Fiserv (FISV), a leading global provider of financial services technology solutions, today reported financial results for the fourth quarter and full year 2012.
GAAP revenue was $1.16 billion and adjusted revenue was $1.08 billion in the fourth quarter, both consistent with the fourth quarter of 2011. For the full year, GAAP revenue was $4.48 billion compared with $4.34 billion in 2011. Adjusted revenue was $4.20 billion compared with $4.07 billion in 2011, an increase of 3 percent.
GAAP earnings per share from continuing operations for the fourth quarter was $1.18 compared with $1.07 in 2011. GAAP earnings per share from continuing operations for the full year was $4.34 compared with $3.40, which included a loss from early debt extinguishment of $0.37 per share, in 2011.
Adjusted earnings per share from continuing operations in the fourth quarter increased 9 percent to $1.39 compared with $1.27 in the fourth quarter of 2011. Adjusted earnings per share from continuing operations for the year grew 12 percent to $5.13 compared with $4.58 in 2011.
"Our 2012 results were highlighted by our 27th consecutive year of double-digit adjusted earnings per share growth and meaningful strategic progress," said Jeffery Yabuki, President and Chief Executive Officer of Fiserv. "We capped off a strong sales year with exceptional performance in the fourth quarter."
On January 14, 2013, the company acquired Open Solutions Inc., a leading provider of collaborative, enterprise account processing technology for financial institutions. This acquisition advances the company's go-to-market strategies including the addition of multiple high-quality technology solutions and over 3,300 clients worldwide.
Fourth Quarter and Full Year 2012
Adjusted revenue grew 3 percent for the full year to $4.20 billion compared to 2011.
Adjusted internal revenue growth for the full year was 2 percent, with 2 percent growth in each of the Payments and Financial segments. Adjusted internal revenue was flat in the quarter due primarily to a decrease in license revenue compared to 2011.
Adjusted operating margin was 30.7 percent in the quarter; an increase of 70 basis points compared with the prior year period, and for the year was up 40 basis points to 29.6 percent compared to 2011.
Adjusted earnings per share in the quarter increased 9 percent to $1.39 and increased 12 percent for the full year to $5.13, compared to the respective prior year periods.
Free cash flow grew 19% in the quarter to $271 million. Free cash flow for the year was $772 million compared with $746 million in 2011, an increase of 3%.
The company repurchased 9.2 million shares of common stock for $625 million in 2012, which included 0.7 million shares in the fourth quarter. The company had approximately 5.6 million shares remaining under its existing share repurchase authorization at year-end.
The company extended its electronic bill payment and presentment relationship with Bank of America for a 10-year term. The bank will leverage the CheckFree® RXP® platform through its online and mobile channels.
The company presented its two billionth electronic bill since 2005 during the quarter.
The company received a $55 million cash dividend payment in the quarter from StoneRiver Group, L.P., a company in which Fiserv owns a 49% interest.
The company signed 134 Mobiliti™ clients in the quarter and 552 mobile banking clients for the full year. As of December 31, 2012, Fiserv has nearly 1,400 mobile banking clients.
The company signed 113 electronic bill payment clients and 40 debit processing clients in the quarter, and 404 electronic bill payment clients and 165 debit clients for the full year.
The company signed 113 Popmoney® clients in the quarter and 455 for the full year. As of December 31, 2012, the network includes more than 1,800 financial institutions.
Fiserv generated a number of new and expanded client relationships in the quarter, including:
- American Electric Power Company, Inc., one of the largest power generators and distributors in the U.S. serving more than five million customers in 11 states, extended its relationship with Fiserv for a full suite of comprehensive billing and payment options, including CheckFreePay® for walk-in bill payments, Biller Direct™ HV for bill presentment and online payments, BillMatrix® On Demand Payments for phone and web payments and eBill Distribution to enable the delivery of the company's bills to financial institution websites.
- Broadway Bank, headquartered in San Antonio, Texas with $2.8 billion in assets, extended and expanded its relationship with Fiserv. The bank will continue to leverage the Signature® account processing platform and selected an integrated technology suite of Fiserv solutions for payments, processing services, risk and compliance, business intelligence and customer and channel management.
- California Credit Union, one of the largest credit unions in Southern California with $1.1 billion in assets, agreed to leverage payment solutions from Fiserv with CheckFreeRXP and Popmoney for bill payment and person-to-person payments. The credit union is also a member of the ACCEL/Exchange® Network from Fiserv.
- Cape Bank, a $1 billion institution headquartered in Cape May Court House, N.J., selected the Premier® account processing platform. The bank will integrate a full suite of Fiserv solutions, including Mobiliti, CheckFree RXP, CheckFree Small Business, the ACCEL/Exchange Network, Debit Processing, Teller Source Capture™, Merchant Source Capture™, the Fiserv Clearing Network and AccountCreateSM.
- First American International Bank, a New York State chartered commercial bank with $526 million in assets, selected the Premier account processing platform from Fiserv. The bank will also leverage CheckFreeRXP, the ACCEL/Exchange Network and Debit Processing for payments, the Common Origination Platform™ for lending, Branch Source Capture™ and the Fiserv Clearing Network for item processing and Prologue™ for financial performance management.
- Founders Federal Credit Union, headquartered in Lancaster, S.C. with $1.6 billion in assets, expanded its account processing and payments relationship with Fiserv to enhance its digital channels capabilities with Corillian Online®, Mobiliti, AllData® PFM and Mobile Source Capture™.
- Humana Inc., a leading health care company headquartered in Louisville, Ky., selected Fiserv to produce its secure health savings account and member identification cards for the company's commercial and dental customers.
- Katahdin Trust Company, a commercial bank in Houlton, Maine with $576 million in assets, selected the Premier account processing platform, and will integrate Mobiliti, CheckFree RXP, CheckFree Small Business, Popmoney, Source Capture Solutions®, the ACCEL/Exchange Network, Business Online™, Retail Online™, WireXchange, and AccountCreate for customer and channel management, Consumer and Commercial Debit for processing services, and AML Manager and Fraud Risk Manager™ for risk and compliance.
- Mutual of Omaha Bank, headquartered in Omaha, Neb. with $5.8 billion in assets, renewed its relationship with Fiserv for the Signature account processing platform and accompanying solutions, including Corillian Online for online banking, CheckFree RXP for bill payment, Nautilus® for enterprise content management, and WireXchange for wire transfer as well as card production services. The bank also added PEP+® for ACH processing, XRoads™ for data management and Aperio™ for customer and channel management.
- SunTrust Banks, Inc., one of the nation's largest banking organizations with $173.4 billion in assets and headquartered in Atlanta, implemented Popmoney, offering its online banking customers person-to-person payment options. The bank also uses Mobiliti, CheckFree RXP, TransferNow® for inter-bank transfers and FundNow® for new account funding.
- Union Bank, N.A., a subsidiary of UnionBanCal Corporation, a financial holding company with $97 billion in assets, and a member of the Mitsubishi UFJ Financial Group, selected CheckFree RXP from Fiserv to enable electronic bill delivery and payment through its online and mobile banking channels. The bank also leverages TransferNow and Banklink® Cash Management to support its online channel, as well as treasury management, financial crime risk management and cash forecasting solutions from Fiserv.
- United Community Banks, Inc., the third largest bank holding company in Georgia with $6.7 billion in assets, expanded its relationship with Fiserv. Centered on the Premier account processing platform, the bank will implement the ACCEL/Exchange Network and Debit Processing and continue to use CheckFree RXP, Popmoney, Retail Online, Business Online, Merchant Source Capture, Director™ and several other Fiserv solutions.
Outlook for 2013
Fiserv expects total adjusted revenue growth for 2013 to be in excess of 10 percent and adjusted internal revenue growth to be in a range of 3 to 4 percent. The company also expects adjusted earnings per share to be in a range of $5.88 to $6.07, which represents growth of 15 to 18 percent over $5.13 in 2012.
"The continued strength in our recurring revenue businesses, along with the acquisition of Open Solutions, has us well positioned to accelerate revenue growth while delivering strong earnings and cash flow in 2013," said Yabuki.