The paragraph is from the Fiserv, Inc. First Quarter 2025 Earnings Conference Call. Julie Chariell, Senior Vice President of Investor Relations, introduces the call and notes that it includes forward-looking statements and references to non-GAAP financial measures. The call features Frank Bisignano, the outgoing CEO, who discusses the company's strong performance in the first quarter, including exceeding consensus EPS, expanding client and partner relationships, and advancing new product initiatives. He also mentions the completion of the CEO transition to Mike Lyons, who has performed beyond expectations.

The paragraph discusses Fiserv, Inc.'s strategic focus on growth and leadership in the tech and payments industries. The author, potentially Kevin Warren, addresses his pending nomination as Social Security Commissioner and outlines leadership changes with Takis Georgikopoulos promoted to Chief Operating Officer and Guy Chiarillo continuing as vice chairman. The company emphasizes its strengths in scale, profitability, and innovation, which have enabled it to consistently achieve double-digit adjusted EPS growth for 39 years. Key areas of focus include product development, client relationships, and leveraging AI and data.

The paragraph discusses how Fiserv, Inc.'s integrated ecosystem for merchants and financial institutions is boosting its current and future growth. As commerce and banking become more interconnected, Fiserv positions itself to assist clients in achieving their growth goals, offering unique opportunities that are difficult to replicate. Mike Lyons expresses gratitude towards Frank for his leadership during the transition and shares his insights after engaging with employees, partners, and over 1,000 clients. He highlights Fiserv's strong franchise, promising growth prospects, and its valued client relationships, especially in light of economic uncertainties and industry changes. The company's successful start to the year is evidenced by a 7% rise in organic revenue, a 14% increase in adjusted earnings per share, and a 200 basis point improvement in adjusted operating margin for the first quarter.

The paragraph discusses the company's strategic efforts and achievements, including anticipated accelerated revenue growth, several strategic acquisitions, and the opening of a new U.S. operating hub. It highlights recent acquisitions such as Payfair in Canada, CCV Group in Europe, Pinch Payments in Australia and New Zealand, and MoneyMoney in Brazil, all aimed at expanding their global presence and capabilities. Additionally, a new FinTech hub has been established in Overland Park, Kansas, to foster innovation and collaboration. The Merchant Solutions segment saw an 8% organic revenue growth and an increase in operating margin. The company is focusing on expanding Clover's growth through new products, markets, partners, and geographies.

The paragraph discusses the recent international expansion and strategic developments of Clover, a commerce platform, highlighting its introduction in new markets such as Mexico, Brazil, Australia, Singapore, and Belgium, bringing its total to 13 countries. The company emphasizes its growth potential in Brazil due to strong partnerships and multiple distribution channels. Clover launched in Australia with a comprehensive cloud-based SaaS platform and began a pilot in Singapore. In the U.S., Clover has partnered with Klarna to integrate buy now pay later options, targeting over 100,000 merchant locations. Additionally, Clover Sport is expanding within stadiums, while a new point of sale system, Clover Hospitality, will be launched to serve high-end restaurants, enhancing its market reach.

The paragraph discusses the advancements and partnerships of Clover Hospitality, highlighting its debut at the National Restaurant Association Conference with its first client, Lilia. The company is collaborating with ADP and piloting a referral program, seeing positive reception from small businesses. They've added 33 new financial institutions as merchant partners in the U.S. in Q1, with plans to exceed last year's total. They extended their agreement with PNC and transitioned a joint venture with Wells Fargo to a processing agreement. They strengthened their relationship with ICBA Payments and have merchant referral partnerships with 40 of the top 100 financial institutions, with more opportunities in the pipeline.

In Q1, Fiserv, Inc. expanded its merchant partnerships globally, securing business with UniCredit Bank in Austria to introduce Clover to small businesses. They onboarded several enterprise merchants to Commerce Hub and enhanced BaaS services, signing clients like Fanatics Sportsbook and Sezzle for a range of e-commerce services. Additionally, Texas Roadhouse adopted Fiserv's gift solutions for improved analytics, while Yum! Brands expanded its contract for fraud and optimization tools. Fiserv also utilized its leadership in merchant acquiring and card processing to enhance authorization rates using data and AI, achieving a 30% improvement in recovery rates during a pilot with a major tech firm.

The Financial Solutions segment reported a 6% organic revenue growth and a strong adjusted operating margin of 47.5%. The company focuses on three key strategies: leadership in issuing and banking, adopting Cash Flow Central and XD, and advancing Fiserv, Inc. solutions. The issuing business achieved milestones by adding Target Circle Card to its Optus platform and signing a 12-year agreement with Banquist Banking Group in EMEA for the Vision Next platform. In the U.S., they renewed several key relationships and expanded their account base to 1.7 billion. In banking, the company launched Core Advance for community banks, providing cloud-based real-time processing services.

In the paragraph, the article discusses the expansion and success of various products and services offered by Fiserv, Inc. Large financial institutions continue to adopt DNA, with recent agreements signed with Republic Bank and Northwest Bank. Cash Flow Central has launched its first client, Washington Federal, and aims to onboard more institutions. In Q1, Cash Flow Essential garnered 15 new mandates, including significant clientele like BECU and a large commercial bank. Fiserv is enhancing three primary solution areas: the STAR and Excel debit networks, SMB integrated suites, and cross-product synergies. Notably, Domino's signed on for debit routing, and Teachers Federal Credit Union adopted a comprehensive SMB suite, further illustrating Fiserv’s growth in integrated financial services.

The paragraph discusses the company's success and strategies in embedded finance, highlighting key developments such as a partnership with DoorDash and the acquisition of PayFair, which added valuable assets to their portfolio. These actions have bolstered the company's capabilities in providing banking, lending, and payment services across various commerce experiences. The paragraph also mentions a strategic partnership with Threadbank, utilizing Finxact's cloud-based platform for scaling embedded banking solutions. The company's financial performance in the first quarter met expectations, with 7% organic revenue growth, and they anticipate accelerated growth in the latter half of the year. Bob Hau is set to detail the company's financials, indicating overall positive progress.

The paragraph discusses the financial performance of a company, highlighting several key metrics. Adjusted revenue growth was 5%, affected by currency translation, with free cash flow at $371 million for Q1 and $5.2 billion over the trailing twelve months. A target of $5.5 billion free cash flow is set for 2025. Revenue growth differs from 2024 due to inflation and interest effects in Argentina, with no contribution from excess inflation or interest rates this quarter compared to last year. The total company adjusted operating margin rose to 37.8%, a rise of 200 basis points, with adjusted operating income increasing by 11% and earnings per share up 14% to $2.4. In the Merchant Solutions segment, organic and adjusted revenue growth were 8% and 5%, respectively, affected by the leap year, Easter timing, and a large fee from Q1 2024. Small business within this segment saw organic and adjusted revenue growth of 10% and 7% on a 3% payment volume growth.

The paragraph discusses a slightly slower pace of volume growth for Clover in the first quarter due to factors such as the previous year's leap year, Easter timing, and a challenging comparison against prior achievements. Specific sectors like travel, hotels, and restaurants saw declines, while grocery, services, and QSR establishments performed better. Despite softened volume growth, Clover's revenue increased by 27%, attributed to factors like improved penetration of value-added services, strong hardware sales, and growth from Clover Capital in Argentina. Overall, enterprise organic and adjusted revenue grew in the quarter, supported by a 13% increase in transactions.

The paragraph discusses the company's financial performance, highlighting growth driven by new clients and services like data as a service and an authorization optimization tool. Although processing organic revenue declined by 7%, excluding a previous termination fee, it would have been up 4%. The Merchant Solutions segment saw a 5% increase in adjusted operating income and a 10 basis point rise in operating margin. In the Financial Solutions segment, organic and adjusted revenue grew by 6%, aligning with future growth projections. Digital payments experienced 8% growth, driven by a 22% increase in Zelle transactions and new data sales revenue. The company is beginning to capitalize on its data investments, expecting future revenue growth. It continues to expand its role in Zelle, representing two-thirds of network financial institutions. In issuing, both organic and adjusted revenues rose 8% and 7%, respectively.

In the first quarter, the Issuing segment saw strong growth driven by international expansion and North American momentum, with significant contributions from healthcare and loan accounts. Revenue is expected to increase further in the latter half of the year with contributions from Verizon and embedded finance. The banking sector experienced a 1% organic and adjusted revenue growth, supported by fintech contributions and anticipated growth from digital clients due to an improved migration solution. The Financial Solutions segment reported a 14% increase in adjusted operating income and a 340 basis point rise in operating margin due to improved efficiency and a higher mix of data and license sales. The adjusted effective tax rate stood at 17.9%, with expectations of an approximate 19.5% full-year rate. Total debt was $28.3 billion, and the debt to adjusted EBITDA ratio rose to 2.9 times due to cash flow timing and share repurchases.

The paragraph outlines the company's financial and operational strategies, including maintaining a leverage range of 2.5 to 3 times. During the quarter, they repurchased 10 million shares worth $2.2 billion, totaling $6.2 billion returned to shareholders over the past year, resulting in a 5% decrease in average outstanding shares since last year. It affirms the full-year 2025 guidance of 10% to 12% organic revenue growth and adjusted EPS growth of 15% to 17%, despite a 1.5% foreign exchange impact. The impact of tariffs is minimal. Revenue growth is expected to be higher in the second half of the year, supported by contracts and new products. The adjusted operating margin is projected to expand by at least 125 basis points. Merchant Solutions is forecasted to grow by 12% to 15% in 2025, driven by Clover's international expansion, new products, and increased value-added services.

The company is on track to reach its targets of $3.5 billion in revenue for Clover and 25% Banking as a Service (BaaS) penetration by the end of the year. In Financial Solutions, they expect organic revenue growth of 6% to 8%, supported by a strong pipeline for products like Cash Flow Central, XD, Fintech, issuing, and real-time payments. The guidance considers variability, but the company has a history of navigating economic cycles well and investing in people and products. As competitors struggle, the company is ready to support its clients more aggressively. The conference call opens for questions, with Darrin Peller from Wolfe Research asking about the Clover merchant business's growth trajectory and expectations, particularly in Brazil, Australia, and with the introduction of VaaS, to understand the bridge between volume and revenue growth for Clover. Bob Hau thanks Darrin for the question.

The paragraph discusses the positive outlook for the Clover business, highlighting a 27% revenue growth and a goal of achieving $3.5 billion in revenue for the year, alongside 25% BaaS growth. It mentions factors affecting Q1 results, including the timing of Easter and leap year impact, but expects accelerated growth later in the year. The growth is attributed to the rollout of new initiatives like Clover Hospitality, expansion in international regions, and new acquisitions like CCV. Additionally, the expansion of distribution channels, particularly in Europe with Belgium, and enhancements to the merchant experience through partnerships and AI integrations are expected to drive success.

In response to a question about Global Payments and FIS's asset swap, Frank Bisignano emphasizes Fiserv, Inc.'s strategic strengths and direction. He highlights Fiserv's assets, such as Clover's global rollout and their unmatched partnership model with over a thousand bank partners, which provide significant growth opportunities through the intersection of merchants and financial institutions. Bisignano asserts confidence in Fiserv's talented management team, their unparalleled debit network, and issuing business. He underscores the vast market opportunity available through their robust distribution network and issuer strength, boasting 1.7 billion accounts on file, which is double that of their largest competitor. He suggests that while current numbers may not reflect these advantages, future results will showcase their strategic edge.

The paragraph features a discussion primarily about the strengths and strategic advantages of a fintech company, particularly following a deal with Fiserv, Inc. Key points include the company's unmatched ability to engage with banks and clients, as well as their strategy's size, scale, and consistency. Mike Lyons emphasizes that numerous client meetings have focused on expanding collaborations, particularly at the crossroads of commerce and banking. The firm views its size and scale as significant advantages, particularly in the fintech sector where smaller companies may struggle with capital. Finally, a question from Ramsey El-Assal from Barclays inquires about market conditions related to Clover volumes, asking if challenges faced in Canada are specific to the region or more broadly applicable.

The paragraph features a discussion about economic dynamics in various markets, specifically focusing on discretionary spending in the travel, hotel, and restaurant sectors, which has decreased, particularly in Canada. However, nondiscretionary sectors like groceries, services, and QSR are holding steady, providing balance. Bob Hau notes this stability is expected to continue positively. In a subsequent dialogue, Tim Chiodo from UBS asks about factors contributing to Clover's revenue growth, such as pricing, SaaS packages, and direct sales channels. Mike Lyons responds, highlighting the importance of their broad distribution channels, including their expanding direct sales and FI merchant partnerships, toward achieving a $4.5 billion revenue target for Clover by 2026.

In the paragraph, the speakers discuss the Merchant segment's performance, noting an 8% organic growth for the quarter, in line with expectations despite calendar-related headwinds. If adjusted for these factors, growth would be at 11%, slightly below the full-year range. They highlight future growth prospects, emphasizing that new acquisitions will have limited impact until 2025-2027. They mention international expansion in countries like Brazil, Mexico, Australia, and Singapore, as well as the upcoming launch of Clover Hospitality for high-end restaurants. Overall, they expect these developments to help achieve revenue targets of $3.5 billion this year and $4.5 billion next year.

In the paragraph, Brian Keane from Deutsche Bank inquires about the increase in financial institution (FI) signings, expressing surprise given the assumption that most institutions would have already chosen their partners. Mike Lyons responds by emphasizing that their success is due to being a great partner and offering products like Clover that benefit banks, particularly in areas like small business deposits and cash flow transactions. He mentions that there is strong interest from banks and a large pipeline for further partnerships. Lyons highlights their product, Cash Flow Essential, as solving challenges in scalable accounts payable and receivable for small businesses. He is optimistic about growth and the value their offerings bring to financial institutions.

In the conversation, Will Nance from Goldman Sachs asks Mike Lyons about the impact of the current macroeconomic environment on banks' technology investments, particularly in contrast to typical enterprise software companies. Mike Lyons responds that despite concerns about large enterprises cutting back on capital expenditures, banks and merchants are still focused on doing more with technology, as they require mid-mission critical systems for generating revenue and serving clients. Lyons notes that there has been a "flight to quality," with clients seeking Fiserv, Inc.'s comprehensive and stable solutions rather than piecing together multiple fintech solutions. Thus far, they have not observed a slowdown in implementation pipelines, but rather a demand to do more with technology. The conversation then moves on to another question from Jamie Friedman about merchant services.

The paragraph discusses the impact of various factors on the financial performance of a business, particularly focusing on the processing segment and the business's growth trajectory. Bob Hau explains that a significant periodic revenue item from the previous year has affected current comparative growth figures, with organic revenue growth actually being about 4% for the recent quarter when adjusted for this item. He notes that the processing segment, although the smallest part of the business, is expected to show flat to slightly positive growth over time. Despite being a smaller component, processing is part of the broader Merchant Solutions business, which shows potential for growth. Additionally, Dan Dolev asks about specific impacts from Dollar Tree in relation to other economic factors like interest rates and inflation. Bob Hau responds by stating that Argentina contributed no growth impact in the first quarter of the current year, whereas it contributed significantly in the previous year, with Dollar Turista alone accounting for seven points of growth.

The paragraph discusses changes in Argentina's economic situation and its impact on Fiserv, Inc. It mentions that Argentina's inflation and interest rates have returned to normal levels, and an agreement with the IMF has led to an anticipated end of the Dollar Turista program. The conversation then shifts to Fiserv, Inc.'s improved offerings and distribution channels for banks over recent years. Frank Bisignano compares the current situation to five or seven years ago, highlighting Fiserv's strengthened partnerships and products, such as account processing and bill pay services, which have enhanced their banking collaborations and contributed to significant growth, with mentions of broader partnerships like ADP as examples.

The paragraph discusses the evolution of a company's partnerships with banks and its business model. Initially, there were successful joint ventures with banks, but the company has since transitioned to a broader, more robust platform that extends beyond these partnerships. The focus is now on leveraging the company's capabilities to better serve small businesses by offering bundled solutions, such as the Clover SaaS dashboard. The success of these partnerships depends more on delivering quality products and helping bank partners meet client needs, rather than on the structure of the partnerships. The company's model has evolved and they are optimistic about continued growth and expansion of their total addressable market (TAM).

The paragraph discusses the strong operating margin growth of a company, with significant expansions over recent years. Bob Hau explains that the company originally guided for a 100 basis point increase in margins during their last Investor Day in November 2023, but has since exceeded this prediction. The growth strategy involves a cycle where investment leads to growth, which facilitates further margin expansion and reinvestment, contributing to 39 years of consecutive double-digit earnings growth. The international market presence, including growth in areas like Brazil and the U.S., plays a crucial role in this expansion, although new market entries initially may not contribute as significantly to margins. Overall, the company leverages its global scale to maintain profitability and margin growth.

In the article paragraph, Mike Lyons discusses Fiserv, Inc.'s strategy of investing in new products and markets to seize opportunities and improve efficiency amid industry disruptions like tariffs and mergers. He highlights the importance of consistent investment in high-quality products to attract more customers. He mentions the company's recent investment in the Kansas City Fintech Hub to enhance employee effectiveness and efficiency. Lyons expresses optimism about increasing company margins and thanks the company's 38,000 associates for their contribution to its success. The paragraph concludes with the operator thanking participants and ending the conference call.

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