💰 Market Cap: $40.8B | 🏢 38K Employees | 🌍 Global Fintech Leader

👨‍💼 CEO Mike Lyons (New) | 🎯 One Fiserv Reset | 🇺🇸 Milwaukee, WI

$74.80

📉 -$51.37 (-40.7%) Today

-64% YTD | Q3 2025 Disaster

🚀 Needs:

One Fiserv action plan delivers rapid results with Financial Solutions returning to 3-5% organic growth by Q1 2026 • Clover accelerates to mid-high-teens revenue growth (10%+ GPV growth long-term per management) after Q4 2025 trough • New leadership team (Todd from Global Payments, Georgakopoulos from JP Morgan, Suryadevara from Optum/Stripe) stabilizes operations and closes client service gaps • Project Elevate with IBM drives 200bps+ margin expansion through AI-enabled operational excellence • Banking cores consolidation (16 to 5) and Finxact/VisionNext launches accelerate mid-2026 • Embedded finance TAM expansion with issuing + merchant combination drives upside

⚖️ Needs:

Company achieves guided 3.5-4% organic revenue growth for 2025 with 2026 delivering low single-digit growth • Financial Solutions stabilizes at lower single-digit range (banking low single-digit, issuing low-mid single-digit per call) • Margins trough in Q1 2026 at ~33-35% then recover to exit 2026 at 2025 run rate levels • Clover grows low-teens in 2026 (with pricing comp headwinds) before mid-high-teens in 2027+ • Management executes leadership transition without further disruption • Free cash flow stabilizes at $4.25B for 2025, improves modestly in 2026 • Market accepts "mid single-digit" structural growth profile (ex-Argentina) with appropriate valuation discount

⚠️ Risk:

Problems prove structural rather than cyclical with Financial Solutions declining -5% to -10% in 2026 due to lost clients and increased competition • Leadership changes create execution chaos and culture disruption • Clover loses market share to Square, Toast, and other nimble competitors • Digital payments segment continues -5% decline due to industry headwinds • Client defections accelerate after service gap revelations • Operating margins compress below 35% • Another guidance reset shatters remaining investor confidence • Debt load of $30B becomes concerning with declining cash flow generation

💰

What Happened

Massive Miss: Adj EPS $2.04 vs $2.65 estimate (-23% miss), Revenue $4.92B vs $5.36B estimate (-8% miss)

Q3 Unusual Items: Argentina FX devaluation hit EPS by $0.10, higher Argentina interest expense -$0.04, merchant alliance termination gain +$0.16

Growth Collapse: Organic revenue growth 1% vs prior 10-12% guidance expectations; ex-Argentina company grew mid single-digits in 2023-2024

Segment Crisis: Financial Solutions down 3% organic (banking -7%, digital payments -5%, issuing +1%), periodic license revenue down 2ppts

Margin Compression: Adj operating margin fell 320bps to 37%, Financial Solutions down 490bps to 42.5% on lower license revenue and investment spend

📈

Why It Matters

Argentina Reality Check: Argentina added 10ppts to 2024 growth (329% growth), 5ppts to 2023 (257% growth), only 2ppts in 2025 YTD (56% growth) - company is mid single-digit ex-Argentina

4 Factors Driving Reset: (1) Slowing Argentina cyclical growth, (2) Unrealistic assumptions (outsized volume growth, record sales), (3) Deferred investments limiting execution, (4) Deprioritization of short-term revenue initiatives

Admissions From CEO: "Incremental assumptions would have been objectively difficult to achieve even with right investment and strong execution" - implies overpromising

Cash Flow Pressure: CapEx rising to $1.8B (9% of revenue) for One Fiserv investments, FCF guidance $4.25B for 2025, down from prior expectations

Historic Collapse: Stock down 40%+ creating worst single-day decline in company's 39-year public history, -64% YTD from $238 March peak

🎯

What's Next

Project Elevate Launch: Multi-year AI transformation with IBM targeting 5 processes (sales, client onboarding, Clover service, HR, finance) with 2-year timeline

2026 Preliminary Outlook: Low single-digit organic revenue growth, adjusted EPS down modestly vs 2025, Q1 2026 margin trough at 33-35% before recovery

Clover Trajectory: Q4 2025 10% growth (high-teens ex-pricing reversals), low-teens 2026 (with comp noise), mid-high-teens 2027+, Japan partnership launching 2026

Double-Digit EPS by 2027: Management targeting return to "mid single-digit" organic growth beyond 2026 with operating leverage driving 10%+ EPS growth starting 2027

Investor Day H1 2026: Company will provide detailed medium-term outlook, Project Elevate costs/benefits, and enhanced forecasting rigor at upcoming investor event

💡

Bottom Line for Retail Investors

The brutal truth: Fiserv admitted it's structurally a "mid single-digit" growth company once you strip out Argentina's extraordinary 257-329% growth in 2023-2024 (which added 5-10 percentage points). CEO Lyons confessed to "incremental assumptions that would have been objectively difficult to achieve" - meaning management knowingly set unrealistic targets. The company deferred investments, prioritized short-term revenue initiatives, and embedded "record sales activity" assumptions into guidance. Now they're reversing course, which craters near-term results but supposedly sets a "sustainable baseline." The 40% stock collapse reflects total credibility destruction. However, there's a contrarian case: at 7x forward P/E, the stock prices in disaster while management claims "nothing is fundamentally broken." They're targeting mid single-digit revenue growth with operating leverage driving double-digit EPS growth starting 2027. Project Elevate (AI transformation with IBM) could be a game-changer. For investors: this screams value trap until proven otherwise. Wait for Q1 2026 margin trough (~33-35%) to pass and see if Financial Solutions stabilizes in back half 2026. The Japan Clover deal and embedded finance wins show assets are intact, but execution risk is extreme. Dead money for 6-12 months minimum.

🔥

Extreme Valuation Dislocation

P/E Multiple: Now trading at 7-9x forward earnings vs 15-20x for FIS, Global Payments, and peers

Market Cap Drop: Lost $46B in market value from March 2025 peak of $130B to current $41B

Oversold Condition: 52-week high of $238.59 to current $74.80 represents 69% decline in 8 months

Value Opportunity: If company stabilizes at even 5% growth, stock should trade at 12-15x or $100-$135

💪

Market Position Intact

#1 Global Fintech: Named top provider by IDC FinTech Rankings for third consecutive year

Scale Advantage: World's largest fintech with $21B revenue, serving most US banks and millions of merchants

Sticky Clients: Core banking and payment processing creates high switching costs and long-term contracts

Distribution Moat: Unmatched reach with financial institutions and merchant relationships across 100+ countries

🚀

Clover Growth Engine

Revenue Scale: Clover Q3 revenue grew 26%, tracking to $3.3B in 2025 with 8% reported GPV growth (11% ex-Gateway conversion)

6 Growth Pillars: Vertical expansion (Rectangle Health healthcare partnership), horizontal (ADP/Homebase integrations), international (Brazil on track, Japan 2026 launch), AI operational excellence, embedded finance TAM expansion, back book conversion starting 2026

VAS Penetration: 26% of merchants using value-added solutions (up from 24%), driven by vertical software, Clover Capital, anticipation services

Long-Term Trajectory: Management confirmed 10%+ GPV growth and mid-high-teens to 20% revenue growth long-term once past 2026 comp normalization

🎯

Fresh Leadership Team

Paul Todd CFO: Ex-CFO of Global Payments and Thesys, most recently Partner at TTV Capital fintech VC - brings "integrity and accountability" per CEO (starts Oct 31)

Co-President Takis Georgakopoulos: Ex-Global Head of Payments at JP Morgan, joined Fiserv late 2024, now leading Merchant Solutions and Technology, "already driving impactful change"

Co-President Dhivya Suryadevara: Ex-CEO Optum Financial/Optum Insight (was Fiserv client), ex-CFO of Stripe and General Motors, leads Financial Solutions/Sales/Operations (Dec 1)

Board Powerhouse: Gordon Nixon (ex-RBC CEO, incoming Chairman), Gary Shedlin (ex-BlackRock CFO, Audit Chair), Celine Dufetel (Bridgewater CFO, ex-T. Rowe Price/Checkout.com CFO) - all Jan 1

💔

Trust Obliterated

Serial Over-Promiser: July guidance cut (10 weeks into CEO tenure) focused on "major projects" - but Q3 revealed "additional assumptions" and "stretch revenue numbers" embedded throughout

Discovery Timeline Red Flag: CEO admitted financial surprises emerged "at start of Q3" prompting "much more rigorous review" - means problems surfaced only 4 months into his tenure

Intra-Quarter Blindness: Analyst asked: How did things change so dramatically in 2 months in a "recurring" segment? Answer reveals lack of visibility and forecasting rigor

Short-Term Addiction: Company relied on "short-term initiatives" for results, prioritized "in-quarter results" over long-term relationships - now reversing these drives Q4 margin crash 800bps

📉

Structural Revenue Decline

Financial Solutions Reality: CFO admitted Q1-Q2 growth of 7-8% was "higher level than you typically see given underlying fundamentals" - means H1 was unsustainably inflated

True Run Rate Lower: Banking should grow "low single digits," issuing "low-mid single digits," digital payments facing "industry dynamics" - all structurally slower than portrayed

Core Consolidation Risk: Banking cores reducing from 16 to 5, management admitted "we haven't executed that perfectly" - client disruption and implementation delays hurting growth

Deferred Investment Catch-Up: Years of cost cuts and deferred investment "improved margins short-term but now limiting ability to serve clients in world class way" - playing catch-up while competitors advance

💸

Margin Pressure & Cash Drain

Q4 Margin Crash: Implied Q4 margins down ~800bps or $400M lower EBIT due to pricing reversals and investment ramp - "double whack" per CEO

2026 Margin Trough: CFO guided to 33-35% adjusted operating margin in Q1 2026 (vs 40%+ historically), won't recover to 2025 exit rate until Q4 2026

CapEx Surge: 2025 CapEx jumping to $1.8B (9% of revenue) from historical 7% for core modernization, Commerce Hub, VisionNext, AI transformation - multi-year elevated spend

Cash Flow Reality: FCF guide of $4.25B for 2025 barely covers $5.4B YTD buybacks - company burning cash at current pace while trying to invest for growth

⚠️

Execution Risk Extreme

Visibility Problem: When asked how "recurring" Financial Solutions changed so dramatically in 2 months, management couldn't provide clear answer - indicates forecasting issues run deep

4 Leadership Changes in 9 Months: CEO transition Feb, CEO-elect role created, CFO change Oct 31, Co-Presidents Dec 1, 3 board members Jan 1 - unprecedented turnover creates culture shock

Integration Complexity: Smith Consulting, CardFree, StoneCastle (pending), TD Bank merchant business all acquired during reset - adding integration burden while fixing core problems

McKinsey Portfolio Review: Company hired McKinsey to "optimize business mix and allocation of capital" with plans to "monetize certain smaller businesses" - suggests more disruption ahead, potential divestitures