Fiserv Inc at Wolfe Research FinTech Forum Transcript

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

Question: Darrin Peller - Wolfe Research, LLC - Analyst : We'll just start off and get right to it. I mean, Fiserv, obviously, had another strong year this year and I think Bob, maybe you'd be helpful if we just kick in with a few of the biggest milestones you were most proud of from last year, business performance in '24. And then maybe we could also just touch on what you're most excited about for this year ahead in '25.

Question: Darrin Peller - Wolfe Research, LLC - Analyst : Yeah. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 11, 2025 / 2:10PM, FI.N - Fiserv Inc at Wolfe Research FinTech Forum

Question: Darrin Peller - Wolfe Research, LLC - Analyst : I remember being out in Vegas that [Julie] invited us to, I've seen you and Frank and a ton of your leadership pitching product left and right to the banks in the room and there were like thousands of them in that room. And they were really eating a lot of it up because I think their ability to cross-sell. So to me, it was hard to almost distill what's most exciting about coming up for '25. So what are you most excited about in terms of the products you're launching now, the new innovation that you see, starting to really take hold and resonate this year ahead of us?

Question: Darrin Peller - Wolfe Research, LLC - Analyst : Yeah. That's really impressive. Shifting gears a little bit. I mean, I think it's been six weeks now since the announcement of Mike Lyons as CEO. So Bob, just anything worth calling out about the strategic direction of the company or management style you think that might be different going forward?

Question: Darrin Peller - Wolfe Research, LLC - Analyst : That's very cool. Maybe we could shift and talk about first quarter trends. Maybe just comment if you're seeing any continuation of Q4 trends. And just most recently, what you're seeing in the market just given the macro noise we're seeing? And then if you could even just add on to it GPV on trends and Clover and how we should expect that to play out through.

Question: Darrin Peller - Wolfe Research, LLC - Analyst : So you definitely have a lot in your control, obviously, in terms of incremental revenue generation to help support that ramp on revenue. But just sticking for one more second on GPV on trends, it sounds like you're seeing relative stability, maybe a little bit of macro softness or a little bit of macro nuances impacting February, I guess you called out from the data you showed, but you're still trying to see what's noise in the system and what's not.

Question: Darrin Peller - Wolfe Research, LLC - Analyst : And Clover, again, I mean in terms of the trajectory you expect for the year, how it just looks, it's coming off of a really strong year. So thinking about comps and just thinking about trajectory going forward?

Question: Darrin Peller - Wolfe Research, LLC - Analyst : Okay. Actually, let's just stay on that topic. I mean, international is really a big driver for your business, and you talked about, I think I mean, Germany, Brazil and Australia, there's so many new markets. Argentina is relatively, again, not totally new, but you're doing a lot more with them. And Frank had just gotten back from Brazil recently talking about Clover, right? So where are we? What inning are we in these international communities for Clover, and then maybe more broadly, and what is it, what do you have to do to get there? I mean, is it just more sales? Do you have enough distribution with partners?

Question: Darrin Peller - Wolfe Research, LLC - Analyst : It's still early days, I guess. All right, so taking international into account and what that can drive for you guys and in the context of this sort of uncertain macro now, I mean, you still have conviction back to Clover again, you still have the conviction in the Clover trajectory you guys have talked about for this year and for next year?

Question: Darrin Peller - Wolfe Research, LLC - Analyst : I was going to go on that next, so the building blocks sound like, obviously, it's not just volume, it's all of these areas, VAS being a big part of it. Going from 22% of total mix of Clover, something much higher. Help us understand what's happening there. I mean, what are you actually

Question: Darrin Peller - Wolfe Research, LLC - Analyst : And that percentage is supposed to go to what again? What did you guys call for?

Question: Darrin Peller - Wolfe Research, LLC - Analyst : And then just one question we get a lot is the back book, right? Whether or not you're actually really benefiting from Clover's growth from just converting business over from your existing business. Where are you on that in terms of whether it's a percent number or anything else you can give us?

Question: Darrin Peller - Wolfe Research, LLC - Analyst : So Bob, Clover has been growing nearly 30%. But before we go to the financial solutions and the fintech side of the business, just make sure we understand the rest of the overall merchant mix and the overall growth potential of the business be of the segment, I should say. Yeah. Even beyond Clover, you know, whether it's processing business or enterprise, just if we can just hit on all that before we go to the other side. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 11, 2025 / 2:10PM, FI.N - Fiserv Inc at Wolfe Research FinTech Forum

Question: Darrin Peller - Wolfe Research, LLC - Analyst : And the whole segment expectation is still, I mean, when you put Clover into context from a growth rate standpoint, the rest of the business has generally been what, mid single digits more or less?

Question: Darrin Peller - Wolfe Research, LLC - Analyst : That's helpful. What was the latest disclosure on discretionary versus nondiscretionary? Just given the macro dynamics going on, just do you remember the any data points you guys have provided on that?

Question: Darrin Peller - Wolfe Research, LLC - Analyst : Okay.

Question: Darrin Peller - Wolfe Research, LLC - Analyst : And you saw that play out most recently in in pandemic with COVID. Okay. Let's let's shift gears to financial solutions. I mean, you've talked about it accelerating this year from what was, I think, about a 6%, let's call it 5% to 7% last year, right, to a 6% to 8% growth rate in 2025.

Question: Darrin Peller - Wolfe Research, LLC - Analyst : And a lot of new business coming on, an issuer processing, but you're also cross selling into this, you know, great distribution channel you have, whether that's cash flow central or other other offerings. So just help us walk through the building blocks of the acceleration from last to this year, Kam, please.

Question: Darrin Peller - Wolfe Research, LLC - Analyst : Yeah. Some of those are pretty material contributions to your accounts on file. Yeah.

Question: Darrin Peller - Wolfe Research, LLC - Analyst : I mean, there's so many we can go after, but just in interest of time, CashFlow Central is one we've written about quite a bit and we've done work on. It seems like an exciting opportunity that banks could use to leverage to generate more noninterest income for themselves.

Question: Darrin Peller - Wolfe Research, LLC - Analyst : When do you expect to see that start contributing to you guys in terms of P&L? I know you've mentioned, what, 20 or 29, I think, right? How many banks did you mention again?

Question: Darrin Peller - Wolfe Research, LLC - Analyst : 39 banks that have already agreed to work with it and and adopt it. But, really, it's up to the small businesses to --

Question: Darrin Peller - Wolfe Research, LLC - Analyst : Take it on.

Question: Darrin Peller - Wolfe Research, LLC - Analyst : That's great. Just shifting gears in interest of time to margins. You expanded another good year. I think you said 100 or better than 125 basis points, which is already after several years of margin expansion. So, you know, help us understand how you're actually achieving that. What you expect to see this year is it? How much is operating leverage versus expense management? Yeah.

Question: Darrin Peller - Wolfe Research, LLC - Analyst : Yeah. Just to wrap it up, you're generating strong free cash as you mentioned, and you only have, I think, around two and half turns of leverage now coming out of last year. So maybe just remind us your capital allocation thoughts going forward. And then if we have time, guys, I think we'll take one or maybe one question from the audience.

Question: Darrin Peller - Wolfe Research, LLC - Analyst : Maybe one time for one question if there is. Unidentified Participant Yes. Just to touch on CashFlow Central again, you mentioned adopted by 39 banks, but how are they implementing it into their customer base?

Question: Darrin Peller - Wolfe Research, LLC - Analyst : Absolutely. Congrats on a great year last year and hopefully another one this year. And thank you for being with us.

Question: Darrin Peller - Wolfe Research, LLC - Analyst : Appreciate it. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 11, 2025 / 2:10PM, FI.N - Fiserv Inc at Wolfe Research FinTech Forum