Fiserv (FI) Baird 2024 Global Consumer, Technology & Services Conference summary

Strategic construction and growth outlook

• Emphasizes a deliberate company construction focused on balancing growth streaks with long-term investments, resulting in a different quality of double-digit growth compared to the past.

• Post-merger, the company is considered 'young' with a strong free cash flow model and top-line growth exceeding legacy rates.

• Achieved better operating income growth and margin expansion, with continued excitement about bundling products and distribution.

• Sees significant multi-year growth opportunities ahead, leveraging a robust foundation.

Merchant segment performance and strategy

• Merchant segment, about half of revenue, shows strong April results, with May slightly slower but within expectations; consumer spending remains solid.

• Revenue growth is outpacing volume growth due to value-added services and software, with under-penetration signaling further upside.

• Clover, a key SMB platform, is expected to grow from $2.1B in 2023 to $4.5B in 2026, driven by distribution, international expansion, and value-added services.

• Back book migration to Clover is architecturally driven and not yet fully penetrated; most growth is net new.

• Bank and ISO distribution channels are still in early innings, with significant opportunity to expand penetration.

Enterprise and international expansion

• Competes effectively in enterprise by being omni-channel, global, and innovating with Commerce Hub and embedded finance.

• Argentina, about 10% of merchant segment, remains a strong growth market even after adjusting for inflation and currency, with performance above high-end expectations.