FISV

Welcome to the Fiserv Q1 2026 Earnings Conference Call. All participants will be in a listen-only mode until the question-and-answer session begins following the presentation. As a reminder, today's call is being recorded. At this time, I will turn the call over to Walter Pritchard, Senior Vice President and Head of Investor Relations at Fiserv.

Thank you. Good 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. Please refer to these materials for an explanation of the non-GAAP financial measures discussed in this call, along with a reconciliation of those measures to the nearest applicable GAAP measures. Unless otherwise noted, 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. Now we'll turn the call over to Mike.

Thank you, Walter. Good morning, everyone. As we began the year, we were firmly in execution mode. Our Q1 results were in line with the expectations we shared with you in February. Our teams continued to be laser-focused on executing against the One Fiserv action plan. While there is still significant work to do, we are taking the right actions with the right sense of urgency and feel really good about the progress to date. We are confident in our strategy. The unprecedented pace of change in banking and payments is creating an extraordinary opportunity for us. As our clients and prospects want a trusted partner to deliver sophisticated technology and value-added solutions, we are uniquely positioned to do exactly that.

To drive these efforts, we continue to add outstanding talent across the organization, including new heads of operations for both Merchant Solutions and Financial Solutions, new chief revenue officers for Clover and Enterprise Merchant, and a new head of product for Financial Solutions. With respect to business performance, I'll start with Merchant Solutions, where we saw solid growth in Clover GPV, supported by good execution against our strategic initiatives and a stable macro. Clover VaaS revenue represented 27% of Clover revenue in Q1, growing 18% from a year ago, driven by software and Clover Capital. We also saw steady growth in enterprise transactions. While anticipation lending volumes in Argentina remained strong, lower inflation and interest rates in Argentina were a revenue headwind to Merchant Solutions in Q1. I would note that this revenue softness was largely offset by lower interest expense below the line.

Our preliminary April merchant volume growth, including Clover GPV, remained solid around Q1 levels. Going forward in Merchant, we're watching the impact of various environmental factors, including higher gas prices from the conflict in the Middle East, which, if sustained, can impact the mix of consumer spending. We saw some of this dynamic in the most recent Fiserv Small Business Index data. In Q1, we signed 27 new banks as merchant referral partners. We also announced our largest agent bank partnership in our history with Western Alliance Bank, which has more than $90 billion in assets and expands our reach with merchants across the Western U.S. We also hit important milestones in the quarter, going live with Commerce Hub omnichannel capability across a number of our largest petro customers. We also went live on Commerce Hub with Bilt Rewards in neighborhood hospitality and Viamericas in cross-border remittance.

Our broadening global releases and customer go-lives are driving Commerce Hub transaction growth, which was up nearly 200% in Q1. Other key Enterprise Merchant wins in Q1 included a retail energy provider, Blue Shield of California, a leading tax compliance platform, and a large telecom provider who added on fraud capabilities. In Financial Solutions, we saw solid underlying business volume growth, particularly in Finxact and our payments businesses, excluding Bill Pay. New business sales showed continued momentum. We hit important product delivery milestones, and we saw an improvement in key client service metrics. While core bank account and revenue attrition remain above our long-term trend, we've seen early signs that our client service initiatives have been well-received. We're also getting positive client feedback on our decision to continue supporting all of our cores, and we are signing and renewing customers across all cores.

Also contributing to an enhanced client experience is the value we are delivering from our recent acquisitions of StoneCastle and Smith Consulting, where both our strategic and financial results are in line with our business cases. Key new business wins in Financial Solutions included OceanFirst Bank, which is a $14.5 billion Northeast regional bank that is growing rapidly through its announced acquisition of Flushing Bank. It extended its Premier core and surrounds agreement with us, adding digital payments and committing to deploy CoreAdvance. Nicolet National Bank, a $16 billion Wisconsin-based bank, is adopting our Premier core with its MidWestOne acquisition. Truliant Federal Credit Union, a $5 billion+ North Carolina-based institution, chose to move to our debit processing platform. We expanded our long-standing digital money movement relationship with PNC Bank to include CashFlow Central AP and AR services for their small businesses.

We had embedded finance wins with a large payroll provider and a large retailer to bring new capabilities to their payroll members and customers. In these wins, we will leverage new integrated capabilities across Fiserv, including Finxact for Ledger, Payfare for banking applications and program management, and Vision Next as a cardholder platform. Finxact was named Best SaaS for FinTech at the 2026 FinTech Awards, recognizing the combination of its market-leading innovation and scaled customer deployments. Finxact continued to grow strongly in Q1, with accounts and positions up over 70%, as clients find value in its ability to provide financial infrastructure to enable any asset class in any domain at scale under a common platform and business model. Our execution is improving across both businesses.

As expected, that progress is not yet visible in our reported financial results as we are still lapping a higher mix of non-recurring revenue, feeling the lingering impacts from prior client service challenges, and absorbing the incremental expense from investments that will drive long-term client-focused growth. All necessary and important elements of our transition year in 2026. We look forward to the second half of the year and 2027 when we expect our operating performance will be more fully visible in our financial results. I'll now provide an update on our execution against the One Fiserv action plan. Of course, we will cover all aspects of the plan in greater detail at the May 14th Investor Day. Under our client-first pillar, we continue to make targeted investments to raise the bar for client coverage, relationship management, service delivery, and product resilience.

The number of client-facing personnel we have is up significantly, meeting a key demand from clients. Importantly, we are seeing better day-to-day execution. Our time to resolve client inquiries is down 27% year-on-year. While we still have significant work to do, high-impact client incidents are down nearly 60% year-on-year. We launched important AI initiatives to enhance the performance of our primary client portal and call centers in Financial Solutions. Turning to Clover, our second pillar, we continue to make progress towards establishing it as the preeminent small business operating platform. We launched two new verticals in March with PracticePay in the healthcare space and our professional services offering.

We are seeing promising early results with annualized GPV per healthcare outlet running at double-digit levels above our existing Clover healthcare merchants and a 20%+ increase in new professional services outlets that attached our paid SaaS offering in the month. Internationally, our momentum continued with Brazil Clover outlets up over 30% sequentially. We had another strong Clover quarter in Canada, where we remain on track to enable TD Merchant Solutions to provide Clover's product offering, processing, and servicing to its clients in the second half of the year. After launching in Q4, we continued to expand our digital merchant activation capability and now have 22 of our top bank partners signed. We will also add this capability to our clover.com online merchant referral partners. Through integration with StoneCastle, we remain on track to launch Clover Savings, our merchant cash management program, before the end of Q2.

Through a number of important partnerships, we continue to build agentic capabilities for our Clover merchants, and we'll showcase some of these at Investor Day. Finally, we are excited to share that Clover is slated to support 30 World Cup games this summer in the U.S. and Mexico. Next, on the innovation front, we continue to hit critical milestones on key strategic products, including Experience Digital, Cash Flow Central, Vision Next, Optis, and Commerce Hub, as I mentioned earlier. In our Enterprise Merchant business, we delivered a new developer portal supporting agentic commerce. Our teams have further ramped up their usage of AI tooling in the software development process with early results showing a significant reduction across key steps in new feature development and delivery time with mainframe modernization. Finally, we are on track to launch our previously announced stablecoin pilot this summer to facilitate interbank money movement.

Fourth, we are in full swing with Project Elevate. With AI at the center of this program, we are very encouraged by the early results. The teams have identified hundreds of opportunities to drive revenue uplift, reduce expenses, increase simplicity, and improve productivity, and we're moving with urgency to operationalize them. Paul will outline our financial targets for Elevate at Investor Day. Beyond Elevate, we took several important actions in Q1 to drive efficiency, including closing two subscale offices, exiting underperforming merchant businesses in India, reducing management layers and implementing more aggressive performance management. Just last week, we completed the migration of all customer activities from a significant data center as we continue our modernization activity. Last, but certainly not least on One Fiserv, is our commitment to highly disciplined capital allocation.

We continue to sharpen our focus on the businesses and assets that best align to our go-forward strategy, including evaluating potential dispositions. I'll conclude by saying, we look forward to seeing you at Investor Day, where among other topics, we will further highlight our strategic priorities, describe how our businesses are converging further to unlock more synergies, and share how we're using AI to transform systems of record into systems of collaboration, create new TAMs, and increase efficiency. Together, these actions will support the mid-single-digit adjusted revenue and double-digit EPS growth that we've discussed since last fall. This will position Fiserv to return to its roots and create significant shareholder value as a constant compounder. I want to thank our employees for their hard work and dedication, and our clients for their continued trust.

With that, I'll turn it over to Paul to cover the details of Q1 and our guidance.

Thank you, Mike. Good morning, everyone. I will cover details on total company and segment performance in the Q1 and reiterate our guidance for 2026. Beginning on slide 6, total company Q1 adjusted revenue was $4.68 billion, a decrease of 2.4% compared to the prior year period, and was in line with our guidance as we lapped higher non-recurring revenue from a year ago. Q1 adjusted operating income was $1.4 billion, resulting in adjusted operating margin of 29.7%, also in line with the just below 30% view I provided on our last call. Total company organic revenue was down 3.6% in Q1, with a differential in organic to adjusted revenue of just over 1%, in line with the approximately 1% delta we communicated in February.

Q1 adjusted earnings per share was $1.79. Our Q1 results reflect an adjusted effective tax rate of 11%, driven by the release of a tax valuation allowance in the Q1. Relative to our expected annual adjusted tax rate of between 19% and 19.5%, this lower tax rate resulted in a $0.17 positive impact to adjusted earnings per share in Q1. This 11% rate in Q1 is strictly a timing-related impact. Our full-year adjusted tax rate guidance of 19%-19.5% remains unchanged, and we expect higher quarterly effective tax rates through the balance of the year as an offset.

Free cash flow for the quarter was $259 million and in line with our expectations we noted in February and reflects typical seasonality where Q1 is our lowest free cash flow quarter of the year. Now I will turn to the performance by segment for Q1, starting on slide 7 for Merchant Solutions. Merchant Solutions organic revenue declined 1% for the quarter, while adjusted revenue was flat, which is largely in line with our expectations as we fully anniversary the CCB transaction. As Mike mentioned, lower inflation and interest rates in Argentina did have a negative impact on adjusted revenue in our merchant business. Small business revenue declined 1% on an organic basis in Q1 and grew 1% on an adjusted basis. Small business volume grew 7% in the quarter. Clover revenue grew 6% in Q1.

Excluding higher non-recurring revenue from the Q1 of 2025, Clover revenue growth would have been in the mid-teens. Clover revenue from payment processing grew 10% more in line with volume trends. As we noted in February, we expect similar trends for Clover in Q2, with this period representing the peak in non-recurring impacts, and also expect that Clover processing revenue will grow in line with Clover GPV. Clover volume grew over 9% on a reported basis and was in line with our expectations as we saw stable growth both in the U.S. and in key international markets. Clover volume, excluding the previously discussed gateway conversion, grew 12%. The previously discussed gateway conversion continues to run off, the delta between Clover reported and ex-gateway growth will converge.

We continue to expect Clover revenue growth in the low double digits for 2026 and GPV growth of 10%-15% ex the gateway conversion. The lower end represents the core growth rate, while the higher end assumes more significant conversion of non-Clover merchants. Value-Added Services revenue contributed 27% of Clover revenue in Q1, growing 18% from a year ago, driven by software attach and lending, including Clover Capital. Moving on to Enterprise, our revenue grew 3% on an organic basis in Q1 and grew 2% on an adjusted basis. Enterprise transactions grew 8%. Finally, in processing, organic revenue declined 14%, while adjusted revenue declined 9%. Q1 adjusted operating income for Merchant Solutions segment was $626 million, down 23%, with adjusted operating margin of 26.4%.

Now I will cover Financial Solutions starting on slide 8. For the quarter, organic revenue declined by 6% in Financial Solutions, while adjusted revenue declined by 5% relative to our expectations of adjusted revenue decline at the high end of mid-single digits that I mentioned on our last call. In digital payments, both organic and adjusted revenue declined by 5%. Our underlying account and volume growth in Financial Solutions was in line with what we expected and our recent history. This included low single-digit growth in debit processing and low double-digit debit network volume growth. Zelle transactions grew 18% in the quarter, in line with recent trends we have seen, while we saw Bill Pay transactions down high single-digits. Also, we saw further ramp in CashFlow Central revenue in the quarter.

In issuing, revenue declined by 6% on an organic basis and 5% on an adjusted basis. While global accounts on file grew in the low single-digits, revenue comparables were impacted by non-recurring revenue in Q1 last year, a trend we expect to be more pronounced in Q2. Finally, in banking, revenue decreased 6% on an organic basis and was down 4% on an adjusted basis as we continued to be impacted by certain actions taken over the last several years, as well as higher non-recurring revenue in the year-ago period, as well as attrition that remains above our long-term target. We saw core accounts decline 2% year-over-year, while overall accounts and positions, including Finxact, grew 6%.

Q1 adjusted operating income for the Financial Solutions segment declined 24% to $877 million, and adjusted operating margin was 38.1% versus 47.5% in the prior year period. From a leverage standpoint, we finished the quarter with a debt to adjusted EBITDA ratio below 3.2x measured on a gross basis. We expect to finish the year at approximately three times. Turning to slide 9, we repurchased 3.3 million shares during the quarter for approximately $200 million. As we noted in February, we are focused on managing our leverage ratio and remain committed to returning capital to shareholders. Now with slide 10, I'll move on to our 2026 guidance.

First, on revenue, we continue to expect 2026 organic revenue growth in the range of 1%-3%, with Merchant Solutions revenue growth in the mid-single digits and Financial Solutions flat to slightly down. Consistent with February, we expect adjusted revenue growth in the range of 1%-3%. All of this continues to assume a stable macro environment. As we told you in February, we expect the Q2 to be the trough in terms of our year-on-year revenue decline, and we expect our Financial Solutions business to decline at the high end of mid-single digits in Q2. We expect our weighted average share count to be approximately 530 million, resulting in adjusted EPS of $8.00-$8.30, consistent with our prior guidance. We continue to expect adjusted operating margin of approximately 34% for the year.

In line with our commentary in February, we expect first half adjusted operating margin of approximately 31%-32%. In the second half of the year, we continue to expect adjusted operating margin of 35%-36%, with Q4 representing the high point in the year. We continue to expect capital expenditures to remain approximately flat with 2025 levels. We continue to expect free cash flow conversion of approximately 90% of adjusted net income for the year, in line with historical levels and our February guidance. With that, I will turn the call back to the operator to start the Q&A session.

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 press star one on your phone. If you would like to withdraw your question, press star two. Our first question comes from Tien-Tsin Huang from JPMorgan. Please go ahead.

Hey, thanks. Thanks for going through all of that. I wanted to ask just on maybe visibility on the banking side and retention, given some of the bank conversions that you're doing. Surprise there. I know the trough comments were made, I'd love to hear a little bit more detail on attrition and retention, that kind of thing.

Yeah. Good morning, Tien-Tsin. You know, I think broadly on banking, we continue to be, obviously very proud of the leading market share position, we have in the business and all the support across almost 3,000 banks and credit unions on the core side. As we've said, and we said again today, you know, core attrition's been above where we want it to be, and getting that back to normal is a significant focus for us. That attrition, as you know, is the result of actions taken over the last several years, and especially around the client service front. And we're confident we have the right fixes and addresses, and the way we're addressing it is the right thing to do.

While there's significant work to do, as I said today, we feel like we're bending that curve in a positive way. Contributing to that is we've significantly increased our client coverage efforts, which was an ask of our that came directly from the clients. From that has come better service, and we're seeing that show up in both our surveys and anecdotal evidence. We've really leveraged a number of different forms of AI to help in call centers, enhancing our client portal experience, accelerating our tech modernization and reducing the books of work we have.

Obviously the decision to support all of our cores, was an important one for our clients and has taken a significant amount of pressure, perceived pressure that they had on themselves to switch and obviously pressure on us. Little things or less highlighted things. The StoneCastle acquisition's been a great value-added positive, supporting our clients and one of the depository clients and one of their biggest needs, which is continue deposit growth. Our approach to embracing the consultant community and even acquiring Smith Consulting to really drive value-added services to our depository partners, again, is another piece.

Finally, we've taken an advanced approach, again, using AI to measure our what we call a client health index across all their experiences with us in terms of pace of change, resolution, inquiries, client touch and the like. It's given us a much better view and perspective of where these clients stand, which allows us to play much more on the offensive side to getting to them. A lot of stuff listed, but it's a complete package of behavioral changes, technology changes, service changes, alignment changes, enhancements. We talked about continued enhancement in the quality of our leadership team, bringing in new executives to combine with executives here.

I wish it was more visible in the results, but when you go through the underlying KPIs that we have, we feel really good about the progress we're making and our ability to get core revenue-related attrition back down to more normal levels. Ideally would like to have none, but of course you got M&A and stuff, and we've had some over history. Getting it back to those historical levels, we feel like we're doing all the right stuff and are on the path to do it, just takes time and work.

Good. No, it's important stuff. Thank you for going through it.

Next, we'll go to the line of Andrew Schmidt from KeyBanc Capital Markets. Please go ahead.

Hey, Mike. Hey, Paul. Thanks for taking the question this morning. I wanted to ask just on SMB back book, if you could talk about the performance there, ex Clover. I know there's a swing factor in terms of conversion of non-Clover merchants. If you did any testing there, it'd be interesting to just understand how that testing has performed and how that might influence just the go-forward emphasis on converting those non-Clover merchants to Clover. Thanks so much.

Andrew, thanks for the question. First of all, I wouldn't call out anything unique as it relates to the back book conversion in the Q1. Certainly for the year, we don't have any different expectations around what that back book conversion looks like. You know, we've commented for some time now, we're being very mindful about how we approach any of the non-Clover to Clover transition to make sure that we're doing it in a very mindful, customer-centric way. We've had some good tests around that, around the receptivity of those moves when there's a good product fit. There isn't anything incremental.

You know, we've talked about in the overall Clover GPV guide for the year, you know, the low side of the guide assumes very minimal back book conversion, and the higher side assumes a more meaningful back book conversion. Right now, everything's on plan as it relates to how we're looking at that. We're going to talk a lot about this at Investor Day. Takis is going to be going through just the overall Clover strategy, the overall merchant strategy. You'll see all the pieces kind of fit together related to this topic at Investor Day. Right now, nothing's changed. Mike, do you have anything to add?

I'd just add that we've said in the past that our ability and willingness to pursue conversions of Fiserv customers from one platform onto Clover, we'd obviously very much like to do that given the robust set of VaaS we have on the Clover side. That depends on us doing certain actions, and we're proud this quarter to launch two new verticals, as I mentioned in the prepared comments, in healthcare and professional services. Each time we build unique capabilities to address a certain vertical, that allows us a greater opportunity to go in and address the back book with compelling offers. We don't wanna just go in and try to move that to Clover without a strong rationale and mutual benefit for the customer.

As Paul said, our efforts to date have been very modest. Takis will talk you through that, study, learn, test, and then when we have the right capabilities and the right understanding of it, you can pick up the pace a bit.

Perfect. Thanks so much. Look forward to hearing more at the Investor Day.

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

Hey, guys. Great progress here. Quick question on AI. I think your competitor made an announcement yesterday on AI with regards to banking, bank processing. Can you maybe, Mike, elaborate on some of the initiatives and how you add value with AI to your banking plans? Thank you.

Thanks for the question. You know, as we keep progressing with it for our businesses, we get more and more excited about what AI is allowing us to do, and we've seen incredible results to date, recognizing it's still early in the development of it. We're really intensely focused on four areas, which is taking those great systems of record we have into systems of greater value and systems of collaboration, generating new revenue sources and TAMs, which goes a little bit to your question, enhancing client service where we I just mentioned, and then increasing our own productivity and efficiency across the company.

On, with respect specifically to leveraging AI on the revenue side and for the benefit of our clients, agentic is clearly the next important phase on both the merchant side and the banking side. We have a number of extremely exciting developments going on there, including new agentic commerce capabilities, which we've been talking about in merchant and rolling out through important partnerships. Takis will go through that in detail next week. We see a great opportunity, especially with the Clover customer base and enabling them to access an agentic world without building all the backend systems needed.

On the banking side, at IR Day, Divya will introduce a new governed AI operating layer that will importantly allow FIs to access and fully capture the power and benefit of all agents across many functions, including front, middle, and back office and using any LLM. We're already live with pilot agents with two financial institutions around this today, and then have a number of others lined up with different use cases. Think about loan originations, compliance, and call centers. Not to steal too much thunder for next week, but Divya will formally introduce the product, and you'll be able to actually see some demos of it. Again, whether it's internally or externally, merchant or financial, we're seeing great opportunities both to drive value for ourselves and help our clients access the agentic capabilities available to them.

Thank you. Very insightful. Appreciate it.

Next, we'll go to Vasu Govil from KBW. Please go ahead.

Hi. Thanks for taking my question. I just had a couple of quick ones on Clover. I guess the first one just on the non-recurring revenue that you called out, Paul, from last year. Was that mostly hardware revenue or something else? Then more broadly, Mike, on Clover Capital, you've highlighted in prior calls how the penetration is still relatively low in your installed base. So maybe if you could just talk a little bit about what has constrained adoption so far. As you look to scale that business, how should we think about the long-term penetration potential and sort of the mix between on balance sheet, off balance sheet to support that growth?

Yeah. Vasu, maybe I'll take two parts of those, and then Mike, if you wanna add anything. You know, as it relates to the non-recurring revenue on the, on the Clover side, yes, hardware is a big piece of that. There are some other things from a non-recurring standpoint in that comparative. We highlighted that up. That's why the Clover revenue growth in the mid-teens, the reported growth of 6%. If you take the comparative dynamics of the non-recurring not repeating in the Q1 of this year, that puts you to the mid-teens or roughly 15%, and hardware is the biggest or one of the biggest pieces there. On the Clover Capital side, we will talk more about this at Investor Day and just our strategy around Clover Capital.

You're right, we are under-penetrated relative to the opportunity set, you know, we're gonna kinda lay out a much broader strategy around how we're going to be approaching the marketplace, both from a balance sheet standpoint as well as just an overall growth standpoint at Investor Day. I'd rather kinda give a more wholesome view of that on a go-forward base. We did see good Clover Capital growth in the quarter, so we're very pleased with the underlying volume growth that we saw, and we don't see any change in that growth trajectory as we look at the forecast for the remaining part of the year. We'll give you more color at Investor Day. Mike, anything else?

No, I think you highlighted perfectly that the opportunity is significant in front of us. We're a couple quarters into enhancing what we had as core capabilities and going after that, and it's domestic and international opportunity.

Thank you.

Next, we'll go to Bryan Bergin from TD Cowen. Please go ahead.

Hi. Good morning. Thank you. I wanted to ask on Financial Solutions. Can you just give us a sense on the non-recurring revenue headwinds where relevant across the sub-segments? I'm thinking particularly in issuing and banking. Then the relative potential size of those headwinds in 2Q, just so we can unpack the recurring performance, you know, within overall performance.

Specifically in the issuing area, the biggest single driver I'd point out to is the Output Solutions area where we had some significantly sized Output Solutions business that is not recurring this year that is in the first half. Specifically in the Q2, you'll recall we had that teens growth rate on the issuing business in the first half or in the Q2 of last year. That's providing a meaningful comparative headwind on the issuing side. There are other non-recurring across the digital channel as well as in banking. As it relates to a general sizing, we kinda gave you when we talked about the high mid-single digit and the Q2 being the trough.

Relative sizing of what we expect the impact to be. I would say, you know, we are pleased with the fundamental growth across the Financial Solutions segment of each of the underlying growths across digital, our issuing business. Mike commented on the banking, we're seeing consistent. The volume picture that we see in the Q1 and the Q2 and really for the back half of the year is very stable. It's just these comparative dynamics that we have in the first half and more acutely in the Q2 of the first half is what we're needing to grow through, and then we're gonna be to a much more visible, normalized growth picture in the back half of the year.

We do have some natural tailwinds in the back half of the year as it relates to growth. We have a comparative tailwind in the back half on Financial Solutions due to some of the strategic things we did in the digital space in the Q3 of last year. That's a natural tailwind. We have some contracted revenue from some of the client wins that we've talked about that also will be additive in the back half of the year. Mike, anything else to add?

No, I think it's the same comments we made last quarter. It's hard to go through every single recurring, re-revenue item. You know, broadly, we think, and we'll talk about Investor Day, that we're a mid-single-digit growth company with FS being a low-single-digit growth company, probably operating flattish today on a clean basis, and merchant being a mid-to-high single-digit company today operating a mid-single-digit basis. Our plan is to obviously make-- We're anxious to get it so it's more visible in the financial results. To Paul's point, you look at the underlying volumes, they track very much against what we're talking about from a high level. Maintaining and growing that volume stuff, the revenue will come behind it and start to match.

Okay. That's clear. Thank you.

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

Hey, thank you for taking the question. Mike, if I could just follow up on the comment you made. I think you've been pretty clear in sort of telegraphing what you think the right growth rate is for this business and, and the message you expect to deliver, at the Investor Day coming up. I'm wondering, y-you know, to the, to the comment that maybe the underlying growth in FS is more or less flat right now, and obviously the investments that you're making, that are weighing on margins right now. As you look out into next year, you've talked about seeing the benefits of some of the improved execution coming through the numbers. Is it your expectation that the company can actually get to that level of performance sort of exiting the year and into 2027?

Are there lingering kind of performance and attrition issues in FS or, you know, investments you wanna make on the margin front that, you know, could delay that?

I'd say that, go back to the One Fiserv comments. We are confident we're taking the right actions. We obviously have to execute against those and complete them. The team has rallied around those. We're laser-focused on them. We know the fundamentals that we have to get in the right place to be a mid-single-digit grower. The efforts we need to get there are fully funded and fully resourced. I believe that we've brought in some great talent to complement the talent we have here. Feel good about all the execution. We have to go do it. We've said as you exit 2026, you start to look.

There's still comparables, obviously, with some of the actions we did across the business in Q3 and Q4, some going the other way being beneficial comps to us as you get into Q4. 2027, we sort of see as the first full year where you can see really clear visible growth. Again, we're trying to give you, and we'll give you more at Investor Day, the underlying volume drivers that we're seeing that support our belief that we've got a great business. We've got two great TAMs in merchant and banking, both in a very strong position today, both in an investment mode. Probably the best meetings we've had in a long time here where, whether it's an Enterprise Merchant or an FI, you leave with a lot of stuff to work on.

The environmental support's there, the fundamentals underlying our volumes are there, and we got to put ourselves in a position where the execution, resilience, and service is much crisper than it's been, and that's the path we're on. Very confident we're taking the right actions to get to where we need to get to to put the business in a position to do it. We have to execute.

Got it. That's clear. Appreciate it. Look forward to the Investor Day next week.

Yeah.

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

Hey, thanks for taking the question. This is Melissa Chen on for Jason. I wanted to ask about the launch of Clover PracticePay. It sounds like the initial reception there has been good. Can you talk a little bit about how big the addressable market is in healthcare POS and who you're mainly competing with in that space? Thanks.

Yeah, we were thrilled. We've been previewing this for some time now. We're thrilled to get it launched this quarter. Very optimistic about our growth in that area. It's a massive TAM. This was the number one area from our bank partners, which is a major distribution channel for us where they need help, and we heard it loudly from our ISO partners. The specific TAM, as you know, is massive. Think about more of the local doctor practice. Our penetration there is low and our growth rate relative The FSBI over time, if you measure us against a index using the FSBI as a proxy to the industry, we've been below that. This is the key component that we're missing, and it's a key component that'll allow us to go after some of the back book conversion. Got a great partner in developing with Rectangle, and we're pleased. You know, we launched this month, so it's still early, but we're very pleased with the progress we're making, and we'll continue to remain very focused on execution here.

Thank you. Next, we'll go to James Friedman from Susquehanna. Please go ahead.

Hi, good morning. I was wondering at a high level if you could share your perspective on the competitive dynamic of Financial Solutions, specifically in issuing and banking, because it does seem like the landscape is changing somewhat. Investors are potentially anxious about it. Thank you.

I think, you know, Mike, I made a lot of comments on core banking earlier specifically. Obviously, we got great competitors across banking, digital and issuing. I think and all of them are, we enjoy competing against every day, innovation and competition fuels growth for the industry. As I said, the backdrop for the industry is very supportive of solutions from all of us, we're focused. All the stuff we're doing in One Fiserv to put us in a position to compete very effectively against any of the competitors. I think a lot of the questions we hear is around the modern core space, you know, changing competitive dynamics.

We are thrilled, as we said in the prepared comments, with Finxact, which is far and away the largest, with the most accounts being served on the modern core platform, cloud agnostic, asset agnostic, through modern core, truly modern core digital ledger. We're thrilled with our competitive position there. That continues to be the hallmark, and both Divya and Takis will address that at Investor Day around our embedded, the growing embedded finance space. I think no major changes in the competitive landscape as we see it. We've got great competitors. They're, you know, innovating, competing, as always. Our focus is to make sure that our underlying fundamentals around service, product delivery, value-added solutions, and speed to market are at the highest level to allow us to compete and maintain all the leadership positions we have across the FI businesses.

Thank you.

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

Great. Thank you for taking the question. I was hoping we could spend a few minutes on non-Clover SMB. It's roughly 20% of total company revenue, roughly 40% of the Merchant segment. I know that there's a lot of moving parts there in terms of some of the Argentina changes, some of the Clover migration. I was hoping you could talk about the organic growth on an adjusted basis for that business this past quarter, also over the past few, what is implied in the guidance. Maybe a little bit bigger picture. I understand this might be more of an Investor Day topic, to the extent that you could decompose some of the portions that are U.S., that are international, how large the ISV or partner business might be in there, et cetera.

Any additional color, and again, I appreciate that last part might be more suited for the Investor Day. Thanks.

Yeah, Tim. Yeah, that's exactly what I'd say on that last piece is we are gonna go over this in good detail at Investor Day. You'll get a lot of that clarity around some of the componentry there. We're gonna provide additive disclosure of Clover, just in general of the components of Clover, as well as the non-Clover. You'll also understand maybe some of the strategic things around the non-Clover side, particularly in ISV and some of the international expansion there. As it relates to the organic growth, we do have comparative dynamics here. We have the Argentinian kind of noise. As I said on our last call, we're expecting our non-Clover SMB business to have slight growth this year.

We were down low single-digits in the Q1. Organically, we were down in the low single-digits for the Q1. We would expect similar kind of performance if everything kind of holds in the Q2. As it relates to the back half, kind of what changes there is we do have incremental ISV growth that's coming in there. Specifically, some of the international growth is we're seeing good ramping, particularly in Brazil. There's a few international dynamics that are playing through throughout the year that help that. Generally speaking, you know, we've talked about that non-SMB, non-Clover SMB not being a growth business for us.

Relative to the overall picture, we're managing it in a more systemic way than we have in the past and being very mindful about how we approach that of moving over that business to Clover over time in the right sort of way. That's the end goal is to move as much of that business to Clover, where the product and the feature functionality of Clover, you know, fits with those merchants. Takis and team will cover that in more detail. Mike, anything to add?

No, I think, all great topics for next week and, all in our materials to be addressed.

Excellent. Thanks a lot.

Next, we'll go to James Faucette from Morgan Stanley. Please go ahead.

Thank you very much. Appreciate all the commentary, and apologies if I missed something because I've been bouncing between calls. Would like to ask quickly when you talk about like moving volumes and taking advantage of Clover's strength, how are you thinking about kind of the moving targets and competitive environment, especially as we see more companies looking to add incremental functionality for omni-channel, et cetera, even for SMB? How do we think about that and its implications for Clover's product roadmap? Thanks.

Yeah. Again, we'll do a deep dive next week on Clover. High level, we think we've got the best small business operating system in the business. We're continuing to invest heavily across horizontal features, vertical features. We talked about PracticePay and professional services coming in this quarter, seeing great growth and opportunities on the international side. Takis and his team are digging deep on the experience piece of Clover, where as well as we've done, we have room for improvement there. Then we think we've got the best distribution channel by a significant margin, combining not only a direct sales force but 1,000+ banking partners, thousands of ISOs, as Paul mentioned and was in the previous question, an unbelievable ISV business that's growing at a very, very attractive rate.

Other great partners, whether it's an ADP or some of the big food distribution businesses. The opportunity there, the focus, the investment around the product is strong. When you look across retail and restaurant, which we, you know, we always characterize, even that we have small market share. You go into some of these other verticals and Clover market share is, you know, still single-digits. We see a ton of room for growth. There's always a great competitive landscape, as I said to the earlier question on the banking side. That's part of a natural part of any business with great growth opportunities. We think we got a great platform here, and it's everything is about investing, focusing, and driving Clover growth here and abroad.

Thanks so much. Look forward to next week.

Next, we'll go to Ramsey El-Assal from Cantor Fitzgerald. Please go ahead.

This is Ryan on for Ramsey. Thanks for taking our question. You called out some senior hires in Merchant Solutions. Could you comment more broadly on the org chart in terms of whether you have all the pieces in place to execute on the plan, and also if there's more opportunities to streamline that down by way of AI. Thank you.

Yeah. First part question, we're mentioning the prepared comments that we've been thrilled, actually, blown away by the interest of seeing talented senior people from outside of Fiserv wanting to come join Fiserv and we've added a number of incredibly talented people on both the Merchant side and the FS side who are additive to an already strong team here. So we feel very, very good about where we are in terms of critical hires remaining to have the go forward team. It's, you know, it's down to very few. So yes, we've got the right team in place, an outstanding team I look forward to. We'll have a series of demos at the IR Day next week. So in addition to Paul and Takis, you'll have a chance to meet a chance to meet a lot of these leaders and see some of the products they're working on.

But we love the team, and we love the combination of some external talent we brought in, along with the great institutional knowledge that's been built here at Fiserv on AI, allowing to risk efficiency. A couple thoughts there. First of all, we're going pillar four of the One Fiserv plan, Project Elevate. We are deep into the process of Project Elevate. We're very pleased with the portions we've gone through so far, which is really the origination of ideas and sourcing of ideas as part of that. There are no sacred cows for the customers and more efficient for us. Yes, we see great opportunities, especially in and around the areas you'd expect in operations and call center services, app development, and the like. Generally very excited about the potential for AI across all aspects of the business, and we're leaning in hard to it.

Thanks. Looking forward to hearing more at the Investor Day.

Thank you. Our final question comes from David Koning from Baird. Please go ahead.

Yeah. Hey, guys. Thank you. In the acceptance segment, it seems like you're implying high single-digit growth in the back half, and it seems like the first half is probably close to mid-single digits. I'm just wondering, source of acceleration, you answered Tim's question, there's gonna be some in SMB non-Clover. Will Clover accelerate from the normalized 15%, and will Enterprise Merchant accelerate to the high single-digits, and maybe how will those things happen?

Yeah, Dave. We do obviously expect that Clover on a certainly reported basis will accelerate from the 6% because we're expecting low double-digit revenue growth for Clover for the year. If you just, you know, kind of do the math, you're going to see e-acceleration there. I would point to two kind of favorable dynamics in the back half of the year for the Clover acceleration. One is. You'll recall in the Q4, we had some pricing rollbacks on Clover specifically that provide a nice tailwind in the Q4 from a comparative standpoint that fuels just some of the additional growth on a reported basis from the fundamental growth that you would otherwise expect just relative to static volume growth.

The other nice comparative tailwind that we get on the Clover side is, you know, in the Q4, we did have some weakness, particularly in November, on the volume side. We actually have a volume positive compare as well, in addition to all the other things of Clover Capital and all the other growth that you would otherwise see as we progress along the year. From a Clover standpoint, if you look right now, you know, fundamentally, we're at a mid-teens growth rate from the Clover side and would expect to see a fundamental growth rate in line with being able to deliver the low double-digit Clover revenue growth.

On the non-Clover side, you heard me comment earlier, we are right now at a decline of low single-digit overall, and there's comparative dynamics in there as well. Given some of the growth that I talked about on the ISV side, given some of the international expansion that will come through there, as I said, we expect that to improve and largely expect that to be a very small contributor to growth, but net positive for the overall year. That's the way the shaping. Nothing's changed in our volume assumptions. Obviously, we're very pleased with the volume growth we saw in the Q1. The shaping of the year, we still expect to be intact. You know, that gives you kind of from a Clover standpoint, the more moving parts.

Overall, we're still expecting the same kind of growth rates for Clover and non-Clover that we did, you know, at the start of the year.

Thank you.

[crosstalk] Thanks, everyone, for joining today. We look forward to seeing you next week at the Investor Day.

Thank you all for participating in the Fiserv Q1 2026 earnings conference call. That concludes today's call. Please disconnect at this time, and have a great rest of your day.