FISV - Earnings call transcript Q1 2022

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Operator

Welcome to the Fiserv 2022 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 and Bisignano, Financial Bob the Chief President Officer. on Officer; Executive Hau, me today, our Frank and With our Chief

performance available Unless discussed these those nearest materials are Our the an reconciliation explanation references section supplemental of and non-GAAP for otherwise call, fiserv.com. on financial applicable along the are the measures of to earnings the Relations this comparisons. the GAAP mentioned refer materials Please stated, to of measures. Investor in release year-over-year quarter for with

today will expected remarks and include Our among forward-looking other operating strategic statements matters, results, about, and financial initiatives.

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

release should of a discussion factors. to You earnings these Frank. to refer for And our risk now, over

Frank Bisignano

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

you As across extending operating our for enterprises. to by large and movement commerce our growth. capture serve clients money FinTechs to unions, midmarket businesses and base credit grow the know, new We services platform money we help and banks, SMBs new from ranging client system our as to of

total adjusted the We has organic by consecutive quarter. points to Our innovation of by for list our company revenue entered XXXX innovative first Fast We've year. XX%. growth margin the expanded We most us relentless XX% on momentum. XX the clients of delivered Company for pursuit second in world's companies placed operating the basis strong with

since and to of a period adjusted this to end of the actioned million following quarter, XX% $XXX of goal the five-year million $XXX to hit $XX million the increased of merger. XX% also by We synergies EPS $X.XX. expect merger growth the year. commitment achieved now that and attained the reaching revenue We

merger. synergy the our $X.X As we the We earnings closing synergies billion of since on actions cost with our you promised XXXX having of program, concluded year-end call. shared the

to million. versus accelerate a invested the outlook. a came at flow ranges $XXX bottom we line meet position full good growth, exceed puts in our or in guidance on outperformance and As full year The year cash to free top us

to are As maintaining XXXX. we growth guidance earnings to we backdrop representing we X% and rising Accordingly, the interest organic XXXX per is X% of given unchanged growth in with prudent evaluate range XXXX year geopolitical macroeconomic our issues uncertain our high XX% to believe a leave outlook for and it XX% of adjusted share $X.XX for ahead, inflation, the to revenue $X.XX, rates looming. of

our size selling are FinTechs. approach the of and to individual create medium turning business in Clover operating Solutions for large were strategy, total Now Fiserv and geared more merchants makes transforming enterprises. market our three merchants, This including with offering for to merchants from operating systems expands systems. solutions merchants and sized financial small our We to us point towards value grow ways. to addressable Starting valuable Carat customers. institutions,

operating First, systems. merchants attracting more our to

customer modules. our And our the benefiting the encouraging adoption of third, have growth relationship merchants more software-as-a-services Second, expanding base. by from with existing we organic of

of we Turning we market. to continuously to acquisition closed broaden and developer our our In clients, our native for our Finxact, cloud innovate banking total financial remain of steadfast early institution in leading a clients commitment addressable April, the solutions.

new strategic will interest and as base finance broaden our well large accelerate acquisition digital analytics. the believe of data focus We’ve institutions, FinTechs, in solutions amount clients. client clients, existing this augment platform enrich to to tremendous and include a opportunities. financial embedded seen through our banking-as-a-service, already as existing and and advanced on delivery our and ability to We the of from have We

time utilize insights marketing. data will This risk new Finicity valuable real to fraud, and and Equifax, strengthen our and and with to we announced which create MX, partnerships offerings highly quarter, create vast across

data early the for us. growth a be to driver we new expect and analytics journey, While in

diving outperformance Next, deeper business segment. into in by the quarter

Let revenue of XX% merchant transactions Global acceptance. and year-over-year. organic very X%, respectively. growth with posted volume and me strong XX% a merchant start grew We

quarter, accounts Our Poland EMEA XXXX. Netherlands is a the and and global verticals were particularly the restrictions such well X% America UK as travel year-over-year was followed enterprise followed active Travel and all in the by led early in later in quarter, by in was across in strength strong within [indiscernible]. merchant grew as the Ireland, since strong, Germany strength the as lifted vertical, first particularly restaurant start quarter. trend the were as strong across restaurants and North hospitality. positive Spending in of SMBs, in continuing the Results January, regions. by

one to Our presence mandate rapidly Mexico quarter. the Colombia. onboarding merchant onboarded. retail signing was Caixa very also trends strong key in in through strong travel, in merchant made discretionary acquiring from were India continue in We've agreement, our as year Brazil, expanding also progress exclusive in since just LatAm fueling normalcy, business the merchants and and with currently XXX,XXX significant In restaurants. in are spend we as and merchants in resume such such Australia APAC as very Spending markets verticals

to implement continued the rebound, business. and has to win new addition cyclical In region the

with growth of systems, in and software XX% operating penetration grew and gain significant sequential Moving as global in basis driven quarter, services XX% points Carat close traction of revenue as to the to well of Clover XX%. revenue by to to clients. XXX growth our Clover continue merchant volume

conversion is very positive. BentoBox restaurants, the points continue ARPU on of Starting in into both make are all progress We rate early to focus. And our and lead group vertical Clover the well underway. with integration

government, merchants travel, mandate the [indiscernible]. solutions Omni technology, leading across the including flows, In vertical saw food disbursement including the omni-commerce Chick-fil-A, of Within restaurants. continues revenue partnership retail for verticals, Carat, fast and doubling system SaaS address functions key tailored through we wins we new for offering grew and broad our extension are across acquiring business operating leading quarter. the Carat's services offerings. card-not-present preinstalled the to payment processed XX%. impressive combination in with growth Within enterprise apps, serve quick quarter, and of ecom a based the digital verticals omnichannel volume for of mandate long-standing sports acquiring and payouts brand, some a our fantasy leadership DraftKings, an player with in had We

NFT extended of During our we the marketplace. quarter, launch with support their to contract Coinbase an

payment platform high rapid businesses. differentiated making to services facilitators risk solution managed markets the fully such acquisition are and platforms. market, us the We funding NetPay and onboarding, a into gives including as of November The inroads high-growth growth support these in

end rapid this clients signing growth nearly seen market past with in the new transactions doubling have in We year.

closing on and Finally, merchant out point-of-sale the update our progress of before lending segment offering. the

leverage position as businesses, medium to platform been and has along pay all small, the later large to offer options. strategy now for buy our operating of a Our range

clients an offer merchant enabling businesses. Carat large their small we're through market of app into possible the our to and their for integration effective them the providers system cost We payment to experience Clover and are easily an BNPL enterprises options way. and to app BNPL in-demand connect easy-to-manage By choice, customers it making enabling simplifying operating the for midsized for downloads through

Moving of was This a cross to by in the and growth Organic enabled grew lines. quarter. variety for sell Payments revenue Network drivers X% segment. business

the and and loyalty This in fraud on like growth account new and quarter, more of tough platform only surrounds our demonstrating last environment. These in We network favorable onboarding Genesis processing grew the ramped we induced growth of was Financial comparisons mandates We've onto metrics in QX for flywheel active a competitiveness stimulus three enhance digital announced into but offering debit more attractive engagement ago. OFIs, in our risk solutions, SpendTrack XX% credit accounts Our impressive North market-leading new driven despite of and growth of file platform along cards by our with to processing had AI-based onboarding and major CardHub, an driven business not and credit our Excel credit offer We businesses, solutions Atlanticus last year. serve debit credit wins fraud, by of our digital drive fully processing year American which system. versus Fiserv networks, in greatly processing two onboarding Star and the the driven the year, opportunities banking solid and debit across a growth to seen also marked debit the XXXX. effect. by our our card

to continue the growth see driven transaction Zelle, XX% strong which posted We in by a digital growth quarter. payments in of

sequential our Bank Finally, including cases still growth rates as softness new see and wallets, while improve paper renewals business, notably with Bank. FinTechs, to continue large we use long-term and enter clients, bill crypto payments like bill digital create U.S. Regions we in

experience. we the bill summer, pay revamped this elevate will Additionally, to customer interface a launch

X% the us gives pipeline payment product and revenue medium term ability sales range. organic grow in in how to the segment to ahead, Looking confidence our X%

signed in renewal long-term highly issuer our services wins best-in-class to our the clients. and this client merchant to solutions Our across bank quarter a momentum. valued processing, reinforcing a acquiring, spanning client, commitment Synchrony, We providing support with

processing with credit Canada. new Financial in win relationship the mandates a in the smaller our our KeyBanc nation's Union, These provider, In spanning we win asset the processing to installment processing, surround included extending with globally. debit the loan quarter, continue credit breadth an debit We Credit wins digital client. a win first integrated million solutions showcase quarter and and largest financial $XXX to signed wins capabilities, The of Flexiti institutions. some size reach unions Federal network from of Heritage a and debit processing

FinTechs. continue show our competitive with working our to We advantage and offering when of also enterprise the power

across quarter, financial and and debit This with digital new services bank an company output agreement we signed services enterprise services. a processing credit

solutions as our fully implementations card previously Network the confidence quarter, grade this the known wins in quarters, growth second this last Chime Great The us couple for and investments continued in also the of year. Bread like tailwinds debit of over onboard surround quarter segment. Payments will digital and and from Data, gives Financial, in We recent Southern processing KeyBanc large our the Alliance of

developer surrounds, such ABILITY, revenue mobile posted platform. banking fully to help integrated of competitive driven segment. the In takeaways. The growth FinTech strategy, finance and Sales clients embedded to quarter. combined our that including for banking-as-a-service. online XXXX, new as four at to clients. Moving organic full and finance CardHub, of is Developer surround embedded by exposing had landscape Studio, the a of destination our strategy us microservice X% quickly, APIs banking of the the stickier with and SpendTrack, modern and third clip, solutions expanding our healthy of the we of our for grow offer at the digital offerings a capabilities, digital core of linchpin XX modern market with integrations. penetration the continue continues Finxact's existing of to The thereby success Financial We stack for Sales believe our quarter card for a the launched We FinTech of finance open community core quarter, to our the us digital aimed Zelle initiative. in deepen including we positions financial ecosystem in creating platform called the portal uniquely choice focus becoming evolve addressable our core merchant the Technology competitive goal strong of processing our and increased and clients developer and institution issuing wins the the

financial client their reach to and segments. market enables while into modern new their to FinTech extending banking-as-a-service increase institutions relevance capability solutions to Our engagement expose base

payment banking FinTechs solution institutions offer and finance Our and banking-as-a-service of positioned community we financial payment also to revolution footprint merchants our services. and the breadth wanting in We ongoing banking-as-a-service capabilities. capability for of power due to is and embedded and best to believe turnkey banking are a

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

Bob Hau

additional on Frank, and Thank you, some segments. cover everyone. operating I'll good three our morning, detail

metrics Slide If on on our I'm X. financial slides, with are you our along starting following trends and

company segment, Frank said, revenue strong. grew with the and across the Total Total grew all off started Merchant quarter company in year was to revenue adjusted over XX%. we which segments, billion. organic Acceptance growth XX% $X.X XX% the by up As led

adjusted up our with in-line XX% XX was to operating XX%, billion, income to Our basis points $X.X adjusted operating margin and expanded expectations.

of we expansion the reminder, year. at in quarter, XXX our expansion a As two for deliver XXX the expansion resulting outlook points adjusted basis basis the of year basis last points least years. points margin in We delivered to margin over of ago XXX reaffirm

impacting capital Latin the acquired investment, inventory First of quarter, increased XX% driven given newly and for cash growth, achieve was the of disruption working in one our minimize a conversion supply timing increased anticipation share conversion flow driven $X.XX. in by capital free for $XXX of Free factors to to third, to quarter next. potential And first, XXX% a capabilities; second, our per in adjusted combination from to increased hardware of integration any growth XX%, the million America; earnings finally, by revenue flow constraints. areas resulting expenditures technology rate year. reaffirmed We the clients including outlook in to the increased full to cash quarter cash XX% revenue

to our the revenue segment growth Merchant volume a X. Organic results grew the quarter. XX% on very and looking Acceptance X%, Slide in respectively. Adjusted growth transactions Now was Global revenue was year-over-year. XX% Merchant segment starting XX% and strong in

the of Excluding XX% expand small mid XX% in Clover, system strength medium quarter, Merchant businesses, the volume client on them. last $XX growth and quarterly quarter, for and merchants to processing GPV $XXX billion the grew its or product billion strong more to posted basis and of and loss operating Clover of annualized Global a XX%. sized year, retain XX% a build respectively. with continues relationships our revenue transactions the was on an attract offering In and and

XX.X%, venture last In adjusted merchant Alliance Our with quarter. operating in the points our Carat, the ISV Clover for omni-commerce the as grew certain sale first disclosed operating up basis year. from year-over-year. to $XXX grew the quarter of XX% we growth. Connect in margin completed XX% balance gains increased contracts and we through efficiency revenue million, enterprise for quarter, continued operating ISVs joint quarter. We volume XX clients, in Adjusted an that XX was segment XX% signed Acceptance income this system to we the investment

basis As we year estimated full revenue. outlook. company on XXXX of is quarter call, shared points earnings fully our adjusted fourth with you the in XX total is XXXX impact It be of the sale the under to contemplated

Network within X% growth segment Turning and quarter X% organic in X% our revenue of range The guided Payments to for year. Slide X. the of to posted the

driven onboard. credit in as by file saw of business solutions accounts growth credit strong our As impact coming issuer the on as expected, active clients the growth well new

and ago very were which Consumer was X% growth a operating for number quarter processing and to of tough X% in offsets the network difficult stimulus and the quarter. to $XXX against digital for quarter. debit operating offerings very Pay. compelling Zelle driven debit Bill continued The in points on comps with of to up XX% the up account-to-account live continued proposition as adjusted decelerated Our Zelle up our and the business, comparison. in the margin the year year in value PXP XXX surrounds clients to Adjusted the faced by businesses year-over-year even driven demand prepaid basis perform well, transactions up transaction XX%, income XX.X% segment was million, was ago

full operating was points million, expansion million basis margin points was grew XX.X%. The X. quarter, operating Financial segment operating X% to adjusted Adjusted Turning in organic to revenue. first corporate adjusted in XXX in in revenue to loss income XXX Slide including basis Technology the $XXX $XXX quarter of The year. resulting quarters. basis pacing up The expected periodic from the the with XX% quarter of average four was effective rate points XXXX is quarterly year. the to XX% the continue The than and the approximately tax XX.X%, year the adjusted for last quarter, rate effective for in-line adjusted higher last be tax last as XX should at same the

through quarter. to million we Additionally, this returned shareholders $XXX share repurchases

decreased debt-to-adjusted target Total $XX times as million level. outstanding the more we on EBITDA have XX, approach billion X XX our of was We leverage authorization repurchase than shares March remaining. to ratio and debt

sheet made EBITDA strides We meaningful our adjusted a and since lower allocation capital to X. a turn new by half results a to debt balance We've last highlight merger. slide, full performance over from to overtime. and turn Turning ratio our Slide QX the year

shares representing two last of billion towards $X.X the share combination flow have and of generated X% Over $X allocated repurchases, and free of M&A we've billion years, a cash outstanding.

we at last creating of This allocate adjusted Fiserv integrations, approach goal significantly us the of integration and debt Data will allow even expected over towards both First X capital and completed Additionally, to end and share that $X.X which acquisitions to billion merger to are decline deployed of times to leverage. we the value and repurchase. of EBITDA repayment under year more as time debt have the our

Slide turning X. Finally, to

Although early back and year outperformed in we on uncertain. backdrop it's Frank. revenue remains the EPS the adjusted for we still prudent macroeconomic unchanged the and our it is first to feel me keep quarter, that turn outlook call With to given that, let the XXXX

Frank Bisignano

quarter. I am this Thanks, accomplished of results the very we've Bob. proud

at agenda, mentioned strategies. Place be was ensuring Innovative Great our and CSR in diversity In as alignment and and investment focused earlier, to Fast community to are inclusion I Argentina, employee continues the Most Uruguay, and to recognition in Fiserv Company on top a our quarter, first the the As addition Mexico. of we Colombia into Work engagement named XXXX

employer. For designated year, indexes Fiserv by as events a the X-star has been second consecutive

In note, other Nina programs as year. donation been matching the in American including a invasion Ukraine, financial activated of We've in to campaign activated and report in published consecutive local efforts. of will initiatives Great in be civilians has the donations fourth Ireland grants region. our also weeks. addition, Fiserv and support not-for-profit for now Cross Technology Red direct a finalized XXXX several the in to A response displaced for our quick coming CSR organizations humanitarian to associates, Center recognized has for Work Place Russia's

the open As hard the and I for all operator, With associates our to please clients our close, world working working service line to you, around for relentlessly questions. thank I would XX,XXX-plus that, like shareholders.

Operator

Huang now first question come will ahead. lines JPMorgan. Please questions. [Operator the go Tien-Tsin Our would for to you. the open line from of Instructions] from Thank We like

Tien-Tsin Huang

a I much. of questions. couple had so thanks Hey,

the but first very The one segment, strong there. Visa's, like It that. exceed growth the matched revenue on Acceptance looks obviously, did growth volume

higher if driving quick revenue a And what here had going in So to And this I volume quarter? through follow-up, the spread what's we year? expect mind. the don't the balance you should of

Bob Hau

Tien-Tsin. Yeah,

mix, like we and volumes saw volumes in international et our there cetera. I there's, a differences in quarters, cetera, think between are and cross-border Visa's mix the previous of number et

in standpoint. So as growth volume you from said, a revenue overall. line We good had we're

a quarters, couple been the yield quarter-to-quarter talked quarter, that we've it's flows the strong. this As a ebbs quite is has bit metric of math weaker and last little

with lot one of clearly there. point a of of very the in Merchant and growth good, board continuing continue we're organic across a start And the the growth there's we on a great that variation so pleased of quite quarterly focused year. segment things that having margin Carat in variation good performance revenue quarter less for to strong with growth in it's think yield Clover, XX% a segment growth expansion, little the our to very in because the on the is the to I and revenue

Tien-Tsin Huang

come the Yeah. above. No,

So don't -- let mind. you me if my follow-up ask quick

I XX buying the the the free CapEx you're XXX to terminals full conversion. year, the heard opportunistically keeping cash but on some here, Just and the same.

So for drive full XX moving year? the that confidence what's to the the XXX to in here getting for that some of outlook pieces to

Frank Bisignano

Frank. -- think I it's

terminals. supply more volume chain, and into the board, thought all, across it of it drive growth. competing First physical smart parts opportunities a prudent given move we have was the than buy and ahead we to the also, very was way which It's

of clearly category. grow forward. expand these confidence the we inventory margin, our flows as the Obviously, confidence going to quarter-to-quarter part obviously, story and see, we of and as be are And also would margins the capital. we also ability onetimer and in So that see on ebbs timing reiterate

great about the the I those feel about margins. about So good expand feel to in manners. We our growth. ability it We think

growth ability try So we we feel about the of bought and have expenditure good not what that ahead forward. actually going

Tien-Tsin Huang

Understood, thank you.

Operator

Thank you.

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

Lisa Ellis

networks. guess, take there. I pieces your of payments which lower Thank X% a came and lot at in Good X% the morning. to within end of networks, know and I'll I long-term you. of outlook there's payments moving

of pandemic. business I both lapping and payment then of was related a highlighted, year? what think, of parse versus where debit as out business, see throughout meaning the a of bit, have been well. And or some which those the then Thank you stimulus also go I sort the bit apart drag coming effects quarter prepaid issues a protracted just to we onetime we a you. the the but business, You Can has lapping the hitting quick stimulus follow-up of little in as might a more bill struggle

Bob Hau

Sure, Lisa.

of driven. segment, 'XX, shift into more year credit to that And certainly to to a which our with kind as tough within really 'XX created mean the was think is it we late Payments to or consumer compare revert credit now So to stimulus last prepaid debit, move QX we and of a business. stimulus And debit. back starting norm to we're of see than with saw

paid Of on get course, the we a transaction paid we're payments side gross but on as side, debit credit accounts. segment, per in basis know, active you on on the processing a

lift now nice the accounts, so shift debit doesn't in transaction of we're but from seeing number itself credit to directly. revenue a And manifest the in

business last year. year. had year we've back Debit had seen the was then as So all not last we improvement headwind. actually And the of and this and pay QX the in credit growth in came of good biller debit, quarter of high throughout quite side, growth in versus as bill QX. our Still weak but an

new particularly the us. the clients, business. couple to going FinTech a you'll for new to growth has that improve an the here of as rate and opportunity the course, last improved in live late in as the bit. this talked quite second the business, things of quarter, it's from in interface biller beginning accelerating credit The And we we with two we quarters. overall. also the big growth launch So issuers third issue we bill And continued go things see improve three user both decline of still space, issuer And the to number probably of see, but see of summer, live a of one credit the pay implemented we have two side with payments as we now over

Lisa Ellis

it. Got

examples of Okay. partnerships types stickiness give stream? follow-up and I advanced little just and with Can you a data around with for on Equifax A new maybe new quick guess, Finicity, analytics cetera. Frank the just maybe -- highlight these et or the base? bit new color a rate revenue kind the bank of of is elaborate is there? offerings of this in business. And this dynamic the Just more Or of win

Frank Bisignano

No, that revenue at top always and stream. it's a things it, and data some new you a Maybe We've did we talent believed we of we where is advantage, it the manifesting house, had itself. organizationally. dedicated remember against the

data. in new to out year. We other information. and data others to good high when have pretty providing stream this what a a yet to and quarter we market that then the said, to capabilities as later offer clients do in opportunity, we yet, but come proved into at haven't part and a year year, And our and capabilities to partners the marketing with going completely we real-time have in the why proof margins of next in that's then this is combining providing We and we that concept expect now. improved, decisioning see be jointly right later have We with and offer revenue into believe road we those map capabilities of

Lisa Ellis

Terrific. Thank you.

Operator

Darrin go ahead. of go to line Research. we'll Please Peller Wolfe the from Next,

Darrin Peller

guys. thanks Hey,

want on do those what top-line, this Finxact price actually to to When to add just digits also touch on can given of top growth do, built I'd both, the look you're FinTech resilient And do and extent on can segment. like expect first, now. what pretty the more to it at can the What year? on side, on CPI that through First, seem But potentially you And that seeing. love contribute? growth, pipeline the business push hear mid-single thoughts to that escalators in. acquisition I does seem the we the

Frank Bisignano

I So talk might about.

expectation December maniacal would and we action think Finxact their these showing had in the guiding it in to where where that and plans and us and on a team XXXX, we company serve laid today. the get think have how growth I to are think the in when levels. components bringing of the of product focus we to innovation to the up. of an that all client I type we strategic we And We the out and demand is that team

assets very, I well. digital think play our very

So offering. I have is talk like a digital when gets all is we really the surrounds, advantage. today. also client's about into a office, the things together saw to strategic our us a bring you it which where mobility, do ability then are Ondot lens And And us that good comes in one-of-a-kind to

very I strategic. Finxact is think thinking beyond today,

to get other went combo As plus assets Finxact, we us our said, to think it we of had markets we before. we expands TAM long haul, a allow to capability. And think do over our the

very it, what we that's about and the ability deliver few The look as and team team is over to closed, of great Finxact very, So from acquisitions, moving next know, you at integration the the [ph] the the XX-plus well. The when that. feel done. job you years we expect has along

think line of believe. clear were the how addressing have We about that's And digital that offerings market offerings, of our segment. our we that and digital the sight, we around total future think we totality set current our addressable I expanding business,

Bob Hau

typically items. changes. terms CPI particularly get very contract Those does And allow Typical we for Darren, are processing of annual in our in business. do annual account core CPI,

the apply the we end the So next contracts index calculate of it at and the to year, CPI year's vary. billing. And

and -- you're bill board, the because all, our QX but of that CPI is across and caps, annual varies guidance, have the it's into some an locked that's fully for it Some the year. first have full in baked seeing results

Darrin Peller

M&A when below the at quick definitely just you a an one Thanks. in follow-up. there's the time, ton level now standpoint, we And market. same valuations helpful. from Frank, Okay. opportunistic sense. think the leverage what coming make But about said, just across of That's Obviously, But three. buybacks

in terms preference of capital So of and going types assets? just what revisit again, forward your can you guys. Thanks allocation

Frank Bisignano

Yeah.

both a grow if think look Ondot. to demonstrated their approach all capital our what into with and them pretty if clients at really Finxact allocation, of find BentoBox we've leaning I we've our done their balanced look or framework. And with what you with digital or business helping you a did clients we you

beneficiary there new mindset future would should fact, is that So around investing is it expect in we opportunities just grow that of of acquisitions, put form addressing the their I new how, growth. business, help in for another because about out and you our fact, become clients largely wholesale. markets, which which And

shareholders saw, that we last through into paydowns. the months capital Bob integration XX that to have and leverage just of allocation can forward. methodology believe think inside investing a our opportunistically deployable. always I those even expense be Hope expect obviously, we merchant that have went And the the use our capital And XX% now so our about we've where stronger guys will you is dollars for methodology. we and in You rate. house that should back over assets talked market growth what continue we tried And capital returning And far shares do, about the will you better same too. growth we we buying true going And to we to fell as And kind done it opportunities. on ring allocation. other and feel of the great the we'll

Operator

Thank you.

Baird. go Please comes ahead. from Koning Our Dave next from question

David Koning

period I every first get a quarter I in -- ago investor you industry. year, in that Great the and we Hey, we're seems a Yeah. and merchant a maybe inflation, handful few Should getting expect weeks I my meeting it we'll guys. had seems be that, of XX.X% growth question, talked about yeah. smaller like overtime. guess guess, job. better kind tickets, the into to of entering pricing behind guess, of the And

all contributing, that are those Now those question. fair then XX.X% things assumptions all and

Bob Hau

from conference, first through a after number. So obviously, quarterly XX% up closing we flow, put that a marching going quarter

growth executing multiple Obviously, Clover the Carat do, every talked to expect a continued So on that we of we perform XX.X% Lots five-year a terms that conference. projection. quarter. of of quarter left very great well. to or year during certainly in about and shape good out first don't XX.X% elements in every

new in invest to continue there. capabilities We

off feel I to So a start. great we're like

was Of think, March. conference, I course, that early in

and to early but well of our in our small good cautious terms Frank think We a great got America. operating we've set geography. a his the systems We've the clients. and distribution a we're into very to going of system, how business we're bring remarks, in process, assets prepared global enterprise position. talked both about great in So reach Latin strength got in and

where cylinders, think so far, we but I go. on are to quite and So with more hitting pleased we're plenty we're all

David Koning

above that the Great, was maybe get margin And the great. half Is one you when through little than guidance. cadence then The just too. than slower, the follow-up. fair Yeah. a guidance? a year the little slower full is year, QX QX back

Bob Hau

those internal the expectations million continue expectations. Yeah, And obviously, it's and significant the that's $XXX up integration execute. really the exactly a for said where stick, we of a for of since two-plus now And we're line us to reduced. in did, -- work be get know, the basis we amount years. we're not I business. right year merger adjusted up our of with continue at. finish we still XX in what, it's we first to will unquote the merged. of tempo integration the the the quote we'll integration of a treatment, business. i.e., and believe quarter. We back matter hockey will our have prepared acquisition no internal and some into in good last as growth quarters, longer we're ease couple as to those over projects our in and the We achieving fall points of results spending. And And merger That's remarks, we on you full through have ended couple adding -- years costs And and for going next merger That

come So the you'll see XXX over year. the in of course the

David Koning

Yeah.

guys. job. Sounds great. Good Thanks,

Operator

from Kupferberg go of Bank Next, Please of to America. ahead. we'll go Jason line the

Jason Kupferberg

sounds Thanks. come there. like morning, for Good second. to wanted It guys. the positive a signals some to you're Payments seeing I back just segment

just newer for know about X% of X% more You've just the of good this coming think medium are we our being But the to about got properly. so term that the wins you're calibrated make I because lower half at some range down we've year. But pike. process should I talking expectations want in we're know the here that just the of our midpoint the year right cadence maybe I to sure from to starting kind given thought got X? that the tougher get comps on out.

Frank Bisignano

about talked $XXX we into whole it. wins, tougher, them beginning in of in talked overtime, pipeline we're see really bunch Obviously, I comes we've to get elements this million issuer of the a too. numbers. year about do but Comps and our think And

feel assets a talk And from where heard strong are a assets. on you very ago. pay were we the bill change also We very, year in us direction about

all that in in at So the end we're go at low we the forward. our on don't that range feel

Jason Kupferberg

Finxact the you hear. How contribute this just Okay. to That's on the going strategy to a revenue is asset? it FinTech just do little And go to the good of to acquisition. the into segment and there bring Fiserv expect kind And follow-up maybe a can you to this much synergy that deeper go-to-market year?

Frank Bisignano

won’t-- you about numbers. but Well, you anything see more, I this in Yeah. can year's won't talk

digital have multi-prongs. change go-to-market we cycle car a long strategy If One the our crypto side a rate. growth structurally to if But the digital ability today clients a sales. want we is there's capability, to that. bring ability Obviously, build to to want they has bank to. the do they or our So

element But given fact of we what So people, of you this that see the doing expands the that's that one can in having do it. TAM won't for year. economics that anything

of together a able the a DNA Finxact bring The being offering clients in second different to number element manner. an and unviable to of combination

a should where TAM hear digital opportunity. in base other open is finance. think you very cases, some when all come market to our was. But maybe spot great FinTechs they've a talk I a more lifetime banks it, standing that, has than you fashion. sweet to our larger The offering. very very, complements in surrounds that together third about assets And of would then Finxact be and Finxact a And up into demonstration and expect us strong embedded becomes And current that. the sold well that and finance it under how go to We concerted initiative be

not I think overtime. this growth you be in year, growth see expect years, the outer you'll highly to that should but in accretive our rate to

Bob Hau

hit the on to revenue year. And point Okay. this home

all would it be course, Of inorganic.

company our segment. it the for for total of -- So the X% X% FinTech it X% is wouldn't X% impact to were to

Jason Kupferberg

Right. Thanks, Bob.

Bob Hau

revenue adjusted also. small very an overall, But from standpoint

Jason Kupferberg

you. Thank Okay.

Operator

go to we'll Barclays. line from Ramsey the ahead. Next, El-Assal of Please go

Ramsey El-Assal

across sort clues seeing so prices Hi, morning. to question guys trends? share you taking robust headwind? the fuel this higher sign on thanks from tailwind your will macro view seen much for spending are tipping the inflation my or sustainable? Are updated Any levels business that other that or that any factors spending prove we've Can you of kind consumer of

Frank Bisignano

the and occur, prepared really consumer. future, travel in restaurants the talked Obviously, you of little this as been that's with did mean, about remarks. I on would been some I looks thought more retail. petro at if same factored But fundamentally are up We in think the services little areas a lot process. conscious management we Well, and And prudence happen say like our and slowdown I maybe looked less. places, maybe the a prudent we our what would places, and think bit April, it if about the clearly, has same some we've a level, at around holding

but guarded fashion. little in very change and we're very we're right managing a guarded So now,

Ramsey El-Assal

you also business with would Okay. kind inflection interface in kinds of color And be revamped think that you rolling that was direction? What the I the you're do summer. in if out, us wondering to could more nice the continue right back a mentioned I seeing on you give pay to that that bill the of I believe, little can things

Frank Bisignano

Yeah.

really think capabilities I bill their environment. to experience. It's our were the them that clients. experience, pay to it's be user their then the actually It about about partners with that increase bank allows capability giving able all refreshing user about in

in comments. So M&A focused. remember, we're my you hear always it And

with business, more --in do to we business opportunity hear You give how the clients it on clients. the we run their how our

it to be which the banks about good, think by engagement versus And and higher usable that with user I most front more as So banks much they end client had that capability, modern us allow that it mind and ability a actually that get equal be change user to in and as believe more usage their more very what will our to able we've for before. our conversation, them that base. built navigate easy, touch completely allows will end believe the it

Ramsey El-Assal

All it. it. Appreciate Got much. right. Thanks so

Operator

James to Faucette Stanley. Please of from line go we'll Next, go the ahead. Morgan

James Faucette

the much. Thank you to segment first. wanted very touch I FinTech on

upgrade what change, them sense cetera. Just obviously, earnings spend interest systems, banks to et to strong for potential to looks rates get of given the -- and of as to appetite especially and a try continue period their and a be

your now you in improvements And or changes just any sets right there? So opportunity feel appetite? for what's are seeing

Frank Bisignano

the can of can we're appetite and appetite completely being like the committed. we serving here towards that I clients change a strong. of and Finxact, having lot time What they of find now opened get seen bank these DNA and the amount help fair seen of in a spent Having The the now. lot is small strong to can lot they capabilities And better, how eyes non-banks my them they them is in Yeah. believe to here. sort from and they're better a a very, going We've that of around if very assets actually our as the wins. digital We've do mind, their those spending banks means in bring to that of not that space, job tall, if it current size in a the serve just say. grow addition to capabilities, has is of if I would

tremendously to time So encouraging business. that it be find a for I

James Faucette

it. about okay, where on And about there's acquisitions potential evaluating you business Got merchant FinTech direction based are where another you opportunity, acquisitions? at look -- to going lots like, your traction on on of you're merchant Finxact we're But the Got and you feel the one focus if prioritize acquisition with always obviously, place there versus of as is where or think seeing there's and thing. when and or what M&A, feel as think you're leaning and it. to consistent you need like that kind you we

Frank Bisignano

big platform think very, Well, in acquisition, the gave can modern which very in was a tremendously opinion, us that scale. industry Finxact most my I the

long haul. think that, and very important up the for us was I that So sets

we're in to earlier, focused places not my back go clients grow warrant in our we're you on think If we're helping not I manner. comments very or

is the at us be ARPU that to in does it restaurant of BentoBox, strong. front allows to What to us in business very for our look very, capability. move you store the If

expect And to deploy our in our us the in revenue. more that to not acquisitions clients so should markets better of you space capital collecting we're serve in how

to backend and So a eye on as synergies opposed of investing digital all for it. growth really

James Faucette

That’s great color.

Sorry, Bob.

Bob Hau

Yeah.

think Frank should on both serve so benefited our different think I ultimately, digital think I eight Just capital the thinks better think we can business. as our the digital as both. XX the available we one segment. investments In they about their last customers. Frank about FinTech serve our merchant months, think I well benefited thing that we've we I guess, add don't as can Merchant done focused segment, it and all better don't deploy, I'd which is, pointed we I our out, do and we can Payments Those about to And our given they on do? how They it acquisitions, it's as benefited customers have segment.

James Faucette

very great That’s gentlemen. much. color, Thank you

Bob Hau

Great. Thank you.

Operator

Jamie from question Susquehanna. our Please And ahead. comes from go final Friedman

Jamie Friedman

the guide Hi. there call annual specific of Bob, Thank the QX if I was But wondering to any This helpful. 'XX. out XX on were super Slide you. is

mind? we in that any 'XX, standouts we QX of For there example, anything else the should or of should be periodic keep aware from are like that

Bob Hau

and off we expect QX we of was think the activity. that the we We did issued having year. by all individual of Not cards. every business, you QX difficult we the QX we benefit helped and within stimulus very but QX then recovery. overall consumer, to perform difficult growth And but And strong i.e., is matter, cash That about No. QX benefit a of a -- in put into U.S. the to saw thing the saw the QX flows QX, rate of push at of we last a last cash growth, only very actually consumer, look But about did the I compare. using year, the and if the merchant overall, had cash. that had a pretty big it's growth recovery in ebbs more into continue we well. that for the business. pandemic year, quarter guess of We last of consumer good XX% And a the feel XXXX. our of we to three segments particular, was

Jamie Friedman

QX margin Any the about similar comment expectation?

Bob Hau

actually, that that see flows. gave the because adding I work improve a guess, talked of bit better but adjusted points think, little this the in half. making us we margins investments a QX, some throughout about -- you'll first back of back bit we're basis the ramping an expansion we're We more year second full timing integration operating get at expansive, various the basis $XXX we of this little least the second quarter, because XXX year some of the We for of down for expected earlier. in the the in when improved We points. million still said longer of full I the this Yeah. fact, you'll see standpoint, from Obviously, than no we margin XX the in at year, But half. reach

Jamie Friedman

Thanks it. color. the for Got

Bob Hau

Sure.

Frank Bisignano

you, Thank everybody, for today. you. Thank your attention

in So talking team great to day. And IR I please Thank the reach and any department to to out look questions. our with free you have And you. forward feel a to future.

Operator

conference earnings That day. concludes Please disconnect today's for time. call. this the And you great your participating all of Fiserv XXXX have a at quarter Thank in rest first call.

Fiserv (FI) 27 Apr 222022 Q1 Earnings call transcript