Fiserv Q4 2025 Fiserv Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 Fiserv Inc Earnings Call
Speaker #1: Against following the presentation. As a reminder, today's call is being recorded. At this time, I will turn the call over to Walter Pritchard, Senior Vice President and Head of Investor Relations at
Mike Lyons: Success in our workforce management partnership with Homebase, and we continued our build-out with ADP, a partnership that is already producing strong sales collaboration and that has significant potential over time. In December, we integrated CashFlow Central, our transformative AR/AP product, directly into ADP's run platform, allowing small businesses to manage their cash flow more effectively. And finally, on the horizontal front, Clover Capital grew 30% in 2025 in North America as we continue to see significant upside with this high-value client offering where we only have mid-single-digit penetration of our eligible client base today. Internationally, our launch in Brazil continues to be highly successful, with results tracking ahead of plan and reflecting the importance of partnering with market-leading financial institutions like Caixa. Canada grew strongly in 2025 and should further accelerate as we ramp up our new strategic relationship with TD.
Speaker #1: FISERV. Thank you, and good
Speaker #2: morning. With me on the call today are Mike Lyons, our Chief Executive Officer and Paul Todd, our Chief Financial Officer. Our earnings release and supplemental materials for the quarter are available on the Investor Relations section of FISERV.com.
Speaker #2: 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 measures.
Speaker #2: Unless otherwise stated, performance references are year-over-year comparisons. Our remarks today will include forward-looking statements about, among other matters, expected operating and financial results and strategic initiatives.
Speaker #2: 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 risks/factors.
Speaker #2: And now I will turn the
Speaker #2: call over to Mike. Thank you,
Speaker #3: Walter, and welcome aboard. Good morning, everyone, and thank you for joining us. This quarter marked a decisive and positive step toward building the foundation to consistently deliver on the pillars that have long distinguished FISERV.
Mike Lyons: We introduced our flagship partnership with SMCC to offer Clover to SMBs in Japan starting later this year. This is a focused market for us given its size and low card penetration. Additionally, we are excited about the special support Visa is providing in this partnership.
Speaker #3: These include exceptional client service, world-class execution, value-added technology, and cutting-edge innovation. While there remain significant work ahead of us, we are clear on our strategy: laser-focused on our priorities, and are optimistic about our multi-quarter path towards delivering strong, sustainable operating performance and ultimately realizing FISERV's full potential.
Mike Lyons: We grew and further diversified Clover distribution channels across the board in Q4, including adding 47 banks to the Clover referral ecosystem, refreshing our merchant relationship with Truist, which will now support businesses of all sizes across the bank's large footprint, including 1,900 branches, expanding our industry-leading ISO and agent platforms, continuing to add direct salespeople in North America where we have over 600 today, launching a new digital tool for our bank partners which integrates Clover merchant onboarding into the bank's digital banking experience, introducing AI prospecting tools to assist with the identification and conversion of high-value merchants, and finally, building on the takeaways from prior pilots, we began targeting select non-Clover SMB merchants in the US with a Clover offering.
Speaker #3: While Paul will review our financial performance in detail, I would note that our Q4 results demonstrated stable, broad-based business activity trends and there were no major surprises relative to the outlook that we provided in October and that our 2026 guidance is in line with the preliminary view from Q3.
Speaker #3: As we told you in October, our headline results are below our go-forward expectations, and they will remain that way for the first half of 2026 as we invest in the franchise and lap a higher mix of non-recurring revenue.
Speaker #3: Importantly, we continue to add senior talent complementing the high-quality team that was in place when I came aboard. In addition to Paul, Walter, and Divya, we have added leaders in technology, Clover, and merchant product and sales, among other areas.
Mike Lyons: While these efforts have been narrow in scope and it's still early, we have seen some promising results with benefits for our clients and higher revenue yield for us. Our efforts here will remain deliberate, ensuring we prioritize the right experience and fit for the client. To finish on Clover, we are driving a number of merchant experience improvements, including digital feature enrollment and setup, AI-driven end-to-end merchant lifecycle orchestration, a range of automated and high-touch service capabilities, and simplification to pricing and billing statements. Next, on the innovation front, we have prioritized appropriately resourcing and completing a focused set of deliverables that are driven by strong demand from our customers. In the quarter, we made significant progress on these strategic priorities. Commerce Hub is progressing well towards a fully integrated cloud-native global omnichannel gateway supporting a best-in-class enterprise value proposition.
Speaker #3: Overall, I'm encouraged by the team's energy, and pleased that our overall employee retention is up, with retention of our top talent reaching a multi-year high in 2025.
Speaker #3: With the team in place and focused, we were firmly in execution mode in Q4, taking decisive actions across the One FISERV plan. One FISERV is at the foundation of our strategy and firmly integrated into our 2026 plan.
Speaker #3: With this in mind, I want to provide a brief update on the progress we have made across each of the five strategic areas of the plan.
Speaker #3: Operating with a client-first mindset, building the preeminent small business operating platform through Clover, creating differentiated, innovative platforms in finance and commerce, delivering operational excellence and efficiency enabled by AI, and finally employing disciplined, capital allocation for the long term.
Speaker #3: Under our client-first pillar, we made targeted investments to better align around client needs, especially in our financial solutions business. Over time, we expect this shift to enhance client satisfaction and ultimately drive sustainable growth in average revenue per customer, which has been a hallmark of FISERV.
Mike Lyons: In Q4, we launched this capability across the Americas and are ramping a leading video streaming service provider client. The platform continues to scale in North America, processing over $200 billion in 2025, a greater than 200% increase year-over-year. In financial solutions, we continued to invest in modernizing our core banking and card issuer processing platforms. In banking, we are building cloud-based, real-time secure, API-enabled, and more open capabilities, a modernization effort that began in 2022. At our client forum in September, we made it clear that there will be no forced upgrades or conversions as part of this effort, reflecting feedback we received from our customers. With respect to our newest cores, we went live with our first clients on Core Advance, and Finxact continues to perform exceptionally well and gain broad recognition for innovation.
Speaker #3: The actions we took this quarter included broadly increasing client-facing resources, revamping and improving our approach to working with consultants, including closing the Smith transaction, delivering against the first phase of product development-related commitments we made at our FISERV Forum client event, leveraging innovation, including AI trained on our DNA core, to streamline product upgrades and implementations, and accelerating our investment to modernize our technology platforms including additional multi-site resiliency measures across most of our consumer-facing payment platforms.
Mike Lyons: The Finxact platform surpassed 30 million total accounts and positions, representing over 80% growth in 2025, and is becoming the ledger of choice for fintechs and digital banks. In card issuer processing, we continued to modernize Optis and build out Vision Next, our next-gen card issuing platform. On Optis, we signed a multi-year extension with PNC and a new mandate with Fidem Finance, a fast-growing credit card asset manager that has acquired over $15 billion in assets. Fiserv will power Fidem's new co-branded credit card programs. We are now live with 5 FI clients on CashFlow Central with over 100,000 of their SMBs using our transformative all-in-one AR/AP payments platform and seeing real value. With over 155 FI signed since launch and a pipeline of over 400 prospects, we are excited about CashFlow Central's long-term potential.
Speaker #3: We remain on track to complete this effort by mid-2026. We are encouraged by the early positive client response to these efforts and will be steadfast in our focus on delivering great service and value-added solutions to our clients.
Speaker #3: And to this point, corporate sales were up solidly in Q4 versus last year and the prior quarter. With positive contributions from both the merchant and financial solutions segments, some of the more meaningful wins included new and expansion commerce hub agreements, with a leading medical device company, a large specialty retail company, and AT&T among others.
Speaker #3: An expansion of our relationship with California-based mechanics Bancorp, now with over 22 billion in assets, which selected FISERV's core and added our XD digital platform following their merger with Home Street Bank.
Speaker #3: On Optus, we signed a multi-year extension with our client, Atlanticus, a leading issuer, which includes converting the accounts they recently added with their Mercury acquisition to FISERV.
Mike Lyons: We advanced our efforts in stablecoin through the exploration of pilots with Huntington and several other banks, including use cases in cross-border payments, digital escrow, and interbank money movement. With the closing of the StoneCastle acquisition, we introduced stablecoin custody capabilities, allowing us to recycle reserves back to financial institutions, a unique capability in the space. We're also excited about StoneCastle's ability to introduce next-gen cash management capabilities to our merchants, including Clover clients. Lastly, on innovation, we continue to develop agentic commerce capabilities for our merchants and are particularly excited about our unique position with Clover to bring turnkey agentic capabilities to small businesses. We see agentic fundamentally changing the payments landscape and are working with Google, Mastercard, and Visa to bring agentic to mainstream commerce. Additionally, we're exploring arrangements to enable agentic commerce across the landscape of conversational AI platforms.
Speaker #3: A new core deal with Republic Bank and Trust Company, a Kentucky-based $7 billion bank moving to DNA, enabling the bank to give their clients faster access to deposited funds through real-time continuous processing and enabling real-time account alerts.
Speaker #3: And an expansion of our credit card relationship with Robinhood to add debit processing. Turning to our second pillar, Q4 saw continued momentum toward establishing Clover as the preeminent small business operating platform.
Speaker #3: In vertical markets, we remain on track to launch our practice pay healthcare initiative and our professional services offering this quarter. In restaurant, we continue to see market share gains as we consolidate a number of strong assets to expand our offering under the Clover Hospitality brand, and achieve economies of scale.
Speaker #3: As part of this, we are rolling out new capabilities, including multi-location support, AI-generated menus, streamlined delivery enrollment, checklist dining, and new diner engagement tools.
Mike Lyons: Fourth, we are in full swing with Project Elevate, which is a highly structured enterprise-wide evaluation of all of our activities. We are encouraged by the potential here, given we have identified ample room to simplify the business and execute faster and more efficiently, and we are attacking these opportunities with urgency. This includes a comprehensive review of how we can further deploy AI across Fiserv. We look forward to providing a more fulsome update on Elevate at our investor day. Rounding out our One Fiserv plan is our commitment to highly disciplined capital allocation. As we mentioned on our last call, we continue to evaluate businesses and assets to ensure that they are consistent with our go-forward strategy. This exercise is critical in focusing our time and resources on our most important assets and activities. In summary, we made good progress in Q4.
Speaker #3: Horizontally, we are seeing strong early success in our workforce management partnership with Homebase, and we continue our buildout with ADP, a partnership that is already producing strong sales collaboration and that has significant potential over time.
Speaker #3: In December, we integrated cash flow central, our transformative ARAP product, directly into ADP's run platform, allowing small businesses to manage their cash flow more effectively.
Speaker #3: And finally, on the horizontal front, Clover Capital grew 30% in 2025 in North America, as we continue to see significant upside with this high-value client offering where we only have mid-single-digit penetration of our eligible client base today.
Speaker #1: Success in our workforce management partnership with buildout with ADP. A partnership that is already producing strong sales collaboration and that Homebase. And we continued our time.
Operator: Success in our workforce management partnership with Homebase, and we continued our build-out with ADP, a partnership that is already producing strong sales collaboration and that has significant potential over time. In December, we integrated CashFlow Central, our transformative AR/AP product, directly into ADP's run platform, allowing small businesses to manage their cash flow more effectively. And finally, on the horizontal front, Clover Capital grew 30% in 2025 in North America as we continue to see significant upside with this high-value client offering where we only have mid-single-digit penetration of our eligible client base today. Internationally, our launch in Brazil continues to be highly successful, with results tracking ahead of plan and reflecting the importance of partnering with market-leading financial institutions like Caixa. Canada grew strongly in 2025 and should further accelerate as we ramp up our new strategic relationship with TD.
Speaker #1: In December, we integrated Cash Flow Central, our transformative ARAP product, directly into ADP's RUN platform, allowing small businesses to manage their cash flow more effectively.
Mike Lyons: We are focused and confident in our strategy and ability to execute. No other company has the assets, breadth, and scale to connect all parts of the financial ecosystem. Our unique position at the center of commerce and finance, two massive TAMs, strengthens the market position of both our merchant and financial solutions businesses and creates opportunities in areas like embedded finance, stablecoins, networks, and merchant liquidity optimization, all expanding the boundaries of how our market is defined today. New technologies, especially AI, further accelerate our ability to capitalize on and scale these opportunities. We have scheduled an investor day for 14 May and look forward to sharing additional details on our strategy and financial outlook and introducing you to the leadership team responsible for executing on our plan.
Speaker #3: Internationally, our launch in Brazil continues to be highly successful, with results tracking ahead of plan and reflecting the importance of partnering with market-leading financial institutions like Caixa, Canada grew strongly in 2025 and should further accelerate as we ramp up our new strategic relationship with TD.
Speaker #1: And finally, on the horizontal front, Clover Capital grew 30% in 2025 in to see significant upside with this high-value client offering where we only have North America, as we continue mid-single-digit penetration of our eligible client base Internationally, our launch in Brazil continues today.
Speaker #3: And we introduced our flagship partnership with SMCC to offer Clover to SMBs in Japan starting later this year. This is a focused market for us given its size and low card penetration.
Speaker #3: Additionally, we are excited about the special support visas providing in this partnership. We grew and further diversified Clover distribution channels across the board in Q4, including adding 47 banks to the Clover referral ecosystem, refreshing our merchant relationship with Truist, which will now support businesses of all sizes across the bank's large footprint, including 1,900 branches.
Speaker #1: Plan and reflecting the importance of partnering with market-leading financial institutions like Accelerate as we ramp up our new results tracking ahead of strategic relationships in 2025, and should further Caixa. Canada grew strongly in TD.
Speaker #1: And we introduced our flagship partnership, Clover, to SMBs in Japan starting later this year. This is a focused market for us given its size and low card penetration.
Operator: We introduced our flagship partnership with SMCC to offer Clover to SMBs in Japan starting later this year. This is a focused market for us given its size and low card penetration. Additionally, we are excited about the special support Visa is providing in this partnership.
Mike Lyons: I'll finish by thanking our employees for their hard work and dedication, and our clients for the continued trust they place in us. I will now pass it off to Paul to go into more detail on Q4 and 2026.
Speaker #3: Expanding our industry-leading ISO and agent platforms, continuing to add direct salespeople in North America, where we have over 600 today, launching a new digital tool for our bank partners, which integrates Clover merchant onboarding into the bank's digital banking experience.
Speaker #1: Additionally, partnership. We grew and further diversified with SMCC to offer Clover distribution channels across the board in Q4, including support visas. Providing in this, adding 47 banks to the Clover referral ecosystem, refreshing our—which will now support businesses of all sizes across the bank's large footprint, including 1,900 branches. We are excited about the special
Paul Todd: Thank you, Mike, and good morning, everyone. I will cover details on total company and segment performance in the fourth quarter and full year and then review our guidance for 2026. Beginning on slide six, total company Q4 adjusted revenue of $4.9 billion was flat, and adjusted operating income was $1.7 billion, resulting in adjusted operating margin of 34.9%. This results in full year total company adjusted revenue of $19.8 billion, up 4%, with adjusted operating income of $7.4 billion, resulting in an adjusted operating margin of 37.4%, a decrease of 200 basis points, right in line with our guidance. Total company organic revenue was roughly flat, down approximately 40 basis points in Q4, resulting in annual organic revenue growth of 3.8% in the upper half of the 3.5% to 4% guidance range we gave on our last call.
Operator: We grew and further diversified Clover distribution channels across the board in Q4, including adding 47 banks to the Clover referral ecosystem, refreshing our merchant relationship with Truist, which will now support businesses of all sizes across the bank's large footprint, including 1,900 branches, expanding our industry-leading ISO and agent platforms, continuing to add direct salespeople in North America where we have over 600 today, launching a new digital tool for our bank partners which integrates Clover merchant onboarding into the bank's digital banking experience, introducing AI prospecting tools to assist with the identification and conversion of high-value merchants, and finally, building on the takeaways from prior pilots, we began targeting select non-Clover SMB merchants in the US with a Clover offering.
Speaker #3: Introducing AI prospecting tools to assist with the identification and conversion of high-value merchants, and finally, building on the takeaways from prior pilots, we began targeting select non-Clover SMB merchants in the US with a Clover offering.
Speaker #1: Expanding our industry-leading ISO and agent direct salespeople in North America, where we have over 600 platforms, continuing to add merchant relationships with Truist. Today, launching a new digital tool for our bank partners, which integrates Clover merchant onboarding into the bank's digital banking experience.
Speaker #3: While these efforts have been narrow in scope, and it's still early, we have seen some promising results with benefits for our clients and higher revenue yield for us.
Speaker #3: Our efforts here will remain deliberate, ensuring we prioritize the right experience and fit for the client. To finish on Clover, we are driving a number of merchant experience improvements including digital feature enrollment and setup, AI-driven end-to-end merchant lifecycle orchestration, a range of automated and high-touch service capabilities, and simplification to pricing and billing statements.
Speaker #1: Introducing AI prospecting tools to assist with the identification and conversion of high-value from prior pilots, we began targeting select finally, building on the takeaways non-Clover SMB merchants in the US with a Clover been narrow in scope, and it's promising results, with benefits for our offering.
Operator: While these efforts have been narrow in scope and it's still early, we have seen some promising results with benefits for our clients and higher revenue yield for us. Our efforts here will remain deliberate, ensuring we prioritize the right experience and fit for the client. To finish on Clover, we are driving a number of merchant experience improvements, including digital feature enrollment and setup, AI-driven end-to-end merchant lifecycle orchestration, a range of automated and high-touch service capabilities, and simplification to pricing and billing statements. Next, on the innovation front, we have prioritized appropriately resourcing and completing a focused set of deliverables that are driven by strong demand from our customers. In the quarter, we made significant progress on these strategic priorities. Commerce Hub is progressing well towards a fully integrated cloud-native global omnichannel gateway supporting a best-in-class enterprise value proposition.
Paul Todd: Turning to slide 7, Merchant Solutions grew 6% organically for the year, while Financial Solutions grew 2%. Fourth quarter adjusted earnings per share was $1.99, resulting in annual adjusted earnings per share of $8.64, above our guidance range of $8.50 to $8.60. Free cash flow for the quarter was $1.6 billion and $4.44 billion for the year, ahead of our guidance of $4.25 billion, representing approximately 93% conversion. Now I will turn to the performance by segment for Q4, starting on slide 8 on Merchant Solutions. Merchant Solutions organic revenue growth was 1% for the quarter, while adjusted revenue grew 2%. Small Business revenue grew 2% on an organic basis in Q4 and 3% on an adjusted basis, with the impact of the CCB acquisition slightly greater than the FX headwind.
Speaker #3: Next, on the innovation front, we have prioritized appropriately resourcing and completing a focused set of deliverables that are driven by strong demand from our customers.
Speaker #1: Our efforts here will remain deliberate, ensuring we prioritize the right experience and fit for each client. While these efforts have clients and higher revenue, we are driving a number of merchant experience improvements on Clover, including digital feature enrollment and setup, AI-driven end-to-end merchant lifecycle orchestration, a range of automated and high-touch service capabilities, and simplification to pricing and billing statements.
Speaker #3: In the quarter, we made significant progress on these strategic priorities. Commerce Hub is progressing well, towards a fully integrated cloud-native global omnichannel gateway supporting a best-in-class enterprise value proposition.
Speaker #3: In Q4, we launched this capability across the Americas and are ramping a leading video streaming service provider client. The platform continues to scale in North America, processing over 200 billion dollars in 2025, a greater than 200% increase year over year.
Speaker #1: Next, on the innovation front, we have been resourcing and completing a focused set of prioritized, appropriate deliverables that are driven by strong demand from our customers. In the quarter, we made significant progress on these strategic priorities.
Speaker #3: In financial solutions, we continued to invest in modernizing our core banking and card issuer processing platforms. In banking, we are building cloud-based real-time secure API-enabled and more open capabilities.
Speaker #1: Commerce Hub is progressing well, towards a fully integrated cloud-native global omnichannel gateway supporting a best-in-class enterprise value proposition. In Q4, we launched this capability across the Americas and are ramping a leading video client.
Operator: In Q4, we launched this capability across the Americas and are ramping a leading video streaming service provider client. The platform continues to scale in North America, processing over $200 billion in 2025, a greater than 200% increase year-over-year. In financial solutions, we continued to invest in modernizing our core banking and card issuer processing platforms. In banking, we are building cloud-based, real-time secure, API-enabled, and more open capabilities, a modernization effort that began in 2022. At our client forum in September, we made it clear that there will be no forced upgrades or conversions as part of this effort, reflecting feedback we received from our customers. With respect to our newest cores, we went live with our first clients on Core Advance, and Finxact continues to perform exceptionally well and gain broad recognition for innovation.
Speaker #3: A modernization effort that began in 2022. At our client forum in September, we made it clear that there will be no forced upgrades or conversions as part of this effort, reflecting feedback we received from our customers.
Paul Todd: In addition, the Clover fee eliminations we discussed last quarter were a 2-point headwind to small business growth in Q4. Small business volume grew 7% in the quarter, inclusive of CCB. Clover revenue grew 12% in Q4, 2 percentage points higher than our guidance. There was a 6-point growth headwind to Q4 Clover revenue from the fee eliminations we called out on our last call. Clover volume grew 6% on a reported basis and 9%, excluding the previously discussed gateway conversion. Clover volume growth was below our expectations for the quarter, driven largely by softness we experienced in the month of November in the US, particularly in the restaurant and retail sectors where we have a large presence. This softness in the US was consistent with broader industry trends, and Clover volumes reaccelerated on a combined basis in December and January to approximately 11%, ex the gateway conversion.
Speaker #1: The platform continues over 200 billion dollars in to scale in North America, processing 2025, a greater than streaming service provider 200% increase year over banking and card issuer processing we are building cloud-based real-time platforms.
Speaker #3: With respect to our newest cores, we went live with our first clients on Core Advance and FinTech continues to perform exceptionally well and gain broad recognition for innovation.
Speaker #3: The FinTech platform surpassed 30 million total accounts and positions, representing over 80% growth in 2025, and is becoming the ledger of choice for FinTechs and digital banks.
Speaker #1: secure API-enabled solutions, we continued to invest year. In financial and more open capabilities, a modernization effort that began in 2022. At our client forum in September, we made it clear that there will be no forced upgrades or conversions as part of this effort, reflecting feedback we received from our In banking, in modernizing our core our newest cores, we went customers.
Speaker #3: In card issuer processing, we continued to modernize OpTIS and build out Vision Next, our next-gen card issuing platform. On OpTIS, we signed a multi-year extension with PNC and a new mandate with FIDOM Financial, a fast-growing credit card asset manager that has acquired over 15 billion in assets.
Speaker #1: live with our first clients on Core Advance and FinZach continues to perform exceptionally well and gain broad recognition for innovation. The FinZach platform surpassed 30 million total accounts and positions, representing over 80% growth in With respect to 2025, and is becoming the ledger of choice for fintechs and digital processing, we continued to modernize Optus, and build out Vision Next, our next-gen card issuing banks.
Operator: The Finxact platform surpassed 30 million total accounts and positions, representing over 80% growth in 2025, and is becoming the ledger of choice for fintechs and digital banks. In card issuer processing, we continued to modernize Optis and build out Vision Next, our next-gen card issuing platform. On Optis, we signed a multi-year extension with PNC and a new mandate with Fidem Finance, a fast-growing credit card asset manager that has acquired over $15 billion in assets. Fiserv will power Fidem's new co-branded credit card programs. We are now live with 5 FI clients on CashFlow Central with over 100,000 of their SMBs using our transformative all-in-one AR/AP payments platform and seeing real value. With over 155 FI signed since launch and a pipeline of over 400 prospects, we are excited about CashFlow Central's long-term potential.
Speaker #3: FISERV will power FIDOM's new co-branded credit card programs. We are now live with five FI clients on cash flow central with over 100,000 of their SMBs using our transformative all-in-one ARAP payments platform and seeing real value.
Paul Todd: Value-added services contributed 27% of Clover revenue in Q4, up five points from a year ago, driven by anticipation, software attach, and Clover Capital. Clover revenue finished the year at $3.3 billion, up 23%, while non-Clover small business revenue ex Argentina was flat in Q4 and up 3% for the year. Consistent with our preliminary view in October and assuming stable macroeconomic conditions, we expect Clover GPV growth of 10% to 15% in 2026, ex the gateway conversion. The lower end represents the core growth rate, while the higher end assumes more significant conversion of non-Clover merchants. Based on these volume expectations, the impact of Clover fee eliminations and more moderate growth from Argentina, we expect Clover revenue to grow in the low double digits for 2026. On a structural basis, our medium-term revenue growth rate target for Clover remains in the 15% to 20% range.
Speaker #3: With over 155 FI signed since launch, and a pipeline of over 400 prospects, we are excited about cash flow central's long-term potential. We advanced our efforts in stablecoin through the exploration of pilots with Huntington and several other banks, including use cases in cross-border payments digital escrow and interbank money movement.
Speaker #1: multi-year extension with PNC and a new mandate with FIDEM Financial, a fast-growing credit card asset 15 billion in assets. FISERV will power FIDEM's In card issuer new co-branded credit card programs.
Speaker #1: We are now live with five FI clients on On Optus. We signed a Cash Flow Central with over 100,000 of their SMBs. Manager that has acquired over using our transformative all-in-one AR/AP payments platform and seeing real value.
Speaker #3: With the closing of the Stone Castle acquisition, we introduced stablecoin custody capabilities allowing us to recycle reserves back to financial institutions a unique capability in the space.
Speaker #1: With over 400 prospects, we are excited about Cash Flow Central's long-term 155 FI signs since potential. We advanced our efforts in stablecoin through the exploration of launch, and a pipeline of over pilots with Huntington and several other banks, including use cases, escrow, and interbank money movement.
Speaker #1: With over 400 prospects, we are excited about cash flow central's long-term 155 FI signs since potential. We advanced our efforts in stablecoin through the exploration of launch, and a pipeline of over pilots with Huntington and several other banks, including use cases escrow, and interbank money in cross-border payments, digital closing of the Stone Castle acquisition, custody capabilities, allowing us to recycle reserves back to financial institutions, a unique capability in the space.
Speaker #3: We're also excited about Stone Castle's ability to introduce next-gen cash management capabilities to our merchants including Clover clients. Lastly, on innovation, we continue to develop agentic commerce capabilities for our merchants and are particularly excited about our unique position with Clover to bring turnkey agentic capabilities to small businesses.
Operator: We advanced our efforts in stablecoin through the exploration of pilots with Huntington and several other banks, including use cases in cross-border payments, digital escrow, and interbank money movement. With the closing of the StoneCastle acquisition, we introduced stablecoin custody capabilities, allowing us to recycle reserves back to financial institutions, a unique capability in the space. We're also excited about StoneCastle's ability to introduce next-gen cash management capabilities to our merchants, including Clover clients. Lastly, on innovation, we continue to develop agentic commerce capabilities for our merchants and are particularly excited about our unique position with Clover to bring turnkey agentic capabilities to small businesses. We see agentic fundamentally changing the payments landscape and are working with Google, Mastercard, and Visa to bring agentic to mainstream commerce. Additionally, we're exploring arrangements to enable agentic commerce across the landscape of conversational AI platforms.
Paul Todd: Moving on to enterprise, our business grew 1% on an organic basis in Q4, while declining 2% on an adjusted basis. Excluding the revenue from network fee timing associated with a large PayFac client that went live in Q3 2024, adjusted revenue for enterprise would have been 6% higher in the quarter and more in line with the 6% transaction growth. Transaction growth slowed sequentially from Q3 due to lapping the ramp of the large PayFac client mentioned earlier. And finally, in processing, organic revenue declined 1%, while adjusted revenue grew 1%, driven by FX tailwinds. Fourth quarter, adjusted operating income for the merchant solution segment was $816 million, down 17%, with adjusted operating margin of 32.1%. For the full year, merchant solutions adjusted operating income was down 2% to $3.5 billion, with adjusted operating margin of 34.5%. Now I will cover financial solutions starting on slide 9.
Speaker #3: We see agentic fundamentally changing the payments landscape and are working with Google, MasterCard, and Visa to bring agentic to mainstream commerce. Additionally, we're exploring arrangements to enable agentic commerce across the landscape of conversational AI platforms.
Speaker #1: We're also excited about Stone Castle's ability to introduce we introduced stablecoin next-gen cash management capabilities to our merchants, including Clover innovation, we continue to develop Agentic clients.
Speaker #3: Fourth, we are in full swing with Project Elevate, which is a highly structured enterprise-wide evaluation of all of our activities. We are encouraged by the potential here given we have identified ample room to simplify the business and execute faster and more efficiently.
Speaker #1: We are particularly excited about our unique position with Clover to bring turnkey Agentic Lastly, on capabilities to small businesses. We see Agentic fundamentally changing the payments landscape and are working with Google, MasterCard, and Visa to bring Agentic to mainstream commerce.
Speaker #3: And we are attacking these opportunities with urgency. This includes a comprehensive review of how we can further deploy AI across FISERV. We look forward to providing a more fulsome update on Elevate at our investor day.
Speaker #1: Additionally, we're re-exploring arrangements to enable conversational AI agentic commerce across the landscape of platforms. Fourth, we are in full swing with Project Elevate, which is a highly structured, enterprise-wide evaluation of all of our activities.
Speaker #3: Rounding out our One FISERV plan is our commitment to highly disciplined capital allocation. As we mentioned on our last call, we continue to evaluate businesses and assets to ensure that they are consistent with our go-forward strategy.
Operator: Fourth, we are in full swing with Project Elevate, which is a highly structured enterprise-wide evaluation of all of our activities. We are encouraged by the potential here, given we have identified ample room to simplify the business and execute faster and more efficiently, and we are attacking these opportunities with urgency. This includes a comprehensive review of how we can further deploy AI across Fiserv. We look forward to providing a more fulsome update on Elevate at our investor day. Rounding out our One Fiserv plan is our commitment to highly disciplined capital allocation. As we mentioned on our last call, we continue to evaluate businesses and assets to ensure that they are consistent with our go-forward strategy. This exercise is critical in focusing our time and resources on our most important assets and activities. In summary, we made good progress in Q4.
Speaker #1: We are encouraged by the potential here, given we have identified ample room to simplify the business and execute faster—and pursue these opportunities with urgency.
Speaker #3: This exercise is critical in focusing our time and resources on our most important assets and activities. In summary, we made good progress in Q4.
Paul Todd: For the quarter, both organic and adjusted revenue in financial solutions declined by 2%. In digital payments, organic and adjusted revenue declined by 1%. We saw good volume growth in debit processing and network volumes, consistent with the growth levels from last quarter. Zelle transactions grew 15% in the quarter as we continue to see a slowing of the growth curve for Zelle as the product matures. Also, we started to ramp revenue from CashFlow Central in the quarter. Finally, ATM managed services was an approximate 1-point headwind to revenue growth in digital payments. In issuing, revenue declined 1% on both an organic and adjusted basis as global active accounts on file grew in the low single digits.
Speaker #1: This includes an efficiently. And we are attacking deploy AI across Fiserv. We look forward to providing a more fulsome update on Elevate at our Investor Day.
Speaker #3: We are focused, and confident in our strategy and ability to execute. No other company has the assets, breadth, and scale to connect all parts of the financial ecosystem.
Speaker #1: Rounding out our One Fiserv plan is our commitment to highly— As we mentioned on our last call, we continue to evaluate businesses and assets to ensure that they are strategy.
Speaker #3: Our unique position at the center of commerce and finance, two massive TAMs, strengthens the market position of both our merchant and financial solutions businesses and creates opportunities in areas like embedded finance, stablecoins, networks, and merchant liquidity optimization.
Speaker #1: This exercise is critical and consistent with our go-forward focus on allocating our time and resources to our most important assets and activities. In summary, we made good progress in Q4.
Speaker #3: All expanding the boundaries of how our market is defined today. New technologies, especially AI, further accelerate our ability to capitalize on and scale these opportunities.
Speaker #1: We are focused and confident in our strategy and ability to execute. No other company has the disciplined capital allocation, assets, breadth, and scale ecosystem.
Operator: We are focused and confident in our strategy and ability to execute. No other company has the assets, breadth, and scale to connect all parts of the financial ecosystem. Our unique position at the center of commerce and finance, two massive TAMs, strengthens the market position of both our merchant and financial solutions businesses and creates opportunities in areas like embedded finance, stablecoins, networks, and merchant liquidity optimization, all expanding the boundaries of how our market is defined today. New technologies, especially AI, further accelerate our ability to capitalize on and scale these opportunities. We have scheduled an investor day for 14 May and look forward to sharing additional details on our strategy and financial outlook and introducing you to the leadership team responsible for executing on our plan.
Speaker #3: We have scheduled an investor day for sharing additional details on our strategy May 14th and look forward to and financial outlook and introducing you to the leadership team responsible for executing on our plan.
Speaker #1: Our unique finance, two massive positions at the center of commerce and TAMs, strengthens the market position of both our merchant and financial solutions to connect all parts of the financial businesses, and creates opportunities in areas like embedded finance, stablecoins, networks, and merchant liquidity optimization.
Paul Todd: Finally, in banking, revenue decreased 4% on an organic basis and was down 3% on an adjusted basis as we continue to be impacted by certain actions taken over the last several years. While an improvement sequentially, we are still facing comparative headwinds and will continue to face these throughout the first half of next year, after which we expect a return to stability. As Mike mentioned earlier, this is a significant area of investment and focus for us. Fourth quarter adjusted operating income for the Financial Solutions segment declined 20% to $997 million, and adjusted operating margin was 42.2% versus 51.7% in the prior year. The most significant impact on margins in Q4 was related to incremental vendor spend and headcount investments to improve client experience. For the year, adjusted operating income for the segment was down 2% to $4.4 billion, with adjusted operating margin of 45.3%.
Speaker #3: I'll finish by thanking our employees for their hard work and dedication and our clients for the continued trust they place in us. I will now pass it off to Paul to go into more detail on Q4 in
Speaker #1: All expanding the today. New technologies, especially AI, further accelerate our ability to capitalize on and boundaries of how our market is defined, scale these opportunities.
Speaker #3: 2026. Thank you, Mike, and
Speaker #2: good morning, everyone. I will cover details on total company and segment performance in the fourth quarter and full year and then review our guidance for 2026.
Speaker #1: We have scheduled an Investor Day for May 14, and look forward to sharing additional details on our strategy and financial outlook, and the team responsible for executing on our plan, as well as introducing you to the leadership.
Speaker #2: Beginning on slide six, total company Q4 adjusted revenue of $4.9 billion was flat and adjusted operating income was $1.7 billion, resulting in adjusted operating margin of 34.9%.
Speaker #1: I'll finish by thanking our employees for their hard work and dedication, and our clients for the continued trust they place in us. I will now pass it off to Paul to go into more detail on Q4.
Operator: I'll finish by thanking our employees for their hard work and dedication, and our clients for the continued trust they place in us. I will now pass it off to Paul to go into more detail on Q4 and 2026.
Speaker #2: This results in full year total company adjusted revenue of $19.8 billion up 4% with adjusted operating income of $7.4 billion resulting in an adjusted operating margin of 37.4%, a decrease of 200 basis points, right in line with our guidance.
Speaker #2: Thank you, Mike. Good morning, everyone. I will cover details on total company and segment performance in the fourth quarter and full year, and then review our guidance for 2026.
Paul Todd: Thank you, Mike, and good morning, everyone. I will cover details on total company and segment performance in the fourth quarter and full year and then review our guidance for 2026. Beginning on slide six, total company Q4 adjusted revenue of $4.9 billion was flat, and adjusted operating income was $1.7 billion, resulting in adjusted operating margin of 34.9%. This results in full year total company adjusted revenue of $19.8 billion, up 4%, with adjusted operating income of $7.4 billion, resulting in an adjusted operating margin of 37.4%, a decrease of 200 basis points, right in line with our guidance. Total company organic revenue was roughly flat, down approximately 40 basis points in Q4, resulting in annual organic revenue growth of 3.8% in the upper half of the 3.5% to 4% guidance range we gave on our last call.
Paul Todd: At the corporate level, our adjusted effective tax rate was 19.3% for the quarter and 18.6% for the year. From a leverage standpoint, we finished the year with a debt-to-adjusted EBITDA ratio of 3x, in line with our expectations. We continue to target long-term leverage at 2.5x to 3x. Turning to slide 10, we also repurchased 3 million shares during the quarter for approximately $200 million and paid down over $1 billion in debt after funding the acquisitions of StoneCastle and a portfolio of TD merchant contracts. With respect to Project Elevate in Q4, we incurred $73 million of expenses related to this program, and we will continue to have related one-time costs in 2026. Now with slide 11, I'll move on to 2026 guidance, which is in line with the preliminary view we gave on our last call. First, on revenue.
Speaker #2: Beginning on slide six, total company Q4 adjusted revenue of $4.9 billion was income was $1.7 billion, resulting in adjusted operating margin of 34.9%. This results in full-year total company adjusted revenue of flat, and adjusted operating $19.8 billion, up 4%, with adjusted operating income of $7.4 an adjusted operating margin of 37.4%, a decrease of 200 basis guidance.
Speaker #2: Total company organic revenue was roughly flat down approximately 40 basis points in Q4, resulting in annual organic 3.8% in the upper half of revenue growth of the 3.5 to 4% guidance range we gave on call.
Speaker #2: Turning to slide seven, merchant solutions grew 6% organically for the year while financial solutions grew 2%. Fourth quarter adjusted earnings per share was $1.99, resulting in annual adjusted earnings per share of $8.64 above our guidance range of $8.50 to $8.60.
Speaker #2: Total company organic revenue was roughly flat, right in line with our guidance, down approximately 3.8%, and in the upper half of the 3.5% to 4% guidance range we gave, resulting in annual organic revenue growth in line with the call.
Speaker #2: Free cash flow for the quarter was $1.6 billion and $4.44 billion for the year ahead of our guidance of $4.25 billion representing approximately 93% conversion.
Speaker #2: Turning to slide our last seven, merchant solutions grew 6% organically for the year, while financial solutions grew basis points in Q4, in annual adjusted earnings $1.99, resulting 2%.
Paul Todd: Turning to slide 7, Merchant Solutions grew 6% organically for the year, while Financial Solutions grew 2%. Fourth quarter adjusted earnings per share was $1.99, resulting in annual adjusted earnings per share of $8.64, above our guidance range of $8.50 to $8.60. Free cash flow for the quarter was $1.6 billion and $4.44 billion for the year, ahead of our guidance of $4.25 billion, representing approximately 93% conversion. Now I will turn to the performance by segment for Q4, starting on slide 8 on Merchant Solutions. Merchant Solutions organic revenue growth was 1% for the quarter, while adjusted revenue grew 2%. Small Business revenue grew 2% on an organic basis in Q4 and 3% on an adjusted basis, with the impact of the CCB acquisition slightly greater than the FX headwind.
Paul Todd: We are continuing to provide guidance regarding our organic revenue growth for 2026, and we plan to supplement this with additional information about our assumptions to help investors and analysts arrive at adjusted revenue. Also, to provide further insight, we are giving growth expectations for the merchant and financial solutions segments. We expect 2026 organic revenue growth in the range of 1% to 3%, with merchant solutions revenue growth in the mid-single digits, and financial solutions flat to slightly down. Reflecting higher non-recurring revenue a year ago, we expect adjusted revenue growth in both quarters of the first half of 2026 to decline to the low single digits, with Q2 representing the trough in terms of the rate of decline. In our financial solutions business, we expect a more pronounced growover trend in the first half, resulting in a decline at the high end of mid-single digits.
Speaker #2: Now I will turn to the performance by segment for Q4 starting on slide eight on merchant solutions. Merchant solutions organic revenue growth was 1% for the quarter while adjusted revenue grew 2%.
Speaker #2: $8.50 per share on $1.6 billion, and $4.44 billion for the year, ahead of our $8.64, above our guidance of $4.25 to $8.60. Fourth quarter free cash flow for the quarter was $1 billion, representing conversion.
Speaker #2: Small business revenue grew 2% on an organic basis in Q4 and 3% on an adjusted basis with the impact of the CCB acquisition slightly greater than the FX headwind.
Speaker #2: In addition, the Clover fee eliminations we discussed last quarter were a two-point headwind to small business growth in Q4. Small business volume grew 7% in the quarter inclusive of CCB.
Speaker #2: Now I’ll approximately—93%—turn to the performance by segment for Q4, starting on slide eight on Merchant Solutions. Merchant Solutions organic revenue growth was 1% for the quarter and grew 2%.
Speaker #2: Clover revenue grew 12% in Q4, 2 percentage points higher than our guidance. There was a six-point growth headwind to Q4 Clover revenue from the fee eliminations we called out on our last call.
Speaker #2: Small business revenue grew 2% on an organic basis in Q4, and 3% on an quarter, while adjusted revenue of the CCB acquisition headwind. In addition, the Clover fee eliminations a two-point headwind to small business growth in Q4.
Speaker #2: Clover volume grew 6% on a reported basis and 9% excluding the previously discussed gateway conversion. Clover volume growth was below our expectations for the quarter driven largely by softness we experienced in the month of November in the US, particularly in the restaurant and retail sectors where we have a large presence.
Paul Todd: As we get to the second half of the year, we expect our adjusted revenue growth to be more tightly correlated to underlying drivers such as volume, transaction, and account growth. We expect offsetting FX and M&A impacts for 2026, driving our expectation for adjusted revenue growth that is also in the range of 1% to 3%. As a reminder, Q1 is the last quarter of impact from the CCV acquisition, and thus we expect an approximate one-point difference between organic and adjusted revenue in this period. We expect Argentina will have a modest positive impact to organic revenue growth in 2026, while having a slightly larger negative impact to adjusted revenue growth. As compared to prior years, based on our current expectations, this is a much more modest contribution from Argentina.
Paul Todd: In addition, the Clover fee eliminations we discussed last quarter were a 2-point headwind to small business growth in Q4. Small business volume grew 7% in the quarter, inclusive of CCB. Clover revenue grew 12% in Q4, 2 percentage points higher than our guidance. There was a 6-point growth headwind to Q4 Clover revenue from the fee eliminations we called out on our last call. Clover volume grew 6% on a reported basis and 9%, excluding the previously discussed gateway conversion. Clover volume growth was below our expectations for the quarter, driven largely by softness we experienced in the month of November in the US, particularly in the restaurant and retail sectors where we have a large presence. This softness in the US was consistent with broader industry trends, and Clover volumes reaccelerated on a combined basis in December and January to approximately 11%, ex the gateway conversion.
Speaker #2: Small business volume grew basis and 9% excluding call. Clover volume grew the previously discussed gateway conversion. Clover 6% on a reported called out on our last softness we experienced in the month There was a six-point volume growth was below our expectations of November in the US, for the quarter-driven largely by particularly in the restaurant and presence.
Speaker #2: of CCB. Clover revenue grew we discussed last quarter were 12% in Q4, 2 percentage points higher than our slightly greater than the FX growth headwind to Q4 Clover revenue from the fee eliminations we guidance.
Speaker #2: This softness in the US was consistent with broader industry trends and Clover volumes re-accelerated on a combined basis in December and January to approximately 11% ex the gateway conversion value-added services contributed 27% of Clover revenue in Q4 up 5 points from a year ago driven by anticipation software attach and Clover capital.
Speaker #2: Clover revenue finished the year at $3.3 billion up 23% while non-Clover small business revenue ex Argentina was flat in Q4 and up 3% for the year.
Speaker #2: US was consistent with broader industry trends, and Clover volumes re-accelerated on a combined basis. This softness in December and in retail sectors, where we have a large presence, was ex the gateway conversion. Value-added services contributed 27% of Clover revenue in Q4, up 5 points from a year ago, driven by anticipation, software attach, and Clover Capital.
Paul Todd: We expect our effective tax rate to be in the range of approximately 19% to 19.5% for the full year, and weighted average share count to be approximately 530 million. Putting it all together, we expect adjusted EPS of $8 to $8.30. Similar to our expectations around revenue, we expect a different level of operating margins in the first and second halves of the year. In the first half, we expect adjusted operating margin of 31% to 32%, with Q1 representing the low point just below 30%. In the second half of the year, we expect adjusted operating margin of 35% to 36%, with Q4 representing the high point in the year. For the year, this translates into approximately 34% adjusted operating margin.
Speaker #2: Consistent with our preliminary view in October, and assuming stable macroeconomic conditions, we expect Clover GPV growth of 10 to 15% in 2026 ex the gateway conversion.
Paul Todd: Value-added services contributed 27% of Clover revenue in Q4, up five points from a year ago, driven by anticipation, software attach, and Clover Capital. Clover revenue finished the year at $3.3 billion, up 23%, while non-Clover small business revenue ex Argentina was flat in Q4 and up 3% for the year. Consistent with our preliminary view in October and assuming stable macroeconomic conditions, we expect Clover GPV growth of 10% to 15% in 2026, ex the gateway conversion. The lower end represents the core growth rate, while the higher end assumes more significant conversion of non-Clover merchants. Based on these volume expectations, the impact of Clover fee eliminations and more moderate growth from Argentina, we expect Clover revenue to grow in the low double digits for 2026. On a structural basis, our medium-term revenue growth rate target for Clover remains in the 15% to 20% range.
Speaker #2: The lower end represents the core growth rate while the higher end assumes more significant conversion of non-Clover merchants. Based on these volume expectations, the impact of Clover fee eliminations and more moderate growth from Argentina we expect Clover revenue to grow in the low double digits for 2026.
Speaker #2: Clover revenue finished the year at $3.3 January to approximately 23%, while non-Clover small business revenue ex Argentina was flat in Q4 and up 3% for the year.
Speaker #2: Preliminary view in October, and assuming consistent with our stable macroeconomic conditions, we expect Clover 15% in 2026 ex the gateway conversion. The core growth rate, while the lower end represents, the higher end assumes more significant conversion of non-Clover merchants.
Speaker #2: On a structural basis, our medium-term revenue growth rate target for Clover remains in the 15 to 20 percent range. Moving on to enterprise, our business grew 1% on an organic basis in Q4 while declining 2% on an adjusted basis.
Paul Todd: To complete our strategic investments, we expect capital expenditures to remain approximately flat with 2025 levels and end the year with a leverage ratio of approximately 3x. We expect free cash flow conversion of approximately 90% of adjusted net income for the year, in line with historical levels. As always, Q1 will be our trough for free cash flow conversion. Finally, to the extent we generate any excess cash from business and asset optimization activities, we intend to deploy this additional cash to share repurchase. And with that, I will turn the call back to the operator to start the Q&A session.
Speaker #2: Excluding the revenue from network fee timing, associated with a large PayFact client that went live in Q3 2024, adjusted revenue for enterprise would have been 6% higher in the quarter and more in line with the 6% transaction growth.
Speaker #2: Based on these volume expectations, the impact of Clover fee eliminations, GPV growth of 10 to Argentina, we expect Clover revenue to grow in the low double digits and more moderate growth from 2026.
Speaker #2: On a structural basis, our medium-term revenue growth rate digits for range. target for Clover remains in Moving on to enterprise, our the 15 to 20 percent business grew 1% on an organic basis in Q4, while declining 2% on an adjusted basis.
Speaker #2: Transaction growth slowed sequentially from Q3 due to lapping the ramp of the large PayFact client mentioned earlier. And finally, in processing, organic revenue declined 1% while adjusted revenue grew 1% driven by FX tailwinds.
Paul Todd: Moving on to enterprise, our business grew 1% on an organic basis in Q4, while declining 2% on an adjusted basis. Excluding the revenue from network fee timing associated with a large PayFac client that went live in Q3 2024, adjusted revenue for enterprise would have been 6% higher in the quarter and more in line with the 6% transaction growth. Transaction growth slowed sequentially from Q3 due to lapping the ramp of the large PayFac client mentioned earlier. And finally, in processing, organic revenue declined 1%, while adjusted revenue grew 1%, driven by FX tailwinds. Fourth quarter, adjusted operating income for the merchant solution segment was $816 million, down 17%, with adjusted operating margin of 32.1%. For the full year, merchant solutions adjusted operating income was down 2% to $3.5 billion, with adjusted operating margin of 34.5%. Now I will cover financial solutions starting on slide 9.
Speaker #2: Excluding the revenue from network fee timing, associated with a large PayFact client that went live in Q3 2024, adjusted and more in line with the 6% transaction growth.
Speaker #2: Fourth quarter adjusted operating income for the merchant solution segment was $816 million down 17% with adjusted operating margin of 32.1%. For the full year, merchant solutions adjusted operating income was down 2% to $3.5 billion with adjusted operating margin of 34.5%.
Operator: Thank you. We would like to open the phone lines for questions. As a reminder, for today's call, 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, press star two. Our first question comes from Darrin Peller from Wolfe Research. Please go ahead.
Speaker #2: revenue for enterprise would have been Transaction growth slowed sequentially 6% higher in the quarter client mentioned earlier. And finally, in processing, from Q3 due to lapping the organic revenue declined 1% while adjusted revenue grew 1% driven by FX tailwinds.
Darrin Peller: Thanks, guys. Mike, can you just touch on whether you believe the review you've taken of the business has really accomplished everything you need, and you fully see what you needed to see? Do you feel confident on the numbers going forward?
Speaker #2: Now I will cover financial solutions starting on slide nine. For the quarter, both organic and adjusted revenue in financial solutions declined by 2%. In digital payments, organic and adjusted revenue declined by 1%.
Speaker #2: Fourth quarter adjusted operating income for the merchant solution segment was $816 million, down 17%, with adjusted operating margin of ramp of the large PayFact 32.1%.
Mike Lyons: Yeah, thank you for the question. We feel great, as we went through in the prepared comments. They would feel great about the progress we're making and the pace that we're moving at. Relative to the conclusions that we outlined from the analysis we did in Q3, there's nothing new, and that's fully reflected in hitting what we thought we'd do for Q4 and introducing guidance for 2026 in line with the preliminary view we provided back in October. So as I said, it's a multi-quarter path. We feel great about the progress. We're fully aware of what we need to do to position our business as this constant compounder goal that we have, and 100% of our focus is on executing against the pillars we put forth in the One Fiserv plan, and I went through with it.
Speaker #2: We saw good volume growth in debit processing and network volumes consistent with the growth levels from last quarter. Zelle transactions grew 15% in the quarter as we continue to see a slowing of the growth curve for Zelle as the product matures.
Speaker #2: For the full year, Merchant Solutions adjusted operating income was down 2% to $3.5 billion, with an adjusted operating margin of 34.5%. Now I will cover Financial Solutions, starting on slide nine.
Speaker #2: Also, we started to ramp revenue from cash flow central in the quarter. Finally, ATM managed services was an approximate 1-point headwind to revenue growth in digital payments.
Speaker #2: For the quarter, both organic and adjusted revenue in 2%. In digital revenue declined by growth in debit processing and network volumes consistent with the growth payments, organic and adjusted quarter.
Paul Todd: For the quarter, both organic and adjusted revenue in financial solutions declined by 2%. In digital payments, organic and adjusted revenue declined by 1%. We saw good volume growth in debit processing and network volumes, consistent with the growth levels from last quarter. Zelle transactions grew 15% in the quarter as we continue to see a slowing of the growth curve for Zelle as the product matures. Also, we started to ramp revenue from CashFlow Central in the quarter. Finally, ATM managed services was an approximate 1-point headwind to revenue growth in digital payments. In issuing, revenue declined 1% on both an organic and adjusted basis as global active accounts on file grew in the low single digits.
Speaker #2: In issuing, revenue declined 1% on both an organic and adjusted basis as global active accounts on file grew in the low single digits. Finally, in banking, revenue decreased 4% on an organic basis and was down 3% on an adjusted basis as we continue to be impacted by certain actions taken over the last several years.
Speaker #2: 15% in the quarter as we Zelle transactions grew continue to see a slowing of the growth curve matures. Also, we levels from last started to ramp revenue from cash flow central in the quarter.
Mike Lyons: As you saw and Paul talked about in his comments, we just have to – it was difficult to compare. In the first half of the years, we pivoted the strategy, and the third quarter to focus on more recurring revenue. So overall, we feel good. The quarter was about execution, and that's where we go from here.
Speaker #2: While an improvement sequentially, we are still facing comparative headwinds and will continue to face these throughout the first half of next year after which we expect a return to stability.
Speaker #2: Finally, ATM for Zelle as the product managed services was an approximate 1-point headwind to revenue payments. In issuing, revenue declined 1% on both an organic and adjusted basis, as global active accounts on file grew in the low single digits. Finally, in banking, revenue decreased 4% on an organic basis and was down digits.
Darrin Peller: All right. Thanks a lot, guys.
Speaker #2: As Mike mentioned earlier, this is a significant area of investment and focus for us. Fourth quarter adjusted operating income for the financial solution segment declined 20% to $997 million and adjusted operating margin was 42.2% versus 51.7% in the prior year.
Operator: We'll move to line Timothy Chiodo from UBS. Please go ahead.
Timothy Chiodo: Great. Thanks a lot. I want to touch on digital payments, so that subsegment within the financial solutions segment. That is the largest bucket there. I believe it's about $4 billion or so in annual revenues. And correct me if I'm wrong, but I think Star and Accel, the debit networks, make up about maybe a quarter of that, so say $1 billion or so of that $4 billion of revenue within digital payments. Last quarter, you called out some pricing actions within that subsegment, and I believe some of them related to the debit networks as well and maybe some other portions of that subsegment.
Paul Todd: Finally, in banking, revenue decreased 4% on an organic basis and was down 3% on an adjusted basis as we continue to be impacted by certain actions taken over the last several years. While an improvement sequentially, we are still facing comparative headwinds and will continue to face these throughout the first half of next year, after which we expect a return to stability. As Mike mentioned earlier, this is a significant area of investment and focus for us. Fourth quarter adjusted operating income for the Financial Solutions segment declined 20% to $997 million, and adjusted operating margin was 42.2% versus 51.7% in the prior year. The most significant impact on margins in Q4 was related to incremental vendor spend and headcount investments to improve client experience. For the year, adjusted operating income for the segment was down 2% to $4.4 billion, with adjusted operating margin of 45.3%.
Speaker #2: By certain actions taken over the last several years. While an improvement sequentially, we are still facing a comparative basis as we continue to be impacted by headwinds and will continue to face these throughout, after which we expect a return to stability.
Speaker #2: The most significant impact on margins in Q4 was related to incremental vendor spend and headcount investments to improve client experience. For the year, adjusted operating income for the segment was down 2% to $4.4 billion with adjusted operating margin of 45.3%.
Speaker #2: As Mike mentioned earlier, this is a the first half of next year focus for us. 3% on an adjusted Fourth quarter adjusted operating income for the significant area of investment and financial solution segment declined 20% to $997 million, and adjusted operating margin was 42.2% versus 51.7% in the prior year.
Timothy Chiodo: Maybe you could just add some more detail on those price changes and maybe an update or a response to what you saw in the market, whether it brought on additional volume, it protected volume that might have been lost, and anything else you can provide around really Star and Accel as the focus. I know you mentioned that things are pretty consistent, but anything else you could add would be appreciated.
Speaker #2: At the corporate level, our adjusted effective tax rate was 19.3% for the year. From a leverage quarter and 18.6% for the standpoint, we finished the year with a debt-to-adjusted EBITDA ratio of three times in line with our expectations, we continue to target long-term leverage at 2.5 to three times.
Speaker #2: Incremental vendor spend impacted client experience. For the year, adjusted operating income was down 2% to $4.4 billion, with an adjusted operating margin of 45.3%. The most significant impact for the segment was reflected here.
Mike Lyons: Sure, Tim. Thanks for the question. And yeah, we did make comments on the last quarter call in regard to that. I wouldn't add anything new to that. There wasn't any new development in Q4 related to any of those actions. I would say we were very pleased not only with the sequential improvement in digital payments, but also what we saw on the volume side, particularly on the network side. We did see growth on the network volumes. And in that overall digital space, we also saw good transactions in our debit processing area as well. And I think that's what was the underpinning of the performance there. Just like with all the segments, we do have comparative headwinds that will continue in digital payments for the first half of next year, but there wouldn't be anything else I would add on the network side.
Speaker #2: Turning to slide 10, we also repurchased $3 million shares during the quarter for approximately $200 million and paid down over a billion dollars in debt after funding the acquisitions of Stone Castle and a portfolio of TD Merchant contracts.
Speaker #2: At the corporate level, our adjusted effective tax rate was and headcount investments to improve quarter and 18.6% for the 19.3% for the year. From a leverage standpoint, we finished the year with a debt-to-adjusted EBITDA ratio of three times in line with our expectations.
Paul Todd: At the corporate level, our adjusted effective tax rate was 19.3% for the quarter and 18.6% for the year. From a leverage standpoint, we finished the year with a debt-to-adjusted EBITDA ratio of 3x, in line with our expectations. We continue to target long-term leverage at 2.5x to 3x. Turning to slide 10, we also repurchased 3 million shares during the quarter for approximately $200 million and paid down over $1 billion in debt after funding the acquisitions of StoneCastle and a portfolio of TD merchant contracts. With respect to Project Elevate in Q4, we incurred $73 million of expenses related to this program, and we will continue to have related one-time costs in 2026. Now with slide 11, I'll move on to 2026 guidance, which is in line with the preliminary view we gave on our last call. First, on revenue.
Speaker #2: With respect to project Elevate in Q4, we incurred $73 million of expenses related to this program and we will continue to have related one-time costs in 2026.
Speaker #2: target long-term leverage at times. Turning to slide 2.5 to three million shares during the quarter for approximately $200 million, and paid down over a billion dollars in debt after funding the acquisitions of Stone Castle and a portfolio of TD merchant contracts.
Speaker #2: Now with slide 11, I'll move on to 2026 guidance, which is in line with the preliminary view we gave on our last call. First, on revenue.
Speaker #2: We are continuing to provide guidance regarding our organic revenue growth for 2026 and we plan to supplement this with additional information about our assumptions to help investors and analysts arrive at adjusted revenue.
Mike Lyons: I would just add strategically, we continue to be very pleased with both Star and Accel and the value we add on both sides of our business, classic synergy play between FS and MS sides of the business. And we continue to try to look for all ways that we can fully leverage those networks.
Speaker #2: With respect to project Elevate in Q4, we expenses related to this program, 10, we also repurchased $3 encouraged 73 million of related one-time costs in 2026.
Speaker #2: Also, to provide further insight, we are giving growth expectations for the merchant and financial solution segments. We expect 2026 organic revenue growth in the range of 1 to 3 percent with merchant solutions revenue growth in the mid-single digits and financial solutions flat to slightly down.
Timothy Chiodo: Great. Thank you both.
Speaker #2: Now, with 2026 guidance—which is in line with the preliminary view we gave on our last call—first, on revenue. We are on slide 11. I'll move on to continue providing guidance regarding our organic revenue growth for 2026, and we plan to supplement this with additional information about our assumptions to help.
Operator: We'll go to the line of Tien-tsin Huang from JPMorgan. Please go ahead.
Tien-Tsin Huang: Hi. Thank you. It seems like you got some good line of sight into the business, which is great. I want to better understand the expenses required to execute One Fiserv. Specifically, how much is structural versus one-time like consulting or IT staff augmentation, that kind of thing? Looks like you're going to exit the year at 36% margin. How clean is that 36%? Thanks.
Paul Todd: We are continuing to provide guidance regarding our organic revenue growth for 2026, and we plan to supplement this with additional information about our assumptions to help investors and analysts arrive at adjusted revenue. Also, to provide further insight, we are giving growth expectations for the merchant and financial solutions segments. We expect 2026 organic revenue growth in the range of 1% to 3%, with merchant solutions revenue growth in the mid-single digits, and financial solutions flat to slightly down. Reflecting higher non-recurring revenue a year ago, we expect adjusted revenue growth in both quarters of the first half of 2026 to decline to the low single digits, with Q2 representing the trough in terms of the rate of decline. In our financial solutions business, we expect a more pronounced growover trend in the first half, resulting in a decline at the high end of mid-single digits.
Speaker #2: Reflecting higher non-recurring revenue a year ago, we expect adjusted revenue growth in both quarters of the first half of 2026 to decline to the low single digits with Q2 representing the trough in terms of the rate of decline.
Speaker #1: We are giving merchant financial solutions segments growth and are giving expectations for the 2026 growth. We expect further growth and provide insight to help analysts arrive at adjusted revenue.
Speaker #2: In our financial solutions business, we expect a more pronounced growover trend in the first half, resulting in a decline at the high end of mid-single digits.
Mike Lyons: Yeah. So, Tien-Tsin Huang, thanks. I would speak to the overall margin first and the expense. We don't see any material kind of expense ramp-up. As we kind of said on our last call, we have largely baked in the expenses related to One Fiserv, and particularly around the infrastructure and some of the resiliency investments and such. So just as an operating margin standpoint, there is an increase year over year on expenses from an operating standpoint, but it's in line with exactly what we were expecting when we gave the guidance. Hence, the margin guide is in line. As it relates to the transformation, Project Elevate expenses, particularly, we did call out the size of those. There was startup-related expenses, particularly around professional services in there. We did have some infrastructure expenses as well.
Speaker #1: segments expect 2026 organic revenue growth and in the of range with Solutions merchant in the revenue Financial 1 to 3% , slightly mid-single solutions investors and non-recurring revenue .
Speaker #2: As we get to the second half of the year, we expect our adjusted revenue growth to be more tightly correlated to underlying drivers such as volume, transaction, and account growth.
Speaker #2: We expect offsetting FX and M&A impacts for 2026, driving our expectation for adjusted revenue growth that is also in the range of 1 to 3 percent.
Speaker #1: A and year growth . ago , we expect adjusted revenue growth in both quarters of down half Also to of decline to the low 2026 to single first higher digits , with the representing trough .
Speaker #2: As a reminder, Q1 is the last quarter of impact from the CCV acquisition and thus we expect an approximate 1-point difference between organic and adjusted revenue in this period.
Speaker #1: In terms of the rate of inflow in our Financial Solutions business, we pronounced growth. We expect a more moderate growth over the first half, resulting in a first half decline at the trend in the end of high mid-single digits.
Paul Todd: As we get to the second half of the year, we expect our adjusted revenue growth to be more tightly correlated to underlying drivers such as volume, transaction, and account growth. We expect offsetting FX and M&A impacts for 2026, driving our expectation for adjusted revenue growth that is also in the range of 1% to 3%. As a reminder, Q1 is the last quarter of impact from the CCV acquisition, and thus we expect an approximate one-point difference between organic and adjusted revenue in this period. We expect Argentina will have a modest positive impact to organic revenue growth in 2026, while having a slightly larger negative impact to adjusted revenue growth. As compared to prior years, based on our current expectations, this is a much more modest contribution from Argentina.
Speaker #2: We expect Argentina will have a modest positive impact to organic revenue growth in 2026 while having a slightly larger negative impact to adjusted revenue growth.
Mike Lyons: And that is about the right kind of cadence of what we expect quarterly expenses related to Project Elevate to be. They will increase some as we move forward and broaden the project as we focus now on process efficiencies and other efficiencies that we expect to get out of the business. And those will then be more kind of technological-related expenses as opposed to more professional services related.
Speaker #1: As we get to the second half of the expect our adjusted year , we revenue growth to be more correlated such as decline , transaction and account volume We tightly growth offsetting FX and to M&A impacts underlying for our .
Speaker #2: As compared to prior years, based on our current expectations, this is a much more modest contribution from Argentina. We expect our effective tax rate to be in the range of approximately 19 to 19.5 percent for the full year and weighted average share count to be approximately 530 million.
Speaker #1: in the revenue drivers , As reminder , 2026 , driving Q1 is the last quarter of impact from a CSV acquisition and thus we also of approximate one point difference growth .
Tien-Tsin Huang: Okay. Great. Thank you.
Operator: We'll move to David Koning from Baird. Please go ahead.
Speaker #2: Putting it all together, we expect adjusted EPS of $8 to $8.30. Similar to our expectations around revenue, we expect a different level of operating margins in the first and second halves of the year.
David Koning: Yeah. Hey, guys. Thank you. I guess my question is on the SMB portion of the acceptance segment. You mentioned the Clover part will probably grow revenue, low double digits, but I'm also wondering, what do you expect from the non-Clover part of SMB that's been declining, maybe flattish, ex-Argentina? But then as a corollary to it, Argentina, the merchant cash advances look like they were down dramatically. There's a lot less. So is that creating a little bit of a headwind in that non-Clover part? And so I guess kind of multiple-layer question just on how SMB is going to do in 2026.
Speaker #1: . We and Argentina expect the modest will impact to positive growth in while adjusted slightly having a 2026 , adjusted organic revenue growth larger as our current Based on years .
Speaker #2: In the first half, we expect adjusted operating margin of 31 to 32 percent with Q1 representing the low point just below 30 percent. In the second half of the year, we expect adjusted operating margin of 35 to 36 percent with Q4 representing the high point in the year.
Paul Todd: We expect our effective tax rate to be in the range of approximately 19% to 19.5% for the full year, and weighted average share count to be approximately 530 million. Putting it all together, we expect adjusted EPS of $8 to $8.30. Similar to our expectations around revenue, we expect a different level of operating margins in the first and second halves of the year. In the first half, we expect adjusted operating margin of 31% to 32%, with Q1 representing the low point just below 30%. In the second half of the year, we expect adjusted operating margin of 35% to 36%, with Q4 representing the high point in the year. For the year, this translates into approximately 34% adjusted operating margin.
Speaker #1: expectations , compared to prior this is from contribution That . much more expect our We range of the tax rate effective to be in 19 to 19.5% for the full year , and weighted average approximately count to be share revenue a 530 million , putting it all approximately we expect adjusted EPs of $8 to $8.30 .
Speaker #2: For the year, this translates into approximately 34 percent adjusted operating margin. To complete our strategic investments, we expect capital expenditures to remain approximately flat with 2025 levels and in the year with a leverage ratio of approximately three times.
Mike Lyons: Yeah. So overall, we did comment on the Clover part of SMB. We do expect slight growth in the non-Clover SMB for next year. We kind of talked about that as being kind of flat to maybe just a little bit of growth on the non-Clover SMB. You're right, Dave, as it relates to Argentina in general; it's now really not a growth factor at all relative to the go-forward expectations in 2026. And so we had an impact in 2025 that we called out, that if you took out Argentina, we actually did grow the non-Clover piece. But as you look forward in 2026, we expect roughly a flat to a slightly growth non-Clover SMB picture that's embedded in our guidance.
Speaker #1: Similar to our expectations around revenue . We expect different level of operating margins in the the second halves of and first the year In the first half , we expect .
Speaker #2: We expect free cash flow conversion of approximately 90 percent of adjusted net income for the year in line with historical levels. As always, Q1 will be our trough for free cash flow conversion.
Speaker #1: operating margin of adjusted 31 to 32% , with Q1 representing the low just in the second half of the below 30% year . We expect operating adjusted margin of 35 to 36% , with Q4 the high representing year .
Speaker #2: Finally, to the extent we generate any excess cash from business and asset optimization activities, we intend to deploy this additional cash to share repurchase.
Speaker #1: in the point translates year this point operating 34% adjusted For the . To strategic investments , we capital expect expenditures complete our approximately with 2025 levels .
Paul Todd: To complete our strategic investments, we expect capital expenditures to remain approximately flat with 2025 levels and end the year with a leverage ratio of approximately 3x. We expect free cash flow conversion of approximately 90% of adjusted net income for the year, in line with historical levels. As always, Q1 will be our trough for free cash flow conversion. Finally, to the extent we generate any excess cash from business and asset optimization activities, we intend to deploy this additional cash to share repurchase. And with that, I will turn the call back to the operator to start the Q&A session.
Speaker #2: And with that, I will turn the call back to the operator to start the Q&A
Speaker #2: And with that, I will turn the call back to the operator to start the Q&A session. Thank you.
Speaker #1: We would like to open the phone lines for questions. As a reminder, for today's call, please limit yourself to one question to ensure ample time to answer as many questions as possible.
David Koning: Great. Thanks, guys.
Speaker #1: flat approximately year with in the the And ratio of approximately we expect free cash into conversion of to flow approximately 90% of adjusted net income in line with year , for the levels historical always , .
Operator: We'll go to the line of Andrew Jeffrey from William Blair. Please go ahead.
Speaker #1: If you would like to ask a question, you may press star one on your phone. If you would like to withdraw your question, press star two.
Andrew Jeffrey: Hi. Good morning. Appreciate you taking the question. Mike, I'd like to dig in a little bit on your outlook for Clover yield. The medium-term revenue guidance in Clover obviously implies some nice share gains relative to at least the US market. And yield growth, obviously, given the fee changes, has slowed quite a bit. But can you talk about the areas where you think you have the ability to add sort of durable value with value-added services and what the yield progression in that business looks like over time? Just trying to get a little more clarity on the outlook for accelerating Clover revenue growth.
Speaker #1: Our first question comes from Darren Peller from Wolf Research. Please go ahead.
Speaker #2: Thanks, guys. Mike, can you just touch on whether you believe the review you've taken of the business is really accomplished everything you need? And you fully see what you needed to see that you feel confident on the numbers going
Speaker #1: Q1 will be our trough for cash flow conversion As to the Finally , extent we generate free any excess cash from asset optimization activities , we intend to business and deploy this additional to share repurchase that , I will turn back to cash start the Q&A .
Speaker #2: forward? Yeah.
Speaker #3: Thank you, for the question. And we feel great through in the prepared comments that we feel great about the progress we're making and the pace that we're moving at.
Operator: Thank you. We would like to open the phone lines for questions. As a reminder, for today's call, 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, press star two. Our first question comes from Darrin Peller from Wolfe Research. Please go ahead.
Speaker #1: the call
Speaker #1: .
Speaker #2: We
Speaker #2: We
Speaker #2: to open the phone lines for questions . reminder , for today's call , please limit would like yourself to ample time
Speaker #3: And relative to the conclusions that we outlined from the analysis we did in Q3, there is nothing new and that's fully reflected in us hitting up what we thought we'd do for Q4 and introducing guidance for 26 in line with the preliminary view we provided back in October.
Mike Lyons: Sure. I just started at the highest level is we were very pleased with the underlying trends we saw in Clover in Q4. We talked about some of the macro factors. Then, more importantly, with the progress we made against the Clover business priorities that we highlighted as part of the One Fiserv action plan and Pillar Two. And those are critical to reaching this goal of creating, I think, a little bit to where you're going is what we believe will be the preeminent small business operating platform. That's obviously our goal, not just be a payments box, but help small businesses run their full operations from there. And that goes to the partnerships on the horizontal side with Homebase, with ADP, with CashFlow Central, obviously, embedded into ADP, Clover Capital.
Speaker #2: ensure ask a If you possible . to answer may press star one on your phone . If you would like to withdraw question , press star as many from from Wolfe first question comes Our Please go your ahead two . .
Speaker #2: ensure ask a If you possible . to answer may press star one on your phone . If you would like to withdraw question , press star as many from from Wolfe first question comes Our Please go your ahead two .
Paul Todd: Thanks, guys. Mike, can you just touch on whether you believe the review you've taken of the business has really accomplished everything you need, and you fully see what you needed to see? Do you feel confident on the numbers going forward?
Speaker #3: Thanks ,
Speaker #3: So as I said at the multi-quarter path, feel great about the progress. We're fully aware of what we need to do to position our business as this constant compounder goal that we have in 100 percent of our focus is on executing against the pillars we put forth in the 150 plan.
Speaker #3: whether you've Mike , believe the review taken of the business accomplished ?
Mike Lyons: Yeah, thank you for the question. We feel great, as we went through in the prepared comments. They would feel great about the progress we're making and the pace that we're moving at. Relative to the conclusions that we outlined from the analysis we did in Q3, there's nothing new, and that's fully reflected in hitting what we thought we'd do for Q4 and introducing guidance for 2026 in line with the preliminary view we provided back in October. So as I said, it's a multi-quarter path. We feel great about the progress. We're fully aware of what we need to do to position our business as this constant compounder goal that we have, and 100% of our focus is on executing against the pillars we put forth in the One Fiserv plan, and I went through with it.
Speaker #3: need and needed to is really see numbers forward going Research . confident
Speaker #4: Thank
Speaker #4: Thank
Speaker #4: And comments , progress we're
Speaker #4: you
Speaker #3: And I went through with it. And as you saw and Paul talked about in his comments, we just have to there's a difficult compare in the first half of the year as we pivoted the strategy in the third quarter to focus on more recurring revenue.
Speaker #4: moving at . . And great . relative to we outlined from the that Q3 that you feel the . There did in is nothing analysis we new see what you that's fully in hitting what we thought reflected we'd do for Q4 .
Speaker #3: So overall, we feel good. The quarter was about execution and that's where we go from here.
Mike Lyons: And then, really, to get after and drive higher yield for the overall SMB book, not just focusing on Clover, our entire SMB book, is to continue to build out our vertical expertise and mentioned in the opening comments that we'll launch this quarter on the healthcare side and the professional services side. And the more custom solutions and value-added solutions we can embed inside the platform of Clover, obviously, yield will grow with that. And we're optimistic on that over the long term. There's hard work being done to create a value proposition to the $4 billion or so of revenue we have sitting in non-Clover SMB. But more specifically in the guidance stuff, I'll let Paul comment on yield.
Speaker #4: introducing on the , and for fully with the preliminary 26 , in line back in October . So , as I said at the guidance path , feel view , we the great about us progress .
Speaker #4: provided through that and as to And you we just comments , you know , about in his and Paul to have difficult compare in the pivoted strategy to as we in the revenue .
Speaker #2: All right. Thanks a lot, guys.
Speaker #1: Thanks a lot, Timothy Chiodo from UBS. Please go ahead.
Speaker #4: fully of what we need to do to our Multi-quarter compounder goal that we have . And business 100% of our focus position executing aware against the as forth pillars we in the put in the And I went plan .
Speaker #4: Great. Thanks a lot. I want to touch on digital payments. So that subsegment within the financial solution segment, that is the largest bucket there.
Mike Lyons: As you saw and Paul talked about in his comments, we just have to – it was difficult to compare. In the first half of the years, we pivoted the strategy, and the third quarter to focus on more recurring revenue. So overall, we feel good. The quarter was about execution, and that's where we go from here.
Speaker #4: I believe it's about $4 billion or so in annual revenues and correct me if I'm wrong, but I think starting to sell the debit networks make up about maybe a quarter of that.
Speaker #4: So say a billion or so of that $4 billion of revenue within digital payments. Last quarter, you called out some pricing actions within that subsegment.
Speaker #4: third recurring
Speaker #4: quarter
Speaker #4: quarter
Speaker #4: quarter
Speaker #4: focus on more So overall , we feel good . You know , execution , the and that's where we go from the quarter here there's a .
Paul Todd: All right. Thanks a lot, guys.
Speaker #4: And I believe some of them related to the debit networks as well and maybe some other portions of that subsegment. Maybe you could just add some more detail on those price changes and maybe an update or a response to what you saw in the market, whether it brought on additional volume, it protected volume that might have been lost, and anything else you can provide around really star and a sell as the focus.
Operator: We'll move to line Timothy Chiodo from UBS. Please go ahead.
Paul Todd: Yeah. So Andrew, I think it would be fair to say that we're very pleased with yield maintenance for 2025 overall. We don't expect any change really on the yield side in 2026. You can kind of see that based on our volume growth being in line with our revenue growth on kind of overall kind of high level. I think as it relates to go-forward, like Mike commented, as we look at vertical expansions, you would see 15% to 20% kind of growth on the revenue side in the longer term against that 10% to 15% growth, which speaks to a higher yield on a go-forward basis as we penetrate more in Clover Capital, as we do more on the software side. As Mike says, we do more on the platform side. You'd see kind of that yield maintenance or even slight yield improvement on a go-forward basis that's consistent with our strategy.
Speaker #3: guys All right . first half of the year
Timothy Chiodo: Great. Thanks a lot. I want to touch on digital payments, so that subsegment within the financial solutions segment. That is the largest bucket there. I believe it's about $4 billion or so in annual revenues. And correct me if I'm wrong, but I think Star and Accel, the debit networks, make up about maybe a quarter of that, so say $1 billion or so of that $4 billion of revenue within digital payments. Last quarter, you called out some pricing actions within that subsegment, and I believe some of them related to the debit networks as well and maybe some other portions of that subsegment.
Speaker #2: To the line
Speaker #2: Chiodo from UBS . go . ahead
Speaker #2: .
Speaker #5: I want to touch digital payments so on that subsegment within
Speaker #5: solutions largest bucket the financial
Speaker #4: I know you mentioned that things are pretty consistent, but anything else you could add would be appreciated.
Speaker #5: about Great . in think star correct me to annual revenues . sell the one five debit And is up about
Speaker #3: Sure, Tim. Thanks for the question. And yeah, we did make comments on the last quarter call in regard to that. I wouldn't add anything new to that.
Speaker #5: that , last called out some pricing it's actions within segment digital that quarter , subsegment . And I believe some of them 4 billion or so to the debit of networks as well , and maybe some 4 billion of other portions of you could Maybe just Thanks a add if I'm wrong , Thanks a lot .
Speaker #3: There wasn't any new development in Q4 related to any of those actions. I would say we were very pleased not only with the sequential improvement in digital payments, but also what we saw in the volume side particularly on the network side.
Timothy Chiodo: Maybe you could just add some more detail on those price changes and maybe an update or a response to what you saw in the market, whether it brought on additional volume, it protected volume that might have been lost, and anything else you can provide around really Star and Accel as the focus. I know you mentioned that things are pretty consistent, but anything else you could add would be appreciated.
Speaker #5: that on some detail more price those networks subsegment . maybe an update or a changes , and saw in the on protected volume , it additional volume that might have whether lost anything else you been provide around can a sell as the star and focus .
Speaker #3: We did see growth on the network volumes. And in that overall digital space, we also saw good transactions in our debit processing area as well.
Paul Todd: Certainly, we'll get more color on that at our upcoming IR day.
Andrew Jeffrey: I appreciate it. Thank you.
Speaker #3: And I think that's what was the underpinning of the performance there. Just like with all the segments, we do have comparative headwinds. That will continue in digital payments for the first half of next year.
Mike Lyons: Sure, Tim. Thanks for the question. And yeah, we did make comments on the last quarter call in regard to that. I wouldn't add anything new to that. There wasn't any new development in Q4 related to any of those actions. I would say we were very pleased not only with the sequential improvement in digital payments, but also what we saw on the volume side, particularly on the network side. We did see growth on the network volumes. And in that overall digital space, we also saw good transactions in our debit processing area as well. And I think that's what was the underpinning of the performance there. Just like with all the segments, we do have comparative headwinds that will continue in digital payments for the first half of next year, but there wouldn't be anything else I would add on the network side.
Operator: We'll go to the line of Andrew Schmidt from KeyBanc Capital Markets. Please go ahead.
Speaker #5: I know you are pretty and that things but you could add . appreciated
Andrew Schmidt: Hi, Mike. Hi, Paul. Thanks for taking the question this morning. Just a quick two-parter on the banking segment. Mike, I hear your comments on sort of the core client retention. Maybe just a little bit more color on what you're seeing there. It sounds like you've been very proactive in being high touch with clients. And then just beyond the core, can you talk about how you view the portfolio today? Do you need additional capabilities, thinking digital, etc., or do you feel good about where you're at from a capability perspective? Thanks so much.
Speaker #3: But there wouldn't be anything else I would add on the network side.
Speaker #6: Sure , Tim ,
Speaker #6: Sure , Tim , question .
Speaker #6: we did
Speaker #5: I would just add strategically we can continue to be very pleased with both star and Excel and the value we add on both sides of our business, classic synergy play between FS and MS sides of the business.
Speaker #6: in regard to that . I wouldn't add anything
Speaker #6: that . the We did see
Speaker #6: any new development in Q4 related wasn't say we it brought with the
Speaker #6: sequential improvement actions . digital payments , but what you I would also what we saw were very side , consistent ,
Speaker #5: And we continue to try to look for all ways that we can fully leverage those networks.
Speaker #6: volumes , There that , not only overall and in digital would be space , we anything else also good transactions in our debit processing area as well .
Speaker #4: Great. Thank you
Speaker #4: both. Next, we'll go to Lioness Engine Wong from
Speaker #6: And I think that's was the really underpinning of performance there . with with the all the segments we do have you know , that will continue in headwinds , digital payments for the year , but there wouldn't anything else I next would add on network side .
Speaker #1: JP Morgan. Please go ahead.
Mike Lyons: Yeah. Thanks for the question. First, on the core part, as I said in the opening comments, we're going down the path of core modernization. First of all, we're proud of our leading market share position broadly in core banking. And we support a lot of banks and credit unions across the country on our various platforms. And we're proud of that. We began that core modernization process in 2022, building cloud-based, real-time, secure API, and really more open capabilities from our perspective. That plan remains in place and is a good thing for everyone. As we rolled out back at our client forum in September and talked about on the last call, based on some feedback we got from clients, we were explicitly clear that there are no forced conversions as part of this modernization. So if a client wants to make a change, it's totally on their timeline.
Speaker #6: Hi. Thank you. Seems like you got some good line of sight into the business, which is great. I wanted to better understand the expenses required to execute 150, specifically how much is structural versus one-time like consulting or IT staff augmentation, that kind of thing.
Mike Lyons: I would just add strategically, we continue to be very pleased with both Star and Accel and the value we add on both sides of our business, classic synergy play between FS and MS sides of the business. And we continue to try to look for all ways that we can fully leverage those networks.
Speaker #4: strategically , we can the continue to be very pleased with I would both star and Excel in the we add on business . synergy Classic value both FX sides of the business and we our look for between sides of
Speaker #6: Looks like you're going to exit the year at 36%
Speaker #1: That margin . How is clean that ? 36% . Thanks .
Speaker #2: Yes . Attention . Thanks . You know , I would the speak to overall margin first and the expense . We any don't see material kind of expense .
Timothy Chiodo: Great. Thank you both.
Operator: We'll go to the line of Tien-tsin Huang from JPMorgan. Please go ahead.
Speaker #4: ways that we
Speaker #4: networks
Speaker #4: . first half of
Speaker #2: Yes . Attention . You know , I would to the speak Thanks . overall margin first and the expense . We don't see any material kind ramp up .
Speaker #5: both .
Speaker #5: both
Speaker #5: both .
Tien-Tsin Huang: Hi. Thank you. It seems like you got some good line of sight into the business, which is great. I want to better understand the expenses required to execute One Fiserv. Specifically, how much is structural versus one-time like consulting or IT staff augmentation, that kind of thing? Looks like you're going to exit the year at 36% margin. How clean is that 36%? Thanks.
Speaker #2: line of from JP Please go ahead .
Speaker #2: line of from JP Please go ahead
Speaker #2: line of from JP Please go ahead
Speaker #2: As we kind of said on our last call , we have largely baked in the expenses related to one buy , serve and particularly around the infrastructure and some of the resiliency investments and such .
Speaker #3: Hi .
Speaker #3: into the business , which is be great . I
Speaker #3: required to leverage those understand the execute
Speaker #3: one FISERV INC . much is structural continue
Speaker #2: just as So an operating margin standpoint , you is know , there an increased year over year on expenses from an operating standpoint , but it's in exactly what we line with were expecting when we gave the guidance .
Speaker #3: one time ? Like or like you have play augmentation , that
Speaker #3: one time ? Like or like you have play augmentation , that kind of thing . consulting going to exit the year at at 36% margin .
Mike Lyons: All that said, as a result of some actions taken over the last couple of years, including the prior core conversion approach, we have lost some market share, especially, you see it, on the smaller credit union side of our business, and have been disappointed, obviously, in the results that have come through in the banking segment from those actions. Our view is, given the pivot we made at Forum on the conversion approach, as well as a series of other client commitments we made at Forum and a whole series of investments that I talked about earlier, both on the technology side and on the people side, day-to-day people side. We think we're on the right path to having banking return to positive growth, of which we've talked about in the low single digits.
Mike Lyons: Yeah. So, Tien-Tsin Huang, thanks. I would speak to the overall margin first and the expense. We don't see any material kind of expense ramp-up. As we kind of said on our last call, we have largely baked in the expenses related to One Fiserv, and particularly around the infrastructure and some of the resiliency investments and such. So just as an operating margin standpoint, there is an increase year over year on expenses from an operating standpoint, but it's in line with exactly what we were expecting when we gave the guidance. Hence, the margin guide is in line. As it relates to the transformation, Project Elevate expenses, particularly, we did call out the size of those. There was startup-related expenses, particularly around professional services in there. We did have some infrastructure expenses as well.
Speaker #3: How clean go to the all Looks like you're is that Thanks better .
Speaker #2: Hence the margin is is guide in as it line the relates to transformation Elevate project . expenses particularly we did call out the size of those .
Speaker #6: Yes , no You know , I would speak to the Morgan . first and the expense we don't any material kind see of up .
Speaker #6: Yes , no You know , I would speak to the Morgan . first and the expense we don't any material kind see of up expense on our margin last call , we have baked in expenses the particularly around ramp kind of said one serve and some of the resiliency investments and infrastructure and an standpoint , you know , there just as such .
Speaker #2: There was related startup expenses , particularly around professional services in there . We did have some infrastructure expenses as that well , and is about the cadence right kind of expect of related to what we expenses Elevate to .
Speaker #2: Quarterly increase will some as we move the forward and broaden project . As we focus now on process efficiencies other and efficiencies that we expect to get out of business , and the be will then those more kind of related expenses as opposed to more services professional related .
Speaker #6: on overall standpoint , but it's in line with exactly what we were expecting is when we gave the guidance . Hence the margin guide in line relates to transformation project .
Mike Lyons: I think most importantly, what we feel good about is the fixes are really 100% in our control, and we're investing directly against them. These aren't things we can't solve. These are things that we need to do and are the right things for our clients to do. Specifically on core client attrition in 2025, it was above where we wanted to be, but stable with where it was in 2024 and 2023. We didn't see any change on that front. And the very near-term and how we went into the planning for next year, we were realistic about the impact of past decisions and how fast we can bend the curve. That's all included in our plan. But, look, our goal is to serve all our great clients appropriately and compete strongly every day in the market.
Speaker #6: the We did have some around infrastructure expenses as . We did is about the right kind of cadence professional expect . Quarterly expenses related to of Project Elevate to be they will increase some forward and project as we now process efficiencies on focus .
Speaker #6: Elevate is expenses as it margin particularly year call out the size of those . There was startup related expenses , particularly services in there .
Mike Lyons: And that is about the right kind of cadence of what we expect quarterly expenses related to Project Elevate to be. They will increase some as we move forward and broaden the project as we focus now on process efficiencies and other efficiencies that we expect to get out of the business. And those will then be more kind of technological-related expenses as opposed to more professional services related.
Speaker #1: Okay , great . Thank you .
Speaker #3: from Dave Koning Baird . Please go ahead .
Speaker #4: Yeah . Hey , guys . Thank you . And I guess my question is on the SMB portion of the acceptance segment , you mentioned the clover part will probably grow revenue low double digits , but I'm also wondering what do you expect from the part non clover of SMB ?
Speaker #6: And other efficiencies that we expect to get out of, as we broaden and move the business, and kind of those technological efficiencies as opposed to more expenses as related.
Speaker #4: That's declining ? Maybe flattish ? Argentina . But then as a corollary to it , Argentina , the merchant cash advances look like they were down dramatically .
Tien-Tsin Huang: Okay. Great. Thank you.
Operator: We'll move to David Koning from Baird. Please go ahead.
David Koning: Yeah. Hey, guys. Thank you. I guess my question is on the SMB portion of the acceptance segment. You mentioned the Clover part will probably grow revenue, low double digits, but I'm also wondering, what do you expect from the non-Clover part of SMB that's been declining, maybe flattish, ex-Argentina? But then as a corollary to it, Argentina, the merchant cash advances look like they were down dramatically. There's a lot less. So is that creating a little bit of a headwind in that non-Clover part? And so I guess kind of multiple-layer question just on how SMB is going to do in 2026.
Speaker #4: Like there's a lot less . is that creating a little bit of a So headwind in that , in that non part . clover So I guess kind of multiple question just on how going to do SMB is in 26 .
Speaker #3: Okay , great . Thank you .
Speaker #2: Baird . Please go Dave
Speaker #2: Baird . Please go
Mike Lyons: And on top of the cores, to second part of your question, we feel really good about the portfolio solutions we're adding. And we continue to listen to what banks and credit unions are focused on, which includes generating core deposits, which the StoneCastle capability helped us with. How do you address the emerging value or threat of stablecoin? And feel great about what we've done there, launching our own stablecoin on behalf of the banks, FIUSD, and then creating what we think is the first closed-loop stablecoin deposit network by acquiring the custody capabilities through StoneCastle this year. And we think out more and more around AI in a box and other types of solutions around that. CashFlow Central goes directly to the desire to build small businesses. So we feel great about the portfolio of solutions around it.
Speaker #7: Thank you . And I guess my question the
Speaker #7: acceptance
Speaker #2: Yeah . So overall you know comment on the we did clover part of SMB . We do slight expect growth in the . Non for next SMB Just it would be kind of talked about year .
Speaker #7: part will probably
Speaker #7: part will probably grow revenue low double digits , but
Speaker #7: wondering what do you expect the
Speaker #7: clover part SMB ? That's been declining ? of clover ? Argentina . But then as a corollary to it , Argentina , the merchant cash
Speaker #2: that as being kind of flat to maybe just a little bit of growth on the on the non right You're Dave , as it relates to Argentina in general , now really it's growth not a factor the at all go relative to forward expectations in in 2026 .
Speaker #7: like down they were dramatically . there's a Koning from creating is that lot less . So related a little headwind in that , in that non services clover professional is on And so I bit of a part .
Mike Lyons: Yeah. So overall, we did comment on the Clover part of SMB. We do expect slight growth in the non-Clover SMB for next year. We kind of talked about that as being kind of flat to maybe just a little bit of growth on the non-Clover SMB. You're right, Dave, as it relates to Argentina in general; it's now really not a growth factor at all relative to the go-forward expectations in 2026. And so we had an impact in 2025 that we called out, that if you took out Argentina, we actually did grow the non-Clover piece. But as you look forward in 2026, we expect roughly a flat to a slightly growth non-Clover SMB picture that's embedded in our guidance.
Speaker #2: And so we had do . We an impact in in called out that if 2025 that we you took out Argentina , we actually did grow the clover piece .
Speaker #2: And so we had do . We an impact in in called out that if 2025 that we you took out Argentina , we actually did grow the clover non But as you look forward 2026 , we in expect roughly a flat to a slightly growth non clover SMB picture .
Speaker #7: multiple layer question ahead . advances look SMB is Like going to do Maybe flattish guess kind of
Speaker #7: multiple layer question ahead . advances look SMB is Like going to do Maybe flattish guess kind of
Speaker #7: in
Speaker #6: So
Speaker #6: we did clover overall you know
Speaker #6: the for next year . Just SMB would be it kind of kind of flat to maybe just a little bit of growth being the on the non You're right Dave , as Argentina in it's now really not a general , growth factor relative to at all go the forward expectations in in 2026 .
Speaker #6: the for next year . Just SMB would be it kind of kind of flat to maybe just a little bit of growth being the on the non You're right Dave , as Argentina in it's now really not a general , growth factor relative to at all
Speaker #6: part of comment SMB . We do expect slight on
Speaker #2: That's embedded in our guidance .
Speaker #4: Thanks guys Great . .
Mike Lyons: If we have to add small capabilities, you've seen us do it with stuff like StoneCastle. But we're anxious to get our day-to-day service commitment levels and our clients back to one of that pillar of great client service and then focus on this great portfolio of value-added capabilities we have.
Speaker #5: go to the We'll line of Andrew Jeffrey from William Blair . Please ahead go .
Speaker #4: Good appreciate you Hi . morning I taking the question I'd Mike . like to dig in a little bit on your outlook for Clover yield and the medium term revenue guidance in Clover .
Speaker #6: And so an We had impact in SMB . that if you took in out actually did called out the clover But as you look piece .
Speaker #4: Obviously implies some some nice share to relative gains market at least the US and yield growth . Obviously , given the fee changes has slowed quite a bit .
Speaker #6: Argentina , we it 2026 , we expect flat to slightly non non growth grow clover in SMB roughly a . That's our a Yeah .
Andrew Schmidt: Thank you, Mike. Appreciate all the detail here.
David Koning: Great. Thanks, guys.
Operator: We'll go to the line of Jason Kupferberg from Wells Fargo. Please go ahead.
Speaker #4: But can you talk about the areas where you think you have the ability to add durable value with value added services and what the yield progression in that business looks like over time ?
Operator: We'll go to the line of Andrew Jeffrey from William Blair. Please go ahead.
Speaker #6: .
Jason Kupferberg: Hey. Good morning, guys. I wanted to come back to Clover for a second. If you can talk about what drove some of the improvement in December, January, you said to 11%. And then the midpoint of your guide for 2026 would suggest maybe a little bit more acceleration off those December, January levels. So what drove the improvement in December, January? And then what are the drivers of some of the potential further improvement as you go through 2026? And if you can just remind us also when you think we lapped the gateway conversion, that would be really helpful. Thanks.
Speaker #7: Great . Thanks
Andrew Jeffrey: Hi. Good morning. Appreciate you taking the question. Mike, I'd like to dig in a little bit on your outlook for Clover yield. The medium-term revenue guidance in Clover obviously implies some nice share gains relative to at least the US market. And yield growth, obviously, given the fee changes, has slowed quite a bit. But can you talk about the areas where you think you have the ability to add sort of durable value with value-added services and what the yield progression in that business looks like over time? Just trying to get a little more clarity on the outlook for accelerating Clover revenue growth.
Speaker #2: go to the Andrew Jeffrey Please go embedded in ahead .
Speaker #2: go to the Andrew Jeffrey Please go embedded in ahead
Speaker #2: go to the Andrew Jeffrey Please go embedded in ahead
Speaker #4: Just trying to get a little more clarity on the outlook for accelerating Clover growth
Speaker #4: . For
Speaker #8: like to
Speaker #6: . I just the started at the highest level is we were very pleased with the underlying trends we saw in Clover in Q4 , that we talked about some of the macro factors .
Speaker #8: on your outlook
Speaker #8: Clover William Blair . yield the term guidance and Obviously implies some some nice share gains relative to at least the
Speaker #6: And then more importantly , with the progress we made against the Clover business priorities that we highlighted as part of the one price action plan in pillar two .
Speaker #8: . And yield revenue growth . given the fee appreciate you has slowed quite a bit . But can you in talk about the areas where you have ability to add durable .
Speaker #8: . And yield revenue growth . given the fee appreciate you has slowed quite a bit . But can you in talk about the areas where you have ability to add durable . sort of value with value added picture .
Speaker #6: And those are critical to reaching this goal of creating . I think , a little bit to where you're going is what we believe will be the preeminent small business operating obviously platform that's our just the goal , not payments box , but help small businesses run the full operations And that from there .
Mike Lyons: Yeah. A couple of parts there. First, to start, December, January went back to where we thought we'd be for the quarter. We had said 11% in Q3. Came in under that, obviously. We cited November as being macro weakness. We saw that in other people participate in our industry. And part of our vertical build is to drive yield higher to the prior point, but it's also to reduce some of our concentration in the restaurant and retail area, especially restaurants, and that had a weaker November. So macro anomaly in the month. And then we saw volumes reaccelerate back to where we thought they'd be for the quarter. So we feel good about that. I think just longer term, if you exclude the gateway conversion over the last couple of years, we bounced around quarter to quarter from the high single digits to the low double digits.
Speaker #8: progression in that and what looks like over Just trying to get a clarity on the outlook little more Clover revenue services .
Mike Lyons: Sure. I just started at the highest level is we were very pleased with the underlying trends we saw in Clover in Q4. We talked about some of the macro factors. Then, more importantly, with the progress we made against the Clover business priorities that we highlighted as part of the One Fiserv action plan and Pillar Two. And those are critical to reaching this goal of creating, I think, a little bit to where you're going is what we believe will be the preeminent small business operating platform. That's obviously our goal, not just be a payments box, but help small businesses run their full operations from there. And that goes to the partnerships on the horizontal side with Homebase, with ADP, with CashFlow Central, obviously, embedded into ADP, Clover Capital.
Speaker #4: For growth I just
Speaker #4: For growth I just started at the we were line of very level is pleased with
Speaker #4: the highest underlying
Speaker #6: goes to the partnerships on the horizontal side with home base , with ADP , with cash flow central obviously embedded into ADP , Clover Capital , and then really to get after and drive higher yield for the overall book , SMB not just focusing on Clover , our SMB book is to continue to build out our vertical expertise and engine in the comments that opening we'll launch this quarter on the healthcare side and the professional services side and the more custom solutions and value added solutions we can embed inside the platform of Clover , obviously , yield will grow with that , and we're optimistic on that over the long term .
Speaker #4: about some , that we talked macro of the Q4
Speaker #4: and then
Speaker #4: importantly , factors with the we made progress trends we Clover the business priorities that we highlighted against time ? for part of the action plan in pillar two .
Speaker #4: those are
Speaker #4: those are accelerating goal medium of think you critical We'll as reaching this one price little bit you're to where creating , I going think , a is what we the believe will be small business preeminent our just the
Speaker #4: help small operating businesses run the And from there . And that operations goes to the partnerships on the horizontal full with the home base , with ADP , central , obviously cash flow embedded into Capital , Clover payments really to get after and , and drive higher SMB book , not just focusing on side Clover , with book SMB is to continue to build out our expertise and mentioned in the opening comments that yield for we'll launch this on the healthcare side overall professional services .
Mike Lyons: And then, really, to get after and drive higher yield for the overall SMB book, not just focusing on Clover, our entire SMB book, is to continue to build out our vertical expertise and mentioned in the opening comments that we'll launch this quarter on the healthcare side and the professional services side. And the more custom solutions and value-added solutions we can embed inside the platform of Clover, obviously, yield will grow with that. And we're optimistic on that over the long term. There's hard work being done to create a value proposition to the $4 billion or so of revenue we have sitting in non-Clover SMB. But more specifically in the guidance stuff, I'll let Paul comment on yield. Yeah. So Andrew, I think it would be fair to say that we're very pleased with yield maintenance for 2025 overall.
Mike Lyons: The four quarters of 2025 were between 9% and 11%. That's sort of where we see the core growth rate of the business sometimes, independent of macro factors. I think that's a good view to lead, a good area to lead around that. Just to be careful on the gateway conversion, remember, there's not a technical lapping of the gateway conversion. You stop converting over a gateway, and then there's continuous runoff over time. So it's not a traditional anniversary thing. As long as there are gateway converted clients on the system, if one of those runs off, it will impact growth going forward. But obviously, the magnitude of that will go down. And we have it going. It was 3 points for most of 3-point differential for most of this year. And it will go down in 2026 and going forward. So hopefully, that's helpful. Anything to add?
Speaker #6: There's there's hard work being done to create a value proposition to the 4 billion or so of revenue we have sitting in non clover SMB .
Speaker #6: But in more specifically in the guidance stuff . I'll let Paul yield . comment on
Speaker #2: Yeah . So Andrew , I think it would be fair to say that we're very pleased with yield maintenance for 2025 overall . And we don't expect any change really on the yield side in 2026 .
Speaker #4: And inside that, and the custom, more added solutions we can embed inside the platform Clover, value that, and we're obviously optimistic on, will grow over the quarter, that term.
Speaker #2: And you can kind of see that based on our volume growth being in line with our revenue growth on of overall kind of high level .
Speaker #2: And I think as it relates to go forward , like my commented , as we look at vertical expansions , you would see 15 to 20% kind of growth on the revenue side .
Speaker #4: There's over being done there's hard work to value proposition 4 billion or so create a revenue we have Clover , to the of But in more sitting in guidance stuff , I'll let comment on
Speaker #2: And the against that 10 to 15% growth , which speaks to a higher yield on a go forward basis . As we penetrate more in Clover Capital , as we do more on the software Mike side , as said , we do more on the platform side .
Speaker #4: yield .
Speaker #4: yield .
Mike Lyons: We don't expect any change really on the yield side in 2026. You can kind of see that based on our volume growth being in line with our revenue growth on kind of overall kind of high level. I think as it relates to go-forward, like Mike commented, as we look at vertical expansions, you would see 15% to 20% kind of growth on the revenue side in the longer term against that 10% to 15% growth, which speaks to a higher yield on a go-forward basis as we penetrate more in Clover Capital, as we do more on the software side. As Mike says, we do more on the platform side. You'd see kind of that yield maintenance or even slight yield improvement on a go-forward basis that's consistent with our strategy.
Speaker #6: So , Andrew , , yield I
Speaker #6: Very fair to say, yield that we're with maintenance for 2025—we don't overall, and any change really, specifically on the yield side in 2026.
Paul Todd: Yeah. The only thing I would add is, Jason, is we feel good about where we sit when we saw what December did, when we see what January did as it relates to that overall guide that we gave. The things that we talked about in the prepared remarks around business development, expansion, some of the verticals expansion, those are all just kind of tailwinds that help us get very confident about the overall guide of GPV. As Mike said earlier, the overall macro, we're assuming kind of a normalized macro. We also commented in the prepared remarks that the lower side of that guide is reflective of less kind of non-Clover transition. The higher side reflects kind of more on the non-Clover transition.
Speaker #2: You see kind of that yield maintenance or even slight yield improvement on a go forward basis . That's consistent with our strategy and certainly we'll give more color on that at our upcoming IR day .
Speaker #6: And you can kind of see that would, I think it pleased our volume growth being expected at the revenue level. And I think as it relates to go forward, I've commented, of high in line as we look at, like, expansions we would vertically see with our 15% to 20% kind of growth on the revenue side.
Speaker #4: I it . appreciate Thank you .
Speaker #3: We'll line of go to the Andrew Schmidt from KeyBanc Capital Markets . Please go ahead .
Speaker #6: And the longer my that 10 to 15% growth , which speaks to a higher yield go kind As we basis . penetrate more in Clover Capital , as we do more on the software on side , as Mike said , we do overall more on the platform side .
Speaker #7: Hi , Mike . Hey , Paul , thanks for taking the question . This morning . Just a quick two parter on the banking segment .
Speaker #7: Mike , I hear your comments on the sort of the core client retention , maybe just a little bit more color on what you're seeing there .
Mike Lyons: Certainly, we'll get more color on that at our upcoming IR day.
Speaker #6: You see kind of that yield maintenance yield against improvement on a go basis . forward , you That's certainly we'll give more at our upcoming IR on that color day
Speaker #6: or even
Speaker #7: like you've been very It sounds proactive in being high touch with clients . And then just beyond the core , can you talk about you view the how portfolio today ?
David Koning: I appreciate it. Thank you.
Speaker #6: consistent it .
Speaker #6: consistent it .
Operator: We'll go to the line of Andrew Schmidt from KeyBanc Capital Markets. Please go ahead.
Speaker #8: I
Speaker #8: Thank you
Speaker #8: .
Speaker #7: Do you need additional capabilities thinking digital , etc. , or do you feel good about where you're at from a capability perspective ? much Thanks so .
Jason Kupferberg: Helpful. Thanks.
David Koning: Hi, Mike. Hi, Paul. Thanks for taking the question this morning. Just a quick two-parter on the banking segment. Mike, I hear your comments on sort of the core client retention. Maybe just a little bit more color on what you're seeing there. It sounds like you've been very proactive in being high touch with clients. And then just beyond the core, can you talk about how you view the portfolio today? Do you need additional capabilities, thinking digital, etc., or do you feel good about where you're at from a capability perspective? Thanks so much.
Paul Todd: Yep.
Speaker #2: We'll go to the Andrew . KeyBanc
Speaker #2: line of
Speaker #2: line of
Operator: We'll go to the line of Dan Dolev from Mizuho. Please go ahead.
Speaker #2: Please go term
Speaker #2: Please go term
Speaker #6: Yeah , thanks . question . Thanks for that On first on the on the core part , I said in as the opening comments , we're going down the path of core modernization .
Dan Dolev: Hey, guys. Thanks for taking my question. Lots of good things, improvements across the board. Great job here. Mike, it's been a few months now. I mean, is anything that surprised you most? Any new surprises here? Anything you're seeing that hasn't been appreciated that you would like to highlight? That would be great. Thank you.
Speaker #7: Hey , Hi , Mike .
Speaker #7: question this morning . Just
Speaker #7: segment . Mike , I slight hear your on a core sort of the retention quick comments on little bit more color just a you're seeing there .
Speaker #6: We're first of proud of all , we're our leading share market position broadly in core we And banking . support of and credit banks unions a lot across the country on our platforms , and we're various proud of that .
Speaker #7: Sounds like you've client proactive the appreciate
Speaker #7: been very
Speaker #7: with ahead just in beyond high touch , maybe And then could you talk about with our how core , the portfolio today ? Do you need additional capabilities thinking clients .
Speaker #6: We began that core modernization process in 2022 , building cloud based , real time , secure API and really more open capabilities from our perspective , that plan remains in place and is a good thing for everyone .
Mike Lyons: Yeah. As I mentioned earlier, with respect to new developments or surprises with a negative connotation from what we've seen in the third quarter, there are none. Our focus is all on execution. I think all the surprises on the positive side are the capability and potential for this company to not only deliver on the pillars that we've delivered on historically, to serve two massive TAMs who are eager and have a high appetite for advice and advanced technology from us. That just continues to grow. So we're anxious to get these investments made and be able to focus on exciting things similar to what I talked about in the banking core space. Our cores are great. They meet a lot of different needs of a lot of different institutions. We want to make sure the service is great on that.
Mike Lyons: Yeah. Thanks for the question. First, on the core part, as I said in the opening comments, we're going down the path of core modernization. First of all, we're proud of our leading market share position broadly in core banking. And we support a lot of banks and credit unions across the country on our various platforms. And we're proud of that. We began that core modernization process in 2022, building cloud-based, real-time, secure API, and really more open capabilities from our perspective. That plan remains in place and is a good thing for everyone. As we rolled out back at our client forum in September and talked about on the last call, based on some feedback we got from clients, we were explicitly clear that there are no forced conversions as part of this modernization. So if a client wants to make a change, it's totally on their timeline.
Speaker #7: good you're at from a capability much Thanks so you feel .
Speaker #4: Yeah , thanks .
Speaker #4: On
Speaker #6: As we rolled out back at our client forum in September and talked about on the last call , based on some feedback we got from clients , we were explicitly clear that there are no forced conversions .
Speaker #4: first on the on the core part ,
Speaker #4: opening , we're digital going down of core the path modernization . We're comments proud of our first of market share position core broadly in banking .
Speaker #6: As part of this modernization . So if a client wants to make a change , it's totally on their timeline . All that said , as a result of some actions taken over the last couple of years , including the prior core conversion approach , we have lost some market share , especially you see it on the smaller credit union side of our business and have been disappointed .
Speaker #4: And we leading as of banks about where across the you view country on our various that . a lot began proud of that core modernization platforms , and we're all , we're process in building cloud based , real secure 2022 , open time , capabilities from perspective , that our remains in is a good place and .
Speaker #6: Obviously , in the results that have come through in the banking segment from those actions . Our is given view the pivot we made forum on on the conversion approach as at well as a series of other client commitments we made at forum and a whole series of investments that I talked about earlier , both on the side and on the people side day to day people side .
Speaker #4: As we rolled everyone back client at our out I said September and last call , based on some on the feedback we got clients , explicitly that there are forced conversions .
Mike Lyons: So then we can talk to the banks about how do you grow small business customers? How do you deal with modern forms of payments? How do you bring, how can we, as an execution and orchestration layer on behalf of them, bring AI into their businesses? And the same thing on the merchant side, where agent capabilities, our ability to democratize that for small businesses across the country and allow them to participate in a similar way, is right in front of us. So lots of positive surprises. It's the things that people have known about. I served for a long time. But as modern technology accelerates our ability to capitalize on those, it just gets greater and greater.
Speaker #4: As part of modernization . So if a client no make a clear wants their change , totally on timeline . All that said , as a result of some to the last couple of years , including prior core conversion actions lost some market especially you see it on the smaller credit union side share , of our approach business and disappointed .
Mike Lyons: All that said, as a result of some actions taken over the last couple of years, including the prior core conversion approach, we have lost some market share, especially, you see it, on the smaller credit union side of our business, and have been disappointed, obviously, in the results that have come through in the banking segment from those actions. Our view is, given the pivot we made at Forum on the conversion approach, as well as a series of other client commitments we made at Forum and a whole series of investments that I talked about earlier, both on the technology side and on the people side, day-to-day people side. We think we're on the right path to having banking return to positive growth, of which we've talked about in the low single digits.
Speaker #6: We think we're on the right path to having banking return to , you know , to positive growth , which we've talked about in the low single digits .
Speaker #6: And I think most importantly , what we feel good about is the fixes are really 100% in our control and we're investing directly against them .
Speaker #4: Obviously , in have been the , we have results through in the have come banking the segment from taken over the pivot we that at forum on those conversion as well a series of other approach client as commitments we made at a and whole the that I talked about series of forum is given investments technology .
Speaker #6: These are things we can't solve . These are things that we need to do and are the right things for our clients to do .
Speaker #6: Specifically on core client attrition in 2025 , it was above where we wanted to be , but stable with where it was in 2024 and 2023 .
Speaker #4: earlier , both to day people We think the right path having banking we're on return to , you know , positive which we've talked about in the low to single digits .
Dan Dolev: Great stuff. Thank you.
Speaker #6: We didn't see any change on that front and the very near term and how we went into the planning for next year . We were realistic about the impact of past decisions and how fast we can bend all and that is the curve , included in our plan .
Operator: We'll go to the line of Will Nance from Goldman Sachs. Please go ahead.
Mike Lyons: I think most importantly, what we feel good about is the fixes are really 100% in our control, and we're investing directly against them. These aren't things we can't solve. These are things that we need to do and are the right things for our clients to do. Specifically on core client attrition in 2025, it was above where we wanted to be, but stable with where it was in 2024 and 2023. We didn't see any change on that front. And the very near-term and how we went into the planning for next year, we were realistic about the impact of past decisions and how fast we can bend the curve. That's all included in our plan. But, look, our goal is to serve all our great clients appropriately and compete strongly every day in the market.
Will Nance: Hi. I appreciate you taking the question. I just had a little more learning here. On the enterprise side, you've been calling out the PayFac growth over issues for a bit now. Just remind us again when those lapped and if there's any way of quantifying the magnitude on both revenue and transactions. That would be helpful as well. Thank you.
Speaker #4: And think importantly , what we feel good about Our fixes are is the really 100% in our growth , investing directly we're control and These are can't I solve .
Speaker #6: , you know , But we look our goal is to serve all our great clients appropriately and compete strongly every day in the market and on top of the core .
Speaker #4: against them . wanted it but stable with In was in 2024 and 2023 . see change on that front and the very near term and went into how we the planning for next year .
Speaker #4: These are things that we need to do right side . clients most to do and are the . Specifically things we attrition 2025 , it was .
Speaker #6: You know , second part of your question , we feel really good about the portfolio solutions . We're adding , and we continue to listen to what banks and are credit unions focused on which .
Paul Todd: Yeah. So Will, we did in the prepared remarks. I made a couple of comments, particularly around enterprise. As I talked about, this will be the last quarter that we talk about enterprise transition of this PayFac client. And we had about 6 points of differential that existed in Q4 related to this. If you kind of add that to the revenue side, the -2% goes to kind of more of a +4. If you look at the transactions of 6%, which is kind of a clean number on the transaction side, that 4% revenue growth is very in line with the 6%. And then that kind of 4% or kind of mid-single digit growth is consistent with what we've had in Q3 and also consistent with roughly what we expect as we look forward to next year.
Speaker #4: We didn't We were realistic where it about impact the decisions and the how fast curve , and in our plan . But , you know , we look , our is to all our great clients compete strongly every day in the market and top on of the serve core .
Speaker #6: You know , includes generating for deposits , you know , which the stonecastle capability helped us with . How do you address the emerging value or threat of stablecoin and feel great about what we've done there ?
Mike Lyons: And on top of the cores, to second part of your question, we feel really good about the portfolio solutions we're adding. And we continue to listen to what banks and credit unions are focused on, which includes generating core deposits, which the StoneCastle capability helped us with. How do you address the emerging value or threat of stablecoin? And feel great about what we've done there, launching our own stablecoin on behalf of the banks, FIUSD, and then creating what we think is the first closed-loop stablecoin deposit network by acquiring the custody capabilities through StoneCastle this year. And we think out more and more around AI in a box and other types of solutions around that. CashFlow Central goes directly to the desire to build small businesses. So we feel great about the portfolio of solutions around it.
Speaker #6: Launching our own stablecoin on behalf of the banks fireside . And then creating what we think is the first closed loop stablecoin deposit network by acquiring the custody capabilities through Stonecastle this year .
Speaker #4: know You , can bend question , we feel really about the of past portfolio that's all We're solutions . continue to listen what banks and credit we unions are focused to on good .
Speaker #6: And , you know , we think out more and more around AI in a box and other types of around that solutions cash flow .
Speaker #4: know , which included You generating goal for deposits , you know , which the stonecastle capability helped us . How do address includes the emerging value or and feel great about what we've done there ?
Speaker #6: Central goes directly to the desire to small build businesses . we So feel great about the portfolio of solutions around it . If we have to add small capabilities .
Paul Todd: And that mid-single-digit transaction growth would also be the right way to think about the business on a go-forward basis without the PayFac noise in that line.
Speaker #6: You've seen us do it with stuff like Stonecastle , but we're anxious to get our day to day service commitment levels . And and our clients back to one of that , that pillar of great client service .
Speaker #4: own and stablecoin Launching our stablecoin with on you banks threat of fireside . And then we think creating what is the first closed loop stablecoin network by acquiring the custody capabilities through year .
Will Nance: Got it. Okay. So converging in Q1. Appreciate it. Thank you.
Paul Todd: Thanks.
Operator: We'll go to Bryan Keane from Citi. Please go ahead.
Speaker #6: And and then focus on this great portfolio of value added capabilities . We have .
Bryan Keane: Hi. Good morning. Thanks for taking the question. Just to follow up on that, Paul, how do we think about the mid-single digit growth for the organic growth for the year in merchant? You just went through enterprise. Small business, though, with Clover, it looks like it'll be about the same growth rate we saw in the fourth quarter. Going from 1% organic growth in the fourth quarter to mid-single digits, we get a lift from enterprise. But do we also get any lift from SMB and processing? Thanks.
Speaker #4: know , we deposit more think out around AI box and in a other solutions around directly desire small to build Stonecastle this businesses .
Speaker #7: Thank you . Mike . Appreciate detail all the here .
Mike Lyons: If we have to add small capabilities, you've seen us do it with stuff like StoneCastle. But we're anxious to get our day-to-day service commitment levels and our clients back to one of that pillar of great client service and then focus on this great portfolio of value-added capabilities we have.
Speaker #4: that Central And , you cash flow . great about the portfolio of solutions around it . If to we have small add You've seen with capabilities .
Speaker #3: the line of business . And Kupferberg from We'll go to Wells Fargo , please go ahead .
Speaker #8: Hey good morning guys . I wanted to come back to Clover for a second . If you can talk about what drove some of the improvement in December , January .
Speaker #4: stuff like us do it Stonecastle , but we're types anxious to get our day to of day service commitment levels . our and our goes clients back to that client service .
Speaker #8: You said to 11% and then the midpoint of your guide for 26 would suggest maybe a little bit more acceleration off those December , January levels .
David Koning: Thank you, Mike. Appreciate all the detail here.
Speaker #8: So what drove the improvement in December , January ? And then what are the drivers of some of the potential further improvement as you go through 2026 ?
Paul Todd: Yeah, Brian. So I gave some comments on that in my prepared remarks around the overall mid-single-digit growth expectations we have for merchant next year. I would say I think your comment related to Clover specifically is accurate when we gave the overall Clover revenue growth guidance of the low double digits. So I think that kind of holds. And if you try to add back kind of the headwinds that we had in the fourth quarter, you get back to that mid-single-digit growth rate for merchant in the fourth quarter. So if you looked at it from a third quarter and a fourth quarter, how merchant has performed overall, that gives you line of sight into roughly how we will perform in that range roughly for next year.
Speaker #4: focus on this great portfolio of capabilities . then value .
Speaker #4: Focus on this great portfolio of capabilities, then value added. Thank you.
Operator: We'll go to the line of Jason Kupferberg from Wells Fargo. Please go ahead.
Speaker #7: Appreciate detail here all the
Jason Kupferberg: Hey. Good morning, guys. I wanted to come back to Clover for a second. If you can talk about what drove some of the improvement in December, January, you said to 11%. And then the midpoint of your guide for 2026 would suggest maybe a little bit more acceleration off those December, January levels. So what drove the improvement in December, January? And then what are the drivers of some of the potential further improvement as you go through 2026? And if you can just remind us also when you think we lapped the gateway conversion, that would be really helpful. Thanks.
Speaker #8: And if you can just remind us also when you we think lapped the gateway that would be conversion , really helpful . Thanks .
Speaker #2: We'll go to the line
Speaker #2: We'll go to
Speaker #2: .
Speaker #8: Hey good pillar of great
Speaker #8: Hey, good pillar of great and guys.
Speaker #6: to come back .
Speaker #6: Yeah . A couple of thoughts there . First , I'd start is , you know , December January went back where we to thought we'd be for the quarter .
Speaker #8: To Clover for a second . If you can about
Speaker #8: To Clover for a second . If you can about what
Speaker #8: , January . You said to
Speaker #8: , January . You said to the 11% and midpoint talk suggest maybe We morning . more acceleration off those December , one of that , then the levels .
Speaker #6: We had said 11% in Q3 came in under that . Obviously we signed in November as being macro weakness . We saw that in other other people participate in our industry .
Speaker #8: January Kupferberg from Fargo . what drove the 26 would December , then what drivers of some of the January ? potential And further
Speaker #6: And , you know , part of our vertical is build to drive yield higher to to the prior point . But it's also to reduce of some our concentration in the restaurant .
Speaker #8: 2026 ? And if you can just for . you think we lapped the
Mike Lyons: Yeah. A couple of parts there. First, to start, December, January went back to where we thought we'd be for the quarter. We had said 11% in Q3. Came in under that, obviously. We cited November as being macro weakness. We saw that in other people participate in our industry. And part of our vertical build is to drive yield higher to the prior point, but it's also to reduce some of our concentration in the restaurant and retail area, especially restaurants, and that had a weaker November. So macro anomaly in the month. And then we saw volumes reaccelerate back to where we thought they'd be for the quarter. So we feel good about that. I think just longer term, if you exclude the gateway conversion over the last couple of years, we bounced around quarter to quarter from the high single digits to the low double digits.
Speaker #8: Thanks .
Paul Todd: I would just highlight that we do have the comparative dynamics in the first half of the year in merchant like we do in financial solutions. It's not as dramatic. And so we obviously called out the more dramatic FS headwinds, comparative headwinds in the first half. But I think the Q3, Q4 adjusted run rate, if you want to call it that, gives confidence of what the overall merchant solutions look like for next year.
Speaker #6: And retail area , especially restaurants . And that had a weaker November . So macro anomaly in the month . And then we saw volumes accelerate back to where we thought they'd be for the quarter .
Speaker #4: Yeah , a of your
Speaker #4: Yeah , a of your
Speaker #4: is , you us know , December ,
Speaker #4: the quarter . We had to where we 11% in under that went Q3 started November as being And macro weakness . We saw also when that in other other back in our participate industry , you .
Speaker #4: the quarter . We had to where we 11% in under that went Q3 started November as being And macro weakness . We saw also when that in other other back in our participate industry , you guide know , part of our is came in thoughts there . yield higher to to And prior point .
Speaker #4: the quarter . We had to where we 11% in under that went Q3 started November as being And macro weakness . We saw also when that in other other back in our participate industry , you guide know , part of our is came in thoughts there .
Speaker #6: So good about feel that . I think just longer term , if exclude the you gateway conversion over the last couple of years , we've bounce been we around quarter high quarter from the single digits to the low double digits .
Speaker #6: The four quarters of 25 or between 9 and 11 . And that's sort of where we see the core growth rate of the business .
Speaker #4: But really it's also to reduce some of . January Obviously concentration in the restaurant . the build And retail area , especially restaurants .
Speaker #6: Sometimes , you know , a independent of macro factors . So I think that's a good view to lead , good area to lead around that .
Operator: Next, we'll go to the line of James Faucette from Morgan Stanley. Please go ahead.
Speaker #4: And that, too, had a weaker November—so a macro anomaly in the month. And then we saw volumes re-accelerate back to vertical, where we thought they'd be for the quarter.
James Faucette: Thank you very much. I wanted to follow up on some of the fee changes that you've made and any color you can give there in terms of merchant response. I'm sure they're happy about it. But things that you can measure, like changes in churn or retention. And how long do you think you'll see some of those impacts for? Thanks.
Speaker #6: Just to be careful on the gateway conversion , remember that there's not a technical laughing of the gateway conversion . You know , you stop converting over a gateway and then there's continuous runoff over time .
Speaker #4: thought So feel that . I think just term , if you exclude the gateway the last couple of good about been years , we around quarter to quarter from the high single digits to double digits .
Mike Lyons: The four quarters of 2025 were between 9% and 11%. That's sort of where we see the core growth rate of the business sometimes, independent of macro factors. I think that's a good view to lead, a good area to lead around that. Just to be careful on the gateway conversion, remember, there's not a technical lapping of the gateway conversion. You stop converting over a gateway, and then there's continuous runoff over time. So it's not a traditional anniversary thing. As long as there are gateway converted clients on the system, if one of those runs off, it will impact growth going forward. But obviously, the magnitude of that will go down. And we have it going. It was 3 points for most of 3-point differential for most of this year. And it will go down in 2026 and going forward. So hopefully, that's helpful. Anything to add?
Speaker #6: not a So it's traditional anniversary thing that will as long as there are gateway converted clients on the system , if one of those runs off , it will impact growth .
Speaker #4: The four quarters—25 or of between 9 and 11—sort of where we see the core growth rate, sort of where we see the business conversion over.
Mike Lyons: Yeah. So first on the changes we talked about last quarter with respect to those specific Clover fees, they were implemented. And we've received positive feedback from our partners. I don't know if you can directly attribute it to in-quarter or any specific in-quarter movements. We just thought it was the right thing to do on behalf of our customers, partners, and the business. And that's the way we'll continue to run the business.
Speaker #4: Sometimes , independent of macro factors . So I think that's a good , you know the view to area to , good lead around that the careful on conversion , remember , just to be there's not a that technical laughing at the gateway stop a there's converting over gateway and then runoff continuous not a know , you traditional conversion .
Speaker #6: Going forward . But obviously the magnitude of that will go . And down we we have it going with three points for of most three point of this year , and it differential for most will go down in 26 .
Speaker #6: going forward . And So helpful hopefully . Anything to add ?
Speaker #6: that's The only
Speaker #2: thing I would add is , as Jason , as we feel good about where we sit , when we saw what December did , when we see what January did as it relates to that overall guide that we gave and the things that we talked about in the prepared remarks around business development expansion , some of the verticals , expansion , those are all just kind of tailwinds that help us get very confident about the overall guide of GPB .
Speaker #4: time . So it's gateway clients over if system , one of those the off , it are impact will growth . on forward .
Operator: Thank you. Next, we'll go to James Friedman from Susquehanna. Please go ahead.
James Friedman: Hi. Good morning. A more general question on the financial solutions segment. Obviously, it posted negative organic growth in the quarter. I'm just wondering what, from your perspective, needs to change for that segment to reaccelerate and grow. What indicators are you looking at? And what should investors watch in terms of the opportunity overall for financial solutions? Thank you.
Speaker #4: Going But obviously the will go down magnitude that . And of converted it have we we It was most for going . three points of three point differential for most of this year , and it You down forward .
Paul Todd: Yeah. The only thing I would add is, Jason, is we feel good about where we sit when we saw what December did, when we see what January did as it relates to that overall guide that we gave. The things that we talked about in the prepared remarks around business development, expansion, some of the verticals expansion, those are all just kind of tailwinds that help us get very confident about the overall guide of GPV. As Mike said earlier, the overall macro, we're assuming kind of a normalized macro. We also commented in the prepared remarks that the lower side of that guide is reflective of less kind of non-Clover transition. The higher side reflects kind of more on the non-Clover transition.
Speaker #2: And , you know , the the as Mike said earlier , the overall macro , we were assuming kind of a normalized macro .
Speaker #4: So hopefully that's Anything .
Speaker #2: And , you know , we also commented in the prepared remarks that , you know , the lower side of that guide is reflective of less kind of non-closure transition in the higher side reflects kind of more on the on the clover or clover transition .
Speaker #6: thing I would To add ? The only add is ,
Speaker #6: Jason , as we we saw sit , when what December about where did , when what January did as it relates
Speaker #6: guide feel that we gave things that we talked about in the prepared business
Mike Lyons: Yeah. Overall, again, we think we have a great platform. We talked about some of the investments in and around the client service and specifically around the core customer service platform that we have to make. We're making those. We're closely monitoring the progress of those. Obviously, there's easy KPIs for those in terms of client satisfaction, and the like, and average revenue per client. So continue to watch those. I would say broadly, the impact of comparable periods and you have to continue to monitor that. If we look at the underlying volume growth across almost all aspects of the financial service business, it remains in trend areas that it's been in for a long time. And we feel good about it. It's not just purely translating to period-on-period revenue growth as you go over the comparables from a prior period.
Speaker #6: verticals around those are development of all just And going that help us very
Speaker #8: Helpful . Thanks .
Speaker #9: Yep .
Speaker #6: tailwinds commented in get remarks you know , that , overall lower side of that we the guide macro is TPV in the higher non-closure kind of side on the on more clover or reflective of a kind .
Speaker #3: We'll go to the line of Dan Dolev from Mizuho . ahead Please go .
Speaker #6: of , expansion , you know , the remarks the overall earlier , macro we've as . And , normalized . And you will go also know , helpful .
Speaker #1: guys . Hey Thanks for taking my question . Lots of good things . Improvements across the board . Great job here Mike . You know , it's been a few months now .
Speaker #1: I mean , is anything that surprised you most ? Any new surprises here ? Anything you're seeing that that hasn't been appreciated that you would like to highlight .
Speaker #6: less
Speaker #6: less Yep go to the
Jason Kupferberg: Helpful. Thanks.
Paul Todd: Yep.
Speaker #1: That would be great . Thank you .
Operator: We'll go to the line of Dan Dolev from Mizuho. Please go ahead.
Speaker #6: I as I mentioned earlier , with respect to new developments or surprises with the negative connotation from the from what we said in the third quarter , there are none .
Speaker #8: Helpful . Thanks
Speaker #8: Helpful . Thanks
Dan Dolev: Hey, guys. Thanks for taking my question. Lots of good things, improvements across the board. Great job here. Mike, it's been a few months now. I mean, is anything that surprised you most? Any new surprises here? Anything you're seeing that hasn't been appreciated that you would like to highlight? That would be great. Thank you.
Speaker #2: Dan
Speaker #2: Olive Mizuho . Please go from ahead . We'll
Speaker #2: .
Speaker #3: Hey taking my question good of things . Improvements across the board . Great
Speaker #3: Thanks for
Speaker #6: And our focus is all on execution . I think , you know , all the things , the surprises on the positive side are the capability and potential for this company to not only deliver on the pillars that we've delivered on historically to serve who are two massive Tams eager and have a high appetite advice and advanced technology from us that just continues to grow .
Speaker #3: Lots Mike . You here know , it's been a few months now . the mean , is anything that of most any new surprises Anything you're seeing clover that that hasn't been appreciated that you would like to highlight .
Mike Lyons: So one of the most important things we watch, and Paul mentioned in his comments, is what are those underlying volume growth rates. Again, we feel good about those. We told you in the banking space that we're not happy with where we are in performance. Last quarter, we remained there. But we know what we have to do to fix it. We're addressing it.
Mike Lyons: Yeah. As I mentioned earlier, with respect to new developments or surprises with a negative connotation from what we've seen in the third quarter, there are none. Our focus is all on execution. I think all the surprises on the positive side are the capability and potential for this company to not only deliver on the pillars that we've delivered on historically, to serve two massive TAMs who are eager and have a high appetite for advice and advanced technology from us. That just continues to grow. So we're anxious to get these investments made and be able to focus on exciting things similar to what I talked about in the banking core space. Our cores are great. They meet a lot of different needs of a lot of different institutions. We want to make sure the service is great on that.
Speaker #3: would be great . Thank you That .
Speaker #4: Yeah , I as I
Speaker #4: earlier with to new as developments surprises negative with the connotation from the said in from what we the third quarter . none . or our And is all There are focus execution .
Paul Todd: Yeah. And the only thing I would add on to that, Jenny, would be that we do expect to see in the back half of next year growth in all three of these areas of financial solutions based on those volume underpinnings that Mike just mentioned. These are very volume-driven businesses. We like the volumes as they're growing across those businesses. For 2026, we have these non-recurring kind of comparative headwinds. And so we will see expected growth across the board in the back half of the year. And we've talked about financial solutions being a low-single-digit kind of growth business. And that's what we expect on a go-forward basis after we get past this year.
Speaker #6: And so we're anxious to get these investments made and be able to focus on exciting things similar to what I talked about in the in the banking core , our core are great .
Speaker #4: I think , you know , all the things surprises the are positive on the side the capability and here ? potential for this company not only to respect the on we on delivered to serve two massive Tams who are have a and eager appetite for deliver on and advanced technology from us high so we're anxious And get these continues to made and be able to focus on grow .
Speaker #6: They meet a lot of different needs , of a lot of different institutions . We want to make sure the service is great on that , so then we can talk to the banks about how do you grow small business customers , how do you deal with modern forms of payments ?
Speaker #6: How do you bring how can we as an execution and orchestration layer on behalf of them , bring AI into their businesses and the same thing on the merchant side , where capabilities , our ability to democratize for that businesses small across the country and allow them to participate in a similar way , right in is front of us .
Bryan Keane: Thank you.
Speaker #4: We talked similarly about the exciting banking space. At our core, what we do is different for institutions. We want to make sure the service is there.
Mike Lyons: So then we can talk to the banks about how do you grow small business customers? How do you deal with modern forms of payments? How do you bring, how can we, as an execution and orchestration layer on behalf of them, bring AI into their businesses? And the same thing on the merchant side, where agent capabilities, our ability to democratize that for small businesses across the country and allow them to participate in a similar way, is right in front of us. So lots of positive surprises. It's the things that people have known about. I served for a long time. But as modern technology accelerates our ability to capitalize on those, it just gets greater and greater.
Speaker #6: So lots of positive surprises . It's the things that people have known about for a long time , but as modern our accelerates , those capitalize on technology ability to just gets greater and greater .
Operator: We'll go to Ken Suchoski. He's from Autonomous Research. Please go ahead. Your line is open.
Speaker #4: So the banks about great on how do you can talk to business small do you customers , how forms of payments ? deal with How bring how can modern and execution behalf layer on them , bring AI as an into their same thing in the on the merchant side , where orchestration capabilities , our democratize ability to that for businesses businesses across small country and in a participate allow them to way , is So lots of positive of similar right in front of us .
Ken Suchoski: Hey. Good morning. Thanks for taking the question. Just one on the non-Clover SMB part. I think you mentioned you're assuming slight growth in that business in 2026. We estimated it was down slightly in 2025 and maybe a little bit more of a decline in the second half. So maybe just talk about the drivers of the acceleration and how you get to that slight growth in that business in 2026. Thank you.
Speaker #1: Great stuff .
Speaker #9: Thank you .
Speaker #3: We'll go to the line of Will Nance from Goldman Sachs . Please go ahead .
Speaker #10: I appreciate you taking the question . I just had a little modeling here on the enterprise side . You've been calling out the pace Grove or issues for a bit now .
Speaker #4: The things that have been known about Pfizer. But modern, as technology accelerates, our ability to capitalize just gets greater, and on those.
Speaker #10: Just remind us again when those lap and if there's any way of quantifying the magnitude on on both revenue and transactions , that would be helpful as well .
Paul Todd: Yeah. I would start off by saying you're right in that rough estimation of slightly down overall. As we said, ex-Argentina, I would say we've got a very strategic approach as it relates to. I think Mike made some comments on this earlier around testing the non-Clover merchants as they move over to Clover, and just a greater attention on just this book in general, and how we go about that book. We are very focused on growing the Clover business. But we are also very focused on the transition of non-Clover merchants and the retention of non-Clover merchants as well. So I'd say all of the things that we're doing across the board are collaborative in nature. They're more Clover-focused. But we're also focused on this side of the business as well.
Dan Dolev: Great stuff. Thank you.
Speaker #10: Thank you .
Operator: We'll go to the line of Will Nance from Goldman Sachs. Please go ahead.
Speaker #2: So Yeah . will we . Did in the prepared remarks , I made a couple of comments , particularly around enterprise , as I talked about this will be the last quarter that we talk about enterprise transition of this client .
Speaker #3: stuff . Great Thank you
Will Nance: Hi. I appreciate you taking the question. I just had a little more learning here. On the enterprise side, you've been calling out the PayFac growth over issues for a bit now. Just remind us again when those lapped and if there's any way of quantifying the magnitude on both revenue and transactions. That would be helpful as well. Thank you.
Speaker #3: .
Speaker #2: We'll go to .
Speaker #2: the line Nance from Goldman ahead Please go
Speaker #2: the line Nance from Goldman
Speaker #9: appreciate you taking the question . I a just had little aluminum here I enterprise side . You know you've been calling the out
Speaker #2: And we had about six points of differential that existed in the fourth quarter . Related to this . If you kind of add that to the revenue side , you know , the minus 2% goes to kind of plus more of a four .
Speaker #9: issues for a bit now . Just again when those lap and if there's any way time . of quantifying the pace at magnitude on Sachs .
Paul Todd: Yeah. So Will, we did in the prepared remarks. I made a couple of comments, particularly around enterprise. As I talked about, this will be the last quarter that we talk about enterprise transition of this PayFac client. And we had about 6 points of differential that existed in Q4 related to this. If you kind of add that to the revenue side, the -2% goes to kind of more of a +4. If you look at the transactions of 6%, which is kind of a clean number on the transaction side, that 4% revenue growth is very in line with the 6%. And then that kind of 4% or kind of mid-single digit growth is consistent with what we've had in Q3 and also consistent with roughly what we expect as we look forward to next year.
Speaker #2: transactions If you 6% , which is kind the clean of a the transaction side , that 4% revenue growth is in line very with the 6% .
Speaker #9: And transactions, that would be as well. Thank you.
Speaker #6: Yeah . will we .
Speaker #2: And then that kind of 4% or kind of mid-single digit growth is consistent with what we've had in the third quarter . And also consistent with roughly what we expect as we look forward to next year .
Speaker #6: I made a “did” in a couple of comments, so prepared remarks, enterprise, as talked about—this will be the ‘we talk’ quarter that lasts about the enterprise helpful client.
Speaker #6: I made a Did in couple of comments , So prepared remarks , enterprise , as talked about this will be the we talk quarter that last about the enterprise
Bryan Keane: Thank you, Paul.
Speaker #6: And we about particularly six points I existed had this , if around of of add revenue that to the you kind Related to more of a kind of plus remind us four .
Speaker #2: And that mid-single digit growth transaction would also be the right way to to about think the business on a go forward basis without the fat noise in that line .
Operator: For the final question, we'll go to the line of Harshita Rawat from Bernstein. Please go ahead.
Harshita Rawat: Hi. Good morning. Just two quick ones. On the Clover 10% to 15% volume growth for the year, Paul, what drives the pace of backbook conversion that could land you in the high end of the range in volumes? And then, Mike, just want to follow up on your conversation with your banking customers. There's been some dissatisfaction with the service and product levels that you talked about and also addressed at the forum. You talked about the elevated churn. My question is, as you go on and change your organizational mindset and make these investments, what are you hearing currently from your customers? Thank you.
Speaker #10: Okay . So converging in the first quarter , appreciate it . Thank you .
Speaker #6: Look at in the fourth quarter, 6% of a, which is kind of -2%, goes to number on the transactions, on transaction very in line with the 6%.
Speaker #6: look at the in the fourth quarter . 6% , of a which is kind -2% goes to number on the transactions of on transaction very in line that If you And then that kind of 4% or kind of growth consistent with what we've in the third quarter .
Speaker #9: Thanks .
Speaker #3: We'll go to Bryan Keane from city . Please go ahead .
Speaker #11: Hi . Good morning and thanks for taking the question . Just a follow up on that Paul . How do how do we think about the mid-single digit growth for the organic growth for the year in merchant ?
Paul Todd: And that mid-single-digit transaction growth would also be the right way to think about the business on a go-forward basis without the PayFac noise in that line.
Speaker #6: And also, mid-single digit is consistent, roughly with what we expect looking forward to next year. And mid-single digit growth in transactions also would be the right way to think about it going forward. I think the noise had been in that line.
Speaker #11: You just went through enterprise small business though with Clover it looks like it'll be about the same growth rate we saw in the quarter .
Will Nance: Got it. Okay. So converging in Q1. Appreciate it. Thank you.
Speaker #11: So know , fourth fourth , you going from 1% organic growth in the fourth quarter to mid-single digits . We get a lift from enterprise .
Paul Todd: Thanks.
Operator: We'll go to Bryan Keane from Citi. Please go ahead.
Speaker #9: so Okay , converging in the first it . Thank you
Mike Lyons: Yeah. On the 10% to 15% GPVs, I said earlier, the business on a core basis, exclude any non-Clover to Clover transitions, has been growing in high single digits, low double digits. That's the formation of 10. You should think of that as the organic growth rate assuming economic conditions stay in relatively constant form. Over time, and we also mentioned that we're taking a very deliberate and thoughtful approach to any backbook conversion, making sure that there's a right value proposition for the merchant because today, again, it's all Fiserv revenue. And we want to make sure if we do anything, it's very thoughtful and with a clear value proposition. That would have to be working in a very significant way more than we contemplate in the near term to get to the high end of the range.
Speaker #11: But do we also get any lift from SMB and processing ? Thanks .
Bryan Keane: Hi. Good morning. Thanks for taking the question. Just to follow up on that, Paul, how do we think about the mid-single digit growth for the organic growth for the year in merchant? You just went through enterprise. Small business, though, with Clover, it looks like it'll be about the same growth rate we saw in the fourth quarter. Going from 1% organic growth in the fourth quarter to mid-single digits, we get a lift from enterprise. But do we also get any lift from SMB and processing? Thanks.
Speaker #9: . Thanks
Speaker #9: .
Speaker #2: We'll go to Keane to to Brian go .
Speaker #2: Yeah . And so you know I gave some comments on that in my prepared remarks around the overall mid-single digit growth expectations . We have for merchant next year .
Speaker #10: Good morning and from Hi . taking the question . thanks for a follow that up on how do Just we think do Paul .
Speaker #10: about the
Speaker #10: digit How mid-single growth the in the year merchant ? organic just went
Speaker #2: I would say I think your comment related to Clover specifically is accurate . When we gave the overall Clover growth , revenue growth guidance of the low double digits , and so I think , you know , that kind of holds .
Speaker #10: business as we though with it looks like it'll be about the same growth rate we fourth fourth quarter . So the know , Citi .
Speaker #10: 1% organic Clover going from growth in the
Speaker #2: And if you try to add back kind of the headwinds that we had in the fourth quarter , you get back to that mid-single digit growth rate for merchant in the fourth quarter .
Paul Todd: Yeah, Brian. So I gave some comments on that in my prepared remarks around the overall mid-single-digit growth expectations we have for merchant next year. I would say I think your comment related to Clover specifically is accurate when we gave the overall Clover revenue growth guidance of the low double digits. So I think that kind of holds. And if you try to add back kind of the headwinds that we had in the fourth quarter, you get back to that mid-single-digit growth rate for merchant in the fourth quarter. So if you looked at it from a third quarter and a fourth quarter, how merchant has performed overall, that gives you line of sight into roughly how we will perform in that range roughly for next year.
Speaker #10: mid-single digits . from Please fourth quarter to But do we We also get SMB and processing ? lift from , you
Speaker #6: So you know , I gave you some
Speaker #2: you looked So if at it from a third quarter and a fourth quarter , how merchant has performed overall , that gives you line of sight into roughly how we will perform in that roughly range , for next year .
Speaker #6: around the overall mid-single remarks expectations . We
Speaker #6: for merchant
Speaker #6: I next your comment Clover related to When we the overall would say through Clover , revenue growth ahead have guidance I think gave the low .
Speaker #2: I just highlight that we do have the comparative dynamics in the first half of the year in merchant , like we do in financial solutions .
Mike Lyons: And if we have some success in that, again, we're being very deliberate and very thoughtful as we do it, making sure we have the right vertical capabilities, the right BAS to add value to those clients. So anything we do and we're successful there, we would bring it above that core line of growth. On the banking side, I think it's reflective of what I said for the first quarter of a multi-quarter effort. We are out doing the right things, making the right investments. And the anecdotal feedback we're getting from clients is they like what they see. But they want to see it sustained and delivery on the commitments we've made. And that's 100% what we're focused on.
Speaker #2: It's not as dramatic . And so we obviously out the called more dramatic FX headwinds , comparative headwinds in the first half . But I think the third quarter .
Speaker #6: you know , that kind of holds you try to add digits of back kind of headwinds
Speaker #6: had in the fourth quarter , you get that digit mid-single growth rate Brian . growth for merchant in the fourth quarter . at it from any back to looked quarter and a fourth quarter , how Yeah .
Speaker #2: Fourth quarter adjusted run rate , if you want to call it that , gives confidence of what the overall merchant solutions looks like next for year .
Paul Todd: I would just highlight that we do have the comparative dynamics in the first half of the year in merchant like we do in financial solutions. It's not as dramatic. And so we obviously called out the more dramatic FS headwinds, comparative headwinds in the first half. But I think the Q3, Q4 adjusted run rate, if you want to call it that, gives confidence of what the overall merchant solutions look like for next year.
Speaker #6: That gives you a line of roughly where we will be. So, if you—and if my range is roughly for next year, that’s how we perform in that.
Speaker #6: would just highlight that have the comparative we do dynamics in the first half of the year in we do financial solutions . It's not dramatic .
Speaker #6: would just highlight that have the comparative we do dynamics in the first half of the year in we do financial solutions . It's not in And so we obviously accurate .
Speaker #3: Next will go to the line of James Faucette from Morgan Stanley . Please go ahead .
Speaker #12: Thank you very much . I wanted to follow up on some of the fee changes that you've made and color any you can give there in terms merchant of response , I'm sure they're happy about it , things but that you can measure , like changes in churn or retention and and how long do you think you'll some of those thanks for impacts .
Speaker #6: called out the more dramatic FX , comparative headwinds as merchant , like headwinds in the first half . think the But I third quarter .
Operator: Thank you. Final question?
Speaker #6: Fourth quarter if you want run rate , to call it that , confidence of overall merchant solutions what the looks like for gives year next .
Mike Lyons: No. Thank you all for joining us today. We look forward to seeing you at the various conferences and different meetings over the course of the quarter.
Operator: Next, we'll go to the line of James Faucette from Morgan Stanley. Please go ahead.
Operator: Thank you all for participating in the Fiserv Fourth Quarter 2025 Earnings Conference Call. That concludes today's call. Please disconnect at this time. Have a great rest of your day.
Speaker #6: question . Thanks a the changes we talked last quarter with respect to those specific clover fees . They were implemented . And we've received positive feedback from our partners .
James Faucette: Thank you very much. I wanted to follow up on some of the fee changes that you've made and any color you can give there in terms of merchant response. I'm sure they're happy about it. But things that you can measure, like changes in churn or retention. And how long do you think you'll see some of those impacts for? Thanks.
Speaker #2: James the line of will go to Fawcett from Morgan Please go ahead .
Speaker #11: Thank you very much . I wanted to follow up on some of the fee changes
Speaker #6: don't know if I you can directly attribute it to any specific quarter movements . We just thought it was the right thing to on behalf of our customers , partners the and business .
Speaker #11: made , you've and color you give any there can in terms of merchant response , I'm sure they're happy about it . But things that you can measure , Stanley .
Speaker #6: And that's the way we'll continue to run the business .
Speaker #11: changes like in or churn retention and how and think you'll long see those impacts for thanks some of .
Mike Lyons: Yeah. So first on the changes we talked about last quarter with respect to those specific Clover fees, they were implemented. And we've received positive feedback from our partners. I don't know if you can directly attribute it to in-quarter or any specific in-quarter movements. We just thought it was the right thing to do on behalf of our customers, partners, and the business. And that's the way we'll continue to run the business.
Speaker #3: Thank you . Next , we'll go to from Susquehanna . Please go ahead .
Speaker #13: Good Hi . morning . A more general question on the financials Solutions segment . Obviously , it organic growth in the quarter . I'm just what from your perspective needs to change for that segment to reaccelerate and grow .
Speaker #4: Thanks . A question . The changes we talked about last quarter respect with to those specific clover fees , they were . And implemented we've received positive feedback partners .
Speaker #4: From our I don't know, can directly to in court any specific quarter movements. If you—we just thought it was the right thing to do on behalf of our customers, attribute it partners, and the business.
Speaker #13: What indicators are are you looking at and in terms of the overall for opportunity financial solutions ? Thank you .
Speaker #4: And that's the way we'll continue to run the business .
Operator: Thank you. Next, we'll go to James Friedman from Susquehanna. Please go ahead.
Speaker #6: again , we think Overall , we have a great platform . We talked about some of the investments in and around the client service and core and specifically around the core customer service platform that we have to make .
James Friedman: Hi. Good morning. A more general question on the financial solutions segment. Obviously, it posted negative organic growth in the quarter. I'm just wondering what, from your perspective, needs to change for that segment to reaccelerate and grow. What indicators are you looking at? And what should investors watch in terms of the opportunity overall for financial solutions? Thank you.
Speaker #2: next Susquehanna . one from Please There .
Speaker #12: Hi . Good morning . A more general question on the financial solutions segment post a negative organic growth in the I'm just wondering what from your perspective change , needs to for that segment to .
Speaker #6: We're making those we're closely monitoring the progress of those . Obviously , there's easy KPIs for those in terms of client satisfaction and the like , and average revenue client .
Speaker #12: Re-accelerate grow and . What indicators are are you at looking and and and what investors watch should in terms of the opportunity overall for financial solutions ?
Speaker #6: So we'll continue to watch those . I would say the impact of comparable periods and you know , you have to continue to monitor that .
Mike Lyons: Yeah. Overall, again, we think we have a great platform. We talked about some of the investments in and around the client service and specifically around the core customer service platform that we have to make. We're making those. We're closely monitoring the progress of those. Obviously, there's easy KPIs for those in terms of client satisfaction, and the like, and average revenue per client. So continue to watch those. I would say broadly, the impact of comparable periods and you have to continue to monitor that. If we look at the underlying volume growth across almost all aspects of the financial service business, it remains in trend areas that it's been in for a long time. And we feel good about it. It's not just purely translating to period-on-period revenue growth as you go over the comparables from a prior period.
Speaker #6: If we look at the underlying volume growth across almost all aspects of the financial service business , it remains in a in trend areas that it's been in for a long time .
Speaker #12: Thank you quarter . .
Speaker #4: Overall , again , have a we think we platform
Speaker #4: investments in and the around client service and and specifically around the core customer service platform that we have to make . We're making those we're closely monitoring the progress of those .
Speaker #6: And we feel good about . It's not just purely translating to a period on period growth . Revenue growth as you comparables go over the from from a prior period .
Speaker #4: Obviously KPIs easy , there's those in . terms of client satisfaction like and and the average revenue per client . So we'll watch those .
Speaker #4: Obviously KPIs easy , there's those in . terms of client satisfaction like and and the
Speaker #6: So one of the most important things we watch , and mentioned Paul in his comments , is what are those underlying volume growth rates .
Speaker #4: continue to I would say broadly , the impact of comparable periods and know you , you have to continue that . If we look at the underlying volume growth across almost all aspects of the financial to monitor service business , it remains in Obviously , a in trend areas that it's been long time .
Speaker #6: And again , we feel good about those . We told you in the banking space that we're not happy with where we are in performance last quarter .
Speaker #6: We remain there , but we know what we have to do to fix it . And we're addressing .
Speaker #9: It .
Speaker #2: Yeah . The only thing I would add on to that , Jamie , would be that we do expect to see in the back half of next year growth in all three of these areas of financial solutions , based on those volume mentioned , these are very volume driven businesses .
Speaker #4: in for a And we feel good about . It's translating purely not just a period on period growth . Revenue growth you as go over the from from a comparables prior period .
Mike Lyons: So one of the most important things we watch, and Paul mentioned in his comments, is what are those underlying volume growth rates. Again, we feel good about those. We told you in the banking space that we're not happy with where we are in performance. Last quarter, we remained there. But we know what we have to do to fix it. We're addressing it.
Speaker #2: We'd like the volumes as they're growing across those businesses 2026 , we . For have these comparative non-recurring kind of comparative headwinds . And so we will see , you know , expected growth across the board in the back half of the year .
Speaker #4: So important things, one of the most we watch and mentioned in his is what comments Paul underlying are, those volume growth rates.
Speaker #4: And again , we feel good about those . We in the told you banking space that we're not happy with where we are in last performance quarter .
Paul Todd: Yeah. And the only thing I would add on to that, Jenny, would be that we do expect to see in the back half of next year growth in all three of these areas of financial solutions based on those volume underpinnings that Mike just mentioned. These are very volume-driven businesses. We like the volumes as they're growing across those businesses. For 2026, we have these non-recurring kind of comparative headwinds. And so we will see expected growth across the board in the back half of the year. And we've talked about financial solutions being a low-single-digit kind of growth business. And that's what we expect on a go-forward basis after we get past this year.
Speaker #2: And we've talked about financial solutions being a low single digit kind of business . that's what And we expect on a go forward basis .
Speaker #4: remain there , but we know what we have to do to We fix And we're addressing it it . .
Speaker #6: only thing Yeah . The I would add on that to , Jenny , would be that we do expect to see in the back half of next year growth in all three of these areas of financial solutions , based on those volume underpinnings , that might just mentioned , these are very volume driven businesses .
Speaker #2: After we get past this year .
Speaker #9: Thank you .
Speaker #3: From Autonomous Research , please go ahead . line is Your open .
Speaker #6: We'd like the volumes as they're growing across those businesses . For we 2026 , have these comparative non-recurring kind of comparative headwinds . And so we will see expected growth across the board in the back year .
Speaker #14: Hey . Good morning . Thanks for taking the question . Just one on the non SMB part . I think you mentioned you're assuming slight growth in that business in 2026 .
Speaker #14: We estimated it was down slightly in maybe a 2025 . And little bit more of a decline in the second half . So maybe just talk about the drivers of the acceleration and how you get to that slight growth in that business in 26 .
Speaker #6: Half of the, about, and Financial—we've talked solutions being a low single digit kind of growth. And that's what we expect on a go-forward basis.
Bryan Keane: Thank you.
Operator: We'll go to Ken Suchoski. He's from Autonomous Research. Please go ahead. Your line is open.
Speaker #6: After we get past this year .
Speaker #12: Thank you .
Speaker #13: Thank you .
Speaker #9: Thank you .
Speaker #2: Yeah . And I would start off by saying you're you're right in that rough estimation of slightly down overall . And as we said XR Argentina I would say we've got a very strategic approach as it relates to I think Mike made some this comments on earlier around testing the non clover merchants as they move over to Clover .
Speaker #2: We'll go from research. Autonomous, please go ahead. Your line is open.
Ken Suchoski: Hey. Good morning. Thanks for taking the question. Just one on the non-Clover SMB part. I think you mentioned you're assuming slight growth in that business in 2026. We estimated it was down slightly in 2025 and maybe a little bit more of a decline in the second half. So maybe just talk about the drivers of the acceleration and how you get to that slight growth in that business in 2026. Thank you.
Speaker #14: Hey . Good morning . Thanks for taking the question . Just one on the non clover SMB part . I think you mentioned you're assuming slight growth that business in 2026 .
Speaker #14: in We estimated it was down slightly in 2025 . And maybe a little bit more of a decline in the second half . So maybe just talk about the drivers of the acceleration and how you get to that slight growth in that business in 26 .
Speaker #2: just And a greater attention on just this book in general , and how we go about that book . We are very focused on growing the Clover business , but we are also very focused on the transition of clover merchants and the retention of clover merchants as well .
Paul Todd: Yeah. I would start off by saying you're right in that rough estimation of slightly down overall. As we said, ex-Argentina, I would say we've got a very strategic approach as it relates to. I think Mike made some comments on this earlier around testing the non-Clover merchants as they move over to Clover, and just a greater attention on just this book in general, and how we go about that book. We are very focused on growing the Clover business. But we are also very focused on the transition of non-Clover merchants and the retention of non-Clover merchants as well. So I'd say all of the things that we're doing across the board are collaborative in nature. They're more Clover-focused. But we're also focused on this side of the business as well.
Speaker #14: Thank you .
Speaker #6: Yeah . And I off by would start saying you're you're right in that rough estimation of slightly overall . And as we down said Argentina ex I would say we've got a very strategic approach as it relates to might make I think some comments on this earlier around testing the non clover merchants as they move over to Clover .
Speaker #2: So I'd say all of the things that we're doing across the board are collaborative in nature . They're they're more clover focused , but we're also focused on on this side of the business as well .
Speaker #14: Thank you .
Speaker #9: Paul .
Speaker #3: Final question . We'll go to the line of Harshita Rawat from Bernstein . Please go ahead .
Speaker #6: just a And greater attention on just this book in general and how we go about that . But we are very focused on growing the Clover business , but we are also very focused on the transition of non clover merchants and the retention of non clover merchants as well .
Speaker #15: Hi . Good morning . Just two quick ones on the clover tend to 15% volume growth for the year . Paul , what drives the pace of that book conversion that could land you in the high end of the volumes range and .
Speaker #15: And my then just want to follow up conversation with your banking customers . You there's been some dissatisfaction with service and the product levels that you talked about .
Speaker #6: I'd say all of the things that we're doing across the board , are collaborative in nature . They're they're more clover focused . But we're also focused on on this side of the business as well .
Bryan Keane: Thank you, Paul.
Operator: For the final question, we'll go to the line of Harshita Rawat from Bernstein. Please go ahead.
Speaker #15: And also addressed at the forum . You talked about the elevated churn . My question is , as you go on and change the organizational mindset and make these investments , what are you hearing from your customers ?
Speaker #14: Thank you Paul .
Harshita Rawat: Hi. Good morning. Just two quick ones. On the Clover 10% to 15% volume growth for the year, Paul, what drives the pace of backbook conversion that could land you in the high end of the range in volumes? And then, Mike, just want to follow up on your conversation with your banking customers. There's been some dissatisfaction with the service and product levels that you talked about and also addressed at the forum. You talked about the elevated churn. My question is, as you go on and change your organizational mindset and make these investments, what are you hearing currently from your customers? Thank you.
Speaker #2: Final question. We'll go to the line of Harshita Rawat from Bernstein. Please go ahead.
Speaker #15: Hi . Good morning . Just two quick ones on the clover , 10 to 15% volume growth for the year what drives . Paul , the of pace back book conversion that could land you in the high end of and the range volumes ?
Speaker #9: Thank you .
Speaker #6: Yeah . On the 10 to 15% PPV , I said know , earlier , you the business on a core basis exclude any non clover to clover transitions has been growing in high single digits .
Speaker #15: And then I just want to follow up on your conversation around banking with your customers. You know, there's been some dissatisfaction with the service and product levels that were talked about.
Speaker #6: Low double digits . That's the formation of ten . You should think of that as the organic growth rate . Assuming economic conditions stay in relatively constant form over time .
Speaker #15: And also addressed at the talked about forum . You the elevated churn . My question is , as you go on and change the organizational mindset and make these investments , what are you hearing from your customers ?
Speaker #6: And we also mentioned that , you know , we're we're taking a very deliberate and thoughtful backward approach to any conversion , making sure that right there's a value proposition for the merchant , because today it's again , it's all Fiserv revenue .
Mike Lyons: Yeah. On the 10% to 15% GPVs, I said earlier, the business on a core basis, exclude any non-Clover to Clover transitions, has been growing in high single digits, low double digits. That's the formation of 10. You should think of that as the organic growth rate assuming economic conditions stay in relatively constant form. Over time, and we also mentioned that we're taking a very deliberate and thoughtful approach to any backbook conversion, making sure that there's a right value proposition for the merchant because today, again, it's all Fiserv revenue. And we want to make sure if we do anything, it's very thoughtful and with a clear value proposition. That would have to be working in a very significant way more than we contemplate in the near term to get to the high end of the range.
Speaker #15: Thank you you .
Speaker #4: Yep . On the 10 to 15% GPB , as I said earlier , you know the business . On a core basis any non-covered to Clover , exclude transitions has been growing in high single digits .
Speaker #6: And we want to make sure if we do anything , it's very thoughtful and with a clear value proposition that would have to be working in a very significant way , more than we contemplate in the near term to get to the high end of the range .
Speaker #4: Low double digits . That's the formation of ten . You should think of that as the organic growth rate . Assuming economic conditions stay constant , relatively form time .
Speaker #6: And if we have some success in that , again , we're being very deliberate and very thoughtful as we do it , making sure we have the right vertical capabilities , the right base to add value to those clients .
Speaker #4: also And we mentioned that , you over know , we're we're taking a very deliberate and thoughtful approach to . Any backward conversion , making sure that there's a right value proposition for the merchant , because today it's again , it's all Fiserv revenue .
Speaker #6: So anything we do and we're successful , there would be would bring it above that core line of growth on the on the banking side , I think it's reflective of what I said for the first quarter of a multi quarter effort .
Speaker #4: And we want to make sure if we do anything , it's very thoughtful and with a clear value have that would to be working in a very significant way , more than we contemplate in the near term to get to the high end of the range .
Speaker #6: We are out doing the right things , making the right investments and the anecdotal feedback we're getting from clients like what they see , but they want to see it sustained and delivery on the commitments we've made .
Mike Lyons: And if we have some success in that, again, we're being very deliberate and very thoughtful as we do it, making sure we have the right vertical capabilities, the right BAS to add value to those clients. So anything we do and we're successful there, we would bring it above that core line of growth. On the banking side, I think it's reflective of what I said for the first quarter of a multi-quarter effort. We are out doing the right things, making the right investments. And the anecdotal feedback we're getting from clients is they like what they see. But they want to see it sustained and delivery on the commitments we've made. And that's 100% what we're focused on.
Speaker #4: And if we have some success in that , again , we're being very and very thoughtful as we do it , making we have the right sure vertical capability , the right mass to add value to those clients .
Speaker #6: And that's 100% what we're focused .
Speaker #9: On . Okay . Question .
Speaker #4: So anything we we're do and successful , there be would would bring it above that core line of growth the . On on the banking side , I it's reflective of what I think said over the first quarter of a multi effort .
Speaker #6: Thank you all for joining us today . And we look forward to seeing the various conferences in different meetings over the course of the quarter .
Speaker #3: Thank you all for participating in the fourth quarter 2020 earnings conference call . That concludes today's call . Please disconnect at this time and have a great rest of your day .
Speaker #4: Quarter are out. We're doing the right things, investments, and the feedback we're getting from clients is anecdotal. They like what they see, but they want to see it sustained.
Operator: Thank you. Final question?
Speaker #4: delivering on the commitments we've made . And that's 100% what we're focused on .
Mike Lyons: No. Thank you all for joining us today. We look forward to seeing you at the various conferences and different meetings over the course of the quarter.
Speaker #13: Yep . Question .
Speaker #4: all for joining us look forward today . And we to seeing the various Thank you conferences different meetings in over the course of the making the right quarter .
Operator: Thank you all for participating in the Fiserv Fourth Quarter 2025 Earnings Conference Call. That concludes today's call. Please disconnect at this time. Have a great rest of your day.
Speaker #2: Thank you all for participating in the fourth quarter 2020 earnings concludes call . That today's Please this time great rest of disconnect at call .
