Dive Brief:
- Fiserv has hired a pack of new executives, including a chief operations officer for its merchant solutions business and a chief revenue officer for its Clover point-of-sale unit, to help improve the company’s performance, CEO Mike Lyons said on an earnings webcast Tuesday.
- The payments processor now has “the right team in place” as it makes its way through a “transition year,” with Lyons promising to lift the company’s current low single-digit revenue growth rate, after what he expects will be a “trough” in the current quarter.
- The Milwaukee-based company has also closed two office locations, terminated a merchant business in India and eliminated some management layers in a bid to lower costs, Lyons said. A team of managers is working on additional cost reduction and productivity ideas, including through new artificial intelligence applications, he said.
Dive Insight:
Fiserv reported that its first-quarter net income dropped by about a third to $571 million, as revenue dipped 2% to $5.03 billion, according to its earnings press release.
In addition to the merchant solutions and Clover appointments, Lyons listed a new head of operations for the company’s financial solutions segment and a new head of product for that area as well.
A spokesperson for Fiserv declined to name the new hires, though at least one new appointment about a month ago showed up on LinkedIn. A post on the social media site said Fiserv had tapped Adam Hyde, formerly of JPMorgan Chase, to oversee the merchant solutions operations, including point-of-sale, e-commerce tools and payment processing.
Analysts took the latest earnings report in stride, pointing to a coming investor day presentation later this month as likely to provide a better review of the company’s progress on goals.
Analysts at investment firm Baird Equity Research dubbed this a “rebuild year” in a Tuesday note to investor clients. They said “some of the strategic initiatives made to right the ship are expected to translate to better revenue/margins” in the second half of the year.
Fiserv has been struggling since last year to prove it can grow at the heady rates that were part of investor expectations two years ago, before CEO Frank Bisignano left the company to lead the Social Security Administration. Lyons was named as his replacement and immediately encountered what appeared to be operations not living up to prior commitments.
Shortly after Bisignano exited last June, the company reported third-quarter results that fell short of analyst expectations. In particular, questions arose about the company’s Clover point-of-sale unit not growing as fast as expected. The company’s stock price has plummeted over the past year, dropping nearly 70%.
Lyons recognized the deficiencies after the earnings report in October. “Our current performance is not where we want it to be nor where our stakeholders expect it to be,” Lyons said at that time.
The CEO also spelled out a recovery plan in late October that the company is trying to execute on, with the assistance of new top executives he appointed late last year, plus the new managers he referenced Tuesday.
“While there is still significant work to do, we are taking the right actions with the right sense of urgency and feel really good about the progress to date,” Lyons told analysts.
