Release Date: October 22, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Fiserv Inc (FI, Financial) reported a strong quarter with adjusted earnings per share of $2.30, up 17% year-over-year.
- The company achieved organic revenue growth of 15% and adjusted operating margin expansion to 40.2%.
- Fiserv Inc (FI) returned $1.3 billion to shareholders through share repurchases.
- The company announced strategic partnerships with DoorDash and Walmart, enhancing its embedded finance and real-time payment capabilities.
- Clover, a key product in the merchant solutions segment, saw revenue growth of 28% and value-added services penetration increased to 21%.
Negative Points
- The company faces currency headwinds, particularly from the Argentine peso, impacting adjusted revenue growth.
- Organic revenue growth in the processing segment declined by 1%, indicating challenges in this area.
- The transitory contribution from excess inflation in Argentina is expected to ease, potentially impacting future growth rates.
- Consumer spending growth has slowed, affecting payment volume growth in the small business segment.
- The company anticipates continued headwinds from foreign currency exchange, impacting adjusted revenue growth.
Q & A Highlights
Q: Can you explain the acceleration in enterprise growth and what is sustainable for the fourth quarter?
A: Robert Hau, CFO: We saw a 12% increase in transaction growth, matching Q1 and up from 8% in Q2. This was partly due to a large PayFac ramping up in Q3. We expect some continuation into Q4 before returning to normal levels. Year-to-date, enterprise growth is at 11% on an adjusted basis.
Q: Can you provide examples of cross-selling between segments and the outlook for financial solutions growth?
A: Frank Bisignano, CEO: Our strategic assets allow us to be a partner of choice, integrating solutions like Clover with financial institutions. Initiatives like the SMB bundle and partnerships with companies like Walmart and DoorDash demonstrate our cross-segment capabilities. We expect financial solutions to grow from 5%-7% to 6%-8% next year due to these integrated offerings.
Q: How is Fiserv positioned to grow in the digital capabilities space, especially with changes in the US?
A: Frank Bisignano, CEO: We aim to compete for transactions for our clients' benefit, leveraging our strategic assets like the debit network. We offer dual messaging capabilities and choices for merchants and issuers to compete at every level. This strategy supports steady volume share gains.
Q: What are the expectations for Clover's revenue and volume growth in Q4?
A: Robert Hau, CFO: Clover's revenue growth remains strong at 28%, with value-added services penetration increasing to 21%. While consumer spending has eased, we feel good about current spending levels and expect continued growth supported by new product and country launches.
Q: Can you discuss the strategy and initial traction for Clover Go and Clover Compact?
A: Frank Bisignano, CEO: These products are designed to augment our client base and expand TAM, particularly in the food space and internationally. They cater to different markets and offer more mobile solutions, enhancing our current offerings.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
