Fiserv Inc. stock plummeted by more than 44% on Wednesday, setting the company on track for a record single-day decline, after the payments software firm reported third quarter results that fell significantly below Wall Street estimates and slashed its growth forecast for the second consecutive quarter.
The highly disappointing earnings report underscores the mounting pressure on the fintech’s core payments and merchant division. This business has struggled to maintain its momentum in the face of fierce competition and a noticeable slowdown in consumer spending.
Fiserv has now drastically revised its expectations, anticipating annual revenue growth of 3.5% to 4%, a sharp drop from its previous forecast of 10%. Likewise, the outlook for annual adjusted profit per share has been lowered to between $8.50 and $8.60, down from the earlier projection of $10.15 to $10.30.
The firm reported third quarter adjusted earnings per share (EPS) of just $2.04, substantially missing the consensus Wall Street estimate of $2.64 per share. Adjusted revenue of $4.92 billion also fell well short of expectations, which had been set at $5.36 billion, as both its merchant solutions and financial solutions businesses lagged.
Fiserv attributed the weak results partly to the significant deterioration of the Argentine peso and a jump in interest rates in Argentina during the quarter.
“We need to change the way we forecast and communicate about our business and engage with analysts and investors,” Fiserv CEO Mike Lyons said in a call with analysts, reported Reuters.
He said the forecast reset was taken after a “rigorous” analysis during the third quarter as the firm shifts its strategic focus away from short-term revenue initiatives, while experiencing a slowdown in growth in its Argentina business.
“This reset is about aligning structural versus cyclical growth and sustainable revenues and expenses versus short-term results,” Lyons added.
Management Reshuffle
Accompanying the financial setback, Fiserv also announced a major overhaul of its senior leadership team, appointing a new finance chief and two co-presidents. Management changes of this scale often signal internal challenges or a fundamental shift in corporate strategy, deepening investor concerns about the company’s near-term prognosis.
Todd, previously finance boss at Global Payments, will succeed Robert Hau, who is transitioning into a senior adviser role until the first quarter of 2026.
Concerns over slowing growth in Clover, Fiserv’s key point-of-sale and business management platform, have been a persistent issue for investors throughout the year.
The bleak results had a ripple effect on rivals, with shares in payments firms also taking a hit: FIS was down 7.5%, Global Payments fell 5%, while Block and Jack Henry & Associates dropped 3% and 2%, respectively.