Q1 2024 Fiserv Inc Earnings Call

Operator: Please stand by. The conference will begin shortly. Again, please stand by. The conference will begin shortly. Thank you. This is the FISER First Quarter 2024 Earnings Conference Call. All participants will be in a listen-only mode until the question and answer session begins following the presentation. As a reminder, today's call is being recorded. At this time, I would like to turn the call over to Julie Chariell, Senior Vice President of Investor Relations at Fiserv.

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

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Speaker Change: Welcome to the Pfizer first quarter 2024 earnings conference call all participants will be in a listen only mode until the question answer session begins following the presentation.

Speaker Change: As a reminder, today's call is being recorded at this time I would like to turn the call over to Julie Sherry, All senior Vice President of Investor Relations adviser.

Julie Chariell: Thank you and good morning. With me on the call today are Frank Bisignano, our Chairman, President, and Chief Executive Officer, and Bob Hau, our Chief Financial Officer. Our earnings release and supplemental materials for the quarter are available 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.

Julie Chariell: Thank you and good morning with me on the call today are frankly isn't yano, our chairman President and Chief Executive Officer, and Bob Hau, Our Chief Financial Officer.

Julie Chariell: Our earnings release and supplemental materials for the quarter are available on the Investor Relations section of Fiserv Dot com.

Julie Chariell: 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.

Julie Chariell: Unless otherwise stated, performance references are year-over-year comparisons. Our remarks today will include forward-looking statements about, among other things, expected operating and financial results and strategic initiatives. Forward-looking statements may differ materially from actual results and are subject to a number of risks and uncertainties. You should refer to our earnings release for a discussion of these risk factors. As a reminder, starting in the first quarter of this year, Fiserv now reports two segments, emergent solutions and financial solutions, to align with how we serve our clients.

Julie Chariell: Unless otherwise stated performance references our year over year comparisons.

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

Julie Chariell: That's at the operating and financial results and strategic initiatives.

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

Julie Chariell: You should refer to our earnings release for a discussion of these risk factors as a reminder, starting in the first quarter of this year.

Julie Chariell: We are now reporting two segments merchant solutions and financial solution to align with how we serve our clients. When you see our current reports on the form 8-K filed on March 26th 'twenty 'twenty four for an explanation of the new segments and a recast of 2022 and 2023 inches.

Julie Chariell: Please see our current report on the Form 8K, filed on March 26, 2024, for an explanation of the new segment and a recast of 2022 and 2023 into the new segment. And with that, I'll turn the call over to Frank.

Julie Chariell: A new segment.

Julie Chariell: And with that I'll turn the call over to Frank.

Frank J. Bisignano: I thank you all for joining us today to discuss our first quarter results and a strong start to the year. Fiserv delivered a strong first quarter with adjusted earnings per share of $1.88, up 19%, which reflects our continued revenue growth and operating margin expansion. Adjusted revenue growth was 7%, and the adjusted operating margin of 35.8% increased by 180 basis points. We had organic revenue growth of 20% in the first quarter. This is consistent with our expectation of higher growth in the first half of 2024 toward our full year outlook of 15-17% organic growth. This healthy top-line growth, coupled with Q1's stronger margin performance, leads us to raise our adjusted earnings-per-share outlook to a range of $8.60 to $8.75. From the prior range of $8.55 to $8.70, which is 14-16% growth.

Frank: Thank you Julie.

Frank: And thank you all for joining us today to discuss our first quarter results and our strong start to the year.

Frank: Five serve delivered a strong first quarter with adjusted earnings per share of $1.88 up 19%, which reflects our continued revenue growth and operating margin expansion.

Frank: Adjusted revenue growth was 7% and adjusted operating margin of 35.8% increased 180 basis points.

Frank: We had organic revenue growth of 20% in the first quarter.

Frank: This is consistent with all expectations of higher growth in the first half of 'twenty 'twenty four toward our full year outlook.

Frank: 15% to 17% organic growth.

Frank: This healthy top line growth, coupled with Q1's, a stronger margin performance leads us to raise our adjusted earnings per share outlook to a range of $8.60 to $8.75.

Frank: From the prior range of $8.55 to $8.70, which is 14% to 16% growth.

Frank J. Bisignano: We now expect adjusted operating margin to expand at least 125 basis points this year, compared to our prior outlook for at least 100 basis points of margin improvement. As you know, beginning this quarter, we realigned our business to best reflect how clients engage with our solutions today. This client-centric model is now reported in two segments, with roughly half of our business in the merchant solution segment and the other half in the financial solution segment. Through this change, we retain our fundamental approach of providing business operating systems to run our clients' key processes while delivering a variety of value-added solutions for Enhanced Capability.

Frank: We now expect adjusted operating margin to expand at least 125 basis points this year compared to our prior outlook for at least 100 basis points of margin improvement as.

Frank: As you know beginning this quarter, we realigned our business to best reflect our clients engage with al solutions today.

Frank: This client centric model is now reported in two segments with roughly half of our business and the merchant solutions segment and the other half in the financial solutions segment.

Frank: This change will retain a fundamental approach of providing business operating systems to run our clients' key processes, while delivering a variety of value added solutions for enhanced capability.

Frank J. Bisignano: Our business model combines the recurring revenue and high incremental margin of a scaled processing business, with higher growth and higher more, but still consistent, cloud-based software and services offering. Both our segments performed well and within our expectations. Merchant Solutions' organic revenue grew 36% in Q1 and 13% on an adjusted basis. Financial solutions revenue grew 5% organically and 2% on an adjusted basis. This performance reflects a solid macro environment along with our ability to drive outperformance by adding new clients, retaining and growing with existing clients, and providing them with more value-added solutions. At a macro level, consumer spending remained resilient.

Our business model combines the recurring revenue and high incremental margin of a scale processing business with higher growth and higher margin, but still consistent cloud based software and services offerings both of our segments perform.

Frank: Dwell and within our expectations.

Frank: Merchant solutions organic revenue grew 36% in Q1 and 13% on an adjusted basis.

Frank: Financial solutions revenue grew 5% organically and 2% on an adjusted basis.

Frank: This performance reflects a solid macro environment, along with our ability to drive outperformance by adding new clients, retaining and growing with existing clients and providing them more value added solutions at a macro level.

Frank: Consumer spending remains resilient or by service small business index based upon the spending activity at 2 million small merchants in the U S shows spending rose three 4% in the first quarter.

Frank J. Bisignano: The Fiserv Small Business Index, based on the spending activity at 2 million small merchants in the U.S., shows spending rose 3.4% in the first quarter, up from 2.5% in Q4. The early read on April is that growth is tracking slightly ahead of the Q1 average. The index also showed that roughly 60% of Q1 spend was on non-discretionary categories, and the remaining spend went mostly to dining out, amusement, hotels, and short-

Frank: From two 5% in Q4 the early read on April is that growth is tracking slightly ahead of the Q1 average.

Frank: The index also showed that roughly 60% of Q1 spend was on non discretionary categories and they're remaining spend went mostly to dining out amusement hotels and short term rentals.

Frank J. Bisignano: These metrics point to a resilient consumer in the U.S. turning to the broader environment for banking. While there are some signs of pressure on net interest income given high interest rates and potentially tighter lending, we have not seen this having an impact on our clients' IT spending for the essential services we provide.

Frank: These metrics point to a resilient consumer in the U S. Turning to the broader environment for banking well there are some signs of pressure on net interest income given high interest rates and potentially tighter lending we have not seen this half.

Frank: Having an impact on our clients I T spending for the essential services, we provide with that macro backdrop. There are a number of highlights for fire service business in Q1, and the remainder of the year.

Frank J. Bisignano: With that macro backdrop, there are a number of highlights for Fiserv's business in Q1 and the remainder of the year. In Merchant Solutions, first-quarter activity reinforced our progress toward achieving the targets we set in our November Investor Day, including to reach $12 billion in revenue in 2026 as we continue to expand adjusted operating margins. Let's discuss five of the drivers that support this outlook.

Frank: In merchant solutions first quarter activity reinforced our progress towards achieving the targets. We set in our November investor day, including to reach $12 billion in revenue in 2026, as we continue to explore.

And adjusted operating margin, let's discuss five of the drivers that support this outlook.

Frank J. Bisignano: First, Clover continues to lead the small business merchant SaaS market in growth and scale and remains on track to reach the expected $4.5 billion in revenue in 2026. Clover posted a second consecutive quarter of 30% revenue growth, supported by new merchant ads and a 20% penetration of value-added solutions. Second, we are launching multiple new Clover products this year. In the first quarter, we rolled out a larger kitchen display system and our ordering kiosk for the restaurant version. Around mid-year, we'll be rolling out a new COVID device. Call to contact us.

Frank: First Clover continues to lead the small business merchants SaaS market and growth in scale and remains on track to reach the expected $4.5 billion in revenue in 'twenty 'twenty six.

Frank: Glover burst is our second consecutive quarter of 30% revenue growth supported by new merchant ads and a 20% penetration of value added solutions.

Frank: Second.

Frank: We are launching multiple new Cobra products this year.

Frank: In the first quarter, we rolled out a larger kitchen display system and are ordering kiosk for the restaurant vertical.

Frank: Around midyear, we will be rolling out a new cover device called the compact.

Frank J. Bisignano: In the second half of the year, we expect to begin offering additional software solutions for the professional services vertical. Third, our progress in international markets continues to differentiate us by... Demand for Clover is strong in Germany, and leads are building from Albert, our joint venture with Deutsche Bank. In the Netherlands, where we acquired the remaining portion of the joint venture from our bank partner last year, we are seeing pent-up demand for Clover. In Argentina, we are having success adding merchants to Clover as we prepare to launch it in Brazil and Mexico in the second half of the year. In Asia-Pacific, we continue to build on our high-end hospitality market leadership. Signing the Grand Hyatt in Q1 to reach over 25 five-star properties in Singapore and Malaysia.

Frank: And the second half of the year, we expect to begin offering additional software solutions and professional services vertical.

Frank: Third our progress in international markets continues to differentiate Pfizer.

Frank: Demand for Clover is strong in Germany and leads are building from Albert joint venture with Deutsche Bank.

Frank: In the Netherlands, where we acquired the remaining portion of the joint venture from our bank partner last year, we're seeing pent up demand for Clover in Argentina, we are having success, adding merchants to claw back as we prepare to launch it in Brazil.

Frank: In Mexico in the second half of the year in Asia Pac we continue to build on our high end hospitality market leadership side.

Frank: Signing the Grand Hyatt in Q1 to reach over 25, five star properties in Singapore, and Malaysia, We continue to ramp up distribution as we prepare for the Clover lunch in the APAC region.

Frank J. Bisignano: We continue to ramp up distribution as we prepare for the Clover launch in the APAC region. We already have over 50 ISO and PAYFAC partners, and we onboarded more partners in Q1, including K-PAY, which added 20,000 merchants to our platform. We continue to expect a full-featured Clover launch in Australia, Singapore, and Hong Kong in 2025.

Frank: We already have over 50, ISO and payback partners and we on boarded more partners in Q1, including K day, which added 20000 merchants onto our platform.

Frank: We continue to expect a full featured Clover launch in Australia, Singapore, and Hong Kong in 2025 for our value added solutions penetration continues to rise in.

Frank J. Bisignano: Fourth, our value-added solutions penetration continues to rise. In Q1, Clover Vast Penetration reached 20% due to growth in Clover SaaS, Clover Capital, and Rapid Deposit. In the enterprise business, we are seeing a newer Vast Opportunity emerge with our SnapPay product, a B2B payments offering for mid-market merchants that integrates seamlessly with popular ERP solutions. After over 20% revenue growth in 2023, SNAP-PAY is poised for continued strength this year. Coventer Energy signed up for SNAP-PAY in Q1, and we had an additional government win with the state of Texas to digitize revenue collection.

Frank: In Q1, Clover vast penetration reached 20% on growth in Clover, SAS Clover capital and rapid deposit in the enterprise business. We are seeing in newer bass opportunity emerge without snap HAE product, a b to b payments offering for mid.

Frank: Market merchants that integrates seamlessly with popular ERP solutions.

Frank: After over 20% revenue growth in 'twenty two 'twenty three snap. He is poised for continued strength this year Covanta energy side upper snap pay in Q1, and we had additional government win with the state of Texas to digitize rather.

Frank: In your collection activity, we also entered into.

Frank J. Bisignano: We're also into our first major reseller agreement for SnapPay, opening the opportunity to reach even more mid-market clients. Fifth, and finally, we continue to add new merchant relationships across the SMB and enterprise markets. Building on the success we saw in 2023, Clover Sport added over 20 new venues, putting thousands of new Clover devices in the market. These venues include stadiums that are home to teams in the MLB, NFL, and NCAA, as well as amphitheaters, golf courses, and large-scale festivals.

Frank: Into our first major reseller agreement for snap Hay opening the opportunity to reach even more mid market clients fifth and finally, we continue to add new merchant relationships across the SMB and enterprise markets.

Frank: Building on the success, we saw in 2023 Clubbers bore it added over 20, new venues, putting thousands of new clover devices in the market.

Frank: Venues include stadiums that are home to teams and the MLB and NFL and NCAA as well as amphitheaters golf courses and large scale festivals.

Frank J. Bisignano: You know, enterprise business. We address a wide breadth of industries and have a growing presence in new markets, such as social gaming, which is a $10 billion opportunity by volume and growing around 20%. We signed three more clients in this space in Q1, and now serve 13 social gaming merchants, including three of the top five. We are seeing good uptake of commerce sales. A single orchestration layer that allows enterprise clients to operate a unified omni-channel platform. In Q1, our Commerce Hub client count surpassed 200. These five are just some of the ways we plan to achieve the targets we've set for 2026.

Frank: Enterprise business, we have.

Frank: Dress, a wide breadth of industries and a growing presence in new markets such as social gaming.

Frank: Which is a 10 billion dollar opportunity by volume a growing around 20% we signed three more clients in this space in Q1, and now serve 13, social gaming merchants, including three of the top spot.

Frank: We are seeing good uptake of commerce has.

Frank: Oh single orchestration layer that allows enterprise clients to operate a unified omnichannel platform.

Frank: In Q1, our commerce hub client count surpassed 200 these.

Frank: These five are just some of the ways, we plan to achieve the targets, we've set for 2020 six.

Frank J. Bisignano: Turning to the financial solutions segment, demand for modernization and innovation is on full display. We posted four FinZAC wins for new and traditional use cases in Q1. Although we do not expect the revenue contribution to be significant in 2024, this progress reinforces FinZAC's capability and flexibility as a cloud-based core banking and embedded finance platform. Let's take a deeper look at all four.

Frank: Turning to the financial solutions segment demand for modernization and innovation is on full display.

We posted four Finn Zach wins for new and traditional use cases in Q1.

Frank: Although we do not expect the revenue contribution to be significant in 'twenty 'twenty four this progress reinforces <unk> capability and flexibility as a cloud based core banking and embedded finance platform.

Frank: Let's take a deep rollout at all for <unk>.

Frank J. Bisignano: First, FinZAC will be the core platform for a new U.S.-based digital bank from Banco Inter Brazil, a current Fiserv client. Second, FinTech wants to deal with the FinTech Program Manager that helps businesses access the payment ecosystem. This client decided to upgrade to VINZAC and consolidate volumes on the platform.

Frank: First.

Frank: Zach will be the core platform for a new U S based digital bank from Banco Inter Brazil, our current bias Eric client.

Frank: Second thing Zack wanted to deal with a Fintech program manager that helps businesses access the payments ecosystem. This client decided to upgrade defense Act and consolidate volumes on the platform.

Frank J. Bisignano: Third, FinZac signed a current Fiserv SMB Solutions Aggregator client as they build embedded finance for their merchant clients. This opportunity ties deeper into Fiserv, as we will be working with our financial institution clients to find sponsors of these lending services. Fourth, and finally, FinZAC won a deal to become the core account processor for a major U.S. government agency as part of the client's much larger modernization plan, which will pull in other parts of El Visno.

Frank: Third <unk> signed a current five serve S. M B solutions aggregator clients as they build embedded finance for their merchant clients. This opportunity ties deeper into Pfizer as we'll be working without financial institution.

Clients to buy and sponsors of these lending services.

Frank: Fourth and finally <unk>.

Frank: <unk> won a deal to become the core account processor for a major U S government agency as part of the clients much larger modernization plan, which will pull in other parts of our business.

Frank J. Bisignano: It's clear that FinTech is demonstrating its capability across the broader financial services landscape, and we're encouraged by its growing pipeline today and the bigger opportunity it can bring to Fiserv over time. Turning to credit issuing, we partnered with Robinhood as it launches its gold card program following the acquisition of X1, which is built on Fiserv credit processes. We also extend our relationship with Kuwait Finance House on the back of its acquisition of Ali United Bank, and we'll be migrating that card portfolio onto Alpac.

Frank: It's clear that Linzess is demonstrating its capability across the broader financial services landscape and we're encouraged by its growing pipeline today and the bigger opportunity it can bring to Pfizer of overtime.

Frank: Turning to credit issuing we partnered with Robin Hood as it launches its gold card programs. Following the acquisition of Epsilon, which is built on Pfizer of credit processing.

Frank: We also extended our relationship with Kuwait Finance house on the back of its acquisition of all United Bank and will be migrating that card portfolio onto our platform.

Frank J. Bisignano: These are two more examples of how financial institution M&A is presenting more opportunities than risk as our technology leadership grows clearer. Lastly, for digital payment solutions, demand among Alcor account clients and other financial institutions remains strong. One of the fastest-growing examples of this is Zelle, the largest P2P payment platform where we remain the leading third party systems integrator and recorded 45% transaction growth in Q1. A second example that's still emerging is FedNow and RTP, where we've signed more than 500 financial institutions to provide access to these real-time rails.

Frank: These are two more examples of how financial institution M&A is presenting more opportunities than risk and to our technology leadership grows clearer.

Frank: Lastly, in digital payment solutions demand among our core account clients and other financial institutions remain strong.

Frank: One of the fastest growing examples of this is Earl.

Frank: The largest piece of big payment platform, where we remain the leading third party systems integrator and recorded 45% transaction growth in Q1.

Frank: A second example, that's still emerging is dead now and our T P where.

Frank: Where are we signed more than 500 financial institutions to Brian provided access to these real time rails.

Frank J. Bisignano: And perhaps our biggest medium-to-long-term opportunity is cash flow centrality. Our small business accounts payable, and accounts receivable solution that we are currently marketing to banks as a resource. The product will be available this summer, and we've already sold it to four large banks, including U.S. Bank, announced in February, and this month, Fulton Bank, and Citizens Bank. You should also expect to see Cash Flow Central distributed through Clover later this year. The product is off to a great start, and we are encouraged by what we are seeing. Now, I will turn the call over to Bob to walk you through the financials in more detail. Thank you.

Frank: And perhaps the biggest medium to long term opportunity is cash flow central our small business accounts payable accounts receivable solution that we are currently marketing two bank says resellers.

The product will be available this summer and we've already sold it to four large banks, including U S Bank announced in February and this month Fulton Bank and citizens Bank.

Frank: You should also expect to see cash flow central distributed through Clover later this year.

Frank: Product is off to a great start and we're encouraged by what we are saying.

Frank: And now let me turn the call over to Bob to walk you through the financials in more detail.

Robert W. Hau: Thank you, Frank, and good morning, everyone. 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 4, our first quarter performance demonstrated our ability to deliver top line growth and continue to drive margin expansion. First quarter total company adjusted revenue grew 7% to $4.5 billion, and adjusted operating income grew 13% to $1.6 billion, resulting in an adjusted operating margin of 35.8%, an increase of 180 basis points versus the prior year.

Robert W. Hau: 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.

Robert W. Hau: Starting with our financial metrics and trends on slide four.

Robert W. Hau: First quarter performance demonstrated our ability to deliver topline growth and continue to drive margin expansion.

Robert W. Hau: First quarter total company adjusted revenue grew 7% to $4.5 billion in adjusted operating income grew 13% to $1 $6 billion.

Robert W. Hau: Resulting in adjusted operating margin of 35, 8% an increase of 180 basis points versus the prior year. As a reminder, our adjusted revenue was recast as part of our realigned segment reporting and if you haven't already I encourage you to review our 8-K.

Robert W. Hau: As a reminder, our adjusted revenue was recast as part of our realigned segment reporting, and if you haven't already, I encourage you to review our 8K filing from March 26th for historical comparison. The recast numbers include a small change to our adjusted revenue in the prior years to account for all pass-through post-pandemic. In our prior reporting, we adjusted the postage pass-through revenue only from our output business, which represents a significant majority of our postage activity. We are now adjusting out the non-output pass-through postage revenue as well.

Robert W. Hau: <unk> from March 26 for historical comparisons.

Robert W. Hau: The recast numbers include a small change to our adjusted revenue in the prior years to account for all pass through postage.

Robert W. Hau: In our prior reporting we adjusted the postage pass through revenue only from our output business.

Robert W. Hau: Which represents the significant majority of our postage activity.

Robert W. Hau: We are now adjusting out the non output pass through postage revenue as well.

Robert W. Hau: The change slightly lowered our adjusted revenue for the recast prior periods and better aligns with our internal reporting. On an organic basis, revenue grew 20% in the quarter, with particular ongoing strength in Merchant Solutions Organic Revenue, which was up 36%, and Steady Growth of 5% in Financial Solutions Organic. First quarter adjusted earnings per share increased 19% to $1.88, compared to $1.58 in the prior year. Our adjusted earnings per share in Q1 grew well above the 14-16% growth level anticipated for the full year. Pre-cash flow for the quarter was $454 million.

Robert W. Hau: The change slightly lowered our adjusted revenue for the recast prior periods and better aligns with our internal reporting.

Robert W. Hau: On an organic basis revenue grew 20% in the quarter with particular ongoing strength in merchant solutions organic revenue, which was up 36% and steady growth of 5% and financial solutions organic revenue.

Robert W. Hau: First quarter adjusted earnings per share increased 19% to $1.88 compared to $1 58 in the prior year.

Our adjusted earnings per share in Q1 grew well above the 14% to 16% gross level anticipated for the full year.

Robert W. Hau: Free cash flow for the quarter was $454 million well. This number is lower than normally seen in the quarter. It is in line with our expectations given the timing of payments for the Green tax credit program.

Robert W. Hau: While this number is lower than normally seen in the quarter, it is in line with our expectations given the timing of payments for the Green Tax Credit Program. This timing is consistent with what we described during last quarter's earnings call, and we expect this cash flow headwind to become a tailwind in the second half of this year when we apply the credit to lower our second half cash tax payment. We continue to expect to generate $4.5 billion in free cash flow for the year.

Robert W. Hau: This timing is consistent with what we described during last quarters earnings call.

Robert W. Hau: And we expect this cash flow headwind to become a tailwind in the second half of this year when we apply the credit to lower our second half cash tax payments.

Robert W. Hau: We continue to expect to generate $4 5 billion in free cash flow for the year.

Robert W. Hau: Turning to performance, Starting on slide 5, organic revenue growth in the merchant solutions segment was 36% in the quarter. This includes a 15-point benefit from excess revenue driven by above-average interest and inflation in Argentina. Without this transitory benefit, organic growth would have been 21%.

Robert W. Hau: Turning to performance by segment.

Robert W. Hau: Starting on slide five organic revenue growth in the merchant solutions segment was 36% in the quarter.

Robert W. Hau: This includes a 15 point benefit from excess revenue driven by above average interest and inflation in Argentina.

Robert W. Hau: Without this transitory benefit organic growth would have been 21%.

Robert W. Hau: On slide 6, we've added a summary of the impact of excess Argentine inflation and interest on total Fiserv and merchant segment revenue and the offsetting headwind from currency devaluation, which impacts adjusted revenue. Adjusted revenue growth for Merchant Solutions was 13% in the quarter. It includes a 23 percentage point currency headwind, largely from the Argentine peso and the impact of the devaluation in late December last year. Unlike in 2023, the currency headwind in Q1'24 was much higher than the inflation and interest tailwind. If interest and inflation fall back to normal levels, which we expect to happen in the medium term, we anticipate the headwind from foreign currency exchange would ease as well.

Robert W. Hau: On slide six we've added a summary of the impact of excess Argentine inflation in interest on total five surf and merchant segment revenue.

Robert W. Hau: And the offsetting headwinds from currency devaluation, which impacts our adjusted revenue.

Adjusted revenue growth for merchant solutions was 13% in the quarter.

Robert W. Hau: It includes a 23 percentage point currency headwind largely from the Argentine peso and the impact of the devaluation in late December last year.

Robert W. Hau: Unlike in 2023, the currency headwind in Q1, 24 was much higher than the inflation and interest tailwind.

Robert W. Hau: If interest and inflation fall back to normal levels, which we expect to happen in the medium term, we anticipate the headwinds from foreign currency exchange would ease as well.

Robert W. Hau: Moving to the business line, small business organic revenue growth and adjusted revenue growth were 45% and 16%, respectively. Small business volume growth was eight percent. As I mentioned, over the last few quarters, revenue from excess inflation and interest in Argentina is boosting organic growth, while the currency devaluation is a headwind to adjusted revenue. Global revenue grew 30% in the first quarter, an annualized payment volume growth of 19%. The spread between revenue and volume growth reflects a higher penetration of value-added solutions, continued channel mix shift, and some price. Vast penetration reached 20% in Q1, up from 19% in Q4, and on pace to meet our 27% target by 2026.

Speaker Change: Moving to the business lines.

Speaker Change: Small business organic revenue growth and adjusted revenue growth was 45% and 16% respectively.

Speaker Change: Small business volume growth was 8%.

Speaker Change: As I mentioned over the last few quarters revenue from the excess inflation interest in Argentina is boosting organic growth, while the currency devaluation as a headwind to adjusted revenue.

Speaker Change: Overall revenue grew 30% in the first quarter and annualized payment volume growth of 19%.

Speaker Change: The spread between revenue and volume growth reflects a higher penetration of value added solutions continued channel mix shift and some pricing.

Speaker Change: Vast penetration reached 20% in Q1 up from 19% in Q4 and on pace to meet our 27% target by 2026.

Robert W. Hau: The increase was driven by revenue from Clover Capital, Rapid Deposit, and our basic Clover SaaS. Clover Capital is our short-term working capital advance program. Rapid Deposit allows merchants to access money from daily car sales instantly for a fee. And while there are several standard Clover SaaS plans, the basic package includes a virtual terminal, e-commerce products, developer tools, invoicing, and transaction reports. These are just some examples of the value-added solutions available with Clover.

Speaker Change: The increase was driven by revenue from corporate capital.

Speaker Change: Rapid deposit and our basic oversized plants.

Speaker Change: Barbara Capital is our short term working capital advance program.

Speaker Change: Rapid deposit allows merchants to access money from daily car sales instantly for a fee.

Speaker Change: And while there are several standard Cobra SaaS plans. The basic package includes virtual terminal ecommerce products developer tools invoicing and transaction reports.

Speaker Change: These are just some examples of the value added solutions available with Clover.

Robert W. Hau: Enterprise Organic and Adjusted Revenue Growth was 29% and 6%, respectively, driven by transactions growth of 12% and higher broadband penetration. As in small business, organic growth included some transitory Benefit from excess inflation and interest in Argentina but was also impacted by the inclusion of three lower growth products as part of the shift in our business segmentation to start this year. Finally, processing organic and adjusted revenue grew by 9% and 10%, respectively. As mentioned in the past, processing represents the back-end processing we do for our partners where they own the merchant relationship.

Speaker Change: Enterprise organic and adjusted revenue growth was 29% and 6% respectively.

Speaker Change: Driven by transactions growth of 12% and hire fast penetration.

Speaker Change: As in small business organic growth includes some transitory benefit from excess inflation and interest in Argentina, but was also impacted by the inclusion of three lower growth products as part of the shift in our business segmentation to start this year.

Speaker Change: Finally processing organic and adjusted revenue grew by 9% and 10% respectively.

Speaker Change: As mentioned in the past processes represents the backend processing, we do for our partners, where they own the merchant relationship.

Robert W. Hau: The increase this quarter was driven by a termination fee from an existing client who canceled a planned expansion into New Geography. This will not impact ongoing revenue in established geographies, where our relationship with this client remains strong. Excluding periodic revenue, processing revenue declined 2% in the quarter. This business line has no revenue from us.

Speaker Change: The increase this quarter was driven by a termination fee from an existing client who canceled a planned expansion into new geographies.

Speaker Change: This will not impact ongoing revenue and established geographies, where our relationship with this client remains strong.

Speaker Change: Excluding periodic revenue processing revenue declined 2% in the quarter.

Speaker Change: This business line has no revenue from Argentina.

Robert W. Hau: Overall, we continue to anticipate processing adjusted revenue to be roughly flat over the medium term. Adjusted operating income in the merchant solutions segment increased 30% to $769 million in the quarter, with an adjusted operating margin of 440 basis points to 34.1%. In accordance with GAAP, interest expense from anticipation revenue is recorded below the operating income line. However, if the interest costs from anticipation were included in operating income, merchant adjusted operating margins would still have expanded a very strong 390 basis points for the quarter. Turning to slide 7 on the financial solutions, organic revenue grew 5% in the quarter, which is in line with our full year outlook of 5-7%. Looking at the business,

Speaker Change: Overall, we continue to anticipate processing adjusted revenue to be roughly flat over the medium term.

Speaker Change: Adjusted operating income in the merchant solutions segment increased 30% to $769 million in the quarter with adjusted operating margin up 440 basis points to 34, 1%.

Speaker Change: In accordance with GAAP interest expense from anticipation revenue is recorded below the operating income line.

Speaker Change: If the interest cost from anticipation were included in operating income merchant adjusted operating margins would've still expanded a very strong 390 basis points for the quarter.

Speaker Change: Turning to slide seven on the financial solutions segment organic revenue grew 5% in the quarter, which is in line with our full year outlook of 5% to 7%.

Speaker Change: Looking at the business lines digital payments organic and adjusted revenue each grew by 5%.

Robert W. Hau: Digital payments, organic, and adjusted revenue each grew by 5%. Dell transactions and the number of clients continue to grow at a healthy clip, at 45% and 20%, respectively. And we continue to see strong demand from clients for FedNow and RTP integration. Issuing organic and adjusted revenue grew 8% and 3%, respectively. Driven by several factors, including the launch of money network cards to unemployment and disability benefit recipients under the California Employment Development Department program. Banking Organic and Adjusted Revenue declined 1 and 3% respectively. Excluding periodic license and termination fee revenue, banking organic revenue grew 2%.

Speaker Change: The old transactions and number of clients continued to grow at a healthy clip at 45% and 20% respectively.

Speaker Change: And we continue to see strong demand from clients for fed now and RTP integration.

Speaker Change: Issuing organic and adjusted revenue grew 8% and 3% respectively.

Speaker Change: Driven by several factors, including the launch of money network cards to unemployment and disability benefit recipients under the California employment Development Department program.

Speaker Change: Banking organic and adjusted revenue declined one 3% respectively.

Speaker Change: Excluding periodic license and termination fee revenue banking organic revenue grew 2%.

Speaker Change: Yeah.

Robert W. Hau: First quarter adjusted operating income for the financial solutions segment was up 6% to $1 billion. Adjusted operating margin was up 160 basis points to 44.1%, driven by operating leverage from scaled revenue growth and cost efficiency. As we highlighted at our investor conference in November, the cross-Fiserv activity between our two segments is particularly powerful because, following the success of the Fiserv First Data Merger, we are the only single provider of merchant, bank IT, and payments functionality. Let me share three examples where we've had important Cross-Visor wins in Q1.

Speaker Change: First quarter adjusted operating income for the financial solutions segment was up 6% to $1 billion in.

Speaker Change: And adjusted operating margin was up 160 basis points to 44, 1%.

Speaker Change: Driven by operating leverage from scale revenue growth and cost efficiency.

Speaker Change: As we highlighted at our Investor Conference in November the Crossfire serve activity between our two segments is particularly powerful because following the success of the fiserv first data merger, where the only single provider of merchant Bank I T and payments functionality.

Speaker Change: Let me share three examples where we've had important cross Pfizer wins in Q1.

Robert W. Hau: In our debit networks, Star and Excel, we had five merchant wins in the quarter, including ConocoPhillips, a traditional merchant, along with a social media company and a PAYFAC, both of which will be able to benefit from more choice under Reg I.I. Traditional and online merchants are using our debit networks to efficiently route card transactions at the point of sale. These wins drive revenue in our digital payments business line and often go hand-in-hand with merchant acquiring and other value-added solution sales that only Fiserv offers.

Speaker Change: And our debit networks star in itself with five merchant wins in the quarter, including Conocophillips traditional merchant.

Speaker Change: Along with a social media company and a pay back both of which will be able to benefit from more choice under Reg II.

Speaker Change: Traditional and online merchants are using our debit networks to efficiently route car transactions at the point of sale.

Speaker Change: These wins drive revenue in our digital payments business line and often go hand in hand with merchant acquiring wins and other value added solution sales that only Pfizer of offers.

Robert W. Hau: A second example can be found in Open Banking, where we provide our data solutions to facilitators such as Plaid and MasterCard Open Banking as a single API into the open banking data of our financial institution clients. In Q1, we signed a data access agreement with Visa Open Banking Solutions, acquired through TINK, as they enter the U.S. The data is typically used by clients of these organizations to verify bank accounts for payments and transfers, underwrite loans, and facilitate financial wellness and planning, and by merchants to facilitate pay-by-bank transactions, as just a few examples.

Speaker Change: A second example can be found in open banking, where we provide our data solutions to facilitate or such as Plaid and Mastercard open banking is a single API into the open banking data of our financial institution clients.

Speaker Change: In Q1, we signed the data access agreement with visa open banking solutions acquired through <unk> as they enter the U S.

Speaker Change: The data is typically used by clients with these organizations to verify bank accounts for payments and transfers underwrite loans and facilitating financial wellness and planning and by merchants to facilitate pay by bank transactions is just a few examples.

Robert W. Hau: And third, over the past year, we have announced a number of wins in the government sector, and we're excited about our continued momentum in this large vertical across our merchant and financial sectors. Revenue from government clients recently surpassed $500 million. Now let me wrap up with some remaining details on the financials. The corporate adjusted operating loss was $148 billion in the quarter, largely in line with our expectations. The adjusted effective tax rate for the quarter was 18.2%.

Speaker Change: Third over the past year, we have announced a number of wins in the government sector and we're excited about our continued momentum in this large vertical across our merchant and financial segments.

Speaker Change: Revenue from government clients recently surpassed $500 million.

Speaker Change: Now, let me wrap up with some remaining details on the financials.

The corporate adjusted operating loss was $148 million in the quarter largely in line with our expectations.

Speaker Change: The adjusted effective tax rate in the quarter was 18, 2%.

Robert W. Hau: The Q1 tax rate is traditionally below the full-year rate, and we continue to expect the 2024 adjusted effective tax rate to be approximately 20% for the full year. Total debt outstanding was $24.4 billion on March 31st. Our debt-to-adjusted EBITDA ratio slightly increased to 2.8 times within our targeted leverage, and we have approximately 7% of our debt in variable rate installments. During the quarter, we repurchased 10.2 million shares for $1.5 billion, bringing our total cash return to shareholders for the last 12 months to $4.7 billion. We have 42 million shares remaining authorized for repurchase at the end of the quarter.

Speaker Change: The Q1 tax rate is traditionally below the full year rate and we continue to expect the 2024 adjusted effective tax rate to be approximately 20% for the full year.

Speaker Change: Total debt outstanding was $24 $4 billion on March 31.

Speaker Change: Our debt to adjusted EBITDA ratio slightly increased to two eight times within our targeted leverage range.

Speaker Change: And we have approximately 7% of our debt and variable rate instruments.

Speaker Change: During the quarter, we repurchased 10 2 million shares for $1 $5 billion, bringing our total cash returned to shareholders for the last 12 months to $4 $7 billion.

Speaker Change: We had 42 million shares remaining authorized for repurchase at the end of the quarter.

Robert W. Hau: Our longstanding capital allocation strategy will continue in 2024, defined by a strong balance sheet, share repurchases, and complementary and innovative acquisitions. As Frank said earlier, we continue to expect organic revenue growth of 15-17% for the full year. One quarter into the year, we are maintaining our 2024 organic revenue growth rate outlook. While the interest and inflation tail went from Argentina eased faster than we expected.

Speaker Change: Our long standing capital allocation strategy will continue in 2024 defined by a strong balance sheet share repurchases and complementary and innovative acquisitions.

Speaker Change: As Frank said earlier, we continue to expect organic revenue growth of 15% to 17% for the full year.

Speaker Change: One quarter into the year, we are maintaining our 2020 for organic revenue growth rate outlook.

Speaker Change: While the interest and inflation tailwind from Argentina east faster than we expected.

Robert W. Hau: Further moves in the balance of the year remain unclear, while our overall business remains strong. For the full year, we now expect Adjusted Operating Margin Expansion to be more than 125 bases, up from our previous outlook of at least 100 bases. This translates to adjusted earnings per share of $8.60 to $8.75, which is 14 to 16% growth over 2023. This performance for 2024 would represent our 39th consecutive year of double-digit adjusted EPS growth. With that, let me turn the call back to Frank for some closing remarks. Thanks, Bob.

Speaker Change: Further moves in the balance of the year remain unclear well our overall business remains strong.

Speaker Change: For the full year, we now expect adjusted operating margin expansion to be more than 125 basis points.

Speaker Change: Up from our previous outlook of at least 100 basis points.

Speaker Change: This translates to adjusted earnings per share of $8 60.

Speaker Change: The $8.75 a five <unk> increase in our outlook at the midpoint, which is 14% to 16% growth over 2023.

Speaker Change: This performance for 2024 would represent our 39th consecutive year of double digit adjusted EPS growth.

Speaker Change: With that let me turn the call back to Frank for some closing remarks.

Frank: Thanks, Bob.

Last week, we published our fourth corporate social responsibility report.

Frank J. Bisignano: Last week, we published our fourth corporate social responsibility report. In it, we highlight the ways we execute on our four strategic pillars, empower people, advance communities and society, champion responsible business practices, and invest in sustainable systems. In summary, we believe that doing good is good for business. We are committed to diverse representation at all levels of the organization, including leadership positions.

Frank: In it we highlight the ways, we execute on our four strategic pillars empowered people.

Frank: Vance communities and society champion responsible business practices and invest in sustainable systems.

Frank: In summary, we.

Frank: We believe that doing good is good for business, we are committed to diverse representation at all levels of the organization, including leadership positions. We continue to engage with communities, where we live and work, including small businesses and.

Frank J. Bisignano: We continue to engage with communities where we live and work, including small businesses and minority depository institutions. We recognize the importance of strong governance as part of our overall strategy, and we continue to invest in sustainability. For the first time, our CSR report includes a greenhouse gas reduction goal.

Frank: Minority depository institutions, we were.

Frank: Recognize the importance of a strong governance as part of our overall strategy and we continue to invest in sustainability.

Frank: The first time, our CSR report includes a greenhouse gas reduction goal.

Frank J. Bisignano: Later this year, we will be celebrating two important milestones for FISERV. Our 40th year in business, and our fifth year since merging with First Data. On these occasions, you naturally reflect on what it means to have come of a certain age.

Frank: Later this year, we'll be celebrating two important milestones for flash served.

Our 48 year in business.

Frank: And our 50 years since merging with first data.

Frank: On these occasions do naturally reflect on what it means to come of a certain age.

Frank J. Bisignano: Professor, 40 years old means proven, resilient, and experienced to deliver on our commitment. And we've done just that. It also means scaled, savvy, and well-capitalized to sustain strong top and bottom line growth. We are doing that as well. But when you consider the significant change created by the merger.

Frank: Revise or 40 years old means proven resilient and experience to deliver on our commitments and we've done just that.

Frank: It also means scaled savvy and well capitalized to sustain strong top and bottom line growth.

Frank: We are doing that as well.

Frank: Well when you consider the significant change created by the merger.

Frank J. Bisignano: We're also a lot like a young five-year-old company. Five means a fresh foundation to support investors. We have used our cash to invest in products, services, and people, and that's driving higher growth. Five also means a longer-term opportunity ahead, fueled by innovation. And therefore, we see continued, strong, further top and bottom line growth at five. The Proven Strength of Fortune

Frank: We are also a lot like a young five year old company.

Frank: By means of fresh validation to support investment.

Frank: We have used our cash to invest in products services and people and that's driving higher growth.

Frank: Five also means a longer term opportunity ahead fueled by innovation.

Frank: And therefore, we see continued strong further top and bottom line growth advisor.

Frank: The proven strength of 40 combined with the opportunistic growth of five put spicer and a distinguished position to both lead and drive innovation.

Frank J. Bisignano: Combined with the opportunistic growth of FISERV, it puts FISERV in a distinguished position to both lead and drive innovation. And that's exactly what we are. All of this is possible because of our over 40,000 employees. I would like to thank them for what they do for our clients, shareholders, and each other. Thank you for your time today, and now, 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. If you would like to withdraw your question, press star 2. Our first question comes from David Togut from Evercore.

Frank: And that's exactly what we're doing all of this is possible because of our over 40000 employees I would like to thank them for what they do for our clients shareholders and each other.

Speaker Change: Thank you very time today and now operator, please open the line for questions.

Speaker Change: 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 one on your phone if you would like to withdraw your question press start to our first question comes from David <unk> from Evercore ISI. Please go ahead.

David: Thank you good morning, great to see Clover revenue growth sustained at 30% with accelerating payment volume growth and higher pass attach rates. When you look at the picture for Clover for the year as a whole.

Operator: 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. If you would like to withdraw your question, press star 2. Our first question comes from David Togut from Evercore ISI. Please go ahead. Thank you. Good morning.

David: Revenue growth sustained in this high Twenty's Colo Thirtyish range, you know when you look at the Brazil market entry, Argentina expansion and vast growth opportunities.

Speaker Change: Yeah, Hey, Thanks, David.

Frank J. Bisignano: Yeah, hey, thanks, David, you know. We've been focused on all of those for quite some time, and we keep unveiling new products, new initiatives, new markets, while continuing to, you know, draw on the embedded business we have, generating new merchants. Right? So, you know, our basic philosophy is... the number of merchants we have, be able to deliver more products to merchants, and then go into areas that we haven't been before.

Speaker Change:

Speaker Change: We've been focused on all of those for quite some time and we treat unveiling new product a new initiatives market, while continuing to you know.

Speaker Change: Draw in the embedded business, we have generated new merchants right. So you know all our basic philosophy is.

Speaker Change: Increase our number of merchants that you have to be able to deliver more products at merchants and then go into the areas that we haven't been before.

Frank J. Bisignano: So we feel very, very good about what we laid out a couple of years ago and what we talked about in November. You can see the traction here, which is... and above what the CAGR needed to be. But you should expect us to be on all cylinders on Clover, as we have a bunch of other parts of our company also, I would have to say.

Speaker Change: So we feel very very good about what we laid out a couple of years ago, and what we talked about in November.

Speaker Change: You can see the traction here, which is kind of above what the CAGR needed to be.

Speaker Change: But you should expect us to be all cylinders on clover.

Speaker Change: As we have a bunch of other parts of our company also I would have to say.

Speaker Change: Thank you.

Speaker Change: Thank you. Our next question comes from Tien Tsin Huang from JP Morgan. Please go ahead.

Operator: Thank you. Thank you. Our next question comes from Tianzhen Wang from J.P. Morgan. Please go ahead. Thanks so much. Good morning.

Speaker Change: Thanks, So much good morning, just the the increase here in the operating margin how much of that 25 bps as it was.

Speaker Change: From favorable mix versus other surprises maybe the term fee in processing in Argentina of course, there's always the factor there just curious on the increase.

Operator: Thank you. Our next question comes from Tenjin Wong from J.P. Morgan. Please go ahead.

Speaker Change: Callouts for the second quarter or the second half with respect to the margin. Thanks.

Robert W. Hau: Yes, engines, Bob, good morning. I think overall that the 25 basis points that you're describing our full-year outlook, moving from previously at least 100 basis points of margin expansion to now more than 125, is really driven by continued volume leverage, strong growth in the overall company, as well as continued progress on productivity. The termination fee in processing is relatively small in the grand scheme, but obviously, it matters a bit in the processing line for this quarter. But in terms of the overall company's margin improvement, it really is continued volume leverage and a focus on productivity. Yeah, and I just add, you know, when we

Speaker Change: Yes, Tien tsin its Bob good morning.

Robert W. Hau: I think overall, the 25 basis points that you're describing our full year outlook moving from previously at least 100 basis points margin expansion to now more than 125 is really driven by continued.

Robert W. Hau: Volume leverage.

Robert W. Hau: Growth in the overall company as well as continued progress on productivity.

Robert W. Hau: Emanation fee and the processing is relatively small in the Grand scheme, obviously, it matters a bit in the processing.

Robert W. Hau: Volume for this quarter, but in terms of the overall company's margin improvement. It really is continued volume leverage and our focus on productivity.

Speaker Change: Yeah, and I'd just add.

Speaker Change: We think about.

Speaker Change: Running this company.

Speaker Change: Our investment in technology is really around new product development.

Robert W. Hau: Yeah, and I'd just add, you know, when we think about running this company, our investment in technology is really around new product development, improved service, and the ability to deliver the next dollar of revenue at a better incremental cost by the end of the year. Investing in products. So that will be for the rest of LA. And AI and those type of things just allow us to do more of it. We're at the tip of that, but, you know, we can see our way very clearly.

Improved service and the ability to deliver the next dollar of revenue at a better incremental costs.

Speaker Change:

Speaker Change: First thing in productivity, so that will be for the rest of our lives.

Speaker Change: And those type of items just to allow us to do more of it.

We're at the hip on that but.

Speaker Change: We can see we can see very clearly this year.

Speaker Change: That's correct. Thank you.

Speaker Change: Next we'll go to the line of Dave Koning from Baird. Please go ahead.

David Koning: Yeah, Hey, guys, great job again, and maybe just on the financials segment digital slowed a bit this quarter I think it was 5% or 7% to 8%. The last few quarters I'm wondering just about that and if I, if you've kind of fully benefited from that or if that's still has incremental room to benefit and accelerate growth in.

Operator: Next, we'll go to the line of Dave Koning from Bayard. Please go ahead.

Robert W. Hau: Hey guys, great job again. Maybe just on the financial segment, digital slowed a bit this quarter, I think it was 5%, compared to 7% to 8% the last few quarters. Wondering just about that and whether REG II has kind of fully benefited from that or if that still has incremental room to benefit and accelerate growth in that part.

David Koning: That that part.

Speaker Change: Yes, David good morning.

David Koning: On the Reg I I'd say that there is still.

David Koning: Probably more opportunity than what we've seen remains to truly be seeing what that means we're seeing good.

David Koning: Check again, our network business, whether that's really driven by Red Guy I or just continued progress in our in our debit business I think it's just more continued progress in terms of a court slowdown I wouldn't read anything into it other than quarterly fluctuations.

Robert W. Hau: Yeah, David, good morning. On REG-II, I'd say that, you know, there's probably still more opportunity ahead than what we've seen. It remains to truly be seen what that means. We're seeing a good uptick in our network business, whether that's really driven by REG-II or just continued progress in our debit business, I think it's just more continued progress. In terms of a, quote, slowdown, I wouldn't read anything into it other than, you know, quarterly fluctuations and a tough comp against Q1 priority.

David Koning: Tough comp against Q1 prior year.

Speaker Change: Gotcha, Thanks, and if I can just do one more quick SMB grew so fast 45% over 30, so non clover is actually growing faster, which I assume is just Argentina, but maybe how is non Argentina non clover doing and is there room for that to keep growing well too.

Speaker Change: But let's see non Argentina non clover.

Speaker Change: To pull up my Venn diagrams here.

Robert W. Hau: Gotcha, thanks, and if I can just do one more quick, SMB grew so fast, 45%, clover grew 30, so non-clover is actually growing faster, which I assume is just Argentina, but maybe how is non-Argentina, non-clover doing, and is there room for that to keep growing well too?

Speaker Change: Obviously tongue in cheek.

Speaker Change: Bottom line is we're seeing good growth, obviously across the entire SMB business.

Speaker Change: That small business.

Speaker Change: Certainly has good growth from Clover, and you saw the 30% growth in Clover, we continue to see real opportunity there.

Speaker Change: Non clover side, there's certainly impact.

Robert W. Hau: But let's see, non-Argentina, non-Clover; I'll have to pull out my Venn diagrams. Obviously, tongue-in-cheek there.

Speaker Change: From Argentina, there is a small piece of Clover, Argentina, there, but the 30% growth is really heavily driven by the United States growth. There on an overall segment you heard us talk in the prepared remarks about the Argentine impac.

Robert W. Hau: The bottom line is we're seeing good growth, obviously, across the entire SMB business. That small business certainly has good growth from Clover, and you saw the 30% growth in Clover. We continue to see real opportunity there.

Robert W. Hau: On the non-Clover side, there's certainly an impact from Argentina. There's a small piece of Clover Argentina there, but the 30% growth is really heavily driven by the United States growth there. On the overall segment, you heard us talk in the prepared remarks about the Argentinian impact from organic growth.

Speaker Change: <unk> from organic growth.

Speaker Change: We continue to see that easing later into the year it was a bit lower.

Speaker Change: What we expected in the first quarter I E inflation and interest eased a little bit faster than we anticipated.

Speaker Change: In previous in the last earnings call. We indicated we expect about a.

Speaker Change: 14% impact from Argentina for the full year in the merchant business Q1 came in a little bit above that we expect that.

Robert W. Hau: We continue to see that easing later into the year. It was a bit lower than what we expected in the first quarter, i.e., inflation and interest eased a little bit faster than we anticipated. In the last earnings call, we indicated we expected about a 14% impact from Argentina for the full year in the merchant business. Q1 came in a little bit above that.

Speaker Change: He's in the later part of the year that certainly impacts the non clover business.

Speaker Change: But overall non clover is growing quite well and.

Speaker Change: And we continue to see opportunity.

Speaker Change: Not just about adding Culver and small businesses supporting them wherever they want to take a merchant acquiring solutions.

Robert W. Hau: We expect that to ease into the latter part of the year. That certainly impacts the non-Clover business, but overall, non-Clover is growing quite well, and we continue to see opportunity. It's not just about adding Clover to small businesses but supporting them wherever they want to take merchant acquiring. The other thing I would add, and it's an impact on the first quarter that we expect to ease into the balance of the year, is that in Q1, we saw the benefit of a better-than-expected lift in the use of foreign-based currency credit cards in Argentina.

Speaker Change: The other thing I would add and it's had an impact to the first quarter, we expect to ease into a into the balance of the year is in Q1, we saw the benefit of a better than expected lift on the use of foreign based currency credit cards.

Speaker Change: In Argentina. This as some people may have heard the term dollars to restart.

Speaker Change: Argentine government has a program sponsored by the Central Bank to encourage foreign denominated foreign currency denominated credit cards, and we saw that pick up in the first quarter.

That is a program that the Argentine government.

Speaker Change: Has at their discretion to help with the economy, obviously, they're seeing the economy improve so I would certainly not anticipate.

Speaker Change: A 45% small business organic growth into the future.

Robert W. Hau: This is, some people may have heard the term "dollar turista." The Argentine government has a program sponsored by the central bank to encourage foreign-denominated, foreign-currency-denominated credit cards, and we saw that pick up in the first quarter. That is a program that the Argentine government has at its discretion to help the economy, obviously, to see the economy improve. So I would certainly not anticipate a 45% small business organic growth rate into the future, and we're seeing some of that kind of transitory impact this quarter.

Speaker Change: We're seeing some of that kind of transitory impacts this quarter.

Speaker Change: Gotcha, great job thanks, guys.

Speaker Change: Thank you.

Speaker Change: Next we'll go to the line of Timothy Chiodo from UBS. Please go ahead.

Timothy Chiodo: Great. Thank you for taking the question looking at the gap between the 19% volume growth in the 30% revenue growth for cover you hit it pretty well I think on the vas, adding about 900 basis points. It just implies that there's a small component there from direct mix hardware and pricing as you mentioned so I just wanted to see if you could provide some context on the path to the.

Speaker Change: $4 5 billion, how we should think about those other contributors direct hardware and pricing contributing and maybe a different way to ask it is should we expect the volume growth to stay in this sort of high teens range or should we expect slightly higher cover volume growth.

Operator: Gotcha. Great job. Thanks, guys.

Operator: Next, we'll go to the line of Timothy Chiodo from UBS. Please go ahead. Great, thank you.

Robert W. Hau: It just implies that there's a small component there from direct mix, hardware, and pricing, as you mentioned. So I just wanted to see if you could provide some context on the path to the $4.5 billion, and how we should think about those other contributors, direct, hardware, and pricing. And maybe a different way to ask it is, should we expect the volume growth to stay in this sort of high teens range, or should we expect slightly higher Clover volume growth?

Speaker Change: Okay.

Speaker Change: So a number of elements to that question first in order to achieve four and $5 billion goal that we set out by 2026, we need kind of a very high 20% call. It 28% total revenue growth.

Speaker Change: As part of that goal, we've indicated we expect vas to achieve 27% penetration from.

Speaker Change: The current quarter of Q1 at 20%, So certainly a big part of it is additional bass.

Speaker Change: We've talked about this in the past the secret recipe to growing closer to $4 $5 billion.

Speaker Change: Not so secret, it's getting new merchants sell more stuff to those merchants and grow with those margins and that's exactly what we see to your point in the current quarter. There was a big part of the overall revenue left certainly the delta between revenue and volume was driven by bass.

Robert W. Hau: So a number of elements to that question. First, in order to achieve the four and a half billion dollar goal that we set out ahead by 2026, we need kind of a very high 20%, call it 28%, total clover revenue growth. As part of that goal, we've indicated we expect VAS to achieve 27% penetration from the current quarter P1 at 20%. So certainly, a big part of it is additional VAS. We've talked about this in the past; the secret recipe for growing clover to $4.5 billion is actually not so secret.

Speaker Change: We kind of gave the sequence in order.

Of importance and I think that will continue as we progress over the next couple of years as we March towards that $4 $5 billion fast will be a big part of it of course, there's always price depending on what's going on with inflation, what's going on in the market, but that's that's.

Speaker Change: A third of the three important factors.

Speaker Change: Great. Thank you.

Speaker Change: Thank you.

Speaker Change: Next we'll go to the line of Jason Kupferberg from Bank of America Merrill Lynch. Please go ahead.

Robert W. Hau: It's get new merchants, sell more stuff to those merchants, and grow with those merchants. And that's exactly what we see. To your point, in the current quarter, a big part of the overall revenue left, certainly the delta between revenue and volume, was driven by VAS. We kind of gave the sequence in order of importance, and I think that will continue as we progress over the next couple of years. As we march towards that $4.5 billion, VAS will be a big part of it. Plus, there's always price, depending on what's going on with inflation and what's going on in the market, but that's probably the third of the three important factors.

Jason Kupferberg: Good morning, guys I just had a two part question on merchant. The first is just do you have the total segment volume and transaction growth for the quarter not sure if youre going to continue to provide that going forward and then the second part is just on the April comment Frank I think you indicated actually a little bit of an uptick in <unk>.

Jason Kupferberg: April relative to Q1, which could be viewed as a bit of an upside surprise, considering Easter timing and how that fell this year. So just curious which parts of merchant might've performed better so far in April versus Q1. Thank you.

Speaker Change: Okay Bob.

Speaker Change: The first part I'll take the second.

Speaker Change: First part of my question is in our prepared remarks, we gave a small business volume growth at 8%.

Operator: Next, we'll go to the line of Jason Kupferberg from Bank of America Merrill Lynch. Please go ahead.

Robert W. Hau: Enterprise transactions growth at 12% given the way we're reporting now for that merchant solutions segment and the three business lines, we felt that the volume for small business is the driver of revenue.

Robert W. Hau: Good morning, guys. I just had a two-part question on Merchant. The first question is just, do you have the total segment volume and transaction growth for the quarter? I'm not sure if you're going to continue to provide that going forward. And then the second part is just on the April comments. Frank, I think you indicated actually a little bit of an uptick in April relative to Q1, which could be viewed as a bit of an upside surprise considering Easter timing and how that fell this year. So, just curious which parts of Merchant might have performed better so far in April versus Q1.

Robert W. Hau: And in four transactions it's enterprise.

Robert W. Hau: Transaction activity in small business is not a revenue driver in volume for enterprise is not a revenue driver so without providing good.

Robert W. Hau: The key metrics that really are driving the business what's important.

Robert W. Hau: And.

Robert W. Hau: Yeah.

Robert W. Hau: Boy out on.

Robert W. Hau: Clarity you know a small tracking a small.

Robert W. Hau: Growth I wanted and I put it in the non discretionary buckets.

Robert W. Hau: Thinking about where it occurred obviously, that's an early indicator.

Operator: Thank you.

Robert W. Hau: Yeah, so the first part of my question is, in our prepared remarks, we gave small business volume growth at 8% and enterprise transactions growth at 12%. Given the way we're reporting now for that merchant solutions segment across the three business lines, we felt that volume for small business is the driver of revenue, and for transactions, it's enterprise. Transaction activity in small business is not a revenue driver, and volume for enterprise is not a revenue driver. So we thought about providing the key metrics that really are driving the business. And, uh, just to...

Speaker Change: Not necessarily.

Speaker Change: You know how the whole quarters, you got to play, but we always feel committed to be able to talk to you about what we see in a vast amount of volume we have gone through all that.

Speaker Change: Both in the U S and around the world et cetera.

Speaker Change: A small increase.

Speaker Change: Thank you next we'll go to Dan Jim.

Speaker Change: Yeah, we'll go to Dan Dolor from Mizuho. Please go ahead.

Dan Dolev: Hey, guys Great results I just had a quick question on pace.

Dan Dolev: Can you maybe give us some context on.

Dan Dolev: The conversion of the Clover.

Dan Dolev: Roughly timing and contribution.

Are there any other conversion.

Thanks again.

Yeah, the way the way a great question the way we think about.

Speaker Change: Hey, easy it was a processing system.

I'm very tired and then built out.

Robert W. Hau: And just to be blatant about clarity, you know, a small tracking, a small growth, you know, I wanted. And I put it in the non-discretionary buckets. If you're thinking about where it occurred, obviously, that's an early indicator. It's not necessarily, you know, how the whole quarter is going to play out, but we always feel committed to be able to talk to you about what we see, given the vast amount of volume we have going throughout the... both in the U.S. and around the world, and I consider it a small, small area. Thank you. Next, we'll go to Dan.

Speaker Change: Commerce hub.

And brought some of that volume, which already existed.

Speaker Change: Colbert.

Speaker Change: You know two two.

Speaker Change: Due to the future.

Speaker Change: Merchants.

Speaker Change: That was that's completed.

Speaker Change: <unk> migrated a multi year project.

Speaker Change: We built out in a way that allowed us to build out commerce hub that allowed us to deliver a bass.

Speaker Change: And also F pace XE operating well.

Speaker Change: Within our SMB base, so I feel great about closing the books on that from a conversion standpoint, and we're seeing on the enterprise side, you heard us talking about 200 commerce hub huge areas.

Frank J. Bisignano: Yeah, the way, great question, the way we think about, you know, Paisley, it was a processing system that was retired and then built out both Commerce Hub and brought some of that volume, which already existed through Clover, you know, to the future. New Merchant. That's a completed, migrated, multi-year project that we built out in a way that allowed us to build out Commerce Hub, that allowed us to deliver VAS into Commerce Hub, and also have PAY-EZ operating within our SMB. So we feel great about closing the books on that from a conversion standpoint, and we're seeing on the enterprise side, you heard us talk about 200.

Speaker Change: And a strategic platform for us going forward.

Speaker Change: Great. Thank you and great results with it.

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

Ramsey Clark El: Hi, Thanks for taking my question. This morning, I wanted to ask about M&A and what you're seeing out there. It feels like there's a little more opportunity maybe urgency on the side of sellers in the sort of Fintech our industry.

Ramsey Clark El: What are you seeing in and what's your appetite right now for doing a deal.

Ramsey Clark El: Well.

Ramsey Clark El: You know I.

Operator: Next, we'll go to the line of Ramsey and Ellis, all from Barclays.

Speaker Change: I don't know about urgency.

Speaker Change: On seller as part as much as you know our valuation and understanding what real valuations are.

Frank J. Bisignano: Well, um, you know, uh... I don't know about urgency on sellers' parts as much as valuation and understanding what real valuations are. Now we have a really great model which we talked about, our ability to generate cash flow, invest in our business, and the ability to deploy capital. I think we've done a very, very good job with the assets we've acquired, integrated, and grown. And so, I'd say our appetite to acquire properties is always high.

Speaker Change: Now you know we have a really great model, which we talked about you know our ability to generate cash flow investing in our business.

Speaker Change: And the ability to deploy capital.

Speaker Change: We've done a very very good job.

Speaker Change: The assets, we required integrated and grow and and so.

Speaker Change: I'd say, our appetite to acquire property is always high I mean, we're always travel again.

Frank J. Bisignano: I mean, we're always trafficking. I think, on the other hand, you know, we want to be very, very, very clear that it's within our strategy, which I think is holding tight. It's within our structure and the ability to distribute the product to a vast client base, both on the merchant side and on the FI side.

Speaker Change: Well I think on the other hand.

Speaker Change: We want to be very very very clear.

Speaker Change: That's within our strategy.

Speaker Change: Which I think is.

Speaker Change: Hi.

Speaker Change: It's worth it now our structure and the ability to distribute the product go out vast client base both on the merchant side.

Speaker Change: Have eyesight.

Speaker Change: So.

Speaker Change: I you know I like to believe that we're always engaged in working and thinking through it.

Robert W. Hau: I like to believe that we're always engaged in working through it, and we're highly selective to make sure we're using our shareholders' dollars as appropriately as possible, and I think we've got a pretty darn good track record in that so far. Ramsey, I think I'll carry your analogy one step further in terms of the question on appetite. The appetite's good. It's a strong appetite, but we're not hungry. So, you know, you go to the shopping mall or to the grocery store when you're hungry, you buy a lot of stuff, you get home, and you realize you didn't eat all that stuff.

Speaker Change: And we're highly selective.

Speaker Change: Make sure we're using our shareholders' dollars as appropriately as possible and I think we've got a pretty darn good track record in that so far Ramsey I think carrier analogy one step further in terms of the question on appetite appetite is good.

Speaker Change: <unk> appetite.

Speaker Change: We're not hungry.

Speaker Change: So you go to the shopping mall or to the grocery store when you're hungry you buy a lot of stuff you.

Speaker Change: You get home and you realize you didn't need all that stuff.

Robert W. Hau: We're certainly seeing a lot of activity, but we're not hungry. And while we have tremendous capacity on our balance sheet and could do deals, we're making sure that what we see is of good value and brings value to our shareholders before we go ahead and strike. Fantastic. Thanks. Next, we'll go to the line of Christopher Kennedy from William Blair. Please go ahead.

Speaker Change: We're certainly seeing a lot of activity.

Speaker Change: But we're not hungry and while we have.

Speaker Change: Tremendous capacity on our balance sheet and could do deals.

Speaker Change: We're making sure that what.

Speaker Change: What we see is a good value and brings value to our shareholders before we go out and strike on it.

Speaker Change: Fantastic. Thanks.

Speaker Change: Thanks very much.

Speaker Change: Next we'll go to the line of Christopher Kennedy from William Blair. Please go ahead.

Christopher Kennedy: Good morning, Thanks for taking the question. So we have good targets for the value added solutions for Clover is there a way to think about the opportunity for some of the other operating systems, such as Caret DNA Since act or office.

Operator: Next, we'll go to the line of Christopher Kennedy from William Blair. Please go ahead. Good morning.

Frank J. Bisignano: Well, I think we haven't articulated goals around them, but they're clearly embedded in our guide and the things we think about our growth. I think what we think about, even at a more broader standpoint, are what those are, right? And you can go across the board from our fraud integration products, like advanced defense, to how we bring in Cash Flow Central, you heard us talk about that, and that really hangs both in the SMB space through our own distribution and then, you know, obviously attached to a banking product.

Well I think I I think.

Christopher Kennedy: We have not articulated goals around them, but they're clearly embedded in our guide and the things that you think about our growth rates right.

Christopher Kennedy: I think what we think about even out a more broader standpoint is what numbers are right and you could go across the board from our fraud integration products.

Christopher Kennedy: Advanced defense to how even when we bring in cash flow Central you heard us talk about that and that really hangs.

Christopher Kennedy: Both in the SMB space.

Christopher Kennedy: Through our own distribution and then.

Christopher Kennedy: Obviously attached to our banking product.

Frank J. Bisignano: I think, you know, over time we probably should come back with better clarity around some of it. Having said that, we've been selling value-added services to our clients, we've sold a gift product into our enterprise for a long time. We've sold different forms of data and information to them, you know, so I think really the way we look at it at the large macro level on the enterprise is really that, you know, you can go back to the circle that we used to have about we're going to sell a core, but really all the revenue comes when growth comes from... And I think in reality, when you look at how we report, we are reporting our economics and some of those actually value-added services as business lines also.

Christopher Kennedy: I think you know overtime.

Christopher Kennedy: Probably should come back with better clarity around some of it having said that we've been selling value added services to our clients to ensure they get product into elk and comprise for a long time, we have sold.

Christopher Kennedy: All of the different forms of data information to them.

Christopher Kennedy: So I think I think really the way we look at it at the large macro level on enterprise. It really that you know you can go back to the <unk> goal that we used to have about.

Christopher Kennedy: To sell a core but really all of the revenue comes by and growth comes from.

Christopher Kennedy: Great credit.

Christopher Kennedy: Digital.

Christopher Kennedy: And you know in their own right. Those are value added services hanging off of core the same is true.

Christopher Kennedy: In our enterprise business in merchant.

Operator: Next, we'll go to... Yeah, next we'll go to the line of Jamie Friedman from Susquehanna. Please go ahead.

Christopher Kennedy: In reality when you look at how we report we are reporting.

Operator: Hi, good morning, and I want to mention I appreciate the incremental disclosures. The segmentation is really helpful.

Christopher Kennedy: Our our economics in some of those actually value added services and business lines also so.

Operator: I wanted to ask you about government. Frank, forgive me if I mess this up because the transcript is not out yet, but I thought you said it's a $500 million category. Again, I apologize if I heard that wrong. But what I wanted to ask is, is it correct that that rolls into the financial solutions segment? If possible, if you could unpack, like, where in there, like, is it issuing specifically? And generally, how are you going to market it to the government? Thank you.

Christopher Kennedy: I'll go think about it a little more but I think you know encompass.

Christopher Kennedy: And the economics, and how we show up.

Christopher Kennedy: That's right.

Christopher Kennedy: Yeah.

Christopher Kennedy: Next we'll go to Ken.

Christopher Kennedy: Next we'll go to the line of Jamie Friedman from Susquehanna. Please go ahead.

Jamie Friedman: Alright, good morning, and I wanted to mentioned I.

Jamie Friedman: The incremental disclosures the segmentation is really helpful. I wanted to ask about government Frank you right. If I mess this up because the transcripts.

Jamie Friedman: Yeah, but I thought you said its a $500 million category again, I apologize if I heard that wrong, but what I wanted to ask is is it correct that that rolls into the financial solutions segment and.

Jamie Friedman: If possible if you could unpack like we're in there like is it issuing specifically and generally how are you going to market with government. Thank you.

Frank J. Bisignano: So, why don't I start with how we go to government, how we go to marketing government. You know, we've been focused on government as a very large vertical, call it that. And that is everywhere, from state and local to federal. And so we have a team, and their sole job is government, right?

Speaker Change: So why don't I start with how it got government, how we go to market and government.

Speaker Change: We have been focused on government as a very large.

Speaker Change: Vertical call it.

Speaker Change: And that is everywhere from state and local to federal.

Speaker Change: And so we have a team and their sole job is government right and.

Frank J. Bisignano: And the traffic in the transactions you've even heard. And, you know, our thought was always, it transcends the org. That's why we have a dedicated client sales force for it. Because, you know, at times, we have opportunities to bid on merchant acquiring. At times, you've heard us talk about delivering FINVAC. You know, the government, you know, is, you know, we called out the half billion because it demonstrated where we started, which was very, very small in relation to growth, but it transcends most things.

Speaker Change: The traffic in the transaction Julian that hurt.

Speaker Change: And.

Speaker Change: Our thought is always.

Speaker Change: It transcends the org.

Speaker Change: It's why we have a dedicated client salesforce to it.

Speaker Change: As you know at time, we have opportunities to bid on merchant acquiring at.

Speaker Change: <unk> heard us talk about delivering things back.

Speaker Change: You know the government.

Speaker Change: Is.

Speaker Change: We called out the house Bill yet.

Speaker Change: It demonstrated where we started which was very very small ticket growth. It transcends what segments and you know on any given day almost any one of our products can play in the government space right.

Frank J. Bisignano: And, you know, on any given day, almost any one of our products, can play in the government space. Right, you know, so I don't know if that answers your question, but I think about it as a dedicated coverage model, right, transcending the businesses, and it can be anywhere from Alcor, Finzac, which we just delivered, to Money Network, to Merchant Acquiring, and we really love this segment, vertical, however you want to think about it, you know, and we have a great, great team that knows how to cover government, and, you know, we've been very fortunate, and I went.

Speaker Change: So I don't know if that answers your question, but I think that is dedicated coverage model right transcending the business is at.

Speaker Change: And it can be anywhere from our core.

Speaker Change: Exactly which way, they're still levered to money network, the merchant acquiring and and we really love it.

Speaker Change: Segment.

Speaker Change: Article However, you want to think about it.

Speaker Change: You know and we have a great great team that knows how to cover government and we've been very fortunate in Atlanta.

Speaker Change: Great. Thanks for the color.

Speaker Change: Thank you and our final question will come from James Faucette from Morgan Stanley. Please go ahead.

Operator: Great. Thanks for the call. Thank you. And our final question will come from James Fawcett from Morgan Stanley. Please go ahead. Great, thank you very much. I'm wondering if you can help us understand not only where you're seeing success with Clover in the market.

James Faucette: Great. Thank you very much.

James Faucette: Okay.

James Faucette: Can you help us understand not only where youre seeing success with clover and the market competitively, but how youre thinking about continuing to improve its positioning in the market I mean, it seems like value added services is a key part of that but.

James Faucette: Are there other things or aspects, we should be thinking about it.

Operator: Thank you. And our final question will come from James Fawcett from Morgan Stanley. Please go ahead.

James Faucette: Love to get your sense of what your win rates. If you have any idea of that versus other competitors in the market. Thank you very much.

Frank J. Bisignano: while I try to be as clear as possible on this. Clover. That covers the whole SMB market and expands a little further because you've heard about the thousands of clubbers we delivered at the quarter convention, right? You know, it's a 30% grower today.

Speaker Change: Well I tried to be.

Speaker Change: As clear as possible on us.

Speaker Change: Glover.

Speaker Change: The whole SMB market.

Speaker Change: And expand a little further because you heard about the thousands of Clubbers, we delivered in the quarter.

Speaker Change: Right.

Speaker Change: You know, it's a 30% grower today, we you know have talked very hard and have work to do to finish the swing on restaurant, but I feel very very clear about our ability there.

Frank J. Bisignano: We, you know, have talked very hard and have work to do to finish the swing on restaurants, but feel very, very clear about our ability there. You'll see us go deeper in professional services and in retail. Remember, it's a horizontal platform that we've brought vertical expertise to, and then, you know, we have great demand outside the U.S., as you heard us talk about, and, you know, it's an open platform that we continue to add more software to.

Speaker Change: Youll see us go deeper.

Speaker Change: Professional services and in retail remember, it's a horizontal.

Speaker Change: <unk> platform that we brought vertical expertise.

And then hill.

Speaker Change: We have great.

Speaker Change: And outside the U S that you heard us talk about.

Speaker Change: Along with the ability to continue to distribute throughout channel like more in L. A S V channel.

Frank J. Bisignano: And so when you put that all together and, you know, where we started with, I like to remind us inside the house and outside the house that we were seven engineers and three patents, and now, you know, we have more than a thousand software engineers. We're going to continue that. And I'd like to thank everyone for their attention today. Please reach out to our IOR team with any further questions and have a great day. Thank you.

Speaker Change: So I think.

Speaker Change: It spans the landscape of SMB, obviously no outgrowth.

Speaker Change: Is.

Speaker Change: New business acquisition.

Speaker Change: <unk> has demonstrated that.

Speaker Change: 30%, Mark and you know it's a it's an open platform that we continue to add.

Speaker Change: More software too.

Speaker Change: And so when you put that altogether and you.

Speaker Change: No.

Speaker Change: Where we started with a I'd like to remind us inside the house outside the house.

Speaker Change: We're a seven engineers and <unk>.

Operator: Thank you all for participating in the FISER First Quarter 2024 Earnings Conference Call. That concludes today's call. Please disconnect at this time and have a great rest of your day.

Speaker Change: And no you don't.

Speaker Change: We have more of that thousand software engineers across the world.

Speaker Change: We're going to continue invest heavily and you see it all across the world.

Speaker Change: That's correct.

Okay.

Speaker Change: And I'd like to thank everyone for their attention today, please reach out to our IR team with any further questions and have a great day. Thank you.

Speaker Change: Thank you all for participating in the Pfizer first quarter 2024 earnings conference call that concludes today's call. Please disconnect at this time and have a great rest of your day.