Fiserv's Q3 Net Income Jumps 40% on Revenue Growth, Expense Surge

Ticker: FISV · Form: 10-Q · Filed: 2025-10-30T00:00:00.000Z

Sentiment: mixed

Topics: Fintech, Earnings, Payments Processing, Financial Services, 10-Q, Revenue Growth, Expense Management

Related Tickers: FISV, SQ, PYPL, GPN, V

TL;DR

**Fiserv's Q3 net income surge is a green light, but keep an eye on those climbing expenses and interest rates.**

AI Summary

Fiserv, Inc. reported a significant increase in net income attributable to Fiserv, Inc. for the three months ended September 30, 2025, reaching $792 million, up 40.4% from $564 million in the prior year period. Diluted earnings per share also saw a substantial jump to $1.46 from $0.98. Total revenue increased modestly by 0.9% to $5,263 million from $5,215 million, driven by processing and services revenue of $4,273 million and product revenue of $990 million. Operating income, however, decreased by 10.4% to $1,436 million from $1,602 million, primarily due to higher expenses, including a 10.4% increase in cost of processing and services to $1,486 million and a 9.7% rise in selling, general and administrative expenses to $1,762 million. Interest expense, net, surged by 29.4% to $422 million, impacting income before income taxes. The company also recorded a net gain on sales and distribution of other assets of $100 million for the quarter. For the nine months, net income attributable to Fiserv, Inc. grew 21.7% to $2,669 million, with total revenue up 4.6% to $15,909 million.

Why It Matters

Fiserv's strong net income growth, despite rising expenses and interest costs, signals robust underlying business performance, particularly in its processing and services segments. This could attract investors seeking stability in the financial technology sector, especially given the competitive landscape with players like Block and PayPal. The increase in merchant credit loss allowance to $44 million from $40 million indicates a proactive approach to risk management, which is crucial for maintaining investor confidence. For employees, continued profitability could mean job security and growth opportunities, while customers benefit from Fiserv's ongoing investment in its core offerings, as evidenced by increased capital expenditures. The broader market will watch how Fiserv manages its debt and integrates acquisitions to sustain this growth trajectory.

Risk Assessment

Risk Level: medium — The risk level is medium due to a significant increase in interest expense, net, which rose 29.4% to $422 million for the three months ended September 30, 2025, compared to $326 million in the prior year. Additionally, operating income decreased by 10.4% to $1,436 million, despite revenue growth, indicating pressure on profitability from rising costs like processing and services, which increased by $140 million.

Analyst Insight

Investors should consider Fiserv's ability to generate strong net income despite rising costs, but closely monitor future interest expense trends and operational efficiency. Evaluate the impact of the $100 million net gain on sales of assets on core profitability and assess if this is a sustainable driver. Look for management's commentary on expense control and debt management strategies.

Financial Highlights

revenue
$5,263M
operating Margin
27.3%
net Income
$792M
eps
$1.46
revenue Growth
+0.9%

Revenue Breakdown

SegmentRevenueGrowth
Processing and services$4,273M+0.9%
Product$990M+1.2%

Key Numbers

Key Players & Entities

FAQ

What were Fiserv's net income and revenue for the third quarter of 2025?

Fiserv, Inc. reported net income attributable to Fiserv, Inc. of $792 million for the three months ended September 30, 2025. Total revenue for the same period was $5,263 million.

How did Fiserv's operating income change in Q3 2025 compared to the previous year?

Fiserv's operating income decreased by 10.4% to $1,436 million for the three months ended September 30, 2025, down from $1,602 million in the prior year period.

What was the impact of interest expense on Fiserv's Q3 2025 results?

Interest expense, net, significantly increased by 29.4% to $422 million for the three months ended September 30, 2025, compared to $326 million in the same period of 2024, impacting income before income taxes.

Did Fiserv have any significant gains from asset sales in Q3 2025?

Yes, Fiserv recorded a net gain on sales and distribution of other assets of $100 million for the three months ended September 30, 2025.

What is Fiserv's current allowance for doubtful accounts?

The allowance for doubtful accounts for Fiserv was $82 million at September 30, 2025, an increase from $71 million at December 31, 2024.

How much did Fiserv spend on treasury stock purchases in the first nine months of 2025?

Fiserv purchased $5,695 million of treasury stock, including employee shares withheld for tax obligations, for the nine months ended September 30, 2025.

What is Fiserv's total long-term debt as of September 30, 2025?

Fiserv's total long-term debt stood at $28,876 million as of September 30, 2025, an increase from $23,730 million at December 31, 2024.

What is Fiserv's exposure to merchant credit losses?

Fiserv's aggregate merchant credit loss allowance was $44 million at September 30, 2025, up from $40 million at December 31, 2024. The expense recognized for merchant credit losses was $32 million for Q3 2025.

How many shares of common stock were outstanding for Fiserv as of October 24, 2025?

As of October 24, 2025, there were 537,851,887 shares of common stock, $0.01 par value, of Fiserv, Inc. outstanding.

What are the primary components of Fiserv's revenue?

Fiserv's revenue primarily consists of processing and services revenue, which was $4,273 million for Q3 2025, and product revenue, which was $990 million for the same period.

Industry Context

Fiserv operates in the financial technology sector, providing a wide range of services to banks, credit unions, and merchants. The industry is characterized by rapid technological advancements, increasing competition, and a growing demand for digital payment solutions and data analytics. Companies like Fiserv are focused on innovation to meet evolving customer needs and regulatory requirements.

Regulatory Implications

As a major player in financial services technology, Fiserv is subject to various regulations concerning data privacy, security, and financial transactions. Compliance with these regulations is crucial to avoid penalties and maintain customer trust. Changes in regulatory landscapes, such as those related to open banking or consumer protection, could impact Fiserv's operations and product development.

What Investors Should Do

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Glossary

Noncontrolling interests
Represents the portion of equity in a subsidiary that is not owned by the parent company. (Impacts the net income attributable to Fiserv, Inc. by reducing it by the portion belonging to minority shareholders.)
Redeemable noncontrolling interest
A type of noncontrolling interest that has terms allowing it to be redeemed or repurchased by the issuing company, often at the option of the holder or the issuer. (Affects net income attributable to Fiserv, Inc. and is presented as a component of equity.)
Equity method of accounting
An accounting method where an investment in another company is initially recorded at cost and then adjusted to recognize the investor's share of the investee's earnings or losses. (Used for investments where Fiserv has significant influence but not control, impacting 'income (loss) from investments in unconsolidated affiliates'.)
Diluted earnings per share (EPS)
A calculation of earnings per share that includes the effect of all dilutive potential common shares, such as stock options and convertible securities. (Provides a more conservative measure of profitability per share, showing a significant increase to $1.46 from $0.98.)

Year-Over-Year Comparison

For the three months ended September 30, 2025, Fiserv reported a modest 0.9% increase in total revenue to $5,263 million, while net income attributable to Fiserv, Inc. surged by 40.4% to $792 million. This divergence was driven by a significant $100 million gain on asset sales and a decrease in operating income by 10.4% to $1,436 million, primarily due to higher operating expenses and a substantial 29.4% increase in net interest expense.

Filing Stats: 4,585 words · 18 min read · ~15 pages · Grade level 15.1 · Accepted 2025-10-30 07:07:31

Key Financial Figures

Filing Documents

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

Financial Statements (Unaudited)

Item 1. Financial Statements (Unaudited) Consolidated Statements of Income 1 Consolidated Statements of Comprehensive Income 2 Consolidated Balance Sheets 3 Consolidated Statements of Cash Flows 4

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 5

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 31

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 46

Controls and Procedures

Item 4. Controls and Procedures 46

– OTHER INFORMATION

PART II – OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 46

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 47

Other Information

Item 5. Other Information 47

Exhibits

Item 6. Exhibits 47 Exhibit Index

Signatures

Signatures Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS Fiserv, Inc. Consolidated Statements of Income (In millions, except per share data) (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Revenue: Processing and services (1) $ 4,273 $ 4,237 $ 12,622 $ 12,377 Product 990 978 3,287 2,828 Total revenue 5,263 5,215 15,909 15,205 Expenses: Cost of processing and services 1,486 1,346 4,287 4,043 Cost of product 679 661 2,057 1,951 Selling, general and administrative 1,762 1,606 5,155 5,000 Net gain on sales and distribution of other assets ( 100 ) — ( 117 ) — Total expenses 3,827 3,613 11,382 10,994 Operating income 1,436 1,602 4,527 4,211 Interest expense, net ( 422 ) ( 326 ) ( 1,118 ) ( 872 ) Other expense, net ( 50 ) ( 5 ) ( 107 ) ( 17 ) Income before income taxes and income (loss) from investments in unconsolidated affiliates 964 1,271 3,302 3,322 Income tax provision ( 173 ) ( 74 ) ( 609 ) ( 448 ) Income (loss) from investments in unconsolidated affiliates 8 ( 626 ) ( 16 ) ( 642 ) Net income 799 571 2,677 2,232 Less: net income attributable to noncontrolling interests and redeemable noncontrolling interest 7 7 8 39 Net income attributable to Fiserv, Inc. $ 792 $ 564 $ 2,669 $ 2,193 Net income attributable to Fiserv, Inc. per share: Basic $ 1.46 $ 0.98 $ 4.85 $ 3.76 Diluted $ 1.46 $ 0.98 $ 4.83 $ 3.74 Shares used in computing net income attributable to Fiserv, Inc. per share: Basic 540.2 573.7 550.8 582.5 Diluted 541.8 576.9 553.0 585.7 (1) Includes processing and other fees charged to related party investments accounted for under the equity method of $ 21 million and $ 35 million for the three months ended September 30, 2025 and 2024, respectively, and $ 77 million and $ 111 million for the nine months ended September 30, 2025 and 2024, respectively (see Note 19). See accompanying notes to consolidated financial statements. 1 Table of Contents Fiserv, Inc. Consolidated Statements of Comprehensive Inc

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (Unaudited) 1. Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation The consolidated financial statements for the three and nine months ended September 30, 2025 and 2024 are unaudited. In the opinion of management, all adjustments necessary for a fair presentation of the consolidated financial statements have been included. Such adjustments consisted of normal recurring items. Interim results are not necessarily indicative of results for a full year. The consolidated financial statements and accompanying notes are presented as permitted by Form 10-Q and do not contain certain information included in the annual consolidated financial statements and accompanying notes of Fiserv, Inc. (the "Company"). These interim consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024. Principles of Consolidation The consolidated financial statements include the accounts of Fiserv, Inc. and its subsidiaries in which the Company holds a majority controlling financial interest. All intercompany transactions and balances between the Company and its subsidiaries have been eliminated in consolidation. Control is typically established when ownership and voting interests in an entity are greater than 50%. Investments in which the Company has significant influence but not control are accounted for using the equity method of accounting, for which the Company's share of net income or loss is reported within income (loss) from investments in unconsolidated affiliates, and the related tax expense or benefit is reported within the income tax provision in the consolidated statements of income. Significant influence over an affiliate's operations generally coincides with an ownership interest of between 20% and 50%; for partnerships and limited liabi

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