Fiserv, Inc. (NYSE:FI) Q1 2025 Earnings Conference Call April 24, 2025 8:00 AM ET Company Participants Julie Chariell - SVP, Investor Relations Frank Bisignano - Chairman, President & CEO Mike Lyons - President & CEO Bob Hau - CFO Conference Call Participants Darrin Peller - Wolfe Research Tien-Tsin Huang - JPMorgan Ramsey El-Assal - Barclays Timothy Chiodo - UBS Jason Kupferberg - Bank of America Bryan Keane - Deutsche Bank Will Nance - Goldman Sachs Jamie Friedman - Susquehanna Dan Dolev - Mizuho Securiti ...

Core Insights - Fiserv reported revenue of $4.79 billion for the quarter ended March 2025, reflecting a year-over-year increase of 5.4% [1] - The company's EPS was $2.14, up from $1.88 in the same quarter last year, surpassing the consensus estimate of $2.08 by 2.88% [1] - Revenue fell short of the Zacks Consensus Estimate of $4.86 billion, resulting in a surprise of -1.55% [1] Financial Performance Metrics - Adjusted Revenue from Merchant Solutions was $2.37 billion, below the average estimate of $2.47 billion [4] - Adjusted Revenue from Financial Solutions was $2.42 billion, slightly above the average estimate of $2.41 billion [4] - Revenue from Products reached $1.09 billion, exceeding the four-analyst average estimate of $960.12 million, marking a year-over-year increase of 22.9% [4] - Revenue from Corporate and Other was $341 million, slightly below the estimated $345.50 million [4] - Revenue from Processing and Services was $4.05 billion, below the average estimate of $4.27 billion, with a year-over-year change of 1.1% [4] - Operating income for Corporate and Other was -$563 million, worse than the average estimate of -$485.91 million [4] - Operating income for Financial Solutions was $1.15 billion, exceeding the estimate of $1.10 billion [4] - Operating income for Merchant Solutions was $810 million, slightly below the average estimate of $821.52 million [4] Stock Performance - Fiserv's shares returned -2.1% over the past month, compared to a -5.1% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Fiserv, which belongs to the Zacks Financial Transaction Services industry, posted revenues of $4.79 billion for the quarter ended March 2025, missing the Zacks Consensus Estimate by 1.55%. This compares to year-ago revenues of $4.54 billion. The company has not been able to beat consensus revenue estimates over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commenta ...

© 2025 Fiserv, Inc. or its affiliates 1 © 2025 Fiserv, Inc. or its affiliates. World's Most Admired Companie sTM 2025 Fortune ® Magazine Forward-Looking Statements and Non-GAAP Financial Measures Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding anticipated organic revenue growth, adjusted earnings per share, adjusted earnings per share growth, free cash flow, adjusted op ...

Financial Performance - GAAP revenue increased by 5% to $5.13 billion in Q1 2025, with Merchant Solutions segment growing by 5% and Financial Solutions segment by 6%[2] - GAAP EPS rose by 22% to $1.51 in Q1 2025, with an operating margin of 27.2%, up from 24.2% in Q1 2024[3] - Adjusted revenue increased by 5% to $4.79 billion, with organic revenue growth of 7%, driven by 8% growth in Merchant Solutions and 6% in Financial Solutions[8] - Adjusted EPS grew by 14% to $2.14, with an adjusted operating margin of 37.8%, an increase of 200 basis points year-over-year[8] - Total revenue for Q1 2025 was $5,130 million, an increase from $4,883 million in Q1 2024, representing a growth of 5.05%[27] - Adjusted revenue for Q1 2025 was $4,789 million, up from $4,543 million in Q1 2024, reflecting a growth of 5.43%[27] - Operating income for Q1 2025 was $1,395 million, compared to $1,181 million in Q1 2024, marking an increase of 18.14%[27] - Adjusted operating income for Q1 2025 was $1,808 million, up from $1,629 million in Q1 2024, indicating a growth of 10.98%[27] - Net income for Q1 2025 was $848 million, an increase from $752 million in Q1 2024, representing a growth of 12.79%[30] Cash Flow and Shareholder Returns - Free cash flow was $371 million in Q1 2025, down from $454 million in the prior year period[8] - The company repurchased 9.7 million shares for $2.2 billion in Q1 2025[8] Future Outlook - Fiserv expects organic revenue growth of 10% to 12% and adjusted EPS of $10.10 to $10.30 for 2025, representing growth of 15% to 17%[6] - The company maintains its guidance for 2025, anticipating acceleration in the second half of the year[7] - The company's organic revenue growth outlook for 2025 is projected to be between 10% and 12%[45] - Adjusted earnings per share for 2025 is estimated to be in the range of $10.10 to $10.30, reflecting a growth of 15% to 17% compared to 2024[49] Strategic Initiatives - Four strategic acquisitions were completed in Q1 2025, including Payfare Inc. and CCV Group B.V.[8] - A new 2,000-employee fintech hub is planned to open in Overland Park, Kansas[8] Assets and Liabilities - Total assets as of March 31, 2025, were $80,402 million, an increase from $77,176 million as of December 31, 2024[33] - Total liabilities increased to $53,881 million as of March 31, 2025, compared to $49,490 million as of December 31, 2024[33] Costs and Adjustments - The company incurred $52 million in incremental executive compensation related to the transition of the CEO in Q1 2025[27] - The company incurred merger and integration costs of $81 million and severance costs of $157 million in 2024[49] - The impact of postage reimbursements on revenue is expected to be a decrease of 0.5% for 2025[45] - Currency fluctuations are anticipated to positively impact adjusted revenue by 1.5% for 2025[45] - Acquisition adjustments are expected to reduce revenue growth by 1.0% in 2025[45] - The company estimates a 5% decrease in amortization expense related to acquired intangible assets for 2025 compared to 2024[49] - The tax impact of adjustments is calculated using a tax rate of 20%, reflecting the company's effective tax rate[51]

Group 1: Acquisition Overview - Fiserv plans to acquire Brazilian FinTech company Money Money Servicos Financeiros S.A. to enhance its Clover platform for Brazilian small- to medium-sized businesses (SMBs) [1] - The acquisition will integrate Money Money's financing engine with Clover's cloud-based point-of-sale and business management platform [1][2] - The deal is subject to regulatory approval and is expected to close in the second quarter [2] Group 2: Strategic Importance - The addition of Money Money's services aims to boost growth for Fiserv's acquiring clients by facilitating access to necessary resources for improvements and processes [3] - Fiserv's ongoing investment in the Brazilian market reflects its commitment to advancing clients' business objectives through expanded local capabilities [3] Group 3: Recent Acquisitions - On April 7, Fiserv acquired payment facilitator Pinch Payments, which serves 2,000 merchants in Australia and New Zealand, enhancing its payment orchestration platform [4] - In March, Fiserv acquired CCV, a payment solutions provider in the Netherlands, Belgium, and Germany, to expedite Clover platform deployment in Europe [5] - Also in March, Fiserv finalized the purchase of earned wage access provider Payfare, aimed at accelerating embedded finance solutions for its clients [6]

Core Viewpoint - Fiserv, Inc. is expected to report its first-quarter 2025 results on April 24, with positive earnings surprise history and anticipated growth in various revenue segments [1][5]. Revenue Expectations - The Zacks Consensus Estimate for Fiserv's Q1 2025 revenue is $4.9 billion, reflecting a 7.2% increase from the same quarter last year [2]. - Financial Solutions revenues are projected to rise by 6.3% to $2.4 billion, driven by contributions from clients like Target, Verizon, and DoorDash [2]. - Merchant Solutions revenues are expected to reach $2.5 billion, indicating a 12.7% year-over-year growth, largely attributed to strong performance in Clover [3]. - Processing and Services revenues are estimated at $4.3 billion, representing a 7.7% growth compared to the previous year [4]. - The Product segment's revenues are forecasted to be $988.5 million, suggesting an 11.9% increase year-over-year [4]. Earnings Predictions - The model predicts an earnings beat for Fiserv, supported by a positive Earnings ESP of +0.64% and a Zacks Rank of 3 (Hold) [5].

Core Insights - Fiserv (FI) is expected to report quarterly earnings of $2.07 per share, a 10.1% increase year-over-year, with revenues projected at $4.87 billion, reflecting a 7.2% year-over-year growth [1] Earnings Estimates - The consensus EPS estimate has been revised upward by 0.1% in the last 30 days, indicating analysts' reassessment of their initial projections [2] - Revisions to earnings projections are crucial for predicting investor behavior and are strongly correlated with short-term stock price performance [3] Revenue Projections - Analysts estimate 'Adjusted Revenue- Corporate and Other' to be $2.86 million, showing a year-over-year decline of 42.8% [5] - 'Revenue- Processing and services' is projected to reach $4.29 billion, indicating a year-over-year increase of 7.3% [5] - 'Revenue- Product' is expected to be $963.87 million, reflecting a 9.2% increase from the previous year [5] Stock Performance - Fiserv shares have decreased by 5.9% over the past month, compared to a 6.9% decline in the Zacks S&P 500 composite [6] - The company holds a Zacks Rank 3 (Hold), suggesting it is likely to perform in line with the overall market in the near term [6]

Core Viewpoint - The market anticipates Fiserv (FI) will report a year-over-year increase in earnings driven by higher revenues in its upcoming earnings report for the quarter ended March 2025 [1][3]. Earnings Expectations - Fiserv is expected to post quarterly earnings of $2.07 per share, reflecting a year-over-year increase of +10.1% [3]. - Revenues are projected to reach $4.88 billion, which is a 7.3% increase from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised 0.11% higher in the last 30 days, indicating a positive reassessment by analysts [4]. - A positive Earnings ESP of +1.05% suggests that analysts have recently become more optimistic about Fiserv's earnings prospects [10][11]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive or negative reading can predict the likelihood of actual earnings deviating from consensus estimates, with positive readings being more reliable [7][8]. - Fiserv's current Zacks Rank is 3, which, combined with a positive Earnings ESP, suggests a strong likelihood of beating the consensus EPS estimate [11]. Historical Performance - In the last reported quarter, Fiserv exceeded the expected earnings of $2.48 per share by delivering $2.51, resulting in a surprise of +1.21% [12]. - Over the past four quarters, Fiserv has consistently beaten consensus EPS estimates [13]. Conclusion - While an earnings beat is a positive indicator, other factors may also influence stock movement post-earnings release [14]. - Fiserv is considered a compelling candidate for an earnings beat, but investors should remain aware of additional influencing factors [16].

Group 1 - Fiserv, Inc. (NYSE: FI) is rated as a buy, particularly for long-term investors despite uncertainties from tariffs imposed by the Trump administration [1] - The success rate of copying Mario Silva's trades is 77%, with 76.92% of transactions generating a profit and an average return of 12.20% per rating [1] - The investment approach focuses on fundamental analysis and a "buy & hold" strategy, emphasizing long-term value investing [1] Group 2 - The analyst holds a beneficial long position in Fiserv shares through stock ownership, options, or other derivatives [2] - The article expresses the analyst's own opinions and is not compensated for it, indicating independence in the analysis [2]