Fiserv, Inc. (FI) announced strong third-quarter results, exceeding both revenue and earnings expectations. The financial technology and services provider reported a 7% year-over-year increase in revenue, reaching $5.22 billion, surpassing the analyst consensus estimate of $4.91 billion. Adjusted revenue also rose 7% year-over-year to $4.88 billion. This positive performance was driven by strong growth in both the Merchant Solutions and Financial Solutions segments.
The company’s adjusted earnings per share (EPS) came in at $2.30, exceeding analyst expectations of $2.26 and marking a 17% increase compared to the same period last year. Despite these positive results, Fiserv’s stock price dipped slightly in premarket trading on Tuesday.
The impressive performance was further fueled by a 15% growth in organic revenue, with Merchant Solutions leading the charge at 24% growth, followed by Financial Solutions at 6%. This robust growth was reflected in the company’s adjusted operating margin, which increased by 170 basis points year-over-year to 40.2%. The Merchant Solutions segment saw a significant jump of 290 basis points in its adjusted operating margin, reaching 37.7%, while the Financial Solutions segment saw a 40 basis point increase to 47.4%.
Fiserv’s CEO, Frank Bisignano, expressed satisfaction with the company’s third-quarter performance, highlighting the strength across both its Merchant and Financial Solutions segments and the numerous new wins secured during the quarter.
Looking ahead, Fiserv raised its organic revenue growth outlook for fiscal year 2024 to 16%-17%, compared to the previous guidance of 15%-17%. The company also increased its adjusted EPS outlook to $8.73-$8.80, up from the prior guidance of $8.65-$8.80, indicating a projected growth of 16%-17% year-over-year. This revised outlook surpasses the current analyst consensus estimate of $8.75.
Fiserv’s commitment to innovation and expansion was further emphasized by the announcement of a new partnership with DoorDash Inc. (DASH). This collaboration aims to integrate financial services seamlessly into the popular online delivery platform. DoorDash will leverage Fiserv’s expertise in merchant acquiring, account processing, and card issuing to streamline financial services for its Dashers. Starion Bank, a long-standing Fiserv client, will act as the Sponsor Bank for the Crimson accounts.
Fiserv’s stock has demonstrated impressive growth over the past year, gaining 80% in the last 12 months. However, on Tuesday, FI stock experienced a slight decline of 0.85%, trading at $195.50 in premarket trading.
Overall, Fiserv’s strong third-quarter results, positive revenue guidance, and strategic partnership with DoorDash position the company for continued growth and success in the financial technology landscape.