Earnings

Fiserv Posts Q2 Revenue Growth As First Data Deal Nears Closing

Pa Credit Union Sues Fiserv Over 'Baffling" Security Lapses

As Fiserv heads toward its $22 billion acquisition of First Data — a massive payments and FinTech deal now expected to close on or about July 29 — it put up second quarter financials on Thursday (July 25) that show continued growth in some important areas. The report follows First Data’s own earnings release earlier in the day.

For its Q2 earnings report, Fiserv said that total Q2 revenue hit $1.51 billion, a 6 percent year-over-year increase, and a figure that reportedly met analyst expectations.

In the second quarter of 2019, the company added that it booked a 10 percent year-over-year revenue gain in its payments operations, along with a 2 percent revenue gain in its financial segment.

The company also said that “for the first six months of 2019, GAAP revenue increased 5 percent to $3.01 billion compared to the prior year period, with 9 percent growth in the Payments segment and Financial segment revenue relatively consistent with the prior year period.”

Investors in after-hours trading also seemed pleased with Fiserv beating analyst expectations for its 56 cents of net income per share reported for Q2 2019 — and 82 cents of net income per share when accounting for one-time gains and costs. Analyst expectations for that were reportedly 80 cents per share.

“We delivered stronger than expected second quarter results across all financial measures, including double-digit sales growth,” said Jeffery Yabuki, president and CEO of Fiserv. “At the same time, we continue to advance our integration planning efforts for our pending First Data acquisition, which we expect to close on July 29.”

For the rest of the year, Fiserv said it expects “internal revenue growth in a range of 4.5 to 5 percent for the year. The company also expects adjusted earnings per share in a range of $3.39 to $3.52, which represents growth of 10 to 14 percent.”

Earlier on Thursday, First Data reported its own Q2 results and generally provided good news to Wall Street.

In a press release, First Data said for the second quarter, the firm reported adjusted EPS of $0.42 a share, exceeding the consensus. Total segment revenue in Q2 was up 2 percent and up 7 percent on an organic constant currency basis. Second-quarter revenue was $2.5 billion, higher than the $2.27 billion Wall Street was looking for and up 2 percent year over year.

Looking out at the remainder of the year, First Data backed its past forecast for EPS of $1.55 to $1.58 a share, total segment revenue up 5 percent to 6 percent and total segment EBITDA 6 percent to 8 percent higher on a constant currency basis. The company expects to end 2019 with $1.5 billion in free cash flow.

Earlier this year, Fiserv inked a deal to acquire First Data for $22 billion in an all-stock transaction. At the time the transaction was announced, the companies said users would benefit from a “highly complementary combination” that offers a range of payments and financial services, spanning account processing and digital banking, integrated payments and the Clover POS system, among other products and services.

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