Snapshot
Fiserv Inc reported $5.03B of revenue in Q1 2026, up -2.0% year over year, with diluted EPS of $1.07 and an operating margin of 18.3%.
- Revenue
- $5.03B
- YoY growth
- +-2.0%
- Diluted EPS
- $1.07
- Operating margin
- 18.3%
What management said
- •Our 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.
- •With respect to business performance, I'll start with Merchant Solutions, where we saw solid growth in Clover GPV, supported by good execution against our strategic initiatives and a stable macro.
- •Clover VaaS revenue represented 27% of Clover revenue in Q1, growing 18% from a year ago, driven by software and Clover Capital.
- •While anticipation lending volumes in Argentina remained strong, lower inflation and interest rates in Argentina were a revenue headwind to Merchant Solutions in Q1.
- •I would note that this revenue softness was largely offset by lower interest expense below the line.
- •Our preliminary April merchant volume growth, including Clover GPV, remained solid around Q1 levels.
- •Our broadening global releases and customer go-lives are driving Commerce Hub transaction growth, which was up nearly 200% in Q1.
- •In Financial Solutions, we saw solid underlying business volume growth, particularly in Finxact and our payments businesses, excluding Bill Pay.
- •While core bank account and revenue attrition remain above our long-term trend, we've seen early signs that our client service initiatives have been well-received.
- •Key new business wins in Financial Solutions included OceanFirst Bank, which is a $14.5 billion Northeast regional bank that is growing rapidly through its announced acquisition of Flushing Bank.
- •It extended its Premier core and surrounds agreement with us, adding digital payments and committing to deploy CoreAdvance.
What went well
- •Fiserv reported Q1 results in line with the expectations set in February, with adjusted revenue of $4.68 billion, adjusted operating income of $1.4 billion at a 29.7% margin, and adjusted EPS of $1.79.
- •Management emphasized execution progress on the One Fiserv action plan, citing a 27% year-over-year reduction in time to resolve client inquiries and a nearly 60% drop in high-impact client incidents.
- •In Merchant Solutions, Clover value-added services reached 27% of Clover revenue and grew 18%, Clover GPV growth was solid, small business volume grew 7%, and Commerce Hub transactions were up nearly 200%; reported Clover revenue grew 6% (mid-teens excluding non-recurring revenue).
- •The company signed 27 new banks as merchant referral partners and announced its largest agent bank partnership ever with Western Alliance Bank (over $90 billion in assets).
- •In Financial Solutions, Finxact accounts and positions grew over 70%, Zelle transactions grew 18%, and key wins included OceanFirst Bank, Nicolet National Bank, Truliant Federal Credit Union, and an expanded PNC Bank relationship.
- •Management reiterated full-year 2026 guidance, highlighted a favorable competitive position in modern core via Finxact, and pointed to a stronger, more visible growth profile in the back half and into 2027.
What went wrong
- •Total company adjusted revenue declined 2.4% and organic revenue fell 3.6% as the company lapped higher non-recurring revenue from the prior year, with reported results not yet reflecting underlying execution progress during what management calls a transition year.
- •Merchant Solutions adjusted operating income fell 23% (margin 26.4%) and Financial Solutions adjusted operating income fell 24% with margin compressing to 38.1% from 47.5%, pressured by investments and lower-margin mix.
- •Core bank account and revenue attrition remained above long-term targets, with core accounts down 2% year-over-year, and Bill Pay transactions declined high single-digits.
- •Lower inflation and interest rates in Argentina were a revenue headwind to the merchant business (largely offset by lower interest expense below the line), and processing organic revenue declined 14%.
- •Management also flagged higher gas prices from Middle East conflict as a potential risk to consumer spending mix.
Guidance changes
| Metric | Period | Previous | Current | Change |
|---|---|---|---|---|
| Full-year 2026 guidance | FY2026 | reiterated | reiterated (unchanged) | — |
| Adjusted effective tax rate | FY2026 | 19%-19.5% | 19%-19.5% (unchanged) | — |
| Clover revenue growth | FY2026 | — | low double digits | — |
| Clover GPV growth (ex-gateway) | FY2026 | — | 10%-15% | — |
| Debt to adjusted EBITDA (gross) | FY2026 year-end | below 3.2x at Q1 | approximately 3x | expected to decline |
Performance breakdown
| Metric | YoY change | Reason |
|---|---|---|
| Total adjusted revenue | -2.4% to $4.68B | lapping higher non-recurring revenue from a year ago |
| Total organic revenue | -3.6% | non-recurring revenue comparatives |
| Adjusted EPS | $1.79 | includes $0.17 positive impact from an 11% Q1 tax rate (timing-related valuation allowance release) |
| Merchant Solutions organic revenue | -1% (adjusted flat) | fully anniversarying the CCB transaction and Argentina headwind |
| Clover revenue | +6% (mid-teens ex non-recurring) | non-recurring hardware revenue in prior-year period; payment processing grew 10% |
| Merchant Solutions adjusted operating income | -23% to $626M (26.4% margin) | investment mix and revenue dynamics |
| Financial Solutions organic revenue | -6% (adjusted -5%) | prior actions, non-recurring prior-year revenue, and elevated attrition |
| Financial Solutions adjusted operating income | -24% to $877M (38.1% margin vs 47.5%) | incremental investment expense and revenue decline |
| Free cash flow | $259M | typical seasonality with Q1 as the lowest free cash flow quarter |
Earnings call themes & trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| One Fiserv action plan execution | — | Progress visible in KPIs (inquiry resolution time down 27%, high-impact incidents down ~60%) but not yet in reported financials; 2026 framed as a transition year | up |
| Core banking attrition / client service | above target, result of actions over prior years | Still above long-term trend (core accounts -2% YoY) but early signs the curve is bending via added client coverage, AI, and supporting all cores | stable |
| Clover growth and back-book conversion | — | Solid GPV growth; non-Clover-to-Clover conversion deliberately modest and customer-centric, low-end guide assumes minimal conversion; two new verticals (PracticePay healthcare, professional services) launched | up |
| AI initiatives | — | Focused on four areas including new revenue/TAMs and agentic commerce/banking; governed AI operating layer for FIs to debut at Investor Day with two pilot institutions live | up |
| Finxact / modern core | — | Accounts and positions up over 70%; named Best SaaS for FinTech; positioned as largest modern core platform by accounts served | up |
| Argentina macro | strong anticipation lending volumes | Lower inflation and interest rates a revenue headwind to Merchant, largely offset by lower interest expense below the line | down |
Q&A summary
What is the detail on banking attrition and retention given recent bank conversions?
Core attrition remains above target as a result of prior-years' actions, especially client service; Fiserv believes it is bending the curve via significantly increased client coverage, AI in call centers and portals, the decision to support all cores, StoneCastle and Smith Consulting acquisitions, and an AI-driven client health index, and is confident it can return attrition to normal levels over time.
How is the SMB back book performing ex-Clover, and how is non-Clover-to-Clover conversion testing?
Nothing unique was called out in Q1 and full-year expectations for back-book conversion are unchanged; conversions are being pursued mindfully and customer-centrically with good test receptivity where product fit exists, with the low end of the GPV guide assuming minimal conversion and the high end more meaningful conversion. New verticals support back-book opportunity.
How does Fiserv add value with AI in banking?
Fiserv is focused on four AI areas (systems of value/collaboration, new revenue/TAMs, client service, and productivity); on banking it will introduce a governed AI operating layer letting FIs use agents across front/middle/back office with any LLM, already live in pilots with two institutions for use cases like loan originations, compliance, and call centers.
Was the Clover non-recurring revenue mostly hardware, and what constrains Clover Capital penetration?
Yes, hardware was the biggest piece of the non-recurring revenue lapped in Q1; Clover Capital remains under-penetrated relative to the opportunity with good growth in the quarter, and a broader balance-sheet and growth strategy will be detailed at Investor Day.
What are the non-recurring revenue headwinds in Financial Solutions, particularly issuing and banking, and their size in Q2?
The biggest issuing driver is non-recurring Output Solutions business in the first half (Q2 last year had teens growth, creating a comparative headwind), with other non-recurring items across digital and banking; Q2 is the trough, while the back half benefits from natural tailwinds including digital comparatives and contracted revenue from client wins.
Can Fiserv reach its target growth rate exiting 2026 and into 2027, given flattish underlying FS growth and margin investments?
Management is confident it is taking the right, fully funded actions to become a mid-single-digit grower; as 2026 exits, comparables improve and 2027 is seen as the first full year of clearly visible growth, supported by stable underlying volume drivers in both merchant and banking.