Frank J. Bisignano
President and Chief Executive Officer at Fiserv
Thank you, Julie. Before I begin, let me again welcome Julie to the team. As we announced last quarter, Shub moved to a new role as the Head of Strategy. Julie, joins us from Bloomberg, where she was the Senior Equity Analyst covering the fintech and payment space and has extensive experience as a sell-side analyst and the investment product manager. Welcome to your Fiserv earnings, Julie.
Turning to the results. Overall, I am very pleased with yet another quarter of double-digit growth in both organic revenue and adjusted EPS. We continue to demonstrate the strength of our client base, depth of our partnerships and resilience of our businesses. Consumers activated more cards, continue to spend and were issued new credit. Merchants opened up new businesses, offered better experiences and took advantage of more value-added services. Financial institutions upgraded their systems and invested in new products to better compete and capture efficiences.
In the early days of the fourth-quarter we are seeing the same trends continue. We grew adjusted revenue 8%, with organic revenue up 11% at the top-end of our full-year 2022 guidance range. Adjusted operating margin of 35.2% was up 100 basis points year-over-year, expanded 170 basis points sequentially and was consistent with our internal modeling. Adjusted EPS of $1.63 included an $0.08 foreign exchange headwind versus last year, which is $0.03 more than we anticipated 90 days ago.
As we look forward pressure remain from inflation, a still tight-looking market and geopolitical uncertainty. But as a global and diverse business, we are well-prepared to capitalize in any market environment. Based on continued momentum, strong execution and near-term visibility we are raising our revenue guidance to the high-end of the range for this year to 11% organic and raising our adjusted EPS to $6.48 to $6.55. Clearly, we are executing well beyond our legacy as a mid-single-digit top-line grower.
Based on the actions we've taken and the investments we've made, I remain covenant that we can achieve faster growth in the high-single-digit range or better over the coming years, while maintaining our track record of double-digit adjusted EPS growth. When we brought together Fiserv and First Data in July 2019, we envisioned an industry-leading combination with a complete set of strong payments and fintech capabilities that were highly complementary. As we combine these great companies, we're sometimes asked how being a diversified company that serves merchants and financial institutions, large and small across all payment types, is the winning strategy.
We believe we're already demonstrating this through market-share gains, faster growth and expanding margins in the third-quarter is another proof point of the power of this team and our set of assets and capabilities. Thirrd-quarter highlights the continuing momentum in our Payments and Network segment with organic revenue growth of 11% and adjusted operating margin expanded 190 basis points to 49%. Our Issuer Solutions business, which includes credit processing for large issuers and card and statement services was particularly strong.
Issuer Solutions [Technical Issues] contracts with 3 of the top 25 North American credit card issuers, within the last two years a testament to a single platform that delivers a full suite of digital capabilities. We can trace our success here directly to the investment we've made in the business over the last few years. These include a robust set of APIs, AI-based fraud management, cardholder experience technology via the Ondot acquisition, integrated end-to-end output solutions plus ongoing cloud enablement of our technology stack.
Since we began combining Fiserv and First Data, we made a decision to pursue the opportunity in the government vertical, with its a large TAM and multiple use cases that span merchant, issuer and output services. We began investing in the solutions, people, and infrastructure and this strategy is now playing out. This month we began issuing roughly 10 million prepaid cards for the State of California under its Middle-class Tax Credit Program. Since announcing this win last quarter, we were awarded another contract with the California State Comptroller for cards supporting various disbursement needs.
We work with five other states to disperse and process their unemployment benefit cards. The pipeline remains large and is vertical is traditionally quite resilient through the economic cycle. Investing in innovation is a constant across our business and nowhere other benefits more evident then in our merchant acceptance business. We had another strong quarter for merchant, growing organic revenue 14% once again outpacing our medium-term guidance of 9% to 12%.
At Clover, we rolled out several new products and enhanced the merchant experience and customer authorization. This quarter we will be piloting an expanded retail vertical offering with additional horizontal value-added services, including an integration with accounting and business software. Our vertical solutions are resonating. In September Closer Sport signed an agreement with Caesars Superdome and the Smoothie King Center in New Orleans, adding to its base of over 250 professional and college-level sports venues. Clover will streamline purchasing at concession stands, premium bars and clubs with digital, contactless and self-service purchasing. We will also provide third-party integration to related services and real-time data insights.
Carat, our enterprise omnichannel operating system, launch new money flows and continued to lead the market in payout choice and flexibility. We launched more instances of our multi-purse wallet, a white-label solution that holds multiple sources of value including loyalty and prepaid. And we're proud to share that in July, Fiserv was a Merchant Acquirer of the Year by the Merchant Payments Ecosystem Awards in recognition of the highly successful debut of Carat as an omnichannel commerce operating system.
As I mentioned earlier this year, data is an emerging business for us, and it spans both merchant and financial institution clients. We're excited to announce our new Data as a Service offering in September partnering with Snowflake. Fiserv will enable customers to access their payments data in near real-time to better informed business decisions. By leveraging Snowflake secure data sharing, customers can now seamlessly and securely access and integrate their data, driving deeper timely insights.
A large energy company is just one type of client already in pilot. Financial institutions are excited by our Data-as-a-Service offering as well. Carter Bank, a $4 billion mid-Atlantic community bank, is in an open data pilot with us to consolidate and connect all data across the enterprise. Many banks tell us they spend too much time trying to source, provision and integrate data. Fiserv and Snowflake will make it easier for Carter to use the data across their Fiserv and non-Fiserv systems to fully understand their customers down to the branch level.
Fintech performance was lower than normal this quarter at 1% organic revenue growth, but generated 4% growth year-to-date and is on track to meet our organic growth guidance of 4% to 6%. This is a consistent business, but timing of product additions, new business implementations and professional services revenue can vary from quarter-to-quarter. Some of this revenue anticipated for September slipped into the fourth quarter, and we have good line of sight to full year revenue in the medium-term guidance range.
We remain encouraged by our visibility here after signing 14 core wins in the quarter, with nine being competitive takeaways spread across large banks, new banks, fintechs, community banks and credit unions. Earlier this year, Webster Bank acquired Fiserv client Sterling Bank to create a $65 billion Northeast regional. In the quarter, Webster chose Fiserv as its core account processing platform with multiple surround spanning our fintech and payments offering.
We've talked about the strategic importance of Fintech, a leading cloud banking core today, with 11 clients already in production. After just six months under our umbrella, Fintech is attracting strong interest from both new and existing Fiserv clients. With two large new client wins in the quarter, Fintech will become the cloud-based core platform for two more emerging online banks. And just yesterday, we entered into a new agreement with Zenith to power this global digital bank's first-to-market solution running fintech on the Microsoft Azure Cloud.
Looking forward, there's plenty of uncertainty around what 2023 will bring. We're currently in the planning phase, but have already taken steps to ensure we are prepared for a softer macroeconomic environment. We are fortunate to have a well-diversified business with high recurring revenue and a strong balance sheet. Bob will talk more about these factors shortly, but I want to share with you what I am seeing and hearing from clients and where I see opportunity for Fiserv in the coming quarters.
The Payments segment has successfully capitalized on industry trends that are enabling strong growth. I call out four major trends that are responsible not only for the strong growth we are seeing now but a robust pipeline for the coming year. First, cardholders continue to expect better payment experiences, and more issuers look to our platforms to meet this demand. Issuers are also investing in more modern technology solutions such as better digital, broad and loyalty capabilities, all of which offer us attractive cross-sell opportunities.
Second, the addressable market is growing. Segments such as healthcare, education and government are increasingly looking for new credit processing and disbursement solutions. Nontraditional start-ups and fintechs have also been actively entering the card issuing and lending space. Third, demand for plastic solution remains high as issuers compete heavily for new volume. Finally, the card payments environment has remained active even as we see continued growth in noncard payments, including Zelle and real-time payments.
Two regulation-led opportunities [Technical Issues] first, the Fed announced that its real-time network, FedNow, would go live in mid-2023. Fiserv has been part of the FedNow pilot, and we believe that we are well-positioned to participate in the rising adoption of real-time payments. We enable financial institutions and eventually billers and merchants to integrate with a variety of real-time services and networks through our single connection.
Second, earlier this month, the Federal Reserve finalized a clarification to Reg II that the dual network requirement for debit applies for all transaction types, including card not present. Fiserv believes this will promote market competition, which will ultimately benefit consumers, merchants, issuers and the industry at large. Our debit networks, STAR and Accel, support card-not-present transactions, but many factors will influence our ultimate opportunity, so we will wait to see how issuers implement this rule once it takes effect in July.
In Merchant Acceptance, the uncertain macro environment as merchants large and small looking to optimize the value in their operations. In some cases, this has increased their desire for a single full-service provider over fragmented specialists. And that suits us well given our breadth and scale. Their focus on areas like payment optimization, lower-cost payment methods and fraud is presenting more value-added service opportunities as well. In fact, we've won a few deals to enable Pay by Bank, which lowers the cost of acceptance for merchants, is an easy way for consumers to earn rewards. One of our large petro merchants, Sunoco, with 5,500 locations, was just one such win in the third quarter, with e-commerce penetration returning to a more normal growth trend, card-present solutions are in focus as the more complex problem to solve for integrated omnichannel solutions.
Our marquee base of large merchant customers is looking to us here. This includes leading petro and grocery merchants who are more insulated from economic slowdowns due to the nondiscretionary nature of their businesses. In our Fintech business, banks are managing through the macro uncertainty with a focus on serving existing customers and improving operational efficiency. Two areas where we provide a number of important products and services that offer a way to grow accounts and enter new markets in a cost-effective manner.
Finxact, our new cloud-native modern banking platform, is being recognized as the best way to conceptualize, create and launch new banking products. And our pipeline is particularly active with pioneering digital banks and big issuers entering the banking market via embedded finance. A leading example is our partnership with One Finance, supporting their growth initiatives in retail. We can offer them faster time to market with greater flexibility and scalability plus the largest product portfolio available.
Now let me pass the discussion to Bob for more detail on our financial results.