FISV - Earnings call transcript Q1 2021

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Operator

Welcome to the Fiserv 2021 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 Shub Mukherjee, Senior Vice President of Investor Relations at Fiserv.

Shub Mukherjee

Thank you, and good morning. call Officer; Frank Chief and the and our Financial on Executive Chief Bob me today Bisignano, are President Officer. With Hau, our

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

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

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

should those release with non-GAAP You the refer for discussion the of call and refer earnings supplemental today’s along of our explanation financial basis. Please measures. the factors. growth measures turn a for references to our an now, of for materials references discussed measures earnings these performance in stated, and to currency GAAP release revenue call the to risk over year-over-year Frank. this internal otherwise constant And applicable are a nearest Unless comparisons are to I’ll call on all to reconciliation

Frank Bisignano

of range our is portfolio, metrics. Great innovation, and our Thank XXXX the our pandemic. expectations team. through better start COVID-XX to a client at a you continued strong across investment broad on in Shub. to with strength than reflects have The QX you, our our off results or of technology, our people

overview a our financial the strong brief provide of Let me results in quarter.

been presentation earnings You noticed has updated. QX may our have

countries points, in segment, X% revenue by $XXX to performance will X% in margin global quarter. That increase pandemic first an led up subsequent XXX restrictions, more our the basis in the XXX% adjusted following much EMEA growth pages, a an you're detail If India, exceptional Brazil, was million, and I'll Bob share. internal X%, the double-digit particularly was resulting Free merchant variety including adjusted grew in the overview to low for Adjusted grew Total a on COVID continued operating flow provide result income. along, provide in earnings was company and per acceptance and of net growth for quarter, slide. three of light captured of XX% which cash March. conversion some and then comments the on

Our bodes client's integrated transactions. sales offerings robust future. well our our touch PayPal that our sale. merchant is is sales banks, of and as sales Also strength momentum outlets largest for more presence the remains merchant merchants breadth is the together company and with preferences this free services. for the America throughout The presented shift our point and the the this announced Caixa results Econômical quarter become codes of of Latin bringing of we new well quite office, And strong sales momentum the we morning, as largest PayPal, enable and formula and exclusive one we largest globally. broad were continues Caixa provider XX%, Brazil's via through Carat of combination the agreement a our We XX-year at one and than for extremely with quarter. announced excellent with XX,XXX QR of to platforms Clover important into pipeline an to international to solution second in received wins payments the first and is of continue sales to payments evidence Fiserv's this the our strong this up accept believe model in Venmo consumer a in a businesses. Yesterday, one network towards with Federal offering all of acquiring Brazil, and making of with across believe

merchant payment volume some QX billion in continue SMB leading context to be strength business continue grew XX% annualized. more GPV the solutions around excellent. to XX% merchant to to on year-over-year momentum billion innovation, the like from rich To deliver $XXX -- Clover’s and clients. $XX gross Now, and Clover, Europe's retailer pick Merchant in Omni-channel of update grown platform, retailer, Clover including EMEA won has for up in in provide eCommerce has XXXX the headwinds eCommerce we provider. year-over-year. we enterprise our and digital to of largest to the offering to second were platform; QX as APAC, We we transactions chosen of in this region. QX level set, order provide enterprise business services like omni-channel U.S partnerships, in with commerce leading to XXX% expand won economic unattended Carat, been over for the new billion devices, Australia's strong up drive ended the omni-channel include gateway, and how our a POS well. is compared convenience a despite Solutions the service the Fiserv very enterprise transactions We wins specialty ISV marketplaces our quarter, Fiserv our to leading value sales enabled our to year. Selecta, leading within which The merchant store largest Cost which World and continues services digital record relationship acquiring prior Carat, grew performing. added segments to ahead eCommerce you from Clover internationally. our XX% Acquiring the the one I'd a result clients tokenization. our solution; perform Through business $XXX year, XX hardware. Plus payment enabled in Connect, security Market, notable very pandemic. self chosen where first bill the LatAm, point-of-sale In hardware solutions coffee In such The for provide has in food had solution been eCommerce

brands the Department digital of our are We we EBT insurance new experience of one all most online digital also with for role a relationship bring payments to SNAP world's innovative the such as acceptance innovation companies for Farm, in Company, U.S named Fast payments during claims. was Fiserv of by Agriculture's the pandemic. consumers, key State enabling expanded piloting our payout where Recognizing to our

momentum in continue the Connect. first XX to quarter, partners. see the we We space with signed In Clover new ISV ISV great

in ISV continued QX partner strength up XX% revenue relationships in growth, which results channel and were active driving up is which in strong expanding merchants, Our was XX%.

lower For continuing an example, in ISV growth to Cadence, the another cemented the is further its company, signing servicing for fuel origination This a by example Fiserv integrated verticals with future which yet lead software during agreement quarter, successful a of the partnership channel. software mortgage sale, Mortgage strategic our industry. Accenture provides in mortgage

enhance set technology and relationships by for new ISV build build the and an our existing knowledge. merchants. to us quarter, to In agreement eTail place had to finalized leveraging continuing are with our move we upon and the merchants large of agreement existing their in [indiscernible] market Additionally, we we

processing in our number across a account like we X new sizes expand wins. our recent to quarter, the We on privileged Moving business, signed institutions to continue the financial processing XX all of our highlight few of of to account DNA I'd core including clients relationships and types. platform.

for output Republic products in solutions full and earnings we with As our than more Forbes core a Fiserv in last February. processing, rated commercial service bank a assets by bank on call, billion First we of services signed Bank, and including best $X America's mentioned, card

digital continue our health of synergies. characteristic. position services significant chartered industry we sustained focused common win of in reflect to to digital were a to the to leading quarter, U.S a In clients institution. depository a vertical. to revenue provide qX, minority both cardholder driving novo this momentum, Further their a financial engagement a signed we takeaways platform the service. Additionally, Credit with enable combined acquired large Payment and signed Genesis agreement The provide to bank building including PenFed Ondot, communities. major the banks to can core offer solutions wins First experiences, Network customer our leverage to as Bank selected In a and novo surround commitment In digital de competitive multiple on in care Bank, our Through banks plus statement services as our to two the well agreements goals their in institutions. new These leveraging growth and capabilities. clients QX, of Ondot FI show newly these minority offering to as to digital for signed from our continues our our solutions letter A and segment, Union. wins superior majority we strength our of supporting cases, provider, we range strengthening time newly power of This illustrative we cardholders solutions de spend. support Horizon wide also real drive personalized client

nearly that, on way With efforts. this adoption let QX, our update the of $X.X cost Through digital these already and We of year. billion objective we've our savings, fully our expect across $X.X billion you well solutions are base. client actioned cost end our of by synergy action on integration me to continued

With and the growth sustainable ahead. value are on years further majority work in integration us, of driving we focused behind the

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

synergy in the the and exceed years annual end our meet $XXX expect we over actioned is our growing of of $XXX we've synergies X post sales As to and million already revenue robustly, target million QX, or pipeline merger.

important with of including programs like clients, new be eCommerce offers the a X we all digital the solutions. added merchant $X billion. bank merchant institutions assets to and ability their modern and the capabilities, In along loyalty Our program merchant clients to Clover platform over a XX continues bank innovative quarter, synergy of suite capabilities opportunity with merchant first acquiring offer sizes financial

robust before Additionally, over final these point it The One half our remains of were on takeaways. Bob. digital competitive the through initiatives XXXX. wins rest to of turning pipeline

discuss initiatives utilizing our redefine latest offer for the sizes, payments by quarter. technology you’ve past, and close ecosystem. leading commitment first experience us digital across in provider is to of drive Ondot digital the our a capabilities institutions example this area important one in most heard of experience platform the all the acquisition of is As the innovation strategic An of which financial client to the to Systems,

We acquired announced thereby we strategy. payments. a not the based commerce on but platform RadiusX, capabilities least, cloud definitive ISO to beyond to Carat, hyper-localized had also Pineapple Last focused acquire our leading agreement buy integrated a the that Payments, button enhancing

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

Bob Hau

Thank you, morning, and Frank, good everyone.

points, internal by led quarter, revenue the in the of March X%. pre-pandemic impact the which Total weeks comparison year. of segments. Acceptance period new in on If in the quarter final pandemic We had globe. strong some along a pressure from continued of on first cover light I'll QX you're detail the growth following the Merchant with last to grew slides, our the two X% represents final of each beginning our company materialize was segment, across

up adjusted First was in quarter operating $X.X increased improvement to basis was points by margin XX.X%. margin by produced million cost a execution, adjusted operating operating rigorous billion income incremental XXX performance. and as strong a our strong driven cost which as synergies This synergy to quarter well strong XX% the $XXX of very

earnings to a March. million, a share adjusted in to flow in impacting the income receivable Free increased increase rebound was quarter by in quarter per adjusted QX's was free up year, cash and driven X% revenue to year. an flow accounts over cash XX% strong in $XXX First compared XXX% prior conversion the net $X.XX $X.XX last QX

segments. Turning the the revenue segment growth to in the was X% quarter. in Merchant each Acceptance of Internal

including supported our in business. Our in by performances much Ireland ISV quarter Carat, and clients results driven the U.K., important experienced and from were again portfolio strong from the clients, for our headwind our quarter Poland. of Clover markets several meaningful our strong Germany, another platform, once by restrictions which region, enterprise SMB supported This includes result us, of a for EMEA by

quarter. discussed, continued grow in business the looks of the continues through sequential very for as strong, this the up March the Clover nicely, Frank XX% uplift our that SMB last GPV April. has business in As outlook in witnessed to we weeks The few

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

income most we Day, solution this further that a rolled solution ISVs We Investor their operating out believe $XXX partially Fintech Clover Adjusted segment which future. towards internal fees, result approximately XXX periodic adjusted continued margin in by broad year our XX% was line offset the recurring points increased top solutions grew X% and banking compared XXX in and operating Clover and growth customers we Connect, to for for revenue growth termination and lower in strong revenue, by merchant of in ISVs. to up the recently array quarter our the to basis basis digital to first the differentiation was As and and our again cost the synergies. created quarter. in digital headwind shift discussed internal growth Acceptance prominently segment XX.X%, revenue to the at driven integrated quarter demand high the The excellent revenue the in continue quality the in for as points The strength million continues. extend will prior drive of

our For XX% deposits quarter. XX% over grew Mobile mobility platforms year, last leading example, QX subscribers in XX% digital total architect the grew over mobile across ATM the while self service deposits grew in year. prior and

operating the continue preferred in cost prepaid offset users these the segment headwinds combination to mobile channels levels and experiencing to revenue, after robust strong partially pay by slightly up operational quarter who check segment or was output growth The of growth million. safety. effectiveness processing benefit as a quarter XX% and convenience strong XXX in current a internal on ATM $XXX from a benefits growth We XX% Debit services, in moved for and points as in transactions increased income revenue margin operating adopt a grew saw year-over-year solutions, Zelle XX.X% expect in these synergies. the bill the as revenue businesses. and quarter have deposits trends synergies X% was and and basis our of their credit Adjusted businesses, our Payments Network including to first to Adjusted ahead quarter. last the in may

growth as within in our transactions versus year-ago. such Both in Zelle the doubled live transfers clients transaction to of solutions quarter account-to-account number see PXP. excellent continue and on We and Zelle a the

paying in XX.X% impact million to and margin The quarter. with adjusted and $XXX from operating the basis margin The offset and businesses. by positive the bill cost activity the of half the the lower in was both headwinds line Adjusted with as comparisons. income private in bill reach corporate segment our in rate The results expect the operating up revenue better was by Our higher economic credit the part in mix, credit quarter that label versus million XX.X% adjusted retail adjusted year pandemic saw we and to second paid driven loss X% our the our prior $XXX businesses, XX given we to particular for better subside revenue of up points operating were expectations. tax in synergies, processing flat in revenue quarter was was effective year.

consistent our the expect fairly effective to the adjusted year in We also XX% full tax rate of rate be XX%. range XXXX with to

more we XX capital our we by remaining shares strategy for and allocation shares repurchase. authorized million, the During for quarter, X.X repurchasing $XXX disciplined have than continued million million

$XX.X in TegraXXX, January at and addition, the X.Xx. billion of to as business with remained connection investment In debt was Wealthtech earlier, mentioned Holdings. services acquisition combination completed ratio EBITDA Frank XX outstanding Total in at our the Systems to this Ondot and related the we adjusted debt former increased with investment our March

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

Pineapple pursuing balance investment As our solutions high and maintaining Investor in strong us strategy, organic like we're in long capital you and which making acquisitions a to heard Payments. allocation throughout RadiusX our includes December, fully innovative emphasize Ondot, sheet, Day standing committed value

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

Frank Bisignano

Thanks, Bob.

the to raising of XX% expect to We strong X% the a be internal range Given EPS economic revenue versus XXXX range growth both for adjusted QX performance to and end we improved X% our XX% are previously. in and internal now our growth. outlook, revenue outlook low

at to the We be expect $X.XX which growth from last $X.XX year. range, the This adjusted a EPS to bottom outlook. prior over in our to XX% end $X.XX is XX% is

by and be assumptions to improved for range our the flow of we provided We operating our free economic updated internal outlook material remind were prior in are EPS least and XXX% no state U.S., material you, which at outlook same, adjusted in when in both COVID COVID of both Similarly, current APAC. expand cash continue progress the no trajectory and we uneven internal driven expect the -- at the than recovery year. low persisted economy the year. low the February of end assume for improved XXX EMEA, Regionally, recovery versus economic economic conversion economic of vaccine for about adjusted recovery, we well of from have date. the To U.S., with are more to impacts recovery COVID-XX at February, original good our to to our the distribution our points revenue seeing as LatAm that remainder government pronounced parts The as margin growth outlook of where basis in end of the stimulus the time. by grounded performance X% outlook. the The as and outside greater assumes

indicated we impact more As given last expect quarterly growth last the call, during in our the we in XXXX. earnings of pandemic year, variability timing

Given range, performance we difficult it year full was. outlook comparisons, expected below be to our and QX

navigate year an we've comparison. will outlook easier QX of I'm our expect the crisis. the proud momentum growth and year-ago rates range driven the above We be business ongoing delivered full by as global we results

to per setting even business XXth to share our Our leading what year earnings for foundation incredible in double-digit growth beyond. a be consecutive XXXX, shown of resilience, and we have results strength expect adjusted and stronger

delivering focus results, continue communities. to we financial In on our on addition our to

XXXX. in we During the locations our the in selected BackXBusiness were that grant successfully six program completed quarter, original

Bucks talented as lines the to open to let let's stand and second commitment grants Last, History Month History March women to courage it more held Month, in the deliver of together our the Women's owned additional partnering additional than programs Nancy for shareholders. for Bucks the Lieberman to businesses. value minority award With me we Milwaukee celebrate with the operator, Black partnering our around two clients, that, during thank with and their associates colleagues, small and also XX,XXX questions. We and Milwaukee, you, world for our for in

Operator

Dave question Baird. Instructions] [Operator first Koning from you. comes Our Thank from

is line open. Your

Dave Koning

Yes. great Hey guys, job.

Bob Hau

morning. David. Thanks, Good

Frank Bisignano

you. Thank

Dave Koning

Yes, thanks.

then February just January first worked progress. April nice understand Maybe through really there. I of things the kind on and just were So trends of and were momentum kind the all, and of walk of kind Acceptance could to you March how guess, trends of segment, kind as how how months

Frank Bisignano

Yes, I and take not obviously little a movement it very much. but volume, at level. February January the macro really up began in

it Brazil it Day. talked that's If you on. we took talked we X, that credit amount full when to the you a And the a that at U.S. did little We weather up from up to felt store a better really I X Investor from saw end that and We you for gave weaker going saw would a stronger till than we of March. when in February, but on bottom at we in felt then. all February environment Brazil, we of beginning see fair our March, what to we a X firm headed EMEA see going remember we say up on. in in look the saw total and you EMEA. right did is We challenged because to of the had to December as up strong a we spending that, helpful U.S. you. previously, about lockdowns we're end Obviously, perform of although X bottom that's it, top open there, to hampered had to now from why as talked the And X and And continues India April tremendously take and to we come I'd progression on to COVID as think still by to I saw the kind up has I if in in more and

Dave Koning

to of as And were and was back sequentially like XX% look QX, in Yes. very look you. the another in years GBS I this kind to very close margins the XXX%. incremental First about think of we segment really same QX, way every up last year margins guess into routinely at it up I Thank X the were the Data, through nearly

So points some to XXX, in different just Is those the of like QX even -- there would jump be margins. a trying that seem XXX basis seasonality it's past about sequential that? It but XXX, like triangulate almost would trends, better seasonality? than the anything this

Frank Bisignano

weak definitely QX Yes, it, consider I have top that I versus I of right. -- range a because so against why it would a in was think about to ever I is expect as would thinking we mean, as compare. comp, than you're the at seasonality talked end January outside look perform last seen. being better about the you and it's bad January, would

Bob Hau

the second of revenue days guidance year that quarter, with range full when half in the last pre-pandemic guidance Dave, more year below with line to March, our January, would to QX February we the see QX the to our we the then expect guidance, continue in period, all We of range year. recall do during benefit Merchant be overall second QX sequentially XX quarter seasonality segment. of of to talked full full expected above earnings actually call year cadence given and growth, the against ago, about be really comps half the the

benefit people inoculated and in hopefully and U.S of the see pandemic improvement EMEA the more be begin of relaxed. also will as subside, We as continuing particularly lockdowns in the to some to get more

Dave Koning

Yes, guys. Nice Thanks, job. great.

Bob Hau

Thanks, Dave.

Frank Bisignano

morning you the in to Dave. talk to Good

Dave Koning

Thanks.

Operator

you. Thank

Our Darrin next Research. from Wolfe question comes from Peller

line is Your open.

Darrin Peller

it Frank, to hone Hey, job. in back. or of I you Merchant performance it guys going mix at what there's you at look the the technology. outperformed the debate, Thanks. guys. if on, a was was looking just Great on want lot side in

really can that technology, probably pandemic, now good that side of all, merchant on out data coming stood X% are other that talked it's on than and you a and side drive to are now what this pandemic point, Carat growth about better XX% on first of doing range You the mix the some -- points even what Clover you've could have see And more you was areas ISVs. thinking other if to good combination technologically? of What the areas on pre-pandemic showed really comment that when about? of would that thought you and the the that

Frank Bisignano

I wins strong think the growth, very and backlog very e-comm very, Clover a about Yes, that’s that first continues think to had to onboarding be strong. you very,

I Our ISV well. business lockdowns performing would EMEA affect and U.K see in we in us definitely could the that opening up. I mean, feel coming, us

client but geographies. Our enterprises mix, diverse client presence have huge in across we've sector I've a a been from been well to every very bullish on also base way, as the SMBs whole and large that we clear large as industry

portfolio, so think our you lagging -- travel verticals, we have at and And services. when lagging still restaurants, I look

So in we Connect. second heavily well. We've invested continue quarter to the Clover later and and Clover, it in in that quarter to do heavily continue have do the an expectation third in Heavily recover it. Carat

time. type to this forward to able we have a of continue us long momentum look I for being So

Darrin Peller

all Okay, right.

of are before percentage really guess, those So the of bigger a mix were they going I out right? this coming all areas than of to be

Bob Hau

again, that Say Darrin.

Darrin Peller

ones. Carat So that Is areas give know probably coins Investor you the the contribution out coming us bigger any fair? pandemic some will whether revenue say, and I good if from be can update than but around off I were of data that, don't they would Day the with notably on before, started mix percent it's or of the ISVs, those revenue contribution, Clover or

Bob Hau

geography well. Frank course us the have couple have have things a growth. one largest pretty retail retailers while smallest will that think in there's meaning also of The all Darrin, lot exposure the of ahead client that -- us breadth play. served we way recovery the of down we of out, with Yes, we the to a and pointed and serve them diversity I we has world meaningful strength that of as help will Number SMBs. restaurants to But still of base,

quarters, and think the have the X, we in to X continue X, Going outperformed the forward, we opportunity market frankly … last quite we've

Darrin Peller

Right.

Bob Hau

growth faster meaningful which of the course, as more and that larger Clover see are average a piece and dynamic, other than … overall better company. e-comm, of growing a you'll ISV those becoming become the part, overall the is from

pointed billion continued that we part of nicely. some growth. nice a business to becomes $X providing As out, billion grow It bigger $X segment e-comm and

Darrin Peller

All right.

Just on free shares. that's a repurchasing focus did very little for X, X a Again, quickly, especially that key cash you you good guys, we think over conversion. shares, area given I million

So just and can for of rest update us And you your appetite year? on this guys. your again, the thanks capacity

Bob Hau

the which conversion second will March, full generate XXX% course of as XXX% first strong collect receivables. We prepared I mentioned we feel in in a the about bit in generation quarter, we're quarter. in, those for in track the first good Yes, sure. position cash the the that this cash quarter the accounts well on remarks, year. my driven to great little do given growth of the receivable

So out us we generation, you in lay We gives a, free us $XX like, Day shares. And of in the cash X earnings, the good did strong back heard continued flow balance the capacity got and quarter a feel course, to buy we've our the years. Investor the that our as of in see back first we capital December, in the opportunity buyback next deploy do over of for meaningful year. to billion to

Darrin Peller

guys. again, Thanks Great.

Operator

Thank you.

from next Our Lisa question from Ellis MoffettNathanson. comes

is line open. Your

Lisa Ellis

about approved on a two. the channel much Data -- a their could merchant sales by get the specific Fiserv, was guys. question heard First area I Clover. digital online hadn't or too in of channels directly. this this prior apply, really to If I Clover's invested had the heavily And the building in with last so a instantly we an lot I merger had morning, year recall realized for use the Good sales

channel update So of time just compared deployed? to is this widely that your sales? large significant on just could Clover has major for wondering, been platform Thank differentiator how you. the your us you a factor was competitors, And at how a in

Frank Bisignano

having that we view for When driving great globally, was continued you digital for put us when believed things category, itself And first about we and think every you total in which a bank those partner, of a and our of there. when sign more ultimately partners also accelerate adoption. digital digital the bank the we of we believe the channel programs, one adoption. the growth all, talk it merchant to still our to be Paychex the not places sign that continues experience for up. will We've what using integrated kind we as always say, work while is totality look here And to adoption, right? but one its opportunities place longer digitally us I our believe business channels at direct that of a Verizons addition deliver hear digital and digital about for of up. bank I'd meaningful partner and will to you Clover term, were one great And we’ve new and with would do continuing

it'll contributing partners signup capability ability think overwhelming that up to our part and journey is because of and we part our the but not huge the be of sign to of I attract So our capability growth been X-year rate. merchants is about. new the talk machine, It's digital

Lisa Ellis

distribution another or go-to-market on side. follow-up Okay. related And merchant my then one the to

your thinking specifically aggregators, Just doing the on particular I'm With sort acquisitions, a recent you type. strategy you are strategy or they your do of aggregators restaurant with a of a with particular these you're customers? you. how into are eCommerce types that businesses aggregate in retail with or And in merchant? Thank with like how Connect everything Clover with platforms. question how -- industry serving SMBs about Clover, of Carat, fit

Frank Bisignano

a Latin America every distributor viewed partner you'll an hear of you with Well, us vertical, being of actually, in operate on internally always marketplaces, new our strategy. of us, a that's really extending in our largest e-comm an us them marketplaces talk completely I as one the great We about players, see coming choice, capability. in happen every open today basically enabler And for think and distributor. our commitment that us to and too. example We've a relationship it's Brazil and

deep have I So a we there. think commitment

strong, things you our say are in hear and capabilities our I we it today think in announcement. the

Lisa Ellis

you. Good thank stuff. Terrific,

Operator

Thank you.

from comes Dolev Dan question from next Mizuho. Our

open. Your line is

Dan Dolev

Frank results. Great Amazing you. and thank Very team. impressive. Hey, job,

Frank Bisignano

Thank you, Dan.

Dan Dolev

think little winning explanation we're out can understanding you there who So, you the just maybe winning What almost against? are I are that's you are of In I the who are taking Thank refuse hearing a to you displacing? macro share significant share bit improvement. channel. a you and give How who there? you. acquiring, from and seeing gains guys from, us of accept out you're an I mean, you're merchant what it's there's getting that that

Frank Bisignano

Well, it's you business about in. if -- global are we a think

been a market been So we've capable share large you Brazil and saw was we on that business announce deal beyond in that Brazilian itself. 'XX us and taking 'XX started anybody and thought -- back we've had where

journey Clover and because until So ISV and began I'd and point that we CardConnect but that see we 'XX probably bought fit 'XX to player in big or weren't we with and we back together a that. 'XX there BluePay,

probably and thought know people in well e-comm we're an continue we space. that win to lagger You

cases, you taking in new fundamentally, But at cases, I go have you it's many of bank saying, all if the we through and are won't you wins from hey, know takeaways. it's it those in places us Now the XX% look of hundreds merchant these talked suspect markets. would about, some

with world portfolio said against most every and you look to market with every Clover in has base with compete like as strongly. everybody and vertical in with corner when it to And continue to business this we Investor a that and Connect, diverse very on back technology what we probably gets it Carat, that's Day, Clover, in distribution the at say I So largest client the with the all I most the built corner store, from to we’ve state. think we've the global in that the had

Dan Dolev

like Thank January, March, parse a there you. X% I us Merchant, Merchant? February, bit? about a missed would you give X% If and April cadence follow-up. can if Is to and in you it's way in maybe that on like what quick that little -- specifically any sorry think And the looking then growth in I it I'm it, out

Bob Hau

couple Yes, things. there a of think I is Dan,

the March and February If pre-pandemic half given comparison pre-pandemic. growth January and in rate you the obviously quarter look year-over-year then was the of at

also significantly really the the was People U.S., month half but second month a commerce and year. -- a severe in particularly March other -- as The other in the hit half Europe. shutdown the went half in really of last pretty home a took half of

So you see the two year-over-year comp get significantly weeks. better in those last

the weather, bit look things back in in we strong. transactions, a started January just saw south at the and you If came quite February some quarter the mentioned, bit, down Frank as March of particularly U.S a slow then year, stronger. out raw kind the the

out, -- adjust again seeing nice, help say started up X [indiscernible] not sure supported started or line If continue for can January pick was would I'm and March, flowing really January in that then with and you we've in good that started I the seen again adjusted weather, if you things April. and we into for payments by out coincidentally weather February

the feeling definitely U.S. pandemic of the as in we're So spread recovery vaccines the really

starting seeing retail meaningful more nicely. picking are to pretty pick but a still to more down commerce restaurants starting We sequentially up, up, in year-over-year way, improve and

Dan Dolev

Thank you. I it. appreciate

Operator

you. Thank

Our next from from Truist comes question Securities. Jeffrey Andrew

line open. is Your

Andrew Jeffrey

I'm Good business. sustainable you what you helpful of Acceptance appreciate Hi. the in get what's all bottom the inputs about growth revenue translating I Can taking of bit in of Pardon as of or into Clover, the enterprise improve the top sort your and of SMB, a in business? like that coming a of how that reopen terms be Lots dynamic trying what's versus and little Acceptance internal funnel coming funnel commentary we talk churn. the e-comm we how morning. sense just think to in of question. me. looks out the that about the might

Frank Bisignano

a down a people their of of shut businesses. Well Yes. to lot gets new to get people pandemic lot up open businesses and a

we've And these we're we valuable. going the so think the darn half channels see second in small business are seen. to that's have why ever formation that strongest I

us brand. of businesses restaurant a the saw small you probably to the few to commitment SBA the Our even one as a for technical provider,

ISV I all for by strength small think client to And different platform come our over So done shape base. received good in platform, I down job our of and a Clover in our long and shut Carat our clients our well a are keeping who even platform, haul look those business the think for back formation we've I form.

want got I of So I for any any think us that of the to we upsets about client we level. part we what and these mean you we valuable on guess feel we're good job business if why at all it the is put churn and us, so very for doing leaving strong attrition, in I channels us course have But formation darn to small other top strong tremendously think of about seems are process. believe

Andrew Jeffrey

That’s in I'm Can insight digital helpful. from as transaction to the the really Again quick you follow-up that a debit realize it's Thank on offer line when business. whether of are some headwinds thinking perspective to needle move credit. a you. some Zelle Okay. or in pandemic perhaps nice particular payments. some And solutions PXP, start there in growth and really KPIs, I top

Bob Hau

the overall transactions debit in as performing with number you pointed Andrew, support business, the Zelle processing number doubling some as saw supports out, debit Yes, we -- well. very of of both users there the network certainly nice payments and as quite well KPIs

that particular and the quarter not to an The late that Payments opportunity the love XXXX. of certainly growth an that ramp wins have controls capability, card some overall to And here for credit pandemic at growth the channel. benefit it There as beginning digital of only significant Ondot activation from about part solution. of We opportunity for think quarters and full subside. segment I not in we of the call, the the first as where business still X% that couple but year. we is of services today. our of the provide some into card XXXX see headwinds definite that in ability the talked our earnings and this in issuing obviously indication of the last additional over overall We acquisition our the last continue We end a to see to the to believe are we provide there expect said we but to significant

We expect the for Payments internal be segment revenue. term for the year upper full the to outlook medium end of the at

the think of that and So X% this believe will full we 'XX we results. as we into second segment upper to we Payments be head year and that X% the year see of end the year grow can half XXXX, the at

in we're spot. a think great I So

will credit retail some second Payments and in issuing see see digital continued will in bill particularly We we the private half. the of side in pay and that growth, particularly improvement our the label

Andrew Jeffrey

you. Thank

Operator

Thank you.

Tien-tsin from comes JPMorgan. Huang question next Our from

open. is line Your

Tien-tsin Huang

Hi, Really good slide real appreciate formats, new morning. good. the

spread to global Acceptance here, growth, Just and looking or internal at the the narrow the between growth do see growth revenue you in side XX% volume X% revenue flip potential that volume for even on I'm second I hopefully around businesses more in-store Frank the should on reforming help based because that of half what the said asking quarter new think or you behavior spread. year? and the second

just that. I So to wanted check

Bob Hau

in we lifted the strong. We to quite economy row end rebounds are but range forward All right December see X%. the going now of why and how second There the X% is and improving into It's the see X% spread we economy Acceptance twice last in that's it. way our the I opportunity Merchant from overall think about the now helps certainly right year. in overall will back a Yes, now indications and it helps guidance the to think, Merchant Acceptance, of obviously in bottom that quarter also. company half that

Tien-tsin Huang

what's investments in your check that with quick then I PINless some in those think happening great. the DOJ into debit follow-up. with good on Visa initiatives of to to PINless so time practices looking disclose did debit. wanted I STAR is light just on, the and a and ask Okay. of about you debit And That’s

Frank Bisignano

I Yes, and our [ph] us standout mean, performers continues investment and STAR large. for business Excel to are be and

this work, It's on I but infrastructure a It's us will and long haul. over lot invest see to institutions, about STAR we’ve where investing had deep a too growth it and the aspects company good That's network in the we card we're of is the think a PINless you signature around Excel of continue a and debit haul. talked and as not heavily and short together the where other we’ve time. we especially merchants business network power have belief in network, for and the merchants. network in a financial good ground and in

So a of part something be continue star committed performing are to that will we company show businesses the and journey, in [indiscernible] as the to you intended. but it will and talk long to about that we

Tien-tsin Huang

update. the for Thanks it. Got

Bob Hau

Tien-tsin. Thanks,

Operator

you. Thank

comes from Our David next Togut question ISI. from Evercore

Your is open. line

David Togut

Thank you. Good morning.

would you new Clover Looking in little the into rate Clover. XX% sustainability bit growth clients how understand QX can QX, to the from GPV sales? XX% in trying a improvement to for there, much of in been higher onboarding drivers versus example, down have at the from this for drill in acceleration an same-store growth Just

Bob Hau

growth XX%, the way the last quite to quarter. think XX%, think one, sustainable. number seen is, rate think XX%, a do I in several the is we it very strong Clover Yes, of about growth given We've XX% years,

is that capability certainly formation. Clover depth see, anniversary new and you out, our distribution we channel we last the Frank fourth formation think we the business pointed our given obviously can and benefit saw the think slowing continue that year some of business from very I beneficiary as system, to a pandemic in nicely driven as quarter to that half really of second new

we enhance to expect to continue would capability there to Clover for solution to time going and revenue continue forward the GPV some that continue in growth our I set. me So -- invest and

David Togut

Understood.

follow-up, Just out forward? the growth you QX, growth declining organic underlying Fintech from internal can we can gauge looking saw X% revenue, going periodic call a the in as headwind at revenue you segment in the the that so

Bob Hau

Yes.

of points. into driven the that level basis rate QX, abated we second a periodic slightly us that that, We XXX a what to you by Said the quarter although that longer happens that diminished bit going headwind will but for continue about to then the termination in and we the forward to half headwind year. that do gets of be then I largely do we was which about being a headwind headwind discussed it expect of as no XXX the termination way, improves, half enter driver be we bank year a to was the and beyond headwind, in second economy see a mergers, in not anticipated see will more a level would QX again tends of subsides as second grown then which and another For as outside have fees bps. of, terms fees,

David Togut

for so detail. much the helpful Thanks Understood.

Bob Hau

Thank Sure. you.

Operator

Thank you.

from El-Assal next from Our Barclays. Ramsey question comes

Your line is open.

Ramsey El-Assal

more Hi, Should itself? guys. to take Thanks here. for taking ask if Or my M&A we deals sort opportunity presented would strategy. little larger more and Pineapple -- broader expect Ondot? the of a swing or you the wanted question I at similar about something a size transformative maybe to if

Frank Bisignano

a our The for the for us very, have. well we have great and time. we think, hand total long feel first, played very about I Well, very tuck-ins capabilities

see I when to client going across fashion. Ondot, that capability base, that base the spread gets think digital product to look and you integrated and at you're

another I Pineapple on us think around our capability. area takes ISV

a of it been us. everything bringing to our about tried We’ve is RadiusX, very, exactly they that platform, these if very and I think at we look within pay dynamic committed as and across But so strategy, for it you envelope. large course, of fit changing. about think capital played this allocation acquisitions very world keeps well and true, that attention, all

the So think in on, I path committed the and around table. think all we're pretty about always things market we the to we're

that's it why our has held allocation we for and shareholders sense it to work strategy. capital so And make to our for

Ramsey El-Assal

of That right. makes sense. All lot

And point clarification, covered processing the is guys if Payments in Lastly deck that this forgive in you long you it, that credit just mentioned already persist? what slide segment, off me, headwind the a but expect is pressure cycle you a me for exactly? is of on to it on

Bob Hau

essentially business -- is credit transaction would not is driven. our I issuer processing Yes, -- that

improvement accounts, that economy so in as active improve an see we revenue. see in more will And we the

place of the economy that and improves, in that’s so indicator take expect really half, will we lagging to see And bit we a activity. more a as the second

get will you comparisons. different In addition,

Payments And the credit growth helps issuer so segment and obviously we of the lift think the that processing.

Ramsey El-Assal

it. Got Great.

Okay.

for So okay. issuer credit euphemism just processing that's effect, a

Bob Hau

Right.

Ramsey El-Assal

Thanks much. so Terrific.

Frank Bisignano

Thank you.

Operator

question you. Thank George our last comes from Cowen. And Mihalos from

Your is line open.

George Mihalos

Hey in. for squeezing guys, thanks. Thanks me

ask you're there. momentum the on side, Just seeing off kicking wanted things to nice the Merchant

anecdotally better level Is of As through seeing course to just could be you possible? Xquarter? we're of that if the you high that in there relates month any guys black it the and not I'm things are you any EMEA, trends expect and might why the throughout the in share would reason that in to U.K., April, getting hearing region that's particularly April, curious be

Frank Bisignano

it. the it, I think is, see U.K we feel can we

think somewhere the I too. referred to here along line potentially I

EMEA half, Ireland the half. to I recovery. the business too as about is think has believe is under don't I our the that be the quarter this will I second still thinking pressure as half think much full year. it's been hard well in want in in itself expectation challenges, we first but EMEA And the perform in second

Bob Hau

U.K it's the right though, some to in countries trajectory in of that the hopefully you in soon. other as feels lift Certainly the like say beginning particular are region and restrictions

George Mihalos

but continue to That's just right follow-up, for And we the as should X% it a to direction, is Okay. segment, X% believe, growth on helpful. the tracking Fintech the it's I seems mean Bob, Fintech. like quick in

the table you feeling still 'XX laid are is on you I quarter, for think that how about range? that guys out that or last

Bob Hau

the quarter in is second pretty no to we X% quarter. it's I medium on longer if term the for specific level. fourth your a adjust the guidance. Yes, and our is headwind in in that reiterate just our revenue, in we guidance it and quarter printed 'XX, that subsides didn't too, segment for we will guidance periodic you a give did X.X% don't meaningfully give third We the X% -- a

So we half believe range will that in of in sure. the the see for we will a second nice and segment that be uptick in year

George Mihalos

on results. Congrats guys. you, the Thank Okay.

Bob Hau

very you Thank much.

Frank Bisignano

you. you Thank to great and day. all, a everybody everything look I'd thank you time to their Have forward for like to I do. talking we today. appreciate

Operator

conference. in today's participating all you for Thank

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

Fiserv (FI) 27 Apr 212021 Q1 Earnings call transcript