MILWAUKEE — Fiserv has lowered its full-year revenue and earnings outlook for 2026, citing delays in client projects, weaker economic conditions in Argentina and softer hardware sales, while also planning to invest more than $100 million in technology infrastructure and cybersecurity during the second half of the year.
The revised guidance came last week as Fiserv reported its first quarterly results under CEO Takis Georgakopoulos, who has been leading the payments and banking technology company for about five weeks.
Fiserv said it now expects organic revenue to decline 1% or remain flat for 2026, while adjusted earnings per share are projected to range from $7.20 to $7.40. The company had reaffirmed its second-half outlook as recently as June 15.
Georgakopoulos, a former JPMorgan executive who joined Fiserv in late 2024, said second-quarter results were consistent with the company’s expectations but its outlook for the remainder of the year had changed.
Three Factors Cited
He attributed the revision to three primary factors.
Economic conditions in Argentina have deteriorated, while implementation schedules controlled by some clients are moving more slowly than expected. Fiserv also has fallen behind schedule on some internal growth initiatives.
In addition, management has decided to increase investments in technology, infrastructure and cybersecurity, primarily within the company’s Financial Solutions business.
Chief Financial Officer Paul Todd said delayed contracted revenue and slower launches by enterprise clients reduced Fiserv’s previous second-half adjusted revenue growth forecast by approximately 2 percentage points. The company previously expected adjusted revenue growth of 6% to 8% during the second half.
Lower product revenue, including hardware sales, reduced the outlook by another percentage point, while conditions in Argentina and planned business sales each accounted for approximately another percentage point, according to Fiserv.
Timing Issues, Not Lost Business
Georgakopoulos said during a conference call with analysts that delays involving customers represented timing issues rather than lost business.
He cited one large customer that had been scheduled to go live in September or October but needed additional time because it was completing a merger.
“There’s nothing fundamentally changing in terms of the deal, in terms of the size of the deal, just the timing moves out by a quarter,” Georgakopoulos said. “So, we believe that these numbers that we have is an accurate assessment, derisked and does not impact the momentum that we see in 4Q and beyond.”
Fiserv reported second-quarter revenue of $5.29 billion, down 4% from a year earlier. Net income declined to $630 million from $1.03 billion, while earnings per share fell 37% to $1.17.
Adjusted revenue declined 4% to $4.96 billion, while adjusted earnings per share fell 26% to $1.84. Adjusted operating margin declined to 31.8% from 39.6%.
Fiserv generated $1.1 billion in free cash flow during the quarter.
Merchant Solutions Results
Performance varied across the company’s businesses.
Merchant Solutions organic revenue declined 1%, while revenue from Clover increased 2% on a reported basis.
Fiserv said Clover revenue increased 13% after excluding weaker revenue from Argentina and unusually high one-time revenue recorded during the year-earlier period. Clover payment volume increased 9%.
Financial Solutions reported larger declines. Organic and adjusted revenue each fell 8%, which Fiserv said was partly attributable to higher one-time revenue during the comparable period a year earlier.
Digital Payments revenue declined 6%, Issuing revenue fell 10% and Banking organic revenue decreased 10%. Fiserv said underlying transaction and account trends generally remained stable.
Hardware Sales Slow
Hardware sales also weighed on results after Fiserv sold elevated amounts of equipment during the previous two years, creating more difficult year-over-year comparisons.
Georgakopoulos said the company has not seen a material change in new merchant acquisition and considers the slowdown in hardware sales temporary.
The new CEO is also reviewing Fiserv’s broad portfolio of products and businesses.
Georgakopoulos said Fiserv intends to invest in products that can compete with the strongest alternatives in their markets while considering other options for products where the company does not believe it can compete effectively.
Fiserv has already divested or taken steps to divest its student loan servicing and managed ATM businesses. The company also is exiting unprofitable merchant segments in India.
Georgakopoulos said his immediate priority is improving execution and delivering on commitments to customers.
“They want platforms that work,” Georgakopoulos said of Fiserv’s clients. “They want us to deliver what we promised. They want good customer service.”
