FI - Earnings call 3 2023

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Operator

Welcome to the Fiserv 2023 Third Quarter Earnings Conference Call. [Operator Instructions] As a reminder, today's call is being recorded.

At this time, I will turn the call over to Julie Chariell, Senior Vice President of Investor Relations at Fiserv.

Julie Chariell

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

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

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

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

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

And to now I'll Frank. turn the call over

Frank Bisignano

Julie, Thank us to how thank deliver you, to continues and joining you all Fiserv today for very results. strong discuss

basis. we XXX XX% an acceleration These For quarter, posted the and of organic in our margin basis Merchant revenue third segment to XX.X% growth growth Acceptance organic to revenue expansion adjusted results with points Fintech and reflect XX% an respectively. X%, on

adjusted was Once strong year While with in of higher quarterly segments ahead share free cash year-to-date. and margin, to the was to point results guidance. flow strong per performance our Cash flow quarter $X.XX all $X.X contributed as billion prior XX%. of billion earnings of again, $X.X three full well up

similar retain results. grow close wallet and to in of clients, our with month high, we but versus U.S. we with are consumer Because closing market year-over-year. new year-to-date them. in existing in remains uncertainty which and softening year Macro quarter and of ability the of this, would growth XXXX, levels, point card expand the the account to to In continue share third spending consistency projections the to growth mean all with ones some our of confident add to expect

our support financial characteristics XX% business the of our Merchant of Approximately our to our is institutions in volume more to recurring. revenue look also Nearly nondiscretionary in categories. half We spending of optimism. business our durable is

clients. for both service essential in areas functions solutions our Our

are and customer base network Our industry-leading. distribution

is base expense share deliver and consecutive XXXX benefits we year-to-date helped and being our point this to investment and that adjust high, year. are characteristics per margins can years adjusted discretionary It efficiencies XXth us from incremental our to earnings growth, Our these conditions. that technology-driven double-digit market of results XX match

least factors operating end Our basis execution growth With representing points raise $X.XX, range the this of remainder to year, XXX basis to growth over at per year up at XXX range prior new these raising of the We of midpoint XX% to across expansion. $X.XX XXXX this, revenue up points reach we to for margin leads now of our our more improve our from us full XXXX. share XX%, $X.XX are strong XX%; our of to expectation prior of than to guidance expect top earnings the to of our year. guidance a organic adjusted and X% the XX% and adjusted

also raising our to guidance approximately billion from are year. $X.X We this flow $X free cash billion

five revenue this. powerful The can third focused us of are tenth about I our this growth, on momentum. organic and quarter, opportunities consecutive do double-digit quarter marked quarter sustaining talked Last we that help

proof So points we I'll in the some share third quarter. achieved

improved XX% process Let's released small the Revenue new the payment for in system on businesses. navigation cloud-based experience our and to growth volume, application billion start our from medium-sized annualized quarter accelerated SaaS up Clover reporting apps, new Clover.com that in Clover, with prospects. and and third buying We speeds dashboard market-leading in QX including other to We added with that improved for operating the process expedites $XXX top a XX% merchant XX%. user analytics. features

with open growing our merchants addressable market. to this opportunities expect for long of functionality a Clover We tail

ahead, target including solutions, the laid of We revenue quarter. March investor continues software acceleration of XX% space out horizontal still an services reaching in XXXX to in Clover international growth grow, value-added see results We're by line of Value-added with sight markets. at to the XXXX, retaining presentation. vertical-specific our in that solutions white $X.X penetration revenue in and plenty billion-plus

our unified commerce for Carat, added and new categories. large We chain, a extensions, and merchants. several relationship clients to our petrol nondiscretionary Moving offering spending omnichannel seller major grocery a including to enterprise adding

hotel drive feedbacks in wins clients. from and value-added addressing We platforms, And fraud continue with to foreign products translation, BentoBox. quarter solutions and came enterprise and the restaurants currency with

new of partnership and Braintree millions business We're a on a partner PayPal announce core two products base payment between locations of selected has This long-standing strategic both as that companies. to U.S. assets. several and multiyear merchant that our covering Fiserv its pleased across PayPal direct is for services services and builds

International Group, across with XX Europe. a and several in continues the regions. across services countries in food contract won bid Carat, world's help Compass the quarter wins we In to we unattended foodservice company, our expansion built retail had competitive EMEA, largest

methods single local across providing omnichannel We payment Carat Europe. real-time acquiring, for and platform data are our inventory

and reporting in differentiation our visualization breadth. real-time data normalization, was Our functionality depth access, around and

global acquiring the rental Australia and into car Avis Asia providers, New Zealand. extended with our largest Pacific, relationship world's merchant we of Budget, one

important data for And lastly, in alternative the demonstrate our emerging that access logged quarter for enterprise assets. demand opportunity to wins strong vast the is in space this Open in Data. third an us two We area

underbanked. of account-level consumer's will the bureaus to particularly the use for to profile, our credit data add micro-indicators major credit relevant a One

access supplement businesses. with Bradstreet from credit This for business our to lenders credit database Secondly, merchant decisioning add capital to reports. information solution & can optimize volume we're partnering its small small and Dun to for

union further by contributing origination us and security as clients. Finally, deal and services. and and account to we to verification, away credit further access allowing data, a move with in bank in in generating signed from banking, the this API of for for screen-scraping verification, ID connected our banking company market open the data Plaid opportunity revenue areas penetrate Payments can fraud such We loan area

the company in Merchant The America about of another growth revenue Acceptance, business well Brazil, inflation Latin in total countries. products with revenue, grabbed of and and XX% and across attention it's and by driven largely anticipation opportunity. Uruguay revenue. standout It's diversified represents is of followed X% adjusted our drivers adjusted much region is Colombia, the by have multiple region the Argentina growth But Argentina Caribbean. here. Mexico,

Argentina, this retail as instant expanding Even our less include we that software slower XXXX. year, anticipation growth growth look Software in to presumably opportunities see next of we region. Express Brazil business in inflation Argentina rails the strong in leading the for functionality in on plenty growth and These acquired we payments and for revenue payments for

our acquired to of Software opportunity this largest this With hundreds up distributor next multiple broadly in solutions: including Bank, it, expanding new merchants year; Brazil. with partners, when and added with we XX,XXX Skytef, We ISV the in Brazil, and business processing month earlier rolling value-added acceptance FirstVision bill ability cross-sell of at Clover on more Ramping the XX,XXX across Express expanded we Argentina. Mexico in Brazil payment footprint Caixa facilities out issuer Brazil; and

ahead this is high by high XXXX. have posting revenue greater Merchant in this than and Elevated plan forces year anticipated and of achieve in our time, $XX billion incorporated X% growth ease fully revenue inflation growth business, The the interest to macro Merchant guidance contributing to XX%. America our this assumption will over likely to anticipation our of teens medium-term of well in contributed are we Latin to

digital area the Melio, payments, platform. in introduce a the marks enable finally, step were in we growing very institutions our And large leading Fiserv yesterday payments we and will level a partnership Together financial to and very significant software-led of for of happy BXB Melio, with This meet better emerging market. with this competitors. field needs playing with the payment small businesses to forward

market-leading and well-known, workflows merchant network, with easy-to-use and Fiserv's We combine biller capabilities. plus payable will Melio's receivable accounts payment

our check-free currently we receivable through will solution FIs an for accounts channel. to Central merchants scale will using exclusive market with XXXX, financial payment in Fiserv and summer than through This the Clover clients. by businesses and CashFlow rapidly. distribution to this X,XXX solution agreement Furthermore, By institution more ISV and for bill go future, payable Fiserv includes integrated with Fiserv, near allow will directly we product reach from the small

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

Robert Hau

good everyone. Thank you, morning, Frank, and

If and you're details starting Slide on cover with I on metrics our on segment total trends performance, our and financial will company slides, following X. along

As Frank said, our third quarter was very strong.

solid to was are ability in new and and a continue recovery attractive We growth with Merchant segment. deliver and the in levels in across in growth XX% profitability. XXXX growth of growth to quarter revenue strong outlook confident our company Acceptance organic Fintech the Total

the income XXX adjusted foreign adjusted the organic billion to billion, total grew Total currency grew XX.X%, in XXX margin billion, Adjusted quarter XX% of billion, Year-to-date, an of grew revenue adjusted despite XX%, grew of Acceptance XX% points. income adjusted of quarter adjusted resulting in a to for resulting the X% which Merchant increase revenue Year-to-date, operating basis led meaningful in $X.X revenue increase operating of XX%. $X.X company operating to operating by points. increased X% company headwind. $X.X grew an margin XX.X%, segment, $XX.X basis and

quarter to $X.XX, per Year-to-date, XX% in adjusted the year. per share to earnings Adjusted compared earnings XX% increased the prior prior XX% increased share annual at for range. of high to XX% end the the guidance $X.XX $X.XX to

earnings Argentine year. to particularly foreign earnings impact to given due prior versus adjusted Mostly is growth dollar, of devaluation a quarter our per relative the $X.XX of per share peso headwind for includes the of the noteworthy translation. Our share currency sharp the the

of for XX% versus billion for months X year reached XX%. and cash the the quarter, the billion $X.X first year, up Free $X.X up prior flow the

now in billion year, our cash our typical and flow generation reflecting of second half the We the cash expect year. are $X strength free the raising to guidance in reach this flow

medium-term and Slide the revenue quarter in our We several growth to teens was high year-to-date. international X% full businesses of X. channel be XX% this now growth, in our XX% is growth our revenue transitory XX% a will anticipate the for by for the segment future Organic and ahead well revenue driven growth expect Adjusted well our factors starting growth to ease strong guidance year. as Clover, segment quarter in organic and ISV that Now to segment looking XX% Acceptance on the years. in in growth in was as Merchant results running we in revenue XX% the Organic year-to-date.

contributed year, for well growth elevated this year-to-date about running segment XXX% X The above inflation, which the organic of basis. points on Argentine a is

anticipation Additionally, normalize, But healthy as extended growth expect be we rates settlement Brazil as rates contributed even have given prepayments to these for in a here high in demand to well revenue. interest stronger periods as Argentina in and Uruguay. the

performance processing. excluding volume Recall overall X% X% Merchant that processing. transactions Similarly, from X% and large traditional wholesale volume comes the grew processing. of X% to wholesale volume Turning a overall our excluding and quarter. in portion grew

services processing other acquiring providing to from evolving been recently more offering and for model we've years, software full This alone value-added and business several transition last the solutions. the over However, services our changes better.

per and carry business. SMB processing much to Our businesses acquiring wholesale revenue dollar the compared volume higher enterprise

So processing positive portion in growth as acquiring grows services. and growth large revenue becomes we due value-added of our are volume smaller volume, spread seeing part to with a outpacing widening wholesale a

Going forward, will ebb processing flow. and volume

we segment reminder, Merchant in a from processing XXXX revenue with $XX XXXX Acceptance this projected As billion flat of in to roughly XXXX. revenue

volume. overall revenue of unit revenue outpace growth growth penetration of as to expect services, we which will and means software We volume more increase continue per

GPV was our above Value-added Clover XXXX. over year-ago $XX and Clover annualized X offering, build posted quarter or growing expanded revenue track XX% and and levels services XX% a product on strong points year-to-date. direct of partnerships, its sales target for It on XX%. basis, value-added $XXX was achieve billion to penetration XX% growth by XX%, solutions. Quarterly the billion an the to continues strength on distribution up

XX% large our grew loss enterprise quarter. clients, revenue Carat, a merchant basis, operating aggregator, system omni-commerce for an of discussed as On grew unadjusted last excluding Carat the X%.

wins that to and new orchestration Hub included that services. the enables product, large Commerce our layer two all access easy our had products We single

small First accounting bookkeeping to and with and second, Curb Mobility, the business. service; with system an provider Autobooks, taxi-hailing

XX.X%. operating adjusted Adjusted adjusted in the $XXX XX% basis income million to increased Acceptance segment operating XXX the to billion adjusted in improved was Year-to-date, quarter, operating points up operating to XXX basis XX.X%. margin $X margin and income grew XX% to points and

Slide and Adjusted here new growth this to accounts include in for American grew X% growth X% quarter to Payments slowed which though the revenue North was growth Network active quarter segment Zelle year-to-date. the file, credit Business. the in X%. XX%, and was Growth drivers segment year-to-date. in Turning Zelle Organic segment. transactions X% revenue X% and bit uptake to X, of a on in the benefit continued And from

and advantage STAR pipeline These part adds represent Reg networks, Accel, the II including client debit household of and prior a some in names added of several take Our for in new benefits. new Merchant customers, business. merchant to prospects e-commerce, Acceptance strong

by deal support a our sell a won larger to processing $XX Pinnacle, ability a also and to assets, network debit We win, banks. to successfully and billion in combined demonstrating bank support

Outside solution the technology to Tier a U.S., of our to a X new we using closed later with and our U.K. a combination new launch FirstVision support of deal solutions. of digital X-year pay the buy delivered processing now, a be suite bank

We Bandhan also a of processing won market FirstVision our Bank, credit a in Indian to in our banks bank, as bringing on XX. India, further contract the processing with eighth-largest India's leader position cementing number platform

mid-XXXX. of through comparisons the the we of expected of tougher the large said, through several year second half clients As onboarding anniversary the we've given

year rate to of to X%. be toward anticipate high end full our growth to revenue X% the continue medium-term of the outlook We organic

Adjusted operating up Year-to-date, million basis $X.X margin in XXX quarter, to segment and points was operating up XX% to XX.X%. points income $XXX and adjusted up driven and was billion, to the was mix XX.X% basis operating margin the adjusted up was for XX% operating greater income productivity. to by XXX favorable adjusted

quarter. revenue X, the was of and the X% growth impacted the Financial to reconciliation year-to-date. revenue in Moving financial product at X% quarter year-to-date, of X% in announced Organic Slide growth was the the and beginning segment. Technology the our quarter in by Adjusted X% divestiture the segment

guidance our X% X%. of to the For to the reach of organic growth end range year, low we expect

Adjusted operating to operating quarter. to in up up $XXX the income million $XXX and X% year-to-date. basis points increased segment margin in XX% quarter XX.X% the million for Adjusted was the XXX to

adjusted months, XXX X segment's margin basis first operating to grew the For XX.X%. points the

We cloud-enabled that unions, to both assets wins DNA, and our added the processing credit whose clients including unions credit wins eight the with financial Noble-Federal, came three growing quarter, banks. for institutions $X in including industry-leading benefits billion. Two new core from saw upgrading exceeded of account core

The million effective The months. was year-to-date. XX.X% the adjusted $XXX was XX.X% first in for tax corporate the quarter million $XXX operating the was loss and quarter rate in and X adjusted

to expect XX% the adjusted to for full effective approximately be rate continue tax the We year.

was $XX.X adjusted September X.Xx. outstanding on XX, to debt the Total billion to ratio and EBITDA dropped debt

program the rate X% our reduced and that XX-year During of matured senior of total. quarter, the October balances. third we notes Variable billion debt at to replace in issued $X X-year and notes sits commercial paper

the During shares We XX.X the the X.X end quarter. at for continued shares allocation we of executing capital authorized for repurchase quarter, million repurchasing shares had billion strategy, million million and months. X over for the $X.X XX.X $X.X last remaining billion

share cash committed which acquisitions. business We through organically, our capital pursuing disciplined a long-standing maintaining are shareholders to to fully balance allocation, in innovative our investing approach and sheet, returning to strong repurchase high-value and includes

level in to we at the fourth the And wrapping our third. up to expect full similar revenue and Year-to-date, growth the the the year, on organic be is for quarter of business of guidance prior top Slide X. end activity

is unemployment the half be year has union relative first, While the in second remain to for rates profitability. credit been low. consumer remained consumer tailwind forecast levels Bank at resilient a a pace the continues IT slower the spending healthy have of interest higher to as and and spending

top $X.XX, the range adjusted a guidance $X.XX adjusted Based guidance over full year higher to revenue XX%. us XX% organic XXXX. confidence higher points The than basis gives results, points. are least scenario basis representing $X.XX this raise full X% expected XX%, to the to end quarter growth revenue at now we this XXX third operating our growth EPS once up organic of new range and more previous to our of to improve guidance growth anticipated prior includes of to range from again to This of from our raising margin, to year, XX% a previous $X.XX XXX year strong combined of on our

We Investor Relations who Investor November our take cannot person, look is so limited, for those webcast Space forward of from Day website. to at seeing the our of on advantage you attend in XX. you please

turn back that, With me let to Frank. the call

Frank Bisignano

and move Bob. Thanks, to provide a we wrap our activities on recognitions recent Q&A. CSR most and brief update before I'll up

clients. them continued meeting, we better In their or September, Advisory serve we we to MDIs. on discussed future quarter, hosted MDI depository to our the institutions, strategies better where grow our inaugural During council solutions expand focus and products to minority Council how save banks help integrate Fiserv and members' and at

were front We back-to-business on as the well. active

third #X providers. list nearly the far So almost position diverse Fintech was us a in XXX Also, ranking XXX our small, when year, merchant million affirmed of top leadership CNBC Fiserv totaling on Best Fiserv has XXXX. World's its for program this And in IDC in quarter, top Fiserv's also company. back-to-business Fintech funded grants Time technology its on businesses. included financial of ranked Companies global Magazine $X named

I'd be with investor to conclude review formal X from full our November upcoming conference like in XX. what our will first on to This expect my remarks business years.

Our real Fiserv this that way but done, and company value the in is institutions can. merchants work integrate to is combined Data only not a marketplace and only financial driving in across First

and in their Clover; our merchant public the you when between SaaS environment optimizes in the institutions financial acquiring, network Our driven issuing SMB to leaders local cardholder small largest diverse respective platform payment experiences; over by a that connections scale-based cutting-edge of global debit base expertise; leading union all countries and the model; sectors industries; and network; rails we leadership of NOW private value-added large modern and solutions. distribution and superior all from and payment account now a volume containing bank surround cards, a with platforms; deep union the platform clients with set and card client offering that sizes, assets stack #X world, XXX and for region are to by broadest businesses, credit computing credit part the footprint types, the ACH, to organized in from many in to spanning a credit consider of enterprises capability; known real time; cloud unmatched around our bank all large have by best processing

finance newest And with to starting opportunity merchants, by our uniquely Fiserv market banking offering, SMB the expand is new addressable offered is where enabling accounts largest receivable finally, our that our one positioned our cross-platform retailers. of and market payable and Finxact, deliver. includes embedded This that services opportunities Fintech world's platform, and

in our expand more opportunities we'll how We'll X-year you defend forward weeks' plan and we intend you on time and teams And work help on for this and a attention build you Fintech. these a lead to share thank extend and deliver and few to understand your and our come time, to that compelling all today. day in Thank will who every plan.

And lines please operator, open questions. now the for

Operator

Instructions] UBS. Our [Operator Chiodo from Timothy question first comes from

Timothy Chiodo

the win would is on helping to very are networks you more I other you competition, Maybe services right and to bundling mentioned the e-comm wins. and want and appealing touch many But the you now, merchants a STAR e-commerce Accel, Accel Carat STAR could as to new those and that. that these about win bit RFPs, just little enterprise enterprise topical I of appreciate you how share? not talk frequently some market in

Frank Bisignano

fundamentally the would committed capability you of to we at than I omnichannel start our that that. is volume. that Hub Commerce value-added just build-out which I'd gets services We a what Tim. point top, more in you, to bring, and the account fee centerpiece call as And right? really Thank the of brought

to is clients also the of able routing our thought like lowering and us that be about long believe other and also opportunity for network, time. prepaid value-added to, Created to we our products cost acceptance, strategic a platform we've gift, on business strong, us a debit advantage. what a very, very across is allows with work services, the debit the the gives give Our capability very it to

then about us this that's advantage. you'll company, talk have So acquiring we'll other across the bringing the benefit us but value-added strategic across And it a in processing of many hear fundamental of our services. capability, capability the businesses, it and gives --

do So the that I other us to and only you those aspects, also the And look think in omnichannel them able a to like, it's PayPal think gives it experience the at when bring to be besides really more with hand about clients, good enterprise. it across e-comm, we for them really. I and

Operator

Next, ISI. we'll of line go to Dave Togut from the Evercore

David Togut

growth services. for value-added revenue you in to services Good what penetration increased see you've of going just into to XXXX? biggest you you as Clover taking Could of down see drivers forward, the drill and out the growth acceleration in the the model laid value-added

Frank Bisignano

the in it's I software horizontal and from capability there's against way, that employee stacks workforce is they're managing a mean, verticals, systems a then horizontally. used management, Obviously, us, their for gets fact, everything capability. timekeeping to

If And pieces, the I think you because businesses. continues at specific look stickier. other will it some our be it to grow at bundles for continue inventory get rate, you to penetration look if

yesterday But then about announce beyond be can another -- Melio or will you and You goes talk heard today I all it us -- if should we And say. that that Melio, later Merchant, announce that have example for we capabilities will. like. to be that didn't in we our them would that base be in total, merchant before of an will offering bringing their in and it

ability we of across see that also the feel bring good up we is both Clover product verticals to current growth merchants. And horizontal you I are more an natural concept understanding if -- the app the store. that So we the what and we remember, we capability signing the with of merchants then to trajectory started We new converted bring will and what of into it. about think our the and started specific characteristics

David Togut

an a capital moving And down CapEx quarter. flow is third Or XX%. forward? lower easy free function quick toward year-over-year just follow-up. cash comparison? in good see going XX% up to this we Are Bob, was of as intensity the a the just

Robert Hau

a would said to the comparisons. year's I capital think the I Yes. expect last really overall. in levels XXXX past, point we'd I magnitude, that forward. year correct line to line that what we've $X.X be full think But easing. growth with we've as revenue, of perhaps would of going for timing full right revenue, expect. the therefore, And see in billion in and got right spending order we We'll a forward, of now spending David, look percent the in year as are with is and we capital about definitely, some

Operator

Next, we'll Tien-Tsin go the line to of JPMorgan. from Huang

Tien-Tsin Huang

here. Great results

On the just replacing do likely Acceptance I'm curious look there? Am that with side pipeline growth you Lat there, what anticipation deal and does in ease in revenue to the Am? see specifically, I'm How gave some curious, the Lat disclosure. you

Robert Hau

Yes. Tien-Tsin, Argentina, a giving seeing in "transitory us That America, I anticipation from we and in rates. some inflation interest we're higher-than-normal lift in benefits" definitely pointed think out is higher-than-normal particularly Latin an prepared remarks, around our standpoint. definitely

are cash middle think anticipating the basically flow. merchant. in into the I We're payment we of the

XX-day transactions that typical And so that in settle can than their our to we're so a service as able merchants the to they earlier provide cycle region. that

interest. on of borrow. at spread course, rates, rate might our a we're than to able a Interest be we get borrow merchants the And cheaper to able

we're very good middle a us, the that that's business So flow. of risk for low because in

ease expect they would If interest you the see into spread. some which revenue, of easing the the future, you'll not but rates I in anticipate will, to

us. good very a remains for business it so And

don't number both standpoint, results adjusted rates it's to will debate FX. organic while, either and from at the interest is ease. inflation very course, in our our of we correlated And interest though, have rates FX An at inflation what important revenue And an certainly and/or currency, are constant rate does a because organic our is EPS. element, and be

net-net. some also of will revenue and some impact And results inflation transitory basis so and an see adjusted on will EPS we'll strong. that basis an impact, about easing adjusted FX interest see easing Overall remain

franchise Latin only it's but in America, Argentina, not Brazil. About us, in for a tremendous

future. us Uruguay and into to continue in in recent tremendous it a for a Mexico, providing history expect grow growth the good the It's Caribbean. to and the expand continue We in and capability and

Tien-Tsin Huang

Glad to hear, Bob.

me you another if mind asking don't on real Just one just quick, Fintech.

here You How new overall deal the mentioned deals, and is year? where banking Do new the the that the been for et side. new activity, in spending bank spend -- continuing healthy large cross curious we bank has community. see into cetera? medium just calendar I'm appetite on IT you about as

Frank Bisignano

think -- I yes.

I think the robust. dialogue is

were credit has a think about and to I Finxact and from a In belief, Finxact DNA market definitely union. that that and platform the prepared in talk we serving deep I added think industry I bank have our deep my belief, before. leaders capabilities. dialogue I where remarks, has are

had further long term. assets it. clearly talk think banks total we on now to help feel about And the up But and good at Obviously, We'll robust dialogue, you us. there's convert and going I system, driving if to I look dialogue lots XX. talked it leader. about think the We run the of turn also a need always about north robust we're market. we're two into that on deals market closed got But November I really then we've those

ability bring the our about at in that we Fintech in banking and look we've we've FIs to when surrounds I want really so very, probably Payments, number. speak. what also you to is look to how think, performed We've you if to our strong. book, it think X% at very when it, surrounds, been way which been that's in new a attracts at ultimately the we platforms, The look bring and way, year-to-date that's able our total,

in deals. the have. at appetite a on not slowdown have for seen And deep all we're So big dialogues I we things banks' in

Operator

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

Jason Kupferberg

discretionary hoping consumer like is really overall contemplating QX any trajectory little of segment, your spending. doesn't So give guide it both insight in a into versus September, data the past you've say? in nondiscretionary on material the to any volume transaction in regard ex-wholesale maybe month? could the you and seen sound what Acceptance let's I versus change was shifts categories with in spend And October,

Robert Hau

frankly, than Jason, I'm some We're probably far, third earlier through half saw revenue certainly in uncertain are retail. the what lived that. There softer Consumer similar we've in or within certainly we that The continues balanced X-plus for merchant so lot there. than in We've to the quarter. October merchant we're last seen be Roughly to nondiscretionary, tired volume book is quite resilient. others. years word -- is very are and overall restaurants in our steady. merchant discretionary verticals seeing some Quite so environment the be Yes, a nicely pretty what to using uncertain. of quite softness is overall continue of -- our a

as in know, is And the QX. right overall, December so month part quarter, very spending quarter. line So of a we're holiday in with we what in you far, but early saw obviously, in the big

Jason Kupferberg

Okay. you little hear. get visibility bit of a need segment, out just of drivers your organic And it like a some X% on parse guide. in acceleration to of bit to that X% QX to Good of on Fintech to see comp maybe tougher a end the you against just Can that? to the growth the and there looks low

Robert Hau

Yes.

comparison tougher And last get some These time. some a that against we've saw low go that those it's organic X% and on in are order Obviously, we got guidance the low implementations. the in the we've X%, to end growth year. revenue, that versus got end repeat long-cycle of the think we of that you QX implementations. take reach about, that in quarter. I To yes, to ramp your does point, X% QX as talked the fourth of to live,

that and full order Obviously, see some see acceleration periodic in went QX, QX. clients the of new into on to going there's live we'll it basis. variability deliver QX. We'll in in ongoing in X% a revenue year or swings So live

our the clients look Payments and QX, steady, out, to year-to-date is a QX, good market and Pretty on think a of financial pointed to as we QX. business, stronger our a go us broad institution institutions X% suite software combined I organically where services, up and really Fintech good Frank financial is which for with basis. clients, And

and year. that next financial out to continue level. anticipate into services, provide close to expect overall, fourth rate, quarter year and the We look And at us continuing that to clients institution to in that

Operator

Dan from Dolev of Mizuho line Next, Securities. we'll go to the

Dan Dolev

was maybe you way X capability, us think to in you're Frank, its in Congrats. like terms if the projects kind some out, more people quarter. Melio Zelle, all can interested this you of give that Fiserv do could BXB Great think them? years I particularly with the hopefully how of planning color, X, partnership. of change the

Frank Bisignano

thinking bill our capability I'm to their allows with and pay point is SMBs channel product who to exclusively this ability base. And ultimately, in and with want revenue -- outstanding them distribute the Yes. I'm really, a I increase to this great our are, not if and to client product about will really to we our to want the or make us works the I revenue. about have that change to necessarily it, think our that us our new CheckFree offering in fee increase go well actually, FI banks fact allow think

are Clover receive have. solidifying many position it this it's and SMB. be that will not and we in think card, something swath did the taking payments that clients them ISV whole clients. there I to not Yes, But our So of our is to via our clients do also distributed

expect us we're stickiness product in it. partners our we're grow bank and like And we to should SMB much merchant do bring and helping 'XX in again, of their of You more revenue, in summer portfolio. the our adding market business, the on the once

Operator

the go to of Baird. Koning from Dave line we'll Next,

David Koning

years, have quarters Great or as job. commoditization. on what few in in have down. well? merchant been the going if been you've Like churn not growth industry, acquiring your of the noticeable But over shown the And you last really the maybe just anything, improvement churn? seen retention there's But yields fears strongest about up,

Frank Bisignano

our [ Clover to transformation in we base, ability think include to step good we've That processing ARPU to Yes. because Clover. which for back in a has a here get right? will I are. The include That second will there's lot we us a to Brazil. been multiyear products building a what in a business in wholesale talked business revenue to continue today. grow, is that should we're that about volume. So it's our how would producing bring business, but Argentina, we But we product allowed dimensions we you of we're And is stickier. include That drive ARPU are produce bringing on where the relationships those us what to a to make and And that clients. when direct just that's X that and client, is and churn see why best-in-class. we so continue flat, of like in being X core to XX% business more we ] have focused In $X billion of more

you single-dimensional that higher clients Clover, see aren't churn. Yes, in

David Koning

the X%. with processing follow-up. volume the for of in quick one was -- was ex QX? Great. And QX number QX, number that What What

Robert Hau

right at don't Dave, number disclosed I It's fingertips. my not we've have a previously. actually that

Let that. get me

that quarter, this a now full of year But talk the Frank this one excuse brought capability -- business, ago, think is me, one to from processing-only merchant acquirer. everybody being about disclosed years just pointed this long-term we the I to service what is or exactly elements that and to reasons or a out, transition of

an Merchant building investor we XXXX value-added our In services capability, that our conference Clover becoming business, out March about on operating talked system. software extensively

have system We an operating clients. SMB for

operating clients. have for an system We enterprise

a so the becomes much only standpoint, cases, volume delta. the the a the value-added eases not the many processing company of better from fraction the processing merchant selling acquiring revenue volume we're that merchant And processing but services. to volume And are at volume for a value we as a bit acquiring, doing is impact because, point in

rate essentially quarter, representative company. for volume from more you delta opportunity that an in the a volume that's saw this very overall plus the previous year. strong last is segment the Merchant organic overall an growth X% seeing the to of at you're volume quarter, year, in QX enterprise last SMB And why And

Operator

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

Ramsey El-Assal

in step outperformance are in ask And meaning it Zelle, the thinking mix, software, you you're to Clover a wanted sense. active how makes by I about sort of taking cetera, control. that business driven the how margin more sustainable thinking expense versus about about management time, et margin or of back, drivers be seeing. better a is guys expense kind context terms much of just the of And asking more I'm over a seeing this if may year

Frank Bisignano

to clients? do we we That's it. make up, How on deliver better, all eliminate I Yes. we get how always right? we it it How work element just do things of working every how do make that's say necessary? do make we not do better? How that's would we're that? an better How our do for we day, And better quality?

The And is incremental high-quality very, other is revenue strong. drop-through element of very growth. our it

we've build we're would plowed our it. completely our investment, I meaning business say deploy to and So and invest continuing in into, to been resource business

-- on we rate and excellence. have our But of incremental business strong the working productivity is We we always talk drop-through very, very have. on We year quality. operational are about a

never as be So I the one a mix element. take it or other. We're just would to going

I my in investment, As that. the but do lot 'XX, we great feel Melio be out why And an in a will example. product of summer of the said discretionary remarks, about we have that's as

So drop-through, high-quality and client continually revenue, good better stats driving productivity. incremental

just one. got it's do all be don't We to So of it.

Ramsey El-Assal

Okay.

me. above. A all of quick follow-up for the So of sort

a point over a that think stabilization period of On you wholesale a gradually business coming? Or part winding we that over volumes, sort we kind see should down is of the time? Acceptance kind think Do of of this how long evolving time? the business should about of of of very

Frank Bisignano

of all, the billion. you about fundamentally flat right? ] it talked should [ We be expect about we flat, Well, in talked first by it $XX to as

better what's may of mean that There's big there, in a volume, less processing. in mix even yield Now right?

a as We a bank my ring ] of is won't to be business. correspondent it, the have our I'm a running it get piece is correspondent but our and always clearing a said, and And to for we going emphasis and on we business. it never on tomorrow, covers sail running by $X But an bid I've direct as maybe and another the is lot this [ business billion growth, business full business processing could view of broker-dealer. definitely processing. I growing that have way, ISO us heritage high a clearing just fixed. with everybody,

want turn I'll see to don't be flat have zero, Bob. it picture. in And I as that 'XX. So to you over we said it'd We

Robert Hau

we referring is Frank revenue that we In now, revenue. $X X $XX flat to to by XXXX. worth ago is were billion guided X almost processing when million doing about of what, that Ramsey, of $XXX billion to -- merchant years

the will shifts be will that I there the There adds, flows billion will Our volume. a outlook volume, think would that be there's used processing over that, I bit remain flat you'll -- some $XX ebbs be assumed to term in there time period. get deletes, little price, and of

back that is happy volume SMB acceleration. $X to faster anticipate merchant But just will manage it By of go of levels. enterprise revenue. we'll seeing volume That effectively. And But we're an is to revenue billion, continue than about then that it capability for and have the processing. or end X% overall, XX%, that business that as nice to question, an bit XXXX, of and that being QX was, $X XX% it ex the order around I means continue be before us XX% and our to going it up from much to pace our revenue which we full billion acquiring a of next grow processing, QX we're in acceleration that's a to the at magnitude, David, we your question grow a our

continue see So and growth, what's that's good the driving us. line to for top

Operator

KBW. our for to we'll Vasu And go question, from Govil final

Vasundhara Govil

I And congrats on the for these Frank. great one just my banking CFPB first regulation Frank, released quarter. open guess proposal.

organically, meaningful... you that was time that as to and a so into that year, not goes have banks that effect Or already do for comply? Fiserv think of Assuming some opportunity sort is next happened revenue

Frank Bisignano

with conference, clients. it ] every our what at for to listen was what want at did here them Forum having [ bringing to on. business. to we I client was run AGBA day, or did at mean what talking what do XX organically out whether X,XXX huge we with clients, Plaid, we women by I We're more to partners. We we client if capability to you and think look just going going in it a we -- CEOs a veer do an we're We're really out but to all-day franchise. always bank

try And client been to our has banking align so for way on, franchise. and we're a open in that going continuing

Vasundhara Govil

for Great. Bob. one quick you, And then

benefit last growth. helped you that year, the Just revenue I had pricing know some the end year, towards of guys

about fourth Acceptance the segment? of volume growth how we Just spreads should the think in quarter in terms versus

Robert Hau

be we're year up put enterprise continue I deeper organic, at yes, us. quarter penetration expect as growth strong think the We'll to we continue -- so we not to business, we you'll full think said, in And continue On revenue of to we the only XX% space. the in but a have to very value-added growth. another the basis, services, ahead see as teens. small see good year-to-date in also I good of high

Frank Bisignano

your your with you to team everybody. IR have for Thank a great and participation, to We really time reach day. feel questions, any appreciate our Please out attention. free and

Operator

rest for all Call. at participating time, in Quarter your Earnings this concludes have That day. Conference great you of disconnect Thank XXXX Third Please Fiserv today's a the and call.

Fiserv (FI) 24 Oct 232023 Q3 Earnings call transcript