GAAP revenue growth of 1 percent in the quarter and 2 percent year to date;

GAAP EPS increase of 2 percent in the quarter and 33 percent year to date;

Internal revenue growth of 5 percent in both the quarter and year to date;

Adjusted EPS increase of 23 percent in the quarter and 26 percent year to date;

Full year outlook affirmed and lower end of adjusted EPS guidance raised

BROOKFIELD, Wis.--(BUSINESS WIRE)--Oct. 31, 2018-- Fiserv, Inc. (NASDAQ: FISV), a leading global provider of financial services technology solutions, today reported financial results for the third quarter of 2018.

Third Quarter 2018 GAAP Results

GAAP revenue for the company increased 1 percent to $1.41 billion in the third quarter of 2018 compared to the prior year period, with 6 percent growth in the Payments segment and 7 percent decline in the Financial segment. For the first nine months of 2018, GAAP revenue increased 2 percent to $4.27 billion compared to the prior year period, with 7 percent growth in the Payments segment and 4 percent decline in the Financial segment. The sale of 55 percent interest of the company's Lending Solutions business (the "Lending Transaction") in the first quarter of 2018 resulted in a decline in GAAP revenue in 2018 for the Financial segment.

GAAP earnings per share was $0.55 in the third quarter and $2.16 in the first nine months of 2018, increasing 2 percent and 33 percent, respectively, compared to the prior year periods. GAAP earnings per share in the first nine months of 2018 included a gain of $0.36 per share on the Lending Transaction. The company also completed a two-for-one stock split in the first quarter of 2018. Accordingly, all share data and per share amounts are presented on a split-adjusted basis.

GAAP operating margin was 25.2 percent in the third quarter and 31.0 percent in the first nine months of 2018, compared to 26.5 percent in both the third quarter and first nine months of 2017. GAAP operating margin in the first nine months of 2018 included a $227 million gain resulting from the Lending Transaction.

Net cash provided by operating activities was $981 million in the first nine months of 2018, which did not reflect $419 million of sale proceeds from the Lending Transaction. Net cash provided by operating activities was $1.02 billion in the first nine months of 2017, which included cash distributions of $44 million from StoneRiver Group, L.P. ("StoneRiver"), a joint venture in which the company owns a 49 percent interest.

"We delivered another quarter of strong financial results in line with our expectation for internal revenue growth acceleration and excellent bottom-line performance," said Jeffery Yabuki, President and Chief Executive Officer of Fiserv. "We completed the acquisition of the debit payment assets of Elan Financial Services which expands our reach and further enhances our growth profile."

Third Quarter 2018 Non-GAAP Results and Additional Information

• Adjusted revenue increased 1 percent to $1.35 billion in the third quarter and 2 percent to $4.07 billion in the first nine months of 2018 compared to the prior year periods.
• Internal revenue growth for the company was 5 percent in both the third quarter and first nine months of 2018 compared to the prior year periods, with 5 percent growth in the Payments segment and 4 percent growth in the Financial segment in each period.
• Adjusted earnings per share increased 23 percent to $0.75 in the third quarter and 26 percent to $2.26 in the first nine months of 2018 compared to the prior year periods.
• Adjusted operating margin was 31.6 percent in the third quarter of 2018 compared to 32.6 percent in the third quarter of 2017, and was 32.2 percent in the first nine months of 2018 compared to 32.4 percent in the first nine months of 2017.
• Free cash flow was $813 million in the first nine months of 2018 compared to $819 million in the prior year period.
• The company repurchased 5.6 million shares of common stock for $438 million in the third quarter, and 16.6 million shares of common stock for $1.23 billion in the first nine months of 2018.
• The company announced a new 30 million share repurchase authorization in the quarter and had 34.9 million remaining shares authorized for repurchase as of September 30, 2018.
• The company entered into an amended and restated credit facility that extended the maturity of its $2.0 billion revolving credit facility to September 2023.
• The company refinanced $2.0 billion of its debt through a September 2018 public offering of 5-year and 10-year senior notes with a weighted average interest rate of 4.0 percent and term of 7.5 years.
• Today, the company announced the completion of the acquisition of the debit card processing, ATM Managed Services and Money Pass^® surcharge-free network of Elan Financial Services, a unit of U.S. Bancorp, for approximately $690 million.

Outlook for 2018

Fiserv continues to expect internal revenue growth of at least 4.5 percent. The company now expects its adjusted earnings per share will be in a range of $3.10 to $3.15, which represents growth of 25 to 27 percent over 2017, as adjusted for the Lending Transaction.

"We remain on track to achieve our key financial metrics for the year, including internal revenue growth acceleration and our 33rd consecutive year of double-digit adjusted earnings per share growth," said Yabuki.

Earnings Conference Call

The company will discuss its third quarter 2018 results on a conference call and webcast at 4 p.m. CT on Wednesday, October 31, 2018. To register for the event, go to fiserv.com and click on the Q3 Earnings webcast link. Supplemental materials will be available in the "Investor Relations" section of the website.

About Fiserv

Fiserv, Inc. (NASDAQ: FISV) enables clients worldwide to create and deliver financial services experiences in step with the way people live and work today. For nearly 35 years, Fiserv has been a trusted leader in financial services technology, helping clients achieve best-in-class results by driving quality and innovation in payments, processing services, risk and compliance, customer and channel management, and insights and optimization. Fiserv is a member of the FORTUNE^® 500 and has been named among the FORTUNE Magazine World's Most Admired Companies^® for five consecutive years, recognized for strength of business model and innovation leadership. Visit fiserv.com and follow on social media for more information and the latest company news.

Use of Non-GAAP Financial Measures

In this earnings release, the company supplements its reporting of information determined in accordance with GAAP, such as revenue, operating income, operating margin, income from continuing operations, net income, earnings per share from continuing operations, earnings per share and net cash provided by operating activities, with "adjusted revenue," "internal revenue growth," "adjusted operating income," "adjusted operating margin," "adjusted net income," "adjusted earnings per share," "adjusted earnings per share, as adjusted for the Lending Transaction," and "free cash flow." Management believes that adjustments for certain non-cash or other items and the exclusion of certain pass-through revenue and expenses should enhance shareholders' ability to evaluate the company's performance, as such measures provide additional insights into the factors and trends affecting its business. Therefore, the company excludes these items from GAAP revenue, operating income, operating margin, income from continuing operations, net income, earnings per share from continuing operations, earnings per share and net cash provided by operating activities to calculate these non-GAAP measures. The corresponding reconciliations of these non-GAAP financial measures to the most comparable GAAP measures are included in this earnings release, except for forward-looking measures where a reconciliation to the corresponding GAAP measures is not available due to the variability, complexity and limited visibility of the non-cash and other items described below that are excluded from the non-GAAP outlook measures. See page 13 for additional information regarding the company's forward-looking non-GAAP financial measures.

Examples of non-cash or other items may include, but are not limited to, non-cash deferred revenue adjustments arising from acquisitions, non-cash intangible asset amortization expense associated with acquisitions, non-cash impairment charges, severance costs, charges associated with early debt extinguishment, merger and integration costs, certain costs associated with the achievement of the company's operational effectiveness objectives, gains or losses from dispositions and unconsolidated affiliates, and certain discrete tax benefits and expenses. The company excludes these items to more clearly focus on the factors management believes are pertinent to its operations, and management uses this information to make operating decisions, including the allocation of resources to the company's various businesses.

Internal revenue growth and free cash flow are non-GAAP financial measures and are described on page 12. Management believes internal revenue growth is useful because it presents revenue growth excluding acquisitions, dispositions and the impact of postage reimbursements in the company's Output Solutions business, and including deferred revenue purchase accounting adjustments. Management believes free cash flow is useful to measure the funds generated in a given period that are available for debt service requirements and strategic capital decisions. Management believes this supplemental information enhances shareholders' ability to evaluate and understand the company's core business performance.

These non-GAAP measures may not be comparable to similarly titled measures reported by other companies and should be considered in addition to, and not as a substitute for, revenue, operating income, operating margin, income from continuing operations, net income, earnings per share from continuing operations, earnings per share and net cash provided by operating activities or any other amount determined in accordance with GAAP.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding anticipated internal revenue growth, adjusted earnings per share and adjusted earnings per share growth. Statements can generally be identified as forward-looking because they include words such as "believes," "anticipates," "expects," "could," "should" or words of similar meaning. Statements that describe the company's future plans, objectives or goals are also forward-looking statements. Forward-looking statements are subject to assumptions, risks and uncertainties that may cause actual results to differ materially from those contemplated by such forward-looking statements. The factors that may affect the company’s results include, among others: pricing and other actions by competitors; the capacity of the company's technology to keep pace with a rapidly evolving marketplace; the impact of a security breach or operational failure on the company's business; the effect of legislative and regulatory actions in the United States and internationally; the company's ability to comply with government regulations;the company's ability to successfully identify, complete and integrate acquisitions, and to realize the anticipated benefits associated with the same, including with respect to the acquisition of the third-party debit processing solutions of Elan Financial Services; the impact of the company's strategic initiatives; the impact of market and economic conditions on the financial services industry; and other factors included in the company's filings with the SEC, including its Annual Report on Form 10-K for the year ended December 31, 2017, and in other documents that the company files with the SEC. You should consider these factors carefully in evaluating forward-looking statements and are cautioned not to place undue reliance on such statements. The company assumes no obligation to update any forward-looking statements, which speak only as of the date of this press release.

Fiserv, Inc.
Full Year Forward-Looking Non-GAAP Financial Measures

Internal Revenue Growth - The company's internal revenue growth outlook for 2018 excludes acquisitions, dispositions, and the impact of postage reimbursements in its Output Solutions business, and includes deferred revenue purchase accounting adjustments. These adjustments are subject to variability and are anticipated to lower 2018 GAAP revenue growth by approximately 2.5 percentage points as compared to the internal revenue growth rate, primarily due to the Lending Transaction.

Adjusted Earnings Per Share - The company's adjusted earnings per share outlook for 2018 excludes certain non-cash or other items which should enhance shareholders' ability to evaluate the company's performance, as such measures provide additional insights into the factors and trends affecting its business. Non-cash or other items may be significant and include, but are not limited to, non-cash deferred revenue adjustments arising from acquisitions, non-cash intangible asset amortization expense associated with acquisitions, non-cash impairment charges, severance costs, charges associated with early debt extinguishment, merger and integration costs, certain costs associated with the achievement of the company's operational effectiveness objectives, gains or losses from dispositions and unconsolidated affiliates, and certain discrete tax benefits and expenses. The company estimates that the amortization expense with respect to acquired intangible assets as of September 30, 2018 will be approximately $160 million in 2018. Other adjustments to earnings per share that have been incurred to date are presented on page 7. Estimates of these other adjustments on a forward-looking basis are not available due to the variability, complexity and limited visibility of these items.

The company's adjusted earnings per share growth outlook for 2018 reflects 2017 performance as adjusted for the Lending Transaction. The information below is presented with a reconciliation to the most comparable GAAP measure, consistent with the fourth quarter 2017 earnings materials on a split-adjusted basis.

FISV-E

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Source: Fiserv, Inc.

Media Relations:
Britt Zarling
Vice President, Corporate Communications
Fiserv, Inc.
678-375-1595
britt.zarling@fiserv.com
or
Investor Relations:
Tiffany Willis
Vice President, Investor Relations
Fiserv, Inc.
678-375-4643
tiffany.willis@fiserv.com