Fiserv Inc Q1 2025 Earnings Call Transcript

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

Question: Darrin Peller - Wolf Research - Analyst : Hi guys. Thanks. Maybe we could just start off on the trajectory of the Merchant business. Obviously, the Clover growth was very strong at the 27% we are seeing. And so when we build that in, if you could just remind us some of the trends we're seeing and maybe a little bit more quantification of what we'd expect volume growth to look like in Clover as the year progresses. And then more importantly, as we build out in Brazil and Australia, we add these VAS, what kind of revenue growth you see in terms of a bridge between volume and revenue growth for Clover? Finally, just overall Merchant trajectory as the year progresses would be great from a sequential standpoint. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 24, 2025 / 12:00PM, FI.N - Q1 2025 Fiserv Inc Earnings Call

Question: Tien tsin Huang - JP Morgan - Analyst : Thank you so much. I had to ask a parting question for Frank because I'd love to hear, Frank, your thoughts on the Global Payments-FIS asset swap and how they are unbundling merchant and choosing depth there over breadth. And that's clearly in contrast to what Fiserv has done and what you guys have built. So does that change your thinking on that bet and the strategic sort of view on the sum of the parts for Fiserv?

Question: Ramsey El-Assal - Barclays - Analyst : Hi, thanks for taking my questions. Good morning. On Clover volumes, Bob mentioned some Canada headwinds. I'm just curious, were those headwinds -- do you interpret those headwinds as being kind of idiosyncratic to Canada? Are they sort of ring-fenced in Canada? Is there a risk that we see similar dynamics emerge either here in the US or in other international markets? I think you called out travel, for example.

Question: Tim Chiodo - UBS - Analyst : Great. Thank you for taking the question. Bob, I think you did a great job outlining some of the delta between the Clover volume growth and the revenue growth. You touched on hardware, Clover capital in anticipation, I want to dig into some of the other areas. So I think the laundry list is pricing and mix, some of the SaaS packages, there's rapid deposit. But then there's one that you've mentioned on a few of the past earnings calls around the increasing direct mix. And I was wondering if you could talk a little bit about how you expect direct mix to play a role in reaching that eventual $4.5 billion revenue number for 2026 for Clover.

Question: Jason Kupferberg - Bank of America - Analyst : Good morning guys. Thanks. I wanted to come back to the merchant segment for a minute. So I know we were at 8% organic in the quarter. You said that was in-line with plan. You had 3 points, I believe, of headwind related to some of those calendar factors, the term fee comp. So if we adjust for that, I guess, we're at 11%. We are still a little below the full year range. So just help us kind of reconcile from that into, let's say the middle of the full year range in a stable macro scenario. I know you've got some Clover geographies and products ramping. But also wanted to get a sense there in terms of how much of this is coming from the new acquisitions. If you could give us a sense of 2025 revenue contribution from those. Thank you.

Question: Bryan Keane - Deutsche Bank - Analyst : Hi, guys. Thanks for taking the question. I wanted to ask about the 33 signings in the FI and the financial institution side. I guess what's happening in the market that's driving that number higher for you guys to be landing that many financial institutions, because I guess I would have thought that most FIs would have already decided who they are partnering with. So I just want to understand the market dynamics that's driving that. Thanks.

Question: Will Nance - Goldman Sachs - Analyst : Hi, thanks for taking the question. Mike, one for you. There's been a lot of data points on the macro environment about a lot of large enterprises going pencils down on large CapEx investments. But I know banks tend to beat to their own drum. And I was wondering if you could maybe put your PNC hat back on for a second and talk a little bit how the macro environment we entered a month ago may impact the way banks think about technology and deployments. And maybe what I'm getting at, at a higher level is how would you expect implementation pipelines in a business like Fiserv to perform in a weaker macro environment versus maybe a typical enterprise software company? Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 24, 2025 / 12:00PM, FI.N - Q1 2025 Fiserv Inc Earnings Call

Question: James Friedman - Susquehanna - Analyst : Hi, good morning. Bob, I wanted to ask about merchant as well. My math is that small business and enterprise organic grew 10.3% combined ex-processing. And I realized you had messaged last quarter in prior transcripts the challenges in processing. But if you could revisit where we are in the processing journey, because it sounds like you are expecting that to improve. But if you could talk through why it is and what the logic is, I think that will be helpful to understand the trajectory. Thank you.

Question: Dan Dolev - Mizuho Securities - Analyst : Hi guys. Great results, and congrats again Frank and Mike. So really quick on -- I know you called out Dolar Turista impact in tandem with interest rates and excess inflation. But can you maybe quantify just specifically the Dolar Turista impact? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 24, 2025 / 12:00PM, FI.N - Q1 2025 Fiserv Inc Earnings Call

Question: Andrew Jeffrey - William Blair - Analyst : Hi, appreciate taking the question. Mike, and maybe for Frank too, recognizing that Fiserv's offerings for banks have improved and expanded dramatically over the last few years, can you just comment on sort of the nature of that distribution channel compared to the historical JVs? Maybe just qualitatively. Have the partnerships improved along with product? Is it people in the bank partnerships? Because I know that's an area that had sort of been a little choppy historically, but it sounds like now it's really turning to important growth drivers. So I'm wondering if you could sort of compare and contrast today with five or seven years ago perhaps.

Question: James Faucette - Morgan Stanley - Analyst : Thanks very much. Appreciate all the color today. I wanted to ask about the evolution of margins. You, at least relative to our estimates, continue to put up very good operating margins. At the same time, we are seeing the increased contribution of growth from international markets, especially as you roll out over to those markets. How should we think about the maturity of profitability in those markets? And how can that change over time as you continue to grow footprint outside the US.? Thanks.