Fiserv(US:FI)2025-10-29 13:00Financial Data and Key Metrics Changes - Total adjusted revenue for Q3 2025 grew 1% to $4.9 billion, while adjusted operating income decreased 7% to $1.8 billion, resulting in an adjusted operating margin of 37%, a decrease of 320 basis points [36][37] - Year-to-date adjusted revenue grew 5% to $14.9 billion, and adjusted operating income grew 5% to $5.7 billion, maintaining an adjusted operating margin of 38.2% [36][37] - Adjusted EPS for Q3 was $2.04, down 11% from $2.30 in the prior year [37] Business Line Data and Key Metrics Changes - Merchant Solutions segment organic revenue growth was 5% for the quarter and 7% year-to-date, with adjusted revenue growth also at 5% [39] - Financial Solutions segment organic revenue declined 3% in Q3 but grew 3% year-to-date, negatively impacted by lower periodic license revenue [43][44] - Clover revenue grew 26% in Q3, with GPV growth of 8% reported, and 11% excluding the 2023-2024 gateway conversion [40][18] Market Data and Key Metrics Changes - Argentina contributed significantly to organic growth, with a 257% growth in 2023 and 329% in 2024, impacting overall organic growth rates [9][10] - Excluding Argentina, the company's overall organic revenue growth rate was in the mid-single digits for both 2023 and 2024 [10][12] Company Strategy and Development Direction - The company is shifting its strategic focus to prioritize sustainable, client-focused opportunities, which may negatively impact near-term results but is expected to position the company for predictable growth [4][6] - The "One Fiserv" action plan includes investments in client-first operations, Clover platform enhancements, and operational excellence through AI [22][24] - The company aims to return to consistent mid-single-digit revenue growth and double-digit adjusted EPS growth starting in 2027 [33][21] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the need to reset growth and margin targets due to various factors, including slowing growth in Argentina and the impacts of deferred investments [9][12] - The company remains confident in its assets and growth opportunities, emphasizing that challenges are largely self-inflicted and addressable [14][15] - Future guidance for 2026 is expected to reflect a critical investment and transition year, with organic revenue growth anticipated in the low single digits [21][22] Other Important Information - The company announced several leadership changes, including new Co-Presidents and a new CFO, to drive the strategic initiatives forward [26][30] - Three acquisitions were made during the quarter to enhance client service and expand capabilities in stablecoin and digital currency [46][47] Q&A Session Summary Question: How long was Fiserv over earning with deferred investments and short-term initiatives? - Management indicated that a rigorous analysis was conducted over the past six months, revealing that the company has a solid foundation and growth opportunities, with a clear path to mid-single-digit growth [50][54] Question: What changed in the Financial Solutions segment's growth trajectory? - Management noted that while the segment faced challenges, it remains fundamentally strong, with ongoing investments aimed at improving execution and customer service [68][75] Question: Is Clover's 10% revenue growth for Q4 a decent proxy for next year? - Management expressed confidence in Clover's competitive positioning and highlighted ongoing investments in vertical and horizontal expansion, indicating strong growth potential [79][78]