Fiserv (FISV Quick QuoteFISV - Free Report) has reported better-than-expected third-quarter 2026 results, with earnings and revenues surpassing the Zacks Consensus Estimate despite continued profitability pressure.

Adjusted earnings of $1.75 per share beat the consensus estimate of $1.72 by 1.7% but declined 14% year over year. Adjusted revenues of $4.85 billion surpassed the consensus mark of $4.84 billion by 0.2% but declined from the year-ago quarter. Organic revenues were flat, supported by Financial Solutions' return to growth. Clover processing revenues increased 12% year over year.

FISV's Revenue Mix Reflects Continued Pressure

GAAP revenues declined 1% year over year to $5.20 billion from $5.26 billion. Adjusted revenues totaled $4.85 billion compared with $4.92 billion a year earlier. The difference reflected $344 million in postage reimbursements.

Processing and services revenues decreased to $4.23 billion from $4.27 billion. Product revenues declined to $965 million from $990 million, indicating weakness across both revenue streams.

For the first nine months of 2026, adjusted revenues fell 3% to $14.49 billion. Organic revenues also declined 3%, reflecting persistent pressure on the company's underlying business.

Fiserv's Merchant Segment Faces Revenue Headwinds

Merchant Solutions revenues declined 3% year over year to $2.52 billion from $2.59 billion. Organic revenues decreased 2%. Small Business revenues fell 2% to $1.71 billion, while Enterprise and Processing revenues declined 3% and 7%, respectively.

Clover revenues increased 1%, while processing revenues grew 12%. Clover gross payment volume increased 9% on a reported basis and 11% excluding the gateway conversion. Annualized gross payment volume reached $368 billion.

Merchant operating income declined to $724 million from $962 million. The operating margin contracted to 28.7% from 37.2%, highlighting substantial profitability pressure despite relatively modest revenue declines.

FISV's Financial Solutions Returns to Organic Growth

Financial Solutions revenues remained nearly flat at $2.33 billion compared with the year-ago quarter. However, organic revenues increased 2%, marking an improvement from the segment's earlier weakness.

Issuing revenues increased 5% to $840 million, supported by 5% growth in accounts on file. Digital Payments revenues declined 3% to $914 million, while Banking revenues decreased 3% to $577 million. Banking organic revenues fell 5%.

Operating income declined to $887 million from $991 million. The operating margin narrowed to 38.1% from 42.5%. Meanwhile, core banking net attrition improved more than 25% year to date, supported by lower client losses and stronger wins.

Fiserv's Higher Costs Weigh on Profitability

The GAAP operating loss totaled $5.49 billion compared with operating income of $1.44 billion a year earlier. The company recorded a $6.45-billion non-cash goodwill impairment charge following sustained declines in its share price and market capitalization.

Adjusted operating income decreased year over year to $1.51 billion from $1.82 billion. The adjusted operating margin contracted 580 basis points to 31.2% from 37%.

The quarter included $158 million in One Fiserv transformation expenses, $83 million in severance costs, and $31 million in merger and integration expenses. The GAAP loss was $11.17 per share compared with earnings of $1.46 per share a year earlier.

FISV's Cash Flow & Capital Allocation Trends

Net cash provided by operating activities totaled $3.09 billion during the first nine months of 2026, declining from $4.12 billion in the prior-year period. The free cash flow decreased to $2.04 billion from $2.88 billion.

The third-quarter free cash flow totaled $679 million, while capital expenditure reached $482 million. Trailing 12-month free cash flow conversion stood at 91% compared with 93% a year earlier.

Fiserv did not repurchase shares during the quarter but expects $500 million in repurchases during the fourth quarter. Total debt stood at $27.06 billion, representing 3.1 times trailing 12-month adjusted EBITDA.

Fiserv Reaffirms 2026 Outlook, Raises Savings Target

FISV reaffirmed its 2026 adjusted earnings guidance of $7.20-$7.40 per share. The midpoint ($7.30) of the guided range is higher than the Zacks Consensus Estimate of $7.25. The company expects organic revenue growth between negative 1% and flat, with adjusted revenues expected to decline between 0.5% and 1.5%.

Management expects an adjusted operating margin of 31-31.5% and a free cash flow conversion of approximately 90%. Both adjusted and organic revenues are expected to return to growth in the fourth quarter.

The company raised its Project Elevate savings target to $1 billion from $500 million following a comprehensive portfolio review. Management expects additional operational efficiencies while continuing investments in technology modernization and innovation.

Fiserv carries a Zacks Rank #4 (Sell) at present.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings Snapshot

Republic Services (RSG Quick QuoteRSG - Free Report) reported better-than-expected third-quarter 2026 results.

RSG's adjusted earnings of $1.94 per share increased 2.1% year over year and surpassed the Zacks Consensus Estimate of $1.92 by 1%.

Revenues rose 8.2% to $4.56 billion and beat the consensus mark of $4.41 billion by 3.4%.

Waste Management (WM Quick QuoteWM - Free Report) posted mixed third-quarter 2026 results.

Adjusted earnings of $2.15 per share lagged the Zacks Consensus Estimate of $2.18 by 1.4%. The reported figure increased 8.6% from the year-ago quarter's $1.98.

Revenues rose 6.3% year over year to $6.85 billion, surpassing the consensus estimate of $6.8 billion by 0.7%.