Another tough quarter for Fiserv may lead to product changes 

• Key insight: Fiserv had missed some performance metrics for the second quarter, and its leaders are reviewing all its products and services.
  
• What's at stake: The company may end up selling or rebooting some products. It recently divested its managed ATM service.
  
• Forward look: Analysts see hope in some growth the company has experienced, for instance in its Clover business.

The largest bank core software provider in the United States is reviewing its product lines after an earnings miss and multiple recent executive turnovers as banks have expressed dissatisfaction with its core technology offerings.

Fiserv's revenue for the quarter was down by 3% year over year, and its earnings per share, or EPS, also missed Wall Street estimates with a 21% decrease year over year to $1.84.

Fiserv also lowered its 2026 outlook across the board. The company now expects organic revenue growth of -1% to flat compared to the 1% to 3% growth previously forecast, and an adjusted EPS of $7.20 to $7.40 instead of $8 to $8.30 per share.

Takis Georgakopoulos, Fiserv's newly established CEO, said on the quarterly earnings call Thursday that the company is conducting a review of its products to determine which ones to focus on.

"We are significantly expanding the process to review our mix of businesses and associated capital commitments," he said. "We will dispassionately assess how our products compare to best in class [and] whether we have the rights to win in each. If we do, we will double down and make sure we execute. If we don't, we'll evaluate the full range of actions to maximize shareholder value while making it imperative to ensure that we don't do anything that causes disruption for our clients." 

To date, Georgakopoulos said on the call, the review process has led to Fiserv divesting its student loan servicing and managed ATM businesses. A previous joint venture transaction between Fiserv and Bridgeport Partners announced in May of this year included Fiserv's ATM Managed Services, Cash & Logistics and MoneyPass businesses.

"These were the right decisions, [but] these alone do not move the needle," Georgakopoulos said.

Timing and scale of future actions were not provided on the call, and when asked about potentially selling one of Fiserv's debit networks executives did not comment beyond confirming that they are under review.

"While results disappointed against the reiterated full-year 2026 outlook in June, Fiserv did a reasonable job describing moving parts and laying groundwork for stabilizing 2027 growth," KeyBanc Capital Markets analysts said in a research note.

Tyler Brown, an independent fintech and payments consultant, told American Banker that the impact of bank core contracts on Fiserv's performance is unlikely to be immediate.

"Core contracts are measured by the decade; the inertia within banks and Fiserv itself means that neither relationships nor technology will change overnight," he said.

Fiserv Chief Financial Officer Paul Todd said on the earnings call that in the banking sector, "revenue decreased 10% on an organic basis and decreased 8% on an adjusted basis in the quarter as we continued to be impacted by attrition from actions taken over the last several years as well as higher non-recurring revenue in the year-ago period." 

However, Georgakopoulos said on the call that Fiserv is "seeing progress with new core wins and related deal value from these wins versus the same period last year, while attrition remains stable."

Analysts from Truist said in a research note that core client loss is a key concern for Fiserv and "if left to continue, it would impair what has been a durable and stable source of operating income for the company historically."

In a "Core Provider Hate Index" report that Brown assembled from a core platform satisfaction survey by the American Banking Association, he said that "Fiserv has a third of the market for community bank cores and Premier is the dominant core," but Fiserv's DNA core was the product surveyed banks were most dissatisfied with and least likely to renew.

"Big incumbents consolidated the market, competition vanished, and small banks were stuck with brittle technology and terrible contracts under the thumb of a B2B oligopoly," he said in the report. "Big banks more or less did what they wanted; small banks and credit unions got leftovers and terrible contract terms."

A comment letter from Fiserv to the Office of the Comptroller of the Currency, in response to a request for information from the agency on community banks' engagement with core service providers, said that "operating a core banking system is complicated and complex" and "each client's implementation must satisfy institution-specific regulatory and operational requirements that evolve over time and must be compatible, at-scale, across a financial institution's technology environment." 

The company said it employs more than 13,000 software engineers, approximately 10,000 associates to provide operations and client support, and annually spends over $3 billion on technology. "The evolution of core platforms has allowed smaller institutions to operate with levels of sophistication once reserved for larger banks," Fiserv stated in its letter.

Brown also pointed to recent changes in leadership as a sign of future shake-ups at the technology provider. Dhivya Suryadevara resigned from her role as president and head of the financial solutions business for Fiserv last month, and Georgakopoulos became CEO on June 15 as Mike Lyons left the company to become the CEO of Truist Bank. 

Lyons had previously been established as CEO of Fiserv in January 2025 from PNC after Frank Bisignano left the company to run the Social Security Administration, and later the Internal Revenue Service, when nominated by President Donald Trump in December 2024 and subsequently approved by Congress in May of last year.

"When Mike Lyons started cleaning house, I bet he didn't like what he saw," Brown told American Banker. "Cycling through three CEOs and watching the head of financial solutions quit are signs of worse things to come for banks. If Fiserv doesn't know where it's going, how will its customers?"

Phil Philliou told American Banker that although Fiserv's earnings were generally viewed as difficult, he saw potential in the growth of Fiserv's point of sale product line from Clover. Fiserv acquired Clover as part of its $22 billion deal for First Data back in 2019.

"I heard plenty of good things happening in an environment that is very difficult to manage, especially around Fiserv's crown jewel, the Clover point of sale," he said.

For example, Philliou cited the tech provider mentioning Rectangle Health's HIPAA-compliant Clover PracticePay offering for healthcare providers. 

"Success in healthcare will hopefully pave the way for further vertical and segment expansion with Clover," he said.

Clover saw gross payment volume, or GPV, growth of 9% year over year (11% when excluding a gateway conversion), while total revenue grew 2%. 

"Lower hardware and data revenue negatively impacted 2Q26 Clover revenue by approximately 9%," the earnings report noted. "Lower Argentina anticipation revenue negatively impacted 2Q26 Clover revenue by approximately 2%."

Management maintained its medium-term outlook for 10% to 15% GPV growth and 15% to 20% revenue growth for Clover.

Fiserv also announced on the earnings call that Western Alliance Bank is now live on Clover, bringing the number of top 100 U.S. banks working with the platform to nearly 40. The TD Bank partnership with Clover is also expanding, with Fiserv planning to convert TD's existing merchant portfolio starting in 2027. 

"The good news revealed on today's call is that, despite the tough backdrop, Fiserv is plowing forward and backing Clover growth initiatives," Philliou said.