Summary of Fiserv (FI) 2025 Conference Call Company Overview - **Company**: Fiserv - **CEO**: Mike Lyons, recently appointed and previously associated with PNC Bank - **Industry**: Financial Technology (Fintech) and Payment Processing Key Points and Arguments Financial Performance and Growth - Fiserv has achieved 40 consecutive years of over 10% EPS growth, indicating a stable growth trajectory [1] - The financial segment is projected to grow at 6% to 8% this year, reflecting a strong demand for technology solutions among financial institutions [12][10] - The company serves approximately 10,000 financial institutions globally, with a significant presence in the U.S. [14] Technology and Client Relationships - Fiserv emphasizes a "client first mindset," focusing on understanding client needs and delivering tailored solutions [6] - The company has 13,000 software engineers, enabling it to provide advanced technological solutions to financial institutions [4] - The demand for modernized payments and digital solutions is increasing, with banks needing to adapt to consumer expectations for ease of transactions and automation [13] Strategic Initiatives - Fiserv is modernizing its core banking systems, consolidating from 16 to 5 core systems, with a focus on cloud-based solutions [16] - The company is pursuing embedded finance opportunities, allowing merchants to offer banking-like services [17] - Recent acquisitions, such as Payfair, are aimed at enhancing Fiserv's capabilities in embedded finance and card issuing [18] Clover and Merchant Segment - Clover, Fiserv's merchant platform, is experiencing low double-digit growth, with expectations for significant revenue growth in the coming years [40][54] - The company is focused on expanding Clover's capabilities, integrating various services such as payroll and cash management [46][49] - Fiserv aims to enhance operational excellence and expand distribution channels for Clover, leveraging partnerships with banks and ISOs [53] Market Dynamics and Competitive Landscape - The competitive landscape remains challenging, but Fiserv believes there is still room for growth, particularly in the merchant segment [41] - The company is not experiencing market saturation and continues to explore new markets, including international expansion [51] Economic and Market Outlook - The macroeconomic backdrop is viewed positively, with stable demand for Fiserv's services [64] - The Fiserv Small Business Index indicates a steady growth rate, reflecting the health of small businesses [66] Emerging Trends - Fiserv is exploring opportunities in stablecoins and cryptocurrency, preparing to support clients with wallet and custody solutions [33][34] - The company is positioned to assist both financial institutions and merchants in adapting to technological changes in the payment landscape [37] Additional Important Insights - The merger with First Data has proven beneficial, with synergies still being realized [21] - Fiserv's approach to client engagement is centered on providing integrated solutions that meet the evolving needs of small businesses [45] - The company is committed to operational improvements and enhancing customer service to drive user engagement with its platforms [57] This summary encapsulates the key insights from the Fiserv conference call, highlighting the company's strategic direction, growth prospects, and market positioning within the fintech industry.

Company Overview - Fiserv, Inc. has recently undergone a leadership transition with Mike Lyons taking over as CEO, marking a significant change in the company's strategic direction [3][4]. Leadership Insights - The first 100 days of Mike Lyons as CEO have been characterized by a focus on communication and understanding the company's growth drivers, which he acknowledges could have been better articulated to shareholders [4]. - Lyons has engaged with over 1,000 clients and employees globally, indicating a commitment to understanding the operational aspects of the company and its market position [4]. Strategic Focus - The company is systematically re-evaluating all business and operational areas, aiming to enhance its strategic approach and address any underlying issues that may have affected shareholder confidence [4].

Financial Data and Key Metrics Changes - The company has committed to achieving 15% to 17% EPS growth for the year and aims to hit a target of $3.5 billion for Clover [11][12][21] Business Line Data and Key Metrics Changes - Clover volumes have decelerated to 8% in the first quarter, but normalized growth is expected to be in the low double digits for the second quarter [17][19] - The non-Clover SMB business generated approximately $4 billion in revenues and is experiencing growth [46] Market Data and Key Metrics Changes - The company holds less than 10% market share in the U.S. for both volume and merchants, with international market share close to zero, indicating significant growth potential [29][30] - The company is expanding into new markets, including Brazil, where it has established partnerships with major banks [39][40] Company Strategy and Development Direction - The strategy remains unchanged, focusing on winning clients and growing with them by providing value-added products and services [10][11] - The company is emphasizing a client-first mindset and operational excellence to enhance average revenue per client [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth opportunities in both the merchant and financial institution segments, highlighting the interconnectedness of these businesses [6][60] - The company is well-positioned to assist banks in a competitive landscape dominated by technology [63][64] Other Important Information - The partnership with ADP is expected to enhance Clover's distribution and referral relationships, providing a more integrated suite of services for small businesses [41][44] - The company is focusing on expanding its presence in the healthcare and government sectors, which are seen as attractive growth areas [80][81] Q&A Session Summary Question: What changes to Clover's volume growth can be expected? - Management indicated that Clover's volume growth has been in the low double digits when excluding gateway conversions, with no signs of market saturation [19][20] Question: What is the right growth algorithm for Clover? - Management stated that the revenue mix will depend on customer engagement with Clover, emphasizing the importance of building a highly integrated platform [24][25] Question: How is the SMB book excluding Clover performing? - The non-Clover SMB business is generating approximately $4 billion in revenues and is growing, with plans to increase back book conversion to Clover [46][47] Question: What is the company's capital allocation philosophy? - The company maintains a strong focus on funding its businesses, share buybacks, and strategic M&A opportunities, with no changes to its existing framework [92][95] Question: What are the less understood aspects of Fiserv? - Management highlighted the competitive advantage of having both FI and merchant services under one roof, the global growth opportunity, and the quality of its workforce as underappreciated factors [97][102]

Company Performance - Fiserv, Inc. (FI) has gained 6% in the past year, underperforming the industry's 24.2% growth and the Zacks S&P 500 composite's 10.8% rise [1] - Revenues are anticipated to increase by 10.2% in 2025 and 8.4% in 2026, while earnings are estimated to rise by 16.3% in 2025 and 16.8% in 2026 [1] Revenue Generation - The merchant solutions segment generates recurring revenues through per-transaction fees, with peak processing volume exceeding 25,000 financial transactions per second [2] - Subscription fees for Clover contribute to steady revenue flow, with processing and service revenues accounting for nearly 81% of total revenue, driven by account and transaction-based fees under multi-year contracts with high renewal rates [3] Strategic Acquisitions - In March 2025, Fiserv completed the acquisition of Payfare, enhancing its embedded financial solutions with card program management [4] - The same month, Fiserv acquired CCV to boost the Clover platform's deployment across Europe, improving capabilities and innovation [4] - In April 2025, Fiserv acquired Pinch Payments, providing a platform to manage and optimize the payment process for various service providers [5] - Fiserv also entered a definitive agreement to acquire Money Money, expanding services in Brazil to assist small and medium-sized businesses [6] Financial Health - Fiserv's current ratio at the end of Q1 2025 was 1.1, slightly below the industry average of 1.15, but increased by 3.8% sequentially due to a rise in accounts receivable, indicating effective short-term liabilities coverage [7]

Core Insights - The article discusses the expertise of Vladimir Dimitrov, CFA, who has a background in brand and intangible assets valuation, particularly in the technology, telecom, and banking sectors [1]. Group 1 - Vladimir Dimitrov has worked with some of the largest global brands during his career in London [1]. - He graduated from the London School of Economics and focuses on identifying reasonably priced businesses with sustainable long-term competitive advantages [1].

Core Viewpoint - Fiserv management expresses strong confidence in achieving full-year commitments despite recent challenges, particularly regarding Clover's performance and revenue growth [5][6]. Group 1: Financial Performance - Clover's revenue for the first quarter showed a growth of 27%, following a 30% growth in the same quarter of the previous year, indicating robust performance [7]. - The company reaffirms its target of $3.5 billion in revenue for Clover, alongside commitments to organic revenue growth in the merchant and financial solutions sectors [6]. Group 2: Market Outlook - The reported Gross Payment Volume (GPV) for the first quarter and the outlook for the second quarter at 8% were noted as a surprise or disappointment, highlighting potential market challenges [7].

Summary of Fiserv (FI) FY Conference Call - May 20, 2025 Company Overview - **Company**: Fiserv (FI) - **Key Executives**: Bob Howe (CFO), Takis Gerokopoulos (COO) Core Industry Insights - **Industry**: Financial Technology and Merchant Services - **Focus**: Payment processing, merchant acquiring, and financial solutions Key Points and Arguments Clover Performance - Clover is projected to achieve $3.5 billion in revenue for the year, with a reaffirmed commitment to organic revenue growth in the merchant and financial services sectors [4][18] - Clover reported a **27% revenue growth** in Q1, following a **30% growth** in the same quarter of the previous year [5] - The company expects low double-digit growth in GPV (Gross Payment Volume) for Q1 and Q2, despite an 8% outlook being a surprise to investors [6][17] Gateway Transition - The transition to a new gateway was driven by operational efficiency and cost savings, not by increasing volume or revenue [8] - The movement of merchants to the new Clover gateway began in late 2023 and peaked in Q1 2024 [9] Market Position and Growth Opportunities - Fiserv has a **single-digit market share** in the merchant services space, indicating significant growth potential [12][32] - The company is focused on expanding its distribution channels and enhancing its product offerings, including international expansion and new software capabilities [15][32] Consumer Spending Environment - There is a modest slowdown in consumer spending, with a shift from discretionary to non-discretionary spending [25][26] - Fiserv's merchant acquiring business is well-diversified, with approximately **50% of revenue** coming from discretionary spending and **50% from non-discretionary** [27] Software and Service Innovations - Fiserv aims to increase its software attach rate to **27% by 2026**, currently in the mid-twenties [29] - New capabilities such as Cash Flow Central and partnerships with ADP are expected to enhance service offerings and client engagement [30][44] Competitive Landscape - The recent consolidation in the industry does not significantly impact Fiserv, which maintains a clear roadmap and investment strategy [67] - Fiserv is positioned uniquely at the intersection of banking and commerce, leveraging its extensive data capabilities as a competitive differentiator [68][70] Future Outlook - The company is optimistic about its trajectory, with plans to continue innovating and expanding its service offerings [30][32] - Fiserv is focused on enhancing its embedded finance capabilities and exploring new market opportunities, particularly in healthcare and e-commerce [33][34] Conclusion - Fiserv is committed to delivering on its growth targets and enhancing its product offerings through strategic partnerships and innovations in technology, positioning itself for future success in the financial technology sector [72]

Group 1: BILL Holdings, Inc - JP Morgan analyst Tien-tsin Huang hosted 17 payments and processing firms at the Global TMC Conference in Boston, maintaining an Overweight rating on BILL Holdings with a price target of $55 [1] - BILL is recognized as a category killer in SMB AP Automation, effectively displacing manual and legacy solutions, including paper check processing [1] - Huang sees potential for BILL to reclaim its status as a top growth name through cross-selling recent acquisitions, leveraging partnerships with banks and accountants, and helping SMBs reduce costs via automation [2] - Projected fourth-quarter revenue for BILL is $376 million with an adjusted EPS of $0.41 [2] - As of the last check, BILL's stock is down 0.41% at $46.07 [5] Group 2: Fiserv, Inc - Huang maintains an Overweight rating on Fiserv with a price target of $210, slightly down from $211 [2] - Fiserv is viewed as a dependable growth story, with mid-teens EPS growth driven by double-digit top-line growth, operating leverage, and capital deployment [3] - The company has a solid portfolio, including its Clover product, which is gaining market share and growing faster than peers [3] - Projected second-quarter revenue for Fiserv is $5.19 billion with an adjusted EPS of $2.39 [3] Group 3: Marqeta, Inc - Huang upgraded Marqeta's rating to Overweight from Neutral, with a price target of $6, up from $5 [4] - Marqeta's platform supports card programs in high-growth areas of fintech, including BNPL and digital banking, with notable clients like Block and Affirm [4] - Projected second-quarter revenue for Marqeta is $140 million with an adjusted EPS of $(0.05) [4] Group 4: Remitly Global, Inc - Huang has an Overweight rating on Remitly with a price target of $25, viewing it as a mission-driven disruptor in the remittance market [5] - Remitly is experiencing durable growth with a 34% year-to-date revenue increase and 4% market penetration [5] - Projected revenue CAGR for Remitly through 2027 is 21%, one of the highest in Huang's coverage [5] - Projected second-quarter revenue for Remitly is $385 million with an adjusted EPS of $0.19 [5]

Group 1 - The author identifies as an independent investor rather than a professional analyst, preferring the terms "contributor" or "author" to describe their role [1][3] - The author has over 30 years of personal investment experience in the stock market and has a background in economics and finance [1] - The author has worked in various capacities within the financial industry, including as a buy-side analyst, fund co-manager, and analyst at a multi-strategy hedge fund, gaining insights into capital structures and M&A situations [1] Group 2 - The author emphasizes the importance of understanding the dynamics of the broader economy and stock markets, focusing on fundamental analysis and newsflow [1] - The author has experience in developing international regulations and supervising companies, which provided valuable insights into corporate operations and the regulatory environment [1] - The author aims to share investment ideas and engage in discussions with the public, drawing from their diverse background while adhering to compliance guidelines [1]

Summary of Fiserv (FI) FY Conference Call - May 15, 2025 Company Overview - **Company**: Fiserv (FI) - **Industry**: Payments and IT Services Key Points and Arguments Clover Volume and Financial Performance - **Clover Volume Growth**: Reported an 8% growth in Clover volume, slower than the previous year's 14% growth, leading to investor concerns [2][6] - **Factors Affecting Growth**: - Gateway conversion from non-Clover clients to Clover gateway contributed approximately 2 points of headwind against growth [3] - The previous year included a leap year effect, contributing over 1 point of growth [4] - Seasonal timing of Easter also impacted volume, with Easter falling in Q1 last year and Q2 this year [4] - **Future Expectations**: Anticipated that Q2 growth will be similar to Q1, with an increase in gateway headwind expected [5][50] Revenue Growth and Projections - **Clover Revenue Growth**: Reported a 27% growth in Clover revenue, driven by volume, hardware sales, and value-added services [6] - **Revenue Target**: Confident in achieving $3.5 billion in revenue by year-end 2025, with a longer-term target of $4.5 billion by 2026 [8] - **International Expansion**: Added four new countries in Q1, with a focus on launching Clover Hospitality for high-end restaurants [7] Product Development and Market Strategy - **Product Launches**: Significant number of new products launched within Clover and the small business suite, including Cash Flow Central [11][13] - **Partnerships**: Successful integration with ADP's run solution into Clover, enhancing cross-selling opportunities [10] - **Investment in CapEx**: Increased capital expenditures from $900 million in 2020 to approximately $1.5 billion in 2024, aimed at product development and technology [16] Market Conditions and Consumer Spending - **Diverse Client Base**: Approximately 50% of merchant volume is from discretionary spending, providing a natural hedge during economic downturns [25] - **Inflation Impact**: Slight inflation can positively affect revenue, as it may lead to increased transaction volumes [27] - **Consumer Sentiment**: Current consumer spending remains steady, with a Small Business Index indicating 3% year-over-year growth [28][30] Competitive Landscape - **Market Competition**: Acknowledgment of intense competition from companies like Square and Global Payments, but confidence in Fiserv's unique distribution channels and product offerings [32][34] - **Market Share**: Fiserv operates the third-largest debit network in the U.S. and aims to improve its position [72] Implementation and Operational Efficiency - **Long Cycle Times**: Financial solutions often have long implementation cycles, which can affect revenue recognition [44] - **Current Implementation Status**: No significant slowdown in implementation pace observed, with several large clients going live [46] Cash Flow Central - **Market Potential**: Cash Flow Central has a medium-term Total Addressable Market (TAM) of $2 billion, with strong interest from banks and small businesses [61][64] - **Integration with Clover**: Designed to simplify cash management for small businesses, enhancing Fiserv's value proposition [66] Additional Important Insights - **Clover's Role**: Positioned as an operating system for small businesses, integrating various financial solutions to streamline operations [66] - **Transition in Leadership**: Smooth transition to new CEO Mike Lyons, with continuity in management and operations [77] This summary encapsulates the key discussions and insights from the Fiserv FY Conference Call, highlighting the company's performance, strategic initiatives, and market dynamics.