FISV - Earnings call transcript Q3 2021

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Operator

Welcome to the Fiserv 2021 Third 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 Bisignano, the fans. on me today, I'll Frank With quarter Hau, Officer Chief in and June Please been refer the the of Executive discussed materials [indiscernible] relations Bob the supplement the how investor on for to release can Chief measures sidestep.com, East, of and the our this section financial vendor call. Len Financial materials for these are next Officer, non-GAAP measure. of reconciliations mentioned the those GAAP Along with the nearest to applicable comparisons. otherwise performance stated, on [indiscernible] Unless references

will statements as forward-looking Among matters, today [Indiscernible]. remarks results, Our financial expected include strategic other to operating and initiative.

materially Forward-looking statements may I'll actual differ uncertainty. of through number to risks and structure a and results

to these earnings You for a our risk should factors. discussion of refer release

forward, revenue. in we constant now, we be talent Frank. turn volcanic, replace in no just the To to will I change terminology. call to the Frank, going Before using currency, revenue. over this measure, how change And it There intentions calculate is to please that over note

Frank Bisignano

And Thank agenda. listening. quarter progress growth our thank results And against and highlight you, the our share you for Shub. we the as for all

we large know, to our grow and ranging services here client-base by SMB system the businesses, growth. for mid-market Fintechs, as movement in in extending also help our across optimistic new U.S. you the As our especially the money banks, invest to recovery, s platform from We to flows. and continue enterprises. We're money and and from new serve economic We capture seeing real to operating commerce ongoing remain benefits clients

five-year revenue XXX revenue Adjusted and the $X.XX. XX% grew To Company of we XXX synergies. following million operating strong action of actions of date, the We we XX.X%. of million Adjusted to adjusted million. increase for the have XX%. EPS period of merger. achieved XXX commanded quarter XX highest up synergies with basis attained performance, Quarter to a total Turning our our had points to margin expanded a XX% revenue Third

we XXX Free cash the free quarter came flow at by billion to As flow following. year-to-date. a of invested cash driven the in for X.X million was accelerate growth, and combination

increased hubs and First, acquired technology expenditure the capabilities. of integration newly areas the capital of innovation in

Second, increase revenue of growth. loss carries benefit operating net finally, capital And reduced the forwards. driven by working

growth the On per of of adjusted our This investments, per growth now of our XX% our growth back end adjusted prior for and earnings the year. and raising our results $X.XX between of of outlook the We and our share share last adjusted to lower the by are for earnings the strength organic outlook $X.XX. tightening outlook we expect full end lower $X.XX. XX% and revenue raises A EPS. over constant year. organic currency XX% for of

Turning to the let business with me merchant acceptance. start segments,

investing button in the by to We buy Omnichannel beyond capabilities. continue grow world-class

with North and needs posting the enterprises. throughout quarter, average acceptance growth floats. horizontal Clover XX% Solutioning, Clover for America for new in platforms. merchant all Carat growth quarter. business Connect in line year-over-year capturing three of International, led business, revenue in ISV, around and We achieve for performance, organic with the vertical for of job largely Driving the and this, small segment

strength travel, global by was and North XX% driven been basis, America and and of quarter Our growth XX%, The up volume new X% and by XX% year-over-year a clip, at transactions regions. quarter positive XX% all led in locations on in global the respectively. and restaurants, across transactions petrol. respectively, a growing merchant healthy merchants driven by have volume in grew net

volume been Excluding the transaction and of respectively. quarter the a GEDs, XX% of our North have and in the would of large impact loss one through XX% America growth processing

annualized merchants since XXXX that of revenue offering basis. platform, an year-over-year, In help focused or on an SMB Next, suite we solutions, the a grew GPV with $XXX Clover. products by CAGR deeper integrated space, generate vertical-specific XX% starting run XX% in and let's billion remain go business. building to their

acquire differentiated ready and entered and part our Solutions driving management digital BentoBox in as from focused As sizes capabilities, which business deliver an and commerce to Dining strategy, platform, This engagement on will industry-leading thousand unique quick able marketing all agreement dining. out to of fine to restaurants in commerce casual, vertical are nearly XXX and growth of we transaction experience per and into restaurants. Clover expand dining

expect to to added Clover Dining, to as Quarter, Clover on regulatory value close Ahead as continue conditions. well services including and approval Clover unique we Clover customary building for Fourth the Clover App acquisition the Order subject in focus platform, Inventory, Conditionally, Marketplace. Clover We and the closing Capital,

side, recovered year-over-year the secular transactions a the basis international enterprise Omnichannel pandemic Entertainment. gradual of platform lows in volume commerce. in XX%, enterprise tailwinds buy Omnichannel in pickup quarter, including wins, and its and the store notable as and continued sustained driven strong growth Global Carat, in & with momentum. XX% grew quarter. and to Quarter new in wins e-commerce as Johnson by the future Johnson volumes expected the product had online, On with recovery Caesars cross-border quarter, on from unabated cross-border order-ahead the such We E-commerce Third momentum a in grew innovation,

Bakkt, be submitting as quarter, their Bakkt expanded a leader over the and crypto use funds out surface utilize payouts funds new industry-leading existing in in platform In An year-to-date. Carat global was our with Bakkt increase new crypto a network processed payout developed both PayPal digital Fiserv's global clients. [Indiscernible] for added and will solution wallet provider our relationship solution. digital to Fiserv of and merchant Microsoft we XXX% And billion together Traditionally, options tokens. building and for provider. also XX to as We on year-over-year with leading acquiring wallet Venmo cases FI consumer with basis. we're partnership

all tool was X/X Connect, generate ISD and Clover volume hardware, bring, software strong a gives of support along best-in-class unique which for world-class signed our in operational of merchant’s commitment view to platform or two merchant resonating. the The with of allows Quarter, ISVs into ranging Fiserv ISV assets. from a to XXX Connect co-pilot, a quarter Clover processing wins show ISVs XX activities, partner Moving new our best ISVs Third XX% accrual partner Clover, is focused the the of the year-over-year. bringing year-to-date. to us to We to to being application total strength the management offering out

ISVs better new We payments and the winning competition. continue to up signing against than

This quarter, half competitive were than wins our more of takeaways.

area highlight Before I address to like in merchant ending. business, I'd international focus our point-of-sale another our progress,

to businesses, out buying or operating range large, the later of small, We medium offer are a leveraging our for position as pay options. platform

[indiscernible] expanding agreements to our are and the integrations [Indiscernible] We like without BNPL currently are through bring simplifying merchant referral We [indiscernible] their relationships also We Pay to with offerings Citizens Clover. with working our market. experience clients while platforms FI have

with strength flight. already Clover thereby into of focused an with we on We're growth rollout that by is of a India next two out of we is throughout now, size XXXX. Among the the recently example, America, mandate largest fast-growing to and of Germany, market We from in you Bank through pay expansion private-label platform A America. track boost talked Synchrony yields global omnichannel to All Clover. card merchant On processing our market of international. for leveraging as growing connections. office. EMEA, Clover our last cars Brazil global for acceptance common acquire solutions completed the the expected further a in roll we Synchrony Ireland, year, Macao on and and merchant offer Day, Quarter key covering remain end APAC, channels. and UK, the announced acceptance currently market. Deutsche bank Third the markets potential are partners Investor JB, also EMEA the and quarter, Latin launch of Latin tremendous to on growth China partnering Clover expected later the and For In the across direct APAC presence market. in their quarter. the Netherlands, with our Argentina, announced given Bank of in opportunity, buy processing Clover strategy about world-class market in how while platform in in The are with platforms all to is

owner except Fiserv merchant clients. thousand Swiss supporting expand of Finance, in one the institutions post Hoist to to to brands financial restaurant is the iconic to merchants With including Moving also plans initial of the starting services with finance today. and Burger Switzerland, to largest Popeye. with their of base acquiring We're XXXX partnered cards brands, overtime. provide merchant time EMEA, credit Fiserv King card that XX

and Nordics, acquiring on segment, to expands merchant and King Popeyes Company the of To week. Fiserv it's may Europe UK. April, approached. in and Catia the the provider services wanted Brazilian you its onboarded we footprint of going provide merchants omnichannel the when recall, Burger deal the as well for XX-year UK exclusive As an will beginning at in in the largest acquiring merchant implementation of as close for across mandate the one pleased extremely of XX last the report banks. August, to become this that, with We're the thousand of Economical services started Federal,

Issuer which networks, output Moving we consists referred processing growth is segment, and global of the into resulting in the the of X%. also, segment solutions, call which quarter, Solutions, businesses, pay, of X% bill debit to and we prepaid card digital grew three Out and year-to-date revenue processing business network payments business. and payments organic which if in services, debit and XX% of is comprised segment, call credit their solutions, as our

in volume. -- continued average just grew Our the the up is Solutions recovery, general-purpose solutions revenue driven accounts is a with credit issues active the benefit our high issuer by gross credit Issuer payments seeing single-digits. overall credit accounts, business, credit not which segment that of number below Note, of

the counts as recover, number volumes However, will credit follow. of

last be we expect wins, ahead, the of which XX notable in we issuer by growth business ramp including continued the to of year. wins, driven year's top the announced X last Looking

completed BBVA's card our portfolios We platform. through also GNC's of recently conversion

network recover the organic issuance businesses. we faster which pace private-label average, loads, of segment couple the and beginning Our a overall the than anticipated saw out from retail of portfolio transactions points at slower card COVID our we continues grew debit growth at a services than year. payments also in strong to its driving Within although revenue,

business we growth this market. Looking for to ahead, expect of total by [indiscernible] addressable sustain

technical the instance, consumer quarter, leading affiliate that preferred-on aligning signed become the in quarter. the network largest testimony is of agreement network the debit of Debit. well scale Network our VINtek believe also We to for issuance Fintechs its future synergy network was our our and growth. chime for Silver revenues capabilities one to For an with U.S. This and action of in a STAR positions notable one

economics new the are opportunity their community world-class we are managed by discussed program into scale credit we currently customers in credit issuing where than Ondot piloting a FIs as exploring shared their offer Credit a processing. card solution burden launch Credit own that [indiscernible] richer Day, but shorts and Debit Solution, considerably to credit portfolio. card announce of card fully sizable credit as-a-service issuing integrated the Fiserv, we'll card branded to offer solutions, option During distribution that, market branded offering, card such and for addressable to expand FI Choice and to We're actively XX a fully this Investor an market. we issuing Choice to our credit fully Fiserv and operational allows that is surround in pleased were managed leverages QX into SpendLabs, per that experience out running is the Credit their without out XXXX. card

encouraging. launch very and and spend hub completed the of integration hundreds into and card On pipeline. the We our of We of on and strong processing platform that mobile prospects early have you into spoke in the debit banking we our The business seen clients offerings by to labs. QX the results recent credit have early mobile-first platform. platforms, consumer our about powered with interest mobility already been rich call, acquisitions, from

both as migrate fully from seeing to the existing We expect for to as end XXXX. CardValet of hub solution this by demand solution. integrated clients we are card prospects, new whom well the integrated tremendous

loyalty, client sales drive installment dispute In hub addition, we management, add to and and expect platform thereby a differentiator establishing to expand to as payment, retention. new key card the

Zelle greater financial enhances digital with of institution by catapults digital Prepaid overall card creates our good new this It had their into growth banking are through client by activity and changer. growth the the fee transaction quarter, of payment’s banks We game solution the a XXX.. clients digital now wins the [indiscernible] just world's more our in is For live under consumer income mixed. platform, growth was leagues experience engagement clients, of business, the our reaching banks and of results led top solutions neo business. driven in FIs and some XX% usage, number within

driven We use expect basis. new growth to by continue

Our the to continues bill and bill direct pay expected. slower grow biller business, than pay encompasses financial both institutions, which throughout

later we PayPal's payment However, the fill new extending beyond enabler an live pay channel as PayPal's going this our bill of acts. are functionality financial capabilities institution within month

Additionally, our relationship with solution. payments telecom large enable card we BillMatrix expanded a to provider with our commercial

and processing two quarter Moving our We resulting wins. to the expectations, X% growth revenue in segment, the seven core in novo XX with was in growth year-to-date. clients posting the of including line financial de technology quarter, new takeaways added account organic competitive X%

in including In institutions what banking transformation as XX Valley billion deepen National financial and momentum Card the were XXX the our great XX in existing seeing Hub, penetration dollar been platform over incremental which have digital these Our Ability, larger is sales the XXX core the with clients, digital XX success, VNA logo sales surrounds, API takeaways. fully billion assets our SpendLabs. client's Zelle, and Bank, would quarter. competitive sales modern is integrated cloud-based great remaining and our bank new such evidenced. platform drive where The digital as driven of respectively. seeing wins, with would of

Fintechs, clients of with and expansive Quarter. to Studio end last the goals tools Conference, banks, Again, We launched year's rich accelerate the we out call, and a merchants, portal, also Third across ecosystem. API developer Fiserv ecosystem. integrations new the the our enrich with provides towards to developed Investor entire The Fiserv Developer banking the line to and needed enterprise in our which we laid continue innovation, Developer open integrations Fintech support Studio in

digital partnerships consumer, drive new we're by strategically lending that creating retail leveraging developer’s such SpendLabs, Ondot surround like whitespace throughout we of FutureFuel.io, would higher opportunities as a innovation, believe Additionally, FutureFuel.io, for getting acquiring developer integrating or power new and to to Fintechs, ability, segment API also and continue studio heated, new business and attractive the solutions the well-positioned small announced in We in and and and the go-to-market exciting delivering integrations portal, community then and StreetShares, both extremely respectively. StreetShares. revenue

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

Bob Hau

you everyone. (ph), and morning, Thank Frank good

the Before clarifying growth mentioned, terminology. by change that just how the away not This constant I reviewing we the and revenue. broader does begin message organic detailed business metric results clarifies community our Shub future revenue we this are tucked measure, your as aligning with currency simplifying

more organic to seen in from included appendix and You used slide This understanding could we've will presentation. be schedule our be detail or quarters. calculations the in we've an XX, definition prior the summary internal On a new Quarter. in revenue walk to of of the clearly Third revenue same provided the for GAAP

segments. of on will I each cover some our Now detail

along total billion. organic Company also grew revenue also by which Year-to-date, revenue revenue to acceptance Year-to-date, nearly Company the growth nine XX% billion with all merchant X. slides, great quarter are Total about for has If feel starting Slide of our the revenue segment, to led quarter, grown adjusted we acceptance up the segment, you're and the the in in grew in months grew XX%. year. segments strong, the with full-year grew Company XX% results. total XX% both achieve $XX.X across well-positioned I'm performance to financial $X merchant was by We organic Company our adjusted Total which led XX%, first And quarter. following XX%.

now quarter. adjusted XXX we And billion. Third synergy $XX XX% increased to strong strong million adjusted and during income operating improvement up points had basis the income cost our [Indiscernible] XXX produced XX% increased billion margin was year-to-date billion to margin capital was execution, a margin points operating This to expanded and $X.X $X.XX operating incremental Quarter operating XX.X%. cost program adjusted XX.X%. revenue by Adjusted actioned today. have basis $X.X continued disciplined synergies which our to Year-to-date of results disciplined by driven

per capital in and the to $X.XX adjusted $X.XX investment benefit. result the cash by compared technology, on Third of This putting businesses, Our carryforward cash in resiliency this earnings earnings to Through growth. for grew in X acquired related the an $X.XX, adjusted per per share adjusted achieve share first increase our of operating share working months loss September flow by driven testament pace Quarter to Company. earnings prior the reduction strength year in to XX% XX% Free growth, billion, newly free XXth, to conversion. increased incredible us driven of year. XXth world-class investments year consecutive net the increased, double-digit $X.X to was facilities a integration of was flow and revenue capital XX% the resulting A

With free to these be year. and XX the XXX% conversion strong cash to flow growth, for now we expect investments revenue full

to results Now acceptance organic the our a strong segment very looking revenue merchant was on quarter, year-to-date. XX% growth slide and starting in XX% in segment six, the

driven Our and by transactions. growth and combination a revenue of volume was

the performance were growth as billion the continues and new Carat, platform momentum on opposed year-over-year, results all for a Clover strong e-commerce for $XXX of driven on Clover GPV of XX for distribution clients ISVs. large and strength Connect the three won to across by all businesses, in we our basis, product SMBs, strong channels. again Our growth annualized With an very or XX% quarter. with enterprise global Carat across to platforms our once build Clover offering, upon

our as to HD the months. XX space more Carat high-growth EBT turn launched clients past mandate brands, with PVT continuing in Valero, lead such in than expanded the XX online online addition, In high-quality existing

volume Connect ISV quarter the in XX% this year-over-year almost up to of versus Quarter XXX% XXXX. Our grew Third Clover

well adjusted income are acceptance operating to margin basis line to operating driven both improved Adjusted million billion XXX Through points XXth, in income segment in that by operating ISVs XX.X% grew was XX.X%. to We basis leaning increased points September competitive [Indiscernible] payments, adjusted the as top up XXX And margin takeaways. our strength. XX% $XXX $X.X quarter. and to operating adjusted as XX%

X%. growth slide growth seven, payments organic resulting network Turning segment posted revenue in to the of in X% the quarter, and year-to-date of

quarter second [Indiscernible] segment, segment. in growth result under transactions Frank XX% XX% As the transactions revenue Account-to-account Global in a outperformed Zelle bill segment the came versus third light the composition quarter. in the PXP XX% the prepaid live and reduced organic in Solutions number of of consumer by impact macro Zelle was the transfers were payments, demand. rate. Issuer the strong in year-over-year the quarter, the headwind. with in quarter and of the outlined, businesses the driven a and on digital benefits quarter, card in the while of of up our clients up was average, grew the comparisons services, tougher just solutions the stimulus. to rise continue pay

year-to-date, continued client we of network medium-term to within the rate expect outlook of full-year X%, the uptake performance ramp see be driven strong in rate the and offering. new by Given our organic X% the advanced digital to to revenue on-boarding payments and segments growth

organic adjusted positive of X% points to to growth higher-end Adjusted by synergies. this adjusted operating basis Issuer was adjusted up XX.X% of up in revenue operating in target results X% approaching income billion, operating and was $X.X margin points is the driven card X% outlook and $XXX previous up The million, the [indiscernible] margin of to range. basis revenue segment for our impact Year-to-date, momentum our business. to positive the cost expectation However, to XX And operating was quarter. the in slightly XXX XX.X%. in up was X% income were versus

segment Turning X%. X% at organic to growth eight, outlook quarter. interim is of the slide financial Year-to-date, for our grew for revenue the to within segment technology X% revenue in segment this the organic X%

in capabilities solution to the banking digital Our in win continue digital offerings marketplace.

$XXX in We on-dock clients card last self-service we As X% with over completed Adjusted Mobile Adjusted core are quarter XX% half decreased our of year. million our Frank grew were year-to-date the of nearly market segment deposits up XX%. in over points platform banking quarter, $XXX XX mobility operating and processing grew and up QX prior which while the into year, basis in XX deposits new that ATM to integration management competitive quarter operating in was offering. takeaways. margin account the income currently XX% mobile the XX.X% the million. in to mentioned, to added in capabilities

points two-year expanded corporate loss margin operating last adjusted XXXX. year, has basis, However, we adjusted the tax adjusted year-to-date. year. was quarter full-year versus tax adjusted quarter XXX the effective Adjusted XX.X% versus XX%. the now points increased million prior margins on third The XXX improving in a to the quarter with rate basis operating about XX.X%, $XXX basis basis was of in expect effective rate line And points be XXX in our operating to

strategy we by million. capital disciplined allocation $XXX During the continued over quarter, X shares million for repurchasing our

more shares have for authorized share remaining million repurchase. XX We than

earlier Clover's further that platform Dining strengthen an we digital entered for to Frank to agreement engagement focused need our Solutions Omnichannel and As this will ventral growth box, we into to bring mentioned month, and driving acquire platform. restaurants e-commerce a restaurant on marketing into

allocation outstanding to decreased billion this Total EBITDA transaction Frank. QX With strong capital on September the innovative back was to maintaining pursuing expect was debt times. includes me that, organic ratio XX time-tested strategy, which later our quarter. and let making another the sheet, solutions, to turn demonstration of balance close $XX XXth, and debt-to-adjusted acquisitions. a We this investments, X.X high-value to call

Frank Bisignano

another accomplished, we've double-digit I'm adjusted adjusted Bob. double-digit quarter of revenue with very and results growth. proud EPS growth of Thanks, the

associates talent, focus and Best name results, it, to values in forefront the client Equality XXXX, to Index Torch putting to Silver on from National engagement delivering our our Award commitment our MBA July, the of our September, of as on and the addition diversity and the financial Fiserv In Partner recognizing Association communities. And to In Disability we Year, Places goes strategies. Black continue at Work. our received

we apparel a into for opportunity also Center women. entered USA, the aspiring on These entrepreneurship. quarter, increasing the within scallops partnerships Innovation and -- minorities the multi-year relationships for entrepreneurial into and During focused with multi-year Russell access ecosystem. and relation

our and to D.C., area, Detroit, as Maryland, as UK. with Virginia into program the back-to-business We Washington, well our internationally entry expanded also the

during these than more colleagues value please Additionally, talent. CDP our our lines for for internet published our also filing encouraged first around on we achievements world we the of our to thank have our been commitment site. questions. quarter, the together clients, submission would that None shareholders. completed the and our their open time EEO-X XX you, for possible thousand associates as world-class I stand for deliver the without With and our Operator,

Operator

We like for open the phone would now you. questions. Thank to lines

to ask then like phone. press question, would you you a If star may X your on

then you question, withdraw If star would you may like press your two. to

from Huang J.P. Please go comes Tien-Tsin ahead. question from Morgan. first Our

Tien Tsin Huang

yields Looks some Good third If wanted ask much. quarter. you outperformed at was Thanks to negative correctly, acceptance. last so I morning. acceptance. in the on looking but volume. ask like and I'm the this positive quarter, turn Visa it I'll global

for quarter. be into on So here just might and acceptance, Thanks. question and the mix pricing outlook on the fourth in what a here yields general going

Bob Hau

about see Visa, in the attribute difference ever would well trans largely our as good as Bob, you [Indiscernible], I might mix morning. between and of variation to volume SMB so the to enterprises. the relative a that yield, quarter what That's of and within performing Overall, versus and feel peers. that overall slightly quite our overall depending performance, flows on the mix against ebbs market we how we're the good against the

Tien Tsin Huang

Got you.

Thank than mix more pricing. So you.

Bob Hau

Yes.

Operator

Thank you.

MoffettNathanson. from go Ellis question ahead. Please next Lisa Our from comes

Lisa Ellis

Terrific. Thank you.

yielding on ask like overall [indiscernible] volumes specifically on situation then large clients if should and is quarters that the merchant low that also any we in a additional helpful. I'll you there that acceptance roll-off now specifically, that another think three how like or it's on X-point about you. larger take and looks affecting and highlighted you follow it a a little e-com. that on think before drag bit would elaborate something how a and Can will revenues, it's lapsed Thank client drag processing about just up be detail, I question about it's just

Bob Hau

morning. transactions little good client this, in for terms way the and large revenue and it to transparency. revenue reported. overall joint It impact adjusting on We venture. this pointed a actual our Lisa, there very see about a think we of is The that numbers are has as process Yeah, the through volume out you

So client our this decline that off including that platform point. at is largely

so from there's because forward actually at a going standpoint more it our no but decline will end And is quarter. off you see third year-over-year platform there the of

Lisa Ellis

Thank the clarification. Thanks Terrific. you. for

Operator

Thank you.

question go David next Koning from comes Our Baird, please from ahead.

David Koning

some of sequentially of few would up kind percent more And you'd I that in the maybe in nice QX or normal back you grow I look that percent the acceptance, guess, Hey job. still last in guess I seemed QX. all, like of anything Disrupt QX just case? I it a guys, QX, years, on first as from think QX wondering, quarter, even normal few mentioned being pattern. sequentially is sequentially that up just

Bob Hau

growth, talking you're quarter-to-quarter So above sequentially?

David Koning

acceptance. like sequential of up kind percent normal growth just looks is in Yeah, QX. It revenue few in a

Bob Hau

Yes, David.

call normal to line I in quarter think days. anything expect sequentially it's tough would quarter roughly our with year. be for this third to these I fourth

David Koning

Okay.

upper guess secondly, the know of said then payments. it's out for you better into that's anything previously of a going range end maybe And of how I implementations at the in just Okay. but called I within to some you'd be the Cool. kind there XXXX now were anything XX, it would've than that delays or been? there is any range, now, makes falling little that just

Bob Hau

delays new go will a of se, few live program. as wins, into that wouldn't growth of a help of will course, A I soon. signed couple PayPal U.S. live, large per going launched will telecom highlighted we us the the drivers that call but XXXX. any And new choice that we it see announcement we credit

we that for pilot. we're pointed yet. out, Frank not strong something demand in very for had We're As seeing that now formally announced program,

have we just capability. we're for now integrated And that. are early now and some that that out on is next into platform, we'll that full-year card offering we course, to So Ondot hub we read continue fully good of that, have through year, the announcing our mobility build and acquired

Frank Bisignano

have also top beginning XX are the We on-boarding. that three issuers those of

So be client converting on you for also the heard that talk PNC. next us year. numbers us our will platform And about towel within BBVA

we to in continues the get and that Zelle ramp going as also You're onboard grow, to to continue more. there

numbers. I next think the Zelle will factor into year's next year's

David Koning

job. great. Nice Thanks, guys. Sounds

Frank Bisignano

you. Thank

Operator

Thank you.

have James from go Faucette Next Please Morgan ahead. we Stanley.

James Faucette

much. your Thanks bit you I that question. announced appreciate pace answers seems like Frank, about of to that, have deals or about balanced wanted potential bit and new Thanks a customer you're importance it little as acquisitions, near-term ones down feeling to to Bob allocation, a And part recently. debt part makes I'm the the and the color FIS how strategic of talk overall But of if optionality guess come up acquisitions a highlighted least of sense along. but your pay improve doing bigger it if lot. as all? accelerate from at picked Can little a very at getting trends in on bit ask a evolving the case little the all I capital you're of wins. that's you I wondering strategy, tied more to

Frank Bisignano

M&A. integrated how that, the see innovations. what is building M&A think And in its hopefully speed, organically or we're in looking the And on And M&A and fully will investing capability. beyond our I market. we're the agility, about And doing been thing we've winning whether I product in Well, our think thing out that I and about businesses, initial mobile it's first now maybe, inorganically. We at talked on talk maybe is you and it's

You'll BentoBox we're look us go extending see addressable and at and our total market.

it. environment, brings them to the allow all will a start capital nurturing, grow. good, capability strong integrate much With restaurants, we in the front them in put will labs with but you larger. behind And be store that how hear then to thrive of spend that and actually are startups our it with and these can along But

think process, that a integrating CardHub you even expect transforming property is, should in disrupting some we to to skill we itself. in properties, deep to an I us cases realize In CardValet ourselves the move we I and have our we're integration. as So believe think set continue from that

continue you to invest will expect be very, in should about we ecosystem and very organically then and acquisitions, allow and we them not to invest organically standalone thoughtful to our to will drive acquisitions to entities. that what be we but -- us and do So inorganically, the invest will

Bob Hau

the reduction down James, in our or leverage over as back we four times we then when improvement X.X seen debt, And significant at merger, as a far now we've completed paying times. just were

over back our capital deploy years, We free the to naturally quote grows, cash Company as the sheet generate Day $XX the recall, than but Investor also XXXX, good about billion have will entered last continue cash strong as may balance you flow. at EBITDA we we only And to very more capacity December, five not next talked will -lever. as the will we de we flow, have of on

will And leverage that to the just so ratio. historic to capability we maintain borrow have

capital. good So constrained want its to feel very be able prohibited position complete feel to we acquisitions. we're not in or like by We complete to

James Faucette

context. and That's great Bob. Frank. color Thanks, Thanks,

Bob Hau

Sure.

Operator

Please we have Bank from Jason Kupferberg of ahead. go Next America.

Jason Kupferberg

Good guys. morning. Thanks,

price guy's becoming it from too a Just a of it was perspective? it a based this the appears. it's just wanted coming I the numbers to clients the on more on impacted fairly is just because guess it's yet. e-com Was color numbers start volume bit out sizable, looks e-comm wanted to client your processing specifically. just with situation large get that an like little how follow-up much intense that competitive I

Frank Bisignano

in that go our revenue off system is coming volume our first number. let's Yeah

this you So telegraphed thought, But knew as all and volume off is, client when time talked would JV, wasn't look a impact, right? our that they hold in-house. we was it an takeaway, a the just business. Throughout real epic and It it of Without And get period the saw happy to support it. of [indiscernible] a went first client. at that which this never so of was that's the by were large we part to their processing we exactly what -- sounds RPT processing they on like, them. it impact when business, always that capability, competitive economic strategy, about really long a

Jason Kupferberg

Okay, thank that. for you

what last in I hone of line know versus the free your flow Presumably have diminished full-year conversion, because changes wanted move the plan. can is benefit on the previously. I to just the the revenue cash but quarter significant right NOL Just of end expectations been with on most a on were the would quarterly working capital in the coming known your basis, obviously, in around, mean, I at in, day,

you was a were higher than thinking of function anticipated of CapEx day of just quarter? versus last So what the the you at end really this kind

Bob Hau

XX% XX%. about Jason. our was revenue The high the outlook [indiscernible] it to is, end our at original outlook of Yes, to think X% way

we So expected growing we're overall. than bit quite originally a faster

seeing of playing opportunities to invest We are for as your higher. is meaningful also CapEx to growth

new as acquisitions like of Things terms well in only services, investing the -- our into we're not products, we integrate capable to that Ondot, year. In the on on spending announced capabilities, creating that the new there continue our and as software existing growth capability in earlier new integrating free us with good the capabilities, conversion but flow of make and to and cash other invest services, decision those led to to create cash acquisitions, overall. very still some in to our good have development products

Jason Kupferberg

[Indiscernible]. Yes. Doesn't of kind like you. sound Thank

Operator

you. Thank

from El-Assal ahead. Ramsey go Please have we Barclays. Next

Ramsey El Assal

somewhat I and talked time It among marketplace. or question a about The you like from today. debate question. Frank, or to same of layer guys’ be wanted you today, my mean, PayPal taking for to discussion in for infrastructure Fintech the seems of of know a Chime call and some a ask even I kind about there's forces others. broader disruptive seems Thanks slew enablement as investors function and Bakkt I you an the Fintechs. it potential

a of for can this distribution channel a as about potential Fintech Fintech competitor the business. between versus talk So and disruptor sort just high-growth a tension is you

Frank Bisignano

that's up what Yes. think a if for right? mean, to to like development enterprises. for I be a the platform for and you SMB, open a as I then we so times, from community, We're And long-term platform, did that issue them, community Clover say, Fintechs into we think end-users. about really can the a was a in we everything large platform with back

So beyond want that doing my We'll platform happy we all do and serve enable ultimately, labs and use see to our disruptor to we're and continue view to are things like view our dots the of to even a with Clover disrupt communities. ourselves. to us I'd was ourselves. to spend

bringing the So, here, if and being then Bakkt, outflow think you capabilities. and use us to with ecosystem. think heavily compete payment previously, going to about claim we're bill about things enabler Nidec, we've joinable, one outlet you talked We're about clients PayPal into Chime about an more base, going

clients their That's traditional use. higher. and continued that that hears bringing token we being rates capabilities our about will enable talk also we clients from authorization would capabilities have of get and Microsoft. about our that believe think a you about, So When the innovation, who those will all the us she all provider

I So, don't conflict find any here. really

paid open enabling enable we enabled are get up the commerce and property; for and waterfront job commerce. have our waterfront property We to we

Ramsey El Assal

your sense. answers a lot appreciate of you. makes Thank there. That I

Operator

go Peller Next from Research. Please Wolfe we have Darrin ahead.

Darrin Peller

on to what lot of [Indiscernible] you. been on mean Clover discussion thanks, I I asset want because for Hey, a could guys. that know there's

continuing the asset. terms any So of in make grow other Obviously, us any to understand help the success from think of big that on that. revenue more how is sense it's well. metrics But metrics you

terminals what kind profitability about you any some market around Chinese volume? anticipate, -- for kind market? because given there million challenges three is And be think growth opportunity on now, the that in a competitor to their then, terminals some having Now, might of a there'd opportunity they that. an in year-end disruption be or Clover have maybe the on also of I replacement challenge so Now, million or

Bob Hau

its you in basis, capabilities, with the up prospects continue are proportion new a under -- we new Fiserv, the and We're a continued GPV some Darrin, that out Company for is large we our and about overall. that example, capabilities capability. as quarter. to as quite XX% third driver growth invest growth know, overall of billion pleased expand $XXX in of BentoBox volume certainly to expect for great just reach going verticals the is building of is obviously, XX%, that continue across the that there progress And Annualized to so forward. adding Clover

there. joint venture, see see didn't we we back, have terms good the own that a dynamic, so of our opportunity we channels. to have channel direct We and obviously have years Distribution very have significant And quickly we strong And the and we with BAMS devices. Clover dissolution continue have few in terminal a of good growing us the

go this a We the of also we use other for other point. parts disruption our at different of providers to terminals of us have And Company. and those variety terminals

Frank Bisignano

will would expansion making that think forward people for of let others just I a Yeah. that about choices that growth. the choice. just add. as disruption, and international of platform I'll Yeah. would Clover is are further Heard going our accelerate

Darrin Peller

least you flow Quick follow-up an U.S., what's lot just in capital on on for there. the at is that a opportunity and of we shares Yeah, deployment. could take cash to with think be going the

material X.X Average given or what more be, just strongly consider would share chance, now, the normalized target. Thanks, will of about accelerated Just you you how at good guys. the turns. could be earnings by a probably buyback any given that call you end year. at

Bob Hau

Yes, Darrin.

remains we and deployment I think way balanced. and a been think, the quite capital about quite has consistent

XXXX every quarter as doing allocator. of appropriate. know, large time you don't think short short to continue anticipated growing in cash looking doing always between growth, been We on and return buyback, to in to a accretive, acquisitions. have market shareholders will where continue i.e. of essentially the for closing and back to years the obviously period I capital merger announcing had disciplined focus value then we're a us the you our in organically, be business inorganic And

Darrin Peller

Thanks, guys.

Operator

you. Thank

comes ahead. question from Suisse, go next Credit from Our Timothy Chiodo please

Timothy Chiodo

percentages. to last I mix question. a get can two you for Thank are mix-related bit wanted we sort the get the to some the of on These questions taking in question, hopefully more but of with Clover. little alluded

attach. be portion hardware around also, but and strength be components. The some increasing also so then the Investor highlighted would Day revenue, portions the services, of first related, So payments there's large at value-added would the clearly in software you

of sort could So breakdown mix those in just is of the and rough then distribution. even components if you second part give around

channels, ISO, alluded the some of even be whether retail be on wholesale it'd various and to of distribution would the partners, really direct strokes mix broad you helpful. ISO, bank So just

Bob Hau

all as having growth had building things continue very in couple direct through and a partners, of previous question, ventures, be to wide Great, I distribution across of think remains a ISOs, continue broad of -- has have channels winning and joint all capabilities seeing we channel, mentioned will those the been in rod our it's our focused on are in about obviously be of a focus to out and continue to our as channel, as One, Tim, focus well on breadth and through ISV, to of ours. that we whether. of Yeah, there. through so, terms channels,

years merchant but we acceptance We're vast we continue revenue and merchant our of the in businesses, attach for client magic Clover a revenue of attainment terms we assuming the you with acquiring then rate A years sell is to In of and client. hardware detail processing. majority breakdown versus Obviously, and mix high inside on and to I'm focus of the the that. hardware that that haven't the given acquiring my revenue, you of sell, hard. versus have Clover, processing software around merchant the

Timothy Chiodo

Okay, you much Hub. so great. the Thank for

Operator

you. Thank

question Evercore go please Our next ahead. comes Togut ISI, David from from

David Togut

you their or acquiring of you gets Thank when clients. your number in credit. merchant your Company acceptance, merchant debit at buy clients appreciate two, merchant added of mix the particular, versus two And bring And your acquirer? I'd retaining or your terms any you. you, one, funding solution good things Number at insights merchant e-commerce do are BNPL in impact processing help own pay added added a of have BNPL when are now volume in are when has one Thank what you they a is competitive on Within with one morning. seeing into payment later

Bob Hau

these have several CIP or the we've Yeah things. partners of one, for bread Number I these, and over a last we couple of are it's a talked quarters number referral whether announced about think we where relationship to maintains for merchants. those focused obviously, merchants merchant merchants. the be with that continue on Pay, acquirer options multiple for capability, providing our And so and Citizens those that enabling

credit cetera. terms versus of ACH, In

view card industry are is payments. a that finely of paid is portion paying pay today from large think or I now executed broad for to actually later activity buy

David Togut

So customers? you're not seeing any specific terms you look adoption at your mix BNPL in when of across

Bob Hau

is a one four instead some you're space think and No, key TPV of overall relatively seeing terms now It's well, news. in fact, still portion in not the of has there instances, pay I buy small in actually the volume of transactions. later transaction, a moving needle. merchant or high the And

David Togut

you very Thank much. Understood.

Operator

you. Thank

go ahead. Our Please comes from Mizuho. Dan question Dolev from next

Dan Dolev

the Good in quarter, and for you morning. question. be you. great. segments us the growth Thank Fintech. fourth on for That some taking organic color for -- implied payments would the Thank you give guidance what's two my other Can

Bob Hau

multiple quite were you question? that to Dan, key repeat

Dan Dolev

organic guidance other the payments the can and segments give for color what's implied in for some growth, two the on you take guidance Can us by networks.

Bob Hau

Yes.

is their our be X% And of high end we're in expected medium-term range. to outlook adjusted at to be were in That the guidance, range. from now, it's previously medium-term relative then be we're segment, So for in full prepared I And year-to-date, the to think I outlook tried at Fintech X%. in of of segment, our to again, our range our expect just high the towards of the end that to our payment -- some to now expect X% color the X%. to give remarks. that In year-to-date at X% in X%, and medium-term year of range. Right we we that

Dan Dolev

it. Thank Got you so much.

Operator

question you. today's that And our was last call. Thank for

Frank Bisignano

us joining this your We support. I'd appreciate for like to thank morning. everybody

Have have everything. please you and Relations you team. Investor for contact. thank a further questions, day great If

Operator

conference. Thank you participating in all for today's

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

Fiserv (FI) 27 Oct 212021 Q3 Earnings call transcript