Fiserv Internal Revenue Up 5 Pct, Clover Volume Grows More Than 40 Pct

Fiserv reported Q4 earnings results that — in the wake of its First Data acquisition — showed progress on realizing revenue synergies, as well as strong growth in Clover. However, the firm posted adjusted earnings of $1.13, which just missed consensus of $1.14. The adjusted revenue was $3.7 billion, slightly under the $3.8 billion expected.

Drilling down into the earnings results, CEO Jeff Yabuki said that “results for the fourth quarter were right in line” with the guidance that the company provided in Q3. Internal revenue saw growth of 5 percent, and Fiserv’s merchant business surged by 9 percent in the quarter and 10 percent for the full year.

Cloud-based point-of-sale (POS) platform Clover continued its “stellar growth” in Q4, increasing its annualized gross payment volume by more than 40 percent year over year.

“Payment devices shipped was up 25 percent for the year,” Yabuki said, adding that the adoption of add-on Clover services keeps rising throughout the growing base.

The eCommerce merchant business grew transactions by more than 30 percent for the year. Integrated ISV partners expanded by more than 25 percent in the year.

Chief Operating Officer Frank Bisignano said the company is making “great progress” in serving customers by “enhancing our growth profile through revenue synergies,” and moving the needle on cost actions. The company, he added, set initial five-year targets of at least $500 million of revenue synergies, and $900 million of cost benefits. He noted that the company continues to be highly confident in achieving those targets.

Chief Financial Officer Robert Hau said that the company feels excellent about its financial performance, and has confidence in its ability to create sustained value for clients and shareholders. Hau added that the company was pleased to see “modest contributions from our revenue synergies,” which it foresees accelerating to at least $100 million this year.

Supplemental earnings materials released by the company showed that internal revenue across First Data grew by 6 percent in Q4, and payments grew by 4 percent, with “relatively consistent performance in the financial segment compared to the prior-year period.”