Fiserv, Inc. (NYSE: FI) Beats Expectations with 15% Rise in Adjusted EPS to $2.51 in Q4
Fiserv, Inc. (NYSE: FI), a prominent player in the payments and financial services technology sector, reported strong financial results for the fourth quarter and the full year of 2024. The company achieved a 7% increase in GAAP revenue, reaching $5.25 billion for the quarter compared to the same period in the previous year.
This growth was driven by an 11% rise in the Merchant Solutions segment and a 3% increase in the Financial Solutions segment. For the entire year, Fiserv’s GAAP revenue also grew by 7% to $20.46 billion, with the Merchant Solutions segment experiencing a 10% growth and the Financial Solutions segment growing by 4%.
Fiserv, Inc. Reports 13% y/y Growth in GAAP EPS in Fourth-Quarter
The company’s GAAP earnings per share (EPS) for the fourth quarter was $1.64, marking a 13% increase from the previous year. For the full year, GAAP EPS rose by 8% to $5.38. These results were achieved despite a $595 million non-cash impairment charge related to one of Fiserv’s equity method investments and a $147 million non-cash settlement charge for terminated pension plans in the fourth quarter. The operating margin also improved, standing at 31.8% for the fourth quarter and 28.7% for the full year, up from 29.4% and 26.3%, respectively, in the previous year.
Adjusted revenue for the fourth quarter increased by 7% to $4.90 billion, while for the full year, it reached $19.12 billion, also reflecting a 7% increase. Organic revenue growth was particularly strong, with a 13% rise in the fourth quarter, driven by a 23% growth in the Merchant Solutions segment and a 4% growth in the Financial Solutions segment. For the entire year, organic revenue grew by 16%, led by a 27% growth in the Merchant Solutions segment and a 6% growth in the Financial Solutions segment. Adjusted EPS for the fourth quarter increased by 15% to $2.51, while for the full year, it rose by 17% to $8.80.
Fiserv’s fourth-quarter performance exceeded market expectations, showcasing its robust business model. The company reported an adjusted EPS of $2.51, surpassing the anticipated EPS of $2.49. This 15% increase in adjusted EPS compared to the previous year underscores Fiserv’s ability to deliver consistent earnings growth, driven by strong operational performance across its segments.
Revenue expectations were also met, with the company reporting $5.25 billion in GAAP revenue for the quarter, slightly above the expected $4.96 billion. The Merchant Solutions segment played a significant role in this achievement, with an 11% growth rate, while the Financial Solutions segment contributed with a 3% increase. The adjusted revenue of $4.90 billion for the quarter, although slightly below GAAP revenue, reflects a solid 7% growth from the previous year, aligning closely with market expectations.
The company’s ability to exceed EPS expectations while closely meeting revenue forecasts highlights its operational efficiency and strategic focus on high-margin segments. The adjusted operating margin for the fourth quarter increased by 180 basis points to 42.9%, indicating improved profitability and effective cost management.
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Fiserv Expects Adjusted EPS in the Range of $10.10 to $10.30 for Full Year 2025
Fiserv has provided optimistic guidance, projecting organic revenue growth between 10% and 12%. The company also anticipates adjusted EPS to range from $10.10 to $10.30, representing growth of 15% to 17%. This guidance reflects Fiserv’s confidence in its ongoing initiatives within the Merchant and Financial Solutions segments, which have already shown promising early results.
Frank Bisignano, Chairman and CEO of Fiserv, expressed confidence in the company’s ability to meet or exceed its medium-term outlook, emphasizing the success of its product, client, and distribution strategies. The guidance for 2025 is built on Fiserv’s commitment to operational excellence and its strategic focus on enhancing its integrated portfolio of products and solutions. The company’s realignment of its reportable segments in 2024 is expected to further support this growth trajectory.
Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.