(Reuters) -Fiserv lowered its annual earnings forecasts for the second straight quarter on Wednesday and announced an overhaul of its senior leadership as the payments firm grapples with slowing growth, sending its shares diving 31% before the bell.
Analysts and investors had been skeptical of Fiserv’s ability to meet its full-year merchant business forecast, given the acceleration needed in the second half of the year.
“Our current performance is not where we want it to be nor where our stakeholders expect it to be,” CEO Mike Lyons said in a statement.
Fiserv now expects annual revenue growth of 3.5% to 4%, compared with its prior forecast of 10%. Annual adjusted profit per share is now expected between $8.50 and $8.60, down from its earlier forecast of $10.15 to $10.30.
“The magnitude of the 3Q miss and guidance cut for FY25… (are) difficult to comprehend,” according to analysts at Jefferies. “We would not be surprised to see the stock down 40%+ today.”
Slowing growth in the Clover business, Fiserv’s point-of-sale and business management platform, has been a key concern for investors this year.
Fiserv’s third-quarter adjusted profit of $2.04 per share missed analysts’ expectation of $2.64 per share, according to estimates compiled by LSEG.
Adjusted revenue of $4.92 billion also missed estimates of $5.36 billion, as its merchant solutions as well as financial solutions businesses lagged.
Payments firm PayPal on Tuesday flagged smaller basket sizes and cautious shoppers, as consumers become more selective about their purchases.
LEADERSHIP REJIG
Fiserv also announced an overhaul of its senior leadership on Wednesday, appointing Paul Todd as its finance boss, effective October 31.
Todd has previously served as the finance boss of payments firm Global Payments and succeeds Robert Hau, who will be a senior adviser through the first quarter of 2026.
Takis Georgakopoulos and Dhivya Suryadevara have been named Fiserv’s co-presidents, effective December 1.
The rejig comes as Lyons, who took the helm at Fiserv just a few months ago, looks to turn around the ship and deal with growing investor worries.
Amid intense investor scrutiny around Clover, Lyons said earlier this year he had walked into a “bit of a firestorm”.
(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Pooja Desai)
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