The Past Will Not Be Prologue, Fiserv’s Top Executive Promises – Digital Transactions

Fiserv Inc. has had a tough year, with changes in top management, earnings misses, a slowdown in growth in its key merchant business, and pressure from activist investors. But its new chief executive early Thursday sought to reassure Wall Street that the recent past will not be prologue, even as the Milwaukee-based processor’s stock has slumped 20% since the start of the year.

“I’m more confident than ever” about Fiserv, Takis Georgakopoulos, the company’s new chief executive, told equity analysts during a call to discuss the company’s June-quarter results. “But we must deliver the basics first.” Georgakopoulos, who joined Fiserv in late 2024 from J.P. Morgan, took over from Mike Lyons in the middle of June as Lyons left to run Truist Financial Corp.

For one thing, Georgakopoulos sees a pressing need to rework Fiserv’s business lines. “We need to simplify. We need to improve coordination” between Fiserv’s merchant division and other parts of the business, he told analysts on the call. He stressed simplification and investment. “We will drive significant cost savings over the long term,” he said, adding that the company plans to plow $100 million into technology in the second half of the year.

In the meantime, Fiserv faces a significant slowdown in its payments division, its biggest business unit. The company reported Thursday the unit generated $2.61 billion in revenue in the June quarter, down from $2.64 billion last year. Processing revenue for the quarter fell 6% to $264 million, while both small-business and enterprise results slid 1%. Chief financial officer Paul Todd, who also spoke on the call, blamed “headwinds in Argentina” and a slowdown in hardware revenue. Fiserv has done business in Argentina since 2019, when it acquired First Data Corp., which had been operating in that country.

Fiserv’s Clover point-of-sale technology remains a growth engine, though its overall revenue in the quarter increased a slim 2%. In his new position for just five weeks, Georgakopoulos was optimistic, citing a “dramatic increase in the enterprise pipeline” and an agreement to integrate Mastercard Inc.’s Commerce Cloud, a cloud technology that lets merchants process contactless payments on ordinary mobile phones while managing fraud protection.

“This unfortunately is a transition year,” Georgakopoulos said, pointing to brighter horizons. “I’m quite excited about what’s coming ahead.”

He did not comment on a recent letter from activist investor Jana Partners Management LP urging the company to review its entire portfolio of products and services and appoint more board members. The investor action comes as Fiserv’s share price has plummeted to just over $50 from well over $100 last fall.

Outside interest has particularly focused on Fiserv’s two debit networks, Accel and Star. Fiserv has not commented on whether these networks are for sale. “We have two debit networks, and they will be part of our review,” Georgakopoulos said. “I don’t want to comment specifically until we have more time on the job.”

The new CEO promised more to come on Fiserv’s entire operations. “We will report back as we make progress,” he said.

For the quarter, Fiserv reported adjusted revenue of $4.96 billion, down 4% year-over-year. Its adjusted operating margin dipped 780 basis points, to 31.8%, over the same 12 months.