revenue growth,” “organic
revenue,” “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 14 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 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, diluted 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 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, 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 continuing impact of the COVID-19
pandemic on the company’s employees, clients, vendors, supply
chain, operations and sales; 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, or intensified international hostilities, 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, 2022, 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.
Condensed Consolidated
Statements of Income
(In millions, except per share
amounts, unaudited)
Three Months Ended
March 31,
2023
2022
Revenue
Processing and services
$
3,673
$
3,364
Product
874
774
Total revenue
4,547
4,138
Expenses
Cost of processing and services
1,405
1,436
Cost of product
600
536
Selling, general and administrative
1,604
1,467
Net loss (gain) on sale of businesses and
other assets
4
(147
)
Total expenses
3,613
3,292
Operating income
934
846
Interest expense, net
(202
)
(168
)
Other expense
(20
)
(4
)
Income before income taxes and (loss)
income from investments in unconsolidated affiliates
712
674
Income tax provision
(124
)
(98
)
(Loss) income from investments in
unconsolidated affiliates
(12
)
106
Net income
576
682
Less: net income attributable to
noncontrolling interests
13
13
Net income attributable to
Fiserv
$
563
$
669
GAAP earnings per share attributable to
Fiserv — diluted
$
0.89
$
1.02
Diluted shares used in computing
earnings per share attributable to Fiserv
631.3
657.2
Earnings per share is calculated using
actual, unrounded amounts.
Fiserv, Inc.
Reconciliation of GAAP
to
Adjusted Net Income and
Adjusted Earnings Per Share
(In millions, except per share
amounts, unaudited)
Three Months Ended
March 31,
2023
2022
GAAP net income attributable to
Fiserv
$
563
$
669
Adjustments:
Merger and integration costs 1
48
22
Severance costs
24
52
Amortization of acquisition-related
intangible assets 2
427
475
Non wholly-owned entity activities 3
38
(56
)
Net loss (gain) on sale of businesses and
other assets 4
4
(147
)
Tax impact of adjustments 5
(108
)
(94
)
Adjusted net income
$
996
$
921
GAAP earnings per share attributable to
Fiserv - diluted
$
0.89
$
1.02
Adjustments - net of income taxes:
Merger and integration costs 1
0.06
0.03
Severance costs
0.03
0.06
Amortization of acquisition-related
intangible assets 2
0.54
0.57
Non wholly-owned entity activities 3
0.05
(0.07
)
Net loss (gain) on sale of businesses and
other assets 4
—
(0.21
)
Adjusted earnings per share
$
1.58
$
1.40
GAAP earnings per share attributable to
Fiserv decrease
(13
) %
Adjusted earnings per share growth
13
%
See pages 3-4 for disclosures related to the use of non-GAAP
financial measures.
Earnings per share is calculated using
actual, unrounded amounts.
1
Represents acquisition and related
integration costs incurred in connection with various acquisitions.
Merger and integration costs in the first quarter of 2023 include
$20 million of share-based compensation and $14 million of
third-party professional service fees associated with integration
activities. Merger and integration costs in the first quarter of
2022 include $10 million of share-based compensation attributable
to various acquisitions.
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. See additional information on page 13 for an
analysis of the company's amortization expense.
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 for the first quarter of 2022 also
includes a net gain totaling $91 million related to certain equity
investment transactions.
4
Represents a net loss in the first quarter
of 2023 primarily associated with final working capital adjustments
related to the sale of Fiserv Costa Rica, S.A. during the fourth
quarter of 2022 and a gain on the sale of certain merchant
contracts during the first quarter of 2022 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 20% and 21% in the first quarters of
2023 and 2022, respectively, which approximates the company's
anticipated annual effective tax rates, exclusive of the $9 million
actual tax impact on the sale of certain merchant contracts during
the first quarter of 2022.
Fiserv, Inc.
Financial Results by
Segment
(In millions, unaudited)
Three Months Ended
March 31,
2023
2022
Total Company
Revenue
$
4,547
$
4,138
Adjustments:
Output Solutions postage
reimbursements
(273
)
(239
)
Deferred revenue purchase accounting
adjustments
6
7
Adjusted revenue
$
4,280
$
3,906
Operating income
$
934
$
846
Adjustments:
Merger and integration costs 1
48
22
Severance costs
24
52
Amortization of acquisition-related
intangible assets
427
475
Net loss (gain) on sale of businesses and
other assets
4
(147
)
Adjusted operating income
$
1,437
$
1,248
Operating margin
20.5
%
20.5
%
Adjusted operating margin
33.6
%
32.0
%
Merchant Acceptance (“Acceptance”)
2
Revenue
$
1,847
$
1,653
Operating income
$
562
$
470
Operating margin
30.5
%
28.4
%
Financial Technology (“Fintech”)
2
Revenue
$
792
$
778
Operating income
$
280
$
275
Operating margin
35.4
%
35.4
%
Payments and Network
(“Payments”)
Revenue
$
1,629
$
1,462
Adjustments:
Deferred revenue purchase accounting
adjustments
6
7
Adjusted revenue
$
1,635
$
1,469
Operating income
$
711
$
618
Adjustments:
Deferred revenue purchase accounting
adjustments
6
7
Adjusted operating income
$
717
$
625
Operating margin
43.6
%
42.3
%
Adjusted operating margin
43.8
%
42.5
%
Fiserv, Inc.
Financial Results by Segment
(cont.)
(In millions, unaudited)
Three Months Ended
March 31,
2023
2022
Corporate and Other
Revenue
$
279
$
245
Adjustments:
Output Solutions postage
reimbursements
(273
)
(239
)
Adjusted revenue
$
6
$
6
Operating loss
$
(619
)
$
(517
)
Adjustments:
Merger and integration costs
42
15
Severance costs
24
52
Amortization of acquisition-related
intangible assets
427
475
Net loss (gain) on sale of businesses and
other assets
4
(147
)
Adjusted operating loss
$
(122
)
$
(122
)
See pages 3-4 for disclosures related to
the use of non-GAAP financial measures.
Operating margin percentages are
calculated using actual, unrounded amounts.
1
Includes the deferred revenue purchase
accounting adjustments in the Payments segment related to the 2019
acquisition of First Data Corporation. Adjustments for this
residual activity will conclude by December 31, 2023.
2
For all periods presented in the
Acceptance and Fintech segments, there were no adjustments to GAAP
measures presented and thus the adjusted measures are equal to the
GAAP measures presented.
Fiserv, Inc.
Condensed Consolidated
Statements of Cash Flows
(In millions, unaudited)
Three Months Ended
March 31,
2023
2022
Cash flows from operating
activities
Net income
$
576
$
682
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and other amortization
352
313
Amortization of acquisition-related
intangible assets
433
486
Amortization of financing costs and debt
discounts
10
11
Share-based compensation
93
61
Deferred income taxes
(87
)
(183
)
Net loss (gain) on sale of businesses and
other assets
4
(147
)
Loss (income) from investments in
unconsolidated affiliates
12
(106
)
Distributions from unconsolidated
affiliates
11
19
Other operating activities
(1
)
3
Changes in assets and liabilities, net of
effects from acquisitions and dispositions:
Trade accounts receivable
255
(60
)
Prepaid expenses and other assets
(224
)
(130
)
Contract costs
(66
)
(88
)
Accounts payable and other liabilities
(336
)
(78
)
Contract liabilities
98
32
Net cash provided by operating
activities
1,130
815
Cash flows from investing
activities
Capital expenditures, including
capitalized software and other intangibles
(339
)
(331
)
Net proceeds from sale of businesses and
other assets
—
175
Distributions from unconsolidated
affiliates
34
61
Purchases of investments
(5
)
(8
)
Proceeds from sale of investments
—
3
Other investing activities
(4
)
—
Net cash used in investing
activities
(314
)
(100
)
Cash flows from financing
activities
Debt proceeds
2,071
705
Debt repayments
(424
)
(1,086
)
Net (repayments of) proceeds from
commercial paper and short-term borrowings
(781
)
218
Payments of debt financing costs
(15
)
—
Proceeds from issuance of treasury
stock
29
43
Purchases of treasury stock, including
employee shares withheld for tax obligations
(1,530
)
(544
)
Settlement activity, net
(460
)
(400
)
Distributions paid to noncontrolling
interests and redeemable noncontrolling interests
(8
)
(13
)
Other financing activities
(31
)
—
Net cash used in financing
activities
(1,149
)
(1,077
)
Effect of exchange rate changes on cash
and cash equivalents
17
(10
)
Net change in cash and cash
equivalents
(316
)
(372
)
Cash and cash equivalents, beginning
balance
3,192
3,205
Cash and cash equivalents, ending
balance
$
2,876
$
2,833
Fiserv, Inc.
Condensed Consolidated Balance
Sheets
(In millions, unaudited)
March 31,
December 31,
2023
2022
Assets
Cash and cash equivalents
$
1,046
$
902
Trade accounts receivable – net
3,340
3,585
Prepaid expenses and other current
assets
1,762
1,575
Settlement assets
14,141
21,482
Total current assets
20,289
27,544
Property and equipment – net
2,002
1,958
Customer relationships – net
7,973
8,424
Other intangible assets – net
4,021
3,991
Goodwill
37,017
36,811
Contract costs – net
912
905
Investments in unconsolidated
affiliates
2,362
2,403
Other long-term assets
1,972
1,833
Total assets
$
76,548
$
83,869
Liabilities and Equity
Accounts payable and accrued expenses
$
3,569
$
3,883
Short-term and current maturities of
long-term debt
461
468
Contract liabilities
692
625
Settlement obligations
14,141
21,482
Total current liabilities
18,863
26,458
Long-term debt
21,943
20,950
Deferred income taxes
3,520
3,602
Long-term contract liabilities
273
235
Other long-term liabilities
995
936
Total liabilities
45,594
52,181
Redeemable noncontrolling interests
160
161
Fiserv shareholders' equity
30,077
30,828
Noncontrolling interests
717
699
Total equity
30,794
31,527
Total liabilities and equity
$
76,548
$
83,869
Fiserv, Inc.
Selected Non-GAAP Financial
Measures and Additional Information
(In millions, unaudited)
Organic Revenue Growth 1
Three Months Ended
March 31,
2023
2022
Growth
Total Company
Adjusted revenue
$
4,280
$
3,906
Currency impact 2
109
—
Acquisition adjustments
(17
)
—
Divestiture adjustments
(6
)
(39
)
Organic revenue
$
4,366
$
3,867
13
%
Acceptance
Adjusted revenue
$
1,847
$
1,653
Currency impact 2
86
—
Acquisition adjustments
(14
)
—
Divestiture adjustments
—
(23
)
Organic revenue
$
1,919
$
1,630
18
%
Fintech
Adjusted revenue
$
792
$
778
Currency impact 2
2
—
Acquisition adjustments
(3
)
—
Divestiture adjustments
—
(10
)
Organic revenue
$
791
$
768
3
%
Payments
Adjusted revenue
$
1,635
$
1,469
Currency impact 2
21
—
Organic revenue
$
1,656
$
1,469
13
%
Corporate and Other
Adjusted revenue
$
6
$
6
Divestiture adjustments
(6
)
(6
)
Organic revenue
$
—
$
—
See pages 3-4 for disclosures related to
the use of non-GAAP financial measures.
Organic revenue growth is calculated using
actual, unrounded amounts.
1
Organic revenue growth is measured as the
change in adjusted revenue (see pages 8-9) for the current period
excluding the impact of foreign currency fluctuations and revenue
attributable to acquisitions and dispositions, divided by adjusted
revenue from the prior period excluding revenue attributable to
dispositions.
2
Currency impact is measured as the
increase or decrease in adjusted revenue for the current period by
applying prior period foreign currency exchange rates to present a
constant currency comparison to prior periods.
Fiserv, Inc.
Selected Non-GAAP Financial
Measures and Additional Information (cont.)
(In millions, unaudited)
Free Cash Flow
Three Months Ended
March 31,
2023
2022
Net cash provided by operating
activities
$
1,130
$
815
Capital expenditures
(339
)
(331
)
Adjustments:
Distributions paid to noncontrolling
interests and redeemable noncontrolling interests
(8
)
(13
)
Distributions from unconsolidated
affiliates included in cash flows from investing activities
34
61
Severance, merger and integration
payments
55
102
Tax payments on adjustments
(11
)
(21
)
Other
—
(10
)
Free cash flow
$
861
$
603
Total Amortization 1
Three Months Ended
March 31,
2023
2022
Acquisition-related intangible assets
$
433
$
486
Capitalized software and other
intangibles
108
80
Purchased software
54
58
Financing costs and debt discounts
10
11
Sales commissions
28
25
Deferred conversion costs
20
16
Total amortization
$
653
$
676
See pages 3-4 for disclosures related to
the use of non-GAAP financial measures.
1
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 the 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. Amortization of intangible assets that relate
to past acquisitions will recur in future periods until such
intangible assets have been fully amortized. Any future
acquisitions may result in the amortization of additional
intangible assets.
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 2023, 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 for 2023 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.
Growth
2023 Revenue
6% - 7%
Output Solutions postage
reimbursements
(1.0)%
2023 Adjusted revenue
5% - 6%
Currency impact
2.5%
Acquisition adjustments
(0.5)%
Divestiture adjustments
1.0%
2023 Organic revenue
8% - 9%
Adjusted Earnings Per Share - The company's adjusted earnings
per share outlook for 2023 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 and for the three months ended March 31, 2023 are
presented in 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.
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
$7.30 - $7.40
2023 adjusted earnings per share growth
outlook
12% - 14%
In millions, except per share amounts,
unaudited. Earnings per share is calculated using actual, unrounded
amounts.
See pages 3-4 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
primarily includes share-based compensation and third-party
professional service fees attributable to various acquisitions.
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 and expenses associated with
debt refinancing activities 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
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230425005501/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
Fiserv (NASDAQ:FISV)
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