FISV - Earnings call transcript Q4 2020

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Welcome to the Fiserv 2020 Fourth 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 would now like to turn the conference over to Peter Poillon, Senior Vice President of Investor Relations at Fiserv.

Peter Poillon

Thank you, Ivy. everyone. afternoon, Good the and on Chief are Bisignano, Frank Officer. With Executive call Officer; President Chief our and our me today Bob Financial Hau,

Our quarter for Investor supplemental section earnings on Relations available the the fiserv.com. of release and are materials

include on from remarks pandemic and among other the business, expected strategic the initiatives, expected acquisition. operating benefits statements matters, Our forward-looking about synergies impact First the Data will of results, and today our COVID-XX and financial

are differ subject and may from materially of results and a statements risks to Forward-looking uncertainties. actual number

You of are nearest full the to date. should materials financial non-GAAP supplemental an refer of reconciliation GAAP earnings refer a to for all applicable our earnings and to Fiserv Unless to basis. stated with measures. prepared the information and these to to of and financial currency references supplemental making internal have constant non-GAAP growth measures Data First acquisition historical those Frank. prior release our sum measures release for for GAAP otherwise, discussed release materials discussion call in of to And performance Please references for adjustments on certain today’s risk call XXXX this the on now, measures turn by I’ll are comparisons the year periods revenue the earnings a the the been factors. explanation along our that year-over-year and over Note financial call

Frank Bisignano

in our with unprecedented franchise year many and pandemic, We’ve strong tremendous people. we investing you, the good Thank XXXX XXXX technology, clients entered We levels. after Peter, and innovation, the started momentum. our everyone. heavily on and now afternoon, entering was continued

that in people a integration. facets satisfaction franchise, given strengthened top clearly We our a invest very all we’re our We scores across the platform our engagements delivered demonstrates Fortune scores investment client consecutive per XX% and winning amongst a the we delivered growth marking for circumstances We companies year free well in XXth synergy double-digit increased business, year performed the in the company in quartile the and office. in on while our and number measures. adjusted year of client’s across of XX% sales XXX. made raising execution of EPS for cash result innovative Your solutions. out products client adjusted earnings record outstanding We growth share accelerated progress growth flow. We ramping

we momentum and entered, We’re on exiting well-positioned our XXXX and to than in the year capitalize stronger we’re beyond.

was on and our and up by financial Out integrated billion. breadth office free $X.X processing momentum for flow was led future. will for extremely the well-received Sales client’s a excellent XX% X%, up XX%. The quarter together an Acceptance Let formula of at combination and the Fourth without strong me in results billion provide Bob that overview of results, bringing robust businesses. offerings pipeline sales bodes well up sales were that our of in X% the light quarter merchant than more more is up Fiserv’s is quarter bringing evidence sales impressive at processing, model a is and were which for sales segment, internal to Total account year terrific Merchant full and operating XXXX excellent a quite and the results full growth adjusted the credit detail for acquiring remains flow year cash strong. strength the $X.X global company adjusted Total with brief share pandemic. again provide in company was of in per XX%. performance coming a revenue the XXX later the increased the basis was was earnings points call. quarter margin of Free cash in

how rich on enterprise leading Solutions Connect, you Clover, our Now, business our commerce Clover set. Carat, our omni-channel platform; enabled like our and performing. to merchant ISV leading solution; digital update Through SMB is I

We within the continue payment $XXX enabled excellent. innovation, to leading merchant digital continues grew the of segments volume quarter billion solutions merchant the be business momentum to drive The expand to deliver to annualized. clients. in $XX Clover’s our partnerships, gross billion XX% or and

continue solutions segment. digital extend breadth convenience, the We to innovative enhance in Clover with to a of merchants services that especially

ahead collect especially payments For in example, that Clover to bill in allow invoicing global our vertical restaurant We electronically. clients omni-channel and saw order growth XX% full up capabilities with known up introduced so year-over-year seeing quarter some transaction for e-commerce services of in more our than best with service Carat, those as both transactions continued growth. pick excellent XXX% from such the merchants, we and quick recently the consumers is year. our grow about the and store

North more capture winning in and We acquiring of America. Total, one we around clients Europe, e-com quarter, level energy across in to digital than the digital continue providers new world. enterprise acceptance the to a provide XXX in countries payment the for Overstock.com market share In largest XX including services world signed Wingstop fourth global the

signs solutions allows employer also products partnerships ISV relationships clients and to the us up growth strong merchants, and new and to such expanded in delivering services key us now XXX in partners in In we disbursements drivers. where as new XX% the for strong business. our we to the in new driving to fourth are We Clover ISV drive active win revenue growth powering new XX QX are Those channel. partner signed Lyft, year. ISV results relationships, Connect quarter, new partner bring

example, Rfms customers. services partnership omni-channel to capabilities software professionals installation with payment the signed for For agreement their strategic to of Fiserv provider following provide a the largest during quarter,

to of for to partnered new financing offer merchants care options have signed We options. Fiserv purchases our its solutions Financial the merchants, products adoption payment X,XXX providing further payment since finance partnership the customers. buy care The expect the new at also Citizens provide to a we’ve To eye of through Citizens customers drive one flexible merchants largest expand later suite with value-added space. more of expands services fast services Citizens acceptance than to eye providers professional with and And provide and for Group technology point-of-sale. program in we had XXXX it pay point-of-sale to now growing the to the at lending Pay,

solutions. signed Moving all including for to and plus first, solutions processing, card billion service number just bank with payments $X rich with of asset robust processing a on including to of wins. of signed the a of continue expand for core and service also our a on with relationships was $XX core XX Forbes in commercial more the in five debit for billion with we one platform, have financial types. our quarter, the on a service Republic retail full bank Republic new in account includes across business, digital number that Service solutions. DNA core card account processing commercial for suite the Fiserv billion that on account business recent than we voted XX is America Bank services bringing core bank processing processing by institutions in an of processing Lakeside output and services a the in full has year DNA. in clients suite than along signed sizes partnered to highlight We a XXXX. asset and that recently with Fiserv more pleased bank to Bank, the and I’m a CheckFree, XX total suite I’d of $X for few assets privileged full products, our Zelle. like

quarter notable surcharge-free the notable our the see with years to At wins. and across synergy on a with while partnership deal already this card PayPal integrate I’m robust behind including the original we update of execution several selected They note pleased signing de the service. let integration Money additional solutions All of sale. billion ahead. options synergy agreement that ahead growth our growth XX, of ATMs billion to with we to our common of billers, extraordinarily we’ve And over Investor and ATM PayPal are a us note also add leading how plus to three Fiserv’s wins access continue to platform, year. well Network the driving as Pass and go banks to surround efforts. cost customers’ to fully actioned you were and in sales personalization X,XXX to on further With way sustainable a superior me customer goals is by these we our Cap Through a that longstanding savings competitive illustrative discussed continues integration Fiserv well schedule. to focus than of characteristic. more a new that, signed bill multiple for what their to of our of far expanded thousands payment Payment our on sustained cost integration the end takeaways in $X value ATMs entered country. and quarter. and action offering in core In reduction We Capital a XXXX gained $X.X our synergies work One’s One network, support December majority the Day, I’m We we pleased more their novo a digital and segment, activity,

side, level sales, fourth which accelerated On of in the synergy pleased quarter. the revenue with the we’re

us our confidence synergy revenue sales $XXX in million meeting or actioned already annualized exceeding we’ve giving pipeline year-end, is of As robustly and $XXX our million target. growing in synergies,

a XXX total takeaways. the larger prompting capabilities offers remains and along more achieving turning and One merchant offer In synergy our half final bank on robust we since clients pipeline bank of the in Our merchant wins of be added programs point a continued solutions. one merchant quarter, of clients, loyalty of including Bob. The sizable merger, merchant new capabilities XX e-comm modern with institutions, than with those their innovative fourth all like opportunity. it financial over opportunity competitive before acquiring to initiatives continues bringing XXX over confidence the new revenue financial and ability clients into Clover our digital digital to synergy suite the platform, to XXXX institutions program with to sizes important the

to two XX in us digital payments initiatives experience discuss important of capabilities to redefine across offer taken days latest is past, and our technology last heard most in area. this you’ve As the client innovation drive We’ve strategic the one steps important in utilizing ecosystem. by the the the

acquired we the institutions services Ondot sizes. of First, financial all platform digital leading for Systems, card

will lead capital, Officer across committed these all next the Digital develop appointed our important of Data inorganically, and that commitment to leadership this second, into generational solutions data demonstrating to digital the in both Chief Fiserv. We’re and initiatives and a to to growth further deploying drive And growth long organically strategic area, we future.

pass on Now the the let results. me for Bob detail more discussion financial to

Bob Hau

strong a which globe. growth continued quarter had X%. Thank We the Merchant the Total pandemic internal led in company light from fourth the across of quarter, grew you, in segment, good X% Acceptance the Frank, and afternoon, everyone. pressure by revenue was

flat For year, last million were the and revenue helps in million $XX internal that our synergies, was continued for our Growth impact full the during the expectations versus mitigate pressure call. line last in which earnings revenue communicated related from year, to we from pandemic. year, $XXX the with quarter the

basis we that call, or growth by third in performance. strong our as as produced earnings July quarter transaction cost execution, in relatively XX% saw XXX and income driven of Fourth up quarter. synergies to a growth rates which adjusted was margin quarter, saw increased $XXX remain the last shared billion in around operating operating our fourth very to well we with stabilize strong what by the at payment line levels. transaction strong volume our cost incremental rigorous adjusted a and operating synergy, we quarter, million rates points $X.X In During the XX.X%,

most quarter $X.XX full from quarter believe operating the to fact income the of the We actions to for earnings Adjusted validation very memory prior prior year cycle the and and we and permanent Free margin for margin robust $X.XX in adjusted year in savings. XXXX of full as our points improved earnings again share divestitures. beyond. since incremental increased the a strong $X.XX million are operating our share X% improvements and year focused expectations. business. of of we’re of year, our XX% was strong flow $X.X quality once that increased per $X.X Fourth in in margin cost worst economic the at in performance. benefiting points continued by cash XXX adjusted cost is improvements by resilience the and billion. to operational $XXX to adjusted For adjusted to excellent strong sustainable XX% to basis adjusted basis increased on billion ahead the synergy per short-term XXX synergies XXXX, operating The in increased achievement, compared not XX.X%, cost expect And our

to and XXX% year. cash For billion. was flow full free $X.X also year, XXX% for the conversion cash at flow fourth quarter strong Free very more increased for XX% the full the than

each of from was result segments. X% faced pandemic. given to revenue Acceptance Turning in growth quarter, Merchant the was that unimpressive in the the economy hampered the Internal the headwinds by segment

Our results platform, Carat were enterprise by portfolio quarter ISV again by from supported our SMB our driven and strong performances in another business. strong Clover by our client once supported clients

prior line revenue in For the year. internal with full the year, is

great We portfolio ahead up XXXX As XX% quarter, get Clover very beyond the Frank despite we pandemic. the its the to in performance strength grow of that better feel discussed, SMBs. the the and our and in GPV as macroeconomic even months quarters in nicely about difficult for about environment continues

business to growth the integrated payments strong perform quarter. extremely in with Our or ISV continues continued well revenue

excuse will to our As extend their Adjusted sequentially. COVID XXX growth margin in our point results, call, quarter we segments half. integrated basis expected merchant said discussed by basis points adjusted this we increased the more for earnings of believe the improve the the segment than at our ISVs. to the half in solution solution and our customers, financial quarter. that reporting margin up points was basis further XXX Adjusted XXXX We ISVs Clover in compared operating – future. income low in of after million second Acceptance operating points Acceptance XX.X% rolled differentiation recently for $XXX operating XXX in drive impacted Clover the for out Investor we the to and to QX in and connect was first excellent to X% our the aerospace continue increased On me, Day,

revenue half to nearly compared full created lower quality Acceptance the our headwind with prior We’re internal points, XX.X%. year second X% the revenue Fintech year fees, of XXXX in declined our high as again and in by basis that offset The growth which to approximately quarter revenue, achieve prominently bringing pleased margin margin internal termination to the was periodic most fourth to basis segment, recurring growth XXX quarter. much revenue of points

digital see year. a in consider XXXX year, consumers took in prior revenue lockdowns strong full a step line to internal of solutions demand array the of the For and was leading result. with continue as forward with and The towards alike for our to banking shift broad strong banking digital businesses new ways we

in For digital grew total across continue subscribers a architect implementations at mobile quarter. a mobility leading pace. strong platforms, example, our XX% and Architect

as for improving than we In completed such data remote XXXX, fact, safe, our XX% consumer their prior half for the year. FI the deposits offerings during have check results. second than over year, offer service own grew and clients up implementations efficiency and self of in commercial the Mobile architected excellent capture more their more deposits for in an indicator we’re of full XX% to growth. all allowed fast Fiserv QX and and convenient future year clients, while

basis to operational year the to the XX% full ATM the benefits, in and on margin combination self-service income the synergies. $XXX in was XX% operating quarter full XX.X% revenue, robust million. deposits processing grew of up segment While and effectiveness grew XX% in million strong points a in in XXX increased Adjusted cost than more growth $XXX a a the and year. to operating Adjusted quarter quarter both and

and growth and processing margin in our business and as XX.X% skilled X% the For combination both the adjusted points highly up of basis impressive XXX of revenue gains benefits and to impact quarter operating than synergy the and year. segment periodic was declined year, saw in prior internal the productivity more offset the Network lower The Payments fourth to the compared from revenue. revenue

solutions revenue businesses, prior COVID the offset card issuer, continue since levels we was line Internal consistent growth in and services by in was June. single going that revenue year confident the remain our is for very We’ve transactions show elsewhere of digit mid to in the mid high the driven than impacts benefit with this more international growth output forward. As synergies including range. sustainable level And Debit this to in seen growth single digit the stable year. of segment. transaction

cost year, the COVID synergies last over partially quarter was in improvement and from well year. million the XX.X% loss solid the up synergies adjusted and full million sequentially. points the and to for of to compared tax the this to full XXX we up adjusted operating drove for continue prior offset driven the for We basis year. for as Adjusted operating by was such down was effective XX.X% $XXX XX% to as XX.X% and we’re year nearly corporate prior Zelle the up both by and basis in of The variable year. to XXXX up combination The and see million cost Zelle was XX.X% and $XXX expect excellent continued margin solutions, to number adjusted for tripling transaction operating has the The and year. up full X% grown and doubled was and than a income income improvement growth significantly ago year, quarter segment results, and the our the quarter X% PXP. to in productivity, compared This $XX $X.X quarter a The operating clients costs. client strong, the in revenue account-to-account incremental Adjusted strong billion of in count the was fourth a the live compensation, slightly growth beyond. year, on more both quarter quarter was XXX in X% positive our lower year. as points impact transactions year in in rate

XXXX XXXX, to in of For tax year XX%. fairly XX% adjusted the we the effective the rate with full range expect consistent rate

However, quarter timing do rates given discrete we in expect the and items. tax by some the of different comparison variability points

our we QX be such, than As QX effective higher will expect year. rate tax last XXXX

As the We previously debt $X.X capital primarily the billion debt second repaid and our in quarter of focus million $XXX communicated, the to on for in allocation year year. of repayment. was the half priority

allocated of $X.X total to repurchased to million stock fourth quarter, year. repurchase for million in shares X.X also capital the share for We full the $XXX bringing billion

repurchase out our $XX.X million December dropped earlier, XX.X allocation billion Total capital and times. mentioned as running Ondot EBITDA top authorized as to we debt was closed XX. outstanding have X.X December, We of XX shares the and to And in the in of Systems December debt January. for that acquisition priorities at Frank acquisition announced adjusted

year. We are our to some XXXX debt repayment as achieve the anticipate this targeted half EBITDA track second adjusted well growth leverage in on both and we of strong further

us a in Investor longstanding you’ve As our our and in to which includes were emphasize capital heard December, high strong like committed innovative solutions value throughout sheet, Day balance Ondot. organic investment strategy, acquisitions fully we maintaining

share With deployment. capital that, call the let back for turn me Importantly, benchmark remains repurchase our Frank. to

Frank Bisignano

Bob. Thanks,

shared We end the the at Investor X% than range expect better year. preliminary XXXX was at the be our Day. of bottom for This XX% is internal full growth to revenue our recent outlook to modestly

the third synergies. current our global rate the acceleration impact in-year December an quarter, economic continuing for expectations this current stimulus about in overall and and cumulative later prospect to economy. of impacts achievement driven view conditions, business, and continued strength the XXXX of significant growth multipronged is second sales a implementation revenue merchant the The our the global of Given relative in improving stimulus of by including package late

the at which from rate in range We range December. by per $X.XX $X.XX U.S. and driven benefit the stronger programs improvement XXXX Investor of above earnings The adjusted $X.XX, is provided our is to in we in Day the the expect share XXXX of stimulus the exit

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

the largely the half will midpoint we EPS and factors adjusted how pandemic of throughout and the for in lapping growth that There second end then assumptions the second economic performance that a half. much pre-pandemic including believe depth are the cadence revenue assumptions to impact XXXX first year driven in when of QX, half. rate may internal of which outside particular increased the internal generally included pandemic the will grounded economy leading our in out of the and by the and of in full the the improvement recover first guidance the quarterly fall both may and of The rates, year-over-year of from in assumes guidance the growth for quarter, range, impact low XXXX. our are several vaccinations quarter. vary of of year on recovery start the high Our performance, results improvement Quarterly rates the

see our clients, successful do serve their challenges, we was our expect year, toughest comparisons QX, jobs to to differently year. our to with to the and Across be for normalized the year. the more was QX to serve how who our this results. proud every most Fiserv work these favorable the Faced of I’m customers. We Throughout associate turn comparison XXXX of measures, then will half a number comparison, past second of learning challenged how in re-imagine

initiatives, your the verge was clients together a scores to creation forward synergy your those improve as of when our first Among for employee our our completion plan executed to and in satisfaction improved time even integration us a time end client XXXX. our measurably saw the EPS achieved achieve company of of XXth day, its change the important then positive company be a And data communities. at against We a targets regressed during of most. the pandemic. And the needed consecutive year we targets. undertook and through growth. the double-digit in engagement complex Our accelerated most increased integration of We adjusted force scores the our to the meaningfully

program underrepresented associates, for business Forward not and launched our four-part plan, a A is last plan was pillar Together profits. to back owners commitment empower summer. the to Forward business Together and of support Our

to million to black entrepreneurs. to part owned As committed $XX support of business owners back we and minority business, invest and

We into well monetary are $XX to it meaningfully commitment are increasing and now that million.

in further in efforts initiative, Corporate Social excellent the appointed progress of sustainability continued people a for serve as the scores for our efforts world. Executive shareholders. management, admired we hardworking and relentlessly more XX,XXX to to you, will Fiserv eighth this social thanking that responsibility than for questions. is open Fiserv operator, Responsibility indication our most Fiserv other was a our commitment of around close these as well-deserved and clients for categories. well a let’s again, recently the world’s lead year of caring with of With as consecutive and them This associates line As important host Senior named I once working of the to organization. recognition Head the oversee a company, all for by

Operator

MoffettNathanson. from first Thank Ellis Lisa is from Instructions] question Our you. [Operator

Your line open. is

Lisa Ellis

guys. afternoon. Hey, Good good stuff

me Carat. for First question on is

enterprise Acceptance You out some enterprise Merchant describe customer this launch your improving how and you’re getting proposition Can some quarter. you Carat maybe wins on that the feedback called of in is XX of on give value color in offering. space the new the

Frank Bisignano

strategic for around we’ve of the is that ease on point access Carat think I globally. integrated

into underneath to multinational the rate capabilities, acceptance optimize to many office. economy. And bringing names driving those many and client’s single ease it you’ve the could in very to had resonating institutionally, really although, countries, the active talk and execute in a very and high in engineering the the leaning of through that about a there. well its that was what’s heard platform, of So instance is currencies we’ve in globally. it’s year, us is of ability ability are commerce hundreds course win big And And a single are access, the very, utilized wins be that

in it client’s of it’s So a and out the by build team market. done that’s to wanting work the the in office, it platform get lot to be the well very resonated

Lisa Ellis

just unit Bob, give color segment little anticipating is growth you. for follow-up the stuff. outlook? one Thank what a growth you transaction for your embedded outlooks is on type you’re quick also Good XXXX. My or or in And level of could

Bob Hau

individual economic Obviously, XX% let by Sure, Lisa. kind specific revenue. guidance We give segments. the our large number Merchant – But you if the of across Europe, part seeing directionally. of of segment represents in are Investor the Day, second expect revenue the growth certainly an medium we particular during rebound/recover in given the to recovery and that segment. expectation key certainly try get recovery a of midterm has it that Things in that accelerated above folks XX%. of even our color about second our particularly some little a high pretty EPS what We of United or term in to of got little restrictions to a in the difficult been merchant half of as seeing quarter growth having we’ve Acceptance out States and you year. give of being in like, XXXX. place, you lifted the bit improvement overall to vaccinated, Frank X% had and year a growth general the key end in laid in the don’t some a in of assumptions about of for a look matter, XXXX bit at of that a be company from and but a me We certainly plays even

of year, segment, year. but particular, even at in seen by half that really second in impact year We’ve the Fintech a the the much impacted first revenue. the you If this this in across bit periodic half look little year very and overall

get over by be of in to such continue. would the the we XXXX. significant we we range last but Fintech the persisting which fees. periodic that into in X% not really half of that or medium rebound doesn’t year had has of we recovery XXXX, and As of decline the the segment, that subsiding to the a X% for It’s second some quarter, outlook a we QX full that headwind about the the see pretty revenue/termination look expect see of it to we’re we’ve And to second term And quarters. time year, a bit that on lap several a we counting

of And really in range benefit at here expect about segment XX% this term the company. to so the the be upper guidance to again probably Medium we’ll overall X% then XXXX. other half was end segment, the And the X%. of I of that second would see XXXX. in the Payments final segment

as have in know, we business, the kind we’ll As retailers transaction improvement. see in private particularly improve, of a some half second bill those some leading again, COVID pay as particular retail year, growth we our in improve are in you position see of post the and and course, of label, prepaids

you’re three. our course, that certainly XXXX, in Zelle. really earnings processing provide into don’t business, ones in implement, of call some lift And but see again, I’d business some on then talked very large probably below that about wins quite take growth Of top It those last is XXXX nice to those about point into business in last much the to as very come heard some there during significant driver long we segment. this – are issuer into that the a and quite few you’ll talk that won’t and of segment, us provide

bank consumers but on to more my and only do nearly centric tripling FIs PXP seeing mentioned more grow, not we more that volume. As Zelle transaction on I a see a prepared choosing Fiserv, network remarks, through also and continuing of number

essentially the as rates Lisa, quarter. call this roughly midterm us very And the gives to of Again, first be in was bit XXXX in the and that end part XX unique recall, upper of going see And COVID last quarter a is quarter. COVID probably a weeks hit range very you QX, until remarks, confidence I’d kind latter prepared his growth strong in the variation of in significantly QX. that little thing at March obviously some we’ll X%. XX the really X% Frank of by had talked to of about the for free it first we of in some the we’re point, So

exit – range. the that range the point our the internal easier the the lowest time, half. not the people year, quarter, QX of on the a we’re in low in you the the growth take rate Such guidance quarter half half have above So and first upper end we with I to probably set trading second our when in first nicely overall guidance in that much be year-over-year, the for would and actually be but rebound will and growth EPS range comps place of basis, of the opposite revenue be by the guidance second expect terms on only within

Lisa Ellis

Fantastic color. very you Thank much.

Operator

you. Thank

Our comes from Dave from next Koning question Baird.

open. Your line is

Dave Koning

the Great guys. segment. on but this, all, year. XXXX, for Hey by in still guess the know that margins two of guess I Yes. give I actually similar you a on color expansion margin – of don’t where question the was was expanded. just Merchant of I segment down a first sort nicely lot year-over-year one other

to other probably one, margin to that in the range. as by expect for come closer that we segment should revenues the most be guidance benefited the two than expansion So back

Bob Hau

hit in issue Yes, quarter, that terms too far half that the the difficult Obviously, sequentially head. revenue you segment, really second margin on the year. the you’re and thinking, we had right extremely of off second in nice recovery in not probably an both of in

better we half. And so than first did XXXX in into head position we the in much

months Overall we’re this XX nice from some when lift Acceptance second a now, business. the three would bigger of see we Merchant the you’ll benefit in we’ll segments and get of expansion say, in out the on margin again, would expect point all So call, I probably books, close quarter of I comparison improvement XXXX. the

Dave Koning

total lot correlate income the a just X% one imagine and about Merchant it’s And is the line, in But bank hit with the got this thing follow-up, you. you would just about talk stuff more equity Thanks. of don’t year, then profits. hard JVs segment. that pretty Got the might I

way about to probably income than any equity don’t just the there’s I think it, but know be line. around more So it’d business. context if a up good I the if wonder just that’s average

Bob Hau

I see you’re it. right, that overall with I’d think that business equity to the And ventures. and think joint that we way ventures expect recover, help that’s portion to Actually, the largest about see is the the that’s Merchant as line. No. joint exactly merchant of participate And the

Dave Koning

Awesome. Thanks guys.

Frank Bisignano

David. you, Thank

Operator

you. Thank

Our next question comes Securities. from Andrew Jeffrey from Truist

line is Your open.

Andrew Jeffrey

question a taking enterprise in of really – e-comm merchant. given is generally. speak Clover, around the assume terms also generally of these of thinking Bob, magnitude you blend all question. enabled enabled your just rates think revenue and guess, things organic Appreciate My about the to the even omni order and yielding you transactions can considered. couple in afternoon. I should initiatives growth good about from business and tech and up volume. Hi, growth, I’m business to and are maybe I’m e-comm great generally KPIs your contribution acceptance tech impact higher trying I also

Bob Hau

Certainly enabled right was thing yield is and obviously consider Clover XXXX. the element does. big on with generally track, Certainly, you’re growth though SMBs, the and general have to has – tech in the Yes. exposure a higher that of the the in

the a year activity segment, overall necessarily the transactions. won’t don’t type was strong of but one so helped that people businesses of move because Merchant the growth you see in very broadly obviously down the retail Merchant e-commerce small volume. as tech the of in and shut of to the overall. us And as We’ll of you change And heard overall big again, overall a necessarily see continue, report percent quarter, second massive Clover see things enabled share that you that that, segment the acceleration throughout growth within a particularly actually rate

margin driven benefits. synergy So improvement as as the scale by really productivity, business is benefit, continued well

Andrew Jeffrey

I new out on just time that the of you acceptance? like out Do lots very not can It’s acquiring know channel, you your you of get And part relates which lot quick Okay. a productivity helpful. merchant it feel adequate long-term, bank a called follow-up, distribution of SMB as to as especially, banks. Thanks. a channel Frank, network is well. of That’s that

Frank Bisignano

Yes.

XXX%. the was about I multiple thinking I in ways, one, would I think think the about And answer Yes. is bank channel itself. to

I distribution Verizon, us about you’ve seen Paychex, also, think The other, Deluxe. announce partners

Clover are see in touching offering you a with contact these fact now. us offering. So you I they’re SMB and the they’ll mean, their their enhance packaging in Verizon think through that SMBs where relationship points

you what to offering? we then partnership answer feels relationships a And because like bank I bring broader The than gives drop privileged do and to same our we throughout these very it’s very, would two new powerful. strong. the fabulous very the take to the is merchants perspective It their and we’re it of and So if would it very, it much or into ability in three deliver very very think be, no. doing their some a higher the have ability Will But been them have margin eligibility a to cases, years about grow to base. high and partners. it’s country, have good down the penetrating with on ago. Carat as offering our digitally base could core, In it the just

them our So completely revenue generator for the accretive bring with possibility. them actually to this, a do and bank is also. partners it’s responsibility fundamentally our to And

good it’s that It our So perspective, for deepens from partnerships. it.

caused that their also. them stacks to better graded with into building relationship have a client We’re

Andrew Jeffrey

lot. a Thanks

Operator

Thank you.

Research. Our Wolfe Peller question comes from next from Darrin

open. is line Your

Darrin Peller

that to we’ve minute, it as is guys think All recently. Clover right. position on it up want would Again, done I said. it because lot KPI, back XX% circle to for year-over-year. I like XXX%, a other your guys. with a combined you omni And KPIs Thanks. work was of share seem market up Hey the

– both year-over-year, enterprise and I’m the a with the side so if the couple domestic sounded even that the – give the you us side growth, of SMB sense growth count curious number in there in of the the of number if merchant was international strong. mids interactivity when And – you the like can together or and

more growth, volume share merchants of hear just I’d and revenue you really the curious to versus growth anything number SMB be So in the side experience can and than about enterprise.

Frank Bisignano

in I Well, is market you and share Its share little is about and share gains behind bank significant bit why space. the a why played the mean, in role back ISV has growth space. it And the in one question to that the us. talk that’s about for partnerships gains a SMB. it, And don’t Clover really, market bank e-comm gains. gains happening? I market market then, its share Its strategy avenue really distributions, the that. on to And about

able when shape then its position, that clients. institutional the large strong; facets across strong secondarily, two form; through the performed and bringing have as and in this. and all out, of say, big And we’ve of continue across didn’t having and to a into us in And have, combination we of those. had XXXX seen manner, the industry-leading happened might to it; is, good as invested that is pipeline and base every has business it we then all in It’s is the continue across what’s us client about, our has. will growth before general. heavily XXXX. that at to look question allowed be ask rate we XXXX, if of what here, grow ISVs how So growth Carat one we because us and really I offering companies grow you to think And fabulous actually we got you a it, would SMB XXXX, in of through growth then And all your

So it share gains. is market about

Darrin Peller

that to we many to potential per then blackout you should even of think going billion And guys forward that quick know see I capital it or Okay. billion expect be we earnings, your on way as just Investor about $X from do right, Frank period is investors potential right pre Thanks. $X billion your we allocation. looking year. like follow-up when to the right this proactive appetite out forward think left the about that just to billion or Or between your just allocation us, we my think or coming you’d about now When remind $X here? now, $X Bob, stock about as of as $X undervalued it is to billion Day maybe maybe capital And potential? where of of much billion there’s the deleveraging? and maybe buybacks to $X billion potential $X

Bob Hau

Darrin. Yes,

tell certainly Investor assume talked I flow getting very expect XXXX. of billion, $X billion we $XX to over you’re on to – repurchase. through had where We the we continue five And the see and billion cash is would years. about XXXX $X deployment available into the that next continuing the think that today. We great through this I free price of capital capital good or Day, share focus certainly lens We a you share year. the certainly, eyes during

find And you’ll you think don’t there’s results I valuations opportunity. that have certainly XX-week think moved, real where And many given high. buyer. tell below we’re we a where but CFOs we trading XXXX’s We’re otherwise, a see and

pretty to market so see We And quarter. be us active. every in are much continue the you’ll

anything? we’ll you buy in did company. when the the "the five to pay I and acquisitions. suspended Data, big have some of debt XXXX, we for But for of We aggressively across announcing of balance And we’ll like do do continue have we’ll here Frank, to we’ll First I’m than and want quarters to other years, we’ll some genius to believer we end." continue some been, do think shares, with couple a the merger been I’ve the some do pay down that we of debt, with And a down post the this add year. that. back

Frank Bisignano

No.

the past we’ll think pay shares look over see year done we’ll we debt, assets. strategically down and very even balanced approach, I at a which Investor in laid Day, buy you as acquire or and out we’ve and if changed, you back what

Darrin Peller

guys. Thanks, it. Got

Bob Hau

Darrin. Thanks,

Operator

Thank you.

Our comes Guggenheim Securities. next from question from Jeff Cantwell

line Your is open.

Jeff Cantwell

thanks my you modern some a is there business, team? the nice you it’s sounds about It scale Can about it’s Hi, talk It to platform. part I the and a it. little fit ask have bit good of that good very like sounds like taking for wanted question. a Ondot Ondot now afternoon, the acquisition. to

full Ondot that? enhanced, be Fiserv other see if or onboard? then very much. would it great. words, And word nice to In it, now seems that addition. of part can future the you there that’s us little future about on be basis a becoming color Any you synergies there opportunities be are the a the combined how it’s bit for time? tell it’s what going by a So right more like Can Thanks

Frank Bisignano

Yes.

time, for one a the we great came to a First our company the founders Ondot of And well earlier. long all, know very relationship. actually over of had –

And – then and had relationship so with management. deep we a had always we

And this consider well. very integrate we could knew company a I’d about strategically we think to platforms. how So

they acquisition always when it something inside that about I card-enablement and the bring our do there’s But you own. excitement for than the and much view it founder’s think could leading you we And think can as the are great similarities. done platform to company, virtual we access. the Clover larger on what excitements into, it if have their turned

banking their company, core get as that We’ve credit, debit, new taking our much is inked up us of it. data where larger Digital really have ultimately then clients the enterprise. name to inside this and is Clover course, digital give for to We take and Officer, DNA ability will a with a be with to definitely presence Data the to a our a a all Chief click first we’re company. a the to Sunnyvale financial Of It one Sunnyvale win institution. sitting and increased large already complement our institutions large opportunity –

it. So about great we feel

and having driving think could large forward I and integrate, look meetings us to digital well, the integration through so easy we you presence are it acquisition. knew top-line. it weekly And and we deep was its in to I think growth

Jeff Cantwell

excited I you to Thanks very what color. much. the I’m stating. Okay. appreciate see

Frank Bisignano

Thanks.

Operator

Thank you.

David from from comes question Evercore Togut next ISI. Our

line open. is Your

David Togut

Thank you.

margin occur Data, Looking could how $XXX expect address of innovation built year? you you at spending First announced acquiring the into time innovation that much the at of What’s to million this you fund months? the the on then expansion we target least watch there operating call-outs product innovations basis that XX in adjusted are out And of any points? new should XXX for specific at next

Frank Bisignano

Well, for thank that. you

had deploy Officer have number was And talked ideas Data Chief And come. of structure And of would product up us to the created and the a had ending the Digital We we a output that creating so the that begin a of of next would a to groups to million. these actually within within working for company. allow the $XXX the generation company innovation year ago about where so. or

and already that a go we to in course, have begun we begin Of do that, it growth way forward. accelerate will as

go we top million for in $XXX there it. we Day, talked Now already it nothing was that outlook But Investor back our spending and was you. if to given you the had the about had line on we’re

with to and series So initiatives, the company. a manner to move is is a of a Officer whole I Chief inside help across structure that find forward the you being Data a of today in Digital projects able company can deployed, it think be what set built a

initiatives, half get the into year, And so will these you roll top. on year which I the next move this into would think as seeing the into digital start data second ultimately and and we of P&L you’ll

And the to of rate our so XXX, pillars for of our And business what a opportunity at to anything move white want capability add? the it you say, connecting viewed the unlock but Ondot I’d allow and between isn’t brings the will on as to us innovations. faster four part Bob, space us allow many of digital clients. the data to

Bob Hau

amount will XX% spend fair incremental year, in XX% improvement. of or development. still recall encompassed and our this and this of is the There Dave, us this of some terms overall year, gets margin basis in certainly fully XXX Yes, at growth a guidance EPS be course, least spending point

capitalized, gets comes balance the on And sheet so time. this portion a of drawn and over

year-over-year so fully encompassed in and again, necessarily certainly it a isn’t And increase overall guidance. our big

David Togut

very much. you Thank

Operator

from our comes JPMorgan. you. from last Thank And Tien-Tsin Huang question

open. Your line is

Tien-Tsin Huang

Thank you much. so

know good sales, XX% in what XXXX? on Do new SMO fiscal feel I feel question that new kind you think one about quarter, about the internally at for set sales of level? outlook? how curious up you Just the Or you fourth for XX% the I’m compounding targets I year.

Frank Bisignano

we through in sales about I being see company that’s year had course to close really about terms talked we’re Investor that Yes. there. last we because mean Day sales of growth institutional the ourselves what during XX% and a talking of

good January and is to start. – really So a off

about So feel good really I January.

about And it. I robust. opportunities is of pipeline got where to thinking start the that’s So

is in the mean client’s integrated I very So office. a model well-received it

client and stats think then bodes our that with And so going – very I well. up,

employee this course year tough so happen during Our engagement the the this I good what’s very protected of we up to in them think going going inside very time, while we feel company, around that. about

Tien-Tsin Huang

Excellent. Thank you.

Frank Bisignano

to thank afternoon. tremendously joining this like I’d We everybody your Well, for support. us appreciate

any a to hesitate and your don’t great Thank have contact you If evening. for us, you questions, have further time. please

Operator

conference. Thank today’s you all for in participating

rest line You and your may the of enjoy your disconnect day.

Fiserv (FI) 10 Feb 212020 Q4 Earnings call transcript