Fiserv(US:FI)2025-10-30 11:07Acquisitions and Investments - The company acquired Payfare, Inc. for an aggregate purchase price of $397 million, enhancing its embedded finance capabilities[142] - The company expects to acquire StoneCastle for approximately $460 million, which will strengthen its position in institutional deposits[145] - The company received an initial cash payment of $453 million from Wells Fargo upon the expiration of the WFMS joint venture[146] - The company has expanded its Clover platform through multiple acquisitions, enhancing its capabilities in the Merchant segment[144] - The company acquired several businesses for a total of $397 million in the first nine months of 2025, funded through available cash and commercial paper[192] - In September 2025, the company entered into agreements to acquire StoneCastle for approximately $460 million, expected to close in Q1 2026[193] Financial Performance - Total revenue for Q3 2025 was $5,263 million, representing a 1% increase from $5,215 million in Q3 2024[163] - Processing and services revenue was $4,273 million, up 1% from $4,237 million in the previous year, accounting for 81.2% of total revenue[163] - Product revenue increased by 1% to $990 million, making up 18.8% of total revenue[163] - Operating income decreased by 10% to $1,436 million from $1,602 million in Q3 2024, with an operating margin of 27.3%[163] - Net income attributable to Fiserv, Inc. rose by 40% to $792 million compared to $564 million in Q3 2024[163] - For the nine months ended September 30, total revenue was $15,909 million, a 5% increase from $15,205 million in the same period last year[164] - The company reported a 2% increase in processing and services revenue for the nine months ended September 30, totaling $12,622 million[164] - Total revenue increased by $704 million, or 5%, in the first nine months of 2025 compared to 2024, with a 7% growth in the Merchant segment and a 3% growth in the Financial segment[167] - Operating income increased by $316 million, or 8%, in the first nine months of 2025 compared to 2024, while total operating income decreased by $166 million, or 10%, in the third quarter of 2025[177] - Merchant segment revenue grew by $470 million, or 7%, in the first nine months of 2025, driven by a 5% contribution from Small Business and a 1% contribution from Enterprise[168] - Financial segment revenue increased by $226 million, or 3%, in the first nine months of 2025, supported by higher data and analytics sales and license revenue[169] Expenses and Margins - Total expenses increased by $388 million, or 4%, in the first nine months of 2025, with total expenses as a percentage of total revenue decreasing by 80 basis points to 71.5%[171] - Operating margin increased by 80 basis points to 28.5% in the first nine months of 2025, despite a decrease of 340 basis points to 27.3% in the third quarter[177] - Interest expense increased by 29% to $422 million in Q3 2025 from $326 million in Q3 2024[163] - Interest expense, net rose by $246 million, or 28%, in the first nine months of 2025 due to debt financing activities, including the issuance of $2.0 billion in senior notes[181] Cash Flow and Capital Management - Operating cash flow for the first nine months of 2025 was $4.1 billion, a decrease of 7% from $4.4 billion in the same period of 2024[189] - Capital expenditures were approximately 8% of total revenue for both the first nine months of 2025 and 2024, totaling $1.321 billion in 2025, an increase of 13% from $1.170 billion in 2024[190] - The company repurchased 29.1 million shares for $5.4 billion in the first nine months of 2025, compared to 27.8 million shares for $4.3 billion in the same period of 2024[191] - Cash and cash equivalents stood at $1.1 billion, with available capacity under the revolving credit facility of $3.4 billion as of September 30, 2025[188] Debt and Financial Obligations - Total long-term debt increased to $28.876 billion as of September 30, 2025, up from $23.730 billion at the end of 2024[198] - The company completed a public offering of $2.0 billion in senior notes in August 2025, using proceeds for general corporate purposes, including debt repayment and share repurchases[198] - Variable rate debt totaled $3.424 billion as of September 30, 2025, with a weighted-average interest rate of 11.800%[204] - The company maintained compliance with all financial debt covenants during the first nine months of 2025[209] Market Risks and Monitoring - The company actively monitors geopolitical and market conditions that could adversely impact operations and financial results[158] - The company actively monitors market risks, particularly from fluctuations in interest rates and foreign currency exchange rates, and utilizes derivative instruments to hedge against these risks[214] - The major currencies affecting revenues include the Argentine Peso, Brazilian Real, British Pound, Euro, and Indian Rupee, with exposure to currency devaluation risks in certain countries[215] - Foreign currency exchange losses amounted to $53 million and $117 million for the three and nine months ended September 30, 2025, respectively, due to significant volatility in the Argentine Peso[215] Client Relations and Strategic Focus - The company anticipates continued demand for integrated solutions from financial institutions, driven by the shift from traditional to digital banking[155] - The company aims to deepen client relationships by emphasizing digital solutions and value-added services[137] - The One Fiserv action plan was launched in Q3 2025 to enhance client focus and leverage emerging technologies, including AI[160]