Fiserv raises guidance after steady revenue growth in Q1 23

Fiserv raises guidance after steady revenue growth in Q1 23

US-based Fiserv has raised its FY 2023 guidance, after marking a 10% increase in adjusted revenue to $4.28bn in Q1 23. The payment processor’s operating margin has risen by 160 basis points to 33.6%.

Fiserv continues YoY growth in Q1 23
Fiserv quarterly revenues by segment and operating margin, 2020-2023

The main revenue driver for the quarter was merchant acceptance, which saw 12% growth (though this was slower than 18% in Q1 22). Revenues for Clover, the company’s POS platform, were up 22%, while commerce operating system Carat saw 16% growth. Fiserv is continuing to build towards its investor day target of $10bn in merchant acceptance revenue (this was $7.49bn in 2022). 

On the other hand, Fiserv’s payment and network segment saw faster growth this year at 11%, with double-digit growth across all revenue lines. As part of this, P2P money transfer network Zelle, which Fiserv serves as a processor partner for, saw 42% transaction growth and a 32% growth in client numbers for Fiserv. 

Fintech is still a slow-moving segment for Fiserv, missing expectations at just 2% growth. Fiserv said this was due to a particularly strong Q1 last year, and believes recent wins will lead to growth in the second half of the year – for example, a new partnership with Walmart buy now, pay later provider One Finance. 

The company also has some major initiatives on the horizon, including preparing to support the US launch of FedNow – the US Federal Reserve’s instant payments system – by helping facilitate payments through the system for business and its financial clients.

After steady growth, Fiserv has raised its full year 2023 outlook and now expects organic revenue growth of 8-9%, which we calculate to be $18.1bn-18.3bn. While the company’s overall rate of revenue growth hasn’t changed significantly in recent quarters, it continues to build presence in other markets (particularly LatAm countries) through acquisitions and attract more merchants.

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