The news: Fiserv ’s adjusted revenues grew 1% to $14.9 billion, per its Q3 earnings release.

• Merchant solutions revenues climbed 5%.
• Financial services revenues fell 3%.

Fiserv slashed its earnings forecast from $10.15-$10.30 per share to $8.50-$8.60 a share.

In response, investors sent Fiserv’s shares down a record 47%—outstripping its plunge during the 2008 financial crisis of 34.22%. 

CEO Mike Lyons emphasized Fiserv’s less-than-stellar results in his own words: “Our current performance is not where we want it to be nor where our stakeholders expect it to be.”

Why the plunge? Analysts were concerned that Fiserv executives had no convincing explanation for its drastic change in yearly revenue outlook, per Bloomberg.

Lyons, for example, pointed to the Argentine financial crisis putting a damper on revenues, which did significantly hit revenues: 10 percentage points of the payments giants’ 16% growth last year were attributed to the South American state. 

Per the earnings transcript, Fiserv bet that non-Argentinian business growth would blunt the impact of the Argentine downturn, which ultimately did not materialize.

Another big factor was customers souring on what they saw as excessive Clover fees, per Bloomberg. Lyons has since vowed to undo his predecessor Frank Bisignano's upcharges—at the cost of short-term revenues.

What’s next? Fiserv’s strategy has involved investing in stablecoins and expanding Clover into the preeminent POS platform for SMBs. 

For crypto, Fiserv launched its own stablecoin, FIUSD, and the “Roughrider Coin” with the Bank of North Dakota. Fiserv is approaching the point where it could help major retailers issue their own stablecoins, letting them bypass transaction fees. 

Our take: Fiserv took a massive hit from the Argentinian economic crisis and from reorienting its Clover strategy. However, its investments in other avenues have yet to come to fruition.

The payments giant has slowly collected the pieces to successfully issue tokens on behalf of major retailers, which could become a stable pillar of its business and decrease Fiserv’s reliance on certain markets for growth.