Fiserv Inc at Raymond James TMT and Consumer Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: John Davis - Raymond James - Analyst : So Frank, just to kick off here. Stock is up 50%. Numbers have been great all year. What's going right in '24? And what are you focused on heading to '25, especially as you potentially move on?

Question: John Davis - Raymond James - Analyst : Yes. So if I go back a little bit in history to the First Data, merger back in 2019. Obviously, you saw a lot of strategic value at that point. But would just love to be your perspective, five years later, what's gone better? What are you strategic value did you underestimate maybe what wasn't there? Clearly, it's been a very successful merger. But just curious kind of get a postmortem five years in.

Question: John Davis - Raymond James - Analyst : I think before we get into the merchant business, I just want to touch a little bit on what you're seeing from a macro perspective? The health of the US consumer. I think Bob said last week in Arizona that maybe November was a tick down from October, but still tracking to what you thought. I mean just curious what you're seeing real time? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 10, 2024 / 4:20PM, FI.N - Fiserv Inc at Raymond James TMT and Consumer Conference

Question: John Davis - Raymond James - Analyst : Just curious what you're seeing from kind of a brick-and-mortar versus e-comm. If you go back, holiday sales or, I guess, the Big Five, what they call the -- what used to be Black Friday --

Question: John Davis - Raymond James - Analyst : No, just to go back to the merchant business here. So you laid out 12% to 15% organic growth at the Investor Day. Obviously, Clover is a big piece of that, clearly taking share. The industry is probably growing high single digits. So if we just double click on Clover, it's still growing close to 30%. You've laid out a target for $4.5 billion of revenue in '26, which implies kind of high 20s growth from here, mid-teens to high teens volume growth. Just talk a little bit about the sustainability of that growth. What gives you confidence? You mentioned Brazil and Mexico, international rollout. You still haven't really done much with the back book. But just help talk a little bit about the success of Clover, and what's driving that a sustained high level of growth into '25 and '26?

Question: John Davis - Raymond James - Analyst : Yes. And you touched a little bit on it, but VAS penetration has ticked up nicely to 21%. You've got targets out there for 25% next year and 27% in '26. What's been the key -- what are the key products? I'm just curious also, as we think about cohorts of customers, are your newer customers adopting more software today? Or is it the older customers?

Question: John Davis - Raymond James - Analyst : Yes. And if I go back even further in history and you're talking about this earlier, whether North America business the first day was going to grow 2% or 3% and to see where we are today, how has the competitive landscape changed the last decade or so? And why have you been so successful? Is it Clover? Is it integrated payments? Like just curious to get your thoughts of you were the big 800-pound gorilla with a great distribution, didn't have a great product, so you got Clover. That seems like you changed the game, but curious how you see the competitive landscape today?

Question: John Davis - Raymond James - Analyst : Absolutely. And I can talk --

Question: John Davis - Raymond James - Analyst : More than okay. If we think about the ex-Clover merchant business, right, we can talk all day about Clover. And maybe actually before we wrap on Clover, you're a baseball fan, what inning do you think Clover is in?

Question: John Davis - Raymond James - Analyst : And maybe just touch for a minute on the ex-Clover merchant business. You talk a little bit about the success you're having in enterprise kind of other initiatives that are driving pretty healthy growth outside of Clover?

Question: John Davis - Raymond James - Analyst : And then maybe shifting over to Financial Solutions for a minute there. You've also -- you've guided to an acceleration in revenue growth next year to 6% to 8% and kind of that should continue into '26. You had some big wins with Target and Verizon. But just talk a little bit about the confidence level in that acceleration, what the real drivers are?

Question: John Davis - Raymond James - Analyst : Yes. And if we just think about the balance sheet. It's in great shape. Generate north of $5 billion of free cash flow next year. How do you think about capital allocation? Are you seeing kind of a falling in the M&A market, maybe some more reasonable expectations? Obviously, you've been a big buyer of your own stock. Just talk a little bit about the push and pull there? And what potentially would be attractive from an M&A perspective?

Question: John Davis - Raymond James - Analyst : Frank, as this maybe one of your last couple of firesides as you kind of move on --

Question: John Davis - Raymond James - Analyst : I'd love just to get your perspective. What do you want to leave investors with as you kind of potentially move on? You talked about the construction of the company, the assets. But maybe just a minute on what you want us in the room to think about how we should think about Fiserv over the next couple of years as you transition on?

Question: John Davis - Raymond James - Analyst : We'll have to wrap it there.