Fiserv Says ‘Just Scratching Surface' for Clover, But Slowing Growth Slams Shares

Core Insights - Fiserv's Clover is projected to achieve $3.5 billion in annual sales this year, despite some initiatives taking longer than planned [1][4] - The company has trimmed its 2025 organic revenue growth guidance to a low end of 10%, down from a previous target of 10% to 12% [3] - Clover volumes grew by 8% in the second quarter, maintaining a flat growth rate compared to the first quarter [2] Financial Performance - In the Merchant Solutions segment, adjusted revenue growth was reported at 10%, with Clover revenue increasing by 30% in Q2 [5] - Digital payments revenues in the Financial Solutions segment rose by 6%, while issuing-related revenues grew by 14% [8] - Year-to-date, processing organic and adjusted revenue are both down 1%, aligning with the company's guidance for roughly flat organic revenue over the medium term [10] Strategic Initiatives - The company is focusing on ramping Clover merchants in new international markets, including Brazil, Mexico, Australia, Singapore, and various European countries [6] - A partnership with TD Bank Canada was announced, positioning Fiserv as the merchant processing provider, which is expected to drive further revenue [7] - The company is exploring significant potential in verticals such as restaurants and healthcare [7][12] Future Outlook - The company anticipates an acceleration in Clover volumes to 10% in the latter half of the year to meet its sales targets [3] - Management expects organic revenue growth to accelerate in the second half of the year, particularly in the Merchant Solutions segment [11] - The company remains confident in capturing the full strategic and financial benefits of its initiatives, although the timing has been extended [5][12]