Even as the payments and fintech giant cut employees and sold off business units, the company spent $1 billion on acquisitions last year
Fiserv’s fourth-quarter revenue rose about 9% over the year-earlier period to $4.6 billion, according to a Tuesday release. Net income more than doubled to $782 million as the company chopped expenses by about 7%.
Fiserv’s severance costs jumped nearly 75% in the quarter to $75 million and amounted to $209 million for 2022, according to a Tuesday filing with the Securities and Exchange Commission.
As it faced profit margin pressure last year, the company pared its global workforce. Fiserv CEO Frank Bisignano has maintained those cuts were part of the long-term strategy behind the Fiserv-First Data merger.
The “resulting productivity benefits” of the First Data integration, as well as tightened spending and business divestitures in the third and fourth quarters, resulted in improved profit margins for the year, Hau said Tuesday.
During the quarter, Fiserv signed new business agreements with mega-retailer Target, to process its credit cards, and with Canada’s Desjardins Group, also for processing services. Bisignano said Tuesday the company has begun working with both companies and anticipates revenue benefits from each starting next year.
Fiserv also netted more payments work for California’s state government, putting funds on debit cards that are issued to residents. “We were awarded another prepaid mandate supporting California’s unemployment and related insurance programs,” Bisignano said.
That, along with disbursement support for the comptroller’s office announced in October 2022, “represents longer term, recurring work for the state and marks our leadership in payments for the government vertical,” Bisignano said.
A separate tax refund program that Fiserv worked on for that state contributed to revenue during the quarter, Hau noted.
Additionally, Fiserv signed “a large, e-commerce payments company for debit network services” during the quarter, Bisignano said. “This client will enable our Star and Accel networks for its millions of merchants as an alternative to the larger debit networks.” A Fiserv spokesperson didn’t immediately respond to requests for more information on that customer.
By Caitlin Mullen on Feb 7, 2023
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