In the Fiserv Fourth Quarter 2024 Earnings conference call, Frank Bisignano, Chairman and CEO, reported on a successful year for the company. Fiserv exceeded its 2023 investor conference expectations, with adjusted earnings per share increasing by 17% to $8.80, and the adjusted operating margin rising to 39.4%. The company achieved 16% organic revenue growth and generated $5.2 billion in free cash flow, with $5.5 billion returned to shareholders through share repurchases. Throughout the year, Fiserv advanced various strategies and expanded its product offerings, strengthening its position in merchant and financial solutions. The company also expanded its large enterprise client base and extended services to more financial institutions. Clover, Fiserv's payment platform, continued its growth by introducing new offerings and expanding to three additional countries.

The paragraph discusses the launch and features of Cash Flow Central, a comprehensive solution designed to help SMBs manage cash flow, which is a major challenge due to its complexity and cost. This new offering, completed in the fall, integrates products from both merchant and financial ecosystems, creating a unique suite unmatched by competitors. It includes features like Clover payments, Cash Flow Central, Optus, SpendTrac, and Zelle for small businesses, among others. The suite will integrate with the XD digital banking platform this quarter and will soon be available on Clover. The company also emphasizes its role as a leading partner in real-time payments and core modernization strategies. Additionally, they recently appointed Mike Lyon as the new CEO efficiently and effectively.

The paragraph emphasizes Fiserv, Inc.'s commitment to urgency, operational excellence, and a smooth leadership transition under Mike Lyons, who has extensive experience with the company. Lyons, who joined from PNC and has a background as an investor and client, expresses enthusiasm about leading Fiserv. He praises the company's growth, innovation, and value creation track record and highlights the team's talent and opportunities. The main focus is to ensure a seamless leadership transition while executing the established growth plan, leveraging Fiserv's strong history and future prospects to meet client needs and sustain double-digit EPS growth.

In the paragraph, Mike acknowledges Frank Bisignano and the Fiserv leadership for their collaboration over the years and looks forward to leading Fiserv. Frank then highlights Fiserv’s achievements, emphasizing their growing business and financial institution connections, particularly in embedded finance. He mentions a successful partnership with DoorDash to offer banking services through an app, and a strategic partnership with ADP to integrate payroll and HR solutions with Fiserv’s platforms, Clover and Cash Flow Central, aiming to provide comprehensive solutions to small businesses.

The integrated solution simplifies money management for small businesses, enhancing sales, bill payments, and payroll processes. In Q4, mutual client referrals were initiated to support this integration. Financial institutions are reinvesting in merchant acquiring for SMB merchants, resulting in a 65% increase in bank partners in 2024 compared to 2023. Fiserv is approaching 1,000 financial institutions as merchant partners, offering a comprehensive SMB solution with Clover, allowing better client growth, retention, and fee generation. The company aims to help FIs identify and onboard merchant leads digitally. Key wins include CloverSport's venue successes at TD Garden and with the Milwaukee Brewers, and Clover Restaurant's custom solutions for a major hotel operator's 2,000 restaurants in the US.

The paragraph highlights various companies and industries adopting Fiserv's digital and e-commerce solutions. It mentions that a fourth large hotel chain has adopted the Bento package, and other enterprises are joining Commerce Hub, including AT&T and a large petro company. Fiserv is expanding its government solutions through a partnership with Tyler Technologies. The company also strengthened its relationships with PayPal in the US and Latin America and signed agreements with Leap Financial and Bilt. Additionally, Curb Mobility is adopting Fiserv's Commerce Hub to implement Android Tap to Pay, reducing costs associated with taxi payment terminals. Overall, there is a growing recognition of the value of payment data and Fiserv's cross-platform datasets in driving business decisions.

In EMEA, Fiserv made a significant partnership with Spain's Unikaha bank to develop payment and e-commerce solutions. They are also expanding their services in Spain with Rio Hotels by providing Clover Flex terminals and card acquiring. In the financial solutions sector, Fiserv achieved major core banking successes, including collaborations with South State Bank to integrate more assets following an acquisition and with Third Federal Savings in Cleveland for modernization. Fiserv's fast deployment capabilities are evident as they supported Brazil's Banco and Terra and DoorDash with advanced banking services. FinZAC was selected by Africa's FirstRand Group for a digital transformation, becoming the first institution outside the US to use Fiserv's cloud-native platform. Cash Flow Central had a strong fourth quarter.

The paragraph highlights the company's achievements and financial performance in 2024, including signing 39 banking clients, exceeding guidance on key financial metrics, and achieving 11% organic revenue growth once excluding transitory factors. The company returned $5.5 billion to shareholders via share repurchases. Looking forward to 2025, the company projects 10% to 12% organic revenue growth with improved operating margins, EPS growth, and significant free cash flow, assuming economic stabilization in Argentina. With a strong recurring revenue model and ongoing investments, the company aims to maintain its long-standing earnings growth streak. The paragraph concludes by handing the discussion over to Bob for the quarterly and annual financial details.

In the discussed paragraph, Bob Hau provides an overview of the financial performance for the fourth quarter and full year. The company experienced strong revenue growth, with the fourth quarter showing a 7% increase in adjusted revenue, driven by strong growth in the Merchant segment and financial solutions. The total company organic revenue growth was 13%, though currency translation and transitory factors in Argentina impacted these figures. The adjusted operating margin improved to 42.9%, and adjusted earnings per share increased by 15% to $2.51 for the quarter. For the full year, adjusted revenue grew by 7% to $19.1 billion, with a 16% organic revenue growth. Earnings per share reached $8.80, and free cash flow was $1.9 billion for the quarter and $5.2 billion for the year, exceeding expectations.

The paragraph discusses the company's financial performance, highlighting strong free cash flow resulting from a working capital improvement project. The Merchant Solutions segment saw organic revenue growth of 23% for the quarter and 27% for the year, with the exclusion of inflation effects and Argentina-related factors, growth would have been slightly lower. The company's small business revenue grew 24% organically, with significant contributions from Clover's $2.7 billion revenue in 2024, driven by new hardware products and increased penetration of Clover Capital and SaaS packages. Lastly, the enterprise segment recorded a 31% organic and adjusted revenue growth, largely boosted by transaction growth and benefits from Argentina in the fourth quarter.

The paragraph outlines the company's enterprise growth, driven by transitioning a large PayFac client from a processing customer to a direct client, resulting in 31% organic growth and 12% adjusted growth for the year. It also highlights the positive momentum of Commerce Hub, noting a significant increase in clients and daily transactions, as well as the high uptake of additional solutions by Commerce Hub clients. The Merchant Solutions segment saw a 15% increase in adjusted operating income for the quarter and 20% for the year, with operating margins expanding. Additionally, the Financial Solutions segment experienced organic revenue growth of 4% for the quarter and 6% for the year, aligning with the projected outlook.

In the fiscal year, Fiserv saw growth in its digital payments and issuing sectors, with notable increases in Zelle revenue and demand for real-time payments integration like FedNow. Organic and adjusted revenues for various segments generally grew, though some areas experienced below-trend growth due to timing issues. Financial Solutions adjusted operating income and margin also improved. The company's effective tax rate was slightly lower than expected due to benefits from a Green Tax Credit Program. Fiserv reduced its debt to adjusted EBITDA ratio to 2.6 and repurchased six million shares, returning $5.5 billion to shareholders over the year. There are 18 million authorized shares left for buyback.

The company is projecting its full-year 2025 adjusted earnings per share to be between $10.10 and $10.30, reflecting a growth of 15% to 17%. They anticipate organic revenue growth of 10% to 12%, excluding temporary contributions from Argentina in 2024. Due to Argentina's current economic conditions, no significant benefits from inflation or interest are expected for 2025. The Dollar Tree store program will end in early 2025. The impact from foreign currency exchange is projected to decrease from 9% in 2024 to 1.5% in 2025. Adjusted operating margins are expected to expand by at least 125 basis points, with free cash flow around $5.5 billion. The Merchant Solutions segment is forecasted to grow organically by 12% to 15%, driven by the Clover platform's revenue target and increased VAS penetration. Growth is supported by advancements made in 2024, including new hardware, features, and geographic expansion into Brazil, Mexico, and Australia. Small business growth is expected to outpace the segment average, while enterprise growth will normalize following Argentina's transitory benefits and specific one-time revenues.

The processing line is experiencing modest growth, with an expected financial impact from reduced Argentina contributions primarily in the first half of the year. Financial solutions are anticipated to see organic revenue growth of 6% to 8%, with contributions from partnerships with companies like Target, Verizon, and DoorDash, among others. Issuing and digital payments are expected to grow slightly above average, while banking may grow slower. The overall growth is projected to be stronger in the second half of the year due to recent product rollouts, new client implementations, market expansions, and challenging comparisons due to high contributions from Argentina in early 2024. Additionally, Q1 faces tough growth comparisons due to past one-time revenue gains.

The paragraph discusses Fiserv's outlook and guidance for the year, highlighting expectations for organic revenue growth and operating margin expansion driven by merchant and financial solutions. It notes anticipated higher interest expenses and a tax rate of around 19.5%, alongside a commitment to a share repurchase program. Frank Bisignano emphasizes Fiserv's dedication to supporting small businesses, mentioning partnerships with the US Chamber of Commerce Foundation and a $10 million relief fund for clients and employees affected by disasters. The company is recognized for product quality, management, innovation, and long-term investment value, which reflect its underlying strengths and assets.

The paragraph discusses the broad scope and achievements of Fiserv, highlighting its extensive product set, innovative technology, global presence, and diverse client base. The speaker expresses pride in the company's strong returns and gratitude towards the team, board, management, associates, clients, partners, and investors. The speaker emphasizes the company's enduring construction and commitment to meeting financial goals. They also announce a transition plan, mentioning Mike as a new CEO figure and express their dedication to working alongside him. The paragraph ends with an operator opening the floor for questions, leading to a question from Tien-Tsin Huang from JPMorgan directed towards Mike about his initial impressions of Fiserv.

The paragraph discusses the speaker's confidence in their company's strategic plan and its execution, highlighting the exceptional performance and growth potential of the company, particularly in the payments sector. They emphasize the vast opportunities on both the merchant and financial sides, including cross-selling across platforms and exploring international markets. The speaker praises the innovation and talent within the organization, mentioning the engagement of 13,000 engineers and positive client interactions. They express optimism about the company's future and growth prospects.

The paragraph discusses the company's strategies and partnerships that are expected to sustain its growth and meet targets despite challenging comparisons. Frank Bisignano mentions recent developments like a successful launch in Brazil and a partnership with ADP, highlighting the strong foundation from ADP's existing business. He emphasizes the company's broad network of financial institution partners and innovative tools like cash flow central and expense management to bolster penetration and enhance partnerships. The focus is on leveraging global opportunities, strong leadership, and integrated solutions to maintain their position as a preferred partner and drive demand.

The paragraph discusses the integration of new software and the successful rollout of five new products by a team led by Mike, who is praised for his leadership. Timothy Chiodo from UBS asks about the impact of the Payfair acquisition on their embedded finance opportunities, specifically regarding program management capabilities and the revenue potential with existing clients and new RFPs. Bob Hau responds positively, highlighting the successful partnership and quick progress made with DoorDash.

The paragraph discusses the role of program management in the partnership with DoorDash and embedded finance clients, highlighting a combination of in-house capabilities and third-party partnerships, with Payfair enhancing these capabilities. The transaction with Payfair hasn't closed yet but is viewed positively. The company believes they are well-positioned to serve embedded finance clients, as exemplified by DoorDash's selection of them. Bob Hau addresses consumer spending trends in January, noting that spending is strong and resilient across both discretionary and non-discretionary categories. The company expects to continue growing through their diverse distribution channels despite global challenges, mentioning easing FX conditions and future outlook for 2025. They note that reported volumes aren't adjusted for FX or inflation and interest rate changes, such as those in Argentina in 2024.

The paragraph discusses a question-and-answer session during a financial call. Dave Koning from Baird inquires about a slowdown in Financial Solutions, particularly relating to issuer activity, and its connection to product revenue trends in Q2 and Q3. Bob Hau attributes the slowdown to a decrease in volume in the print and plastic business, linked to the overall credit environment. He outlines that major partnerships and projects like those with Target, Verizon, and Desjardins will positively impact business in 2025 and 2026. Additionally, Dan Dolev from Mizuho asks about the strategic implications of a partnership with Walmart, specifically regarding the use of networks and payment innovations. Frank Bisignano begins to address the macro aspects of this partnership.

The paragraph discusses a longstanding partnership with Walmart, highlighting the collaborative efforts in fintech and payments. The speaker emphasizes the strong, 27-year relationship with Walmart, noting the importance of aligning with their strategic initiatives. They describe the partnership as focusing not just on selling, but on serving and understanding clients, emphasizing the strength and diversity of their overall client base, which includes various financial institutions across the U.S. The speaker praises Walmart as a valuable and extraordinary client.

The paragraph is part of a conference call discussing the performance of Clover, a product, and its revenue versus volume growth. Jason Kupferberg from Bank of America asks about the factors contributing to the widening spread between revenue and volume growth, specifically mentioning fast penetration, pricing, and hardware sales. Bob Hau responds, ranking fast penetration as the primary factor, expecting continued improvement and expansion into 2025. He also notes an increase in hardware sales with the rollout of new products and more direct engagement with financial institution clients. The conversation then shifts to James Faucette from Morgan Stanley, who inquires about go-to-market strategies for new offerings, highlighting the excitement around engaging financial partners with small businesses.

In the paragraph, Frank Bisignano discusses the company's strategic focus on enhancing distribution and sales capabilities as part of their go-to-market efforts. They are increasing their sales force and leveraging worldwide distribution to roll out products. The integration of digital distribution channels is also being expanded. The company emphasizes technical integration, particularly with products like ADP and Cash Flow Central, to foster growth and revenue opportunities. Their approach to working with bank partners and distribution channels remains consistent, with a focus on revenue-sharing agreements and technical integration to drive product growth.

In the paragraph, Ramsey El-Assal inquires about the timeline and economic model of Cash Flow Central's impact on the P&L. Frank Bisignano responds, suggesting that while the impact will start to appear in the second half of the current year, it will become more significant by 2026. He emphasizes the company's long-term growth potential and continuous addition of Total Addressable Market (TAM) opportunities. Frank also highlights the company's strategic discussions and growth drivers, indicating an optimistic outlook for future performance.

In the concluding remarks of the Fiserv fourth quarter 2024 earnings conference call, the speaker thanks attendees for their attention, encourages them to contact the IR team for further discussions, and mentions being teamed up with Mike. The operator then officially ends the call and wishes everyone a great day.

This summary was generated with AI and may contain some inaccuracies.