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There's more to Fiserv than Clover
Fiserv’s growth engine runs much deeper
Jevgenijs Kazanins
May 18, 2025
Hey!
I have been planning to research Fiserv for a while. My perception was that the market loved this company purely because of Clover, a modern POS solution for small businesses. Clover has been delivering impressive growth, successfully competing with the likes of Square.
I’m glad I finally did this research. What I found is that two-thirds of Fiserv’s business is hardly at risk of disruption. It competes with other incumbents, like FIS, but faces little competition from the new generation of fintech companies. At least for now.
In the meantime, the company continues to improve its operating efficiency and buy back its stock, which turns single-digit revenue growth into consistent double-digit growth in earnings per share. So Fiserv should be fine, even if Clover can’t maintain its strong momentum.
Let’s dive in!
Jevgenijs
p.s. if you have feedback, just reply to this email or ping me on X/Twitter
In 2019, Fiserv acquired First Data, creating one of the largest Fintech companies globally. The merger combined Fiserv’s core banking and payment technology with First Data’s merchant acquiring and issuer processing businesses. As of this writing, Fiserv $FI ( ▲ 4.73% ) has a market cap of $92 billion, larger than PayPal, Adyen, and Block.
Image source: Fiserv to Combine with First Data
Fiserv’s revenue is equally split between its “Merchant Solutions” and “Financial Services” segments. The “Merchant Solutions” segment covers Fiserv’s payment acceptance business for both small businesses and large enterprises. The “Financial Solutions” segment includes core and digital banking, digital payments, and issuer processing.
Fiserv’s geographic footprint has remained largely unchanged since the merger, with the U.S. still accounting for the majority of its revenue. International markets (EMEA, LatAm, and APAC) contribute just 15%.
Image source: Fiserv 2024 annual report
If there is one word to describe Fiserv’s financial performance, this would be “predictability”. The company has consistently delivered high single-digit adjusted revenue growth, a trend Wall Street analysts expect to continue in the years ahead.
Data source: Koyfin, company reports
Fiserv has also been improving its operational efficiency, delivering low double-digit growth in adjusted net income. The company adjusts its revenue for “postage reimbursements”, which are the pass-through costs associated with customer account statement printing and posting. Fiserv also adjusts its net income for the amortization of acquired intangible assets and one-off acquisition and merger-related costs.
Data source: Koyfin, company reports
In addition, Fiserv uses its free cash flow for stock buybacks, further boosting its adjusted EPS growth. The company does not pay dividends. The chart below probably explains why the market loves Fiserv: consistent double-digit adjusted EPS growth.
Data source: Koyfin, company reports
“For the full year 2024, we returned value to shareholders in the form of share repurchases worth $5.5 billion or 34 million shares, contributing to a nearly 5% decline in average shares outstanding for the year.”
Fiserv is guiding for 10-12% “organic” revenue growth and 15-17% adjusted EPS growth in 2025. The “organic” revenue is essentially adjusted revenue less the impact of exchange fluctuations. In recent years, “organic” revenue growth greatly exceeded adjusted revenue growth due to the devaluation of the Argentine Peso.
Image source: Fiserv Q4 2024 earnings presentation
“For 2025, we are guiding the 10% to 12% organic revenue growth, greater than 125 basis points of adjusted operating margin expansion; 15% to 17% adjusted EPS growth; and roughly $5.5 billion of free cash flow.”
In 2023, Fiserv held an Investor Day, and guided for 9-12% “organic” revenue and 14-18% adjusted EPS growth in 2025-2026. As you might have noticed from the charts above, Wall Street analysts expect this growth rate to continue into 2027.
Image source: Fiserv Investor Conference 2023
“…we expect continued strong free cash flow, generating $4.5 billion next year and $5 billion to $5.5 billion in the medium term. That performance leads to $23 billion in adjusted revenue in 2026 with an adjusted EPS of approximately $11.60, a compound annual growth rate of 16% from 2023 to 2026.”
