Shares of Fiserv, Inc. (NYSE:FISV) increased notably on Tuesday following the release of the companys fiscal fourth-quarter 2025 results, which included mixed financial outcomes alongside cautious optimism for the coming year. Despite a miss on adjusted revenue relative to analyst expectations, Fiserv delivered an earnings per share figure that exceeded consensus, contributing to upward momentum in its stock price.
For the quarter, Fiserv reported adjusted revenue of $4.90 billion, slightly below the analysts median forecast of $4.96 billion. On a year-over-year basis, adjusted revenue remained effectively flat, underscoring a period of subdued top-line growth. Looking at GAAP revenue, the company posted a 1% increase compared to the prior year, reaching $5.28 billion.
In terms of profitability, Fiserv achieved an adjusted earnings per share (EPS) of $1.99, surpassing estimates set at $1.90 by analysts. However, this represents a 21% decline in adjusted EPS compared to the same quarter the previous year, signaling pressures on earnings quality.
Segment-level performance revealed contrasting dynamics: the Merchant Solutions division grew by 2%, while the Financial Solutions segment experienced a 2% contraction. Organic revenue—excluding acquisitions and divestitures—was flat overall; Merchant Solutions expanded by 1% organically, whereas Financial Solutions declined 2%.
Despite steady revenue figures, Fiserv faced notable compression in profit margins. The adjusted operating margin shrank by 800 basis points year-over-year to 34.9%. When segmented further, operating margins in Merchant Solutions dropped by 710 basis points to 32.1%, and Financial Solutions saw an even steeper decrease of 950 basis points to 42.2%. The margin deterioration is attributed to slowing organic growth and heightened investments in technology infrastructure and strategic restructuring initiatives aimed at longer-term growth.
From a cash flow perspective, the company generated $1.94 billion in operating cash flow and $1.56 billion in free cash flow for the quarter, reflecting healthy cash generation capabilities. Additionally, Fiserv repurchased 3.1 million shares of its common stock, totaling $200 million during the same period, demonstrating commitment to returning capital to shareholders.
Leadership comments following the earnings release highlighted a strategic pivot under CEO Mike Lyons, focusing on improving forecasting accuracy and moving away from previous managements short-term growth tactics. It was noted that Fiserv had earlier increased pricing on debit transactions, tactics that temporarily boosted earnings but hindered client acquisition, prompting a subsequent rollback of some pricing changes.
Looking ahead, Fiserv provided guidance for fiscal 2026 forecasting organic revenue growth in the range of 1% to 3%. The company also expects adjusted EPS between $8 and $8.30, compared with analysts consensus target of $8.19, indicating managements expectations for modest profitability improvements.
Ultimately, despite the pressures reflected in margin contraction and flat organic growth, investors responded positively to the earnings beat and forward-looking guidance. At the time of publication on Tuesday, Fiserv shares were trading approximately 5% higher at $63.15, demonstrating market confidence in the companys execution amid a challenging operating environment.