Q2 2022 Fiserv Inc Earnings Call

Please standby the conference will begin shortly again, please standby the conference will begin shortly thank you.

Paul.

[music].

Okay.

[music].

Welcome to the Pfizer of 2022 second quarter earnings Conference call. All participants will be in a listen only mode until the question answer session begins following the presentation. As a reminder, today's call is being recorded at this time I would like to turn the call over.

Our tissue Mukherjee, senior Vice President of Investor Relations adviser.

Thank you and good morning with me on the call today are Frank Bisignano, Chairman, President and Chief Executive Officer, and Bob Hau, Our Chief Financial Officer.

Our earnings release and supplemental materials for the quarter are available on the Investor Relations section of <unk> Dot com.

Please refer to these materials sort of an explanation of the non-GAAP financial measures discussed in this call.

Along with the reconciliation of those measures to the nearest applicable GAAP measure.

Unless otherwise stated performance references our year over year comparisons.

Our remarks today will include forward looking statements about among other matters.

Expected operating and financial results and strategic initiatives.

Forward looking statements may differ materially from actual results and are subject to a number of risks and uncertainties.

You should refer to our earnings release for a discussion of these risk factors.

And now over to Frank.

Sure.

And thank you all for listening in and as we share our results for the quarter and highlight the progress against our growth agenda.

You know we serve as the operating system for Commerce and money movement across our client base of banks credit unions fin techs and businesses ranging from SMB to mid market to large enterprises.

We help our clients grow by extending our platform to capture new services and new money flows.

Our relentless pursuit of innovation for our clients yet again, one of several accolades in the quarter.

<unk> was named a leader among merchant payment providers. So the current operating system by far is the wave.

<unk> was also awarded the prestigious Webby Award proud developers studio.

Good for them, which provides rich inexpensive API integrations.

Now moving to our second quarter results, we delivered a strong 12% total company organic revenue growth.

Once again exceeding the 7% to 9% guidance range, we provided for the year.

The terrific performance on the top line resulted in 14% adjusted EPS growth to $1.56.

Bringing our year to date adjusted EPS growth to 17% at.

At the high end of the 15% to 17% guidance range provided for the full year.

We obtained $180 million of action to revenue synergies in the quarter, reaching $700 million since the merger.

Seeding the increased commitment of 600 million two years ahead of our original commitment.

The impact of high inflation.

Continued investment in the business resulted in adjusted operating margin of 33.5% down 40 basis points from second quarter last year.

We continue to see opportunities to innovate for our clients through our recent acquisitions, such as <unk> Bento box and Vince Act as well as organic investments across our portfolio.

Additionally, these investments and accelerated revenue growth resulted in higher capital expenditures and working capital leading to free cash flow of 658 million for the quarter and 1.3 billion year to date.

Looking into the remainder of the year.

Year to date organic revenue growth outperformance of 11% puts us in a very good position to beat our prior organic revenue growth guidance for the full year.

Given the strength in the first half of the year, we're raising our full year organic revenue growth outlook to a range of 9% to 11% up from 7% to 9% previously.

The low end of this revised growth outlook assumes a macro slowdown in the second half versus the first half of the year with this higher organic revenue outlook in the year to date adjusted EPS performance of 17% growth, we're raising the low.

Sure and above full year, adjusted EPS guidance range by five cents to a new range of $6 45 to $6.55 representing growth of 16% to 17% over 2000.

'twenty one.

Given the elevated inflation environment and favorable foreign exchange and our plans to continue to invest in innovation for our clients. We now expect our full year adjusted margin expansion to be at least 100 basis points.

Now turning to the business strategy.

<unk> solutions are geared towards merchants and financial institutions, including syntax.

Starting with merchants, we are transforming from selling merchants individual point solutions to offering operating systems clover versus small to medium sized merchants and carrot for large enterprises.

This operating system approach expands the size of our total addressable market and makes us more valuable to our customers, we grow and create value in three ways.

First attracting more merchants through our operating system.

Second expanding the relationship we have with al merchants by encouraging adoption of more software and services modules.

And third benefiting from the growth of Alex 15 customer base.

Turning to our financial institution clients, we remain committed to continuously innovate for our clients and broaden our total addressable market. Since we closed the acquisition of Hinzack, a leading developer of cloud Native banking solutions in early April we have been focused on three.

Key areas.

Integrating our existing digital surrounds into Vins Act.

Selling thing Zach to our existing clients as an innovation platform or sidecar Gore.

And winning new logos cells on the fins Act solution.

The feedback from both existing and new clients has been very positive.

Now, let's dive deeper into outperformance in the quarter by business segment.

Let me start with merchant acceptance, we posted very strong organic revenue growth of 17% for the quarter.

Merchant volume and transactions grew 10% and 7% respectively.

Our global active merchant accounts grew 5% in the second quarter, continuing the positive trend since the start of 2021.

Results were strong across all regions North America was led by the strength in SMB is particularly within the restaurant vertical as well as strength in enterprise verticals, such as travel and Petro.

Our international regions also had very strong performance on a local currency basis in part offset by unfavorable foreign exchange.

Spending across the EMEA region accelerated during the quarter driven by strength in hospitality restaurant and retail verticals.

Our merchant business in Latin America was very strong in the quarter as we continue to make significant progress in the Argentina market and in Brazil, Onboarding merchants throughout exclusive merchant acquiring mandate from kasha.

We are also expanding our presence rapidly in Mexico and Colombia.

Spending trends in APAC was strong driven by a rebound in the economic activity across nearly all markets as well as new wins and implementations.

Moving to our merchant operating systems Clover and carry both continue to gain significant traction with clients Cobra Global revenue grew 24% in the quarter driven by volume growth of 27% as well as growth in software and services.

Penetration to 15% up over 350 basis points.

Culver's vertical focused strategy continues to deliver in market with Bento box now fully integrated into Clover for all e-commerce payments.

When vento and Hoover are sold together, we see an over three times increase in average revenue per user versus a clover only restaurant. In addition, Uber eats was launched in the second quarter as another integrated delivery partner for our restaurant merchants.

Terry.

Harmony ecommerce operating system for enterprise clients grew revenue 22%.

We saw broad based growth across verticals, including Petro and quick service restaurants.

In the quarter carat made several strides in further strengthening its positioning within the federal vertical.

Among the notable wins included a contract with Wawa.

Large chain of convenience stores and gas stations.

Additionally, we expanded our relationship with a longstanding client to introduce a customized dealers settlement and reporting platform supporting over 10000 retail locations in North America.

In keeping with carriage submission to continuously innovate for our clients carat launched pay by plate, enabling our petro partners to facilitate transactions.

Just on license plate recognition for customers that opt in replacing the need for a physical card carrier continues to capture new payment flows and has made significant progress across digital payouts and E V T online with transactions grow.

69% and 54% respectively in the quarter.

Further bolstering our capabilities carat launch new payout options in a quarter to include digital checks prepaid cards and crypto wallets.

We also had some notable wins within our enterprise business in North America during the quarter, we expanded our partnership with Walmart to facilitate one time digital payouts to consumers and want a contract what's the deck, so a leading global facilities management.

Denis to digitize consumer and employee payouts.

Turning to our international merchant business, we continue to show strong momentum with the following highlights in the second quarter.

In EMEA Pfizer have signed a deal with Abu Dhabi commercial bank one of the largest banks in the region with over 115 billion assets and a significant residents across our retail corporate and SMB space with over 24000, Pos terminals deployed today.

Pfizer will be providing its acquiring as a service suite of solutions, including our automated onboarding solution and Omnichannel acceptance platform with soft P. O S enabled deployment.

The bank will also benefit from Pfizer's enhanced risk real time fraud management solutions, our merchant portal and reporting capabilities.

In APAC, we went live with sports that the.

The market leader in online sports betting across Australia, and boarded 10000 sub merchants from MYOB.

A leading provider of digital business accounting services to small businesses in Australia.

Moving to the payments and network segment organic revenue grew 8% in the quarter. This growth was enabled by a variety of drivers across all business lines.

North American credit active accounts on file grew 14% versus Q2 of last year.

This growth was driven by both new business, Onboarding and a favorable credit environment.

As a reminder, in the second quarter, we completed the on boarding of bread financial formerly a D. S. The largest of the three top 25 credit issuing wins, we announced in 'twenty 'twenty bread was the third of the three wins to onboard completing the $120 million.

In annual revenue related to new wins, we announced at our last Investor Conference.

Getting forward, our current implementation and sales pipeline remains very robust.

Our international issuing business grew strong double digits, driven by macroeconomic improvement as well as onboarding of new clients.

That business continues to post solid growth driven by new client wins on our debit networks star in excel.

Even as debit transaction growth continues to normalize industry wide following the stimulus driven high debit volumes last year.

Our market, leading digital solutions, including card hub and spend track have become key differentiators in our new business pursuits and serve to drive more cards into a debit network more opportunities for Pfizer have to offer.

Our risk broad digital banking and account processing solutions, demonstrating an attractive flywheel effect.

We continue to see growth in digital payments, driven by zelle, which posted transaction growth of a strong 35% in the quarter.

Our 1000 Zelle client went live during the quarter of <unk>, we accomplished in under four years of commencing zelle implementations.

And we expect this momentum to continue what line of sight into doubling out zelle client base over the next two years.

By serve reach.

Recently won a competitive bid to support the state of California's Middle class tax refund program.

Several manage the program and distribute prepaid debit cards to quasi program recipients. This win reinforces our position as a leading provider of government programs an area of expanding opportunity.

We had a notable win in the student loan processing space, which will considerably extend our position as a provider of choice to student loan Servicers.

We continue to win credit processing mandates globally in the second quarter, we expanded our relationship with U K based financial services company, New day to provide processing and other services as they re launch the John Lewis partnership card one of the.

The U K 's, most popular retail rewards credit cards.

Moving to the financial Technology segment.

We posted another strong quarter with organic revenue growth of 7% driven by strength in our account processing and digital activity as well as the timing benefit of periodic revenue.

We had seven core wins in the quarter, including four competitive takeaways.

Sales of digital surround solutions continue to grow at a healthy clip.

Driven by our three pronged approach.

Our proprietary online and digital banking solutions with integrated surround solutions, such as card hub zelle and spend track offer a leading modern banking experience for our clients and users in keeping with our open source.

The approach to serving our clients. We are also pre integrating third party digital solutions into our cores and making these solutions discoverable the clients via our App marketplace.

Last but definitely not least we're making our platform attractive to the developer community by exposing our micro service AEP is throughout developer studio with the goal of becoming the destination of choice pretty embedded.

And he goes system, including card issuing and processing merchant and core banking integrations.

And spins Act further cements our lead in next generation banking.

Our Fintech product was selected by Colorado base National Bank Holdings to utilize Thins Act modern core to pursue an SMB focused digital only greenfield initiative called to unify as part of their initial modernization.

Effort.

As an example of cross selling Thins act into visors existing core clients, Massachusetts based Martha's Vineyard Bank will utilize thins acts open AP is to deliver innovative new products and services across all channels, including.

Highly personalized experiences for its customers.

The combination of <unk> technology advisor of size and scale ecosystem of digital surrounds and knowledge of banking is winning over other competing offers in the market together, we are delivering value to our clients by accelerating their modernization.

<unk> journey.

Now, let me pass the discussion to Bob for more detail on alpine actual results.

Thank you Frank and good morning, everyone.

If you're following along on our slides I will cover additional detail on total company and segment performance, starting with our financial metrics and trends on slide four.

We had a strong second quarter same store execution across the business and our broad portfolio of products and services.

Total company organic revenue growth was 12% in the quarter with strong growth across all segments.

Notably the merchant acceptance segment, which grew 17%.

Year to date.

Total company organic revenue grew 11% also led by the merchant acceptance segment, which grew 18%.

Second quarter total company adjusted revenue grew 10% to $4 $2 billion.

And adjusted operating income grew 8% to $1 4 billion, resulting in an adjusted operating margin of 33, 5% of.

A decrease of 40 basis points versus the prior year.

For the first half of the year.

<unk> revenue grew 10% to $8 $1 billion in adjusted operating income increased 10% to $2 $7 billion, resulting in adjusted operating margin of 32, 7% consistent with the first half of last year.

The adjusted margin was impacted by a combination of factors, including first cost inflation for both labor and materials, including point of sale terminals for a merchant acceptance segment and paper and plastic for our payments segment.

Second investments related to new acquisitions, including Bento box and Fintech.

And third continued reinvestment into the business, including wrapping up of the Fiserv first data integration projects as we've previously indicated these began ramping down late in the second quarter and into the third quarter.

This will lead to improved margins as we complete the spending and as the benefits of those projects materialize in the second half of the year, particularly in Q4, leading to a strong exit rate for 2023.

Second quarter adjusted earnings per share increased 14% to $1.56 compared to one dollar and 37 cents in the prior year.

Through June 30th adjusted earnings per share increased 17% to $2.96 at the high end of the 15% to 17% guidance range, which we provided for the full year.

Free cash flow came in at $658 million for the quarter and $1.3 billion for the first six months of the year.

Free cash flow conversion was 65% to adjusted net income this quarter and year to date.

The free cash flow conversion was driven by a combination of first increased capital expenditures, particularly in the areas of innovation and integration of newly acquired capabilities.

Second increased working capital investment driven by the very strong revenue growth, including growth in anticipation revenue in Latin America.

Third increased inventory to minimize any potential impact to our clients given the risk of supply chain disruption.

And fourth continued investment in software and application development to drive sustainably higher growth across the business.

As we look forward, we expect the free cash flow conversion to improve meaningfully to end the year at 90% to 95%, which is slightly below our previous outlook of 95% to 100%.

We are focused on serving our clients with innovative solutions.

Sustainably stepping up our growth rate for the company to high single digits or even better this year.

From historic levels of mid single digits.

Now looking to our segment results starting on slide five.

Organic revenue growth in the merchant acceptance segment was a strong 17% in the quarter and 18% year to date.

Adjusted revenue growth in the quarter was 14% and 16% for the first half.

Merchant volume and transactions grew 7% and 5% respectively.

When excluding the loss of a processing client mid last year, which we will fully cycle through in the third quarter.

Orchard volume and transactions grew 10, 7% in the quarter respectively.

Clover or operating system for small and medium sized businesses.

<unk> to build on the strength of its product offering to attract and retain more merchants and expand relationships with them.

Over posted a strong 24% revenue growth for the quarter and 30% year to date.

Quarterly Clover G. P V was $58 billion or $233 billion on an annualized basis.

Up 27%.

Our ISP volume in the quarter through Clover connect grew 39% and 44% year to date.

We signed 45 Isps this quarter, bringing our total signed 89 year to date.

Carrot, our omni commerce operating system for enterprise clients.

Grew revenue, 22% in the second quarter.

Adjusted operating income in the acceptance segment increased 13% to $593 million in the quarter and adjusted operating margin was down 20 basis points to 31, 2%.

This was driven by inflation and continued investments in the business for growth.

Year to date, adjusted operating income improved 17% to $1 1 billion and adjusted operating margin grew 20 basis points to 29, 9%.

We expect adjusted margin in the merchant acceptance segment to improve in the second half of the year as we see the benefit of lower inflation continued strength in revenue and productivity.

Turning to slide six the payments and network segment posted organic revenue growth of 8% in the quarter at the high end of the 5% to 8% medium term guidance range.

Notable growth drivers in this segment include active accounts on file in our North American credit processing business. The output solutions business, our debit networks star and Excel and Zelle led by an increase in the number of clients and transaction growth.

We expect the momentum in this segment to continue through the rest of the year, resulting in the full year organic revenue growth rate to come well within our medium term outlook of 5% to 8%.

Adjusted operating income for the segment was up 5% to $668 million and adjusted operating margin was down 80 basis points to 43, 8% driven by a combination of inflation and investments in the quarter.

Year to date, adjusted operating income was up 6% to $1.3 billion.

And adjusted operating margin was up 20 basis points versus last year at 43, 2%.

Moving to slide seven.

Financial Technology segment organic revenue grew at 7% in the second quarter, resulting in 6% growth for the first half at the high end of our 4% to 6% medium term guidance range.

As Frank mentioned, we added seven new core account processing clients in the quarter, including four competitive takeaways.

Combination of fins ex modern core and five serves leading digital surrounds is winning in the clients' office.

Adjusted operating income was up 3% in the quarter to $281 million.

And up 7% to $556 million year to date.

Adjusted operating margin in the segment decreased 120 basis points to 35% in the quarter driven by investments in Fintech, which we acquired early in the quarter as well as increased organic investments in the business.

For the first half this segment's adjusted operating margin grew 30 basis points to 35, 2%.

The adjusted corporate operating loss was $125 million in the quarter and $247 million year to date.

The adjusted effective tax rate in the quarter was 21% and was 19% for the first half.

We continue to expect 2022, adjusted effective tax rate to be approximately 21% for the full year.

Total debt outstanding was 21 $5 billion on June 30th.

And debt to adjusted EBITDA ratio was 3.0 times in line with our target leverage.

In June we increased our bank revolver to $6 billion from $3 $5 billion previously and extended the maturity to June 2027.

The new revolver provides additional capacity and flexibility.

During the quarter, we continued our disciplined capital allocation strategy repurchasing five 1 million shares for $500 million.

We had 32 million shares remaining authorized for repurchase at the end of the quarter. Additionally, we have had nearly $400 million of share repurchases. So far in July .

We are fully committed to our long standing capital allocation strategy, which includes maintaining a strong balance sheet repurchasing shares and pursuing high value and innovative acquisitions.

With that let me turn the call back to Frank.

Thanks, Bob.

I'm very proud of the results we've accomplished.

Another quarter of double digit growth in both adjusted revenue and adjusted EPS.

In the second quarter, we published a 2021 P. S are important.

Which included a number of key enhancements to add disclosures and respond to new reporting standards on environmental impact and corporate governance.

We are proud to share our ESG journey as we continue to optimize the business, while generating value to shareholders and communities.

In June we expand out back to business program in Nebraska.

In addition to a $10000 grant businesses receive access to innovative business management technology from Clover.

Ongoing community support and small business resources, our program in Nebraska.

<unk> to award $1 million in grants for small diverse businesses.

We are incorporating green building design principles as a priority for our offices and facilities.

In the second quarter by serve received LEED Gold Green building certification for our downtown Manhattan location, and we are working toward lead status at the completion of our Berkeley Heights, New Jersey, and Dublin, Ireland hubs.

Finally, before I turn it over to the operator for Q&A.

Like to thank Shoob.

Or her terrific work as our head of Investor Relations.

Last 18 months.

Szuba is hanging on a new assignment as our head of strategy.

And I look forward to continuing to work with her.

Pleased to welcome Julie Sherry Al who is with US today as our new head of Investor Relations Welcome Julie.

I will close by thanking our more than 40000 hard working via serve associates around the world for working relentlessly to serve our clients and you our shareholders.

With that operator.

Please open the line for questions.

Thank you.

We will now open the phone lines for any questions.

If you would like to ask a question you May press Star one on your phone if you would like to withdraw your question. Please press star two.

Our first question will go to the line of Dave Koning from.

Baird. Please go ahead.

Yeah, Hey, guys great results across the board.

Thanks, Dave.

And yeah, and you know I I thought one of the most interesting things you know volume up 10% in merchant yield must be up 7% I think that's the biggest then.

Maybe ever that we've seen is that primarily you called out mix of smbs, but there could be pricing components or just more services to the merchants is is there any one or two of those that's more prevalent and how sustainable is that.

Yes, Jay Thanks, and good morning.

As you've heard us say over the last couple of quarters.

That's really like to see.

Necessarily track yield practice, we're not managing for yield.

<unk> for revenue growth and overall margin there.

Always quarter to quarter fluctuations this quarter last quarter or two examples where yield is as positive as we continue to sell more value added services as we see more revenue per merchant.

Obviously, we see the benefit of yields.

And yes, we see that.

We believe our overall revenue growth is sustainable and will continue to see good growth in the business some of that will be because of more value added services.

That will be more transactions.

Great. Thank you and then just as a follow up just on margins I know, you've called out investments and inflation impacts, but as we look in the back half I think it has to be up about 200 bps in the back half 200 bps year over year is Q3 or Q4 above or below that like maybe the cadence of the two quarters remaining.

Yes, I think you should.

You should expect the margin to improve into Q3 and more so into Q4.

Combination of could you anticipate inflation to subside a bit from the very high levels. We saw in the first half of the year.

Additionally, as we've talked about.

In the prepared remarks, as well as last quarter.

Over work that we do.

Yep going on from an integration standpoint last year, we dialed those costs out.

<unk>.

As did earnings beginning in January 1st of this year, we stopped dialing that back out and therefore, you see those costs hit Q1, and Q2 they started to ease.

<unk> in the latter part of Q2, we will continue to easing.

So those costs go away. In addition, you get the benefit or the productivity.

That integration work and so you'll see a bigger improvement in fourth quarter than you do on third.

Second half stronger than first half.

Great Great job guys. Thanks.

Thanks, Dave.

Next we'll go to the line of Lisa Ellis from Moffett Nathan. Please go ahead.

Hi.

Good afternoon, and good morning, I guess, thanks, guys I think I'll start with actually the follow on question. Today's question same question for you Bob on the free cash flow bridge throughout the remainder of the year conversion running 65% year to date, you're now expecting 90 to 95 for the full year can you just help us with what.

Gives you confidence in the improvement in conversion in the second half. Thank you.

Yes, Lisa good morning.

Couple of things there one we definitely see improvement in inventory in the back half of the year.

Have been buying significant amounts of inventory.

In terms of point of sale devices, but also in paper and plastic for our payments segment our output.

Output solutions business payments.

See that easing into the second half of the year that was done not only a case of actual point of sale devices, but some components.

Protect our clients from having a hardware available and we see that easing in the second half of the year. So we'll see an improvement there overall I believe working capital will improve into the second half.

Well as some improvement capex.

Capex from a timing standpoint, and then finally as we see improved margins getting more productivity and get more cash flow.

I would just add.

We've had tremendous opportunity.

Product.

Organic opportunities in the market.

Yes.

Take a look at FEMSA.

Sorry, Sam.

We're.

Hi, Thanks.

Very very pleasantly surprised by the opportunity to have a much larger footprint.

Perfect example, we're building on to industrial strength at a much faster speed.

And I think one of the other items I highlighted.

We have increased our speed up actually.

I appreciate it.

All revenue numbers it does affect our capex somewhere also but.

If you look at the speed at which we're yet.

One that the size and scope of which we operate.

Alright.

Okay.

And we think those two last element that Frank pointed out is really at the heart of why we've taken.

Sure.

From the 95 to 190 to 95 continuous opportunities and we want to work those opportunities.

Okay, Great and then my second one is a more of a question related to that because you had a number of Dell related call outs. This quarter, 75% transaction growth, 54% client growth can you just remind us how big zelle is as a contributor to payments and net.

Works like how we should think about the monetization model of selling and its contribution to go. So I guess I think growth of that segment. Thank you.

Yes.

I think overall it's.

Relatively small piece, it's call it roughly 2% of the.

Payments segment.

We've obviously seen good growth there as part of the growth driver of the business and as that.

<unk> to ramp not only in the number of.

Financial institutions, and therefore, the number of users.

See more and more ubiquity of that.

Capability of that tool I.

I E more consumers, making more payments.

And so.

Perfect. Thank you.

Thanks Lisa.

Next we'll go to the line of Tien Tsin Huang from JP Morgan. Please go ahead.

Thanks, and good morning, and congrats issues on the new role for her.

I just wanted to.

That's one of the visibility side, if you don't mind, just any interesting trends in July the callout of volumes and new sales ramping as expected and same thing on the cost side, you have better visibility now on.

On the cost to support this with better revenue growth.

Yes first of all.

Okay July volume.

In line with Q2.

The consumer or the insurance sale again.

Yes.

Fundamentally in line.

And the volume of transaction standpoint also.

So all those months out over this month seems to be continuing.

And the fashion.

And how visibility on.

Expense side is very very clear.

We have clear line of sight.

Yes.

A bunch of decisions.

Business.

<unk> properties.

Level.

It is.

Where we like it.

Allergan.

Okay.

We do see opportunity too.

Thanks, Alan expenses right.

Right.

Okay.

Productivity productivity so in front of us.

Right.

Intention as I pointed out we expect inflation to subside a bit.

We have.

The productivity of completing those integration projects those have been ramping down O&M. So.

Kind of middle to end of second quarter. She cleared last night to see that.

Great.

We see good opportunities to continue to invest.

Focused on sustainably growing this business much faster than it has in the past taking our revenue guidance. This year from 790 911.

9% to 11% and those opportunities that Frank talked about increase our speed of execution and drive innovation not only as an impact to cash flow margin and therefore you saw.

Lower margin a bit even though we took up EPS stronger growth.

Got it got.

Overall encouraging for sure just my quick follow up.

What's your target leverage now you bought a lot of stocks it sounds like.

Curious on the appetite.

With the buybacks versus doing deals it seems like there are some.

Payments Fintech properties for sale out there. So just curious if there's any change in thinking.

Thanks.

No I would say no no change in thinking.

Strength of our balance sheet and our cash flow gives.

Gives us the opportunity to both buyback shares.

The outlook for value accretive acquisitions, and we'll continue to do that.

If you look we did $1 $4 billion through yesterday or so through July so far.

But we also completed a number of acquisitions.

In fact, what over the last call. It 15 to 18 months seven.

Acquisitions for about $2 billion level.

We're also buying back shares so we'll continue to do both.

We're in the market regularly.

We clearly believe there is real opportunities in the value of our stock.

We will buy back, but we also look for value accretive acquisitions.

Perfect. Thank.

Thank you.

Next we'll go to the line of Darrin Peller from Wolfe Research. Please go ahead.

Thanks, guys can we revisit the revenue growth trend, we saw it really across all three segments, but if we hone in on merchant perimeter again, I mean, this is kind of 17% growth would definitely well above what anyone expected and when we look at the sustainability to that.

Is there something anything anomalistic in growth in this segment in the quarter or for that matter either of the other two segments that wouldn't be sustainable in your mind.

Maybe medium term.

Is this a sign of things to come in terms of elevated growth first and then just to revisit again the spread between revenue and Boeing talked about value added services I think and again.

Again, SMB, but is that kind of a spread with like do you expect revenue to outperform volume consistently now.

Right.

I'll start off.

We purposely.

Mr Conference to talk about how we saw it over the longer haul.

Obviously, we do believe and driving penetration rate of software services you saw that.

Yeah.

It just points kind of 15% with talk about moving that over the longer haul.

Eight 5% so are correlated.

Clearly a focus of ours, our ability to also continue to expand in markets you hear us.

Talk about Colombia origin.

No.

Along with Alberta.

We feel very very strongly about our capabilities, we're going to build out over the long haul.

Paul.

In the restaurant vertical and then move into the services articles. So we feel our partnerships continue to grow we believe we're the partner of choice in that business and what you're seeing there. Obviously, we've got a couple of points of inflation there.

But what you really see is the strong productivity investments.

So essentially bought any integration capability of the total franchise.

I believe that we get leverage from our bank partners and other partners in a way that we can then of course clover and carry it to.

Q2, leading products in the industry.

Great.

We continue to invest heavily in so I think the sustainability.

Inflation is right in front of us.

We've been driving this real long time.

We've talked about for a long time, and you're saying the fruits of labor.

Okay, and just a quick follow up on the yield again, if you don't mind.

Sure Yeah. So.

Obviously very positive yield.

This quarter was last quarter.

There's always variability quarter to quarter.

And so we try not to get too myopically focused on that calculation within a given quarter we think.

Got it evens out over time as we continue to provide value added services will continue to see improvements.

We are very focused on.

Adding merchants to our portfolio I E signing up more merchants, we're very focused on selling more products to those merchants that lifts are pooling and drives revenue and margins to the company.

Okay, guys, just very quickly the free cash and margin profile I mean, the business is obviously growing notably faster so should we expect.

Maybe a more moderate margin story going forward or free cash conversion just to support this kind of growth or is this just the anomalistic items around inventory build in restructuring and either way you should get back to that 95% longer term.

Yes.

I'm not ready to update our medium term or long term outlook, obviously, the crystal ball. These days is a little bit fuzzy on what 'twenty two 'twenty three 'twenty four 'twenty five is going to look like.

At the end of the day we're.

We're focused on driving sustainable growth and our revenue were up significantly from where we've been historically, we took up this year.

The merchant business.

Our medium term outlook was 9% to 12%.

And our last fall Investor Conference at the end of 2020.

In March of this year, we actually took that up and so we went out to 2025.

We will believe will be at 11%.

So we're driving for sustainable growth that obviously helps the top line is growing the bottom line, we took our EPS growth up this quarter for the full year and.

And we will continue to look for those opportunities.

To drive overall value by growing the topline bottomline and generating a great free cash flow.

Alright, nice job guys. Thanks.

Thank you.

Next we will go to the line of Ramsey El <unk> from Barclays. Please go ahead.

Hi, Thanks for taking my questions today I wanted to ask about the competitive environment and along the lines. If it's sort of hard to argue over the past few years that we haven't seen a lot of profitless irrational competition are you seeing or do you expect to see any improvement in the competitive environment, I guess, primarily driven by Fintech maybe.

You have a harder time raising.

Raising capital to compete with you with.

I mean, the way I think about it is.

We run.

Large enterprise.

We have competition in every country, we have competition in every business.

I think al solutions.

Our world class.

And I think ultimately.

It is about how we provide our clients an opportunity to grow their businesses, whether it's a small business of community bank or Orange large enterprise. So I don't I don't really look at it and say anything other than our job is to meet the dash.

The best.

And from a competition standpoint, there's a lot of great competitors out there.

But we fail when youre looking at numbers and you look at what's going on and that we're gaining market share.

And Ramsey.

I'd add to punctuate is at the end of the day, we believe.

Profitable scale businesses.

Perform overtime.

Competition comes and goes we will continue to execute will continue to perform for our clients and we will continue to win.

Got it okay.

Follow up for me is I was wondering if you could give us an update on how.

Mix is trending in your acceptance segment, I mean that from both a online offline as well as credit versus debit and I guess the broader question is do you think the mix in your business is sort of stabilized at this point or is there still some sort of post pandemic readjustments that need to occur in order to get back to that stabilized place.

I think from a cabinet.

It's stabilized so I think it's been stabilized.

Or is there some percentage point delta from when we started.

Pre pandemic.

And that credit debit mix, but.

Normalized rate there.

And obviously.

Keep driving.

We keep driving share it.

And that trends up.

But we do have a very large.

Footprint globally, so those move in small increments relative to the size of that merchant business.

Great and online offline.

Sam same story.

Yes.

Okay, great. Thanks, a lot appreciate it.

Next we'll go to the line of Jason Kupferberg from Bank of America. Please go ahead.

Good morning, guys just wanted to start on the revenue side, obviously nice to see the upside there and the raise in the outlook can you give us just a little more detail on how to think about the segment level outlook for the year I think I heard you say prepayments that you'd be comfortably within the five to eight just a little bit more color across the board there would be.

That would be great.

Yes, Jason Thank you and good morning, if you look at the recent months, obviously, we lifted the full company.

From 7% to 9% previous outlook.

The nine to 11, so were above a year were above the midpoint of the media should be above the medium term outlook that we have.

Given in the past.

Payments secondly, as you pointed out we said during the prepared.

Remarks that we think its well within the range of 5% to 8% merchant. We had previously guided provided an outlook of 9% to 12%, which is in line with our medium term outlook.

At this point, obviously, given where 18% year to date.

So a good start in the third quarter with.

Volumes in July .

Continue to be in line. So we expect that to be above our guidance range above that 9% to 12% outlook.

And then fintech at 4% to 6% or 6% year to date I would expect that to be in the range for the full year basis. There are obviously, some ebbs and flows with periodic revenue, but overall, we feel good about the growth rate of all three of our segments.

To be at or better than our previous outlook.

Okay. Thanks for that and then just to follow up on costs can you just comment on your ability to pass some of these inflationary items labor materials side onto your customers, perhaps with some sort of lag. It seems like that's probably the biggest driver of the 50 basis point reduction in the margin outlook for the fourth.

The year.

Yes, I think.

So it varies by segment and varies by business within that segment.

If you think about the overall impact of inflation.

Obviously, we've got some revenue growth or revenue growth driven by that inflation, but.

Bigger impact from an expense standpoint, we do see that slowing down.

For the balance of the year, so both a little bit less benefit on the top line, but a little less hit on the on the expense side. So we will see some margin improvement into the second half of the year that is the large driver of that combined with those investments that we're seeing.

Driving the reduced growth in our.

Margin still up 100 basis points over the prior year at least 100 basis points over the prior year, but inflation and those investments are certainly driving some of that.

Okay. Thank you.

Thank you. Our next question comes from James Faucette from Morgan Stanley . Please go ahead.

Thank you very much thanks for all the color and detail you mentioned the cloudy Crystal ball right. Now can you just give us a little bit of insight of how youre thinking about kind of macro assumptions, then and what youre seeing maybe right now the 10 point thing knows.

Or how you're formulating outlook for the rest of this year.

If you go back.

How we guide.

You know really well and she is happy.

Thank you.

You've heard the comments I'd make.

Some macro slowdown.

And that would be 400 basis.

Basis points deceleration.

Second.

No I just came in July .

Yeah.

<unk>, which isn't exactly showing that yet.

But all of that.

At that.

Look as I look up.

Really caution relative to what's going on and inflation.

What's happening in the workforce dynamics, where we see interest rates.

Obviously that Nashville Atlanta.

If you go to the high end of that is continuing we're continuing right now we're not looking for anything to do much better.

And we do believe that we have a great opportunity.

Coming out.

Getting this asset to that and improve productivity.

March are behind us.

In fact, you can go back and so those are really the assumptions inside here.

From a macro standpoint.

Yes, James actually if you read the Wall Street journal or pick up any.

News report with interest rates and inflation.

Obviously, a headwind unemployment is quite low.

Remarkably resilient.

Consumer balance sheet is quite strong so overall, we feel pretty good about.

Stability near term, it's the 'twenty three 'twenty five.

We're just kicking off for 2023 budgeting cycle.

The end of the day I think one of the keys to think about is the demonstrated resilience of this company into their pre cycle. So if we were to hit a recession.

Some people believe were technically in right now.

Does that recession go how long does it last what's the overall input is it of a job for the recession all of that creates some of that murky to us but at the end of the day, we have proven to be incredibly resilient throughout those cycles. We've got levers we can pull right now we are making a decision given the strength of the top.

Line, the ability to invest and make sure that we are providing continued innovation for our clients.

A little bit lower in margin, but actually raising EPS. We think is the right near term midterm and long term decision, but if things were to suddenly Goldberg yourself.

Small will drive productivity and we will continue to deliver.

I appreciate that and quickly for you Bob just with that rising.

<unk>.

Or recapturing the impact potential impact on your interest costs appropriately or is anything that you would call out that we should keep in mind there.

Yes, I think two things, there, one where about 85% fixed debt.

15% variable look by far the biggest chunk of that is commercial paper and there is a balance of commercial paper both in U S dollar and euro absolutely thats going up with that is quite a bit lower than fixed rate debt. So we're in good shape, there and of course as a company we have a bit of a natural hedge.

We have interest with variable rate debt, but we also have.

Float revenue.

We have cash on the balance sheet that actually generates interest that roughly offsets that variable rates. So overall rising interest rates net net are actually good for us within reason given that we're naturally hedged and higher interest rates are good for our financial institution clients and therefore provide opportunity for us.

Thanks for that Bob.

Thanks James.

And our final question comes from Vasu Cobo from K VW. Please go ahead.

Hi, Thank you very much I think most of my questions were answered I just wanted to get more color and Bob you alluded to it a little bit.

Last answer, but just as we think market is obviously worried about macro concerns. So maybe you could help remind us how the how each of your segments would behave in a recession, where you expect to feel the most pressure.

But see more resiliency and then also on the margin front, what kind of costly rescue hot going into a potential recession.

Yes, I think if you look at the three segments kind of in order of.

What might see impact.

Meaningful downturn.

First followed by payments followed by Fintech overall, though we think we proved quite resilient.

Obviously, even in 2020, which was a very difficult year by all accounts.

We manage to flat revenue grow earnings per share double digits up 12% and so to the earlier comment I made we have levers to pull we have investments we can.

Mitigate and manage the overall bottom line.

This is the 37th year of double digit earnings so we delivered on our.

Guidance for the year, which obviously, we fully expect to do that through lots of <unk>.

Different cycles.

Good and bad and so we believe.

Broadly that we'll do quite well.

If we see a sudden shock and you'll go back to Q2 of 2020, obviously at the height of the pandemic everybody took a hit and we sustained quite well overall, so feel good about our opportunities to weather storms.

Excellent and just one quick modeling one on FX, obviously FX headwinds are trying to get a little bit worse can you update us on what the expectation on that is for the year.

Yes.

Previously you had been expecting about 100 basis points.

Headwind on revenue from FX, that's now up to 200 basis points, clearly driven by Euro and Latam Latin America, largely Argentine peso.

Conversion, but in general clearly.

The headwind that everybody is facing.

Thank you very much.

I'd like to thank everyone for their time, and we look forward to talking to you I appreciate it have a great day.

Thank you all for participating in the Fiserv 2022 second quarter earnings Conference call that concludes today's call. Please disconnect at this time and have a great rest of your day.

Yeah.

[music].

[music].

Welcome to the Pfizer of 2022 second quarter earnings Conference call. All participants will be in a listen only mode until the question answer session begins following the presentation. As a reminder, today's call is being recorded at this time I would like to turn the call over tissue Mukherjee Senior Vice President of Investor Relations adviser.

Thank you and good morning.

With me on the call today are Frank Bisignano, our chairman, President and Chief Executive Officer, and Bob Hau, Our Chief Financial Officer.

Our earnings release and supplemental materials for the quarter are available on the Investor Relations section of <unk> Dot com.

Please refer to these materials for the next generation of the non-GAAP financial measures discussed in this call.

Along with a reconciliation of those measures to the nearest applicable GAAP measures.

Unless otherwise stated performance references a year over year comparisons.

Our remarks today will include forward looking statements about among other matters expected operating and financial results and strategic initiatives.

Forward looking statements may differ materially from actual results and are subject to a number of risks and uncertainties.

You should refer to our earnings release for a discussion of these risk factors.

And now over to Frank.

Sure.

And thank you all for listening in as we share our results for the quarter and highlight the progress against our growth agenda.

As you know we serve as the operating system for Commerce and money movement.

Cross sell client base of banks credit unions syntax and businesses ranging from smbs to mid market to large enterprises.

We help our clients grow by extending our platform to capture new services.

New money flows.

Our relentless pursuit of innovation for our clients yet again, one of several accolades in the quarter.

Pfizer was named a leader among merchant payment providers. So the current operating system by far is the wave.

Five serve was also awarded the prestigious Webby Award proud developers studio.

Good for them, which provides rich inexpensive API integrations.

Now moving to our second quarter results.

We delivered a strong 12% total company organic revenue growth once again exceeding the 7% to 9% guidance range, we provided for the year.

The terrific performance on the top line resulted in 14% adjusted EPS growth to one dollar and 56 cents, bringing our year to date adjusted EPS growth to 17% at.

At the high end of the 15% to 17% guidance range provided for the full year.

We obtained $180 million of action to revenue synergies in the quarter, reaching $700 million since the merger.

Feeding the increased commitment of 600 million two years ahead of our original commitment.

The impact of high inflation.

We continue to invest in the business resulted in adjusted operating margin of 33.5% down 40 basis points from second quarter last year.

We continue to see opportunities to innovate for our clients through our recent acquisitions, such as Honda Bento box and Vince Act as well as organic investments across our portfolio.

Additionally, these investments and accelerated revenue growth resulted in higher capital expenditures and working capital leading to free cash flow of 658 million for the quarter and 1.3 billion year to date.

Looking into the remainder of the year, our year to date organic revenue growth outperformance of 11% puts us in a very good position to beat our prior organic revenue growth guidance for the full year.

Given the strength in the first half of the year, we're raising our full year organic revenue growth outlook to a range of 9% to 11% up from 7% to 9% previously.

The low end of this revised growth outlook assumes a macro slowdown in the second half versus the first half of the year with this higher organic revenue outlook and the year to date adjusted EPS performance of 17% growth, we're raising the low.

Sure and above full year, adjusted EPS guidance range by five cents to a new range of $6.45 to $6.55 representing growth of 16% to 17% over 2000.

'twenty one given.

Given the elevated inflation environment and favorable foreign exchange and our plans to continue to invest in innovation for our clients. We now expect our full year adjusted margin expansion to be at least 100 basis points.

Now turning to the business strategy.

Their solutions are geared towards merchants and financial institutions, including syntax.

Starting with the merchants, we are transforming from selling merchants individual point solutions to offering operating systems clover for small to medium sized merchants.

Garrett for large enterprises.

This operating system approach expands the size of our total addressable market and makes us more valuable to our customers, we grow and create value in three ways.

First attracting more merchants to our operating system.

Second expanding the relationship we have with al merchants by encouraging adoption of more software and services modules.

And third benefiting from the growth of Val existing customer base.

Turning to our financial institution clients, we remain committed to continuously innovate for our clients and broaden our total addressable market. Since we closed the acquisition of <unk>, a leading developer of cloud Native banking solutions in early April we have been focused on three.

Key areas.

Integrating our existing digital surrounds and defend that.

Selling things act to our existing clients as an innovation platform or sidecar Gore.

And winning new logos cells on the fence Zach solution.

The feedback from both existing and new clients has been very positive.

Now, let's dive deeper into our performance in the quarter by business segment.

Let me start with merchant acceptance, we posted very strong organic revenue growth of 17% for the quarter.

Merchant volume and transactions grew 10% and 7% respectively.

Global active merchant accounts grew 5% in the second quarter.

The positive trend since the start of 2021.

Results were strong across all regions.

North America was led by the strength in SMB is particularly within the restaurant vertical as well as strength in enterprise verticals, such as travel and Petro.

Our international regions also had very strong performance on a local currency basis in part offset by unfavorable foreign exchange.

Spending across the EMEA region accelerated during the quarter driven by strength in hospitality restaurant and retail verticals.

Our merchant business in Latin America was very strong in the quarter as we continue to make significant progress in the Argentina market and in Brazil, Onboarding merchants throughout exclusive merchant acquiring mandate from kasha.

We are also expanding our presence rapidly in Mexico and Colombia.

Spending trends in APAC was strong driven by a rebound in the economic activity across nearly all markets as well as new wins and implementations.

Moving to our merchant operating systems Culver and carry both continue to gain significant traction with clients cover global revenue grew 24% in the quarter driven by volume growth of 27% as well as growth in software and services.

Penetration to 15% up over 350 basis points.

Culver's vertical focused strategy continues to deliver in market with Bento box now fully integrated into cover for all E Commerce payments.

When vento Hoover are sold together, we see an over three times increase in average revenue per user versus a clover only restaurant. In addition, Uber eats was launched in the second quarter as another integrated delivery partner for our restaurant merchants.

Terry.

Omni commerce operating system for enterprise clients grew revenue 22%.

We saw broad based growth across verticals, including Petro and quick service restaurants.

In the quarter, Karen made several strides in further strengthening its positioning within the Petro vertical.

Among the notable wins included a contract with Wawa.

Large chain of convenience stores and gas stations.

Additionally, we expanded our relationship with a long standing client to introduce a customized dealers settlement and reporting platform supporting over 10000 retail locations in North America.

In keeping with carriage submission to continuously innovate for our clients care at launch pay by plate, enabling our Petro partners to facilitate transactions.

Just on license plate recognition for customers that opt in replacing the need for a physical card carrier continues to capture new payment flows and has made significant progress across digital payouts and E V T online with transactions grow.

69% and 54% respectively in the quarter.

Further bolstering our capabilities carat launch new payout options in a quarter to include digital checks prepaid cards and crypto wallets.

We also had some notable wins within our enterprise business in North America during the quarter we used.

Our partnership with Walmart to facilitate one time digital payouts to consumers and want a contract what's the deck. So a leading global facilities management company to digitize consumer and employee payouts.

Turning to our international merchant business, we continue to show strong momentum with the following highlights in the second quarter.

In EMEA Pfizer have signed a deal with Abu Dhabi commercial bank one of the largest banks in the region with over 115 billion in assets and a significant presence across our retail corporate and SMB space with over 24000, Pos terminals deployed today.

Pfizer will be providing its acquiring as a service suite of solutions, including our automated onboarding solution and Omnichannel acceptance platform with soft P. O S enable deployment.

The bank will also benefit from Pfizer's enhanced risk real time fraud management solutions, our merchant portal and reporting capabilities.

In APAC, we went live with sports bet.

The market leader in online sports betting across Australia, and boarded 10000, submerges from MYOB, a leading provider of digital business and accounting services to small businesses in Australia.

Moving to the payments and network segment organic revenue grew 8% in a quarter. This growth was enabled by a variety of drivers across our business lines.

North American credit active accounts on file grew 14% versus Q2 of last year.

This growth was driven by both new business, Onboarding and a favorable credit environment.

As a reminder, in the second quarter, we completed the on boarding of bread financial formerly a D. S. The largest of the three top 25 credit issuing wins, we announced in 2020 bread was the third of the three wins to onboard completing the $120 million.

In annual revenue related to new wins, we announced at our last Investor Conference looking forward, our current implementation and sales pipeline remains very robust.

Our international issuing business grew strong double digits, driven by macro economic improvement as well as onboarding of new clients.

Debit business continues to post solid growth driven by new client wins on our debit networks star and XL, even as debit transaction growth continues to normalize industry wide. Following the stimulus driven high debit volumes last year.

Our market, leading digital solutions, including card hub and spend track have become key differentiators and our new business pursuits and serve to drive more cards into a debit network.

More opportunities for Pfizer to offer risk fraud, digital banking and the account processing solutions, demonstrating an attractive flywheel effect.

We continue to see growth in digital payments, driven by zelle, which posted transaction growth of a strong 35% in the quarter.

Our 1000 Zelle client went live during the quarter of <unk>, we accomplished in under four years commencing zelle implementations.

And we expect this momentum to continue what line of sight into doubling out zelle client base over the next two years.

By serve.

Recently won a competitive bid to support the state of California's Middle class tax refund program.

Several manage the program and distribute prepaid debit cards to qualified program recipients. This win reinforces our position as a leading provider of government programs an area of expanding opportunity.

We had a notable win in the student loan processing space, which will considerably extend our position as a provider of choice to student loan Servicers.

We continue to win credit processing mandates globally in the second quarter, we expanded our relationship with U K based financial services company, New day to provide processing and other services as they re launch the John Lewis partnership card one.

The U K 's, most popular retail rewards credit cards.

Moving to the financial Technology segment.

We posted another strong quarter with organic revenue growth of 7% driven by strength in our account processing and digital activity as well as the timing benefit of periodic revenue we.

It had seven core wins in the quarter, including four competitive takeaways.

Sales of digital surround solutions continue to grow at a healthy clip driven by our three pronged approach.

Our proprietary online and digital banking solutions with integrated surround solutions, such as card hub zelle and spend track offer a leading modern banking experience for our clients and users in keeping with our open source there.

Roche to serving our clients. We are also pre integrating third party digital solutions into our cores and making these solutions discoverable, so clients via our App marketplace.

Last but definitely not least we're making our platform attractive to the developer community by exposing a micro service AEP is throughout developer studio with the goal of becoming the destination of choice pretty embedded fine.

<unk> ecosystem, including card issuing and processing merchant and core banking integrations.

And spins Act further cement tallied and next generation banking.

Our Fintech product was selected by Colorado base National Bank Holdings to utilize thin zacks modern core to pursue an SMB focused digital only greenfield initiative called to unify as part of their initial modernization.

Right.

As an example of cross selling things at <unk>.

<unk> existing core clients, Massachusetts, based Martha's Vineyard Bank will utilize thins acts open AP is to deliver innovative new products and services across all channels, including highly personalized experiences for its customers.

The combination of <unk> technology advisor of size and scale ecosystem of digital surround and knowledge of banking is winning over other competing offers in the market together, we are delivering value to our clients by accelerating there.

Modernization journey.

Now, let me pass the discussion to Bob for more detail on our financial results.

Thank you Frank and good morning, everyone.

If you're following along on our slides I will cover additional detail on total company and segment performance, starting with our financial metrics and trends on slide four.

We had a strong second quarter same store execution across the business and our broad portfolio of products and services.

Total company organic revenue growth was 12% in the quarter with strong growth across all segments, notably the merchant acceptance segment, which grew 17%.

Year to date.

Company organic revenue grew 11%.

So led by the merchant acceptance segment, which grew 18%.

Second quarter total company adjusted revenue grew 10% to $4 2 billion and adjusted operating income grew 8% to $1 4 billion, resulting in an adjusted operating margin of 33, 5%.

A decrease of 40 basis points versus the prior year.

For the first half of the year adjusted revenue grew 10% to $8 $1 billion in it.

Adjusted operating income increased 10% to $2 $7 billion, resulting in adjusted operating margin of 32, 7%.

Insistent with the first half of last year.

The adjusted margin was impacted by a combination of factors, including first cost inflation for both labor and material, including point of sale terminals for a merchant acceptance segment and paper and plastic for our payments segment.

Investments related to new acquisitions, including Bento box and Fintech.

And third continued reinvestment into the business, including wrapping up of the Fiserv first data integration projects as we've previously indicated these began ramping down late in the second quarter and into the third quarter.

This will lead to improved margins as we complete the spending and as the benefits of those projects materialize in the second half of the year, particularly in Q4, leading to a strong exit rate for 2023.

Second quarter adjusted earnings per share increased 14% to $1.56 compared to $1 37 in the prior year.

Through June 30th adjusted earnings per share increased 17% to $2 96 at the high end of the 15% to 17% guidance range, which we provided for the full year.

Free cash flow came in at $658 million for the quarter and $1 $3 billion for the first six months of the year.

Free cash flow conversion was 65% to adjusted net income this quarter and year to date.

The free cash flow conversion was driven by a combination of first increased capital expenditures, particularly in the areas of innovation and integration of newly acquired capabilities.

Second increased working capital investment driven by the very strong revenue growth, including growth in anticipation revenue in Latin America.

Third increased inventory to minimize any potential impact to our clients given the risk of supply chain disruption.

And fourth continued investment in software and application development to drive sustainably higher growth across the business.

As we look forward, we expect the free cash flow conversion to improve meaningfully to end the year at 90% to 95%, which is slightly below our previous outlook of 95% to 100%.

We are focused on serving our clients with innovative solutions and sustainably stepping up our growth rate for the company to high single digits or even better this year.

From historic levels of mid single digits.

Now looking to our segment results starting on slide five.

<unk> revenue growth in the merchant acceptance segment was a strong 17% in the quarter and 18% year to date.

Adjusted revenue growth in the quarter was 14% and 16% for the first half.

Merchant volume and transactions grew 7% and 5% respectively.

When excluding the loss of a processing client mid last year, which we will fully cycle through in the third quarter merchant volume and transactions grew 10, 7% in the quarter respectively.

Clover or operating system for small and medium sized businesses continues to build on the strength of its product offering to attract and retain more merchants and expand relationships with them.

Clover posted a strong 24% revenue growth for the quarter and 30% year to date.

Quarterly cohort G. P V was $58 billion or $233 billion on an annualized basis up 27%.

Our ISP volume in the quarter through Clover connect grew 39% and 44% year to date.

We signed 45 Isps this quarter, bringing our total signed 89 year to date.

Carrot, our omni commerce operating system for enterprise clients.

Grew revenue, 22% in the second quarter.

Adjusted operating income in the acceptance segment increased 13% to $593 million in the quarter and adjusted operating margin was down 20 basis points to 31, 2%.

This was driven by inflation and continued investments in the business for growth.

Year to date, adjusted operating income improved 17% to $1 1 billion and adjusted operating margin grew 20 basis points to 29, 9%.

We expect adjusted margin in the merchant acceptance segment to improve in the second half of the year as we see the benefit of lower inflation continued strength in revenue and.

And productivity.

Turning to slide six the payments and network segment posted organic revenue growth of 8% in the quarter at the high end of the 5% to 8% medium term guidance range.

Notable growth drivers in this segment include active accounts on file in our North American credit processing business.

Output solutions business, our debit networks star and Excel Enzo led by an increase in the number of clients and transaction growth.

We expect the momentum in this segment to continue through the rest of the year, resulting in the full year organic revenue growth rate to come well within our medium term outlook of 5% to 8%.

Adjusted operating income for the segment was up 5% to $668 million.

And adjusted operating margin was down 80 basis points to 43, 8%.

By a combination of inflation and investments in the quarter.

Year to date, adjusted operating income was up 6% to $1 $3 billion.

And adjusted operating margin was up 20 basis points versus last year at 43, 2%.

Moving to slide seven the financial Technology segment organic revenue grew at 7% in the second quarter, resulting in 6% growth for the first half.

At the high end of our 4% to 6% medium term guidance range.

As Frank mentioned, we added seven new core account processing clients in the quarter, including four competitive takeaways.

The combination of <unk> modern core and five serves leading digital surrounds is winning in the clients' office.

Adjusted operating income was up 3% in the quarter to $281 million and up 7% to $556 million year to date.

Adjusted operating margin in the segment decreased 120 basis points to 35% in the quarter driven by investments in Fintech, which we acquired early in the quarter as well as increased organic investments in the business.

For the first half the segment's adjusted operating margin grew 30 basis points to 35, 2%.

The adjusted corporate operating loss was $125 million in the quarter and $247 million year to date.

The adjusted effective tax rate in the quarter was 21% and was 19% for the first half.

We continue to expect 2022, adjusted effective tax rate to be approximately 21% for the full year.

Total debt outstanding was 21 $5 billion on June 30th.

And debt to adjusted EBITDA ratio was 3.0 times in line with our target leverage.

In June we increased our bank revolver to $6 billion from $3 $5 billion previously and extended the maturity to June 2027.

The new revolver provides additional capacity and flexibility.

During the quarter, we continued our disciplined capital allocation strategy repurchasing five 1 million shares for $500 million.

We had 32 million shares remaining authorized for repurchase at the end of the quarter.

Additionally, we have had nearly 400 million of share repurchases so far in July .

We are fully committed to our long standing capital allocation strategy, which includes maintaining a strong balance sheet repurchasing shares and pursuing high value and innovative acquisitions.

With that let me turn the call back to Frank.

Thanks, Bob.

I'm very proud of the results we have accomplished.

Another quarter of double digit growth in both adjusted revenue and adjusted EPS.

In the second quarter, we published our 2021 P. S are important.

Which included a number of key enhancements to add disclosures and respond to new reporting standards on environmental impact and corporate governance.

We are proud to share our ESG journey as we continue to optimize the business, while generating value to shareholders and communities.

In June we found out back to business program in Nebraska.

In addition to a $10000 grant businesses receive access to innovative business management technology from Clover.

Ongoing community support and small business resources, our program in Nebraska.

<unk> to award $1 million in grants for small diverse businesses.

We are incorporating green building design principles as a priority for our offices and facilities.

In the second quarter by serve received LEED Gold Green building certification crowd downtown Manhattan location.

We are working toward lead status at the completion of our Berkeley Heights, New Jersey, and Dublin, Ireland hubs.

Finally, before I turn it over to the operator for Q&A.

I'd like to thank Shoob.

Or her terrific work as our head of Investor Relations.

Last 18 months.

Szuba is taking on a new assignment as our head of strategy.

And I look forward to continuing to work with her.

I'm pleased to welcome Julie Sherry Al.

With us today is how new head of Investor Relations welcome Julie.

I'll close by thanking our more than 40000 hard working Pfizer of associates around the world for working relentlessly to serve our clients and you our shareholders.

With that operator, please open the line for questions.

Thank you.

We will now open the phone lines for any questions. If you would like to ask a question you May press star one on your phone if you would like to withdraw your question. Please press star two for our first question will go to the line of Dave Koning from.

Baird. Please go ahead.

Yeah, Hey, guys great results across the board.

Thanks, Dave.

And yeah.

I I thought one of the most interesting things you know volume up 10% in merchant yield must be up 7% I think that's the biggest thing.

Maybe ever that we've seen is that primarily you called out mix of smbs, but there could be pricing components or just more services to the merchants is is there any one or two of those that's more prevalent and how sustainable is that.

Yes, thanks, and good morning.

As you've heard us say over the last couple of quarters, we don't necessarily like.

So necessarily track yield practice, we're not managing for yield.

<unk> for revenue growth and overall margin.

As always quarter to quarter fluctuations this quarter last quarter or two examples where yield is as positive as we continue to sell more value added services as we see more revenue per merchant.

Obviously, we see the benefit of yields.

And yes, we see that.

We believe our overall revenue growth is sustainable and will continue to see good growth in the business some of that will be called <unk>.

Because the more value added services some of that will be more transactions.

Great. Thank you and then just as a follow up just on margins I know, you've called out investments and inflation impacts, but as we look in the back half.

I think it has to be up about 200 bps in the back half 200 bps year over year is Q3 or Q4 above or below that like maybe the cadence of the two quarters remaining.

Yes, I think you should you should expect the margin to improve into Q3 and more so into Q4. That's a combination of do you anticipate inflation to subside a bit from the very high levels. We saw in the first half of the year.

Additionally, as we've talked about.

In the prepared remarks, as well as last quarter.

Jerry over work that way.

They have going on.

Integration standpoint last year, we dial those cost out we get them back.

Adjusted earnings beginning in January 1st of this year, we stopped dialing that back out and therefore, you see those costs hit Q1 and Q.

Q2, they started to ease in the latter part of Q2, we'll continue to see great.

So those costs go away. In addition, you get the benefit or the productivity.

That integration work and so you'll see a bigger improvement in fourth quarter than you do on third and second half stronger than first half.

Great Great job guys. Thanks.

Thanks, Dave.

Next we'll go to the line of Lisa Ellis from Moffett Nathan. Please go ahead.

Hi.

Good afternoon. Good morning, I guess, thanks, guys I think I'll start with actually the follow on question today's question.

Question for you Bob on the free cash flow bridge throughout the remainder of the year conversion running 65% year to date, you're now expecting 90 to 95 for the full year can you just help us with what gives you confidence in the improvement in conversion in the second half. Thank you.

Yes, Lisa good morning.

I think couple of things there one.

We see improvement in inventory in the back half of the year.

We have been buying significant amounts of inventory.

In terms of point of sale devices, but also in paper and plastic for our payments segment our output.

Output solutions business payments, we see that easing into the second half of the year that was done not only in the case of the actual point of sale devices put some components.

Our clients from it having hardware available and we see that easing in the second half of the year. So we will see an improvement there overall I believe working capital will improve into the second half as well as some improvement in <unk>.

Capex from a timing standpoint, and then finally as we see improved margins getting more productivity to get more cash flow.

I would just add.

We've had tremendous opportunity right.

Our product.

Organic opportunities off market opportunities.

Got it.

At FEMSA.

As three examples.

Where.

Hi, Thanks.

Very very pleasantly surprised by the opportunity to have a much larger footprint.

In fact with the Perfect example of building up to industrial strength at a much faster speed.

And I think one of the other items I highlighted.

We have increased our speed up actually I appreciate it.

You see it in our revenue numbers it does affect our Capex number also.

If you look at the speed in which we're yet.

One that the size and scale of which we operate it's been very very good strong trajectory.

Okay.

I think those two last element that Frank pointed out is really at the heart of why we've taken.

Your outlook down from the 95 to 190 to 95 continued opportunities and we want to work those opportunities.

Mhm, Okay, Great and then my second one is a more of a question related to doubt because you had a number of Dell related call outs. This quarter, 75% transaction growth of 54% client growth can you just remind us how big zelle is as a contributor to payments and networks like how.

We should think about the monetization model in sell in and its contribution to growth I guess size and growth of that segment. Thank you.

Yes.

I think overall it's a.

Relatively small piece, it's call it roughly 2% of the.

Payments segment.

We've obviously seen good growth there as part of the growth driver of the business and as that continues to ramp not only in the number of.

Financial institutions, and therefore, the number of users as we see more and more ubiquity go bad.

Capability of that tool.

E more consumers, making more payments will continue to see good growth itself.

Perfect. Thank you.

Thanks Lisa.

Next we'll go to the line of Tien Tsin Huang from Jpmorgan. Please go ahead.

Thanks, and good morning, and congrats issue, but on the new role set it for her.

<unk>.

I just wanted to.

I ask on the visibility side, if you don't mind, just any interesting trends in July the callout of volumes and new sales ramping as expected and same thing on the cost side, you have better visibility now on.

The cost to support this with better revenue growth.

Yes first of all.

What the July volume.

In line with Q2.

The consumer remains resilient.

Yes.

Fundamentally in line.

And the volume of transaction standpoint also.

So all those months out over this month seems to be continuing.

The fashion.

And our visibility.

On the expense side is very very clear.

We have clear line of sight.

Obviously, you've made a bunch of decisions to grow this business.

Properties.

At a level.

It's where we like it.

Allergan.

This opportunity.

The opportunity to.

Thanks, Alex.

Run rate basis relative to.

Our productivity opportunity to acquire productivity so in front of us.

Alright.

Intention as I pointed out and obviously, we expect inflation to subside a bit.

We have.

The productivity of completing those integration projects those have been ramping down so.

So it kind of middle to end of second quarter. She cleared last night to see that.

Great.

And we see good opportunities to continue to invest.

Focused on sustainably growing this business much faster than it has in the past taking our revenue guidance up this year from previous 7% nine nine and 11.

9% to 11% and those opportunities that Frank talked about increase our speed of execution and drive innovation not only as an impact to cash flow margin and therefore you saw.

Lower margin a bit even though we took up EPS get stronger growth.

Got it okay.

Overall encouraging for sure just my quick follow up.

What's your target leverage now you bought a lot of stocks it sounds like.

Curious on the appetite.

With the buybacks versus doing deals it seems like there are some.

Payments Fintech properties for sale out there. So just curious if there is any change in thinking.

Thanks.

No I would say no change in thinking.

Strength of our balance sheet and our.

Our cash flow gives.

Gives us the opportunity to both buyback shares and.

The outlook for value accretive acquisitions, and we'll continue to do that.

If you look we did $1 $4 billion through yesterday or so through July so far.

But we also completed a number of acquisitions.

And in fact, what over the last call. It 15 to 18 months seven different acquisitions for about $2 billion. While also buying back shares. So we will continue to do both as you know we're in the market regularly.

We clearly believe there is real opportunities in the value of our stock buyback.

Buyback, but we also look for value accretive acquisitions.

Perfect.

Thank you.

Next we'll go to the line of Darrin Peller from Wolfe Research. Please go ahead.

Thanks, guys can we revisit the revenue growth trends, we saw it really across all three segments, but if we hone in on merchant or M&A again, I mean, this kind of 17% growth would definitely well above what anyone I think expected and when we look at the sustainability to that.

Is there something anything anomalistic in growth in the segment in the quarter or for that matter either of the other two segments that wouldn't be sustainable in your mind, maybe medium term.

As a sign of things to come in terms of elevated growth first and then just to revisit again the spread between revenue and volume talked about value added services I think and again.

Again, SMB, but is that kind of a spread with like do you expect revenue to outperform volume consistently now.

Right.

I'll start on merchant.

We purposefully.

Mr Conference to talk about how we saw it over the longer haul.

Obviously, we do believe and driving penetration rate of software services, you saw that Oh I'm sorry.

Yeah.

It just points kind of 15% with talk about moving that over the longer haul.

Eight 5% so our focus is clearly a focus on.

Our ability to also continue to expand in markets you hear us talk about Colombia, Argentina, Mexico.

Along with Alberta.

And we feel very very strong about our capabilities, we're going to build out.

In the restaurant vertical in that month, and then services articles so we feel.

Our ships continue to grow we believe we're the partner of choice in that business and what you're seeing there. Obviously, we've got a couple of points of inflation there.

But what you really see is the strong productivity investments.

So essentially bought any integration capability of the total franchise.

I do believe that we get leverage from our bank partners and other partners.

We can and of course clover.

Our two two leading products in the industry.

We continue to invest heavily in so I think the sustainability.

Inflation is.

Right in front of us.

<unk> been driving this for a long time.

You talked about for a long time, and you're saying the first set of labor.

Okay, and Bob just a quick follow up on the yield again, if you don't mind.

Sure yes so.

Obviously very positive appealed.

This quarter was last quarter.

There's always variability quarter to quarter.

And so we try not to get too myopically focused on that calculation with any given quarter, we think.

Got it evens out over time as we continue to provide value added services will continue to see improvements.

We are very focused on.

Adding merchants to our portfolio I E signing up more merchants, we're very focused on selling more products to those merchants that lifts are pooling and drives revenue and margin for the company.

Okay, guys, just very quickly the free cash and margin profile I mean, the business is obviously growing notably faster so should we expect.

Maybe a more moderate margin story going forward or free cash conversion just to support this kind of growth or is this just the anomalistic items around inventory build in restructuring and either way you should get back to that 95% longer term.

Yes.

I'm not ready to update our medium term or long term outlook, obviously, the crystal ball. These days is a little bit fuzzy on what 'twenty two 'twenty three 'twenty four 'twenty five is going to look like look at the end of the day.

We're focused on.

Sustainable growth and our revenue were up significantly from where we've been historically.

Look up this year.

Set the merchant business.

Medium term outlook was 9% to 12%.

And our last fall Investor Conference at the end of 2020.

March of this year, we actually took that up and so we went out to 2025 and say, we'll believe we'll be at 11%.

So we're driving for sustainable growth that obviously helps the top line. It's growing the bottom line, we took our EPS growth up this quarter for the full year and.

And we will continue to look for those opportunities.

To drive overall value by growing the topline bottomline and generating a great free cash flow.

Alright, nice job guys. Thanks.

Thank you.

Next we'll go to the line of Ramsey El <unk> from Barclays. Please go ahead.

Hi, Thanks for taking my question today I wanted to ask about the competitive environment and along the lines of it's sort of hard to argue over the past few years that we haven't seen a lot of profitless irrational competition are you seeing or do you expect to see any improvement in the competitive environment, I guess, primarily driven by Fintech maybe.

Have a harder time raising.

Raising capital to compete with you with.

I mean.

The way I think about it is we run.

Large enterprise.

We have competition in every country, we have competition in every business.

I think al solutions.

Our world class.

And I think ultimately this is.

It is about how we provide our clients an opportunity to grow their businesses, whether it's a small business as a community bank.

Our orange Orange enterprise, So I don't I don't really look at it and say anything other than our job is to be the dash.

The best.

And from a competition standpoint, there's a lot of it already.

Patterns out there.

But we fail when youre looking at numbers and you look at what's going on and that we're gaining market share.

And Ramsey.

The thing I'd add to punctuate is at the end of the day.

Profitable scale businesses.

Perform overtime.

And competition comes and goes we will continue to execute will continue to perform for our clients and we will continue to win.

Got it okay.

Follow up for me is I was wondering if you could give us an update on how.

Mix is trending in your acceptance segment, I mean that from both a online offline as well as credit versus debit and I guess the broader question is do you think the mix in your business is sort of stabilized at this point or is there still some sort of post pandemic readjustments that need to occur in order to get back to that stabilized place.

I think from a debit credit it's stabilized so I think it's been stabilized.

Maybe there's some percentage point delta from when we started.

Pre pandemic can now in that credit debit mix, but I think we're at a normalized rate there.

And obviously.

Keep driving.

We keep driving share it.

And that trends up.

But we do have a very large.

Footprint globally, so those move in small increments relative to the size of that merchant business.

Great and online offline.

Same story.

Yeah.

Okay, great. Thanks, a lot appreciate it.

Next we'll go to the line of Jason Kupferberg from Bank of America. Please go ahead.

Good morning, guys just wanted to start on the revenue side, obviously nice to see the upside there and the reason the outlook can you give us just a little more detail on how to think about the segment level outlook for the year I think I heard you say prepayments that you'd be comfortably within the five to eight just a little bit more color across the board there would be.

That would be great.

Yes, Jason Thank you and good morning, if you look at the recent months, obviously, we lifted the full company.

From 7% to 9% previous outlook.

The nine to 11, so we're above the year were above the midpoint of the media can be above the medium term outlook that we've given in the past.

Payments secondly, as you pointed out we said during the prepared.

Remarks that we think its well within the range of 5% to 8% merchant. We had previously guided provided an outlook of 9% to 12%, which is in line with our medium term outlook.

At this point, obviously, given where 18% year to date.

So a good start in the third quarter with.

Volumes in July .

Continue to be in line. So we expect that to be above our guidance range above that 9% to 12% outlook and then fintech at 4% to 6% or 6% year to date I would expect that to be in the range for the full year basis. There are obviously, some ebbs and flows with periodic revenue but over.

We feel good about the growth rate of all three of our segments.

To be at or better than our previous outlook.

Okay. Thanks for that and then just a follow up on costs can you just comment on your ability to pass some of these inflationary items labor materials side.

Your customers, perhaps with some sort of lag it seems like that's probably the biggest driver of the 50 basis point reduction in the margin outlook for the for the year.

Yes, I think.

So it varies by segment and varies by business within that segment.

If you think about the overall impact of inflation.

Obviously, we've got some revenue growth or revenue growth driven by that inflation, but.

Bigger impact from an expense standpoint, we do see that slowing down.

For the balance of the year, so both a little bit less benefit on the top line, but a little less hit on the on the expense side. So we will see some margin improvement into the second half of the year that is the large driver of that combined with those investments that we're seeing.

Driving the reduced growth and our.

Margin still up 100 basis points over the prior to at least 100 basis points over the prior year, but inflation and those investments are certainly driving some of that.

Okay. Thank you.

Thank you. Our next question comes from James Fawcett from Morgan Stanley . Please go ahead.

Thank you very much thanks for all the color and detail you mentioned the cloudy Crystal ball right. Now can you just give us a little bit of insight of how youre thinking about kind of macro assumptions, then and what youre seeing maybe right now the 10 point thing knows.

Or how you're formulating outlook for the rest of this year.

Well you know what.

If you go back.

How we guide.

You know really well and she is half of it. Thank you.

You've heard the comments I'd make.

That has shown some macro slowdown.

And yes, all of that would be 400 basis.

Basis points deceleration.

Second.

Second half now just.

You guys gave in July .

Yeah Mark.

<unk>, which isn't exactly showing that yet.

But that that.

Look it's a look up.

Really caution relative to what's going on and inflation.

What's happening in the workforce dynamics, where we see interest rates.

Obviously that Nashville Atlanta.

If you go to the.

High end of that is continuing to lay we're continuing right now we're not looking for anything too much better. Thank you.

And we do believe that we have a great opportunity.

Coming out.

Getting a benefit to that and improve productivity.

Kennedy has been cleared.

The merger behind Us.

Where in fact, you can go back and so those are really the assumptions inside here.

From a macro standpoint.

Yes, James actually if you read the Wall Street journal or pick up any.

News report with interest rates and inflation.

No.

Obviously, a headwind unemployment is quite low.

Remarkably resilient.

Consumer balance sheet is quite strong so overall, we feel pretty good about that.

Stability near term, it's the 'twenty three 'twenty, where we're just kicking off our 2020 budgeting cycle.

The end of the day I think one of the keys to think about is the demonstrated resilience of this company and their pre cycle. So if we were to hit.

A recession.

Some people believe were technically in right now how deep does that recession go how long does it last what's the overall input is it of a job for the recession all of that creates some of that murky to us but at the end of the day, we have proven to be incredibly resilient throughout those cycles. We've got levers we can.

Handful right now we are making a decision given the strength of the top line the ability to invest and make sure that we are providing continued innovation for our clients.

A little bit lower in margin, but actually raising EPS. We think is the right near term midterm and long term decision, but if things were to suddenly go very soft we've got leverage small will drive productivity and we will continue to deliver.

I appreciate that and quickly for you Bob just with that rising.

Interest rates are recapturing the impact potential impact on your interest costs appropriately or is anything that you would call out that we should keep in mind there.

Yes, I think two things, there, one where about 85% fixed debt.

15% variable look by far the biggest chunk of that is commercial paper and there is a balance of commercial paper both in U S dollar and euro absolutely thats going up with that is quite a bit lower than <unk>.

Fixed rate debt. So we're in good shape there.

<unk> as a company we have a bit of a natural hedge we have interest.

Variable rate debt, but we also have <unk>.

Float revenue.

We have cash on the balance sheet that actually generates interest that roughly offsets that variable rate. So overall raising interest rates net net are actually good for us within reason.

Even that we're naturally hedged and higher interest rates are good for our financial institution clients and therefore provide opportunity for us.

Thanks for that Bob.

Thanks, Jason.

And our final question comes from Vasu Cobo from K VW. Please go ahead.

Hi, Thank you very much I think most of my questions were answered I just wanted to get more color and Bob you alluded to it a little bit.

Last answer, but just as we think market is obviously worried about macro concerns. So maybe you could help remind us how the how each of your segments would behave in a recession, where you expect to see the most pressure where you would see more resiliency and then also on the margin front, what kind of lastly, unless you have going into a potential recession.

Yes. Thank you.

If you look at the three segments kind of in order of.

What might see impact.

Meaningful downturn.

Merchant first followed by payments followed by Fintech overall, though we think we proved quite resilient.

Even in 2020, which was a very difficult year by all accounts.

We manage to flat revenue.

Earnings per share double digits up 12% and so to the earlier comment I made we have levers to pull we have investments we can.

Mitigate and manage the overall bottom line.

As the 37th year.

Double digit earnings assuming we deliver on our.

Guidance for the year, which obviously, we fully expect to do that through lots of different cycles.

Both good and bad and so we believe.

Broadly that we'll do quite well.

If we see a sudden shock and you'll go back to Q2 of 2020, obviously.

Right.

Pandemic, everybody took a hit and we sustained quite well overall, so feel good about our opportunities to weather storms.

Excellent and just one quick modeling one on FX, obviously, FX headwinds are trending a little bit worse can you update us on what the expectation on that is for the year.

Yes.

We had been expecting about 100 basis points headwind.

Headwind on revenue from FX, that's now up to 200 basis points, clearly driven by Euro and Latam Latin America, largely Argentine peso.

Conversion, but in general clearly.

Headwind that everybody is facing.

Thank you very much.

I'd like to thank everyone for their time, and we look forward to talking to you I appreciate it have a great day.

Thank you all for participating in the Fiserv 2022 second quarter earnings Conference call that concludes today's call. Please disconnect at this time and have a great rest of your day.