Fiserv, Inc. (FISV) Q4 2025 Earnings Call Transcript

Access earnings results, analyst expectations, report, slides, earnings call, and transcript.

Overview

The earnings call summary and Q&A indicate a positive outlook. The company shows strong financial performance, strategic growth in key areas like Clover, and effective execution of plans. Despite some areas lacking clarity, management's optimistic guidance and strategic initiatives suggest a positive stock price movement.

Key Financial Performance

Total Company Q4 Adjusted Revenue $4.9 billion, flat year-over-year. Reasons: Stable broad-based business activity trends.

Total Company Full Year Adjusted Revenue $19.8 billion, up 4% year-over-year. Reasons: Broad-based business activity trends.

Adjusted Operating Income (Q4) $1.7 billion, resulting in an adjusted operating margin of 34.9%. Reasons: Stable business activity trends.

Adjusted Operating Income (Full Year) $7.4 billion, resulting in an adjusted operating margin of 37.4%, a decrease of 200 basis points. Reasons: Investments in the franchise and higher mix of nonrecurring revenue.

Total Company Organic Revenue (Q4) Roughly flat, down approximately 40 basis points year-over-year. Reasons: Stable business activity trends.

Total Company Organic Revenue (Full Year) 3.8% growth, in the upper half of the 3.5% to 4% guidance range. Reasons: Stable business activity trends.

Merchant Solutions Organic Revenue Growth (Full Year) 6% growth. Reasons: Broad-based business activity trends.

Financial Solutions Organic Revenue Growth (Full Year) 2% growth. Reasons: Broad-based business activity trends.

Adjusted Earnings Per Share (Q4) $1.99. Reasons: Stable business activity trends.

Adjusted Earnings Per Share (Full Year) $8.64, above guidance range of $8.50 to $8.60. Reasons: Stable business activity trends.

Free Cash Flow (Q4) $1.6 billion. Reasons: Stable business activity trends.

Free Cash Flow (Full Year) $4.44 billion, ahead of guidance of $4.25 billion, representing approximately 93% conversion. Reasons: Stable business activity trends.

Merchant Solutions Organic Revenue Growth (Q4) 1% growth. Reasons: Stable business activity trends.

Merchant Solutions Adjusted Revenue Growth (Q4) 2% growth. Reasons: Stable business activity trends.

Small Business Revenue Organic Growth (Q4) 2% growth. Reasons: Impact of CCV acquisition and FX headwind.

Small Business Revenue Adjusted Growth (Q4) 3% growth. Reasons: Impact of CCV acquisition and FX headwind.

Clover Revenue Growth (Q4) 12% growth. Reasons: Fee eliminations and softness in U.S. restaurant and retail sectors.

Clover Revenue (Full Year) $3.3 billion, up 23%. Reasons: Fee eliminations and softness in U.S. restaurant and retail sectors.

Enterprise Business Organic Revenue Growth (Q4) 1% growth. Reasons: Stable business activity trends.

Enterprise Business Adjusted Revenue Growth (Q4) Declined 2%. Reasons: Network fee timing associated with a large PayFac client.

Processing Organic Revenue Growth (Q4) Declined 1%. Reasons: Stable business activity trends.

Processing Adjusted Revenue Growth (Q4) 1% growth. Reasons: FX tailwinds.

Financial Solutions Organic Revenue Growth (Q4) Declined 2%. Reasons: Comparative headwinds and actions taken over the last several years.

Financial Solutions Adjusted Revenue Growth (Q4) Declined 2%. Reasons: Comparative headwinds and actions taken over the last several years.

Digital Payments Organic Revenue Growth (Q4) Declined 1%. Reasons: Slowing growth curve for Zelle and ATM Managed Services headwind.

Digital Payments Adjusted Revenue Growth (Q4) Declined 1%. Reasons: Slowing growth curve for Zelle and ATM Managed Services headwind.

Issuing Revenue Organic Growth (Q4) Declined 1%. Reasons: Stable business activity trends.

Issuing Revenue Adjusted Growth (Q4) Declined 1%. Reasons: Stable business activity trends.

Banking Revenue Organic Growth (Q4) Declined 4%. Reasons: Comparative headwinds and actions taken over the last several years.

Banking Revenue Adjusted Growth (Q4) Declined 3%. Reasons: Comparative headwinds and actions taken over the last several years.

You have reached the limit. Sign up to access full content

Get started

Operating Highlights

Clover Hospitality brand: Expanded offerings under the Clover Hospitality brand, including multi-location support, AI-generated menus, streamlined delivery enrollment, and new diner engagement tools.

PracticePay health care initiative: On track to launch this initiative, targeting the healthcare sector.

CashFlow Central: Integrated into ADP's RUN platform, allowing small businesses to manage cash flow more effectively.

Commerce Hub: Launched a fully integrated cloud-native global omnichannel gateway across the Americas, processing over $200 billion in 2025.

CoreAdvance and Finxact: Went live with first clients on CoreAdvance; Finxact platform surpassed 30 million total accounts, representing over 80% growth in 2025.

Vision Next: Building out next-gen card issuing platform.

International expansion: Successful launch in Brazil, strong growth in Canada, and introduction of Clover in Japan through a partnership with SMCC.

Clover referral ecosystem: Added 47 banks to the ecosystem and expanded partnerships with Truist and other institutions.

AI-driven efficiencies: Implemented AI tools for merchant onboarding, prospecting, and lifecycle orchestration.

Project Elevate: Enterprise-wide evaluation to simplify business and improve efficiency, including deploying AI across operations.

One Fiserv plan: Focused on client-first mindset, operational excellence, and disciplined capital allocation.

Stablecoin initiatives: Exploring pilots with banks for cross-border payments, digital escrow, and interbank money movement.

Agentic commerce: Developing capabilities in partnership with Google, Mastercard, and Visa to bring agentic commerce to mainstream.

You have reached the limit. Sign up to access full content

Get started

Risk or Challenges

Revenue Growth Challenges: The company expects organic revenue growth in the range of 1% to 3% for 2026, with adjusted revenue growth also in the same range. However, the first half of 2026 is expected to see low single-digit declines in adjusted revenue growth, with Q2 being the trough. Financial Solutions revenue is expected to be flat to slightly down, reflecting higher nonrecurring revenue in the prior year.

Clover Volume and Revenue Growth: Clover volume growth was below expectations in Q4, driven by softness in the U.S. restaurant and retail sectors in November. While volumes reaccelerated in December and January, the company expects Clover revenue growth to be in the low double digits for 2026, which is below its medium-term target of 15% to 20%.

Financial Solutions Segment Decline: The Financial Solutions segment saw a 2% decline in both organic and adjusted revenue in Q4. Banking revenue decreased 4% on an organic basis, and the segment continues to face comparative headwinds, which are expected to persist through the first half of 2026.

Operating Margin Pressure: The adjusted operating margin for the company is expected to be approximately 34% for 2026, with the first half of the year seeing lower margins (31% to 32%) due to strategic investments and other factors. Q1 is expected to be the low point, with margins just below 30%.

Macroeconomic and Sector-Specific Risks: Softness in the U.S. restaurant and retail sectors impacted Clover volumes in Q4. Broader macroeconomic conditions and sector-specific challenges could continue to affect performance in these areas.

Project Elevate Costs: The company incurred $73 million in expenses related to Project Elevate in Q4 and expects additional one-time costs in 2026, which could impact financial performance.

You have reached the limit. Sign up to access full content

Get started

Guidance & Outlook

2026 Organic Revenue Growth: Expected to be in the range of 1% to 3%, with Merchant Solutions revenue growth in the mid-single digits and Financial Solutions flat to slightly down.

Adjusted Revenue Growth: Expected to decline in the low single digits for the first half of 2026, with Q2 representing the trough. Adjusted revenue growth in the second half of the year is expected to align more closely with volume, transaction, and account growth.

Adjusted EPS: Guidance for 2026 is $8 to $8.30.

Adjusted Operating Margin: Expected to be approximately 34% for 2026, with the first half at 31% to 32% and the second half at 35% to 36%. Q4 is expected to represent the high point at 36%.

Capital Expenditures: Expected to remain approximately flat with 2025 levels.

Free Cash Flow Conversion: Expected to be approximately 90% of adjusted net income for 2026, with Q1 being the trough for free cash flow conversion.

Leverage Ratio: Expected to end 2026 with a leverage ratio of approximately 3x.

Clover Revenue Growth: Expected to grow in the low double digits for 2026, with a medium-term target of 15% to 20% growth.

Clover GPV Growth: Expected to grow 10% to 15% in 2026, excluding the gateway conversion.

You have reached the limit. Sign up to access full content

Get started

Shareholder Return Plan

Share Repurchase: We also repurchased 3 million shares during the quarter for approximately $200 million and paid down over $1 billion in debt after funding the acquisitions of StoneCastle and a portfolio of TD merchant contracts.

Future Share Repurchase Plans: To the extent we generate any excess cash from business and asset optimization activities, we intend to deploy this additional cash to share repurchase.

You have reached the limit. Sign up to access full content

Get started

Key Q&A

Q:Mike, can you just touch on whether you believe the review you've taken in the business has really accomplished everything you need and you fully see what you needed to see that you feel confident on the numbers going forward?

A:Michael Lyons stated that they feel great about the progress made and the pace of execution. He mentioned that the conclusions from the Q3 analysis are fully reflected in their Q4 performance and 2026 guidance. He emphasized their focus on executing the One Fiserv plan and acknowledged the challenges in the first half of the year due to a strategy pivot in Q3.

Q:Can you provide more detail on the pricing actions within the digital payments subsegment, particularly related to STAR and Accel debit networks, and their impact on volume and market response?

A:Paul Todd mentioned there were no new developments in Q4 regarding the pricing actions. He highlighted sequential improvement in digital payments and growth in network volumes and debit processing transactions. Michael Lyons added that they are pleased with STAR and Accel's strategic value and continue to leverage these networks.

Q:What are the expenses required to execute on Fiserv, and how much of it is structural versus onetime? How clean is the 36% margin you expect to exit the year with?

A:Paul Todd explained that there is no material expense ramp-up, and the expenses related to One Fiserv are largely baked in. He noted that Project Elevate expenses include professional services and infrastructure costs, which will shift towards technological expenses as the project progresses. The 36% margin is in line with expectations.

Q:What is the outlook for the SMB portion of the Acceptance segment, including Clover and non-Clover parts?

A:Michael Lyons stated that Clover is expected to grow revenue in low double digits, while the non-Clover SMB segment is expected to be flat or slightly grow in 2026. He noted that Argentina is no longer a growth factor and that excluding Argentina, the non-Clover segment grew in 2025.

Q:Can you elaborate on the outlook for Clover yield and the areas where you can add durable value with value-added services?

A:Michael Lyons emphasized their goal to make Clover a comprehensive small business operating platform, integrating partnerships and vertical expertise. Paul Todd added that they expect 15%-20% long-term revenue growth in vertical expansions, which will drive higher yield.

Q:Can you provide more color on core client retention in the banking segment and the portfolio's current state?

A:Michael Lyons acknowledged past market share losses due to prior core conversion approaches but highlighted investments in core modernization and client commitments. He expressed confidence in returning to positive growth and emphasized the portfolio's strength in addressing client needs like stablecoin and AI solutions.

Q:What drove the improvement in Clover's performance in December and January, and what are the drivers for further improvement in 2026?

A:Michael Lyons attributed the improvement to macro factors normalizing after a weak November and highlighted the focus on reducing concentration in restaurants and retail. He noted that gateway conversion impacts will diminish over time, and Paul Todd added that business development and vertical expansions will support growth.

Q:What needs to change for the Financial Solutions segment to reaccelerate and grow?

A:Michael Lyons and Paul Todd emphasized the importance of addressing client service and core customer service platform investments. They noted that underlying volume growth remains strong, and they expect growth in all areas of Financial Solutions in the back half of 2026.

Q:How do you plan to achieve slight growth in the non-Clover SMB segment in 2026?

A:Paul Todd highlighted a strategic approach to transitioning non-Clover merchants to Clover and retaining non-Clover merchants. He emphasized collaborative efforts and attention to this segment.

Q:What drives the pace of back book conversion in Clover, and what are you hearing from banking customers about service and product levels?

A:Paul Todd explained that back book conversion is deliberate and value-driven, with core growth excluding conversions at high single digits to low double digits. Michael Lyons noted positive client feedback on investments and commitments but emphasized the need for sustained delivery.

Q:Review of Unclear Management Responses

A:Management avoided providing direct answers or lacked clarity on the following: 1. Specific details on the impact of pricing actions within the digital payments subsegment on market response and additional volume. 2. Quantifiable metrics or timelines for improvements in core client retention and churn in the banking segment. 3. Exact drivers and quantifiable impacts of back book conversion in Clover on growth projections.

You have reached the limit. Sign up to access full content

Get started

Earnings Word Cloud

The most frequently occurring keywords in this quarter's earning call

FISV Transcript

Fiserv, Inc. (FISV) Q4 2025 Earnings Call Transcript

Positive2-10

Fiserv, Inc. (FISV) Presents at UBS Global Technology and AI Conference 2025 Transcript

Neutral12-1

Frequently Asked Questions

Where does this earnings call transcript come from?

All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.

How soon is the transcript available after the earnings call ends?

Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.

Is the transcript edited or altered in any way?

No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.

Why do some answers appear as “Unclear” or “Inaudible”?

When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.

Who creates the AI Summary and Key Q&A highlights shown above the transcript?

They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.