Q4 2023 Fiserv Inc Earnings Call

Operator: www.circlelineartschool.com Welcome to the FISERV Fourth Quarter 2023 Earnings Conference Call. All participants will be in a listen-only mode until the question and answer session begins following the presentation.

Welcome to the Pfizer fourth quarter 2023 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 will turn the call over to Julie share yells senior Vice President of Investor Relations at Fiserv.

Operator: As a reminder, today's call is being recorded. At this time, I will turn the call over to Julie Chariell, Senior Vice President of Investor Relations at FISERV. Thank you. Good morning.

Thank you and good morning with me on the call today are Frank didn't Yano, our chairman, President and Chief Executive Officer, and Bob Hau, Our Chief Financial Officer.

Julie Chariell: 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 and full year are available in the Investor Relations section of Fiserv.com. Please refer to these materials for an explanation of the non-GAAP financial measures discussed on this call, along with the reconciliation of those measures to the nearest applicable GAAP measure. Unless otherwise stated, performance references are year-over-year comparisons.

Our earnings release, and supplemental materials for the quarter and full year are available on the Investor Relations section of Fiserv Dot com.

Please refer to these materials for an explanation of the non-GAAP financial measures discussed on this call along with a reconciliation of those measures to the nearest applicable GAAP measures unless otherwise stated performance references our year over year comparisons our remarks today willing to forward looking statements.

Julie Chariell: Our remarks today will include forward-looking statements about, among other things, expected operating and financial results and strategic initiatives. Such 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. Now, over to Frank.

About among other matters.

<unk> 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.

Frank J. Bisignano: Thank you, Julie, and thank you all for joining us today to discuss another double-digit growth year for Fiserv in both organic revenue and adjusted earnings per share. In 2023, we will continue to demonstrate our leadership as proven by our financial performance. 12% organic revenue growth and more than 200 basis points of adjusted operating margin expansion. 16% growth in adjusted earnings per share, $4 billion of free cash flow, and $4.7 billion return to our shareholders through share repurchase. These results are possible because Fiserv possesses a set of assets that's unparalleled in our industry.

Julie and thank you all for joining us today to discuss another double digit growth you have a bias here in both organic revenue and adjusted earnings per share in 'twenty. Two 'twenty three we continued to demonstrate our leadership as proven by our financial performance well per se.

The organic revenue growth more than 200 basis points of adjusted operating margin expansion.

16% and adjusted earnings per share $4 billion of free cash flow and $4.7 billion returned to our shareholders through share repurchase. These results are possible because pfizer possesses.

A set of assets that's unparalleled in our industry for a vast and diverse client base product portfolio and distribution network.

Frank J. Bisignano: From our vast and diverse client base, product portfolio, and distribution network, to Technology and Capital Resources, to a deep bench empowered with strategic vision and operational excellence. This combination of assets is how we plan to sustain strong performance. A fundamental aspect of our culture is that we are not satisfied, and we continue to push for more.

Technology and capital resources to a deep bench empowered with strategic vision and operational excellence. This combination of assets is how we plan to sustain strong performance a fundamental aspect of our culture.

Is that we are not satisfied and we continue to push for more we know that great opportunity remains for continued revenue growth.

Frank J. Bisignano: We know that great opportunity remains for continued revenue growth and improved productivity. We laid out several growth strategies at our investor conference in November, and we are executing on those every day. At the same time, we continue to identify ways to drive further productivity. Five years ago, we announced the plan to merge First Data and Fiserv.

And improve productivity, we laid out several growth strategies at our Investor Conference in November.

We are executing on those every day at the same time, we continue to identify ways to drive further productivity five years ago, We announced the plan to emerge first data and Pfizer today, we're a four and a half year old company with.

Frank J. Bisignano: Today, we are a four-and-a-half-year-old company with a 38-year track record of double-digit adjusted earnings per share growth. Under our new structure, half of our company, Merchant Solutions, is a leader in the high-growth payments market, where SMBs and enterprises are embracing the benefits of an operating system with seamless integration of value-added solutions. The other half, Financial Solutions, is a leader in the high-recurring revenue financial IT software and services market, helping small and medium-sized financial institutions level the playing field with larger banks and helping larger banks migrate to next-generation technology.

38 year track record of double digit adjusted earnings per share growth under our new structure has about company merchant solutions is a leader in the high growth payments market, where smbs and enterprises are embraer.

Seeing the benefits of an operating system with seamless integration of value added solutions. The other half financial solutions is a leader in the high recurring revenue financial I T software and services market helping.

Small and medium sized financial institutions will level, the playing field with larger banks and helping larger banks migrate to next generation technology. This combination of growth and consistency has served us well and our business model is even more.

Frank J. Bisignano: This combination of growth and consistency has served us well, and our business model is even more compelling at the intersection of these two businesses. We continue to see a strong opportunity to cross-sell and integrate merchant and financial solutions to help financial institutions better serve their merchant customers and enable merchants to retain customers with new financial services offerings. Fiserv is unique in its positioning at the center of these two important ecosystems.

More compelling at the.

Intersection of these two businesses, we continue to see strong opportunity to cross sell and integrate merchant and financial solutions to help financial institutions better serve their merchant customers.

And enable merchants to retain customers with new financial services offerings Pfizer is unique in its positioning at the center of these two important ecosystems.

Frank J. Bisignano: Let's take a step back and review our 2023 results. They highlight another important aspect of our culture, delivering on our commitments. In late 2020, we set formidable financial and operational targets for the subsequent three years. We delivered on those and more.

Take a step back and view our 'twenty 'twenty during results. They highlight another important aspect of our culture of delivering on our commitments and later 'twenty 'twenty, we set formula both financial and operational targets for the subsequent three years.

We delivered on those and more where 2023 we started with organic revenue growth guidance of 7% to 9% and delivered 12%. We started with a goal of at least 125 basis points of adjusted operating margin improvement.

Frank J. Bisignano: For 2023, we started with organic revenue growth guidance of 7% to 9% and delivered 12%. We started with a goal of at least 125 basis points of adjusted operating margin improvement and delivered 220 basis points. And we started with adjusted EPS guidance of $7.25 to $7.40, or 12% to 14% growth. And we delivered $7.52, or 16% growth. In the fourth quarter, we achieved organic revenue growth of 12% and an adjusted operating margin of 40.7%, which was 150 basis points from the fourth quarter of 2022, which itself was an exceptionally strong quarter. Our adjusted earnings per share of $2.19 was ahead of expectations on the strength of our merchant revenue and payments margin. Free cash flow was also very strong at $1.3 billion, and we repurchased 8.6 million shares, ending the year with 5% fewer average diluted shares outstanding than last year.

And delivered 220 basis points, and we started with adjusted EPS guidance of $7.25 to $7.40 or 12% to 14% growth and we delivered.

$7.52 or 16% growth in the fourth quarter, we achieved organic revenue growth of 12% and adjusted operating margin of 47% of 150 basis points.

Fourth quarter, 'twenty, 'twenty, two which itself was an exceptionally strong quarter.

Our adjusted earnings per share of $2.19 was ahead of expectations on the strength of our merchant revenue and payments margin free cash flow was also very strong at $1.3 billion and we were.

Repurchased eight 6 million shares ending the year with 5% fewer average diluted shares outstanding than last year, our merchant acceptance segment generated organic revenue growth of 24% and 19.

Frank J. Bisignano: Our merchant acceptance segment generated organic revenue growth of 24% and 19% in the quarter and full year, respectively, exceeding our expectations at the start of the year. Global revenue growth accelerated to 30% in the quarter as SMBs remained healthy and restaurants, in particular, continued to outperform. Our distribution partners globally continue to embrace our platform, and value-added solutions revenue grew more than 40% in 2023 to end the year at a 19% penetration rate. Carriage revenue growth rebounded to 11% in the quarter, or 15%, excluding the client that took processing in-house mid last year.

10% in the quarter and full year, respectively.

Seeding our expectations at the start of the year.

Global revenue growth accelerated to 30% in the quarter as Smbs remained healthy and restaurants in particular, continuing to outperform our distribution partners globally continue to embrace our platform value added solutions revenue grew more.

More than 40% in 2023, and the year and a 19% penetration rate carriage revenue growth rebounded to a 11% in the quarter or 15%. Excluding the client that took processing in house made last year growth was driven.

Frank J. Bisignano: Growth was driven by the accelerated win rate of recent wins by key clients, which has continued into this year. We expanded our global client capability by adding India's UPI and Japan's JCB as payment methods for clients in more than 35 markets. In the energy sector, we complemented our leadership position with a new deal to provide seamless unattended payment experiences for drivers using one of the country's largest networks of charging stations.

And by the ramp of recent wins by key clients, which has continued into this year, we expanded our global acquiring capability by adding India's Upi and Japan's JCB as payment methods for clients in more than 35.

Markets.

In the energy sector, we complemented our leadership position within new deal to provide seamless unattended payment experiences for drivers using one of the country's largest networks of charging stations outside the U S. We were pleased to have signed.

Frank J. Bisignano: Outside the U.S., we were pleased to have signed several new deals in EMEA during Q4 and into January. They included a major new merchant acquiring relationship with a leading apparel and equipment retailer, and a renewal and extension of business with a leading QSR. Additionally, Albert, the joint venture with Deutsche Bank, is now beginning to hit its stride with accelerated Clover merchant signups. In AsiaPAC, we signed a new merchant acquiring deal with Vistara, a domestic airline in India, and went live with more payout options for consumers in the region. In Latin America, we continue to ramp up merchant acquiring in Brazil for Casabank, along with payment acceptance at its BillPay outlets. Additionally, we've laid the groundwork to support more fee-based PIX transactions for our merchant clients with the acquisition of SLED in Q4. SLED is a software solutions company that will allow Fiserv to operate as a direct payment service provider, expanding our reach into the full PIX instant payments universe.

Several new deals in EMEA during Q4 and into January.

Included a major new merchant acquiring relationship with a leading apparel and equipment retailer and renewal and extension of business with a leading U S. R. Additionally, Albert joint venture with Deutsche Bank.

It is now beginning to hit its stride with accelerated Clover merchant sign ups in Asia Pac we designed the new merchant acquiring deal with this there are a domestic airline in India and went live with more payout options for consumers in the region.

In Latin America, we continue to ramp up merchant acquiring in Brazil for cash or bank.

Along with payment acceptance and its bill pay outlets, we've laid the groundwork to support more fee based picks transactions Brown merchant clients with the acquisition of sled in Q4. So that is a software solutions company that will allow.

Pfizer to operate as a direct payment service provider.

Span the outreach into the full picks instant payments universe in April we will be rolling out Clover, which we expect to further advance our leading position in Brazil.

Frank J. Bisignano: In April, we will be rolling out Clover, which we expect to further advance our leading position in Brazil. In Argentina, we're building on our four-year Clover lead with acceleration in new merchant growth. With more Clover merchants engaging in more anticipation activity, our growth in Argentina continues beyond the macro factors of high inflation and interest rates. The payment segment achieved the top end of its medium-term guidance range with 4% organic revenue growth in the quarter and 8% for the year. We added nearly 20 large e-commerce merchants to our debit network, Star and Excel, in the wake of Reg I.I., including eBay and HelloFresh in Q4, and Uber, Lyft, and others earlier in the year. Several of these are new clients' devices.

In Argentina, we are building on a four year globally with an acceleration in new merchant growth.

With more clover merchants engaging in more anticipation activity outgrowth in Argentina continues beyond the macro factors of high inflation and interest rates. The payments segment achieved the top end of its medium term guidance range with <unk>.

4% organic revenue growth in the quarter and 8% for the year. We added nearly 20 large e-commerce merchants to our debit network star in itself in the wake of Red II, including ebay <unk>.

Hello, fresh and Q4, and Uber Lyft and others earlier in the year.

Several of these are new clients to buy a shirt.

It's one of the 20th Arnie, we signed well over 200 of our financial institution clients to island now with network to expand their payment rails to include fed now for real time payments and bill pay the biller directory behind that market leader.

Frank J. Bisignano: In 2023, we signed well over 200 of our financial institution clients to our NOW Network to expand their payment routes to include FedNow for real-time payment. In BillPay, the bill and directory behind a market-leading consumer BillPay business is proving valuable in the SMB space, as we complete the build-out of our new small business accounts receivable and payable offering. Cash Flow Central. We won our first client in the fourth quarter, Washington Federal Bank, with $23 billion in assets. And just last week, Fiserv expanded its longstanding digital money movement relationship with U.S. Bank to now include Cashflow Central. These two important wins came just a few months after formally announcing the product.

In consumer Bill pay business is proving valuable in the SMB space as we complete the build out of our new small business accounts receivable and payable offering.

Cash flow of central.

We won our first client in the fourth quarter, Washington, Federal Bank with 23 billion in assets.

And just last week Pfizer expanded its long standing digital money movement relationship with U S Bank to now include cashless central.

These two important wins came just a few months after formally announcing the product.

Frank J. Bisignano: The pipeline is growing rapidly, with strong interest and demand from financial institutions, including many of the largest. At our investor conference, we talked about value-added solutions and new verticals in our issuing business. We made significant progress on both during 2023 and early Q1. One of our value-added services, an AI-based fraud prevention tool called Advanced Defense, grew volume nearly 5X over 2022. Now Synchrony is in the process of upgrading to Advanced Defense across its portfolio of more than 70 million accounts. We're excited to be rolling out the California Employment Development Department plan for our Money Network prepaid card. This largest-of-its-kind state program for unemployment and other benefits will go live later this month.

The pipeline is growing rapidly with strong interest and demand from financial institutions, including many of the largest at our.

The Investor Conference, we talked about value added solutions and new verticals in our issuing business.

We made significant progress on both during 'twenty two 'twenty three and early Q1, one of our value added services and AI based fraud prevention tool called advanced Defense grew volume nearly five X over 2022 now.

Synchrony is in Nebraska.

Upgrading to advance defense across its portfolio of more than 17 million accounts, we're excited to be rolling out the California employment development Department plan trial money network prepaid cards.

This largest of its kind state program for unemployment and other benefits will go live later this month we.

Frank J. Bisignano: We have a pipeline of other opportunities in the government sector to deliver on our strategy to grow in this vertical. This also extends to healthcare, where we converted a significant portion of health equity's CARD portfolio onto our platform in the fourth quarter, with the remainder scheduled for later this year. In EMEA, we signed our first global open FX issuer deal with ABSA, one of Africa's largest diversified financial services groups.

We have a pipeline of other opportunities in the government sector to deliver on our strategy to grow in this vertical. This also extends to health care, where we converted a significant portion of health equity card portfolio onto our platform.

In the fourth quarter with the remainder scheduled for later this year in EMEA, We signed our first global open FX issuer deal with ads.

One of Africa's largest diversified financial services group. This new currency solution enables issuers to take control of their FX mitigate FX exposure and bring more value to their cardholders with true where it's one of the.

Frank J. Bisignano: This new currency solution enables issuers to take control of their FX, mitigate FX exposure, and bring more value to their CARD holders. With TrueWorths, one of the leading retailers in South Africa, we upgraded to a Vision Plus license, adding more value-added solutions. In AsiaPAC, we added a new India issuer processing client, Equitas Small Finance Bank. They will launch their retail and corporate card programs using our First Vision India Processing Hub with a full-stack offering that includes UPI, loyalty, offers, and real-time fraud management. The FinTech segment recorded a 1% decline in organic revenue for the quarter and a 2% increase for the full year.

Leading retailers in South Africa, we upgraded two of vision bus license attaching more value added solutions and in Asia Pac We added a new India issuer processing client Edwards has small finance bank they will launch.

Their retail and corporate card programs using outburst vision, India processing hub with a full stack offering that includes Upi loyalty offers and real time fraud management.

<unk> segment recorded a 1% decline in organic revenue for the quarter and a 2% increase for the full year organic growth excluding periodic revenue for the year was 4%, while we knew we had a very difficult comparison with high periodic revenue.

Frank J. Bisignano: Organic growth excluding periodic revenue for the year was 4%. While we knew we had a very difficult comparison with high periodic revenue in Q4-22, we had visibility to achieve our growth goal, in large part from the level of client engagement we saw at Forum, our client conference in June. And those discussions continued.

In Q4, 'twenty, two we had visibility to achieve our growth goal in large part from the level of client engagement, we saw and inform our client conference in June and those discussions continue separately the pace of new core wins remains held.

Frank J. Bisignano: Separately, the pace of new core wins remains healthy at 12 in Q4. Additionally, clients are demonstrating two important trends. First, they are migrating from one Fiserv core operating system to another.

The <unk> 12 in Q4 and clients are demonstrating two important trends.

First they are migrating from one Pfizer core operating system to another.

Frank J. Bisignano: This is a positive sign that they are finding the answers to their changing needs right here within the Fiserv portfolio. Second, while M&A activity among financial institutions slowed in 2023, we believe that M&A activity is good for us as we can compete at any level with any institution without platforms, and it creates an opportunity to provide more services to the combined institutions. Prosperity Bank, a Texas-based regional bank with $38.5 billion in assets, decided in Q4 to migrate to our cloud-enabled DNA platform and signed up for our card hub value-added solution.

Positive sign that they are finding the answers to their changing needs right here within the Pfizer portfolio second while M&A activity among financial institutions slowed in 'twenty to 'twenty three we believe that M&A activity is good for us.

As we can't compete at any level with any institution without platforms and it creates an opportunity to provide more services to the combined institution prosperity Bank of Texas based regional bank with 38 and a half billion.

Ours assets decided in Q4 to migrate to our cloud enable DNA platform and signed up for a card.

Value added solutions old National Bank of 49 billion dollar bank in Indiana is a core system client that has been growing with us.

Frank J. Bisignano: Old National Bank, a $49 billion bank in Indiana, is a core system client that has been growing with us as it has been making acquisitions. And we continue to grow our relationship with Old National Bank in the fourth quarter with the addition of debit processing, Excel, CardHub, and other value-added solutions. These are also two examples of our financial technology segment clients buying our value-added solutions in the payment segment. This ongoing trend of clients buying services across these two segments is a key reason why we are creating a single new segment, Financial Solutions. Turning to the outlook for 2024, we expect total company organic revenue growth of 15% to 17%, inclusive of an estimated seven points of growth from excess revenue in Argentina, driven by significantly higher inflation and interest in the Argentina merchant business following the government's steep peso devaluation in mid-December.

As it has been making acquisitions and we continue to grow our relationship with old national in the fourth quarter with the addition of debit processing Excel card hub and other value added solutions. These are.

Also two examples of our financial technologies segment clients buying out value added solutions in the payments segment. This ongoing trend of clients buying services across these two segments is a key reason why we are.

Creating a single news segment financial solutions, turning to the outlook for 'twenty 'twenty four we expect total company organic revenue growth of 15% to 17% inclusive of an estimated seven point.

The growth from excess revenue in Argentina, driven by significantly higher inflation and interest in the Argentina merchant business. Following the government's steep peso devaluation in mid December we.

Frank J. Bisignano: We expect continued margin improvement in 2024, with at least 100 basis points of adjusted operating margin expansion. And adjusted earnings per share should grow 14% to 16%, reaching $8.55 to $8.70. This adjusted EPS growth outlook is in the middle of the range we provided at our investor conference in November, and it's meant to be a prudent reflection of the macroeconomic outlook. Economist consensus calls for U.S. personal consumption growth and consumer savings to be lower in 2024, creating a modest headwind for the merchant business.

<unk> continued margin improvement in 'twenty 'twenty four with at least 100 basis points of adjusted operating margin expansion and adjusted earnings per share should grow 14% to 16% reaching $8 then.

55 cents to $8 and 70 sets. This adjusted EPS growth outlook is in the middle of the range. We provided at our Investor Conference in November and it's meant to be a prudent reflection of the macro economic outlook.

Frank J. Bisignano: Against a potentially softer backdrop, we remain confident in our ability to grow clover and carrot as we add more merchants, sell more to existing clients, and add to our portfolio and penetration of value-added solutions. Our discussions with banks and credit unions indicate that they remain poised to spend to retain and grow deposits. We are meeting their changing needs every day with our operating system approach that offers the most integrated platforms and broadest suite of value-added solutions in the business. We are encouraged by our latest financial solutions initiatives in SMB payments with Cash Flow Central, our new integrated digital banking platform, Experience Digital, and the power of FinZAC to win over larger banks and existing clients. We expect all of these to ramp up over the course of 2024 and set the stage for stronger growth in subsequent years. To summarize, our outlook for 2024 is positive, as we anticipate another year of double-digit organic revenue growth and adjusted earnings per share as well as strong adjusted operating margin expansion. Our optimism for sustained growth is tempered only by the economic backdrop of modestly slower GDP growth and geopolitical tensions.

Economists consensus calls for U S personal consumption growth and consumers savings to be lower in 'twenty 'twenty, four creating a modest headwind to the merchant business against a potentially softer backdrop, we remain confident in our.

Billety to grow Clover, and Karen as we add more merchants sell more to existing clients and add to our portfolio and penetration of value added solutions.

Discussions with banks and credit unions indicate that they remain boys to spend to retain and grow deposits. We are meeting their changing needs every day without operating system approach that offers the most integrated platforms.

And broadest suite of value added solutions in the business. We are encouraged by our newest financial solutions initiatives.

S N V payments with cash was ventral.

Our new integrated digital banking platform experienced digital and the power of thin Zach to win over a larger banks and existing clients. We expect all of these to ramp over the course of 'twenty 'twenty four and set the stage for showing good growth in subsequent years.

Robert W. Hau: We remain confident in our ability to control our growth trajectory at the top and bottom lines through our strong positioning, innovation, good stewardship of capital, and plain hard work. We rely on a resilient business model with its diverse client mix serving non-discretionary spending categories and our high recurring revenue to continue investing at a pace that supports our competitive strengths. For more details on our financial results, I'll pass the discussion on to Bob. Thank you, Frank, and good morning, everyone.

To summarize our outlook for 'twenty 'twenty four is positive as we anticipate another year of double digit organic revenue growth and adjusted earnings per share as well as strong adjusted operating margin expansion.

Our optimism for sustained growth level is tempered only by the economic backdrop, a modestly slower GDP growth and geopolitical tensions we remain confident in our ability to control our growth trajectory.

Robert W. Hau: If you're following along on our slides, I'll cover additional detail on total company and segment performance, starting with our financial metrics and trends on slide four. Fourth quarter and full year results reflected our focus on delivering on our commitments with momentum across the business. Total company organic revenue growth was 12% in the quarter, with ongoing strength in our merchant acceptance and payments and network segments, offset by a decline in the fintech segment against a very difficult comparison. For the full year, total company organic revenue also grew 12% ahead of the guidance we provided in October and November. This performance was led by the merchant acceptance segment, which grew 19%. Fourth quarter total company adjusted revenue grew 6% to $4.6 billion, and adjusted operating income grew 10% to $1.9 billion, resulting in an adjusted operating margin of 40.7%, an increase of 150 basis points versus the prior year and a sequential improvement of 260 basis points.

At the top and bottom lines through our strong positioning innovation, good stewardship of capital and plain hard work already rely on our resilient business model with its diverse client mix, serving non discretionary spending categories.

And al high recurring revenue to continue investing at a pace that supports our competitive strengths for more details on our financial results I'll pass the discussion onto Bob. 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 fourth quarter and full year results reflected our focus on delivering on our commitments with momentum across the business total company organic revenue growth was 12% in the quarter with ongoing strength.

And our merchant acceptance and payments and network segments offset by a decline in the Fintech segment against a very difficult compare for the full year total company organic revenue also grew 12% ahead of the guidance. We provided in October and November. This performance was led by the merchant acceptance segment, which grew 19%.

Fourth quarter total company adjusted revenue grew 6% to $4 6 billion and adjusted operating income grew 10% to $1 $9 billion, resulting in an adjusted operating margin of 47% an increase of 150 basis points versus the prior year.

Robert W. Hau: The 40.7% represents a post-merger high for Fiserv. Our fourth quarter performance brought the full year adjusted operating margin to 37.3%, an increase of 220 basis points over 2022. Fourth quarter adjusted earnings per share increased 15% to $2.19 compared to $1.91 in the prior year. Full year adjusted earnings per share increased 16% to $7.52. Those adjusted EPS results do not include $0.12 per share in expenses relating to the significant devaluation of the Argentine peso as part of a government reform package on December 12th last year.

And a sequential improvement of 260 basis points to 47% represents a post merger high for Fiserv, our fourth quarter performance brought the full year adjusted operating margin to 37, 3% an increase of 220 basis points over 2022 fourth quarter adjust.

Earnings per share increased 15% to $2.19 compared to $1 91 in the prior year full year adjusted earnings per share increased 16% to $7.52. Those adjusted EPS results do not include 12 cents per share and <unk>.

Hence, we leading to the significant devaluation of the Argentine peso as part of our government reform package on December 12 last year. This one day move led to our nonoperating noncash foreign exchange loss for the revaluation of our local balance sheet as required under GAAP rules for her.

Robert W. Hau: This one-day move led to a non-operating, non-cash foreign exchange loss for the revaluation of our local balance sheet as required under GAAP rules for hyperinflation accounting. All other Argentine foreign exchange losses throughout 2023 are included in the adjusted EPS results. Pre-cash flow came in at $1.3 billion for the quarter and $4 billion for the full year, an increase of 14% over last year. Now looking to our segment results, starting on slide 6, organic revenue growth in the merchant acceptance segment was 24% in the quarter and 19% for the full year, well ahead of our previous medium-term segment guidance of 9 to 12%. This includes an 8-point benefit to full-year organic growth from transitory revenue driven by above-average interest and inflation in Argentina.

For inflation accounting.

All other Argentine foreign exchange losses throughout 2023 are included in the adjusted EPS results free.

Free cash flow came in at $1 $3 billion for the quarter and $4 billion for the full year, an increase of 14% over last year now looking to our segment results starting on slide six organic revenue growth in the merchant acceptance segment was 24% in the quarter.

And 19% for the full year well ahead of our previous medium term segment guidance of 9% to 12%. This includes an eight point benefit to the full year organic growth from the transitory revenue driven by above average interest and inflation in Argentina.

Adjusted revenue growth was 14% in the quarter and 12% for the full year.

Robert W. Hau: Adjusted revenue growth was 14% in the quarter and 12% for the full year. You can see from the spread between organic and adjusted revenue growth that currency headwinds from the devaluation of the Argentine peso offset the benefit of the country's very high inflation and interest for the full year in adjusted revenue. Global merchant volume and transactions in the quarter grew 5% and 8%, respectively, excluding wholesale processing.

You can see from the spread between organic and adjusted revenue growth the currency headwinds from the devaluation of the Argentine peso offset the benefit of the country is very high inflation and interest for the full year.

Justin revenue.

Global merchant volume and transactions in the quarter grew 5% and 8% excluding wholesale processing respectively.

Robert W. Hau: Clover revenue grew 30% in the fourth quarter, an annualized payment volume growth of 17%. For the full year, Clover revenue was up 25%. The spread between revenue and volume growth comes from higher penetration of value-added solutions, channel makeshift, and some price shifts. Vast penetration reached 19% in Q4, up from 16% in the year-ago period, and On Pace to meet our 27% target by 2026. Carrick also had a strong quarter, with revenue growing 11%. For the year, Carrick revenue grew 9%.

Cobra revenue grew 30% in the fourth quarter and annualized payment volume growth of 17%.

For the full year Clover revenue was up 25%.

The spread between revenue and volume growth comes from higher penetration of value added solutions channel mix shifts and some pricing.

Vast penetration reached 19% in Q4.

Up from 16% in the year ago period.

And on pace to meet our 27% target by 2026.

Karen also had a strong quarter with revenue growing 11%.

For the year revenue grew 9%, excluding the loss of a Latin American processing clients that moved in house revenue growth was 15% for both the quarter and the year.

Robert W. Hau: Excluding the loss of a Latin American processing client that moved in-house, revenue growth was 15% for both the quarter and the year. Adjusted operating income in the merchant acceptance segment increased 26% to $819 million in the quarter, with margin up 400 basis points to 38.8%. Full-year adjusted operating income improved 23% to $2.9 billion, and margin grew 330 basis points to 35.1%. Over the last couple of quarters, some of you have noted that our revenue includes anticipation in LATAM, but the cost of that anticipation interest is not included in the operating margin, as it is reported as interest expense below the operating income line on the income statement. If we were to take that interest from anticipation and pro forma it back to operating income, merchant margins would still have expanded a very strong 220 basis points for the quarter and 260 basis points for the year. Looking ahead to 2024, January's overall volume growth, excluding process, was similar to December's pace. Difficult weather throughout large portions of the U.S. did slow volume growth for a two-week period in mid-January, but we've seen clear improvement in volume growth since then. The Fiserv Small Business Index also points to steady spending in a healthy environment for small businesses in January.

Adjusted operating income in the merchant acceptance segment increased 26% to $819 million in the quarter.

With margin up 400 basis points to 38, 8% full.

Full year, adjusted operating income improved 23% to $2 $9 billion and margin grew 330 basis points to 35, 1%.

Over the last couple of quarters. Some of you have noted that our revenue includes anticipation in Latam, but the cost of that anticipation interest.

Not included in the operating margin as it is reported as interest expense below the operating income line on the income statement.

If we were to take that interest from anticipation and pro forma is back to operating income.

CIT margins would still have expanded a very strong 220 basis points for the quarter and 260 basis points for the year looking at 2020 for January as overall volume growth, excluding processing with similar to december's pace.

Difficult weather throughout large portions of the U S did slow volume growth for a two week period in mid January but we've seen clear improvement in volume growth since then.

The five serve small business index also points to steady spending in a healthy environment for small businesses in January.

Robert W. Hau: We reported the index on February 2nd with a value of 138, representing year-over-year growth of 1.7% and one-tenth of 1% growth from December on a seasonally adjusted basis. The Fiserv Small Business Index measures U.S. small business activity and is not a direct indicator of Fiserv results but rather a measure of the general pace of activity and health of this key Fiserv client base. Go to slide 7 in the Payments and

We reported the index on February 2nd with a value of $1 38, representing year over year growth of one 7%.

And 110th of 1% growth from December on a seasonally adjusted basis.

<unk> serve small business index measures U S small business activity and it's not a direct indicator of Pfizer results, but rather a measure of journal placement activity and health of this key fiserv client base turning to slide seven on the payments and network segment organic revenue grew 4% in the quarter.

Robert W. Hau: Organic revenue grew 4% in the quarter. This growth was enabled by a variety of drivers across our business lines. We have well over 200 financial institutions live or implementing FedNow and saw continued strength in Zelle with transactions and number of clients growing at 44% and 23%, respectively, for the quarter. Full year organic revenue growth of 8% was at the upper end of our medium-term outlook range of 5% to 8%. Fourth quarter adjusted operating income for the segment was up 8% to $877 million, and Margin was up 250 basis points to 51 percent, driven by operating leverage and some third-party productivity we had been working on throughout the year that came in through the fourth quarter. For the full year, Adjusted Operating Income was up 13 percent to $3.2 billion, and Margin expanded 250 basis points to 47.8 percent.

This growth was enabled by a variety of drivers across our business lines. We are well over 200 financial institutions live or implementing fed now and saw continued strength in zelle with transactions and number of clients growing at 44% and 23% respectively for the <unk>.

<unk> full year organic revenue growth of 8% was at the upper end of our medium term outlook range of 5% to 8% fourth quarter adjusted operating income for the segment was up 8% to $877 million.

And margin was up 250 basis points to 51% driven by operating leverage and some third party productivity. We had been working on throughout the year that came in through the fourth quarter for the full year adjusted operating income was up 13% to $3 $2 billion and margin expanded 250.

Basis points to 47, 8% moving to slide eight and our financial technologies segment, we posted a 1% organic revenue decline for the quarter and 2% growth for the full year organic revenue excluding periodic revenue grew 4% for the full year in client momentum continued.

Robert W. Hau: Moving to slide 8 in the Financial Technologies section, we posted a 1% organic revenue decline for the quarter and 2% growth for the full year. However, organic revenue, excluding periodic revenue, grew 4% for the full year, and client momentum continued with 12 core wins in the quarter, reaching 42 wins for the year. We had expected some strong license sales in the quarter to reach the bottom end of our full year guidance, but in several cases, these did not materialize as clients instead chose our Application Service Provider, or ASP, model. This is where we host the software in our data centers instead of clients purchasing their own software licenses. It had the effect of lowering in-quarter revenue in Q4 and instead spreading it out as monthly payments over multiple years. Adjusted operating income was down 11% in the quarter to $303 million and flat at $1.2 billion for the year.

With 12 core wins in the quarter, reaching 42 wins for the year, we had expected some strong license sales in the quarter to reach the bottom end of our full year guidance, but in several cases. These did not materialize as clients instead chose our application service provider or a S. P model. This is where are we.

We host the software in our data centers instead of clients purchasing their own software licenses. It had the effect of lowering in quarter revenue in Q4, and instead spreading it out his monthly payments over multiple years adjusted operating income was down 11% in the quarter to 303 million.

And flat at $1 $2 billion for the year.

Robert W. Hau: Adjusted operating margin in the segment decreased 340 basis points to 37.9% in the quarter. Annual margin increased 10 basis points to 36.6% with the lower periodic revenue. The corporate adjusted operating loss was $110 million in the quarter and $494 million for the full year. The adjusted effective tax rate in the quarter was 18.7% and was 19.3% for the year.

Adjusted operating margin in the segment decreased 340 basis points to 37, 9% in the quarter full year margin increased 10 basis points to 36, 6% with the lower periodic revenue the corporate adjusted operating loss was $110 million in the quarter and 494 million.

For the full year, the adjusted effective tax rate in the quarter was 18, 7% and was 19, 3% for the year. We expect the 2024 adjusted effective tax rate will be approximately 20% for the full year total debt outstanding was $23 $1 billion on December 31, the debt.

Robert W. Hau: We expect the 2024 adjusted effective tax rate will be approximately 20% for the full year. The net outstanding was $23.1 billion on December 31st. The debt to adjusted EBITDA ratio dropped another tenth of a turn to 2.7 times within our target leverage range. We have approximately 10% of our debt in variable rate instruments. During the quarter, we repurchased 8.6 million shares for $1 billion, bringing our total 2023 share repurchase to $4.7 billion and nearly $10 billion in the last three years. The diluted average share count fell 5% from 2022 levels.

To adjusted EBITDA ratio dropped another 10th of a turn to two seven times within our target leverage range, we have approximately 10% of our debt and variable rate instruments. During the quarter, we repurchased eight 6 million shares for $1 billion, bringing our total 2023 share.

<unk> to $4 $7 billion and nearly $10 billion in the last three years, the diluted average share count fell 5% from 2022 levels. We had 52 million shares remaining authorized for share repurchase at the end of the quarter, our long standing capital allocation strategy will continue.

Robert W. Hau: We have 52 million shares remaining authorized for share repurchase at the end of the quarter. Our longstanding allocation strategy will continue in 2024, defined by a strong balance sheet, share repurchases, and complementary and innovative acquisitions. Turning to slide 9, as Frank said earlier, we expect organic revenue growth of 15 to 17%, with adjusted operating margin expansion of more than 100 basis points. This translates to adjusted earnings per share of $8.55 to $8.70, or 14% to 16% growth over 2023 and would represent our 39th consecutive year of double-digit adjusted EPS growth.

<unk> in 2024 defined by a strong balance sheet share repurchases and complementary and innovative acquisitions.

Turning to slide nine as Frank said earlier, we expect organic revenue growth of 15% to 17% with adjusted operating margin expansion of more than 100 basis points. This translates to adjusted earnings per share of $8 55 to.

To $8.70 or 14% to 16% growth over 2023 and would represent our 39th consecutive year of double digit adjusted EPS growth and merchant solutions, we anticipate organic revenue growth in the 25% to 28% range, including 14 percentage points.

Robert W. Hau: In merchant solutions, we anticipate organic revenue growth in the 25% to 28% range, including 14 percentage points of transitory revenue growth in Argentina. This is higher than the outlook given at our investor conference in November due to the effects of the steep devaluation of the Argentine peso in mid-December. For financial solutions, we continue to expect 5% to 7% organic revenue growth this year. Additionally, we continue to estimate approximately $4.5 billion of free cash flow for 2024. In the second half of 2023, we launched a new initiative to purchase green tax credits, where we buy tax credits at a discount from companies who earn but cannot use them. This reduces the net cash tax paid and, in many cases, defers the cash payment by a quarter or two.

A transitory revenue growth in Argentina. This is higher than the outlook given at our Investor Conference in November due to the effects of the steep devaluation of the Argentine peso mid December for financial solutions, We continue to expect 5% to 7% organic revenue growth. This year, we continue to est.

Approximately $4 $5 billion of free cash flow for 2024 in the second half of 2023, we launched a new initiative to purchase Green tax credits.

Where we buy tax credits at a discount from companies, who earned but cannot use them. This reduces the net cash tax paid and in many cases defers the cash payment by a quarter or two.

Robert W. Hau: A recent new rule codified this practice for 10 years, so we expect to continue to benefit from it. However, this will bring more variability to our quarterly cash flow. In 2024, there'll be a headwind in the first quarter and first half when we pay for the credits, and a tailwind in the second half when some of the tax refunds are received. While we do anticipate some shifts in timing, we continue to expect full-year free cash flow of approximately $4.5 billion. With that, let me turn the call back to Frank for some closing remarks. Thanks, Bob.

We set new rules codified this practice for 10 years. So we expect to continue to benefit from it.

This will bring more variability to our quarterly cash flows.

In 2024, there'll be a headwind in the first quarter and first half when we paid for the credits and a tailwind in the second half when some of the tax refunds are received while we do anticipate some shifts in timing. We continue to expect full year free cash flow of approximately $4 $5 billion with that.

Let me turn the call back to Frank for some closing remarks, thanks, Bob I'd like to spend a few minutes highlighting pfizer's commitment to corporate social responsibility, which we aligned with business operations and employee engagement to maximize impact.

Frank J. Bisignano: I'd like to spend a few minutes highlighting Fiserv's commitment to corporate social responsibility, which we align with business operations and employee engagement to maximize impact. Our next CSR report will be published in the second quarter and will demonstrate the continued development of our employee resource group, the Fiserv CARES Foundation, and our Back to Business program that awards grants to small businesses. To better serve our Minority Depository Institution clients and their communities, we formed an MDI Advisory Council, which includes eight clients and other members.

Our next CSR report will be published in the second quarter and will demonstrate continued development of al employee resource groups.

Is there a cares foundation and back to business program that awards grants to small businesses to better serve our minority depository institution clients and their communities. We formed an MDI Advisory Council, which includes eight client.

<unk> and other members of the council as part of our efforts to better collaborate and deliver value to our MDI clients and the communities they serve.

Frank J. Bisignano: The Council is part of our efforts to better collaborate and deliver value to our MDI clients and the communities they serve. Institutional investors recognized Fiserv for its CSR efforts as a top ESG performer in the payments, processing, and IT services sector, a first for the company. Our programmatic efforts earned recognition from prestigious indices like Bloomberg's Gender Equality Index and the Human Rights Campaign's Equality Index.

Institutional investor recognized by <unk> for its CSR efforts as the top ESG performer and the payments processing and I T services sector.

First for the company.

Our programmatic efforts earned recognition from prestigious indices like Bloomberg's gender equality index and the human rights campaigns or quality index. We also ranked number one on the military times best.

Frank J. Bisignano: We also ranked number one on the Military Times Best for Vets Employers list. And just last week, we were named one of Fortune's world's most admired companies for 2024, marking the ninth time in 10 years that we received this honorable distinction. While we scored highly in many categories, among the highest was innovation. We are particularly proud of this category recognition, as well as other standouts for people leadership, product and service quality, global competitiveness, and long-term investment value. As we look ahead to what's coming in 2024, the ongoing advancement of AI is not driven solely by the expanding capabilities of technology but also by the underlying proliferation of data to feed that generative engine.

Prevents employers list.

And just last week, we were named one of Fortune's world's most admired companies for 'twenty 'twenty four marking the ninth time in 10 years that we received this honorable just sanctioned well.

While we scored highly in many categories among the highest towards innovation.

We are particularly proud of this category recognition as well as other standouts for people leadership product and service quality global competitiveness and long term investment value as.

As we look ahead towards coming in 2020 for the.

The ongoing advancement of AI is not driven solely by the expanding capabilities of the technology.

But also by the underlying proliferation of data to feed that generative engine.

Frank J. Bisignano: For Fiserv, ALDATA and AI Power Intelligence put us on a path to be an effective user and enabler of AI. We're in the early innings of using it to optimize our own operations and deliver actionable insights for our clients as well, with significant benefits for future quality, productivity, and growth. Fiserv already manages one of the most valuable information stores in the industry, and we start from a position of strength based simply on the sheer amount of data that runs through our systems each year. For example, over $4 trillion of payment volume globally across more than 6 million merchant locations, plus 1.6 billion card accounts on file. 325 million deposit and loan accounts and 20 million bill pay users across nearly 10,000 financial institutions.

For Pfizer, our data and AI powered intelligence put us on a path to be an effective user and enabler of AI.

We're in the early innings of using it to optimize our own operations and deliver actionable insights for our clients as well with significant benefits to come in quality productivity and growth.

Pfizer have already manages one of the most valuable information stores in the industry and we.

We start from a position of strength based simply on the sheer amount of data that runs through our system each year.

<unk> four trillion dollars of payment volume globally.

Across more than 6 million merchant locations.

One 6 billion card accounts on file.

325 million the visor only accounts and 20 million bill pay users across nearly 10000 financial institutions.

Frank J. Bisignano: The power of our data fueling AI applications is already helping us throughout our business in areas such as enhanced customer services, analytics on the Clover and Carrot dashboards, and fraud mitigation tools. Let me share with you three ways we are turning data into an increasingly potent AI system. Berge.

The power of that data the only AI applications is already helping us throughout our business in areas such as enhanced customer service.

Analytics on the Clover, and Karen dashboards and fraud mitigation tools.

Let me share with you three ways, where attorney data into an increasingly potent asset.

First we're creating better service and insights for our clients by helping them harness data and actionable ways.

Frank J. Bisignano: We're creating better service and insights for our clients by helping them harness data in actionable ways. As an example, 85% of technical service calls were resolved unassisted through the use of data and AI, with high client satisfaction rates. Additionally, over the last year, more than 2 million of the highest-level technical support inquiries were resolved online through AI-assisted learning. Thank you. We're embedding our data and AI capabilities into value-added solutions, such as advanced defense being used to combat fraud and other security risks. And third, we're packaging our rich data assets to build next-gen products. Earlier this year, for instance, we launched the Fiserv Small Business Index, a real-time assessment of consumer spending at SMBs.

As an example, 85% of technical service calls were resolved unassisted through the use of data and AI with high client satisfaction rates.

Additionally, over the last year more than 2 million of the highest level technical support enquiries or resolved online through AI assistant learning.

Second.

We're embedding our data and AI capabilities into value added solutions, such as advanced events being used to combat fraud and other security risks.

And third we're packaging, our rich data assets to build next gen products.

Earlier this year for instance, we launched the fine serve small business index.

Real time assessment of consumers when the S. M. D is published monthly, enabling new valuable insights for financial institutions.

Frank J. Bisignano: Published monthly, enabling new valuable insights for financial institutions, policy makers, investors, and businesses of all sizes. Bob discussed the results of our January index, which we released on February 2nd, making it an extremely timely measure of the current environment. As Bob and I like to say, intellectual honesty with analytical rigor is how we run the company. Data is the enabler for us to apply this in all that we do, serving our clients, choosing our partners, assessing our competition, prioritizing our investments, understanding our performance, and communicating it to investors. With the many assets I discussed on this call, including our data, along with our dedicated associates worldwide adopting this fundamental practice of intellectual honesty with analytical rigor, I am confident that Fiserv will continue to extend its reach and sustain our leadership through 2024 and beyond. With that, Operator.

Z makers.

Yes, there is and this is of all sizes.

Bob discussed the results of our January Index, which released on February 2nd making it extremely timely measure of the current environment as Bob and I like to say intellectual honesty with analytical rigor is how we run the company.

Dana is the enabler for us to apply this in all that we do survey our clients choose our partners assessing how competition prioritizing our investments understand the outperformance and communicated to investors.

But the many assets I discuss on this call, including our data along with our dedicated associates worldwide.

Dana is fundamental practice intellectual honesty, what analytical rigor.

I'm confident that Pfizer will continue to extend its reach and sustain our leadership through 'twenty 'twenty four and beyond.

With that operator.

Operator: Please open the line for questions. Thank you. We would now like to open the phone lines for questions. If you would like to ask a question, you may press star 1 on your phone.

Please open the line for questions.

Thank you we would like now like to open the phone lines for 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 David <unk> from Evercore ISI. Please go ahead.

Operator: If you would like to withdraw your question, please press star 2. For our first question, we'll go to the line of David Togut from Evercore ISI. Please go ahead. Thank you. Good morning.

Thank you good morning, good to see the continued acceleration of Clover growth.

David Mark Togut: Good to see the continued acceleration of clover growth. I'll ask my question in the follow-up, both up front. So first, in the 4PPT increase in the Organic Revenue Growth Guide for 2024, it looks like about three points of that relate specifically to an increase. Argentina inflation. So if that's correct, could you walk through how your operating organic revenue growth assumptions have changed by segment versus the initial guide at the end of November Investor Day? Yeah, David. Good morning.

That's my question and a follow up both upfront. So first is the four P. P. T increased the organic revenue growth guide for 2024.

Looks like about three points of that relates specifically to an increase in.

Argentina inflation, so if that's correct.

Could you walk through how you're operating organic revenue growth assumptions have changed by segment versus initial guide in AR at the November Investor day. Thanks.

Yeah, David Good morning in your assessment is right on the Mark total company organic revenue growth.

Robert W. Hau: And your assessment is right on the mark; the total company organic revenue growth went up from back in November, when we said 11% to 13%; we now expect 15% to 17%. We previously indicated the impact, the favorable impact of higher than normal interest and inflation in Argentina would drive about six points of growth to the merchant segment or about three points to the total company. We now expect that excess inflation and interest is about seven points of growth for the total company. So, essentially, the increase in organic revenue growth is really attributed to higher inflation and interest expense out of Argentina. The underlying, quote, more normal organic growth of the merchant segment and of the company remains consistent with what we expected and saw back in November.

Went up from back in November we said, 11% to 13%, we now expect 15% to 17% we previously indicated.

The impact of favorable impact of higher than normal interest and inflation in Argentina would drive about six points of growth to the merchant segment or about three points to the total company.

We now expect that that excess inflation and interest is about seven points of growth to the total company. So essentially the growth or the increase in organic revenue growth is really attributed to higher inflation and interest expense out of Argentina, the underlying quote more.

Our normal.

Organic growth of the merchant segment.

Company remain consistent with what we expected and saw back in November the.

Robert W. Hau: The other element, of course, as we talked about in November, is that there is a natural counterbalance in our adjusted revenue and in our income statement that higher excess inflation and interest rates also drive a higher currency variation, or FX, headwind. And that also increased about four points from November. So net, our adjusted revenue, our EPS, our operating margins, very consistent, isolating out just that Argentina impact. Thanks for that.

The other element of course as we talked about in November is there is that natural counter balance in our adjusted revenue and in our income statement.

Higher excess inflation and interest rates.

So it drives a higher currency variation or FX headwind and that also increased about four points from the November so net our adjusted revenue or EPS or operating margins very consistent isolating out just that Argentina impact.

Okay. Thanks for that and then just a quick follow up what are your expectations for Clover revenue growth in 2024 would you expect a continued acceleration and then if so any any call outs I know Frank you mentioned, Brazil, a rollout in.

Robert W. Hau: And then just a quick follow up. What are your expectations for Clover revenue growth in 2024? Would you expect continued acceleration? And then, if so, any call outs?

Robert W. Hau: I know, Frank, you mentioned the Brazil rollout in April. Yeah, from a Clover standpoint, you saw the acceleration of revenue in the fourth quarter to 30%. We've talked quite a bit about the Clover growth rate accelerating into, you know, our Investor Day commitment, actually brought back in our March 2022 call out where we really focused in on Clover overall, where we gave an outlook for 2025. We updated that back in November to 2026.

April.

Yeah from a corporate standpoint, you saw the acceleration of revenue in the fourth quarter to 230%, we've talked quite a bit about the.

Colver growth rate accelerating into our Investor day commitment.

Actually bought back.

March of 2022 call out where we really focused in on Cobra overall, where we gave an outlook for 2025, we updated that back in November.

2026.

Robert W. Hau: So adding another year of our outlook, we continue to believe obviously that we'll deliver against that $10 billion for the total company and $3.5 billion for Clover in 2025, and then $4.5 billion for Clover in 2026. We feel good about the trajectory. I wouldn't suggest that, you know, we're going to get 30% every single quarter, but there are a lot of elements that are driving that growth, and we feel good about the overall trajectory. I would just say we talked about Brazil.

So adding another year of our outlook, we continue to believe obviously that won't deliver against that $10 billion for the total company.

And $3 $5 billion for Clover in 2025.

And then for $5 billion for <unk> in 2026, we feel good about the trajectory I wouldn't suggest that we're going to get 30% every single quarter, but theres a lot of elements that are driving that growth and we feel good about the overall trajectory.

I would just say, our we talked about Brazil that always works out.

Frank J. Bisignano: We've worked on that for a long time, and you should expect us to have further country rollouts. You've heard us talk about the Deutsche Bank JV birth, which has begun to hit some stride and get traction. You've always heard us talk about beginning to proliferate the ISVG, and that fundamentally, there was nothing about albacore. In that set of numbers, either of these. Thank you. ®MD-BO ®MD-BO Bye.

That for a long time.

You should expect us.

Casper as our country Rollouts you heard us talk about the.

Deutsche Bank, JV, Burger, which has.

Yes, it is some strides and getting traction.

You've always heard us talk about gauge gorilla for ATI actually channel.

And that fundamentally there was nothing about our back book is that set of numbers of course, we have a natural 90%.

You had some back book, that's just converts naturally I'd also like to highlight the pen rate that I've already talked about.

Frank J. Bisignano: I also would highlight, you know, the pen rate is a number we talked about. You know, we definitely were about growing our poo, and you see that pen rate up at 19%, which kind of tracks exactly what we've laid out to the population. So Clover continues to do its job. The distribution networks we have are unparalleled.

Got it that way about.

Growing our.

And you see that pen rate at 19%, which kind of tracks exactly.

Okay.

Uh huh.

So <unk> continues to do a job the distribution networks, we have right how else and Walgreens.

Frank J. Bisignano: And we're very, The Bulletproof Executive 2013, Thanks so much. Next, we'll go to the line of Tenjin Wong from J.P. Morgan. Please go ahead.

Do it.

David.

Thanks, so much.

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

Tien-tsin Huang: Hey, thanks. Also, one follow-on from David's question just on the merchant side with volume and transaction growth, the spread there is really still quite favorable, both total and with Clover. So, looking out... Should we expect some kind of cyclical mean reversion with that tightening, plus this value-added services promotion, plus you mentioned pricing as well, so what can we assume there since we're all trying to do the benchmarking? At Tingen, I think certainly we've continued to see that spread between volume and revenue, and it's something that is actually part of our strategic plan to grow to that $3.5 and $4.5 I think ultimately, what it comes down to is that if we continue to sell more software, more value-added services, and more additional capabilities to our merchants, you're gonna see revenue grow faster than volume. Now, the spread will ebb and flow across different quarters, but we continue to see a good opportunity to sell value-added services. That penetration reached 19% in the quarter, up about three full points from a year ago.

Hey, Thanks, I also wanted to follow on with David's question, just on the merchant side with volume and transaction growth of spread there is really still quite favorable both total and with clover. So looking out.

Should we expect some kind of cyclical mean reversion with with that tightening plus under this value added services promotions and pricing as well so what can we assume bear such world.

Trying to do the benchmarking exercise.

Yeah, Tien Tsin, I think certainly we've continued to see that that spread.

Between volume and revenue and it's something that is actually part of our strategic plan to grow to that three and a half from 45 billion and Clover and intend to 12.

For merchant by 25, and 26 I think ultimately what it comes down to as we continue to sell more software more value added services more additional capabilities to our merchants you're going to see revenue grow faster than volume of this spread will ebb and flow across.

Quarters, but we continue to see good opportunity to sell value added services that penetration reached 19% in the quarter up about three four points from a year ago.

Robert W. Hau: As we march towards 27%, by 2026, you'll continue to see great revenue growth overall. And certainly, there's the channel mix, more direct NISV relative to where we are today that'll continue to benefit. All right, right, more detail stuff.

March towards the 27% by 2020 secs, you'll continue to see great revenue growth overall, and certainly there's a channel mix more direct.

I S b relative to where we are today that will continue to benefit that.

Right right more vertical sounds good I'm glad to hear that especially in volume just my quick follow up then just.

Frank J. Bisignano: Good, glad to hear revenue faster than volume. Just my quick follow-up and just to clarify. I mean, Frank and Bobby both talked about a lot of good wins across all the lines here.

Bobby both talked about a lot of good wins across all the lines here just thinking about the outlook for new deal activity in 'twenty 'twenty four should we expect to see a lot of large deals or is it more cross selling wins with with some of the new products. What do you see for this coming year. Thank you.

Frank J. Bisignano: Just thinking about the outlook for new deal activity in 2024, should we expect or do you see a lot of large deals, or is it more of a cross-selling win with some of the new products? What do you see for this coming year here? Well, I mean, I think it's all of the above.

Well I mean, I think it's all of the above I mean I.

Frank J. Bisignano: I mean, I suppose you might also be referring to those cash flow central ones we talked about, new product rollout, tremendous opportunity there. It's another area where we're helping our banks generate revenue and deliver better technology products to their clients. We also believe that we have a lot of cross-sell opportunity, but we have a very large pipeline of just plain old new wins, and you should expect us to continue doing what we've been doing. But our expectation is that we'll always do more. And the term cross cell is obviously something we use internally quite a bit.

But it might be also referring to cashless central and so we've talked about a new product rollout tremendous opportunity. There. It's another area, where we're helping our banks generate revenue deliver better technology product to their client base.

And then you know we also believe that.

And when you have a lot of cross sell opportunity, but we have a very large pipeline of just playing on new wins.

And you shouldn't expect us to continue doing what we've been doing in.

Our expectation is we'll always do more.

In terms of the term cross sell obviously, something we use internally quite a bit and we talked to you folks about ultimately we have a very wide swath of clients are the U S Bank deal that we announced this morning on cash flow central.

Robert W. Hau: We talk to you folks above. Now, ultimately, we have a very wide swath of clients. The U.S. bank deal that we announced this morning on Cash Flow Central, that's a big transaction with a large bank, but it's a cross out. They are a large client of ours. They currently use check-free for their consumers.

As a big a transaction with a large bank, but it's a cross sell they are a large client of ours. They currently use Chuck free further consumers they'll now expand the cash flow central for there.

Robert W. Hau: They'll now expand to Cash Flow Central for their businesses and merchants, and so we'll continue to see lots of opportunities. It'll sometimes be, quote, new logos, but also selling additional capabilities to our existing, Good, good. Thank you. Next, we'll go to the line of Darrin Peller from Wolf Research. Please go ahead. Guys, thanks. It's great to see a person's strength.

Businesses and merchants and so we'll continue to see lots of opportunities it'll sometimes be quote new logos, but also selling additional capability starting to distinct client base.

Good good thank you.

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

Guys say, it's great to see the strength I did want to touch on a couple of the other segments real quickly on the Fintech side just to start.

Darrin Peller: I do want to touch on a couple of the other segments real quickly. And on the FinTech side, just to start, I know you expected Tough Comps, and you obviously called out the software license sales to ASPs as impacting revenues. When we think about what that means in terms of spreading out revenues across a period of time now, in terms of more recurring revenues, maybe just help us understand your anticipation for that segment again. I know you initially raised the combined payments and FinTech outlook a little bit when you had your investor day. So is that still on track, and if you could just revisit the drivers giving you confidence in really both segments? Yeah, Darin, good morning.

I know you expected tough comps and you obviously called out the software license sales to S. P side impacting revenues when we think about what that means in terms of spreading out our revenues across a period of time now in terms of more recurring revenues.

Just help us understand your anticipation for that segment again.

We raised the combined payments and Fintech outlook, a little bit when you're at your Investor day. So is that still on track and if you could just revisit the drivers, giving you call it but it's really in both segments.

Yeah Darrin good morning.

Robert W. Hau: So a couple of things. One, when we sign a license deal, typically that's a three or five year license, you get a large license transaction. December is always a pretty high month for license activity, and you get ongoing maintenance, but licenses are certainly the big chunk. When you convert or when a client instead goes to an ASP contract, you book that over the five-year period every single month on a per account basis or per transaction per user, depending on the product and depending on the client contracting. We feel good.

So a couple of things one when we sign a license deal typically that's a three or five year license you get a large license transaction December is always a pretty high month for license activity and you get ongoing maintenance, but licenses certainly the big chunk when you convert.

Or when a client instead goes to an ISP contract you book that over the five year period every single month on a per account basis.

<unk> per user basis, depending on the product and depending on the class.

And contracting we.

We feel good ultimately that's actually a better economic transaction for us so we like that transition.

Robert W. Hau: Ultimately, that's actually a better economic transaction for us, so we like that transition. If you look at 2023's results and you combine the two bank and credit union-facing segments, FinTech and Payments & Network, we did about 6% organic growth on a combined... If you look at our outlook for 2024, we reiterated what we said back in November. We expect that combined segment, or the new segment, financial solutions. It's largely a combination of the existing Fintech and payment technologies to be in that 5-7% range and actually accelerate into 2025 and beyond to up to 6-8%.

You look at 2020 threes results, you've combined the two banking credit union facing segments.

Tech and payments and network, we did about 6% organic growth on a combined basis. If you look at our outlook for 2024.

We reiterated what we said back in November we expect that combined segment or the new segment financial solutions, which is largely a combination of the existing fintech and payment to be in that 5% to 7% range and they actually accelerate into 2025 and beyond up to six to eight per cent so feel good.

About the overall.

Robert W. Hau: So feel good about the overall growth of that business, the product portfolio, adding things like cash flow central, selling more payment solutions, and benefits of Fintech as that goes live and gets deeper into the marketplace. We feel good about our ability to continue to grow our capability selling into, That's helpful. And then just a quick follow-up on the merchant side again. Frank, you talked a lot about the VAS side having a big penetration opportunity up to the mid-20% plus range.

Growth of that business, the product portfolio, adding things like cash flow central I'm selling more payment solutions a benefits of fintech as that goes live and gets deeper into the marketplace. We feel good about overall our ability.

To continue to grow our capabilities selling into the banks and credit unions.

Okay. That's helpful. And then just quick follow up on the merchant side again Frank.

You talked a lot about the VAT side, having a big penetration opportunity up to the mid 20% plus range I think you had a nice jump this quarter. So maybe just.

Frank J. Bisignano: I think you had a nice jump this quarter, so maybe just touch on what drove that, combined with if you think you have the right assets now or, you know, there's a lot more chatter over potential for Tuckins and M&A again this year as rates may change. So, anything on the horizon for you guys? Thanks, guys. Yeah, I mean, we really do like our hands across the board in the company.

Touch on what drove that combined with if you think do you have the right assets now or you know, there's a lot more chatter over potential for tuck ins M&A again this year as rates may change so.

On the horizon for you guys. Thanks, guys.

Yeah I mean.

We really do like I'll hand across the board and the company you see us add things.

Frank J. Bisignano: You've seen us add things, you know, like FinZac, which I think really complements our ability to compete anywhere, anyhow, along with DNA, which has really proved itself. If you go to the merchant business, we're still, you know, largely focused on building out more verticals, that would be retail and services, and continuing to complement what we're doing in Bento. I think, you know, our software is technically strong, and we're continuing to add functionality to it. We think our pin rate will continue to do what we've forecasted. Obviously, we're always...

Exactly which I think really cop, one and sell our ability to compete anywhere anyhow.

With DNA, which is really proved itself. If you go to a merchant business. We're still you know orange like focused on building.

Building out more verticals that would be retail and services and continue and complements what we're doing in Bento I think I think you know our software stack and strong and we're continuing to add functionality to it we pay out pen rate will continue to do what we've forecasted.

Obviously, we're always looking at opportunities to invest.

Timothy Chiodo: Looking at opportunities to invest as a minority investor, and you've seen us do that in things like Bento and FinTech and others, OnGot, which ended up being in more than 1,000 institutions, tagging on to our mobility product to give an unbelievable experience to a thousand banks. So I think we feel good about our hands. We're always looking at ways to add software functionality, and you should expect us to continue to be great stewards of capital deployment as I hope you all feel we have. Thanks, guys. Next, we'll go to the line from Timothy Chiodo from UBS. Please go ahead.

Been a minority investor and you've seen us do that in things like Bento and exactly when others.

Oh, My God, which ended up you know.

Being more than a thousand institutions tag trial mobility.

Product to give a unbelievable experience a thousand banks.

So I think we feel good about our hands, we're always looking at can we add software functionality.

And you know you should expect us to continue to be great stewards of capital deployment as I Hope you all feel we have it.

Thanks, guys.

Next we'll go to the line from Timothy Cheeto from UBS. Please go ahead.

Robert W. Hau: Thanks a lot for taking the question. You mentioned in the prepared remarks a little bit of channel makeshift for Clover. I was hoping you could provide some directional color broad strokes across the 2023 cohort of new merchants or volume that came on to Clover, whether it be just kind of order of magnitude across direct sales, bank partners, whether they be JV or non-JV, and then, of course, wholesale and retail ISO. And I ask partially because, clearly, the differentiation is partially due to the distribution here, but also so that we could get a better sense of the Yeah, I think we tried to give pretty significant transparency around the last part of that question with quote-unquote excess inflation and interest on Arts and Kina.

Thanks, a lot for taking the question you mentioned in the prepared remarks, a little bit of channel mix shift for Clover I was hoping you could provide some directional color broad strokes across the 2023 cohort of new merchants or volume that came onto clover, whether it be just kind of order of magnitude across direct sales bank partner.

Whether they be JV or non JV, and then of course wholesale and retail I, So and I ask partially because clearly the differentiation is partially due to the the distribution here, but also so that we could get a better sense on the portion of revenues that are hitting adjusted revenue versus maybe.

Being netted out or coming below the line in the equity income line.

Yeah.

Yeah, I think we tried to give some pretty significant transparency around the last part of that question would quote unquote.

Less inflation.

Interest on in Argentina, just as a side note our last time of our Latam business in Argentina business is a great business. Obviously, we've got this variation going on on the quote excess.

Robert W. Hau: On a side note, our LATAM business and our... http://TheBusinessProfessor.com, Obviously, we've got this variation going on, on the quote, excess, but that's a tremendous business. LATAM overall growth in clover as we bring clover down to Brazil, we'll add Mexico later in the year, so we feel very good about our overall growth there. To the first part of the question, I would say, broadly, we continue to expand our distribution capabilities. We have a long track record of ISO and ISV partners, and bank channel partners. We have traditionally not had a big direct business.

But that's a tremendous business Latam overall growth in Clover as we bring <unk> down in Brazil will add Mexico later in the year. So we feel very good about our overall capabilities there too.

So the first part of the question no I would say broadly we continue to expand our distribution capabilities. We have a long track record of ISO and ISP partners. Our bank channel partners, we have traditionally not had a big direct business.

Robert W. Hau: That continues to grow, but we also continue to grow pretty meaningfully in the ISV channels with the expansion of ISV capability into Clover, and having that Clover asset makes us a pretty significant partner of choice, not only for ISVs, but also for banks, so we see growth there. As a percent of growth, our direct business is probably growing the fastest, but a little bit of, you know, it's the smallest piece. It's the newest piece of the organization, but we're seeing good growth across the board. Thank you for that. Next, we'll go to the line for Andola from Mizzou Host Securities. Please go ahead.

As that continues to grow but we also continued to grow pretty meaningfully in the I S V channels.

With expansion of ISP capability into Culver.

And how big that Culver asset.

It makes us a pretty significant partner of choice not only for Ais fees, but also the bank channel. So we see growth there as a percent of growth our direct business is probably growing the fastest but a little bit of a smaller smallest piece. It's the the newest piece out of the organization, but we're seeing good.

Growth across the board.

Excellent. Thank you for that.

Next we'll go to the line of Dan <unk> from Mizuho Securities. Please go ahead.

Ashwin Vassant Shirvaikar: Hey, guys. Great results here. My quick first question is on, again, back to the value-added services, really impressive 40% growth. Can you maybe talk a little bit about the split in 23 between software and capital? You're asking about 2023? Yeah, the 40% growth that you, End 23. So I wouldn't necessarily have a split for you at my fingertips, but we can look to get that for you.

Hey, guys great results here.

My quick first question is on again back to the value added services really impressive 40% growth can you maybe talk a little bit about the split in 'twenty three between software and capital.

Oh, you're asking about 2023.

Yes, the 40% growth that you mentioned.

In 'twenty three.

So I wouldn't.

Necessarily have a split for you at my Fingertips, we can look to.

That for you.

Robert W. Hau: I think I would tell you that it's been pretty consistent. Obviously, we always have a relatively large software capital, software spending, given the nature of our business. And I think that remains relatively consistent. Dan, were you asking what component was largely software and what component was... It's software-dominated. I call it large majority software. Sorry, I heard CapEx spending. Oh, I'm sorry, yeah, my Israeli accent.

I would tell you that it's been pretty consistent obviously, we always have a relatively large software capital.

Software spending given the nature of our business.

And I think that remains relatively consistent.

And what are you asking if you looked at the 40%.

What component was largely software.

I'm, calling it.

Was clover exactly what I was asking.

And you're asking.

Exactly on the value of that software.

Right right.

Software.

Softer dominated.

You know it would be I'd call. It large majority software.

Oh, sorry did I hear anything about your Capex spending Oh, I'm sorry, yeah.

Okay.

Frank J. Bisignano: My quick follow-up: I'm really impressed by the opportunities in RAG-II. I would imagine this is a big benefit for FISERV. Can you maybe talk about or cite the opportunity here for Star and Excel? Well, you know, as I've continued to say, we've been committed to our debit network, Star and Excel, their strategic assets within the company. As REG-II turns into reality, you heard us talk about nearly 20 wins. Obviously, you know... We compete at every level.

I was really asking us for and that's why we got four years here.

And then just my quick follow up really quick.

The opportunities the right Guy I mean, one of the networks.

Commented that this was a drag I would imagine this is a big benefit for Pfizer can you maybe.

Talk about the size of the opportunity here for doing so.

Yeah.

Well as I've continued to say, we've been committed to a debit network star in excel.

Our strategic assets within the company.

Right I I turns into reality you heard us talk about nearly 20 wins obviously you.

You know we compete at every level Theres Fabulous competition out there for these transactions.

Frank J. Bisignano: There's fabulous competition out there for these transactions, but, you know, embedded in what we're looking at is obviously more opportunity than we had before AII, and the fact that some of those household names that you've heard, like HelloFresh or Lyft or others, give us that opportunity. So I think, you know, it's off to a decent start. It remains to be determined over the longer haul, but we feel good about the Ray-Guy-Eye opportunity. Thank you so much.

But you know embedded in what we're looking at is obviously more opportunity.

Before.

And the fact that some of those household names that you heard like Hello fresher.

Sure others are you know give us that opportunity. So I think it's I think it's off to a decent start it remains to be determined over the longer haul, but we feel good about the.

Right.

Okay.

Frank J. Bisignano: Thank you. Thank you. Next, we'll go to the line of Jason Kupferberg from Bank of America. Please go ahead.

Thank you so much.

Thank you.

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

Jason Kupferberg: Good morning, guys. I just wanted to follow up on the FinTech segment and the dynamic you saw there where you switched kind of from the – or the clients wanted to switch kind of from the license model to more of the recurring ASP model. Do you see this as kind of a one-off development with a handful of clients? Or is this a broader trend? You know, just anything you can give us maybe around where that segment sits now in terms of the percentage of revenue that's kind of more periodic versus recurring and what you're projecting on that front going forward. Yeah, I think there's a series of factors.

Good morning, guys I just wanted to follow up on the Fintech segment and the dynamic you saw there where are you switched kind of from the or the clients wanted to switch kind of from the license model to more of the recurring ASP model.

Do you see this as kind of a one off development with a handful of clients is this a broader trend I'm just anything you can give us maybe around where that segment sits now in terms of percentage of revenue that that's kind of more periodic versus recurring and what you are projecting you know on that front going forward.

Yeah, I think there's a series of factors you know I'd go back you know on the full year, a 4%, but not periodic revenue.

Frank J. Bisignano: You know, I'd go back to, you know, on the full year, 4% with non-periodic revenue. And, you know, clearly, we ultimately signed a number of transactions, but they became ASPs instead of licenses, which we thought we had visibility on. We also like to remind everybody that, you know, fourth quarter historically is where fourth quarters are in the last month, and that's where these things happen going down to the wire. Like it would in any software sale, as I know, having been an orange buyer of software for years and jobs I've done.

And you know clearly we ultimately.

A number of transactions, but they became a S E. Instead of license, which we thought we had visibility license. We also like to remind everybody that you know fourth quarter, historically is where fourth quarter was worse.

In the last month is where they change that then going down to the wire.

In any software sale as I know having.

Orange buyer of software for years and jobs have done.

Frank J. Bisignano: So I think that it's not necessarily a trend, but we saw it last year too, in different ways, clients who believe that given regulatory, given cyber, given a series of factors, the ASP model will help their P&L and their ability to perform better than the license. I think it's an institution-by-institution choice. It's not the first time we've seen it, and, you know, I think a lot remains to be done.

So I think that.

It's not necessarily true.

But you know it does have a clients and we saw it last year too in a different way is clients, who believe that given regulatory given cyber or giving a series of factors.

It's P model or help their P&L and their ability to perform better than the license.

I think as an institution by institution choice its not the first time, we've seen it.

And you know I think a lot remains to be determined.

Frank J. Bisignano: Okay, good caller. Just on a separate note, we saw last month Fiserv applied for a bank charter in Georgia. Can you just talk about the steps, the potential timeline to get that application approved, and what the benefits to Fiserv would potentially be, whether that's on the cost side or the ability to provide additional solutions to merchants? Thanks.

Okay. Good color just on a separate note we saw last month five separate quite for a bank charter in Georgia can you just talk about the steps potential timeline to get that application approved what the benefit to fiserv would potentially be a whether that's on the cost side, our ability to provide additional solutions to merchants.

Frank J. Bisignano: Well, yeah, you know, let me bring pure clarity to what that is because there's clearly lots of questions about why Fiserv is applying for a bank license. And obviously, before we did that, we talked to the ABA, and we communicated with our clients. It's a very specific purpose that allows for sponsorship of Merchant Acquired. Historically, you needed a bank, and that's within the Visa and MasterCard rules, and our ability to be able to have an institution for that sole purpose will allow us to be a sponsor for our own Merchant Acquiring Insert will be valuable as we can control more of the outcome than we could otherwise.

Well, Yeah, you know, let me bring pure clarity to what that is.

There's clearly you know a lots of questions about why Pfizer is applying for a bank license and obviously before you did that we talked 10 da da we communicated to our clients. It's a very specific purpose.

I sense that allows for sponsorship of merchant acquiring.

Historically, you needed a bank and that's within the visa and Mastercard rules.

And our ability to be able to have a institution for that sole purpose.

Allow us to be a sponsor for our own merchant acquiring in certain instances will be valuable as we can control more of the outcome than we could before very specific purpose.

Frank J. Bisignano: Very specific purpose, very clear to our banks, we're not competing with them. We have great bank partners, probably the largest bank portfolio in the world when you take merchant banking and all our other businesses, and we're a business to help our banks grow. This ultimately supports our smaller banks, who do not have sponsorship, and we could bring it. It became more clear in the merger when we were able to cross-sell to our community banks and others, which would not have happened at First Data, that our ability to sponsor them ourselves would be very valuable. Thank you, Frank. Go to Beadaholique.com for all of your beading supply needs!

Very clear to all banks were not competing with them.

We have great bank partner as you know.

Probably the largest bank portfolio.

And in the World when you take merchant business and all our other businesses.

We're in business to help out bank's ROE. This all of them really supports our smaller banks, who do not have sponsorship and we could bring it it became more clear in the merger when we were able to cross sell to our community banks and others, which would have not happening first day.

But our ability to sponsor them ourselves so it'd be very bad.

Oh boy.

Thank you Frank.

Yeah.

Thank you. Our next question comes from Dave Koning from Baird. Please go ahead.

Operator: Thank you. Our next question comes from Dave Koning from Baird. Please go ahead.

David Koning: Yeah, hey guys, great year. And I guess my question on merchants, so you guided 25% to 28% organically, and then you talked about 14% benefit from FX and inflation. So you're down to the core of kind of 11% to 14%. Do both North America and international grow in that range, which presumably is taking quite a bit of share? Yeah, so the merchant business overall, obviously good growth. Our Latin, excuse me, our international region. Europe, Latin America, and APAC are all growing very nicely. OMEA, larger than Latin America, is growing a bit slower from an organic standpoint.

Yeah, Hey, guys, great great year, and I guess my question on merchant. So you you guided 25% to 28% organic and then you talked about 14% benefit from FX and inflation. So you got to get down to core of kind of 11% to 14% due both North America and international grow in that range.

Which presumably is taking quite a bit of share.

Yeah. So the the merchant business overall, obviously good growth are to me are our international regions Europe, Latin America, APAC, all growing very nicely.

EMEA are larger than Latin America, growing a bit slower from an organic standpoint broadly our north American business very high single digit growth rate.

Robert W. Hau: Broadly, our North American business, a very high single-digit growth rate. And obviously, the international business is growing meaningfully higher than that, given the size of the business and the opportunity to continue to grow and add merchants and sell more services there also. But good business, most definitely, in all four. Gotcha.

But obviously the international business is growing meaningfully higher than that given the size of the business and the opportunity to continue.

To grow them in.

And at merchants and sell more services, they're also but good business most definitely in all four regions.

Got you and just a quick follow up FX losses will you not add those back again through 2024, I know Q4. It seems like the anomaly you won't add those back and maybe how big do you expect that to be in interest expense in 2024.

Robert W. Hau: And just a quick follow-up, FX losses, will you not add those back again through 2024? I know Q4 seems like an anomaly, but you won't add those back.

Robert W. Hau: And maybe, how big do you expect that to be in interest expense in 2024? Yes, let me make sure we're clear. What we adjusted out was actually not the fourth quarter, not December; it was December 12. It was the one-day devaluation that the new president of Argentina put into place, to a little more than a 50% devaluation, and it was only the impact of revaluing the balance, which in most currencies stays on the balance sheet, but because Argentina is hyperinflationary or highly inflationary, the accounting rules require you to revalue the balance sheet through the income.

Yeah, absolutely be make sure we're clear.

What we.

Adjusted out was actually not fourth quarter not December it was December 12th it was the one day devaluation that the new president of Argentina put it into place.

A little more than a 50% eval and it was only the impact of revaluing the balance sheet.

Which in most currencies stays on the balance sheet, but because Argentina hyperinflation or highly inflationary accounting rules require you to revalue the balance sheet through the income statement. We did that every day of 2022, we do it every day of 2023.

Robert W. Hau: We did that every day of 2022. We did it every day of 2023, with the exception of the one-time significant move that we felt was really non-normal course, non-operating. So we dialed that piece out only. All of the other 364 days went through the income statement. And, in fact, were larger than what we took in that one day.

With the exception of the one time significant transact or significant move that we felt was really not normal course nonoperational. So we dialed back piece I would only all of the other 364 days went through the income statement and in fact were larger.

<unk> than what we took care of that one day, we have that that will occur in 2024, obviously if there is other.

Robert W. Hau: We have confidence that that will occur in 2024. Obviously, if there's another significant deval, we may evaluate that. But we're not anticipating that.

Other significant deep L. We may evaluate that we're not anticipating that.

Robert W. Hau: We think things are, quote, more stabilizing in Argentina remains to be seen. It's a unique economy. We've got some great leadership down there that are running our Latin America business that have been through these cycles multiple times over decades of leadership. So we feel very good about being able to handle the kind of ongoing normal things. This one time, one day default is what we dialed out.

We think things are quote.

Stabilizing in Argentina remains to be seen.

A unique economy, we've got some great leadership down there that are running our Latin America business that have been through these cycles multiple times over decades of leadership. So we feel very good about being able to handle the kind of ongoing normal things. This one time, one day T bells, what we dialed out.

Robert W. Hau: Gotcha. Thanks, guys. Great job. And for our final question, we'll go to the line of Ashwin Shirvaikar from Citi. Please go ahead.

Gotcha, Thanks, guys great job.

Okay.

And for our final question will go to the line of Ashwin <unk> from Citi. Please go ahead.

Ashwin Vassant Shirvaikar: Thank you, Frank. I guess my question is with regard to the cadence of segment revenues and segment margins, what should we expect through the year? Because there are, I think, a couple of factors, at least with regard to how, I guess, Argentina's impact plays out. Does it reduce through the course of the year?

Yeah.

Thank you.

Hi, Bob.

I guess my question is with regards to the.

The cadence of segment revenues and segment margins, what should we expect through the year because there are I think a couple of factors at play.

With regards to how.

How I guess Argentina.

That plays out because it does it reduce through the course of the year.

Robert W. Hau: And then, CARAT, I would imagine, you know, much better in the second half of the year because of the lack of... www.fishingtacklesale.com. I think factors like that, I mean, how should we think of cadence through the course of years? Yeah, I think, first off, broadly across the company, I don't see a big variation from quarter to quarter or first half to second half. There are obviously some specific comparisons within individual segments or individual margins, but broadly, generally in line across the board. With the one nuance in our merchant acceptance business, I would expect organic revenue to be higher in the first half of the year than in the second half of the year because we do anticipate some improvement in interest rates and inflation in the second half relative to what's going on there as the economy deals with some of the things that the government is putting in place, The other thing I would just reiterate, we talked a bit about it in our prepared remarks, cash flow will definitely have some variation with tailwinds in the second half of the year after some headwinds in the first half, but again, we have a good degree of confidence in the $4.5 billion.

And then Ken.

Got it.

I would imagine much better back half of the year because the lack of.

Yeah.

Hum pretty tough comp.

And factors like that I mean, how should we think of cadence through the course of fear.

Yeah, I think first off broadly across the company I don't see big variation from quarter to quarter or first half to second half. There are obviously, some specific comparisons within individual segments or individual margins, but.

Broadly generally in line.

Across the board with the one nuance merchant acceptance business I would expect organic revenue to be higher in the first half of the year than in the second half of the year, because we do anticipate some.

Improvement in interest rates and inflation in the second half.

Relative to what's going on there is as the economy deals with some of the things that the government is putting in place hopefully with their expectation that they ease inflation and interest rates remains to be seen but of course, that's offset by FX. So on an adjusted revenue basis from a margin standpoint.

And EPS relatively stable the other thing I would just reiterate we talked a bit about it in our prepared remarks cash flow will definitely have some variation.

With the tailwind in the second half of the year after some headwinds in the first half but again.

Have a good degree of a car.

Our confidence in the four and $5 billion for the full year.

Got it and then the quick follow up if I sort of small business index.

Robert W. Hau: And then the quick follow-up is Fiserv's small business index. But how indicative is it of the health of Fiserv's own client base? And can you comment, generally speaking, on small business health? It seemed to me like your economic assumptions call for more or less a soft landing, but I just want to clarify. First off, the latter part, yes, I would agree. We are anticipating, I think, like the rest of the world at this point, a soft landing. Things seem to be on track for that. A bit softer macro environment, and modestly slower GDP growth in 2024.

I guess, how indicative is it.

Of the of the health of Pfizer's own client.

Client base.

And then can you comment generally speaking on small business has seemed.

Seems to me like you were.

Cannot make assumptions call for more or less a soft landing but.

I just wanted to clarify.

Yes first off the latter part yes, I would agree we are anticipating I think like the rest of the world at this point.

Soft landing things seem to be on track for that.

Bit soft soffer macro environment modestly slower GDP.

In 2024.

Robert W. Hau: The FSBI is based on a very broad set of data that we have across our company that we then extrapolate to the entire U.S. market. Thus, it is not a direct indication of Fiserv activity. If there are differences in region, mix of, you know, we're very strong in restaurants; we might have more restaurants than we do nail salons, or so we go through the NICS codes across the country, different industry weightings, different regions, but we take our data and extrapolate it across the U.S., so it's a very real-time indicator of the health of small businesses. Now, relative to our performance, we're So, if there's variation in the FSBI, you're likely to see variation in Pfizer's results. Relative to some nuances of different regions, industry weightings, etc., but certainly, a strong FSBI indicator index would be good for us. A weaker index would be a headwind for us.

The FSP I is based upon a very broad set of data that we have across our company.

We then extrapolate to the entire U S market. So it is not a direct indication of Pfizer of activity. If there are.

Differences in region.

Mix of.

We're very strong in restaurant, we might have more restaurants than than.

And then we do nail salons or so we go through the Nics codes.

Across the country different industry weightings different regions, where we take our data and extrapolate it.

Across the U S. So it's very much a very real time indicator of the health of small businesses.

Now.

Relative to our performance.

The largest merchant acquirer in the country.

So if there's variation the FSB, you're likely see variation in <unk> results.

Relative to some nuances of different regions industry, weightings et cetera, but certainly.

Strong FSP I indicator index would be good for us a weaker index would be a headwind for us.

Robert W. Hau: We're actually quite proud of that capability. Not only is it using all of the data we have, by the way, including cash transactions, which obviously don't manifest themselves in our numbers for merchant acquiring, but we have the data. And it's in real time. We're able to provide that information two days after the month ends. It's not a perfect proxy, but it's a proxy.

We're actually quite proud of that capability not only is it using all of the data we have by the way, including cash transactions, which obviously don't manifest themselves in our numbers for merchant acquiring but we have the data and it's very real time, we're able to.

Provide that information two days after the month ends.

Not a perfect proxy, but it's a proxy.

Operator: Got it. Thank you for all the information. Thanks. Thank you everyone for your attention today. Please feel free to reach out to our IR team with any questions and have a great day. Thank you all for participating in the FISER 4th Quarter 2023 Earnings Conference Call. That concludes today's call. Please disconnect at this time and have a great rest of your day.

Got it thank you for or against the motion.

Thanks.

Well, thank you everyone for your attention today.

I just feel free to reach out to IR team with any questions and have a great day.

Thank you all for participating in the Pfizer fourth quarter 2023 earnings Conference call that concludes today's call. Please disconnect at this time and have a great rest of your day.

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