Snapshot
Fiserv Inc reported $5.52B of revenue in Q2 2025, up 8.0% year over year, with diluted EPS of $1.86 and an operating margin of 30.7%.
- Revenue
- $5.52B
- YoY growth
- +8.0%
- Diluted EPS
- $1.86
- Operating margin
- 30.7%
What management said
- •The earnings release and supplemental materials for the quarter are available on the Investor Relations section of fiserv.com.
- •You should refer to our earnings release for a discussion of these risk factors.
- •During the second quarter, we grew sales, clients, and our new business pipeline.
- •For the second quarter, we delivered 8% adjusted and organic revenue growth and strong 16% Adjusted EPS growth.
- •We expanded our adjusted operating margin and generated good free cash flow.
- •As Bob will cover later, we have increased our 2025 share repurchase guidance to approximately 130% of free cash flow.
- •Before Bob walks you through our financial performance in more detail, I'd like to provide some color around the refinements we made to our guidance and share some important business highlights from the quarter.
- •The 2025 guidance, which called for 10%-12% organic revenue growth on top of the 16% growth we achieved in 2024, had always assumed a significant growth ramp on the back half of the year.
- •This trajectory was based on the successful launch of a long and granular list of new products and strategic initiatives, as well as a relatively strong macroeconomic outlook.
- •Our updated guidance reflects the fact that some of those launches and initiatives are taking longer than we had planned.
- •As a result, we have refined our full-year organic revenue growth guidance to approximately 10%, which is at the low end of our guidance range.
- •To be clear, we are maintaining our guidance for $3.5 billion of Clover revenue this year.
What went well
- •Fiserv delivered a strong second quarter with 8% adjusted and organic revenue growth and 16% adjusted EPS growth to $2.47. Adjusted operating margin expanded 120 basis points to 39.6%, and the company returned $2.2 billion to shareholders by repurchasing 12.2 million shares, 26% more than in Q1, raising its 2025 share repurchase guidance to approximately 130% of free cash flow. Clover revenue grew 30% in the quarter with VAS (value-added services) penetration reaching 24%, up from 20% a year ago, and total VAS revenue grew 52%. The company announced an agreement to become the merchant processing provider for TD Bank Canada, including purchasing a portion of TD's existing merchant business covering over 35,000 enterprise and mid-market locations. Issuing revenue in Financial Solutions grew 13%-14% on data and analytics sales, and Zelle transactions grew 19%. The company is maintaining its guidance for $3.5 billion of Clover revenue in 2025.
What went wrong
- •Fiserv refined its full-year organic revenue growth guidance to approximately 10%, the low end of its prior 10%-12% range, because several new product launches and strategic initiatives are taking longer than planned, with the CEO acknowledging some delays are 'on us.' Merchant Solutions adjusted operating margin declined 200 basis points year-over-year to 34.6%, pressured by investments in marketing/sales/distribution, the CCB acquisition coming in below company-average margin, and new software/hardware investments. The full-year margin expansion outlook was reduced from at least 125 basis points to approximately 100 basis points, largely due to dilution from recent acquisitions. Clover reported volume growth was 8% (11% excluding the gateway conversion), and processing organic revenue was down 1% year to date.
Guidance changes
| Metric | Period | Previous | Current | Change |
|---|---|---|---|---|
| Organic revenue growth | FY2025 | 10%-12% | approximately 10% | lowered to low end of range |
| Adjusted EPS growth | FY2025 | 15%-17% | bottom end raised by $0.05 | raised bottom of range |
| Adjusted operating margin expansion | FY2025 | at least 125 bps | approximately 100 bps | lowered |
| Share repurchase | FY2025 | — | approximately 130% of free cash flow | increased |
| Clover revenue | FY2025 | $3.5 billion | $3.5 billion | maintained |
| Free cash flow | FY2025 | — | approximately $5.5 billion | maintained |
| Clover reported volume growth | FY2025 | — | at least 9% reported, at least 11% excluding gateway | — |
| Financial Solutions organic revenue growth | FY2025 | — | 6%-8% | — |
Performance breakdown
| Metric | YoY change | Reason |
|---|---|---|
| Total adjusted revenue | up 8% to $5.2 billion | Solid performance in both Merchant Solutions and Financial Solutions segments |
| Adjusted EPS | up 16% to $2.47 | Revenue growth, margin expansion, and increased share repurchases |
| Clover revenue | up 30% | VAS penetration, working capital products, hardware sales, and pricing |
| Merchant Solutions organic revenue | up 9% | Clover strength; comparison against 28% Q2 2024 growth that included Argentina inflation/Dollar Turista benefit |
| Merchant Solutions adjusted operating margin | down 200 bps to 34.6% | Investments in marketing/sales/distribution, CCB acquisition dilution, and new software/hardware investments |
| Issuing organic/adjusted revenue | up 13%/14% | Data and analytics sales, an early-stage offering |
| Zelle transactions | up 19% | Rising demand for real-time payments |
Earnings call themes & trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Back-half growth ramp | Original plan assumed a significant growth ramp in the back half from new product launches | Initiatives taking longer than planned; full-year refined to ~10% at low end of range; back-half growth now ~12% | softening |
| Clover as a business operating system | Point-of-sale framing | Positioned as a full business operating system with horizontal (Homebase), vertical (Rectangle Health, Clover Hospitality), and geographic expansion | expanding |
| International Clover expansion | Five new countries added (Brazil, Mexico, Australia, Singapore, Europe) | Ramping merchants in all new geographies; Brazil tracking to plan; added Belgium and TD Bank Canada partnership | expanding |
| Clover Capital penetration | Meaningfully under-penetrated versus peers (Toast, Square) | Beginning a holistic effort on pricing, risk, and operations; still taking less risk than competitors | early-stage opportunity |
| Argentina inflation benefit | Contributed 12 points of Merchant organic growth in Q2 2024 | Now gone in 2025 as inflation/interest fell below five-year average, easing comparisons through the year | normalizing |
Q&A summary
What are you doing to unlock the Clover Capital TAM given low penetration versus peers? (Timothy Chiodo, UBS)
Fiserv is at the beginning of a holistic effort on offer operations, negotiation, and pricing while staying prudent on risk; it is under-penetrated across both Clover and non-Clover SMB bases and sees significant TAM within its risk appetite.
What changed in the merchant growth rate from the start of the year, and what drives confidence in the guide? (Darrin Peller, Wolfe Research)
The CEO, ~10 weeks in seat, said the back-half ramp depends on product rollout timing rather than quality; the refinement to ~10% reflects six-plus months of visibility, with back-half growth of ~12% and strong pipelines for the products coming to market.
Which initiatives specifically are being extended, and what is on Fiserv versus external? (J Wong, J.P. Morgan)
Several initiatives across a long list (Cashflow Central, Clover, digital payments/FIUSD, digital banking) are slipping on timing—some controllable via faster execution, some due to partner integrations and an uncertain Q2 macro—but all retain their full financial and strategic benefit.
Can you quantify the merchant margin drivers and was it in line with expectations? (Harshita Rawat, Bernstein)
Merchant margin decline was generally in line with expectations; the full-year company margin guide was cut from 125 to ~100 bps mainly because four recently closed acquisitions (~$200M+ revenue) came in below company-average margin, with less volume to offset.
What drives the implied mid-teens second-half merchant revenue growth? (David Koning, Baird)
Easier Argentina comparisons (transitory benefit now gone), Clover becoming a bigger piece growing ~30%, international expansion (Brazil), and enterprise Commerce Hub ramp drive acceleration from 9% in the first half.
Is hardware strength reoccurring and what about the 2026 Clover target? (Will Nance, Goldman Sachs)
Fiserv is on track for the $3.5B 2025 target set three years ago, and the same initiatives support the ~$4.5B 2026 goal; management disagreed that hardware is non-recurring, noting it earns good margin and has been a consistent mid-teens percentage of Clover revenue.