BROOKFIELD, Wis.–Fiserv stock plunged over 40% this week after the company cut its full-year growth forecast roughly in half.
CEO Mike Lyons called the reset “critical and necessary,” citing internal gaps in client service and competitiveness.
The company’s Clover unit remains a bright spot, but digital payments and banking revenues fell 5% and 7%, respectively, Yahoo Money reported.
For Fiserv, a revamp is in the works, amid slowing growth and margin pressure as the company seeks to close competitive “gaps” it has identified, according to the report.
“Third-quarter results posted before the market opened Wednesday (Oct. 29), and a guidance cut that pointed to growth rates being sliced roughly in half sent the stock plunging more than 40% in early trading,” Yahoo Money stated. “Details via company presentation materials indicated that organic growth slipped to 1% and margins declined. Sales in its Financial Solutions segment were down 3%. Overall organic revenue growth forecasts were chopped to a 3.5% to 4.5%, where that rate had previously been around 10%. Within the Financial Solutions unit, digital payments revenues slid 5%, banking related revenues dipped 7%.”
Management Changes
Fiserv also announced some management changes. Takis Georgakopoulos and Dhivya Suryadevara were named as co-presidents effective Dec. 1, and Paul Todd will be the incoming chief financial officer.
Lyons told analysts that “nothing at Fiserv is fundamentally broken. Our businesses are well positioned. The markets we serve are growing. We are expanding into new TAMs and our clients have a near insatiable appetite for innovative technology and payment solutions. This reset is about aligning structural versus cyclical growth and sustainable revenues and expenses versus short term results.”
