FISV · Q1 2026 Earnings

Bearish

Fiserv

Reported May 5, 2026

30-second summary

Q1 organic revenue fell 4% YoY — below the FY2026 guide of +1% to +3% — with Financial Solutions at -6% organic and Merchant Solutions at -1% organic. Per CFO Paul Todd, FS adjusted revenue declined 5%, landing at the "expectations of adjusted revenue decline at the high end of mid-single digits that I mentioned on our last call," so the Q1 segment shape landed roughly where February's framing implied. Adjusted operating margin of 29.7% landed at the "just below 30%" trough management pre-committed to, and the FY2026 organic, EPS ($8.00–$8.30), and ~34% margin guides were all reaffirmed unchanged. Note Q1 adjusted EPS of $1.79 benefited ~$0.17 from a discrete tax valuation allowance release (Q1 effective tax rate of 11% vs. FY guide of 19%–19.5%) that will reverse over the remaining quarters. The credibility ask remains large: management reiterated — "as we told you in February" — that Q2 is the trough ("we expect our financial solutions business to decline at the high end of mid-single digits in Q2"), and that the recovery is "more fully visible in our financial results in the second half of the year and 2027."

Headline numbers

EPS

Q1 FY2026

$1.79

Revenue

Q1 FY2026

$5.03B

-2.0% YoY

Free cash flow

Q1 FY2026

$0.26B

Operating margin

Q1 FY2026

18.3%

Key financials

Q1 FY2026

Metric	Q1 FY2026	YoY	Q4 FY2025	QoQ
Revenue	$5.03B	-2.0%	$5.28B	-4.8%
EPS	$1.79	—	$1.99	-10.1%
Operating margin	18.3%	—	24.4%	-610bps
Free cash flow	$0.26B	—	—	—

Guidance

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Organic Revenue Growth	Q1 FY2026	1% to 3%	-4%	-5 to -8pts below guide	Missed
Adjusted Operating Margin	Q1 FY2026	just below 30%	29.7%	In-line with 'low point' expectation of ~30%	Missed

New guidance

Metric	Period	Guide	YoY
Financial Solutions Organic Revenue Growth	Q2 FY2026	High end of mid-single digits decline	—
Adjusted Operating Margin	Q2 FY2026	31% to 32%	—

Reaffirmed unchanged this quarter: Organic Revenue Growth (1% to 3%), Adjusted EPS ($8.00 to $8.30), Adjusted Operating Margin (Approximately 34%), Merchant Solutions Organic Revenue Growth (Mid-single digits), Financial Solutions Organic Revenue Growth (Flat to slightly down), Free Cash Flow Conversion (Approximately 90% of adjusted net income), Capital Expenditures (Approximately flat with 2025 levels), Clover Revenue Growth (Low double digits), Clover GPV Growth (10% to 15% excluding gateway conversion)

Segment performance

Q1 FY2026

Segment	Q1 FY2026	YoY
Merchant Solutions	$2.373B	—
Financial Solutions	$2.302B	-4.8%
Merchant Solutions Organic Revenue Growth	-1%	—
Financial Solutions Organic Revenue Growth	-6%	—

Capital & returns

Q1 FY2026

Segment	Q1 FY2026
Share Repurchases	3.3M shares, $200M

Other KPIs

Q1 FY2026

Segment	Q1 FY2026
Adjusted Operating Margin	29.7%
Adjusted Revenue	$4.68B
Organic Revenue Growth	-4%
Merchant Solutions Operating Margin	26.4%
Financial Solutions Operating Margin	38.1%

Management tone

The Q2-as-trough framing was already laid out in February (Q4 FY2025 call). On this call CFO Paul Todd was explicit: "As we told you in February, we expect the second quarter to be the trough in terms of our year-on-year revenue decline and we expect our financial solutions business to decline at the high end of mid-single digits in Q2." Q1 FS at -5% adjusted came in against that February-set high-end-mid-single-digit-decline expectation; organic -6% was ~1 pt wider, consistent with the ~1% organic-to-adjusted delta the CFO flagged. So the news this quarter is reaffirmation, not a fresh deterioration.

That said, management is explicitly deferring the proof point. The framing — "as expected, that progress is not yet visible in our reported financial results as we are still lapping a higher mix of non-recurring revenue, feeling the lingering impacts from prior client service challenges, and absorbing the incremental expense from investments" — normalizes the gap between operational claim and reported result. Mike Lyons: "We look forward to the second half of the year and 2027 when we expect our operating performance will be more fully visible in our financial results." On the Goldman question Lyons added that 2027 is "the first full year where you can see really clear, visible growth."

Attrition framing has not gotten better. The CEO this quarter: "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." "Early signs" sits underneath a -6% organic FS print. Lyons described the remediation as "bending that curve in a positive way" with "significant work to do" — an honest framing, but not yet supported by reported attrition data.

The AI and Project Elevate framing is the one area where management is genuinely leaning forward. The Investor Day positioning around a "governed AI operating layer," two live pilot agents at FIs (loan origination, compliance, call centers), and agentic commerce on the merchant side gives the bull case something to underwrite. But it is being asked to carry weight that the current financials cannot — the call explicitly defers proof to Investor Day (May 14) and to 2027. Project Elevate financial targets will be quantified at Investor Day.

Recurring themes management leaned on this quarter:

Transition year execution delays—operational progress masking financial weaknessAttrition and client service remediation ongoing but incompleteNon-recurring revenue headwinds extending through H2 2026AI and agentic capabilities as strategic lever but results not yet monetizedProject Elevate efficiency savings and Fiserv convergence as 2H and 2027 driversCapital allocation discipline and potential asset dispositions

Risks management surfaced:

Macro instability, particularly higher gas prices from Middle East conflict impacting consumer spending mixCore account attrition remaining above long-term trend despite client service initiativesArgentina revenue headwind from lower inflation and interest ratesBill pay transactions declining high single digitsLeverage management and debt-to-EBITDA targets constraining capital deployment flexibility

Q&A highlights

Tinjin Wang · JPMorgan

Visibility on banking side and retention given bank conversions; detail on attrition and retention dynamics

Core attrition above desired levels but management confident in fixes. Outlined multi-pronged approach: increased client coverage, AI in call centers, portal enhancements, tech modernization, support for all cores, Stone Castle acquisition for deposit growth, Smith Consulting acquisition, and client health index using AI to proactively identify at-risk customers. Bending curve in positive way but acknowledges significant work remains.

Serving almost 3,000 banks and credit unions on core sideCore attrition currently above historical/normal levelsIncreased client coverage directly requested by clientsStone Castle acquisition supporting deposit growth

Dan Doliff · Mizuho

AI initiatives and value-add compared to competitor announcements on banking AI

Management outlined four AI focus areas: systems of record to systems of greater value/collaboration, new revenue sources/TAMs, client service enhancement, internal productivity. On banking side specifically: introducing governed AI operating layer at Investor Day enabling access to agents across front/middle/back office with any LLM. Already live with pilot agents at two FIs with use cases in loan origination, compliance, call centers. On merchant side: agentic commerce capabilities in partnership rollouts.

Four AI focus areas: systems transformation, new revenue/TAMs, client service, productivityGoverned AI operating layer launching at Investor DayAlready live with pilot agents at two financial institutionsMultiple use cases: loan originations, compliance, call centers

Will Nance · Goldman Sachs

Timeline for Financial Solutions segment to reach mid-single-digit growth; when improvements in execution and attrition will be visible in results; 2027 outlook

Management confident in actions being taken and fully funded/resourced. Execution still required. Comparables challenging through 2026 due to Q3/Q4 2025 actions but clearing into Q4. 2027 characterized as first full year where clear, visible growth will be evident. Fundamentals underlying volume drivers strong; environmental support present. Must improve execution, resilience, and service delivery.

FS underlying volume growth currently flat on clean basisMerchant segment mid-to-high single-digit growth on mid-single-digit basisFull funding and resources allocated to execution planQ4 2026 has mixed comparables (some beneficial, some headwinds from prior-year actions)

Vasu Govil · KBW

Nature of non-recurring revenue headwinds in Clover; Clover Capital penetration constraints and long-term penetration potential; balance sheet strategy

Hardware is largest piece of non-recurring revenue decline (comparison to prior year), with other items also present. Clover reported 6% growth but underlying mid-teens when adjusted for non-recurring items. Clover Capital underpenetrated relative to opportunity; management will provide broader strategy at Investor Day including balance sheet vs off-balance sheet approach. Good volume growth in Clover Capital in Q1 with no expected change in trajectory for full year.

Clover reported growth 6%, underlying mid-teens growth adjusted for non-recurringHardware is largest component of non-recurring revenue declineClover Capital showing good growth in Q1Clover Capital underpenetrated relative to market opportunity

Timothy Chiodo · UBS

Non-Clover SMB organic growth trajectory; decomposition of business (U.S., international, ISV/partner); guidance implications; strategic direction

Non-Clover SMB declined low single digits in Q1, expecting similar performance Q2. Second half improves due to incremental ISV growth and international expansion (particularly Brazil). Management characterizes non-Clover SMB as non-growth business but managing systematically with focus on migrating to Clover where product-market fit exists. Detailed component breakdown (U.S., international, ISV) to be provided at Investor Day.

Non-Clover SMB down low single digits in Q1, expecting similar Q2Expecting improvement in back half due to ISV growth and international rampingBrazil international growth ramping stronglyNon-Clover SMB characterized as non-growth business overall

Answers to last quarter's watch list

Q1 FY2026 adjusted operating margin vs the "just below 30%" guide — Q1 printed 29.7% adjusted operating margin, exactly at the pre-committed trough. H1 band of 31–32% reaffirmed, FY ~34% reaffirmed. Status: Resolved positively

Merchant Solutions organic acceleration from +1% to mid-single digits — Q1 organic was -1%, a step down from Q4's +1%, and 5–7 points below the FY mid-single-digit ask. The bridge now requires +6% to +8% organic in H2 starting from -1% — implausible without H2 heroics, which is the exact phrase that flagged this watch item. Status: Resolved negatively

Clover monthly volume cadence — management did not disclose monthly cadence on the call. Clover reported revenue growth of 6% (mid-teens underlying ex non-recurring) and the FY GPV +10–15% ex-gateway guide was reaffirmed. No fresh disclosure that confirms or refutes the Dec/Jan ~11% defense. Status: Continue monitoring

Project Elevate one-time charges and headcount disclosure — no specific charge magnitudes, headcount numbers, or run-rate savings were disclosed in the materials available. Management deferred detail to the May 14 Investor Day. The H2 margin step-up to 35–36% still lacks an audit trail. Status: Not resolved

Buyback pace — Q1 buybacks were $0.2B (3.3M shares) — same residual pace as Q4 FY2025, confirming buybacks remain a residual not a commitment. With share count assumed at ~530M and the FY EPS guide intact, the recovery to >$0.5B per quarter has not happened. Status: Resolved negatively

Financial Solutions Q1 organic vs Q4's -2% — Q1 FS adjusted revenue -5% landed at the high end of mid-single-digit decline, in line with the February framing; organic -6% was ~1 pt wider, consistent with the ~1% organic-to-adjusted delta the CFO flagged. Q2 is reaffirmed at "high end of mid-single digits decline," meaning the segment gets worse before it gets better — but this trajectory was the February setup, not a fresh negative surprise. Status: Resolved in line with February guide

What to watch into next quarter

Q2 Financial Solutions organic vs the "high end of mid-single digits decline" guide — management has staked Q2 as the explicit trough. A print worse than that range would mark a real negative surprise versus the February setup and put the FY flat-to-slightly-down guide out of reach.

Q2 adjusted operating margin inside the 31–32% H1 band — Q1 hit 29.7%, so Q2 mathematically needs to print roughly 32% to 34% to keep H1 inside the band. A Q2 below 32% forces an H1 guide revision and casts doubt on the H2 step-up to 35–36%.

Investor Day disclosures on Project Elevate (May 14) — specifically: dollar run-rate savings, timing of in-year vs out-year contribution, one-time charge schedule, headcount actions. Without these, the H2 margin bridge from 29.7% to 35–36% is an unaudited assertion.

Clover underlying growth ex non-recurring — management claimed mid-teens underlying versus 6% reported; watch whether they provide explicit reconciliation in Q2 or at Investor Day. Continued reliance on "underlying" framing without quantified bridge weakens credibility.

Core banking attrition disclosure — "early signs that client service initiatives have been well received" is the current framing. Watch whether Q2 brings any quantification (gross account losses, signed renewals, attrition rate trend) or whether the qualitative defense continues. Continued vagueness here is itself a signal.

FY2026 organic guide credibility check on Q2 call — if Q2 FS prints at the guided high-end mid-single-digit decline and Merchant stays around -1%, H1 organic will run roughly -4% to -5%. Holding the FY +1% to +3% guide will then require H2 organic of roughly +7% to +10%. Either the guide moves or the H2 ask becomes implausible.

Sources

Fiserv Q1 FY2026 earnings press release (SEC EDGAR): https://www.sec.gov/Archives/edgar/data/798354/000079835426000014/fisvq126earningsrelease.htm
Q1 FY2026 earnings call Q&A exchanges (JPMorgan, KeyBank, Mizuho, KBW, Goldman Sachs, UBS)
Tapebrief Q4 FY2025 FISV brief (prior-quarter guidance baseline and watch list)
Tapebrief Q3 FY2025 and Q2 FY2025 FISV briefs (multi-quarter narrative arc)

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