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Welcome to the Fiserv, Inc. First Quarter 2025 Earnings Conference Call. All participants will be in a listen-only mode until the Q&A session. As a reminder, today's call is being recorded. At this time, I would like to turn the call over to Julie Chariell, Senior Vice President of Investor Relations at Fiserv, Inc.

Thank you, and good morning. Joining me on the call today are Frank Bisignano, our Chairman and Chief Executive Officer, Mike Lyons, our President and incoming CEO, and Bob Hau, our Chief Financial Officer. Our earnings release and supplemental materials for the quarter are available on the Investor Relations section of Fiserv.com. Please refer to these materials for an explanation of the non-GAAP financial measures discussed on this call, along with a reconciliation of those measures to the nearest applicable GAAP measure. 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. Forward-looking statements may differ materially from actual results and are subject to a number of risks and uncertainties. You should refer to our earnings release for a discussion of these risk factors. And now, for the last time, I'll turn the call over to Frank.

Thank you, Julie. And thank you all for joining us today. It was a particularly active first quarter, but I think you've come to expect that from Fiserv, Inc. First, we were steadfast on execution, and that worked out well as we exceeded consensus EPS, expanded a leading client franchise and partner relationships, and advanced our new product and market initiatives while making several strategic acquisitions. We also completed our CEO transition. Mike has exceeded all of my expectations, and as a company, we have not missed a beat. While the economic landscape remains dynamic, we are focused on executing, driving our growth initiatives, and hitting the commitments we set forth in February. As for me, I'll continue to do all I can to extend Fiserv, Inc.'s industry-leading position, pending the outcome of the full Senate vote on my nomination as Social Security Commissioner. You've often heard me talk about the deep bench we have here at Fiserv, Inc., and last month, Mike and I took steps to further advance the organization with the elevation of Takis Georgikopoulos, our new Chief Operating Officer. Takis was named as the Senior Advisor back in June after a successful career at JPMorgan, most recently as Global Head of Payments. The COO role is a natural next step for Takis, who is an accomplished leader and talented operator with deep expertise in technology and payments around the world. He took the baton from Guy Chiarillo, who became vice chairman and continues to report directly to Mike. In this role, Guy is focused on developing best-in-class products, deepening client and partner relationships, and guiding our technology strategy. He is also spearheading our efforts to leverage artificial intelligence and data, both within Fiserv, Inc. and for our clients. The balance of the management committee remains in place. Lastly, I'd like to wrap up with some reflections. I am extremely proud of what we have built at Fiserv, Inc. The company's ability to extend its leadership position is clear. It comes from scale and profitability, a strong balance sheet, global footprint, marquee clients, broad distribution through a network of partners, vast resources to invest and innovate, and a business model that's durable enough to weather shifts in the economy. These attributes have led us to outperform on both operating and valuation post-merger and can extend our track record of thirty-nine consecutive years of double-digit adjusted EPS growth. The alignment of our ecosystems for merchants and financial institutions is driving our growth now and into the future. As commerce and banking are increasingly interconnected, we are positioned to help clients on both sides to meet their growth aspirations. It is a construct unparalleled in the market today, ripe with opportunity and clearly hard to replicate. And with that, I'll turn the call over to Mike.

Thank you, Frank, for your tireless efforts in guiding Fiserv, Inc. and me personally through this transition. It is truly an honor and a privilege to lead the company going forward, and I feel fortunate to do so alongside Guy, Bob, Takis, and the rest of our established and proven management team. Over the last ninety days, I've had the opportunity to meet many of our talented employees and partners and over 1,000 of our clients. These interactions have only further validated my view that Fiserv, Inc. has an absolutely outstanding franchise with many attractive growth opportunities, some of which we are actively pursuing and some that have yet to be tapped and would bring incremental TAM. In nearly all of my client discussions, the focus was on what more Fiserv, Inc. could do for them. It's clear that we are valued, trusted, and that clients recognize our scale, stability, and technical prowess. These attributes are even more important in the current environment of macro uncertainty and industry disruption. So for Fiserv, Inc., commerce and banking activity carry on, and our clients continue to engage with us to explore ways to modernize and digitize, grow their market share, and better serve their customers. Turning to first-quarter results, Fiserv, Inc. is off to a strong start for the year with total company organic revenue up 7%, adjusted earnings per share up 14%, and our adjusted operating margin up 200 basis points. As you know, we had anticipated slower revenue growth to start the year and remain confident that growth will accelerate as the year progresses and we execute on existing contracts and key initiatives. Confidence in our positioning and prospects has us leaning into opportunities presented in this dynamic environment. And in the last sixty days, we announced four strategic acquisitions outside the United States and a new U.S. operating hub. In March, we acquired Payfair, a Canadian provider of program management solutions that enhances our growing embedded finance capability and adds two major gig economy companies as clients. Shortly thereafter, we closed the acquisition of CCV Group, a prominent player in omni-channel payment solutions that meaningfully expands our footprint in The Netherlands, Germany, and Belgium. CCV will help us accelerate the deployment of Clover across Europe. Earlier this month, we acquired Pinch Payments, a payment facilitator serving merchants in Australia and New

Thank you, Mike, and good morning, everyone. If you're following along on our slides, I'll cover the detail on total company and segment performance in the first quarter, starting with our financial metrics and trends on Slide four. Our first-quarter results were in line with our expectations. As I said during last quarter's call, we anticipated a slower start to the year and are pleased with the progress toward our plan for faster growth in the second half. Total company organic revenue growth was 7%, with good growth in each of our segments. Adjusted revenue growth was five, including the impact of currency translation, which had a significantly smaller impact compared to Q1 of last year and was in line with historically average levels of just under 2%. Free cash flow of $371 million reflects expected Q1 seasonality, mostly related to timing of working capital and green tax credits. On a trailing twelve months basis, free cash flow was $5.2 billion, and for 2025, we continue to expect approximately $5.5 billion of free cash flow. Revenue growth this year looks dramatically different from 2024 due to the effects of interest and inflation on our business in Argentina. The contribution from excess inflation, interest rates, and the interim Dollar Treester program to our organic revenue growth is zero this quarter, compared to 10 of the 20 percentage points of organic growth in the year-ago quarter. Total company adjusted operating margin was 37.8%, an increase of 200 basis points versus the prior year, and an adjusted operating income growth of 11%. Adjusted earnings per share for the quarter was $2.4, up 14%. Turning to performance by segment, starting on Slide five. Organic and adjusted revenue growth for the Merchant Solutions segment was 8% and 5%, respectively, for the first quarter. This is in line with our expectation and reflects three timing-related factors. First, the impact of leap year, which contributed an extra day last Q1. Second, timing of the Easter holiday moving from Q1 last year to Q2 this year. And third, a difficult year-over-year comparison against the large term fee that we discussed in Q1 2024. The sum total of these three items impacted our merchant organic revenue growth by roughly three percentage points. Turning to the three business lines of the Merchant Solutions segment. Small business, organic and adjusted revenue growth in the quarter was 10% and 7%, respectively, on payment volume growth of 3%. A slightly slower pace of volume growth reflects the leap year contribution last year and the toughest compare quarter. By sector, we saw declines in discretionary categories in Q1, including travel and hotels, as well as restaurants. By contrast, volume growth at grocery, services, and QSR establishments held up relatively well. Through the quarter, we saw a stable January, slightly lighter February in part driven by weather, with a rebound in March. For April, small business payment volume is tracking in line with March levels. For Clover, revenue grew 27% in the first quarter on annualized payment volume growth of 8%. The softer volume growth largely reflects three factors. First, leap year and Easter, as I just mentioned. Second, a difficult comparison against the gateway conversion that brought new merchants to Clover in Q1 2024. And third, a slowdown in spending in Canada, particularly on travel. Canada is currently the largest international market for Clover. Excluding these specific factors, Clover volume grew at a healthy double-digit pace. Clover revenue growth was a solid 27% against the highest growth quarter last year. There are several reasons for the spread between revenue and volume growth, including a two-point gain sequentially in the penetration rate of Clover value-added services to 24%. Roughly one-third of the spread came from strong Clover hardware sales. As Mike mentioned, banks in particular added Clover hardware as part of a strategic focus to address the SMB acquiring market. Such sales bode well for our processing and VAS revenue going forward. Another nearly one-third came from growth in anticipation of Clover Capital, as we added more Clover merchants in Argentina late last year, their anticipation revenue is now ramping in Clover BaaS. And we continue to see overall strength in other Clover BaaS as well. Enterprise organic and adjusted revenue growth in the quarter was 12% and 8%, respectively, driven by transactions growth of 13%. Enterprise organic revenue growth was mostly driven by new clients and vast penetration, which continues to ramp in part helped by new offerings such as data as a service and our new authorization optimization tool. Finally, processing organic revenue growth in the quarter declined by 7%. Excluding the impact on revenue growth from a termination fee received in the first quarter of last year, processing organic revenue growth would have been up 4%. Adjusted operating income in the Merchant Solutions segment increased 5% for the quarter. Merchant adjusted operating margin expanded 10 basis points to 34.2% compared to a particularly strong result in Q1 2024. Over the past two years, Merchant adjusted operating margin increased 450 basis points. Turning to Slide six. On the Financial Solutions segment, both organic and adjusted revenue grew 6% in the quarter, in line with our 2025 and medium-term outlook of 6% to 8%. Growth was led by strength in digital payments and issuing. Looking at business lines, digital payments organic and adjusted revenue each grew by 8% in the quarter, with growth in

Thank you. We would now 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 use star one on your phone. If you need to withdraw your question at any time, you may press star two. For our first question, we'll go to the line of Darrin Peller from Wolfe Research. Please go ahead.

Hey, guys. Thanks. Maybe we could just start off on the trajectory of the merchant business. Obviously, the Clover growth was very strong at the 27% we're seeing. And so when we build that in, if you could just remind us some of the trends we're seeing and maybe a little bit more quantification of what we'd expect volume growth to look like for Clover as the year progresses? And then more importantly, as we build out in Brazil and Australia and we add these VaaS, what kind of revenue growth do you see in terms of a bridge between volume and revenue growth for Clover? Finally, just overall merchant trajectory as the year progresses would be great from a sequential standpoint.

Yes, Darrin. Good morning and thanks for the question. Overall, we feel good about the 27% revenue growth for the Clover business. BaaS moving up to 24%. As we continue our march and we reaffirmed our commitment to delivering the $3.5 billion for the full year and 25% BaaS for the full year of this year. And Q1 results were right in line with our path towards doing that. We certainly continue to expect growth in the latter part of the year, both in terms of further VAS penetration reaching that 25% as well as overall volume growth. We mentioned in the prepared remarks this morning that Q1 was really impacted by a couple of key things. Obviously, leap year gave us an extra point of growth last year. Easter was in March. It's actually very late April this year. And so we see some acceleration of volume and therefore the revenue growth. Adding to that things like Clover Hospitality going out, the continued acceleration of our international regions, both in Latin America and in Asia Pacific. New countries going live during the first quarter and early second quarter. And then we'll also see some benefit from CCV, the new acquisition. Continued distribution channel expansion in Europe, and actually essentially adding a new country with Belgium having a good distribution channel through CCV and being able to sell Clover through that distribution channel. So there's a number of good things ahead of us that give us confidence in the ability to deliver that $3.5 billion of revenue, and that includes performance in Q1.

Yes. Think probably continue to in terms of distribution and merchant, financial institution partnerships, we continue to see good growth on that front. And then we continue to enhance, talked about it and will throughout the year, continue to enhance the merchant experience, whether that be with the partnership with ADP, the rollout of Cash Flow Central and the integration of that into Clover over time, leveraging AI into Clover's in the merchant opportunities for new leads, get loyalty. Lots of different things around merchant experience.

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

Thanks. Thank you so much. I had to ask a parting question for Frank because I'd love to hear your thoughts on the Global Payments FIS asset swap and how they're unbundling merchant and choosing depth there over breadth, and that's clearly in contrast to what Fiserv, Inc. has done and what you guys have built. So does that change your thinking on that bet in the strategic sort of view on the sum of the parts for Fiserv, Inc.?

I think you know, let's talk about what Fiserv, Inc. is for a second. You have Clover on the front end and now you watch it rolling out globally. So, you know, we then have this partnership model that's unparalleled. You heard us talk about where we're saying top 100 banks, but equally as important as over a thousand bank partners, and we can that something we could continue to grow. With the intersection here of merchants and FIs and, you know, even though we get paid there, that's end of me a home run for us. You don't see any of that right now in the numbers but you'll see it in the future. I mean, I think there's the best talented management team in the industry. I think it puts together the company I never thought there were three deals that were actually the same. Everybody laughed and then we have a debit network. We have an issuing business that's unparalleled. You know, I love our international franchise. Yeah. We leverage the ability to cross-sell through the best distribution network. I feel that market opportunity has opened up across the board. And that would include in the debit space with deals that were done. I mean, I think Mike will have his own point of view out ninety days. But, and I'm I know he's you know, happy to talk about it. But if you think about our issuer strength, that 1.7 billion accounts on file, that's 2x the largest competitor. And we got Fintech coming up. You're gonna continue to watch that win. Our hand in my opinion, is unparalleled. And it we the reason we did the first date of you know, Fiserv, Inc. deal was because that was the deal to do. Right? They weren't comparable. Now debit networks were not the same size. The issuing business was not the same size. Our ability to understand how to sell at the bank or across both companies. I mean, I could go on for the whole call. I won't But I love the hands. I love the company.

I would just add, I meant to the earlier comment that said met with over a thousand clients in the last ninety days and all of those conversations are about how to do more with them. And a lot of those conversations are at the intersection of commerce and banking. And whether it be transactions in the market, noise around tariffs, noise around the equity raising markets or M&A markets. Whatever it may be, size, scale, resilience, continued investment, consistency of strategy. These are all resonating with our clients. And you could feel that come through the quarter as people may look at a certain function that they've relied on a smaller FinTech without access to capital to provide and then turn to us. On the trust front, again, it goes back to size scale and just continuous consistency of strategy that Frank laid over the last several years since that deal. So we see it as a huge advantage for us and like we do every day, are out in the market trying to win share by adding value to our clients. If we get greater ability from disruption in these deals, then that's great.

Next, we'll go to the line of Ramsey El-Assal from Barclays. Please go ahead.

Hi, thanks for taking my question this morning. On Clover volumes, Bob mentioned some Canada headwinds. I'm just curious, were those headwinds do you interpret those headwinds as being kind of idiosyncratic to Canada? Are they sort of ring-fenced in Canada? Is there a risk that we see similar dynamics emerge either here in the U.S. or in other international markets? Think you called out travel, for example.

Yes, Ramsey, where we really saw it was in the travel aspect. And for would say, based on the data we have, it does feel like it is Canadian specific. It's certainly discretionary spending and we saw that come down. We did talk generally in our prepared remarks that broadly across our merchant base, we did see discretionary, I.E. travel, hotels, and restaurant come down. But given the mix of our overall business, having the nondiscretionary growth in groceries and services and QSR holding up, gives us a nice overall balance. We saw that in the first quarter. We saw that in the last many years. And we expect that will continue to bode well for us in any economic outcome.

Next, we'll go to the line of Tim Chiodo from UBS. Please go ahead.

Great. Thank you for taking the question. Bob, I think you did a great job outlining some of the delta between the Clover volume growth and the revenue growth. You touched on hardware, Clover Capital, and anticipation. I want to dig into some of the other areas. So I think the laundry list is pricing and mix, some of the SaaS packages, there's rapid deposit, but then there's one that you've mentioned on a few of the past earnings calls around the increasing direct mix. And I was wondering if you could talk a little bit about how you expect direct mix to play a role in reaching that eventual $4.5 billion revenue number for 2026 for Clover.

Yes. Tim, I would say overall, we've got a very broad, deep set of distribution channels. And direct channel, which, quite honestly, is our newest overall channel. We'll continue to add salespeople, which we refer to as business consultants or VCs, and growing that channel out. We're also seeing great growth in our FI merchant partnerships. So I wouldn't necessarily call any one channel out in particular. We see good opportunities in all of those and the direct channel mix is benefiting overall revenue and margin as we grow that because it's the newest and fastest expanding channel.

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

Good morning, guys. Thanks. I wanted to come back to the Merchant segment for a minute. So I know we were at 8% organic in the quarter. You said that was in line with plan. You had three points, I believe, of headwind related to some of those calendar factors. The term fee comp, so if we adjust for that, I guess we're at 11%. We're still a little below the full-year range. So just help us kind of reconcile from that into, let's say, the middle of the full-year range in a stable macro scenario. I know you've got some Clover geographies and products ramping, but also wanted to get a sense there in terms of how much of this is coming from the new acquisitions, if you could give us a sense of 2025 revenue contribution from those. Thank you.

Yeah. Jason, I would say, first, broadly, it would not be from a contribution of the acquisitions. Those are certainly, will benefit us. Those are brand new into the company. You see very, very, very little impact in Q1. Those will accelerate. It's really a late 2025, 2026, 2027 opportunity for those. We'll continue to see good fast penetration growth. The expansion internationally is certainly a big element for us. Brazil, Mexico, Australia, Singapore, there is an element of CCV giving us international growth. The new product, Clover Hospitality, that rolls out, what, in a couple of weeks now, for high-end restaurants. And generally, broad capabilities and continued growth in a variety of vast capabilities. In new software both in terms of restaurant as well as service and retail that we continue to build out. Give us good opportunities to deliver the $3.5 billion this year and $4.5 billion next year.

Next, we'll go to the line of Brian Keane from Deutsche Bank. Please go ahead.

Hi, guys. Thanks for taking the question. I wanted to ask about the 33 signings in the FI in the financial institution side. I guess what's happening in the market that's driving that number higher for you guys to be landing that many financial institutions? Because I guess I would have thought that most FIs would have already decided who they're partnering with. So I just want to understand the market dynamics that's driving that. Thanks.

I think with respect to all like anything we do and when we approach it, we want to be a great partner and help our clients achieve their objectives. And serving the small business bases of the banks is a very profitable and rich area for the banks, especially in deposits and cash flow transactions. So with our ability products to help them do that highlighted by Clover, and the merchants' appreciation for Clover. We are seeing an increasing interest from banks across the country. The pipeline is huge here for additional banks to come into the fold. And again, we're simply helping our clients achieve their objectives by bringing them great products and services. And you go to this is the classic place to go to for Cash Flow Central, which is I spent most of my life in banking, it's hard to get a scalable AP, an effective AP AR product into a small business integrated in with their acquiring solutions, and that's exactly what Cash Flow Essential is. Making great progress on it. We talked about Washington Federal the first to go live. Continue to build out great functionality with our partners at Meleo and think we have a solution that can help banks achieve their objectives. And that's what our goal is to be. The greatest partner that we can be in the FI emerging markets. And this really at the center of it. So we're very optimistic about the growth we can put on here and what that will do over distribution.

Next, we'll go to the line of Will Nance from Goldman Sachs. Please go ahead.

Hey, thanks for taking the question. Mike, one for you. There have been a lot of data points on the macro environment about a lot of large enterprises going pencils down on large CapEx investments. But I know banks tend to beat to their own drum. I was wondering if you could maybe put your PNC hat back on for a second and talk a little bit about how the macro environment we entered, you know, a month ago, it may impact the way banks think about technology and deployments. And maybe what I'm getting at at a higher level is how would you expect implementation pipelines in a business like Fiserv, Inc. to perform in a weaker macro environment versus maybe a typical enterprise software company? Thanks.

Yes. I think I mentioned it in the earlier comments at least in the conversations we've had throughout the quarter, it's a question about doing more. And those just aren't banks. Probably an even split between merchants and banks. What we generally provide is mid-mission critical systems and capabilities that help them generate revenues. Facilitate sales at our merchants and serve clients, and grow clients at the bank. So have not seen anything of that nature so far this quarter. In fact, I made the point that with a little disruption in the market, we've seen a flight to quality, if you will, in terms of people coming to us around size, scale, stability, consistency of model. Some institutions have over-relied on a multiple of fintech solutions patching together different things, whereas we can bring an end-to-end solution, significant balance sheet, great capabilities, and consistency. So, so far, we've seen the opposite. The question is about doing more.

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

Bob, I wanted to ask about merchant as well. My math is that small business and enterprise organic grew 10.3% combined ex-processing. And I realize you had messaged last quarter in prior transcripts the challenges in processing. But if you could revisit where we are in the processing journey because it sounds like you're expecting that to improve. But if you could talk through why it is and what the logic is, I think that would be helpful to understand the trajectory. Thank you.

Sure, Ed. First off, the processing line certainly was impacted by a periodic revenue item that we had. You recall Q1 of last year, we disclosed we had a large periodic revenue item that accelerated Q1's growth. So we're now growing over that. If you take the organic revenue growth and adjust for that periodic item in Q1 of last year, it actually grew about 4% for the quarter. And we generally believe that the processing line will be roughly flat, slightly positive over an extended period of time. What we've seen over the last several quarters, and we expect to see going forward. And we see great opportunities to grow the overall merchant segment. Processing is an element of that. It's obviously the smallest of the three business lines. And our overall growth as we grow the Merchant Solutions business, processing is a small part of that.

Next, we'll go to the line of Dan Dolev from Mizuho. Please go ahead.

Hey, guys. Great results. And congrats again, Frank and Mike. So really quick on I know you called out Dollar Tree's impact in tandem with interest rates and excess inflation. But can you maybe quantify just specifically the Dollar Tree's impact?

Yes, Dan. From a first-quarter standpoint, Argentina broadly, and that's really all three elements: inflation, interest, and Dollar Turista, was zero impact to the growth in Q1 of this year. Q1 of last year overall Argentina was about 22 points of growth in the merchant segment. And Dollar Turista was seven points of that. But now that Argentina inflation interest has returned to more normal levels. And while we did see some Dollar Turista revenue in the first quarter, it actually was down a bit from Q1 of last year. And we expect that program to likely go away this quarter as you may have seen Argentina reached an agreement with the IMF for a large loan. Their currency peg is expanded or lightened. And we anticipate Dollar Turista to go away this year. Excuse me, this quarter.

Next, we'll go to the line of Andrew Jeffrey from William Blair. Please go ahead.

Hi. Appreciate taking the question. Mike and maybe for Frank too. Recognizing that Fiserv, Inc.'s offerings for banks have improved and expanded dramatically over the last few years, can you just comment on sort of the nature of that distribution channel compared to the historical JVs? Maybe just qualitatively, have the partnerships improved along with product? Is it people in the bank partnerships? Because I know that's an area that had sort of been a little choppy historically, but it sounds like now it's really turning into important growth drivers. So I'm wondering if you could sort of compare and contrast today with five or seven years ago perhaps?

Yes, I could definitely compare and contrast from five seven years ago. You know, I think that was a much different COVID. You know? So you gotta go back to, you know, why we love this franchise and, like, I like to say, the construction of the company. Right? So with any of these bank parts, many of them were providing account processing, the core base system. We got their bill pay. That allows us then ultimately to have CF then deliver Clover. I think we've done a great thing to 's been unbelievable in building this SMB bundle. And then that's why you see people like ADP coming in. You'll see more of those. And so I think the bottom line is we had these great JVs with great bank partners but we've now taken it through the premise of the deal. You know, I always said the synergy went way on way beyond you know, the reported we're still getting the benefit of bank partnership. And if you go anywhere from a First Citizens to other banks across the country. Our ability is just bring them more is very, very strong. And I think you're going to continue to see it. So it's a completely different model. It's the model of the company. It's the construction of the company. You know, it's seven years ago, I was I was debating what you guys whether Clover would be the heavyweight champ. And, you know, that that's probably been a good battle, and we loved it. Now you got a much bigger platform. So I you know, and Mike can talk about the opportunities we have around expanding TAM. It's a you know, we built this we executed, we got through the consolidation. But we're still optimizing the construction of the company and adding adding more capability.

I would say that the success or lack thereof of these partnerships is not dependent on the structure as much as it depends on our ability to help the bank partners serve their clients with their needs. So that means quality of product into it. What the small businesses are saying, they increasingly want a bundled solution. So that's how we're thinking about the Clover SaaS dashboard and platform. That's how you think about ADP. That's how you think about Cash Flow Central. Bring coordinated simple to turn on. Value-added capabilities to small businesses and to distribute them through our great banking partners. But it's less the structure. More the content and our ability to help our banking partners deliver.

And for our final question, we'll go to the line of James Faucette from Morgan Stanley. Please go ahead.

Thank you very much. Appreciate all the color today. I wanted to ask about the evolution of margins. You at least relative to our estimates, continue to put up very good operating margins. At the same time, we're seeing the increased contribution of growth from international markets, especially as you roll out over to those markets. How should we think about the maturity of profitability in those markets? And how can that change over time as you continue to grow footprint outside the U.S.? Thanks.

Yes, James. We've certainly seen tremendous operating margin expansion over the last several years. We guided or provided a medium-term outlook back in our last Investor Day, what November of 2023, that we expected margins to expand 100 basis points. Obviously, strong growth last year. 70 basis points over the prior year. That was on top of 230 the year before that. Our guide for this year is at least 125 basis points. So certainly exceeding our outlook there. We continue to see real opportunity to see that continue into 2026 and beyond. We've talked about the virtuous cycle of growth in this company, where investment brings growth, growth brings very high fall through on a very scaled global business. That allows us to expand operating margins while reinvesting some of that operating income back into the company to provide additional growth. We've seen that for the last many years. It's been secret sauce to thirty-nine consecutive years of double-digit earnings growth. And we think we've got some meaningful runway. Our international businesses are certainly part of that. As you enter new markets with new products, those certainly don't immediately add to margin in a way that a scale business can. But given the breadth of the company, seeing Clover grow meaningfully in the U.S. gives you great margin expansion. While you accelerate things like Brazil. And so the power of the scale of our business, the global breadth of the business allows us to expand margin. While investing both in new products as well as new markets. So we continue to see great opportunity ahead of us.

I think that when we talk at those client conversations we've had and wanting to do more with us, the ability to consistently invest in products and services through the franchise is the most important consideration whether they continue to do incremental business with us. So we think that's important. We think especially important amid disruption in the industry, whether it be tariffs or mergers, the like continued investment in high-quality products. Wins more customers. And then there's still I'm only ninety days in, but there's still plenty of opportunity at the core to continue to increase the efficiency of the company. And we point to the investment in Kansas City. Fintech Hub this week is a great opportunity to bring our employees together, make them more effective, more efficient. More focused. And there's opportunities like that across the company. Frank's incredible at getting after a lot of those, but we still have opportunities to be more efficient, at company. So lots of runway ahead for margins. All right. Thank you everyone to all those on the call today for your interest and a special thanks to the 38,000 associates of Fiserv, Inc. who are driving our success every day. Our IR team is available for any further questions, and we wish you all a great day.