Q2 2024 Fiserv Inc Earnings Call

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Operator: Welcome to the Fiserv second quarter 2024 earnings conference call. All participants will be in a listen-only mode until the question and answer session begins following the presentation.

Julie Chariell: Welcome to the Fiserv second 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 will turn the call over to Julie Sherry, All senior Vice President of Investor Relations at Fiserv.

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

Julie Chariell: With me on the call today are Frank Bisignano, our Chairman, President, and Chief Executive Officer, and Bob Hau, our Chief Financial Officer. Our earnings release and supplemental materials for the quarter are available in the Investor Relations section of Fiserv.com. Please refer to these materials for an explanation of the non-GAAP financial measures discussed on this call, along with the reconciliation of those measures to the nearest applicable GAAP measure. Unless otherwise stated, performance references are year-over-year comparisons.

Speaker Change: 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.

Speaker Change: 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 our year over year comparisons.

Julie Chariell: Our remarks today will include forward-looking statements about, among other things, expected operating and financial results and strategic initiatives. Such forward-looking statements may differ materially from actual results and are subject to a number of risks and uncertainties. You should refer to our earnings release for a discussion of these risk factors. Now, I'll turn the call over to Frank. Thank you, Julie.

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

Julie Chariell: <unk> 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 you should refer to our earnings release for a discussion of these risk factors.

Frank J. Bisignano: And now I'll turn the call over to Frank Thank.

Frank J. Bisignano: And thank you all for joining us today to discuss second quarter results that bring us closer to another year of double-digit organic revenue and adjusted earnings per share growth. Fiserv delivered strong results across our business, with second quarter adjusted earnings per share of $2.13, 18% driven by continued healthy revenue growth and further operating margin expense. Adjusted revenue growth was 7%, and adjusted operating margin rose 160 basis points to 38.4%.

Frank: Thank you Julie and thank you all for joining us today to discuss second quarter results are bringing us closer to another year of double digit organic revenue and adjusted earnings per share growth.

Frank: <unk> delivered strong results across our businesses with second quarter adjusted earnings per share of $2.13 up 18% driven by continued healthy revenue growth and further operating margin expansion.

Frank: Adjusted revenue growth was 7% and adjusted operating margin Rose 160 basis points to 38.4% organic revenue growth was 18%.

Frank J. Bisignano: Organic revenue growth was 18%. We can point to many highlights in our business during the quarter, including Clover revenue up 28%, Accelerated Organic Revenue Growth in Financial Solutions to 8%, multiple wins with marquee clients, including Verizon and Apple, plus new clients in important verticals such as Petro, Gaming, Government, and Healthcare. Outbreak cash flow was $1 billion in the quarter and $4 billion over the last 12 months.

Frank: We can point to many highlights in our business during the quarter, including Clover revenue up 28% accelerated organic revenue growth in financial solutions to 8% multiple wins with marquee clients, including Verizon and Apple plus new clients and employees.

Frank: In verticals, such as Petro gaming government and health care.

Speaker Change: Our free cash flow was $1 billion in a quarter and $4 billion over the last 12 months and we returned one $5 billion to shareholders via share repurchases.

Frank J. Bisignano: And we returned $1.5 billion to shareholders via share repurchase. This month we are celebrating the 40th anniversary of Five, along with the fifth anniversary of the merger between Fiserv and First Data. Our vision back in 2019 was that if we brought together scaled platforms supporting a full breadth of solutions, merchant acquiring, debit and credit issuer services, digital payments of all kinds, and core bank account systems modernized with cloud technology, then clients would find value in the combination and the integration, and Fiserv would become a partner of choice with unparalleled global reach. Today, we can see that's exactly what has happened.

Speaker Change: This month, we are celebrating the 40th anniversary of buys shares along with the fifth anniversary of the merger between Pfizer and first data our vision back in 2019 was that we brought together scaled platforms supporting a full breadth of solutions.

Speaker Change: And acquiring debit and credit issuer services digital payments of all kinds and core bank account systems modernized with cloud technology, then clients will find value in the combination and the integration and five share will become a partner of choice.

Speaker Change: With unparalleled global reach today, we can see that's exactly what has happened.

Frank J. Bisignano: As we realized revenue and cost synergies over this time, we increased our investment in technological innovation. Our purpose has been to deliver solutions to clients of all kinds, established and new, large and small, local and global, spanning all verticals. With the proper amount of disrupting ourselves then and now, Fiserv is better able to run, optimize, and grow our business. And now, we find ourselves at this moment.

Speaker Change: As we realize revenue and cost synergies over this time, we increased our investment in technology innovation.

Herb: Herb this has been to deliver solutions to clients of all kinds established and new.

Herb: Large and small local and global spanning all vertical.

Herb: With a proper amount of disrupting ourselves then and now five serve us better able to run and optimize and grow our business and now we find ourselves at this moment singular and our ability to deliver a breath of leading products across a diverse.

Frank J. Bisignano: Singular in our ability to deliver a breadth of leading products across a diverse base of clients and demonstrate accelerated growth for the past three years. After five years of innovation, in some ways, what's old is new again. Let me share three examples of how our clients are engaging in some of our traditional businesses as new ways to add and retain their own customers. First, in Merchant Acquiring.

Herb: Base of clients and demonstrating accelerated growth for the past three years.

Herb: After five years of innovation and some ways, what's old is new again.

Speaker Change: Let me share three examples of how our clients are engaging in some of our traditional businesses and new ways to add and retain their own customers.

Speaker Change: First in merchant acquiring.

Frank J. Bisignano: Banks are adding this service as a way to grow with small and medium-sized business customers and choosing Fiserv for its leading solutions, including Clover. We already have nearly 900 financial institutions who offer merchant processing services to their small business clients, and thousands more who can still benefit from doing so. As an example, in Q2, we signed a merchant agreement with Connecticut Online Computer Center, known as COCC, which is a client-owned provider of banking technology.

Speaker Change: Banks are adding this service as a way to grow with small and medium size business customers and choosing fives or Bruce leading solutions, including Clover.

Speaker Change: We already have nearly 900, my agile institutions, who will offer a merchant processing services to their small business clients and thousands more who can still benefit from doing so as an example in Q2, we signed a merchant agreement.

Speaker Change: With Connecticut online computer center known as C. O C C, which is a client one provider of banking technology.

Frank J. Bisignano: The 150 community banks and credit unions on the COCC platform now have access to our acquiring services in support of their own hundreds of thousands of merchants. Second, in digital payments, Cash Flow Central takes the best of consumer bill pay and turns it from a cost center within banks to a revenue generator that appeals to small businesses with bill payment and presentment capability.

Speaker Change: 150 community banks and credit unions on the C. O Z platform now have access to our acquiring services.

Speaker Change: In support of their own hundreds of thousands of merchants.

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Speaker Change: And digital payments cash flow central takes the best of them consumer Bill days and turns it from a cost center was in banks to a revenue generator that appeals to small business with Delta Hemant and presentment capability.

Frank J. Bisignano: In the second quarter, we signed two more cash flow essential deals with multi-billion dollar banks, for a total of six in the few months since we introduced this solution. Cash Flow Central will go live this quarter, and the pipeline remains full. We are finding that as they go down this path, financial institutions are revitalizing their consumer bill pay offerings as well, answering the competition from the direct biller model. First Citizens, a top 20 U.S. bank with more than 200 billion assets, was one such consumer bill pay win in Q2. As a reminder, Fiserv is the largest provider of bank consumer bill pay services with over 20 million users on our check-free platform.

Speaker Change: In the second quarter, we signed two more cashless central deals with multibillion dollar banks for a total of six and a few months since we introduced this solution.

Speaker Change: Cash flows central will go live this quarter and the pipeline remains full.

Speaker Change: We are finding that as they go down this path financial institutions are revitalizing their consumer bill pay offerings as well answering the competition from the direct biller model.

Our citizens a top 20 U S bank with more than 200 billion in assets was one such consumer built a win in Q2.

Speaker Change: As a reminder, Pfizer is the largest provider of bank consumer Bill pay services with over 20 million users on our check free platform.

Frank J. Bisignano: Both Merchant Acquiring Solutions and Cash Flow Central are compelling because they provide revenue-generating opportunities for our financial institution clients. They also demonstrate a distinct value proposition for small businesses, which includes other products across our issuing and banking businesses. Next, we are integrating these solutions with Experience Digital, or XD, our new online and mobile banking solution.

Speaker Change: Well its merchant acquiring solutions and cash one of the central are compelling because they provide revenue generating opportunities for our financial institution clients.

Speaker Change: They also demonstrate a distinct value proposition for small businesses, which includes other products across our issuing and banking businesses next we're integrating these solutions, what they experienced digital or X D. A new online and mobile banking solution.

Frank J. Bisignano: And third, traditional enterprise merchants are turning to software that surrounds their payments functionality to enhance revenue and improve data integration, as we've seen from small businesses. The large and mid-market merchants who have been migrating to our omni-channel platform are increasingly integrating our value-added solutions. These include SnapPay, our ERP-integrated B2B bill presentment platform.

Speaker Change: And third traditional enterprise merchants are turning to software that surrounds their payments functionality to enhance revenue and improve data integration as we've seen from small businesses.

Speaker Change: Large and mid market merchants, who have been migrating to our omnichannel platform are increasingly integrating our value added solutions. These include snap pay our ERP integrated feed of the Bill Presentment platform gives solutions, where we used to have.

Frank J. Bisignano: GiveSolutions, where we support multiple leading retail and QSR enterprise clients, and Data Analytics, which I'll discuss a bit later. We continue to invest in new solutions, such as our new dedicated platform for paybacks, which is gaining momentum. In the second quarter, for instance, we were selected by Cantaloupe, a major provider of unattended payment devices such as vending machines, for our Exchange Payback Plus.

Speaker Change: Poor at multiple leading retail and U S. Our enterprise clients and data analytics, which I'll discuss a bit later, we continue to invest in new solutions, such as our new dedicated platform for paybacks, which is gaining momentum in the second quarter grants.

Speaker Change: Since we were selected by Cantaloupe.

Speaker Change: A major provider of unintended payment devices, such as vending machines for al.

Speaker Change: <unk> paid back platform.

Frank J. Bisignano: And we continue to integrate solutions across our two segments. One important example is our new partnership with Apple. That will enable new Apple Pay functionality with two of our next-generation solutions. One is Pay With Points, where loyalty points residing on the card accounts of our issuer clients can be redeemed for a transaction in the Apple Pay Wallet at checkout, serving as currency. We're a national partner given the breadth of our card accounts on file and our technical capability to maintain account point balances, convert and accept those points as payment, and then reconcile the balances.

Speaker Change: And we continue to integrate solutions across our two segments. One important example is our new partnership with Apple that will enable new Apple pay functionality with two of our next generation solutions, one is pay with points, where the loyalty points residing on the card accounts.

Speaker Change: <unk> of our issuer clients can be redeemed for a transaction in the Apple pay wallet at checkout, serving as currency.

Speaker Change: We're a natural partner given the breath of our card accounts on file and technical capability to maintain account went balances convert and accept those points as payment and then reconcile the balances.

Frank J. Bisignano: A second solution is installment loans on credit cards. This is a new feature that presents the consumer with the choice to pay for a purchase in a set of installments when using Apple Pay at checkout. This is differentiating in that consumers have only been provided with the option to pay for a purchase in installments after making a purchase on a credit card. With Apple, we will move this installment loan feature into the checkout flow, giving the consumer choice at the point of purchase.

Speaker Change: The second solution is installment loans or credit cards. This is a new feature that presents the consumer what the choice to pay for a purchase and a set of installments when using Apple pay at checkout.

Speaker Change: This is differentiated and that consumers have only been provided with the option to pay for a purchase and installment after making a purchase on a credit card with Apple will move this installment loan feature into the checkout flow given their consumer choice at the point.

Speaker Change: A purchase having this functionality at the point of sale from a digital wallet tend to drive greater cart conversion card usage and spending power. It also enables our issuing partners to more directly compete with buy now pay later using their existing credit card.

Frank J. Bisignano: Having this functionality at the point of sale from a digital wallet can drive greater cart conversion, card usage, and spending power. It also enables our issuing partners to more directly compete with Buy Now, Pay Later using their existing credit card products. Fiserv is unique in its reach across all parties involved here, the consumer, the digital wallet provider, the issuer, and the merchant.

Speaker Change: Alex Pfizer is unique in its reach across all parties involved here the consumer the digital wallet provider the issuer and the merchant. So we see multiple opportunities ahead as we enable this network effect to be a win win across the globe.

Frank J. Bisignano: So we see multiple opportunities ahead as we enable this network effect to be a win-win across the ecosystem. So let's turn to our Outlook for the vision. Based on strong performance in the quarter and conviction in our unique opportunity set, we're raising our adjusted earnings per share outlook to $8.65 to $8.80, an increase of $0.05 across the range. Our revenue outlook is unchanged at 15 to 17 percent organic growth. This performance for 2024 would represent the 39th consecutive year of double-digit adjusted EPS.

Speaker Change: System, so as parents or outlook for the business based on our strong performance in the quarter and conviction and a unique opportunity set we are raising our adjusted earnings per share outlook to $8.65 to $8 80, an increase of five.

Speaker Change: <unk> sense across a range our revenue outlook is unchanged at 15% to 17% organic growth. This performance for 2024 would represent the 39th consecutive year of double digit adjusted EPS growth.

Frank J. Bisignano: Turning to our segment highlight, in Merchant Solutions, starting with small business, we posted 4% volume, slightly ahead of the sales volume growth for the Fiserv Small Business Index, which rose 3.2% in Q2, as the pace of growth slowed from April to June. There are multiple reasons why outgrowth can differ from this U.S.-only index, including a global presence and different weightings across verticals.

Speaker Change: Turning to our segment highlights and merchant solutions, starting with small business, we posted 4% volume growth slightly ahead of the sales volume growth.

Speaker Change: <unk> serve small business index, which rose three 2% in Q2 as the pace of growth slowed from April to June.

Speaker Change: There are multiple reasons why outgrowth can differ from this U S only index, including our global presence and different weightings across verticals.

Frank J. Bisignano: For Clover, we have a very active second half of the year for new product rollout. We plan to launch additional restaurant software features that target our sweet spot in casual dining to enhance table management, kitchen operations, inventory, and cost management. In the fourth quarter, we'll be rolling out new software offerings in our two other target verticals, Services and Retail. We are very pleased with the initial sales of our restaurant order kiosk, and now we look forward to two new hardware opportunities.

Speaker Change: Club, where we have a very active second half of the year for new product Rollouts. We plan to launch additional restaurant software features that target, our sweet spot and casual dining they enhance table management kitchen operations inventory and call.

Speaker Change: Cost management, and the board, Florida will be rolling out new software offerings and out to other target verticals services and retail.

Speaker Change: We are very pleased with the initial sales of our restaurant order chaos and now we look forward to two new hardware opportunities first is the clover compact.

Frank J. Bisignano: First is the Clover Compact, which we rolled out this month, giving us a broader market opportunity with smaller merchants. And next, an important solution for our restaurant clients, order and pay at the table via a new handheld Clover Flex Pocket coming in August. And we're on pace with our international expansion. Pilots are set to go live in Brazil and Mexico in August, and then in September in Australia ahead of the 2025 launch.

Speaker Change: Which we rolled out this month, giving us a broader market opportunity with smaller merchants and next and important solution for our restaurant clients order and pay at the table. They are new handheld Clover blacks pocket coming in August.

Speaker Change: And we're on pace well international expansion pilots are set to go live in Brazil, and Mexico in August and then in September in Australia ahead of the 2020 vibe launch.

Frank J. Bisignano: In the enterprise merchant business, a key driver is the ongoing adoption of Commerce Hub, the orchestration layer that allows for easy integration with our growing portfolio of value-added solutions. We now have 230 clients live on Commerzhub and signed several more in Q2, including two large petrol retailers to extend a leading position in this vertical. Our financial solutions segment posted strong organic revenue growth of 8% in the quarter, above the high end of our 2024 guidance rate.

Speaker Change: And the enterprise merchant business a key driver is the ongoing adoption of commerce hub. The orchestration layer that allows for easy integration without growing portfolio of value added solutions. We now have 230 clients live on commerce hub inside.

Speaker Change: And several more in Q2, including two large petro retailers to extend our leading position in this vertical.

Speaker Change: Our financial solutions segment posted strong organic revenue growth at 8% in the quarter.

Speaker Change: Above the high end about 'twenty 'twenty four guidance range, we delivered faster organic growth in our banking business, while our core banking and credit Union clients continued to drive strong growth in our digital payments business.

Frank J. Bisignano: We delivered faster organic growth in our banking business, while our core banking and credit union clients continue to drive strong growth in our digital payments business. And we're adding new clients as well. In the second quarter, we had another example of winning the core account processing business in an M&A transaction. In this latest case, Sunflower Bank chose Fiserv after announcing the intent to acquire HomeStreet Bank to create a $17 billion bank by assets in January.

Speaker Change: We're adding new clients as well in the second quarter. We had another example of winning new core account processing business in an M&A transaction.

Speaker Change: This latest case Sun Valley Bank chose Pfizer after announcing the intent to acquire home Street bank to create a $17 billion bank by assets in January and is showing we manage the credit in Wuhan accounts for some of the world's leading issuers and provide technology.

Frank J. Bisignano: In issuing, we manage the credit and loan accounts for some of the world's leading issuers and provide technology to issuers and lenders in healthcare, government, and education. In June, we were very pleased to have won a strategic outsourcing agreement with Verizon to support their device financing activity and manage device payment agreements on Fiserv's Optus platform. Verizon chose Fiserv for the flexibility, optionality, and resiliency of our platform on the foundation of a trusted, long-standing relationship that spans multiple solutions.

Speaker Change: Two issuers and lenders and healthcare government and education.

Speaker Change: In June we were very pleased to have won a strategic outsourcing agreement with Verizon to support their device financing activity and manage device payment agreements on pfizer's off this platform.

Speaker Change: Ryzen shows Pfizer, the flexibility Optionality and resiliency of our platform on the foundation of a trusted long standing relationship that spans multiple solutions. This is another example of extending our issuer and loan processing capability.

Frank J. Bisignano: This is another example of extending our issuer and loan processing capability into adjacent verticals. In fact, we want another point of sale financing deal with an industrial equipment manufacturer to offer short-term loans through a dealer network across the globe using our First Vision platform. With that, I'll turn it over to Bob to discuss more on outperformance and finances. Thank you, Frank, and good morning, everyone.

Into adjacent verticals in fact, we wanted another point of sale financing deal with dress drill equipment manufacturer to offer short term loans through a dealer network across the globe using outburst vision platform.

Robert W. Hau: With that I'll turn it over to Bob to discuss more on outperformance in financials. Thank you Frank and good morning, everyone. If you're following along on our slides I will cover additional detail on total company and segment performance, starting with our financial metrics and trends on slide four.

Robert W. Hau: If you're following along on our slides, I'll cover additional detail on total company and segment performance, starting with our financial metrics and trends on slide four. Our performance in the second quarter showcased our ability to sustain strong revenue growth and margin expansion. Second quarter total company adjusted revenue grew 7% to $4.8 billion, and adjusted operating income grew 12% to $1.8 billion, resulting in an adjusted operating margin of 38.4%, an increase of 160 basis points versus the prior year.

Robert W. Hau: Our performance in the second quarter showcased our ability to sustain strong revenue growth and margin expansion.

Robert W. Hau: Second quarter total company adjusted revenue grew 7% to $4 8 billion and adjusted operating income grew 12% to $1 $8 billion.

Robert W. Hau: Resulting in an adjusted operating margin of 38, 4% an increase of 160 basis points versus the prior year.

Robert W. Hau: For the first half of the year, adjusted revenue grew 7% to $9.3 billion, and adjusted operating income grew 13% to $3.5 billion, resulting in an adjusted operating margin of 37.2%, an increase of 180 basis points versus the prior year. Organic revenue grew 18% in the quarter, with strength in both segments. The transitory contribution from Argentina was five points to our total organic growth in the quarter, down from seven points in Q1.

Robert W. Hau: For the first half of the year adjusted revenue grew 7% to nine 3 billion and adjusted operating income grew 13% to $3 $5 billion, resulting in an adjusted operating margin of 37, 2% an increase of 180 basis points.

Robert W. Hau: The prior year organic revenue grew 18% in the quarter with strength in both segments.

Robert W. Hau: The transitory contribution from Argentina was five points to our total organic growth in the quarter down from seven points in Q1.

Robert W. Hau: In the first six months of the year, organic revenue grew 19%. Second quarter adjusted earnings per share was $2.13 compared to $1.81 in the prior year, an 18% increase and above previous full year guidance of 14-16%. Year-to-date, our adjusted earnings per share increased 18% to $4, compared to $3.38 in the prior year. Free cash flow for the quarter was $1 billion, and $1.5 billion for the first half of the

Robert W. Hau: In the first six months of the year organic revenue grew 19% second.

Robert W. Hau: Second quarter adjusted earnings per share was $2 13, compared to $1 81 in the prior year up 18% and above previous full year guidance of 14% to 16%.

Robert W. Hau: Year to date, our adjusted earnings per share increased 18% to $4 compared to $3.38 in the prior year.

Robert W. Hau: Free cash flow for the quarter was $1 billion and $1 5 billion for the first half of the year.

Robert W. Hau: We expect free cash flow to be much higher in the second half of this year due to the timing of cash flows for the Green Tax Credit Program. Starting on slide five, organic revenue growth in the merchant solution segment was 28% in the quarter and 32% year to date. For the quarter, this includes a 10-point benefit from above-average interest and inflation in Argentina. Without this transitory benefit, organic growth would have been 18%.

Robert W. Hau: We expect free cash flow to be much higher in the second half of this year due to the timing of cash flows for the Green tax credit program turning to performance by segment starting on slide five organic revenue growth in the merchant solutions segment was 28% in the quarter and 32% year to date for.

Robert W. Hau: For the quarter. This includes a 10 point benefit from above average interest and inflation in Argentina.

Robert W. Hau: Without this transitory benefit organic growth would have been 18%.

Robert W. Hau: On slide 6, we've again included a summary of the impact of excess Argentine inflation and interest on total Fiserv and merchant segment revenue, along with the offsetting headwind from currency devaluation, which impacts adjusted revenue. Adjusted revenue growth for merchant solutions was 9% in the quarter and 11% year-to-date. The quarterly results include a 19 percentage point currency headwind, largely from the Argentine peso, after a sharp devaluation in late December last year. Similar to Q1, the currency headwind to adjusted revenue growth was much higher than the inflation and interest tailwind in Q2.

Robert W. Hau: On slide six we've again included a summary of the impact of excess Argentine inflation and interest on total fiserv and merchant segment revenue along with the offsetting headwinds from currency devaluation, which impacts adjusted revenue adjusted revenue growth for merchant solutions was 9% in the quarter and 11% year.

Robert W. Hau: Today.

Robert W. Hau: The quarterly results include a 19 percentage point currency headwind largely from the Argentine peso after a sharp devaluation in late December of last year.

Robert W. Hau: Similar to Q1, the currency headwind to adjusted revenue growth was much higher than the inflation and interest tailwind in Q2.

Robert W. Hau: Moving to the business line, small business, organic, and adjusted revenue growth in the quarter was 35% and 13%, respectively. Clover revenue grew 28% in the second quarter on an annualized payment volume growth of 17%. The spread between revenue and volume growth continues to reflect a higher penetration of value-added solutions, continued channel makeshift, and value-based pricing. Bass penetration stayed constant sequentially at 20% in Q2, an improvement from prior years, where we typically see a seasonal decline from Q1 to Q2.

Robert W. Hau: Moving to the business lines small business organic and adjusted revenue growth in the quarter was 35% and 13% respectively.

Robert W. Hau: What were revenues grew 28% in the second quarter on an annualized payment volume growth of 17%.

Robert W. Hau: The spread between revenue and volume growth continues to reflect a higher penetration of value added solutions continued channel mix shift and value based pricing.

Robert W. Hau: Vast penetration stayed constant sequentially at 20% in Q2, an improvement from prior years, where we typically see a seasonal decline from Q1 to Q2.

Robert W. Hau: Vast penetration was driven by growth in Clover Capital and the Clover SaaS package and should expand with several new offerings coming in the second half. Overall, we remain on pace to meet our 2026 targets. Enterprise Organic and Adjusted Revenue Growth in the quarter was 27% and 9%, respectively, driven by transaction growth of 8% and higher VAS penetration.

Robert W. Hau: Vast penetration was driven by growth in corporate capital and the Clover SaaS package and should expand with several new offerings coming in the second half.

Robert W. Hau: Overall, we remain on pace to meet our 2026 targets enterprise organic and adjusted revenue growth in the quarter was 27% and 9%, respectively, driven by transactions growth of 8% and higher bass penetration.

Robert W. Hau: As with small business, organic growth at Enterprise includes some transitory Benefit from excess inflation and interest in Argentina. We're pleased with the pace of client uptake and growth in Commerce Hub. Daily transactions in Commerce Hub are up 3.5 times from Q1 levels, and clients are increasingly connecting to enhanced solutions. Three of the most popular are Paid by Bank, which allows consumers to pay via ACH payment from their bank account at the point of sale.

Robert W. Hau: As with small business organic growth in enterprise include some transitory benefit from excess inflation and interest in Argentina, We're pleased with the pace of client uptake and growth in commerce hub Dave.

Speaker Change: Daily transactions and Commerce, all are up three five times from Q1 levels and clients are increasingly connecting to enhanced solutions three of the most popular or pay by bank, which allows consumers to pay via a C. H payment from their bank account at the point of sale.

Robert W. Hau: Online EBT, which lets merchants grow by offering payment via government benefit programs, and digital payouts, which merchants increasingly use to pay employees and vendors. Finally, processing organic and adjusted revenue in the quarter declined by 7% and 8%, respectively.

Speaker Change: Online E B T, which less merchant grow by offering payment via government benefit programs, and digital payouts, which merchants increasingly use to pay employees and vendors.

Speaker Change: Finally processing organic and adjusted revenue in the quarter declined by 7% and 8% respectively.

Robert W. Hau: This business represents the back-end processing we do for our partners where they own the merchant relationship. A few large processing clients experienced declines in their volumes and revenue in Q2. Year-to-date, processing organic and adjusted revenue are both up 1%, similar to our guidance for flat adjusted revenue over the medium term. Turning to some merchant highlights outside the U.S. First, in EMEA, the general tone of business is improving as inflation is easing and consumer confidence begins to rise across the region.

This business represents the backend processing, we do for our partners, where they own the merchant relationship.

Speaker Change: A few large processing clients experienced declines in their volumes and revenue in Q2.

Speaker Change: Today processing organic adjusted revenue are both up 1% similar to our guidance for flat adjusted revenue over the medium term.

Speaker Change: Turning to some merchant highlights outside the U S.

Speaker Change: First in EMEA, the general tone of business is improving as inflation is easing and consumer confidence begins to rise across the region.

Robert W. Hau: We had a good quarter for new wins and renewals with follow-on business, and we are finding that our professional services capability in the region is a competitive differentiator that reinforces our right to win. We expanded our strategic partnership with BNP Paribas, one of the leading banks in Europe, allowing it to extend its current merchant acquiring footprint into Germany. Also in Germany, H&M Group, the second largest clothing retailer in the world, selected us as their strategic partner for point of sale, building on our existing relationship in Mexico and highlighting the value we bring to multinational retail clients.

Speaker Change: We had a good quarter for new wins and renewals with follow on business and we're finding that our professional services capability in the region is a competitive differentiator that reinforces our right to win.

Speaker Change: We expanded our strategic partnership with BNP Powerbar, one of the leading banks in Europe, allowing it to extend its current merchant acquiring footprint into Germany.

Speaker Change: Also in Germany, H and M group, the second largest clothing retailer in the world selected us as their strategic partner for point of sale.

Speaker Change: Building on our existing relationship in Mexico, and highlighting the value we bring to multinational retail clients. We're also working with Lloyds banking group one of the leading banks in the U K and a key partner for Pfizer on a major business transformation program for carbonate or merchant acquiring joint venture.

Robert W. Hau: We're also working with Lloyds Banking Group, one of the leading banks in the UK, and a key partner for Fiserv on a major business transformation program for CardNet, our merchant acquiring joint venture. Together, we will deliver tailored solutions including Clover, Dynamic Currency Conversion, and Merchant Cash Advance to add new and grow existing merchant relationships. We've also been selected by Deutsche Bahn, the national railway company of Germany and one of the largest railway companies in the world, to provide terminals, network services, and value-added solutions.

Speaker Change: Together, we will deliver tailored solutions, including Clover dynamic currency conversion and merchant cash advance to add new and grow existing merchant relationships.

Speaker Change: We've also been selected by Deutsche Upon the National Railway company of Germany, and one of the largest railway companies in the world to provide terminals network services and value added solutions, we extended our relationship with Apso, one of Africa's largest diversified financial services groups, we will be.

Robert W. Hau: We extended our relationship with AASA, one of Africa's largest diversified financial services companies. We will be implementing our full ACWIS solution or acquiring as a service, which will allow AFSA to process e-commerce transactions in nine African countries. Aquus integrates multiple value-added solutions, including Payment Gateway, Merchant Onboarding, Merchant Portal, OmniPay BackOffice, OpenFX, and Real-Time Fraud Monitoring. And finally, we've extended our merchant acquiring relationship with Opka Polska, the largest convenience store chain in Central and Eastern Europe, based in Poland, with over 11,000 stores. We've grown to provide more than 20 products to this innovative client, most recently adding Merchant Cash Advance, a growing value-added solution for us in the region. Moving to Latin America.

Speaker Change: Implementing our full aqua solution or acquiring as a service.

Speaker Change: This will allow apps to process e-commerce transactions and nine African countries.

Speaker Change: Equis integrates multiple value added solutions, including payment gateway merchant Onboarding merchant portal.

Speaker Change: We paid back office open FX and real time fraud monitoring and finally, we've extended our merchant acquiring relationship with <unk>, the largest convenience store chain in central and Eastern Europe based in Poland with over 11000 stores, we've grown to provide more than 20 products to this innovative client MAU.

Speaker Change: Recently, I think merchant cash advance our growing value added solution for us in the region.

Speaker Change: Moving to Latin America in Brazil, the extension of our caution relationship to their bill pay locations has begun to ramp with sequential volume growth of over 20% in Q2.

Robert W. Hau: In Brazil, the extension of a cost relationship to their bill pay locations has begun to ramp, with sequential volume growth of over 20% in Q2. In addition, we went live with our pilot for our PICS platform to act as a payment service provider to over 30 merchants. This capability came through the acquisition of SLED in November of 2023 and will open up new growth opportunities from instant payment activity in Brazil. Overall, we continue to grow our instant payment transactions in Brazil and Argentina.

Speaker Change: In addition, we went live with a pilot for our <unk> platform to act as a payment service provider to over 30 merchants. This capability came through the acquisition of sled in November of 2023, and will open up new growth opportunities from instant payment activity in Brazil.

Speaker Change: Overall, we continue to grow our instant payment transactions in Brazil, and Argentina and.

Robert W. Hau: In Brazil, we reached more than 400 million transactions in Q2, up 21% from Q1 levels, and we doubled our number of transactions in Argentina. In Asia Pacific, we went live with our pilot merchant acquiring services in New Zealand, a new market for Pfizer. We plan to target omni-channel merchants primarily in the hospitality and retail segments, as well as e-commerce only merchants, aggregation partners, and payfax. Adjusted operating income in the merchant solutions segment increased 18% to $882 million in the quarter, with an adjusted operating margin of 290 basis points to 36.6%. Year-to-date adjusted operating income increased 23% to $1.7 billion, with an adjusted operating margin of 360 basis points to 35.4%. As noted last quarter, interest expense from anticipation revenue is recorded below the operating income line.

Speaker Change: In Brazil, we reached more than 400 million transactions in Q2 up 21% from Q1 levels and we doubled our number of transactions in Argentina.

Speaker Change: In Asia Pacific, We went live with a pilot merchant acquiring services in New Zealand, a new market for Fiserv, we plan to target Omnichannel merchants, primarily in the hospitality and retail segments as well as ecommerce only merchants aggregation partners and pay facts.

Speaker Change: Adjusted operating income in the merchant solutions segment increased 18% to $882 million in the quarter with adjusted operating margin up 290 basis points to 36, 6% year.

Speaker Change: Year to date, adjusted operating income increased 23% to $1 $7 billion with the adjusted operating margin up 360 basis points to 35, 4% as noted last quarter interest expense from anticipation revenue is recorded below the operating income line.

Robert W. Hau: If the interest costs from anticipation were included in operating income, merchant-adjusted operating margins would have expanded 220 basis points for the quarter and 300 basis points year-to-date. Turning to slide 7 on the financial solutions segment, organic revenue grew 8% in the quarter and 6% year-to-date, in line with our full-year outlook of 5% to 7%. Looking at the business lines, digital payments, organic, and adjusted revenue each grew by 8% in the quarter. Growth in Zelle transactions continues to be strong at 43%, and we signed one of our largest bank clients yet on Zelle, First Horizon Bank with $82 billion in assets, and the pipeline includes other large banks.

Speaker Change: The interest costs from anticipation were included in operating income merchant at just the operating margins would've expanded 220 basis points for the quarter and 300 year to date turning to slide seven on the financial solutions segment organic revenue grew 8% in the quarter and 6% year to date in line.

Speaker Change: With our full year outlook of 5% to 7% looking at the business lines digital payments organic and adjusted revenue each grew by 8% in the quarter.

Speaker Change: Growth in Zelle transactions continue to be strong at 43% and we signed one of our largest bank clients yet on Zelle first horizon bank with $82 billion in assets and our pipeline includes other large prospects.

Robert W. Hau: We continue to see strong demand from clients for FedNow and RTP integration. In Q2, we signed 32 FIs to FedNow, bringing our total signed to nearly 300. In issuing, organic and adjusted revenue grew 9% and 4%, respectively, in the quarter, driven by account growth internationally and new loan accounts in North America.

Speaker Change: We continue to see strong demand from clients for fed now in RTP integration in.

Speaker Change: In Q2, we signed 32 F EIS to fed now, bringing our total signed to nearly 300.

Speaker Change: In issuing organic and adjusted revenue grew 9% and 4% respectively in the quarter driven by a comp growth internationally and new loan accounts in North America.

Robert W. Hau: Another growth vertical that we've been highlighting is government, where we continue to win and convert large programs, including the California Employment Development Department, which has enrolled over 1 billion of our Money Network prepaid cards, funding nearly $5 billion. In Q2, we won an electronic funds transfer mandate with a major U.S. agency, which should help extend our double-digit growth in the federal market. We also won several state and local deals on the merchant side of the business, including Texas, Arizona, North Carolina, and the City of San Francisco.

Speaker Change: Another growth vertical that we've been highlighting is government, where we continue to win and convert large programs, including the California employment development Department, which has enrolled over 1 billion of our money network prepaid cards funding nearly $5 billion.

Speaker Change: In Q2, we wanted electronic funds transfer mandate with a major U S agency, which should help extend our double digit growth in the federal market.

Speaker Change: We also won several state and local deals on the merchant side of the business, including Texas, Arizona, North Carolina, and the city of San Francisco. Meanwhile, we have continued to make strides with prior large wins implementing the first phase of the target program without put services.

Robert W. Hau: Meanwhile, we are continuing to make strides with prior large wins, implementing the first phase of the Target Program with output services, though we expect the vast majority of revenue will start in Q1 2025 when the Circle of Card Accounts begins to go live. Issuing has a meaningful and growing presence outside the U.S., and we have been investing to roll out the next generation of First Vision, our international operating platform. In Q2, we won our first client on the new First Vision platform in Brazil. Banking organic and adjusted revenue grew 6% and 4%, respectively, in the quarter. Excluding periodic revenue, organic revenue grew 4%.

Frank J. Bisignano: The way we expect the vast majority of revenue will start in Q1 225 when the Serpo card accounts begin to go live. Issuing has a meaningful and growing presence outside the US, and we have been infesting to roll out the next generation of first vision, our international operating platform. In Q2, we want our first client on the new First Vision platform in Brazil, thinking organic and adjusted revenue grew six and four percent, respectively, in the quarter. Excluding periodic revenue, organic revenue grew four percent in the quarter. We had two things that went into this quarter, including Metropolitan Commercial Bank, a seven billion our bank, and existing Fiserv Corkline that is decided to build immigration path to Finsack.

Speaker Change: Though we expect the vast majority of revenue will start in Q1 2025, when the circle card accounts begin to go live.

Speaker Change: Issuing has a meaningful and growing presence outside the U S and we've been investing to rollout. The next generation of first vision our international operating platform. In Q2, we won our first client on the new first vision platform in Brazil.

Speaker Change: <unk> organic and adjusted revenue grew 6% and 4% respectively in the quarter, excluding periodic revenue organic revenue grew 4% in the quarter. We had two things that wins this quarter, including Metropolitan commercial Bank, a $7 billion bank and an existing Pfizer core client that has decided to build in migration.

Robert W. Hau: We had two FinZep wins this quarter, including Metropolitan Commercial Bank, a $7 billion bank and an existing Fiserv core client that has decided to build a migration path to Finza. The pipeline remains robust, including embedded finance opportunities, and we completed the integration of FinZAC with Commerce Hub. This allows our enterprise merchants to embed a robust suite of financial services for their customers across shopping and checkout experiences. Second quarter adjusted operating income for the financial solutions segment was up 6% to $1.1 billion, and adjusted operating margin was consistent with a very strong second quarter last year at 45.9%.

Speaker Change: Path to Fintech, the pipeline remains robust, including embedded finance opportunities and we completed the integration of Fintech with commerce hub.

Frank Bisignano: The pipeline remains robust, including embedded finance opportunities, and we completed the integration of Finsack with Commerce Hub. This allows our enterprise merchants to embed a robust suite of financial services for their customers across shopping and checkout experiences. Second quarter adjusted operating income for the financial solution settlement was up 6% to 1.1 billion dollars, and adjusted operating margin was consistent with a very strong second quarter last year at 45.9%. Year today adjusted operating income for the segment was up 6% to 2.1 billion dollars, with adjusted operating margin of 80 basis points to 45%.

Speaker Change: This allows our enterprise merchants to embed a robust suite of financial services for their customers Cross shopping and checkout experiences.

Speaker Change: Second quarter adjusted operating income for the financial solutions segment was up 6% to $1 1 billion and adjusted operating margin was consistent with a very strong second quarter last year at 45, 9%.

Speaker Change: Year to date adjusted operating income for the segment was up 6% to $2 1 billion with adjusted operating margin up 80 basis points to 45%.

Robert W. Hau: Year-to-date adjusted operating income for the segment was up 6% to $2.1 billion, with adjusted operating margin up 80 basis points to 45%. Now, let me wrap up with some remaining details on the financial... The corporate adjusted operating loss was $134 million in the quarter and $282 million year-to-date, in line with our expectations.

Frank Bisignano: Now let me wrap up with some remaining details on the financials. The corporate adjusted operating loss was $134 million in the quarter, and $282 million here today, in line with our expectations. The adjusted effective tax rate in the quarter was 19.9%, and 19.1% for the first half, and we continue to expect the full year rate to be approximately 20%. Total debt outstanding was $25.5 billion on June 30. Our debt to adjusted the even dollar ratio was steady at 2.8 times within our target leverage range. During the quarter, we repurchased 10 million shares for $1.5 billion, bringing our total cash return to shareholders for the last 12 months to just over $5 billion, and nearly $15 billion since the 2019 merger.

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

Speaker Change: The corporate adjusted operating loss was $134 million in the quarter and $282 million year to date in line with our expectations.

Robert W. Hau: The adjusted effective tax rate in the quarter was 19.9% and 19.1% for the first half, and we continue to expect the full-year rate to be approximately 20%. Total debt outstanding was $25.5 billion on June 30th. Our debt to adjusted EBITDA ratio was steady at 2.8 times, within our target leverage range. During the quarter, we repurchased 10 million shares for $1.5 billion. Bringing our total cash return to shareholders for the last 12 months to just over $5 billion and nearly $15 billion since March 2019, we have 32 million shares remaining authorized for repurchase at the end of the quarter.

Speaker Change: The adjusted effective tax rate in the quarter was 19, 9% and 19, 1% for the first half and we continue to expect our full year rate to be approximately 20%.

Speaker Change: Total debt outstanding was $25 $5 billion on June 30th our debt to adjusted EBITDA ratio was steady at two eight times within our target leverage range during the quarter, we repurchased 10 million shares for one $5 billion.

Speaker Change: Our total cash returned to shareholders for the last 12 months to just over $5 billion and nearly $15 billion since the 2019 merger.

Frank Bisignano: We have 32 million shares remaining authorized for repurchase at the end of the quarter.

Speaker Change: We have 32 million shares remaining authorized for repurchase at the end of the quarter turning to slide nine as Frank said earlier, we are raising our full year adjusted earnings per share outlook to a range of $8 65 to.

Robert W. Hau: Turning to slide 9, as Frank said earlier, we are raising our full-year adjusted earnings per share outlook to a range of $8.65 to $8.80, up from $8.60 to $8.75, and an acceleration in forecasted adjusted EPS growth to 15 to 17 percent from 14 to 16 percent. We are maintaining our 2024 Organic Revenue Growth Outlook of 15 to 17% and raising our estimate for Adjusted Operating Margin Expansion to more than 135 basis points compared to at least 125. Previously, our Organic Growth Guidance assumed seven points of contribution from excess inflation and interest in Argentina. But during Q2, we saw a faster than expected decline in both measures.

Frank Bisignano: 30 is Slide 9. As Frank said earlier, we are raising our full year adjusted earnings per share outlook to a range of $8.65 to $8.80, from $8.60 to $8.75. In an acceleration in forecasted adjusted the MPS growth to 15 to 17% from 14 to 16%. We are maintaining our 2024 organic revenue growth outlook of 15 to 17%. And raising our estimate for adjusted operating margin expansion to more than 135 basis points, compared to at least 125 basis points. Previously, our organic growth guidance assumed 7 points of contribution from excess inflation and interest in Argentina. But during Q2, we saw a faster and expected decline in both measures.

Speaker Change: The $8.80.

Up from $8 60 to.

Speaker Change: $8 75, and an acceleration in forecasted adjusted EPS growth to 15% to 17% from 14% to 16%.

Speaker Change: We are maintaining our 2020 for organic revenue growth outlook of 15% to 17% and raising our estimate for adjusted operating margin expansion to more than 135 basis points compared to at least 125 basis points previously our organic growth guidance assumes seven points of contribution from <unk>.

Speaker Change: Excess inflation and interest in Argentina, but during Q2, we saw faster than expected decline in both measures.

Robert W. Hau: This more rapid return to the historic average is good news for our Argentine business and overall stability in the region. However, the extra revenue contribution will now be less this year. Based on the latest economist consensus, we now assume 4 points of benefit from excess inflation and interest this year, down from 7 points. Nevertheless, we are reiterating our previous organic growth guidance for the year despite exogenous shifts affecting our business. This capability has become a hallmark of Fiserv today.

Speaker Change: This more rapid return to the historic average is good news for our Argentine business and overall stability in the region. However, the extra revenue contribution will now be less this year based on the latest economist consensus we now assume four points of benefit from excess inflation and interest this year down from seven points.

Speaker Change: Nevertheless, we are reiterating our previous organic growth guidance for the year, despite exogenous shifts affecting our business.

Speaker Change: This capability has become a hallmark of Pfizer of today. It is a testament to the adaptability of our business model that comes from our broad product portfolio diverse client base resourceful management team and global reach.

Robert W. Hau: It is a testament to the adaptability of our business model that comes from a broad product portfolio, diverse client base, resourceful management team, and global reach. This quarter, we offset the lower inflation and interest benefit in Argentina with additional anticipation revenue, another quarter of dollars in REESTA revenue, and other growth across the company. Our full year outlook of 15 to 17% total company organic growth, less the four point transitory benefit from inflation and interest in Argentina, puts our normalized growth at 11 to 13% for 2024. This is in line with our medium-term guidance of 9-12%, which assumes macro factors in Argentina continue to normalize.

Speaker Change: This quarter, we offset the lower inflation in interest benefit in Argentina with additional anticipation revenue.

Speaker Change: Another quarter of dollar to reach the revenue and other growth across the company.

Speaker Change: Our full year outlook of 15% to 17% total company organic growth less the four point transitory benefit from inflation and interest in Argentina puts.

Speaker Change: Puts our normalized growth at 11% to 13% for 2024.

Speaker Change: This is in line with our medium term guidance of 9% to 12%, which assumes macro factors from Argentina continued to normalize the forecasted impact from foreign currency exchange remains eight 5% and we anticipate will continue to be a stronger though declining headwind to adjusted revenue growth relative.

Robert W. Hau: The forecasted impact from foreign currency exchange remains 8.5%, and we anticipate it will continue to be a stronger, though declining, headwind to adjusted revenue growth relative to the tailwind from excess inflation and interest. Wrapping up with free cash flow, first, I'd like to note a change to our cash flow reporting. We move the Clover Capital and Lansham Anticipation Activity to the Investing section of the Cash Flow Statement beginning in the second

Speaker Change: To the tailwind from excess inflation and interest.

Robert W. Hau: We re-evaluated the presentation of our cash flow statement given a significant increase in merchant cash advance activity. This change is consistent with how our peers account for these activities, and the additional disclosure will provide greater transparency to our investors. This move affected our free cash flow since those amounts are no longer included in cash flows from operating activities.

Speaker Change: Wrapping up with free cash flow first I'd like to note a change to our cash flow reporting.

Speaker Change: We moved our corporate capital in Latam anticipation activity to the investing section of the cash flow statement beginning in the second quarter.

Speaker Change: We re evaluated the presentation or cash flow statement, given the significant increase in the merchant cash advance activity.

This change is consistent with how our peers account for these activities and the additional disclosure will provide greater transparency to our investors. This move affected our free cash flow since those amounts are no longer included in cash flows from operating activities.

Robert W. Hau: So we are adjusting our full-year free cash flow outlook accordingly by increasing our guidance to $4.7 billion from $4.5 billion since we expected $200 million of outflows for merchants' cash advances when we originally set our 2024 outlook. With that, let me turn the call back to Frank for some closing remarks. Thanks, Bob.

Speaker Change: So we are adjusting our full year free cash flow outlook accordingly by increasing our guidance to $4 7 billion from $4.5 billion since we expected $200 million of outflows for merchant cash advances when we originally set our 2024 outlook with that let me.

Speaker Change: Turn the call back to Frank for some closing remarks, thanks, Bob.

Frank J. Bisignano: There's another value creation opportunity within post-merger Fiserv, and that's data. The proposition for us in extracting intelligence from the massive amounts of data that we generate daily is significant, and can be an important growth driver beyond the medium term. Three years ago, long before AI was the hot topic it is today, we assembled a team of internal and external experts in the fields of data science and AI. We gave them a mandate to harness all of the data naturally captured through Fiserv transactions and Account Processing Activity to drive actionable intelligence for us, the marketplace, and our merchant and financial institution clients. There are three advantages that Fiserv has in its data.

Frank: Another value creation opportunity within post merger Pfizer and that data.

Frank: Opposition for us extracting intelligence from the massive amounts of data that we generate daily is significant.

Frank: Can be an important growth driver beyond the medium term.

Speaker Change: Three years ago long before a I was the hot topic. It is today, we assembled a team of internal and external experts in the fields of data science and AI.

Frank Bisignano: We gave them a mandate to harness all of the data naturally captured through Fiserv transactions and account processing activity to drive actionable intelligence for us, the marketplace, and our merchant and financial institution clients. There are three advantages that Fiserv has in its data, houses available in real time. It's granular to transactional level, and it's multifaceted in that it spans merchant issuing and banking activity. This makes our data quite powerful to apply in anti-fraud solutions, which we are doing internally with plans for a client-facing solution this fall. Our first great application for the market is the Fiserv Small Business Index, a real-time assessment of consumer spending at millions of small businesses, published monthly.

Speaker Change: We gave them a mandate to harness all of the data naturally captured through Pfizer transactions and account processing activity to drive actionable intelligence for us the marketplace and our merchant and financial institution clients.

Speaker Change: There are three advantages that fiserv has and its data.

Frank J. Bisignano: Ours is available in real time. It's granular to the transaction level, and it's multifaceted in that it spans merchant issuing and banking activity. This makes our data quite powerful to apply in anti-fraud solutions, which we are doing internally with plans for a client-facing solution this fall. Our first great application for the market is the Fiserv Small Business Index, a real-time assessment of consumer spending at millions of small businesses published monthly. It maximizes the features of Fiserv data with its timely release just two days after month-end, a detailed look at trends by industry and geography, and the inclusion of non-card spending data such as cash and checks.

Speaker Change: Ours is available in real time.

It's granular tier transaction level, and it's multi faceted in that it spans merchant issuing and banking activity. This makes our data quite powerful until apply in anti fraud solutions, which we are doing internally.

Speaker Change: What plans for client facing solution this fall.

Speaker Change: I'll first great application. So the market is the Pfizer of small business in Texas.

Speaker Change: A real time assessment of consumer spending at millions of small businesses published monthly.

Frank Bisignano: It maximizes the features of Fiserv data with its timely release just two days after a month-end. A detailed look at trends by industry and geography and the inclusion of non-cored spending data such as cash and checks.

Speaker Change: It maximizes the features of five serve data with the timely release, just two days after a month and a detailed look at trends by industry and geography, and the inclusion of non card spending data such.

Speaker Change: Cash and checks.

Frank Bisignano: We're also working to support clients in their AI journeys as they invest in the process and understand their own data. Clients are recognizing that we can efficiently add Fiserv data intelligence to help take decision making to the next level. It's a major value and solution that we're already testing with several of our largest clients and on the Clover platform. We're still in the early stages of delivering outdated intelligence solutions, but the opportunity is significant given the power of our integrated platforms and our unmet scale breadth and investment.

Frank J. Bisignano: We're also working to support clients on their AI journeys, as they invest in processing and understanding their own data. Clients are recognizing that we can efficiently add BISERV data and intelligence to help take decision making to the next level. It's a major value-added solution that we're already testing with several of our largest clients and on the Clover platform. We're still in the early stages of delivering our data and intelligence solutions. But the opportunity is significant given the power of our integrated platforms and our unmatched scale, breadth, and investment.

Speaker Change: We're also working to support clients in their AI journeys as they invest the process and understand their own data clients.

Speaker Change: Clients are recognizing that we can efficiently advisor of data intelligence to help take decision making to the next level.

Speaker Change: It's a major value added solution that we're already testing with several of our largest clients and on the Clover platform.

Speaker Change: We're still in the early stages of delivering our data and intelligence solutions, but they opportunity is significant given the power of our integrated platforms and our unmatched scale breadth and investment.

Frank J. Bisignano: Finally, I'd like to thank Elmore and the more than 40,000 employees for their steadfast commitment to our vision and hard work on the day-to-day execution. It's clearly led to our leadership in product and innovation, and the strong results you see us report today. Together, we strive to achieve excellence every day on behalf of our clients, partners, and shareholders.

Speaker Change: L a I.

Frank J. Bisignano: I'd like to thank our more than 40,000 employees for their steadfast commitment to our vision and hard work on the day-to-day execution. It's clearly led to our leadership in product and innovation and the strong results you're seeing us report today. Together, we strive to achieve excellence every day on behalf of our clients, partners, and shareholders. Thank you for your time today, and now, Operator, please open the line for questions. Thank you.

Speaker Change: I'd like to thank our more than 40000 employees for their steadfast commitment to our vision and hard work on the day to day execution.

Speaker Change: It's clearly led to our leadership in product and innovation and the strong results you see us report today.

Speaker Change: Together, we strive to achieve excellence every day on behalf of our clients partners and shareholders.

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

Frank Bisignano: Thank you for your time today, and our operator, please open the line for questions.

Unknown Attendee: Thank you.

Operator: We would now like to open the phone lines for questions. For today's question and answer session, please limit yourself to one question to ensure ample time to answer as many questions as possible. If you would like to ask a question, you may press star 1 on your phone.

Speaker Change: Thank you we would now like to open the phone lines for questions for today's question and answer session. Please limit yourself to one question to ensure ample time to answer as many questions as possible. If he would like to ask a question you May press star one on your phone if you would like to withdraw your question. Please press star two for our first question will go to the line of Dave.

Unknown Attendee: We would now like to open the phone lines for questions. For today's questions, any answers, please limit yourself to one question to ensure ample time to answer as many questions as possible. If you would like to ask a question, you may press star one on your phone. If you would like to withdraw your question, please press star two.

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

David Togut: For our first question, we'll go to the line of David Toget from Evercore ISI. Please go ahead.

<unk> <unk> from Evercore ISI. Please go ahead.

David Mark Togut: Thank you. Good morning, Frank and Bob. I appreciate the update on new product launches for Clover and also the vertical market expansion into services and retail. Could you please update us on the international expansion in Brazil and Mexico? Frank, you called out some initiatives in Brazil, but in terms of the broader kind of new market launch kind of post Friends and Family, what are your expectations for the back half of this year and into 2025? Yeah, I think, first of all, when you look at what we're doing on global penetration, we have, you know, talked about Mexico, Australia, and Brazil. You should expect Brazil and Mexico in August as a pilot.

Dave: Oh, Thank you good morning, Frank and Bob.

Dave: Appreciate the update on new product launches for Clover.

Dave: And also the vertical market expansion into services and retail.

Speaker Change: Could you update us on the international expansion in Brazil, and Mexico, Frank you called out some initiatives in Brazil, but in terms of the broader kind.

Speaker Change: Kind of a new market launch kind of post friends and family.

Speaker Change: Are your expectations for the back half of this year and into 2025.

Frank: Yeah, I think first of all when you look at.

Frank: Global.

Frank: Penetration.

Speaker Change: We have.

Speaker Change: You talked about Mexico, Australia.

Speaker Change: And Brazil.

Speaker Change: You shake the Brazil and Mexico in August.

Les: Hi, Les.

Speaker Change: I wouldn't see it as a full ramp.

Speaker Change: 25, I treat August by your friends and family.

Frank J. Bisignano: I would see it as a full ramp in 2025. I treat August like a friend and family. But remember our business in Brazil. You know, the things we've done with Kasha, the things we've done growing the business, probably eight, nine years ago from a startup to a tremendous competitor. So we have, you know, growth projections for that market, and we expect it to perform as our business has done in Brazil. So I cherish that time we spend together.

Speaker Change: But remember I remember as I've said to Michelle.

Speaker Change: The things like that all across the things.

Speaker Change: We've done growing up there.

Speaker Change: Probably eight nine years ago from a start up and do a.

Speaker Change: Tremendous competitor so we have.

Speaker Change: Both projections for that market.

Speaker Change: That was expected.

Speaker Change: Our business.

Speaker Change: Brazil.

Speaker Change: Mexico has built a business there we continue to grow that business we feel.

Speaker Change: While Mexico, and Brazil build it's very similar that's why you see them coming out together you know once again.

Speaker Change: Friends and family.

Paul: And Oh, yes, Paul.

Paul: And obviously, we'll watch that billed during the fourth quarter and then you know.

Speaker Change: Bought back in 'twenty.

Speaker Change: Yeah, we feel really great about our position in Australia, what we're gonna do in Australia, you'll see us.

Speaker Change: In September at that as a friends and family.

Speaker Change: Expectations of larger partner wins. There also that are very very highly motivated to have closer end market in 'twenty.

Speaker Change: So I don't think you'll get a ton of growth out of that this year.

Speaker Change: We will update you later in the year on an L expectations again, 25, but those builder in wallboard.

Speaker Change: So you want it bad.

Speaker Change: They always say the market demand for all of that so.

Speaker Change: Question you know.

Speaker Change: David.

David: We got on the call I talked about a.

Speaker Change: Celebration that were really having right now which is a 40th anniversary.

Speaker Change: Our bias or.

Speaker Change: First anniversary.

Speaker Change: The merger, but.

Speaker Change: Thank you know what I realized when I got up. This morning is we are actually celebrating your retirement from Evercore and information right. Because you know it wasn't a couch everything here.

Speaker Change: You covered a bias or a 29 years and that's bad for Ceos or Chad the stand on the shoulders of those who came before me. So I cherish that time together and then I think I'm right in 32 years on birth date.

Frank J. Bisignano: And then I think I'm right in 32 years on BERS data. I can't really account for all the CEOs that came before me, specifically post-KKR, but thank you for everything you've done for the industry. Thank you for the work, and I think it's a celebration of your career and your retirement from Evercore. Thanks for being here with us today. Thank you so much, Frank.

Speaker Change: I can't really count for all the Ceos and before me.

Art: Oh, Hey art, but.

Speaker Change: Thank you for everything you've got in any industry. Thank you for the work and I think it's a celebration of your career at her retirement from Evercore.

Speaker Change: I am here with us today.

David Mark Togut: That really means a lot to me. I really enjoy working with you, Bob, and Julie. And, in the tradition of your predecessors, you continue to create tremendous shareholder value. So I'll continue to watch your progress with great interest. Congratulations, Devon.

Speaker Change: Thank you so much Frank that really means a lot to me I really enjoy working with you Bob and Julie and then the tradition of your predecessors, you continue to create tremendous shareholder value. So we'll continue to we'll continue to watch your progress with great interest.

Speaker Change: Congratulations debit.

Robert W. Hau: Thank you, Bob. Next, we'll go to the line of Tianjin Wang from J.P. Morgan. Please go ahead. I was going to say, I can't remember our first date or if I actually called David Togut on it.

Robert W. Hau: Thank you Bob.

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

Speaker Change: Okay. Okay, I can't remember, a first data or petrol calls that they would still get on it. So yes, I agree with that Mike My question.

Tianjin Wang: So, yeah, I echo that. My question... For you guys, just on the margin outlook that was raised, can you just give us a little bit more specifics on the sources? of the upside there. And then just a clarification on the merchant processing side. Was that related to some bank losses? I heard a comment that there are some declines in the banks. I just want to clarify if that was volume specific or not.

Speaker Change: You guys just on the margin outlook that was raised can you just give us a little bit more specifics on the sources.

Speaker Change: Okay upside there and then just a clarification on the merchant processing side.

Speaker Change: Yeah.

Speaker Change: Was that related to some some bank losses I heard a comment that there were some declines in the bank. So just wanted to clarify if that was volume specific or.

Peter what Tricia Thank you.

Robert W. Hau: Thank you. Yeah, thanks, good morning. First on the margin outlook, as you heard in our prepared remarks, we raised our margin outlook actually for the second quarter in a row now greater than 135 basis points. The original guy back in February was greater than 100 basis points. That's really driven by two factors. One is just the scale and volume of the company. As we add more revenue, it drops through to the company average because we have higher than company average rates and continue to see good growth.

Peter: Yeah, Thanks, Jim Good morning.

Peter: First on the on the margin outlook as you.

Speaker Change: Heard in our prepared remarks, we raised our margin outlook actually for the second quarter in a row now.

Speaker Change: Greater than 135 basis points original guidance back in February it was greater than 100 basis points, that's really driven by two factors. One is just the scale.

Speaker Change: Volume of the company as we add more revenue.

Speaker Change: Drops through to the company average because we had better than company average rates.

Speaker Change: Continue to see good growth. The second one of course is ongoing productivity, we continue on an ongoing basis.

Robert W. Hau: The second one, of course, is ongoing. As Frank said earlier, measure everything and continue to see progress towards achieving increased productivity across the organization. So a combination of very strong organic growth.

Speaker Change: As Frank said earlier measure everything.

Good to see progress towards achieving increased productivity across the organization and so the combination of very strong organic growth.

Unknown Attendee: Unknown Attendee, Dan Dolev, Ashwin Shirvaikar, Ramsey El, Darrin Peller, Jason Kupferberg, And then on the merchant processing side, as you know, the processing business line for us is where our clients own the merchant contracts. And so we are providing the back-end processing for those clients, in many cases it's banks, it could be a wholesale ISOs, and what we saw was some volume decline out Contracts in the second quarter.

Frank: To 17% this year plus productivity allows us to continue to expand margin a multiple year basis.

And then the merchants merchant processing side.

Speaker Change: As you know the processing business line for us is where our clients own merchant contracts and so we are providing the back end processing for those.

Speaker Change: Clients in many cases banks could be a wholesale I suppose.

And what we saw is some volume decline out of those processing contracts in the second quarter of course on a year to date basis, we are plus 1% for the first half of the year and that's in line with our ongoing expectation that it's roughly flat.

Unknown Attendee: Of course, on a year-to-date basis, we are plus 1% for the first half of the year, and that's in line with our ongoing expectation that it's roughly flat in this business line going forward. Next, we'll go to the line of Jason Kupferberg from Bank of America Merrill Lynch. Please go ahead.

Speaker Change: This business line going forward.

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

Jason Kupferberg: Good morning, guys. Thanks for taking the time to answer the question. Great to see the ongoing revenue performance here. I was curious just to ask about some of the underlying metrics, small business volume growth, and enterprise transaction growth. We did see some slowdown there in Q2, probably more than can likely be explained just by leap year. So we're hoping you could unpack that a little bit in terms of where you saw some of the softness. Was it certain verticals or higher income versus lower income consumers?

Jason Kupferberg: Good morning, guys. Thanks for taking the question great to see the ongoing revenue performance here I was curious just to ask about some of the underlying metrics small business volume growth enterprise transaction growth. We did see some slowdown there in Q2, probably more than can likely be explained by leap year. So was hoping you could unpack that a little bit in terms of where you saw.

Speaker Change: Some of the softness was it certain verticals or higher income versus lower income consumer or just anything you can give us on what you've seen in July so far we heard from visa last night about a little bit of softness related to hurricane and crowd strike.

Robert W. Hau: And then just anything you can give us on what you've seen in July so far. We heard from Visa last night about a little bit of softness related to the hurricane and the crowd strike. Thank you. Yeah, Jason, good morning.

Jason Kupferberg: Yeah.

Robert W. Hau: There are obviously lots of variables in both of those, both the small business and the enterprise business lines. Generally, we saw a bit of a slowdown. And, in fact, through the second quarter, April and May were in line with our expectations, while July came in a little bit slower.

Jason Kupferberg: Yeah, Jason Good morning, obviously lots of variables in both of those both the small business and the enterprise business lines generally we saw a bit of a slowing and in fact through the second quarter.

Speaker Change: April and May were in line with our expectations July came in a little bit slower, but what I would emphasize that that was in line with our expectations. So partly why we are maintaining our full year organic growth rate of 15% to 17% and in fact for the merchant segment are holding up.

Robert W. Hau: But I would emphasize that that was in line with our expectations, so partly why we're maintaining our full year organic growth rate at 15 to 17%. And in fact, for the merchant segment, holding at the 25 to 28% level despite an acceleration in easing of that transitory Benefit in Argentina. So, generally, the business is performing at or better than we had previously expected outside of that slowing in the transitory Benefit, which, by the way, we think is a good thing for the Argentine economy.

Speaker Change: The 25% to 28%.

Speaker Change: Despite acceleration and easing of that transitory benefit dark down in Argentina. So generally the business is performing at or better than we had previously expected outside of that slowing in.

Speaker Change: Transitory benefit which by the way we think is a good thing for the Argentine economy.

Robert W. Hau: A more normalized growth rate and inflation and interest rate is good for the long term. And so we're encouraged by how that's going and how the overall business is responding. Yeah, maybe I'd make a couple other general macro comments.

Speaker Change: More normalized growth rate and inflation and interest.

Speaker Change: Good long term and so we're encouraged by how that's going and how the overall business has responded.

Speaker Change: I think a couple of other.

Carol macro comments one.

Frank J. Bisignano: One, uh, you know, when you looked at us, we're very, very, uh... I'm proud of what we believe we've created with the F-S-B-I and our ability to track it. Obviously, we talked about how our numbers don't exactly mirror the F-S-B-I because of our international presence and the fact that we have verticals that we think outperform. We see, you know, a slowdown in July, but we see growth in July as we look at it right now, and it's in line with really Q2, if you look at it, and slightly ahead of June.

Speaker Change: When you looked at you know, we're very very proud.

Speaker Change: Proud of what we believe would create.

Speaker Change: S S V I and our ability to track. It obviously, we've talked about how our numbers don't exactly mirror the F N b.

Speaker Change: Because of our international presence and the fact that we had vertical so anything.

Speaker Change: Outperformed.

Speaker Change: We see a you know a slower in July, but we see growth in July.

Speaker Change: As we look at it right now.

Speaker Change: Mine was really.

Speaker Change: Q2, if you look at it and slightly ahead of them.

Frank J. Bisignano: I think also, you know, as you look across our book and our total portfolio, you'll also see the slowing in credit originations across our book, which covers retail, private label, and general purpose, but all of this within our expectation range. And, you know, I'd also make a secondary point, you know, around, you know, We are no longer a volume-only shop. We have lots of apps, both at the enterprise level and at the SMB level, and it really was the design of how to proceed.

Speaker Change: I think also you know as you look across out look at our total portfolio.

Speaker Change: You also see the swallowing and private credit originations.

Speaker Change: Across outdoor which covers retail private label in general purpose.

Speaker Change: But all of this what right now expectation range.

Speaker Change: And.

Speaker Change: I would also make a secondary point you know around volume and revenue.

Speaker Change: There are no longer a volume only shop that we have.

Speaker Change: Lots of vast both at the enterprise level and at the SMB level and it really was the design of how to proceed.

Frank J. Bisignano: We have a great feeling about our ability to grow merchants globally, and that's inclusive of the U.S. So that all falls into our expectation set, and I think, in total, when you look at the business performance and the portfolio size and scope, our hedge is very, very strong. Next, we'll go to the line of Timothy Chiodo from UBS. Please go ahead.

Speaker Change: Yeah, great about our ability to grow margins globally, and that's inclusive of the U S.

Speaker Change: So that all falls into our expectations and I think you know.

Speaker Change: Overall, when you look at the business performance in the portfolio size and scope.

Speaker Change: Edge is very very strong.

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. I want to hit on Cash Flow Central, which is just about to go live here, the six large clients you mentioned. In terms of monetization, I believe it's a combination of subscription fees and then also transaction fees, including some interchange revenue, potentially. I was hoping you could break that down a little bit more and then also talk a little bit about how revenue will be recognized across the two segments. Thanks a lot.

Timothy Chiodo: Great. Thank you for taking the question I want to hit on cash flow Central just give them about to go live here six large clients you mentioned in terms of the monetization I believe it's a combination of subscription fees and then also transaction fees, including some interchange revenue potentially I was hoping you could break that down a little bit more and then also talk a little bit about how.

Speaker Change: The revenue will be recognized across the two segments. Thanks a lot.

Frank J. Bisignano: Yeah, maybe I'll raise it a hair just so we have pure clarity on our SMB strategy here, both with FIs and, you know, on other direct channels. You know, and we referred to it in our prior comments, but I want to be very, very clear. First of all, those wins are large institutional wins before the products in the market in that fashion.

Speaker Change: Yeah, maybe maybe I'll elevated a hair just so we have clarity on how SMB strategy here are both.

Speaker Change: Well, it's worth F EIS and.

Speaker Change: Now the other direct channels.

Speaker Change: When I refer to it.

Speaker Change: Prior comments, well it'd be very very clear first of all of those wins are large institutional wins in for the products in the market.

Speaker Change: And that batch and our pipeline is tremendously strong remember we're also gonna brings us product too.

Clover.

Speaker Change: We're bringing a product to L. I S. V channels also and then when we talk about is a dialect to call. It SMB bundle that SMB bond, though well include Yo.

Speaker Change: Clover cashflow central the ability to integrate that into formation brand activity, which is also winning heavily in the market right. Now is our new digital banking platform and span labs. So I think what you're going to find and banks, thereby love the bundle right yes.

Speaker Change: A cashless central but there's there'll be a long term growth engine and you also heard us talk about our ability to go yes, we have 900 manhandle institutions, we plan on continuing to grow that number so casually central by itself.

Robert W. Hau: We plan on, you know, continuing to grow that number. So Caswell Central by itself is a standout product, which Bob will walk you through the economics, and I want you to focus on the SMB strategy, that it's an integrated strategy. I think we're one of a kind in the ability to deliver digital banking, deliver card spend, deliver Clover, and deliver something like Caswell Central ARAP to this SMB set. And our banks are loving it.

Speaker Change: Standout product.

Speaker Change: Bob will walk you through the economics.

Speaker Change: I wanted to focus on the S. M Big strategy that it's an integrated strategy I think we're one of a kind and the ability to deliver digital banking deliver card spend deliver clover and deliver something like castle essential.

Robert W. Hau: Cause SaaS M B L.

Our banks are loving it we got two shots at helping al bank generate revenue through it. So I don't want to minimize the question without articulating a strategy, which is a long term growth strategy for our total portfolio.

Frank J. Bisignano: We got two shots at helping our banks generate revenue through it, so I didn't want to minimize the question without articulating the strategy, which is a long-term growth strategy for our total portfolio. And Tim, I feel very good about signing up six large banks before you've gone live. We're quite encouraged by the demand from those, www.youtube.com.uk It allows them.

Robert W. Hau: And Tim I would say, we feel very good about signing up six large banks before had gone live.

Tim: We're quite encouraged on the demand from those financial institutions.

Tim: Excitement there.

Tim: As Frank pointed out it's a revenue generator for them.

Speaker Change: It allows them to.

Robert W. Hau: Bring themselves closer to their small business clients. And for us, opposite of our consumer bill pay solution, which is a fee that the banks pay us but typically do not charge. So it's an expense item for Cash Flow Central. It's actually a revenue-generated bill, the likely charge.

Frank: Brings themselves closer to their small business client, which is an important client base for them and for us.

Frank: Opposite of our consumer Bill pay solution, which is a fee.

Speaker Change: The banks pay us, but typically do not charged consumers and so it is an expense item.

Speaker Change: For cash flow central it's actually a revenue generated though likely charged or small business clients with subscription.

Robert W. Hau: Again, generate revenue for themselves and, obviously, for us as transactions flow, very good about the opportunity. I'm very encouraged by the very Next, we'll go to the line of Dave Koning from Baird. Please go ahead.

Speaker Change: Again generate revenue for themselves and obviously for us its transaction as well. So we feel very good about the opportunity and are very encouraged on that.

Speaker Change: Very very early.

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

David Koning: Yeah. Hey, guys. Thanks. Nice job.

David Koning: Yeah, Hey, guys, thanks, and nice job.

David Koning: And I guess my question in the banking subunit you grew 4% ex periodic revenue. That's the best we can see in the six quarters or so since you've given that the new segment data is there something about the market, that's getting better or something that youre doing more specifically and is that is this higher level sustainable.

Frank J. Bisignano: I guess my question is, in the banking subunit, you grew 4% ex-periodic revenue. That's the best we can see in the six quarters or so since you've given us the new segment data. Is there something about the market that's getting better, or something that you're doing more specifically? And is this higher level sustainable? Yeah, maybe I'd cover that.

Speaker Change #100: Yeah, maybe maybe I've covered that I realize it in my comments about that.

Unknown Attendee: MS Sharon fan demand I didn't include that.

Speaker Change #102: Why it's bad for our services out of the financial institutions and that's B R.

Chad: Yeah, sure Chad and.

Speaker Change #104: <unk> capability.

Speaker Change #104: We have tremendous white and the bad.

Speaker Change #104: It goes to D, which is winning in the marketplace.

Speaker Change #105: Let's talk about them, then that glen's how clients are growing.

Speaker Change #105: You know and you go okay things that we've done on exactly one which has been a tremendous.

Speaker Change #105: Robert Kennedy I do think you know and you could point to a recent survey published that we differentiate ourselves.

Speaker Change #105: In the in the service area from where we might have been a couple of years ago.

Speaker Change #106: Livery of a commitment tracker, which allows outside our clients that are 100% synchronization on ultimate delivery rate.

Speaker Change #106: I think those have really really distinguished ourselves.

Frank J. Bisignano: I realize in my comments about business generation and demand, I didn't include that we see large demand for our services out of the financial institutions, and that's beyond this merchant and CFC capability, which both have tremendous large demand. Our relationship management model is making a difference and will continue. Demand is strong. So I think it's all those variables that give us confidence about our ability to be the grower that we talked about today back on I-Day. Next, we'll go to the line of Darrin Peller from Wolf Research. Please go ahead.

Speaker Change #106: Our relationship management model is making a difference and we will continue.

Speaker Change #107: Manta is strong so I think it's all of those variables are.

Speaker Change #107: That gives us confidence about our ability to be to grow out of that we talked about it back on.

Speaker Change #107:

Speaker Change #107: Next we'll go to the line of Darrin Peller from Wolfe Research. Please go ahead.

Darrin Peller: Hey, thanks, guys. If we could just hone in and give a little bit more of a broad update on the financial solutions segment, just given the strength we're seeing. Obviously, Cashless Central is strong, and then you have Zelle and some other implementations.

Darrin Peller: Great. Thanks, guys.

Darrin Peller: If we could just hone in and just give a little bit more of a broad update on the financial solutions segment, just given the strength. We're seeing obviously cashless central was strong and then you have zelle and some other implementations, but help us understand the driving forces of that growth going from where it is today and then I know you've talked about it accelerating to get into 2020 through 'twenty five.

Robert W. Hau: But help us understand the driving forces of that growth going from where it is today, and then I know you've talked about it accelerating again into 2020, like through 25 into 26. Unknown Attendee, Vasundhara Govil, Kartik Mehta, Harshita Rawat, John Gibbons, Suzan Kereare, Frank Bisignano, Timothy Chiarello, John Gibbons, Suzan Kereare, Frank Bisignano, Yeah, Darren, so our expectation or outlook for this year for the financial solutions segment is four to 6%, excuse me, five to seven, five to 7%.

Darrin Peller: Six.

Speaker Change #109: At your Investor Day, just is that still what you see happening and what are the major drivers affecting that.

Robert W. Hau: So we're right at the midpoint of that full year outlook. We anticipate as we go into 25 and 26, our medium-term outlook for the financial solutions segment increases a point to six to eight. So five to seven this year, we're right at the midpoint, halfway through the year, and we expect that to accelerate into 25 in 2026. And that's really driven by the benefits of exactly what you called out, Cashflow Central coming online, growth in XD, our digital banking solution, FinZac, and a broad suite of capabilities that we have continuing to take hold and meet the demands of our financial solutions, our client base.

Speaker Change #110: Yeah, Darren so our expectation our outlook for this year for the financial solutions segment.

Speaker Change #111: Is 4% to 6% should be five to seven 7% year to date, we're at 6%. So we're right at the midpoint of that full year outlook.

Speaker Change #111: We anticipate as we go into 'twenty, five and 26, our medium term outlook for the financial solutions segment increases a point to 6% to 8%. So five to seven this year, we're right at mid point halfway through the year and we expect that to accelerate into 25 in 2026, and that's really through.

Speaker Change #112: And by the benefits of exactly what you've called out cash flow central coming online growth and it's actually our digital banking solution thing Zach.

Speaker Change #112: Broad suite of capabilities that we are continuing to take hold and meet the demands of our financial solutions.

Speaker Change #112: The client base.

Robert W. Hau: We also have on the issuing side, as you heard us talk about back in November at Investor Day, several large client wins that will go live in 2025 and beyond, things like Verizon and Target and Desjardins all giving us a lift. Next, we'll go to the line of Dan Dolev from Mizzou Host Securities. Please go ahead. Hey, Frank and Bob, really nice results. I just wanted to go back to the more sort of like guidance and merchant and macro.

Speaker Change #112: We also have on the issuing side as you heard us talk about back in November at the Investor Day, several large client wins that will go live in 2025 and beyond things like Verizon and target and HR ban all giving us the less we feel quite good.

Speaker Change #112: [noise] about where we are first half of the year and what we see going into 'twenty five and 'twenty six.

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

Dan Dolev: I mean, pretty impressive results, despite, you know, the, I'd say more muted tone at Visa yesterday. So can you maybe provide just, maybe, a little bridge in terms of what, you know, what, what needs to happen? You know, for the guide or the fact that you maintain the guide for the year? Like, is there anything else? Is it all idiosyncrasy, you know, wins, etc., which is what we suspect? Or is there anything else in there?

Speaker Change #113: Hey, Frank and Bob really nice results.

Speaker Change #114: I wanted to go back to the more sort of like guidance in merchant and macro I mean pretty impressive results. Despite the.

Speaker Change #115: I'd say more muted tone at visa yesterday. So can you maybe provide just a maybe like a little bridge in terms of what you know what.

Speaker Change #116: What needs to happen.

Speaker Change #117: For the guide or the fact that you maintain the guide for the year like is there anything is it idiosyncratic wins et cetera, which is what we suspect or is there anything else in there and again congrats.

Robert W. Hau: And again, congrats. Yeah, thanks, Dan. So overall, maintaining our total company organic growth at 15 to 17 in order to do that, we expect the merchant segment to grow 25 to 28% organically. First half of the year, we're ahead of that slightly at the top end.

Dan: Yeah. Thanks, Dan.

Speaker Change #119: So overall.

Speaker Change #120: Maintaining our total company organic growth 15 to 17 in order to do that we expect the merchant segment to grow at 25% to 28% organically.

Speaker Change #120: First half of the year, we're ahead of that slightly at the top end.

Robert W. Hau: Good growth overall. We talked a little bit in our prepared remarks about the easing of the transitory Benefit of inflation and interest. You see in our slides that that number has come down. Our previous expectation for the full year was that it would provide a 14-point benefit to merchant solutions, now a 9-point benefit, and yet we're maintaining our full-year outlook, and that's the strength of things like Clover selling very well, value-added solutions both in our small business and in our enterprise business. Commerce Hub continued to see good uptake from our large enterprise clients.

Speaker Change #121: Good growth overall.

Speaker Change #122: A little bit in our prepared remarks about the easing of the.

Speaker Change #122: Transitory benefit of inflation and interest you.

Speaker Change #122: CNR slides that that number has come down our previous expectation for the full year.

Speaker Change #122: That would provide a 14 point benefit to merchant solutions now nine point benefit.

Speaker Change #122: We're maintaining our full year outlook and that's the strength of things like Clover, selling very well value added solutions, both in our small business and in our our enterprise.

Speaker Change #123: Commerce hub continued to see good uptake from our large enterprise clients. We definitely saw an increase in anticipation of activity down in Latin America that we talked about in our prepared remarks as well as an additional quarter benefit of dollar to reached up so maybe a little bit of that idiosyncratic view from your point.

Robert W. Hau: We definitely saw an increase in anticipation activity down in Latin America that we talked about in our prepared remarks, as well as an additional quarter benefit from the Dollar to Resta, so maybe a little bit of that idiosyncratic view from your point on the Dollar to Resta. Expect that to go away at the tail end of this coming quarter, third quarter, but generally, growth across the business, and I think this is one of the hallmarks of Fiserv over the 40 years that we've been in business. I anticipate that 2024 will be our 39th consecutive year of double-digit EPS growth. We are incredibly resilient.

Speaker Change #124: On a dollar tree store I expect that to go away at the tail end of this call me this quarter third quarter, but generally our growth across the business and I think this is one of the hallmarks. So fiserv over the 40 years that we've been in business.

Speaker Change #124: Anticipating that 2024 will be our 39th consecutive year of double digit EPS growth.

Speaker Change #124: We are incredibly resilient, we respond to changes in the marketplace, we wish that respond to changes in the macroeconomic environment.

James Faucette: We respond to changes in the marketplace. We respond to changes in the macroeconomic environment, and that's the breadth and depth of our capability in our product set, of our client base, and our distribution chain. Next, we'll go to the line of James Faucette from Morgan Stanley. Please go ahead. Great. Thank you very much. And thanks for all the color and detail here. I want to go back to Clover and Clover growth.

Speaker Change #124: The breadth and depth of our capability of our products of our client base and our distribution channels.

Speaker Change #124: Next we'll go to the line of James Faucette from Morgan Stanley. Please go ahead.

James Faucette: Great. Thank you very much and thanks for all the color and detail here I wanted to go back to the Clover in colver growth and one of the questions. We get a lot is you've talked at your analyst meeting back in November about.

Frank J. Bisignano: And one of the questions we get a lot is, you talked at your analyst meeting back in November about using Clover and how the back book could contribute a little bit more going forward to that growth. But I'm wondering if you can talk through a little bit the sales cycle there and where your existing customers see no value in Clover and how you feel about that and maintaining those customers from a competitive standpoint, if they are re-evaluating solutions, etc. Thanks a lot.

Speaker Change #125: Using clover and and how the back book could contribute a little bit more going forward to that growth, but I'm wondering if you could talk through a little bit the sales cycle, there and and where your existing customer, saying no value on clover, and and how you're feeling about that from a.

Speaker Change #125: Maintaining those customers from a competitive standpoint, if they are reevaluating.

Speaker Change #126: Aleutians et cetera, Thanks, a lot.

Frank J. Bisignano: Thank you. Thanks, Jim. Good to hear from you. Really, really.

Speaker Change #130: Thank you. Thanks, Jim good to hear from you Hey, you know I mean like we've been a.

Speaker Change #127: Really really.

Frank J. Bisignano: I am feeling good about the Clover strategy and continuing to refine it. Obviously, we know there'll be a day where we come back here and say we're headed directly into the back book, but we see so much front book activity opportunity, you know, between our international, our ISV, between how we're thinking about the verticals, like services, like restaurants, that, you know, we're continuing to build that product set that that's, obviously, it's an outperformer in attrition And, you know, we have the benefit of looking at attrition rates from everything.

Speaker Change #129: Feeling good about the corporate strategy.

Speaker Change #129: I am very excited about.

Speaker Change #129: We you know we know there'll be a day, where we're going to come back and say we're headed.

Speaker Change #129: Iraq going into the back book, but we see so much front book activity opportunity.

Speaker Change #129: So between our international between all I S V between how we're thinking about the vertical like services like restaurants.

Speaker Change #129: That you know, we're continuing to build that.

Speaker Change #129: Next at that that's.

Speaker Change #132: I just say, it's an outperformer in attrition across the total book and we have the benefit of looking at attrition rates from everything we look out in front of what ally. So portfolios are trading versus L. I S. V portfolios are trading versus how agent versus out direct book.

Frank J. Bisignano: We look at them from the perspective of what our ISO portfolios are trading versus our ISV portfolios are trading versus our agent versus our direct book, and we feel really, really good about how it's performed. We're continuing, you know, to ramp up our investment in value-added services and vertical expertise there. So, you know, we've made a set of commitments, you know, 3.5 and then 4.5 and 10 rates, and, you know, we think about the merchant business being $10 billion and then $12 billion, and all of that feels really, really tight and on track.

Speaker Change #129: And we felt really really good about.

Speaker Change #129: How it's performed we're continuing to ramp up our investment.

Speaker Change #131: You added services and vertical expertise there.

Speaker Change #131: You know we've made a set of commitments.

Speaker Change #133: Three five and then four to five bad Pan rates and you know, we think about the merchant business being 10 billion and then 12 billion and all of that build drill it really tied to on track.

Frank J. Bisignano: You know, obviously, you know, I always, I always have to say, we started Clover with, you know, seven engineers and three patents, and, you know, now we have a global franchise, so it's right in our sights. Obviously, we have lots of other great things in our portfolio, but it also is the key to why we have 900 financial institutions, and I would expect, over a period of time on this journey, you know, that, you know, if you ask me, we haven't ever made a commitment or guided ourselves to having any financial institutions.

Speaker Change #133: You know, obviously, Oh I always I always have to say we started clover with.

Speaker Change #133: Seven engineers and three patents and you know now we got a global franchise.

Speaker Change #133: So it is strained at outside obviously, we have lots of other great things in our portfolio, but it also is the key to why we have 900 financial institutions and I would expect over a period of time on this journey.

Speaker Change #133: So that you know if you asked me we haven't ever made a commitment are guided down any bad news.

Frank J. Bisignano: But you should expect us to, you know, continue to grow that at a double-digit rate every year. So I don't know if that's helpful, Jim. And for our final question, we'll go to the line of Ramsey Elisal from Barclays. Please go ahead.

Speaker Change #133: But you should expect us to continue to grow that at a double digit number every year. So I don't know if that's helpful. Joe.

Speaker Change #133: And for our final question will go to the line of Rumsey Ourself from Barclays. Please go ahead.

Ramsey El: Hi, thanks for squeezing me in here. I wanted to ask about M&A. And I guess, specifically given the valuation, multiples on the public company side seem to be much lower than on the private side. Does that tilt the opportunity set for you guys more towards acquiring, you know, public peers? Would you have an appetite to kind of move in that direction, Frank? Well, I don't, I don't, you know; it's not like I think about public-private.

Ramsey El: Hi, Thanks for squeezing me in here I wanted to ask about M&A and I guess, specifically given the valuation.

Ramsey El: Multiples on the public company side seems to be much lower than on the private side does that tilt the opportunity set for you guys more towards acquiring.

Speaker Change #135: Public peers, what do you have an appetite to kind of move in that direction Frank.

Frank J. Bisignano: I think about, first of all, we have a tried-and-true capital deployment philosophy, which I think we've been, we've been performing well at. I frequently say, jeez, I wish we had acquired more, and I frequently, and I always say, but there's nothing that we traded that I wish we acquired. So I think, I think, you know, it's about value, it's about long-term value creation. Remember, we have the best distribution with our financial institutions, our ISVs, and our ability now to take financial products and bring them to our merchants.

Frank: Well I don't I don't.

Frank: Not like anything about public private I'd think about it first of all we have a tried and true capital deployment philosophy, which I think we've been Woodbine.

Ramsey El: Performing well at <unk>.

When I say geez.

Ramsey El: I wish we had acquired more frequently and always say, but there's nothing that trade at that I wish we acquired so I think.

Ramsey El: Thank you know it's about it's about value it's about long term value creation remember we have the best distribution.

Speaker Change #136: Without financial institutions L. I F E L ability now to take financial products and bring them to our merchant you know we didn't really talk about embedded finance it all today, but that is still an engine that's moving for us.

Frank J. Bisignano: You know, we didn't really talk about embedded finance at all today, but that is still an engine that's moving for us. So it's, you know, where there is value creation, how do we bring it to our clients and our shareholders, and I'm really not thinking public versus private as much as being involved in looking at everything humanly possible. So, you know, that would be, I think that's kind of where we are.

Speaker Change #136: So it's you know, it's it's where's value creation, how do we bring it down with clients and our shareholders.

And I'm really not taken public versus private as much as being involved in it.

Speaker Change #136: Look at everything humanly possible so.

Speaker Change #137: That would be a I think that that's kind of where we are I like to thank everybody for their attention. Today, obviously, we've got a great IR team so reach out to them.

Frank J. Bisignano: I'd like to thank everybody for their attention today. Obviously, we've got a great IR team, so reach out to them with any further questions. Have a great day, and I look forward to talking to you in the future. Thank you all for participating in the Fiserv Second Quarter 2024 Earnings Conference Call. That concludes today's conference. Please disconnect at this time and have a great rest of your day.

Operator: [inaudible] ?? ?? ?? ??. .. [inaudible]

Speaker Change #137: Further question and have a great day, and I look forward to talking to you in the future.

Unknown Attendee: Thank you all for participating in the Fiserv 2nd quarter, 2024 earnings conference call.

Speaker Change #138: Thank you all for participating in the <unk> second quarter 2024 earnings Conference call that concludes today's conference. Please disconnect at this time and have a great rest of your day.

Unknown Attendee: That concludes today's conference. Please disconnect this time and have a great rest of your day.

Speaker Change #138: Hum.

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Speaker Change #138: Okay.

Speaker Change #138: Hmm.

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Speaker Change #138: Mhm mhm.

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Speaker Change #138: Hmm.

Speaker Change #138: Hello.

Speaker Change #138: [music].

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Speaker Change #138: Okay.

Speaker Change #138: Yeah.

Speaker Change #138: Okay.

Speaker Change #138: Hum.

Speaker Change #138: Yeah.