BROOKFIELD, Wis. — One full year after its December 2007 acquisition of CheckFree, Fiserv Inc. says its revenue is up despite the economic slump.
"During 2008, we delivered on our commitments to substantially grow earnings and cash flow while integrating CheckFree, both in the face of a challenging market," said Jeffery Yabuki, president and chief executive of Fiserv. "Our outstanding free cash flow allows us to stay focused on serving clients exceptionally well and continue to invest in future growth opportunities." During the fourth quarter, revenue growth in the company's payments segment helped to offset revenue decreases in the financial-institution segment. 2008 fourth quarter revenue was up 63 percent, totaling $559 million in the payments segment. In the FI segment, revenue was down 2 percent. For the year, both segments were up from 2007, with payments revenue almost doubling (from $1 billion to $2.13 billion) and FI revenue up 5 percent (from $2 billion to $2.14 billion).
"Although we are disappointed with the internal revenue growth in our financial segment, which was negatively impacted by lower home-equity processing and discretionary license revenues, we continue to make great progress in building our base of recurring revenue," Yabuki said. "Our payments segment, which nearly doubled in revenue during 2008 to more than $2 billion, continues to deliver solid revenue and earnings growth."
For the year, the company's net income is up 30 percent, from $39 million ($2.60 per share) to $569 million ($3.49 per share). But during 4Q, net income was down 35 percent from the same period in '07, going from $96 million (58 cents per share) to $62 million (39 cents per share). Fiserv signed 128 clients for its electronic bill payment services during 4Q, totaling more than 550 clients signed in 2008. Fiserv also extended its value-added-reseller bill payment relationship with Digital Insight for three years.
Commerce Bank/Harrisburg, a $2 billion financial retailer based in Harrisburg, Pa., chose Fiserv as its key technology partner to provide a full suite of account-processing technology solutions. Commerce Bank/Harrisburg now uses 14 integrated solutions from Fiserv, including account processing, online banking and electronic bill payment and risk solutions.
Piraeus Bank, one of Greece's leading financial institutions with operations in 11 countries and more than $70 billion in assets, signed a 10-year contract for the Fiserv Universal Banking solution.
BB&T Corp., the nation's 12th largest financial holding company with $137 billion in assets, rolled out the Fiserv Branch Source Capture solution, a part of the Fiserv Source Capture Suite, to more than 330 branches. Additionally, BB&T signed a four-year deal for Fiserv's Personix Card Services to provide outsourced personalized card solutions, card manufacturing and mailing services to its clients.
In December 2008, Fiserv acquired i_Tech Corp. from First Interstate BancSystem Inc., a multistate, $6 billion FI based in Billings, Mont. I_Tech provides outsourced account-processing services as a licensee and reseller of the Fiserv ITI Premier account-processing banking system to 158 FIs.
"As we embark upon our 25th year, our strong client relationships and industry-leading position should allow us to grow earnings at double-digit levels in an environment which we believe will face significant challenges in 2009," Yabuki said. "We are pragmatically approaching our cost structure this year, balanced against our commitment to invest in solutions that will help our clients navigate the market turbulence and extend Fiserv's market differentiation."
