Fiserv Inc., a leading global provider of financial services technology solutions, has reported financial results for the first quarter of 2017.
First Quarter 2017 GAAP Results
GAAP revenue for the company increased 5 percent in the first quarter to $1.39 billion, driven by 6 percent growth in the Payments segment and 4 percent growth in the Financial segment, compared to the first quarter of 2016.
GAAP earnings per share was $1.13 in the first quarter compared with $1.27 in the prior year period. GAAP earnings per share included net investment gains of $0.08 per share and $0.39 per share in the first quarter of 2017 and 2016, respectively, driven by the sales of a subsidiary business and a business interest at StoneRiver Group, L.P. (“StoneRiver”), a joint venture in which the company owns a 49% interest. GAAP earnings per share in the first quarter of 2017 included a benefit related to the adoption of the new accounting standard for excess tax benefits from share-based compensation awards.
GAAP operating margin was 26.2 percent in the first quarter, increasing 70 basis points compared to the first quarter of 2016.
Net cash provided by operating activities was $463 million in the first quarter of 2017 compared with $509 million in the prior year period, a decrease of 9 percent. Net cash provided by operating activities included cash distributions from StoneRiver of $31 million and $140 million in the first quarter of 2017 and 2016, respectively.
“We are off to a good start to the year producing strong financial results across the company,” said Jeffery Yabuki, President and Chief Executive Officer of Fiserv. “Our business model continues to deliver revenue acceleration, strong sales growth and excellent free cash flow.”
First Quarter 2017 Non-GAAP Results and Additional Information
- Adjusted revenue increased 5 percent in the quarter to $1.32 billion compared to the prior year period.
- Internal revenue growth for the company in the quarter was 4 percent, with 5 percent growth in the Payments segment and 4 percent growth in the Financial segment.
- Adjusted earnings per share increased 18 percent in the quarter to $1.25 compared to the prior year period.
- Adjusted operating margin expanded 60 basis points to 32.5 percent in the quarter compared to the prior year period.
- Free cash flow increased 23 percent in the quarter to $366 million compared to the prior year period. A cash distribution from StoneRiver of $31 million in the quarter related to the sale of a subsidiary business has been excluded from the company’s free cash flow results.
- Sales performance increased 30 percent in the quarter compared to the prior year period.
- The company repurchased 3.4 million shares of common stock for $389 million in the first quarter and had 17.0 million remaining shares authorized for repurchase as of March 31, 2017.
Outlook for 2017
Fiserv continues to expect 2017 internal revenue growth in a range of 4 to 5 percent and adjusted earnings per share in a range of $5.03 to $5.17, which represents growth of 14 to 17 percent over $4.43 in 2016.
“Continuing market momentum combined with our strong start to the year provides increased confidence that we will achieve our 2017 financial objectives,” said Yabuki.