Fiserv Stock Tumbles As Outlook Softens Despite Deal With TD
Fiserv, Inc (NYSE:FI) stock tumbled Wednesday after it reported fiscal second-quarter 2025 results.
The company reported quarterly revenue growth of 8% year-over-year to $5.52 billion, beating the analyst consensus estimate of $5.20 billion. Growth was 10% in the Merchant Solutions segment and 7% in the Financial Solutions segment. Adjusted revenue increased 8% year-over-year to $5.20 billion.
The financial technology and services provider's adjusted EPS of $2.47 beat the analyst consensus estimate of $2.43. The quarterly adjusted EPS increased by 16% over the same period last year.
Organic revenue grew 8%, led by 9% growth in Merchant Solutions and 7% in Financial Solutions.
The adjusted operating margin increased by 120 bps Y/Y to 39.6%. Adjusted operating margin decreased 200 basis points Y/Y to 34.6% in the Merchant Solutions segment. The margin increased 280 bps Y/Y to 48.7% in the Financial Solutions segment.
Acquistion
Fiserv expanded its presence in Canada by signing a multi-year Strategic Managed Services agreement with TD Bank Group. The agreement enables TD Merchant Solutions to adopt Fiserv's technology, including the Clover point-of-sale system, for its merchant operations. The deal strengthens Fiserv's Canadian ties and opens new opportunities to scale Clover hardware and software solutions.
Fiserv also signed a purchase agreement to acquire part of TD's Canadian merchant processing business, adding about 3,400 merchant relationships and 30,000 locations to its portfolio. These merchants will migrate to Fiserv's processing platform and use Clover, reinforcing the company's commitment to serving small and mid-sized businesses with innovative technology.
The companies expect the transaction to close later this year, pending customary approvals. Financial details remain undisclosed.
FY25 Outlook
Fiserv expects organic revenue growth of approximately 10% (prior 10%-12%) and adjusted EPS outlook of $10.15-$10.30 (prior $10.10-$10.30), representing growth of 15%-17% Y/Y versus the $10.20 analyst consensus estimate.
Fiserv stock plunged over 19% year-to-date. S&P 500 Index (where Fiserv is a constituent) gained over 7%. Multiple Wall Street firms slashed their price forecasts on the stock in 2025.
Price Action: FI stock is down 21.30% at $130.65 at last check Wednesday.
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