FI - Earnings call 4 2023

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Operator

Welcome to the Fiserv Fourth Quarter 2023 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 on the of the and year and fiserv.com. release available are Investor earnings materials quarter for full Our Relations section non-GAAP of those Please explanation to the this materials these GAAP measures along financial measures. applicable the call reconciliation refer on measures the for with nearest discussed to of an references comparisons. stated, Unless performance otherwise are year-over-year

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

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

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

Frank Bisignano

and capital empowered portfolio and distribution excellence. to performance, Thank billion strong performance. by organic all for $X.X to client to returned industry possesses These assets to Fiserv today in and In adjusted XXX free plan Fiserv financial margin leadership shareholders you, are our assets results year than more billion organic sustain demonstrate and adjusted $X proven growth discuss to both expansion, network to through strategic share. Julie, continue because and is revenue points XX% a growth, thank deep share, for joining we of of in repurchase. growth set our product vast bench earnings vision combination basis resources you another per technology double-digit with per as us revenue diverse This unparalleled a operational of share adjusted in and possible from cash earnings of how that's our operating base, XX% we a and flow our XXXX,

to not November, great further improved are to time, productivity. continue and for our We our several on Conference At for everyday. revenue same strategies opportunity of more. at executing we ways we culture We the to identify those growth in Investor laid out and drive are satisfied, we and continue that aspect push growth fundamental remains continued know productivity. is that A we

is years Fiserv. XX-year to growth. plan a First merge and adjusted with we Five record our the with half Under the a market embracing an our earnings share ago, leader a operating track double-digit benefits are where merchant structure, integration are payment Data of and SMBs we company company, Today, of value-added of announced enterprises system of high-growth seamless new the solutions. X.X-year-old solutions in per

institutions growth in more The migrate financial recurring well, and leader with banks IT and model and the us financial helping businesses. is larger is these intersection and playing banks field business market, a the X helping to services consistency financial technology. other revenue combination half, of level solutions has larger software small- and high This our served even the next-generation compelling at of medium-sized

a financial serve see financial merchant merchants services integrate and better offerings. strong enable retain to to merchant customers opportunity to institutions to continue and cross-sell We help with solutions and customers their financial new

unique positioning at of is its important in ecosystems. these Fiserv X the center

targets operational those results. In and culture, Let's step the important we our our We take commitments. review our X and another back delivered of aspect subsequent years. XXXX, formidable for set XXXX They delivering more. on late a highlight and on financial

started basis XXX we basis started margin or $X.XX guidance delivered XXXX, We of And of with XX%. with XX% a $X.XX to growth. growth with and X% operating EPS guidance growth, least delivered we at XX% and delivered For of $X.XX improvement adjusted X% organic or XX% to started XXX goal of to revenue points. and points we adjusted

was quarter. of adjusted organic revenue achieved fourth we strong an XXXX, operating quarter XX.X%, quarter, from margin growth fourth the XX% basis XXX of excel up In and points which exceptionally

we very was shares last $X.XX repurchased strong payments X.X flow our on margin. billion shares, Free strength than revenue and merchant earnings share of also cash the diluted and year. average year the per with fewer expectations X% of million adjusted was outstanding Our ahead at ending of $X.X

growth generated of XX% remained of segment XX% quarter revenue expectations growth the organic the outperform. and the in Acceptance our continuing healthy Merchant the XX% year. Our accelerated in year, quarter and Global at to start revenue particular, to respectively, as in and exceeding SMBs restaurants, full

the Our XX% XX% embrace distribution rebounded to in-house partners to rate. are in mid quarter grew more revenue penetration last platform. client growth the global at year in continue Value-added to processing XX% XX% revenue end our XXXX or solutions than the Carats year. excluding that a

by India's planning of year. XX global We wins recent and key this in clients a largest complemented by new In unattended has into deal one experiences JCB driven position our networks the payment charging ramp of more country's with sector, for seamless methods was provide the Japan's we drivers Growth for adding UPI leadership capability continued our than expanded by clients, as stations. which the to using markets. payment energy of

signed January. a and during have into in new and and leading we acquirer EMEA included renewal several merchant Outside new with U.S., a It of the a business and with relationship deals QX QSR. pleased retailer equipment to major extension a were apparel leading

is Additionally, to stride sign-ups. hit Bank merchant with accelerated with venture now our its beginning Clover joint Deutsche

options airline allow full PIX in operate with provider, payout reach with expanding more In fixed we SLED into merchant clients to In QX. Fiserv region. solutions new with of our instant the pay to its software signed outlets. groundwork merchant Asia consumers in merchant the up bill a we at more continue laid acceptance payment fee-based the India from along SLED to service that with Brazil acquiring Pac, acquired live Vistera, is as payment a payments a universe. support transactions Casa and for in domestic ramp America, the in direct deal Latin acquisition We've company will for a went Bank,

in Clover growth in in Leave our anticipation continues merchant high we April, in position engaging X-year be acceleration new Brazil. activity, advance macro will With out Argentina, building further beyond our with and of expect we more Argentina which are the to our rolling more factors we In inflation on In interest growth. Clover, leading rates. Clover merchants

organic of quarter year. medium-term and our network, including merchants added Fresh range Reg guidance e-commerce to eBay wake revenue to end segment and Star of Uber, clients debit We and in QX II, the X% the large the with and its of payment achieved nearly Several Hello for Accel, X% XX in in the year. and in are the earlier The growth new Lyft Fiserv. others these top

behind receivable well clients is In the proving BillPay, our valuable signed business financial market-leading consumer BillPay the XXX real-time for our expand to new FedNow we Director the Network of In space small in as payable of include to XXXX, to business we rails and NOW their payments. payment over SMB accounts build-out institution offering. complete our billing our

digital Cash came Fiserv just U.S. product. client in long-standing We These expanded our its quarter. just cash last essential. billion Bank movement now won the essential. relationship Washington assets. fourth after And with a with months few week, flow to X Federal important first Bank wins in money $XX the formally flow include announcing

institutions, issuing QX. strong both solutions many on The the progress interest pipeline is and we our early rapidly business. and about of conference, At growing in new largest. value-added and including our demand during XXXX from verticals made talked investor We with significant financial

grew One AI-based Xx of and Defense services our volume called nearly XXXX. fraud over value-added prevention tool Advanced

more XX upgrading advance accounts. in to the across than defense portfolio process is its of million Synchrony Now of

this We're excited will of network rolling through Development prepaid other out live for be Employment our cards. month. to go largest plan state kind the benefits Department program California later This money and its unemployment

this a have on of grow in pipeline We in deliver other government the sector opportunities vertical. to strategy to our

to This FX deal year. also care, with In take open currency the services later FX extends with we global their EMEA, first where health solution onto This of of their converted remainder value quarter, scheduled the mitigate diversified portfolio FX platform we in signed enables this Absa, HealthEquity's a exposure one to significant to control and portion Africa's more of card for group. our our fourth new issuer bring largest cardholders. financial issuers

They license of In a With the new issuer attaching Truworths, Asia retailers upgraded offering to FirstVision processing Bank. a we and includes solutions. that our stack value-added Small retail Pac, management. will corporate fraud using full hub offers real-time we processing programs their Finance more card India Equitas India Africa, launch one loyalty, South client, UPI, the added vision in plus with leading and

X% in revenue Organic growth, a decline X%. quarter X% for increase for organic recorded was segment a full Fintech the the the revenue year and excluding The year. for periodic

high we revenue periodic very goal. growth knew 'XX, to had achieve QX we in had we comparison difficult While our with a visibility

clients are the wins at pace we client large X of client those trends. of healthy important In discussions our level in core and from QX conference Forum, XX in and in saw remains part, continue. the Separately, June, new demonstrating engagement

positive right here system First, a one are the needs that sign Pfizer they answers they the to core are finding from changing migrating to operating their another, portfolio. Fiserv within

Second, activity us services while without institutions provide XXXX, M&A and institutions compete creates good slowed to we among M&A the combined an opportunity we for believe with as any financial is any that to at platforms, activity level in can institution. it more

a CardHub quarter these debit making in our why trend CardHub segment, the Texas-based Solutions. us Old system that This $XX to across cloud-enabled are $XX.X is addition buying creating up of segments with been grow payment new Technologies also with client bank acquisitions. migrate solutions. we a are in a buying and solutions to a regional billion for Accel, growing assets services single our National the a value-added Financial value-added decided to of and it value-added And in our reason National in with our processing, These Old Bank, been is our Financial clients in has the DNA billion QX bank of X Indiana clients key platform segment Prosperity with fourth as we signed examples other Bank, solutions. X core continue relationship segment. has ongoing

XX% the the business, Argentina revenue and by steep following in peso XXXX, organic expect inflation of to estimated we total outlook excess company from growth devaluation Argentina growth to of significantly for X revenue inclusive XX%, government's the in of higher mid-December. in points driven interest an Turning merchant

investor We to least middle $X.XX. conference XX%, share margin basis provided it's November, our earnings reaching expect points This we adjusted a $X.XX in to outlook. and EPS should of the XXX of XX% to continued meant operating macroeconomic range and at the be prudent adjusted outlook at XXXX grow reflection growth per with in the improvement in is adjusted margin expansion of

folio for calls and ability as Economist to we penetration our savings in merchant growth grow add we backdrop, to consensus the and and to confident personal our add remain solutions. business. clients softer U.S. value-added existing XXXX, on in more potentially Carat more to headwind of consumer merchants and Against lower a a modest creating Clover consumption be sell to

Our remain discussions to unions poised credit to deposits. and they that and spend retain with indicate banks grow

that value-added We needs and system platforms integrated their most suite are in the every changing with business. solutions day operating offers meeting the broader approach of our

We power digital and Central, experienced SMB integrated win are encouraged solutions payments larger initiatives newest in our by FinTech and digital our existing with new banks Cash platform, Flow banking over financial the of to clients.

expect all and in these revenue strong growth longer adjusted To year the as to operating adjusted XXXX per outlook growth set margin course as our over We well and organic ramp share another of XXXX double-digit as we summarize, for expansion. subsequent is of anticipate positive years. for earnings stage of the

tensions. slower GDP tempered modestly sustained by backdrop growth level for only is growth optimism the Our geopolitical of and economic

remain diverse We serving work, innovation, pace at top on our revenue nondiscretionary good business in our client growth strong our our and and of to stewardship and categories investing control continue supports high positioning, we capital our a that the its trajectory competitive ability lines resilient hard confident bottom where rely mix through model with to our strengths. plain spending at recurring

the on Bob. details our on pass to For I'll more discussion financial results,

Robert Hau

Thank morning, and everyone. good you, Frank,

with full If performance, Slide and our on quarter focus slides, following on reflected business. and across company on you're momentum cover X. along and results on year delivering starting commitments metrics total additional our the Fourth trends detail our on with segment I'll financial our

a with our in Acceptance against strength by offset Total in compare. a company Payments and very was organic segments, the growth segment ongoing quarter difficult in revenue decline XX% the and Merchants Network Fintech

and we For year, the grew ahead XX%. company Acceptance Merchant which This organic guidance also XX% segment, by November. in revenue the total was the performance October grew led of provided full

sequential The operating increase adjusted Fourth Fiserv. to revenue to X% points quarter an income operating and adjusted total improvement company basis billion high grew versus points. $X.X adjusted a XX.X% resulting in post-merger basis XXX XX% of of prior XXX and for grew of $X.X represents the XX.X%, margin year billion, an a

per earnings of adjusted XXXX. compared the the of the $X.XX. last to XX.X%, results increased Full XXX EPS reform Fourth not earnings of to increase prior XX% devaluation per December Our basis fourth the share over XX% as quarter performance share government adjusted margin share year. quarter operating do to significant in to package adjusted part on Those an relating year. the expense in points $X.XX include adjusted brought year $X.XX Argentine full increased per year $X.XX XX to peso

one-day XX% increase results. This for and in Free $X.X the adjusted sheet billion rules a last the as quarter year. year, nonoperating for All the foreign to of our other for an XXXX of local flow billion included EPS $X the loss are move at cash for in throughout over came accounting. foreign full exchange hyperinflation exchange noncash balance GAAP Argentine required losses led under revaluation

medium-term previous includes looking guidance growth the the by and in our Organic Merchant Argentina. segment full above-average in organic results, growth revenue This Slide to in to our segment quarter an for X-point of Now transitory segment Acceptance interest of revenue ahead the the well to XX% and full driven X% X. XX% from year benefit inflation XX%. year, on the was starting

revenue quarter Adjusted growth year. and XX% for XX% full was in the the

growth in offset see and full devaluation from the adjusted Argentine that inflation very between and for revenue country's high of peso the the headwinds the interest can revenue. from You benefit of year organic the adjusted spread currency the

annualized X% wholesale respectively. excluding processing, and transactions and XX%. an volume the XX% grew merchant X%, grew volume in Clover quarter, revenue the growth quarter payment in of fourth Global

year, solutions, channel of and shifts full the penetration The from For up revenue Clover higher revenue some XX%. between was pricing. growth mix spread value-added volume and comes

a meet XXXX. VAS period. XX% to by up Carat quarter penetration XX%. XX% pace target growing QX, and had with year-ago in reached XX% strong revenue the on from in our also

the Carat For year, revenue grew X%.

American revenue XX% the a the and Latin processing client the in-house, for Excluding that moved quarter of loss both growth was year.

in basis Adjusted improved increased million operating Merchant margin points $X.X margin XX.X%. the billion Acceptance the segment Full income points operating adjusted grew quarter $XXX year basis to income XXX with XX% XXX and in to to to XX% up XX.X%.

is margin, expense interest of operating couple statement. reported includes that included not the quarters, anticipation on it you in of is revenue Over have the line last some cost income but in anticipation operating noted LatAm, our income as of the that as the interest below

we XXX from would to take interest quarter very pro back operating If for and for anticipation the expanded points and were strong have it still year. to XXX that margins points the forma basis income, a merchant basis

XXXX, volume similar at was overall growth, December's excluding to January's Looking processing, pace.

then. in points period U.S. healthy Small X-week large since small volume a weather in slow seen the did January. throughout growth businesses volume in portions for but mid-January, environment steady in Difficult of spending a clear improvement growth also Index for The we've Business Fiserv to

Index $X.XX, Small X.X% adjusted and of year-over-year a on representing The index is activity seasonally Business pace X growth the indicator but value of on growth measures and Fiserv not basis. client from X/XX and December key Fiserv U.S. of X% of rather results, of a this business a activity Fiserv a with direct reported base. We general health measure February of of small

a by Payments our was to revenue quarter. Turning the lines. segment. the on Organic business and variety grew enabled in X% This across drivers Slide growth Network X of

quarter. financial and for institutions or Zelle of live strength respectively, at growing saw We in and have XX%, well clients over XXX XX% and with FedNow number implementing continued transactions the

medium-term up organic year to X% and Fourth had million end the fourth at X% the to to $XXX was outlook income that revenue basis up of adjusted the was XX%, X%. productivity third-party came for growth was our operating range year XXX segment operating X% upper quarter points working Full the driven of leverage by and some throughout margin quarter. we been on through in of

margin to billion to expanded the $X.X For up XX% was adjusted full operating and basis points XXX income year, XX.X%.

X revenue decline had full periodic in wins the momentum for to organic excluding We these cases, our end the for for some year. quarter segment. Technology year. for strong and reaching did but We quarter, quarter reach bottom Slide several core our as in Financial X% license the year ASP expected provider in full and revenue, grew posted continued not materialize the XX chose the to of full a year sales instead XX X% with guidance, Moving the X% revenue application client Organic service wins in growth the clients model. the or

This in the host of was spreading income billion our clients Adjusted own software and million operating effect revenue out of at over purchasing had payments quarter we in It licenses. and the it instead $XXX where lowering to the software is multiple in data instead monthly centers as $X.X their the flat down QX XX% years. for in-quarter year.

decreased Adjusted segment for million revenue. XX.X% adjusted was the operating basis $XXX $XXX XX.X% Full corporate for the The increased XX.X%, operating XX quarter. the full periodic XXX the year. in adjusted the with loss The and was points points the margin lower in to tax XX.X% basis quarter margin effective quarter to in year. and million in rate the was

adjusted XXXX our the turn billion debt EBITDA to Total be for outstanding full another XX. was effective X.Xx ratio dropped rate XX% the range. leverage on expect of $XX.X adjusted The year. will approximately December target within tenth tax debt We a to

have instruments. our variable XX% of rate We approximately debt in

XX of had last the billion, diluted our levels. and billion count for quarter, the at share repurchase X.X share fell we XXXX authorized bringing $XX XXXX shares X% total quarter. repurchase share remaining million the the in The from end million for We average billion repurchased shares nearly $X years. During X $X.X to

by innovative and XXXX, complementary sheet, a allocation share balance and Our will repurchases acquisitions. strategy long-standing continue strong capital defined in

Turning to Slide X.

earlier, of double-digit As XX% our earnings represent share Frank XXth XX% consecutive adjusted expect of revenue said per of of expansion with to to over This points. to translates XXXX operating more margin would $X.XX EPS than we growth year and adjusted XX%, organic or to basis XXX XX% adjusted growth $X.XX growth.

Merchant Solutions, Argentine to XX steep of This growth at In due November the including the our revenue organic mid-December. in given than investor outlook Argentina. percentage anticipate the we points higher XX% to transitory the in of XX% in of effects revenue peso is conference the growth devaluation range,

we Solutions, For this organic to Financial year. continue expect growth revenue to X% X%

at approximately for XXXX. free XXXX, paid estimate $X.X credits tax companies In of them. half a we X. cash cash a payment to second to defers the new initiative discount reduces earned the launched from and credits but cases, billion tax This green a flow who use continue in where quarter buy of many cash net or cannot the we We by tax purchase

headwind it. A for expect recent more world XX to to will This new codified this be the so years, to credits refunds cash a bring and will continue are from a and tax for flows. half quarter when in when in tailwind second received. the In we XXXX, the we of variability some benefit our there quarterly first practice the half first paid

While we expect to timing, continue we some free of year $X.X cash billion. in flow approximately shifts do anticipate full

for turn some to the With call let that, Frank me remarks. closing back

Frank Bisignano

to employee impact. few engagement align and minutes Thanks, operations Bob. with responsibility, I'd business a to we commitment maximize highlighting Fiserv's to corporate spend social which like

employee the Pfizer an includes second X report that the CSR resource and clients and their Cares grants and serve to in development we our of institution which groups, to Council, our MDI clients be Our other Foundation members. will businesses depository formed better next back-to-business continued will program communities, Advisory and our quarter awards minority small published demonstrate

Investor through the performer ESG sector, part collaborate MDI efforts Institutional value in for Fiserv first the processing the services CSR of better they its for to efforts clients council our and communities deliver and our company. recognized the The payments, as serve. in and IT a top

and indices Human Rights Campaigns Our Gender like the Equality Bloomberg's Index recognition prestigious Equality programmatic efforts Index. earned from

admired Best We we in Fortune's received one #X we week, Military marking world's XXXX, companies XX years distinction. most the for time this also last Employers And [indiscernible] were that Times Xth list. the ranked of just on honorable named

highly While in innovation. towards among scored categories, we the many highest

We leadership, global are other particularly proud of for as competitiveness value. and people this quality, product as standouts category investment and long-term service well recognition

of the engine. As driven we expanding to feed by solely proliferation technology ahead towards underlying advancement of also not data is but XXXX, by generative of that the look in ongoing coming AI the capabilities

the data Fiserv, for enabler For significant our on innings clients path to be using of the deliver as to start based early systems stores of of runs in amount benefits information operations a Fiserv our and AI-powered in and it our we already with in year. valuable We're AI. an actionable of of to one and come industry, and quality, and sheer most well a each us growth. through own put our strength user productivity position the data optimize the simply insights that manages intelligence from effective on

institutions. The us and in AI applications on is helping fraud as and the trillion data such X.X Carat tools. $X analytics Clover merchant deposit users fueling XX accounts accounts payment globally across across of XXX service, plus BillPay mitigation of our enhanced X more and financial locations, loan dashboards already XX,XXX file million million Over customer throughout our billion nearly areas business on than volume million power card

X an potent increasingly share we you ways with Let data me AI are into turning assets.

for service better by and creating clients insights ways. we're helping data actionable harness First, and them our

high of rates. satisfaction of XX% with service were client example, in an the As data calls use AI through technical resolved unassisted

Additionally, year, assisted over AI of online million learning. X support than inquiries the resolve last technical highest-level more the through

assets data Second, build data advanced such to security capabilities our packaging products. combat solutions to third, into other we're And as used being our embedding events, and risks. we're fraud and next-gen value-added AI rich

an our for investors February financial of we Earlier new the monthly, published real-time sizes. timely SMBs all measure valuable it of policymakers, January Index, on results X, instance, institutions, consumer discussed we a index, spending extremely the Small released businesses of assessment Fiserv Bob current for making insights launched environment. enabling of year, and Business the which at this

to choosing say, the how that like Serving outperformance all us with I intellectual it investors. is clients, investments, our and Data run prioritizing competition, understand apply honesty in analytical to communicating the assessing is our rigor to our and company. partners, we the enabler Bob for this As our do. we

dedicated discussed the worldwide extend including open With many the on of leadership I rigor, this will reach honesty adopting data, that practice XXXX associates intellectual continue our with fundamental assets and and this through our With operator, its please that, our beyond. call, with I'm along Fiserv to confident sustain analytical line for questions.

Operator

our the [Operator go Evercore question, first David Togut Instructions] For we'll to ISI. line from of

David Togut

the question ask Good the to see acceleration growth. both follow-up of continued I'll Clover my and upfront.

of So relates in looks first, the XXXX, X an in like growth in ppt for revenue organic guide about to inflation. increase points it Argentina specifically increase X the that

So through segment your versus in revenue assumptions -- operating the organic at if walk could changed growth by how you November initial that's guide Investor correct, have the Day?

Robert Hau

David. Yes,

would XX% from assessment growth X said the in We've We we segment. to points about that company. XX%. XX%. to and of organic went X in to the points previously expect inflation -- favorable points growth the growth interest that, -- back about November, now up excess of interest on company. now impact expect or the right company impact and total the is about of Argentina merchant higher-than-normal X the total drive mark, Your revenue total XX% the to We is inflation to indicated

of normal the what the The really is back of and with consistent "more growth revenue organic expense in increase we remain the company organic growth" out interest segment underlying to -- and in Merchant inflation attributed and growth higher Argentina. of saw the expected essentially, November. So

income is other of and inflation the higher in and higher our and currency revenue about a FX natural increased rate in X interest drives The excess points our that November. statement we from also or element, adjusted November about there course, that is counterbalance also talked as in a variation headwind,

So very isolating net just our adjusted operating consistent out EPS, our our that impact. Argentina revenue, margins

David Togut

expect then And in follow-up. if Brazil so, you then What And callouts? a I you mentioned expectations growth XXXX? Frank, just Clover in Would are rollout any quick acceleration? know, revenue for April. continued your

Robert Hau

back about really XXXX. accelerating gave the Clover quite to Clover bought of rate call Investor our into March outlook bit the on back our overall, an acceleration XXXX. in we a in commitment growth where fourth quarter XX%. a Yes. From in we standpoint, saw you updated that focused XXXX We We've Clover talked actually to out revenue where the in Day of to November

we obviously, another year that for Clover of for believe, adding $X.X XXXX. XXXX $XX our billion then to deliver the every suggest good get We but the and about good the overall that company Clover that I elements wouldn't we're trajectory. a driving to that against and So feel going are quarter, growth billion XX% outlook, single feel there's in that trajectory. of lot continue we'll and total for $X.X about billion we in

Frank Bisignano

time. about talked I in that Brazil. long a just we for work say, would And We

us expect country have to rollouts. further should You

the which getting begun to and some talk You've stride heard Bank traction. about Bird, hit Deutsche has us JV

new set to You've the channel. our we of path that always definitely highlight to We nothing out were tracks book and be about there is there, some the which of heard us XX%, would growing back we also talk we're a proliferate about pen add was you I just we talked rate converts XX% centrally. And we'll of back about. book natural rate that about number believe ISV the on. see laying that exactly ARPU. the up that And kind course, beginning fundamentally, in pen have numbers in at

and we distribution its continues job, it Clover have the to it. the into do function paralleled are So are to and bringing networks then geographies more

David. thanks, So

Operator

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

Tien-Tsin Huang

and there Clover. side transaction favorable, follow volume merchant question to and wanted on with total with is on both I quite The really David's the still just spread growth. with

kind promotions So cyclical services reversion looking well. should of with tightening and we as value-added expect plus out, you under mean pricing this mentioned some that

can do assume what all we're the to So . there trying we exercise? since benchmarking

Robert Hau

billion Yes, and Merchant grow to to Tien-Tsin, of 'XX part between and 'XX. strategic it's $X.X and actually that something and I billion for $XX in billion spread think certainly, we've Clover is revenue, continued $XX billion to $X.X to our that to by plan volume that and see

I comes value-added capabilities we our software, more merchants. to what think sell more is ultimately, it to services, down more continue additional to

ago revenue to reached than good volume. we of and see channel about a march see that The by continue grow that. continue up ebb points growth across X we year direct to there's to going full continue You're quarters, towards will to That different mix XX% ISV in the where XX% sell services. are great quarter, the faster revenue And XXXX, a penetration but today, and from more spread as you'll overall. relative opportunity see will we to certainly, value-added flow benefit to

Tien-Tsin Huang

Right. revenue faster Right. volume. Glad get Good. to than the

follow-up a of good Bobby here. lines all both I -- just Just lot quick talked wins then across the Craig a about and mean

about the thinking Or see large activity outlook should you in XXXX, more products? cross-selling for lot some for year? you do is new deals? we Just it expect deal or new the do coming this of a wins with of see What

Frank Bisignano

Central might I I suppose all I mean, talked also we you of about. above. referring to I as think wins be Flow mean Well, the it's Cash

pipeline should that And our is but deliver of their we're opportunity, what large always continue new been we've It's we'll on us New very then a technology do better area we you generate have of helping doing expectation And product play we to doing and cross-sell another believe product have just we more. client a to wins. expect rollout tremendous where also lot our revenue, base. opportunity there. banks

Robert Hau

of with to quite we bank I is you on a morning very large announced client use internally U.S. a big deal cross-sell Tien-Tsin, clients. we and ours. are we a bank a use wide They expand currently something this term a Flow check-free Central, Central consumers. folks bit. for obviously the but Ultimately, cross-sell. now They talked cash that's transaction have We a about. of to businesses that mean it's The swath large to And flow for their Cash merchants. their They'll

also It additional of existing sometimes new And continue base. so selling be capabilities to client will we'll but lack see opportunities. our to logos,

Operator

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

Darrin Peller

in Maybe of had quickly. more understand of for and outlook on comps terms called in Day. And about a had on side, start, your what the help strength. expected other the revenues. the It's think great across fintech do anticipation Investor out recurring you to segment payments little that you we software the of again. a to ASP period just time out just impacting now know real Fintech a revenues. obviously you When when the and sales us that you see to I the combined raised means merchant bit to spreading your of tough want I segments license initially side know terms revenues touch couple I

the So that you And could drivers both track? on in if you revisit giving is really still just confidence segments.

Robert Hau

Darren. Yes,

the always So license, transaction. depending is a month a over client contracting. a contract, month or ASP December license transaction typically, We a and you of but the an a you on a we you every X-year period, on activity, product per One, deal, good. certainly basis, transaction large or when X- that's license on depending to convert goes account a that's get Ultimately, things. sign the X-year that for maintenance, feel a per instead or actually us. economic couple license basis per user big when license is high booked chunk. the and you pretty a get better for client a When single ongoing

transition. like that we So

you and bank a network, the organic look combined segments, at union XXXX's we about on did and facing and results combine and X% basis. payments growth credit Fintech you If

back we X% to reiterated XXXX XXXX, actually what beyond the to new a and to If in we into fintech range X% combination that and you X%. be expect segment Solutions, accelerate we is largely up November, of which look and Financial X% for the payment to existing at combined our outlook in segment, that for said

to feel growth solutions, live So our grow Central, as good into of payment and capability selling selling overall that Fintech the of adding and feel Flow marketplace, our about Cash the overall ability product benefits like things gets credit that about business, into to continue banks we unions. the good deeper the goes portfolio, more

Darrin Peller

on you having the a about opportunity mid-XX% up again. Okay. Frank, the quick merchant a the plus just a VAS talked to range. big And That's helpful. follow-up then lot side penetration side

this a you nice think jump quarter. I had

there's may lot as drove again touch a rates you combined that, over or just have -- year think if potential with more maybe on assets So the change. what now right and this you M&A tuck-ins chatter for

guys? the So anything you on horizon for

Frank Bisignano

I our board Yes. the across hands really we company. mean do like the in

fintech, think really proved add us has I compete anywhere, like anyhow ability see which You things to really complements our with itself. which along DNA,

verticals, and out doing complements retail to we're more still merchant we're what and on business, services go would in be that continuing largely Bento. you the If building focused

others to mobility and that always any X,XXX will ended and pen at is think investor we're give tagged institutions I us strong, what to software to on or unbelievable do experience things more invest X,XXX our being which forecasted. think you've we've taxi product it. in rate dot, and do banks. and continuing Bento our Obviously, add an our to up like to functionality Fintech continue minor opportunities as We we're than to seen to looking

our we And looking how us be So functionality. to add I all think we capital feel we We're great software you I of you as good continue been. should always hand. deployment stewards have to about at feel hope expect

Operator

to Timothy from Next, from line Chiodo we'll the UBS. go

Timothy Chiodo

partners, color of it for revenues the or of hitting could SPXXXXXXXXX of came maybe is remarks here, sense JV below Clover, prepared the mix that line partially to we of order and channel distribution line? the wholesale the You sales because you that shift they coming I course, clearly, or magnitude some retail of also the volume that then, of but on to non-JV get little due XXXX merchants Clover. income ISO. kind being so the are a new differentiation in just direct versus directional be revenue asked, and strokes netted hoping bit adjusted the a equity could out I provide better broad whether cohort portion And whether was across bank across on be mentioned or partially in

Robert Hau

Yes.

business transparency side pretty variation that's Mexico a tried as we've a in going Argentina great of LatAm Clover as the is part to bring interest the we growth a to Brazil. on "excess", but LatAm give in around down overall of I business. significant last we've in business. think Obviously, our tremendous that business inflation" later Argentina, question got Clover We'll this in in just on the "excess add year. on, with

feel we very So good about our there. overall capabilities

would the I we first To our distribution question, the expand to of say, part capabilities. broadly, continue

We record bank have ISV a partners. track channel of ISO partners, and long

we to is continues that pretty grow, a not capability continue grow partner that bank but direct We And of only traditionally significant of ISVs, pretty channels. in -- the Clover. that ISV but a makes to had not also meaningfully with for have big us also channels choice, business, ISV having into the asset expansion Clover

there. little So seeing -- is organization, growing as see probably It's direct the bit of growth of piece the newest it's our of we business but growth, percent across growth we're good the a smallest a but fastest the a piece. board.

Operator

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

Dan Dolev

the services, great capital? talk XX% quick Can impressive growth. value-added split bit 'XX a really question in software on, is maybe here. the to My results and you first Guys, again, back between little about

Robert Hau

about asking You're XXXX?

Dan Dolev

XX% 'XX. mentioned the growth in Yes, that you

Robert Hau

for split a finger in my tips. have necessarily wouldn't you I So

think you that consistent. remains to look I relatively get we have capital large pretty And we consistent. Obviously, tell think So given you. software spending, been for nature I the it's a would that our that relatively can of I and software always business,

Frank Bisignano

was look you're asking? Dan, that the at software component were and over was you largely the what you capital? question asking, what if Was XX%, component

Dan Dolev

exactly the service. value on Yes, added

Frank Bisignano

would software large it I dominated. software. it, I'd mean majority call be, It's

Robert Hau

Sorry, hear spending. I CapEx

Dan Dolev

Oh, I'm [indiscernible]. sorry, yes. There's

Frank Bisignano

here. we got X why years That's

Dan Dolev

big by opportunity then for Can the maybe mean, opportunities size you imagine in I Reg about here for would one the the And quick this really Star of networks impressed just Fiserv. I my Accel? a drag. that a follow-up, benefit the II. talk and commented this is

Frank Bisignano

continue been the Well, Star network, committed to debit within assets their as and to strategic Accel, I have say, we company.

turns As Reg reality. into II

for heard like AI But embedded Fresh nearly out you the more us we some compete heard There's fabulous obviously or wins. household in or looking about talk You've us opportunity. Hello at every had fact and of Lyft is at opportunity level. there than that we competition those that XX others what give transactions. names before we're Obviously, these that

a to we determined It be Reg off it's II the good to think decent longer start. opportunity. the I feel about haul, So but remains over

Operator

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

Jason Kupferberg

wanted there from of recurring ASP more kind the -- follow forward. you kind what Do where switch broader a now that of that's on just trend? sits clients? saw revenue one-off FinTech kind you the to license up I that from this to of you Just projecting handful model a to segment switched wanted around of dynamic as and us this versus clients and of the periodic see can the of where you more percentage model. the of the terms give a front with segment development recurring on kind anything Is maybe going you're or in

Frank Bisignano

Yes.

but series we thought we go of year a X%, visibility on of back they sign the which had we full nonperiodic there's revenue. a to number And of I'd think license, transactions, I license. but ultimately clearly, became factors. ASP instead

quarter as I in would in everybody it been down to years month going software where the last these is any for the sale, things buyer wire. that of is historically to like done. also and where quarter fourth awarded Like been remind having We software jobs fourth know, have have

think that clients way factors, will ability the P&L not their to it too, but I trend, necessarily different a giving perform and the we year, series better -- does have regulatory, of. it's that given it So believe than given license saw and last model their a clients, would in cyber, ASP who help is of

think we've seen be the choice. not institution-by-institution I lot I think an time determined. first it. it's a It's remains to And

Jason Kupferberg

Okay. Good color.

application steps, that's that saw merchants. on side the separate the talk to whether a additional on Fiserv be, for solutions applied cost would or to provide last Just line Georgia. bank potential month, what the about Can you approved, in to just get we benefit potentially to note, a ability charter time Fiserv

Frank Bisignano

ABA, able merchant them. we license. within for the that, did needed specific specific Well, purpose with yes, because our our sponsorship pure we to ability we to as merchant me and MasterCard Visa not allows to to about institution communicate very of sponsor of that have be bring than clients. banks. obviously, Fiserv to valuable acquiring. acquiring more a to let clearly own for outcome why bank before. We're there's very is the allow be we a license a purpose It's clarity that a to that's we be certain bank for sole questions a talked Very of instances for competing the And is you rules. will what that And that could before control purpose Historically, in and our will lots clear can our us applying

not have ability banks very sponsorship we were others, can that and First able more It the it. help bring and when great when have we you supports than you probably portfolio the in our This bank community in and and cross-sell not have where our merger as which bank know, sponsor became do banks all banks smaller clear our world business We valuable. Data our to who to grow. ourselves businesses, our take largest other we the partners, to merchant ultimately would business and be would have

Operator

Dave Baird. question comes next Koning from from Our

David Koning

Great year. on question my And merchant. guess I

And from you about guided XX% organic. and then to you XX% FX benefit talked inflation. XX% So

and a bit So core range, you're XX% international down is to of taking both America North a quite to in presumably of which share? of kind that do grow XX%,

Robert Hau

Yes.

obviously, the business merchant growth. good So overall,

than more in that But definitely Europe, than business and opportunity there merchants organic all good growth rate. business, bit America, of Broadly all single-digit very Our most international growing the business and and larger given continue to standpoint. also. international to services nicely. is Latin APAC, our slower And higher business, an EMEA add meaningfully very size North a America, American the regions. sell growing regions: high Latin the the X obviously, growing from grow

David Koning

those seems in expense will FX won't an not add you XXXX? back. again anomaly, XXXX? that to through back how know Got I losses, be add you. you big you expect those interest maybe And a follow-up. do just quick like the And QX

Robert Hau

Yes.

significant most put December, which was the be sure we're was into of impact only that we place not clear. because it stays the require But devaluation is non-normal to of X-day onetime quarter, What we actually with that little Argentina of every So XXXX more statement. was rules sheet every and course, the Argentina We did day out a the let the a fourth balance significant did sheet, deal, -- of sheet. currencies or revaluing exception was transact December highly new revalue inflationary, was than in balance not you me XXXX. accounting on the through balance of We really hyperinflation it move nonoperational. the income adjusted XX% day it the the make that or to the felt It President XX.

that dialed we piece So out only.

one All of in XXX than larger the other in days what through went we took fact, day. And statement. were that the income

evaluate in times We've be our economy. Latin unique decades multiple may there's down cycles running that. there. in not to -- XXXX. if another through have anticipating Argentina other deval, that. occur remains some are We're we leadership think these business a significant of got that things leadership. "stabilizing" that America will great that We It's that, We Obviously, have seen. over are been

feel ongoing being detail of the very about able we This dialed out. what is we things. kind handle good one-day So to normal onetime

Operator

line to final question, we'll go Shirvaikar from the And Ashwin of for our Citi.

Ashwin Shirvaikar

the expect margins, because with year? imagine, what least segment comp, half I tough would the guess, And cadence of course a of guess cadence my to I I should we the factors think mean, of year the back the of much better how comp, I through of course lack through that. then year? the Carat, of reduce it the like out? at and Because segment year? think, regards how, question the plays of factors to Does is I through are, with there Argentina couple impact we regards revenues should

Robert Hau

Yes.

in the putting of we some anticipate rates by ease half going that year I interest in in half of relative to expectation half I nuance the big or improvement But across with because the than the hopefully second the is think, expect things course, comparisons deals first see and are acceptance there interest line first margins. in higher some seen. in inflation the organic rates year merchant they some what's the generally off, half. There one inflation the segments second don't within of to individual broadly, across to government obviously be place to with be and their broadly, on a do I board with remains offset that individual revenue specific the in second would that's of FX. in our quarter-to-quarter the variation But business. as the from economy or first company. half

basis, So standpoint and a an relatively margin on EPS, revenue adjusted stable. from

after flow just half. the in full would talked some about a of we year. it have of again, I remarks. headwinds confidence prepared thing we the the good year the other with have in in the some in degree first definitely a for half Cash tailwinds The bit variation second reiterate, $X.X will But our billion

Ashwin Shirvaikar

like a then generally Got the comment, speaking, just And on is guess, it. quick to call And I of follow-up indicative but small base? client it you or of small business your landing, assumptions less soft to own Fiserv's is more for business seemed economic clarify. want health I me Fiserv's index, the health? can how It

Robert Hau

Yes.

would agree. latter First I yes, part, off, the

on is bit A GDP broad we then across XXXX. entire think, that track environment, to our FSPI The like at landing softer have that I the rest the upon point, company soft anticipating, based set of macro are very seem a slower of be We U.S. market. for the extrapolate world in this we modestly to things data that.

we're but are go through is industry across than weightings, in there different extrapolate region regions, strong direct data activity. we different salons indication and in we so mix country, it restaurant. our it do might We differences restaurants the or U.S. If we of very across the not So Fiserv more a codes take of have the NICS nail

much of very of it's the businesses. indicator health small a real-time So very

in to performance, the we're relative our country. Now the largest acquirer merchant

is would But in for be real us, Pfizer's strong it's us. actually FSBI time. industry Obviously, but proud a manifest the good data, quite provide indicator it using ends. and weaker see data some there's cash be themselves merchant but for We're the index if variation information of not the different variation weightings, would a a It's et for very index that to headwind you're capability regions, in by all X cetera. relative a have not days So FSBI, of a including only way, likely to certainly, results in of month it's we the the transactions. don't to have, perfect our numbers we We're that proxy. able proxy, acquiring, after nuances

Frank Bisignano

to Well, IR team thank and Please have great reach you, for questions, today. feel a to your with everyone, day. out any free attention

Operator

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

Fiserv (FI) 6 Feb 242023 Q4 Earnings call transcript