FISV - Earnings call transcript Q1 2019

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Operator

Welcome to the Fiserv 2019 First Quarter Earnings Conference Call. All participants will be in a listen-only mode until the question-and-answer session begins following the presentation.

As a reminder, today's call is being recorded. At this time, I will turn the call over to Tiffany Willis, Vice President of Investor Relations at Fiserv.

Tiffany Willis

Thank you, and good afternoon. the Bob Jeff Officer. Hau, for Executive our today and Officer; our me call Yabuki, are Chief With Chief Financial note the release quarter earnings fiserv.com. that presentation Please the for and are Relations Investor supplemental on section of available our

include Data, today about, statements the financial and synergies, including and expected will expected the anticipated timing among initiatives financing the complete results, benefits, transaction. strategic Our and matters, ability of combinations operating forward-looking remarks other financial with to and First projections,

Forward-looking Please statements actual for and our may risk materially differ results of release these are from number a factors. risk subject a earnings refer to discussion of and uncertainties. to

in results those These non-GAAP for nearest You results for basis call management non-GAAP between explanation this additional measure. meaningful for this should provide to comparisons call measures applicable with GAAP indicators current Unless an are are discussed the periods. future call, reconciliation planning the to reported and references refer also for along our the comparisons. otherwise, of assumed materials that today's stated of uses made prior year-over-year measures performance throughout measures a to as financial and to be and forecasting

with and earnings solutions business, for which in and comments adjusted let interest lending Jeff. our the majority turn that prior-year And of me over earnings release, to are sale closed reminder, supplemental a March per share amounts adjusted adjusted the press As the materials of XXXX. call a in

Jeff Yabuki

Tiffany, good everyone. Thanks and afternoon

per growth the by quarter, and carried adjusted last first earnings highlighted growth. financial into internal momentum year of share performance revenue the XX% X% Our

demand with validating sales our in also sales first our solutions. of We one the market-leading totals highest ever, the last year's quarter record QX further for followed

our financial full better-than-anticipated Our achieve has positioned to well commitments. year the year to us start

with merger. focused more lines, are First addition to approved results, strong the support issuance shareholders Along Data than shares combination. those engaging planning in also serving associates clients, our delivering integration with overwhelmingly of on Fiserv the we and financial In XX% for connection

received from the Department request As clearance. information to know, are second achieve on we for you the of and cooperatively working Justice our transaction

believe will required the our of to We differentiated our completely close, in transaction provide consistent approved, is second not we the clients all and of sizes to the original business will expectations. be more close year, will priority and half divestitures number continue all be industries. even value to with shapes, one Upon

incremental ensuring and customers centered institutions to sustainably our delivering great we've absolute market. of further the teams bring million work well together variety ways upon client we revenue of determine are progress The we of We further these $XXX $XXX integration For planning rate streams best across run exceed the and synergy million recurring and talent evaluate on customer shareholder have see way best a value, annual of multiple working advantages, the number and identifying cost of example, they benefits. to identifying will ways community-based targets which the to closing enable to of in and serve. financial made to offerings client

significant innovation advance Along delivered. to the investments make will services announced in a companies those redefine our solution lines, today. shared also and payment of top a commitment market $X.X on to which of have FinTech each to incremental We in way be in billion desire we the and invest the

shareholder integration, and while commitments; which third incorporated with enables an which and relationships priorities, to has client results, meeting innovation value multiple been none value, high We XXXX sources digital in emphasis even of to expect projections. continue which and should next to create to against quality investment solutions With our first that customer and our financial review clients. our to lead on client let's build this which revenue, differentiated performance enhance stronger payment earnings our to of key for are deliver

led mentioned, the X% We segment financial the our internal we growth, including license I growth our revenue good X% are saw quarter As pleased with businesses acceleration with in by financial in in along the and some strong X% results in the in across payments revenue recurring internal revenue of financial segment. the performance quarter, segment.

quarter year's benefit The last and per implementations, additional revenue was Bob primarily from in flow and earnings the conversion cadence XX% up of adjusted year, operating investments change programs combination ramp and throughout XX% to driving client These contribute Free growth, reinvestment of our divestitures, value due step internal in operating up from growth and a higher are share the lower client years. will rate adjusted a related year dilution of was detail. given all discuss which, from to carryover and next full quarter margin for better-than-planned prior generally over taxes. cash over XXXX. expectations tax the should adjusted in continuing with revenue expected the margin acquisitions the First on some several our focused of to investments consistent in more was

priority solutions. second client and relationships with digital enhance is an on payments to Our emphasis

Bank processing Community in New assets. of As adding recall over quarter, you the York billion last account our largest we signed will with $XX client new history,

processing on is reputation and as participants Fiserv This is primarily in product qualified US leading named which our provider. We including based evaluation, continue based issued quarter, class its evaluation core institutions of client portfolio. on system Also robust core Aite Group account platform. market breadth sole the quarter, best strength, a to Premier market on the XX signing all vendor during the in our base, growing and banking on six focus market of

award with pleased this very are recognition. We and

having including solutions. greater surround a $X.X We quarter in DNA, Nassau also billion selected with several assets Credit the Federal competitive signed Educators Union billion, in DNA six clients with four takeaway $X than along who important of assets with

with quarter. top just a financial expect under X.X ASP subscribers priority XX% in the Mobiliti I Increasing the in implementations that customers total client digital remains throughout build for those new seven million. lines, institutions. the to completed also nearly quarter to We Along grew engagement year.

app average store to this achieved differentiation out notifications, integrated commitment X.X controls enhanced experience, multi-institution of critical has and barometer solution, and the of rating results of a such These average X. digital enhanced reflect user Importantly, as our star and now digital features for strong rating expanded experience card biometrics.

expanded account revenue selected assets, both signed Atlanta continue with We increase clients We Postal help meaningful members debit Atlanta account through opportunities States. programs. to including to Union and is credit credit selected who network see and card clients not Credit advisory the fraud process. which Postal support processing service across United billion subscription to core across service to a their more in Union, additional client, quarter, management XX XXX,XXX also in processing the Credit their credit $X.X over and their provide debit, than our

which commercial clients Dovetail, continues priority meet and innovation differentiated and select our innovation. process, integration leading our the Building meaningful to needs. XX Fiserv top technology, payment is banks as for a Our deliver clients. its competitive international In momentum, business move to third evolving towards selected hub market to QX's payments their enables on value continued see we a

for and value for as unique growing continue modernization payments believe payments creates clients. to back next opportunities to front position our five a network the our see provider to expect three We to years create

leading look enhance market customers. in institutional traction services most their Center, of payments, due seeing In to our functionality to growing years capabilities. as we're acquired digital clients commercial to the solutions their which nearly to a Commercial ago, new has addition we added couple banks important XX and

the and fact, quarter In had remains we strong. go live clients eight alone pipeline the in very first

of of utilizing solution. seen sequentially. a service institution over end prior example business year and clients in services the and Another was commercial clients business up number growth Financial XX% strong XX% Mobiliti grew can the year-over-year commercial very be XX% our the digital

drive to expect for revenue of the and for clients enhanced digitization us. growth We important value commercial services

enthusiasm Zelle network whole. delivered clients, customers. We market financial the commitment continues Our to for service's of the Zelle the their will as but to not believe of in benefits expand a just our institutions and terms enhance for

$XX value-added with fraud competitive risk This their management Bank, assets, by billion in in capabilities. Citizens Zelle decision replacement selected Zelle in over part and ability our First utilize was driven replacement. a to

financial a our quarter. services in provider also online to the turnkey leading Zelle solution We signed

expect position as meaningfully leadership turn year let that to With call the opportunity. our important our this expand Bob on this We me more over Zelle results. embraces detail market to provide more the fully to financial

Bob Hau

Thank and good you, everyone. Jeff afternoon

of ahead divestitures, internal grew upfront, the driving revenue of X% benefits Overall our of in acquisitions billion the some of the We license up saw start financial a were pleased to growth the $X.X quarter, in along in year, quarter the and in strong which Adjusted results impact our businesses the internal expectations. includes quarter termination solid revenue, many essentially with timing with X% well. across revenue flat. shared fees As we're with the as segment. of execution

quarter than points XX.X% of payment our some to actually First was client digital lending implementation was in in our solutions quarter. X% reinvestment income by of margin ahead and pressure and program. and points XXXX Adjusted costs tax million operating XX plan, the the included the to the performance, originated carryover basis negatively basis transaction. adjusted impacted down from expenses more Margin of $XXX higher was which XX increased operating from

fully lending basis the positions margin a share consecutive incorporated operating and year. XX growth. the XXth least Adjusted acquisitions strong quarter. XX start points prior was in achieve up adjusted compared us year. of at guidance transaction anticipated double-digit the for results $X.XX to per well had to We also adjusted from This basis These the EPS to were headwind our point earnings in in year expansion our of XX%

$XXX X% card in led and Internal the adjusted was by revenue electronic the includes quarter growth services processing biller the over solutions. acquisition. Our million, payments, first grew payments revenue up to segment which Elan prior debit XX% year,

services due to Our lower mix year. reverse bit in card later revenue, we and which the was a segment timing growth this of the will quarter primarily expect rate

the the remains of accelerate year. The acquisition the high-single we of very growth digits Elan is the rate quarter. internal well. the And payment for balance debit the expect progressing transaction in segment integration growth debit revenue processing to for Importantly, strong

revenue down will clients as investment X% calculation the to XX% grew margin more and November. Segment Pass, internal Money from than adjusted operating business surcharge points costs, mix In synergy from $XXX services expanded in revenue growth Adjusted implementations incorporated result beginning segment negatively increased by ATM impacted our to Elan's was basis and in quarter. performance points the network. in margin compression acquisition. such million Elan payments addition to and opportunities was basis operating traction managed in XXX XXX ATM free serving our for income seeing early in be were

year, the the to the expect As we Mobiliti the operating roll of tax improve. off in grew to consumers just come implementations in on second and the reinvestment subscribers million mobile reinforce to as importance under quarter performance of ASP nearly projects segment line continue channel. XX% adjusted the half X.X margin

In one to which our addition, Architect, solutions, experience delivers a across unified of gain traction. channels, continues all-digital newer

after versus since And transactions, which and include architect alone have last platform this nearly nearly XX% XX prior we the number year XXX% to Zelle were XXXX, the in digital acquisition. subscribers growth both versus signed this Popmoney quarter. the expect We Zelle of in up year. clients And quadrupled the PXP nearly subscriber transactions double achieving year.

of bring acceleration XXXX. in year even significant number new We more live expect and a Zelle clients this to

financial market. solely on Adjusted divestiture our navigate evolving $XXX to payments was anniversaried continue down the lending segment to focus revenue X% quarter benefit for We along our strength businesses, the in due clients enabling revenue account with led to which in in Internal to million the quarter, and core processing timing was quarter. to a the X% strong March. growth license in revenue in by the very item deals

The effective negative items and timing was line which tax revenue the for effective discrete better with rate rate. recall, our tax due XX%. Adjusted pleased may had our year margin XX financial the very quarter expectations expectations transaction. and higher basis with margin revenue quarter. tough just which to for than Overall, for be strong million segment high down capital, adjusted flow $X.XX related due at to capital the anticipated a year's very some our offset periodic Free the to in quarter. compare impact we're of of recurring in QX, expanded in lending cash QX in operating $XXX pressured working loss also net XX.X% XX%. very continue commission about this timing in by the timing acquisitions under product investments. corporate at The a benefit QX. strong the you negative revenue had last second Free we and the and points quarter. was We for million due between X%, cash to of growth quarter. working was $XX XX% As the to in benefit of expenditures timing performance reflects million XX% a financial impacted basis disproportionately a provide prior the to to effective somewhat And primarily year's to favorably in license adjusted rate tax operating by a $XXX includes operating following expect conversion the was of tax of adjusted Adjusted slightly which year will adjusted we the flow was and payments divestitures segment the the and down

at expect normalizes cash reverses. free have working for turn call our to prior remaining million to debt-to-adjusted billion shares returning as for continue XXX least With announced, authorized at was timing our X.X be down quarter, end. as Jeff. was the until transaction. had XXX% Data transaction share as our of $XXX we to We repurchase we with the closes. Total $X.X ahead, program We announcing to quarter and our capital repurchase million outstanding XX times. EBITDA me deferred back XX the million shares million debt shares March flow X.X that let in and of the outstanding And shareholders the to year First conversion Looking repurchased CapEx to

Jeff Yabuki

Bob. Thanks

As upfront, we for momentum year. or to exceed we are our positioned meet sales been the mentioned has and excellent well target sales

account Fiserv Importantly will expect over We clients record quarter our additional record which event year. performance next solutions quarter card fourth Dovetail. first to saw best ever, week number and We our our a we last across will of throughout including of processing, we also one increase a solutions, host the which of create number output sales Forum, a strength annual translated prospects with totals opportunities XX% followed areas and at year.

fourth typical, higher domestic in achieve objective. very will Integrated our Our sales sales goals. are will slightly expect build the full pipeline a quarter the throughout was that integrated strong confident quarter and after year than is we to sales achieve year again and down is we we our last and year we as

five-year look demonstrate We muscle continue early. strong close a $XXX full effectiveness to program our million to year operational we as out a

results quarter million track first $XX across against are the our Our for savings of full on year. areas achieving multiple $XX million target

but of than number de Market Before amount the and remains generally the a Last, past. won novo provides we we innovation. are financial approvals which at capacity solutions, wrap, From institutions financial scale retail and savvy First slow and are new appear provide our perspective perspective, on evolving half for security all believe of differentiated We're and payments expect landscape. technologically capacity core investment a the which digitally and stakes on early and more we steady these combination, partner number Data XXXX necessary in to for will technology for to and very scale the competitiveness both across seeing high enablement, let prevailing me this share. evolving, platform we're environment. continue. taking applications institutions, enabled investment seeing payments and of the long-term We've lion's The deposits participants commercial M&A seen be of in themes and expect providers since investments services. the a digital centered some significant have we rising year

further our these strategic and Company for focus long-term aligned your these remain with - positions overall However, trends success. trends

financial achieve year. to the our track for commitments on we're guidance, for As

range revenue full X.X% to of rate We to X% expect the with half a be second year internal growth our growth in the of higher in year.

per We continue the and share to a XX% earnings adjusted range $X.XX XX% $X.XX of increase year. to between in to expect for

had remind year. year's a that in difficult compare very which Although you create important we to it's will quarterly don't we periodic revenue high guidance, QX, provide this last

with will such, EPS we acceleration back watermark be both the second As half of revenue into adjusted growth the anticipate internal quarter for strong and year. low the the

the cash by and that adjusted XXX%. margin year expect expand more points least for flow also than We XX at free will conversion to operating be basis

or does start impact We're while our financial guidance with solutions not pleased the the Company. our from to First include, Lastly, year, any results, transaction. delivering your strong anticipate sales Data the in investing of and strategic

while client market significant incremental value the deliver We to shareholder of differentiation, are meaningful number through combination. First and bullish about the Data building opportunities

with Lastly, each Fiserv clients who let purpose world me and XX,XXX the to the worked day. our excellence tirelessly associates around serve thank

You powered years the forward success With last are well the us will for for open to let's questions. that, the XX future. move that and the has great line differentiator us into

Operator

Instructions] line Baird. first the from Koning Dave [Operator comes question of of Our

Your line open. is now

David Koning

I the was as too. First I the And was weaker And bit of guess, first you all just about a and accelerate processing bit the happened sorry the little landscape. segment a payments Is about to I'm Congrats you I a happened maybe maybe - the - things that a payments that mix. and talked what of talked growth and the Data QX, were Easter days little rest in like you team, I'm about - it great think think year? will think talked you why some just quarter little there across

Bob Hau

So margin rate or a standpoint segment growth a you're asking? from standpoint,

David Koning

rate standpoint. growth a from Yes,

Bob Hau

Yes.

a about quarters seen it over what the at bit came little we've last So than X%. few was lighter in

the keys remarks out that volume underlying digits. high-single debit pointed in we that was of is One the the opening

will some that a and basis. on part around timing back or on of it card timing So think get so consistent in merchant full rest a year fees with we it there the expect to year year was seen, latter do meaningful growth full this we payment what bit and largely the for us of come provide typical was and we've a and basis

Jeff Yabuki

And the things falling always day-to-day Dave it the year. year each work always as throughout you out have you will have versus those did this with year that Easter where you know, comparisons and obviously last, themselves

David Koning

kind QX. you is what and I some that nice QX a of if margins, you is second to about in I margins talk three each that of did up, to then growth thing headwinds out could think the hit remaining underlying job laying the quarters, of guess Maybe fair the expect you the And is say? the go

Jeff Yabuki

Dave, add and certainly we've Bob that So let the the between start tax-oriented divestitures with can me say know then you of in laid I in. would acquisitions and the investments. as some that

I payments points financial remarks We segment in more some the basis think had in his Bob it the segment. prepared was growth in indicated that XXX than along.

you sense. if think it So XXX-ish points, that about the comparative gives you in think of area a I basis

We time QX. we think in high actually in said, our have a I year very also revenue getting remarks, QX. that had over mountain in we'll periodic last hard

a normalized. of again second line. investments half the degradation So, of more the The of and then periodic coming year, growth we'll a in reinvestments revenue when begin little is and the have implementations bit abate, abate the have on bunch the to tax come program

Operator

of Darrin Wolfe next the Our question from line Peller Research. comes of

is now line open. Your

Darrin Peller

and of plan well type synergies the conviction then that First mean color start terms in confidence -- Data clients around growth? a kind your more just of of that you me given obviously, as at revenue synergies deal? feedback just were few strong. results I in terms -- or rate any the in the different the incremental now on Jeff potential months the been of run Let And from was has least

Jeff Yabuki

on that take And revenue planning side XX the of and process, positive the both were focus we've me bit first also acquisition let our a fact, revenue the combination would actually been had the on revenue energy actually QX focused talked in in to the broader about side, of more getting begin continued. the value that on this certainly opportunity, at ideas across and areas be little able cost or client on market - market XX we've taking we discrete And both than on and for will the integration to specific than deliver from side. we of companies built into together responses is that's that we positive people the of based that us, the feedback, putting we the revenue and working on call impressions part we and teams on stage. turn we as a end question. have And our So which but the have ways anticipated

of lot it's Now have closing that work a clearly are to right ideas putting plenty are quite through together, of going perspective. been and not we get together pursue and interesting but them positive all but teams is that now, XX turn to really really there begin from as to we'll

Darrin Peller

Data you side, the again And I then what in guess? just I trends on that First there I line mean with the well as is would mean have seem sound expected

Jeff Yabuki

say Yes, is what I call January would in Darrin I and we products market is - share and think growing great the the and back to embraces business point don't the we great solid with his we and original fully fact the have that put where think, did understands together team great a said opportunity. this market would First Frank I I good that that performance and mean Data,

So, get and we to we're those closing about feel and the results, together. excited good working begin

Darrin Peller

of area Anything reaching potentially change the of that that it still mean to you is be couple last seems I follow-up. whole Digital I driver mean, us driver front big or out industry that it's Just the been inflection general, on you as, the I kind acceleration, in to you has saw banking think showing a mean, of focus very for in further? we could that quarters. an still quick guys call

Jeff Yabuki

- obviously that you're doing you've Darrin of Yes and fan done work. a you're of lot

and other about about about if as allow some focus, a up in reasons create not banks we're merchant the seeing talking attractive just comments the business more to frankly, heard business quite it's within digital, and things one often our when client we the and compete very of prepared retail focus solution of and we intersection much of you talk on of our the a that commercial we're digital those the One house think side the will and end is capabilities more banks Clover because fulsome of small commercial Data - First will capabilities to excited enablement in we that and why way.

exactly you're digital continue. right. think I services I going commercial And That's to So also and like of the intersection modernization. payments

Operator

Our from Ramsey El-Assal line of of next Barclays. question the comes

Your line is now open.

Damian Wille

on Damian is Wille This for Ramsey.

maybe to the what good larger profile wins the that guess size institutions you win new the like pipeline Maybe you quarter the I of and see So six D&A, last on and big institution. just on asset quarter with could of obviously looks if guys kind this at? looking the size there more you're

Jeff Yabuki

just surround the we the slowly in Yes, we've we be all moving can once asset is of but that fraud message. strong Dovetail, get quite that differentiated solution. that been of will that full the York point We fantastic Bank that I and other and whether to mentioned risk up Community so think go mobility, mean, of deliver, strong. will commercial proof live be a a into intentionally the not We we it it center, had D&A products suite be QX ladder think size continues New

one to when growing we're recognize moving certainly platform fighting be the the little things of don't comments and the strength tend think the client Aite but market the win, Clearly, mix. also at the a again we the us we're real-time, the my interest. major of base to we provider of real-time bit of in U.S. strength is gave the combination the seeing company, reflects decisions. core the and talked or pipeline that of of decisions about provider, the in in need platforms. and we're strength today that the being to talked and there, consider only one least about any recognizes always are and best-in-class we environmental contemplated We I the to designation, the So move

Damian Wille

know can process maybe this color the but second just and there give on you And in us they're think question, there? the general, the I is any maybe on update the on regulator, answer I what to approval from approval that request, process the focused specifically on any

Jeff Yabuki

We said in expectations. necessary with the we to process Yes, prepared are the Department of which the cooperatively we remarks, HSR like I working will is our inconsistent close nothing expect don't of we beliefs, second in We the I a said businesses, manner, this has said still today, year. believe we again we of divestitures through to-date, There mean, our half we in get secure the original and with believe. in approval. any believe will our I - Justice the like original with consistent been

Operator

from Schneider Goldman of comes Jim Sachs. question next of the Our line

open. is line now Your

Jim Schneider

your of people clients. bank But spending maybe are sales backdrop update, a merger about just an how in or the of then smaller you spending the kind some wanting side. of on and priorities, terms heads of flip side in on further the maybe the among client overall momentum on especially things, terms of SunTrust their BB&T provide see to the it? of to maybe acceleration terms put overall could any good seeing maybe or in talk are continuing Jeff, client, And hold at accelerate us urgency, you're It's whether technology viewing just where

Jeff Yabuki

continuing in security to from So more We're implications digital a a investments. of we're of overall, perspective say I focus view would holistic payments. the seeing see of market the a broader platform

Zelle another proof point with around is So that that's a the on payments happening absolutely energy modernization.

a fight going of on. really There's So that got we've all deposits. for

as that one understanding pay, over primary there deposits. And the attention of an so the absolute bill the account carries bill pay majority gotten is that last even which is areas your number such years, haven't

get make solutions banks of chosen out try game. sure are to new seeing funding the you're the basket to So that winning

that's think continue will that attention and level, to happen. so absolutely and energy And gotten we

digital retail side, commercial sure also So well. on but the as -- commercial and that just just making not then it's digital

places. mean to have sending invest the number As large it front back that go digital platform facing said not heard of gotten had and is of risk payments scale, go half fraudsters we this to as into important the solutions, I again, to BB&T to message fraud a that gets capacity some into allocated banks relates times but where together we to of need have and SunTrust the and of Also, Most solutions. the we've landscape. and whole to the different continues office, the client learn and need office to and be area across the

we're that's the that, I think a think And of comfort some to then subway that -- start and in level New we'll important. to start so the York last introduction is I We throw is thing the see sub have rise. confidence, bit contactless to crack in our that contactless, of see a little starting out would out the we there.

at beautifully we links digital the idea think level acceptance and see So that we that more drive enablement. the contactless quite more digital in actually into the that'll

Jim Schneider

be view how, we've between if with competitive Worldpay. FIS at follow-up. a on announced as will clients services you going since your difficult changed of cross forward? easy how announced to Data, with sell landscape, Clearly, your also or seen and and penetrate the combination it maybe then that's And First Maybe transaction all your comment additional the bank proposed

Jeff Yabuki

Sure.

other set merchant And and here the a relevance are we their combination time. changing industry don't the markets having have believe the And think broader gives they're us point the the that could is with far First Data risk providers So who a created the combination. that than is run diminish They over in not of Data in payment There change combination any the in listen, that fast. the are global solution in real I changing, incredible conversation leader data issuer acquirer, risk they included that years processing somewhere a First global the leader but last a just First merchant are solutions. been they hasn't acquiring. bench because Data the solutions, and XX of hasn't in fraud have

of type more need over what have recognize brings, we but are happen about this there and excited combination combination the So we is a quite that it time. to also of

goal done absolutely to that Our believe lead we've that. and was change we

Operator

comes of question line Brett the Huff from Stephens Incorporated. next Our of

is line Your open. now

Brett Huff

more the business. is in a there scale in going Direct question, smaller Competitive consolidation Biller

or number for are that, that that number change How share. guys competitive of Any do at dynamic the buy front? update that looking share the it the think is kind to I does on you've seen while. two coming something look three you a

Jeff Yabuki

point kinds I of players those validates opportunity we get more FinTech your much together forms bring really the It mean grab focus distribution FinTech more compete to all players. we see space is really that on-demand funded of the I In trying Yes, there's to that been see - kind just that out not to there. that of it robust from - mean of the lots well where we space. to -

positions leadership that upon direct else. an the channel, capabilities. we course not then continuing ISP bank bring We the but important So to more to ecommerce of combination allow just channel, quite perspectives. a will the just we do And think are build us from than that channel, anyone closing think which those both out

Brett Huff

ago, I combined years -- another I recall several talked launch about product. mean That's of And that guys you great. a a then one. payment

was it think Fiserv I now?

Jeff Yabuki

Yes. our In network.

Brett Huff

product that of the with - fit about come potential the Data deal, combine do portfolio. bigger that changes And how that things - can a kind how that dreaming First new in does might of fit a from of kind Fiserv or dream into that that with does you with thinking is may precursor the greater

Jeff Yabuki

extent like the we I really access that of of think bigger purpose at and to a we the again And gateway to was Brett, I The the way what that's Network super have a said like the to function, that some dreaming merchant. dream didn't to like the really little the bit that down way direct scale encapsulates. - you is

a about the movement solution. part of a will have DDA a lot the you there XX back We any of the connectivity and the opportunity. think big ultimate do be of and in the One, think money we real-time to are that of now of have with, lot office, a number so ecosystem how the opportunities

Operator

Our next Jeff Guggenheim the Cantwell of question comes from of line Securities.

is line now open. Your

Jeff Cantwell

as XX about if next just to XX on see your the to XX one optimism spending a, it with call bit and far for you little how of on to sounds had as we talk and XX are some the going it a about outcome can that. months, how we advisor economic showing I growth. institution view talked outlook and your call next maybe financial the about XX budgets - temperature your spot-check very want competitors really optimistic Jeff, heard generally you them conversations terms of on could months about with technology clients months,

Jeff Yabuki

Sure.

going We are event. a an have to and lots in next of and number prospects week conversations obviously talk Fiserv at our with opportunity Forum annual clients record we're to of

is of getting but feel deposits, focus the commercial certainly cycle that that focus at by belief more opportunity point lending. will feedback digital, start feedback is some beauty some on there in we’ll the the out there offset pressure is So this we're probably to real on market, focus the but that is some, the grab credit on

a say better actually back did, So guidance I results gave good than pretty even I it's time we in when would feel February. QX in now

feeling I'm trend like right the the in direction. So is

are we new a but can seeing amount fact I every M&A, have as novos. day, the of fair also that like do you We see

movement. connects larger larger are in I financial institutions about For and the experience our when clients, a well digital you not money The institutions belief institutions well, larger into so especially with economy larger that and more still as think that is shape. quite and good more the the money there's merchants and a the but - putting just strategies, think

good right is a, now. it's So it time a

Jeff Cantwell

in into slightly a low seem first takes a like this early translate given your days, quite then cautious know some status potentially just could what a puts but next And as quarter. of Might it. during growth one, bar year. related X% Appreciate how of optimism here line lot and there's that top I sustaining

just can Thanks. give we that us appreciate So there? context or you comments

Jeff Yabuki

linking and increasing context investors flow allocating quarters we've talked the to backup to of about in value. that that that then to turning high build. build allocating the of revenue about in I'm is that say all sorry would the try I it to all cash shareholders sustainably market, our it build quality into free statistical shareholder to to strategy all back growth give we the our our of

So perspective, that from that continues.

had points about XX think I of basis we lift last year.

been is But your flow not when we had you on that with of we're guidance. build to we along rate, for have a you I had. layer revenue rate do to assuming as thinking there point, performance that in that internal quarter. year, this that, next X.X% growth synergy good our First that, would level, up and all and but internal quarter guidance free X% part stepped think our allocate certainly along Fiserv, giving and rate the X% - on we're the and, cash back when we've growth see and with value. layer we on Bob, generate not have, do you the to our expect has that growth We layer trailing our hovering standalone and growth opportunities Data to do, to when would shareholders expect the our a more year to giving guidance, is we X.X% again step-up in in to expect this and revenue trailing well

Operator

George question comes Company. Cowen the next line Our Mihalos of from of and

is line Your now open.

Allison Jordan

for This is George. Allison Jordan in

and could in on me. really renewing being just Data digested question discussions the was of as update you confidence one has little you. hoping provide Thank a level Just client your in larger Data and more I the partnerships First some that color today. for First place quick deals an

Jeff Yabuki

important have heard we that believe not about that that and First to less we'll Data versus clients that operate in feel continue clients create good is reason incremental First to that close. the note separate that all certainly companies size more But we've as make until Fiserv Data we So of is to again, actually to and clients it's every value, and that will objective as do do feedback our that happen.

Operator

comes Our Matt of the Research. Autonomous of next line O'Neill question from

line now Your is open.

Matt O'Neill

partners believe and bit a respect a With partners and I'm on conformation and of level back that are as the at one a finer is lot for the renewal is that well Data’s to more one them. on still you First also Fiserv’s last to own about with with of one when America, Bank to high of forth point is any there. I there of even largest your take a Certainly the appropriate any on put JV question dovetail First have been you or involvement if any discrete Data’s while largest probably particular to And it. of companies. there test But given incremental that ask there relationship any discussion or to ways Is kind two just maybe going a And think it. you respect and relationship. management,

Jeff Yabuki

continue until you active So, of and know, term will your with companies has closing. a have important to a we being we relationship many partner But have of Matt. to expect Again, point, continue as long Data America, of with that's a relationship operate history very years. going And together, Bank very and an fully even First we America. bank the with to an separate important important and Bank long larger more for relationship that as

Operator

Joseph of Our of Foresi next the question line Fitzgerald. from comes Cantor

now Your line is open.

Drew Kootman

is margins Joe. expansion of if on have keep levers could Drew you you just I some going? for touching was Kootman the just looking longer-term the on on, This to wondering touch at guys

Bob Hau

during Ultimately, current the some and we our its the reinvestments. prepared got Bob. Drew, pointed that here saw headwinds from first we in and quarter remarks year tax we've quarter some out, last the

November. second transaction We've and of making that the more significant year. transaction off So half year. investments the in in of - The quarter the in lending that first the last significant this trailing first really we're are where anniversary acquisition year discretionary got half some were these will anniversarying of in

combined or We've opportunity you'll basis the see line nice on top those will our meaningful second that full half about year. margin meaningful half points And gives continued into the half got first to that to so the magnitude getting reinvestment change improvement progress tax where for in X.X% so, confidence some is in second you lift give forward year. last of to at down, really that the of least see margin we that that year. delivering a dwindle this us All a we that spent year to of second of of the half going order trailing pretty $XX for us as expansion grow some commitment XX will million X%

helps margin year. So and basis very basis revenue quality growth. focused the point multiple We're after points margin That future. into upwards deliver points last growth means, improvement on revenue revenue good XX over to us growth XX of high XXX XX basis years that recurring

Jeff Yabuki

back you I step about multi-year kind if think take would margin trend. the of a and add,

that anything this. pay at things We lot One of a the of to systemic attention don't we see all. anything,

There operational are and margin it that We results products other especially that continue builds revenue growing more one that I'm things to you step tends year-over-year. if think come over around then on new on the at operational if you lower effectiveness you things of to business again when continue about scale. back, in revenue two that recurring sorry, deliver does really growth - to grow up, the happen are revenue, your effectiveness strong recurring

tax a about If acquisitions divestiture in the last we've little that XX-ish more And of the and fact done in the XX know, of basis of XXX I effect talked the neighborhood the program we've you margin. in the to XX last in basis reinvestment year is area somewhere months, the lending over net on bit about than then think combination points that's don't the that points.

new kind margins it these we've minimally the of a underlying underlying XX of unusual this, so. is a we're clip. really growth the kind you year scaling that margins, months, the consume operational down performance But, at getting points feel the basis about effectiveness we'll good we of quite, that through the along over of the think margin healthy and that I year. to wrap the two growing And items even of all means up last those quite So were that or actually through given combine last things, set solutions, with of when had XX this

Drew Kootman

that? one just then Zelle. recently. couple wins pipeline big does a How a quick And on mentioned look for of you I know the

Jeff Yabuki

pipeline of The number stronger. the Fantastic. in institutions. has the I mean been of terms never pipeline

expect We not assuming are systemic there constraints. that again

bring number of next be this we'll year live of end and that had higher year. the XXXX, of the up them bring at even it We clients will think we multiples will we

So we're feeling and going. good about really Zelle where it's

Operator

Bryan comes question next the of Bank. from Keane of Deutsche line Our

line now open. is Your

Bryan Keane

license Bob just sales. I you us help had two financial those like quantify clarifications, the can maybe It their probably for impact just little of on they sounds boosted bit.

want for because what make what to does a the impact sure the back that have bit and sales. the back I get necessarily half year the that just is the that year? then sounds in card of was license back that why rolls down we but sure So payments, up maybe like not and that of it through the the picks timing quarter to little of secondly And throughout year on would the half second services exactly and

Bob Hau

revenue, did we've as revenue margin quarter, point the to overall. by of XX up about actually periodic That financial up points little see, overall the investments The license Sure. recurring was a basis me the are of implementation talked though you benefit out we was some product of we bit. that for offset some

points basis line X% are us improvement those giving two XX growth. So revenue top nice the really a canceling other out and each underlying on

there high some internal tried to the single-digits that growth so will the fees, were order underlying We that overall at payment X% underlying come of segment year, In segment of timing and on this year the the it about and based there not to that. the made balance seen point the for every some point again this full-year payment magnitude this see basis. those transactions X% quarter quarter transactions. lumpiness and revenue make we'll came we services terms card we've in of quarter be merchant turn the up good can on It's is in payments, of the periodic,

Bryan Keane

are to what the on on side, just the on the me license had gave And revenue it periodic you financial, quarter? boost think about I in sales then that the margin side, revenue

Bob Hau

kind overall millions single-digit million, millions. single-digit were was $X it low Yes, million. High of $X

Operator

Humphrey. question from the Andrew line SunTrust of of comes Robinson Jeffrey Our next

Your open. line is now

Andrew Jeffrey

the I in the FinTechs and to as can Jeff, there emphasis or of new perhaps institutions. I some things with with just is do especially appropriately the a to existing move inroads as up and guess to to address challenger in the do. boldly you by position but digitization of banks you generally which banks Community do investing technology course you stay how Data need traditional guess First with opportunities some is the particular, how begin And plan Fiserv, there little competitive, balance. constituency Financial make players all they even market? on combine you're you Perhaps in market

Jeff Yabuki

that's I great a mean Yes, question.

end the all that sub-segment companies which delivers in community-based time. financial in over back small will some I want we the of FinTechs I and the Andrew that but whether and providers solutions stuff will don't product FinTech institutions. organizations don't and But I get FinTech that specifically time clients this build that a create we'll question like integrated we needs and through integrate us cases will think require some think today, to know community, very services, there it around cases small they do be and up relationship around, if a is being or between of overall cooperative large, a

being cooperative longer continue digital, enabled I get movement you either and it fully I start system. it I invest. will don't part that around think as see do that’s FinTech around we for fully and into I important So real a solutions a more or money to an see the to much being think

differentiated help that size over to longer-haul. functionality will the sized continue financial unique and merchants when institutions all will create and frankly We all

Andrew Jeffrey

you when And commercial talk then solutions. about

clear, and that is of contemplating to acquiring software Data want that I expanded kind understand. you it. you're addressing Yeah, of SMB Clover to and how talking all about and viewing Solutions? First you Commercial are specifically suite Just be things Are the today, an

Jeff Yabuki

Yes.

the U.S. sophisticated large to largest clients. solution, of if you think our we're today, enabling very commercial the in some center serve banks So commercial about

management. solution, think As all about our cash digitally you enabling sized mobility we're business

SMBs be kind whether would across they mid-tier, the up So, that ecosystem. of the entire we have solutions the or into the go

ISP whether to So ecosystem whether largest Clover, it think or in global it create an see be opportunities, it we merchants, whether in about the be bank a e-com provider is new it be unique is very so most industry creates that value nearest that excited the about one and talk bank for we about opportunity, in clearly that merchant. participants the quite the it's we're because the

integrating do be how Clover kinds we and clients either solutions. So into enable the of physical management technology as them other such our or to network and through distributed into cash digitally

broad So, talked and touching ecosystem into do that that on that work but kinds view of of are we are streams XX the driving see focused those some about we the opportunities. revenue

Operator

of Kartik question Our line Northcoast Mehta comes last from Research. of the

Your line is now open.

Kartik Mehta

I'm probably community and one A your combination banks as you, banks any Bob. you're you question do about to at assuming First merger? And wondering institutions the there are Data for as with concerns big What have positive this community is little conversations you, bit for of you've look conversations relates Jeff. with any and see had them. because then as having you do they financial Jeff, I'm it different. the a the with And in merger - a

Bob Hau

that it's and valuable of on the can the the the management, digital the goes quite to and so that is the technology very got be bring for institutions substantial it that merchant view are institutions time, enablement it's in to solutions, once the the different do is together of it kind market. in how on. the things is of quite data done. that interesting integral system, of they fragmented things serve how be and closed the and don't wholly cash part alerts Thinking merchant notifications community-based platforms they've opportunity market, as Part working because and is it real see majority other of data financial about system relationship the commercial core Yes, something and excited were and quickly, could the about a us digital kind to that's

sit quite what sure So and literally of for focused time then this been is bankers, about let's period you've and you they'll excitedly the and on it focused on. make they you make let's do a reasonable what sure banks, well, stay the always talk say

negative see see side done to rely or think being coin, they obviously the And would so that we of could both. can I the we not saying, do kind as that I don't they on both. did see other it not this institutions have us of the And on we if wanting it positive do confidence

Kartik Mehta

are what And the headwinds that anticipating in then periodic just revenue? revenue the are of just second in a quarter you clarification, because

Jeff Yabuki

So, if had you benefit. year, last a of recall, quarter second we

we benefit had slide revenue license in from going into where QX. license up some then partially year, We saw internal second So revenue effect QX significant in QX. QX that pick the into saw seeing growth QX coming and year last some saw this out of and we actually of the timing revenue, the is QX that driven quarter so what you're timing reverse of

that quarter. kind taking in of dual a effect so And second of place

Kartik Mehta

headwind a - absolute expect second year's standpoint dollar give you range a you able of the second from be this dollar quarter? Bob. to what So standpoint, in Are the to

Bob Hau

you about thing year we timing last that mid-teens revenue benefit impact point of - teens millions, sorry. the talked is One being to I'd mid QX about license of

Jeff Yabuki

continuing and you thank us. joining discussions. We Kartik, everyone to Thanks look for forward

to team. hesitate Relations don't call please good our to a anything need Investor you Have If evening. contact

Fiserv (FI) 30 Apr 192019 Q1 Earnings call transcript