Why don't we get the ball rolling here in the first session of the afternoon. First of all, again, thank you all for joining us on day two of the Wolfe FinTech Forum. Really happy to have everybody here. It's been a really intense, you know, and interesting couple of days so far. A lot of thematic discussions around not just idiosyncratic company dynamics, but obviously a lot of top-down topics around banks and consolidation, obviously AI and geopolitics. You know, we have a company here with Fiserv, and we're really happy to have you guys here that really covers almost all of fintech in many ways, and so we have a lot to talk about here. We have both the CEO, Mike Lyons, and the CFO, Paul Todd. Guys, I'm really happy to have you here.
Thank you for joining us.
No, thank you for having us. First time for me.
Yeah. Why don't we just take a step back? I mean, the company's gone through a meaningful reset over the past year. You could just talk about, first, the confidence that the company has that you've really reviewed everything you feel you needed to review, and you're on good footing structurally, as far as the story goes long term.
Yeah. I think if you go back, you know, when we talked about it, what we did late last summer and through the fall, leading up to the announcement in the third quarter, which is a pretty extensive, rigorous review of the company. We covered everything, ops, tech, business strategy, business mix, risk management, talent, all parts of the company. We included a series of outside advisors to help us and we brought our board of directors along for that full ride. The conclusions that came out of it, we learned a lot, obviously, about the company, especially being new, and then the conclusions that came out of it.
First, while we identified some competitive and customer service gaps that we're now addressing, we found two incredible businesses, incredible platforms, leadership positions, incredible data, incredible scale, breadth, relationships that those are great businesses and with incredible tech being developed around them, that was great at the core. By and large, the strategy of the company was in good shape, but we had some gaps we had to address there. Second big thing we found was we had to shift some of our priorities and focus to go to long-term sustainable client driven revenues. Third, we saw an opportunity to enhance talent as we think about modern payments and modern financial solutions and redo our board. Both of those are done.
The final piece obviously is we saw that we had to reset our growth expectations, taking into account the stuff I talked about and what was going on cyclically. We had a couple of years where we benefited from outside cyclical growth in some of our markets. We had to reset expectations there relative to where we were and make a clear commitment to explain when growth drivers come through in our business, we'll tell you what's cyclical and what's structural. You get through that, 100% of our focus is now on execution against the One Fiserv action plan, which we call it, which has five pillars against it. We're making good progress on those. We haven't, as we've progressed since late last fall, we haven't found any new surprises.
Uh-
Mm-hmm.
Q4 was.
Good
No new surprises so far in the first quarter. We know where the gaps are. We have a bunch of effort focused against the gaps, and there aren't any unknowns that we've identified so far. It doesn't mean our problems are behind us and the fact that you know them and address them and put capital against them, that they're just gone. It means that we're putting capital, resources, focus and a big sense of urgency around filling those. I think Paul always reminds me in true health of the business, and whether there's structural growth or not, the underlying volumes remain the underlying volumes. All that's moved is the revenues against those weaker than we hope in the core banking space, which I'm sure we'll talk about.
Otherwise, volumes are healthy across the company. It's a good sign of it. The large part of it, I think, I get asked this question a lot, you know, how do you know this is right? You know, I remind the team and our clients a lot that, you know, you look back at the history of the two companies. You go back First Data and Fiserv as independent companies. They grew for 20 years between 1%-6%.
Yeah.
Never higher than 6%, never below 1%. You get to 2020, the company grows 0%, obviously pretty impressive in light of where COVID is. 2021, company has 11%. The world takes the COVID average, if you will, of 2020 and 2021, you're at 5.5%. That fits in range. We catch some lingering US inflation benefit in 2022, and then you get we get this significant outsized growth from our business in Argentina, all good in 2023 and 2024. That dissipates in 2025. Mix in some episodic revenues in 2025, we do 4%, which is in the 1-6% range. We guide to 1%-3% for this year, and we said there's some comparability, especially in the first half of the year.
if you look at what we are today, it's the same thing that we were for a really long time, and we have all the elements still of being a constant compounder, and that's the investment case that we've-
Okay
presented to investors. Yeah, do we have work to do? Of course. There's a, what's here is here, and it's always been here.
What is your focus right now, and what do you want investors to measure you on from a milestone standpoint over the next 12 months, let's call it?
100% of the focus on executing against the One Fiserv action plan. Not everybody knows that I do it every day, and we don't do anything in the company unless you can indicate which pillar of the five that you're doing something under. Just as a reminder, the first is to reset the company around a client-first mindset. That means great service. It means resilient, strong technology. It means great value-added services to our customers. We've got tons of efforts going on around that. Second major thing is continued build-out of what we think is the best small business operating platform in Clover, which has tremendous potential. That's got a series of investments underlying it.
The third piece is to continue with the great innovation that the company has. There were a number of products that we had massive pipelines for that needed to be appropriately resourced and managed to get to market. We're on track with those, plus a bunch of new technology innovations, whether it be our stablecoin platform, our Vision Next card platform, or the acquisition that we just did in December with StoneCastle to create a cash optimization network that can binds the two businesses. Fourth is Project Elevate. It's an efficiency plan, a simplicity plan. We're going after it aggressively right now. We're coming up on our first milestone.
Paul's running that effort, and we think we'll be an easier company to do business with, and an easier company to do business inside of, and we'll be more productive as a result. The final piece is just around what we talked about with capital allocation. In there, it's a big part of capital allocation for us isn't just do you buy back stock or do what you do. It's do we appropriately allocate our free cash flow, which remains very strong in the budgeting process, to what's most important to the company. Some other stuff didn't get it. Take some of the siloed aspects of spreading it out of there.
Second is, are we getting the right focus, pulling out stuff from our capital planning that's distracting and
Right.
We've got some work ongoing there. The final piece is maintaining a very strong balance sheet, which we judge by the investment grade rating. We're going to highlight some of the on the metric front that just wrote. We're going to highlight some key metrics when we do the investor day in May, but there's nothing that's going to be not intuitive, right? Are we resetting around the client? Is client satisfaction good? Is retention good? Are we doing the development on Clover? Is the front door wide open and the back door
Right.
is closed? It'd be very intuitive. Are we hitting our milestones that we're supposed to hit on delivering the key projects we're delivering? Are we more productive? It'll be very intuitive, no major surprises.
It sounds like you've reviewed the business, you feel pretty good about what you have found and you've decided to invest in at this point.
It's an unbelievable franchise.
Right.
We are focused on executing against it. We gotta fill these gaps, but it's an unbelievable franchise.
Speaking of that, I mean, are there assets here that you don't think are necessary to be a part of the, you know, any divestitures we should think about potentially?
We talked about in October, and we talked about on the last call, there was a series of businesses, they're not significant, it's in the hundreds of millions we talked about in revenue that, when you take a really hard look at where you should allocate capital, they don't get allocated capital either because customers don't want them or, they're not competitive, and they don't fit within our franchise. We are selling those assets and, you know, we said we'd keep you up to date on, as that goes.
Okay.
It's not a major. It's couple of million in revenue.
Those are relatively, like you said.
Mm-hmm.
A couple hundred million in revenues. I imagine some of those are throughout the financial side more than the payment side or the merchant side.
It's a mix, yeah.
Okay.
Not biased one or the other.
It begs the question on a bigger picture than of just keeping the business together. I mean, it's incredible when you look back at some of the largest payments and fintech deals in the last seven, eight years. Really, Fiserv is the only one left that maintained First Data and Fiserv together, whereas, you know, obviously GPN-
Yeah.
TSYS are no longer, then go back to FIS, Worldpay , you know, Worldpay. Just help me understand the thought process of whether it makes sense. Does it still make sense to keep them? Is there really synergies between the two assets? It's more than two assets, but between-
Right.
Two businesses, I guess.
Back to your earlier question, when we did the review in the fall, we took a hard look at every part of the company, including the structure of the company and the strategy of the company, and we've re-underwritten it many times since, and we answer this question a lot. From everything that we can see, there's far more synergies, some real today and some where we have tremendous option value in both strategic and financial synergies of having the two businesses together than having them apart. You know, again, some of the synergies are absolutely real today. You think about distribution by natively embedding our Clover products and merchant products and small business payment products, CashFlow Central, into the bank's platforms.
We gain a massive distribution partner that's unmatched in the industry. We help them position themselves, and we deepen the relationship, and that's what the company had always talked about this virtuous cycle of by adding value to them, there's opportunities given back to us. Distribution's a huge one. Data's a huge one, and it's getting even more powerful with what the tools around AI can do, and the agents are available to us. Forming a three-sixty view of an individual increases auth rates, reduces fraud rates, allows CRM to come through better, cross-sell to come through better for the banks. We can do new things we've never done before. That data, having all that data from both the merchant and financial side, huge asset to us.
Pay by bank, we think, is a great opportunity.
Okay.
Going forward. The networks we sell to both merchants and banks. Stablecoin, we think is super interesting on that front. We love what we've done on the StoneCastle front, which is create a cash network, if you will. We have a whole bunch of merchants with idle cash. We've bought the technology and formed the technology that they can deposit that into our banks in an FDIC product seamlessly. These are all things that immediately come together through the businesses. All that said, you know, we're not the architects of this. Everybody. You know, most of the leadership team is new, and if the synergies don't materialize, we'll obviously do the right thing.
We'll figure it out, yeah.
by shareholders.
No, I mean, it definitely sounds like there's a real cross-sell opportunity.
Absolutely.
We've always talked about go to market and distribution and your bank partnerships as a huge opportunity for SMB from the merchant or from the payment side.
Yeah.
You know, where are you? I mean, in terms of actually maximizing that and cross-selling and delivering on that, you know, are we still moving forward in that direction in the pace that you want to?
Yeah. One final thought on the prior question was, we talked about this in one of our meetings earlier, is, we're not letting ourselves say that our business model has been tried and failed because, no one has ever put banking, issuing, large merchant, and SMB merchant together.
Right.
One peer tried banking and large merchant, and another peer tried issuing and large merchant, but nobody's ever put it all together. We're going to do a lot more work and a lot more testing and a lot more interaction with our clients before we say, "Okay, somebody else tried it and doesn't work for us." I think all the things I talked about are real synergies today. They're working. We have 1,000 bank partnerships. They're not all producing at the same level our best ones are, so there's lots of opportunity to deepen further synergies around those. Then there are things that we're barely scratching the surface of.
I think the single biggest synergy opportunity in our business, and the company's had this view for a long time, is the embedded finance space, where we have a couple customers today, but if more merchants, which we think will play out, decide to provide more financial services products, people are defining this TAM in the $100-$200 billion range with double-digit, strong double-digit growth.
Right.
Nobody else has the assets in the world that we have to execute on it. Why would you give up that option value at this stage. You see the pace and the change of how payments is evolving, and we've got a great position there. We're going to run this out. We're going to you know, do it. Again, if it doesn't work, if the answer is these assets are individually great and not greater together, then we'll address it as appropriate.
Okay. You guys have probably among the largest, you know, views of the consumer in the country and even more. Just, we saw the index, the SMB, the Fiserv SMB index come out, and I think it was up 1.2%, so it accelerated a bit from the 0.7% in January.
Mm-hmm
Even despite weather, actually.
Mm-hmm.
Just help us understand what you're seeing in terms of overall spend across retail, restaurant, enterprise? You see daily data, I believe.
Yeah
at least weekly.
Yeah, we do. We give it to you monthly on the second day of the month, and we think that gives a leading indicator to lots of other lagging data that you get out there, so we're proud of the index. Not all that different from what you're hearing about. Some people talk about the K-shaped economy. We talk about a cautious but still strong consumer. They have a job.
Yep.
They're still spending, but we're seeing real changes in the spending habits, particularly if you exclude inflation and look at real discretionary spend has been down for 12 months in a row. That's in the FSBI index. You can get it all in the FSBI index and watch that. Inflation bounces around. Essential spend's been much more durable, much more reliable. You continue to see behaviors in there where higher income customers appreciating assets benefit a little bit on the inflation side versus less assets hurt by inflation on the lower side of the K-shaped economy. We call it a cautiously strong consumer.
Okay.
Obviously, employment's a big key to it.
All right. Again, from a sub-segment standpoint, any variances in terms of what you're seeing from a sector over-
No. I mean, think, discretionary weaker, essential stronger.
Okay.
You can bucket that appropriately in there.
With your 10%-15% Clover volume guide, and this goes a little more specific to you guys now, what assumptions are embedded around macro and same-store sales when we think about coming off what we're seeing right now on the macro front?
Yeah. You want to go?
Yeah. Well, we said on the call that we expected a stable macro just to start off with. So, that embeds you know the macro picture that we assumed. Then you know as it relates to same-store sales and what that looks like, we talked about on the call both December and January and what we saw you know there from a growth standpoint and the return to growth that we saw in that period. That gives us a good launching point as it relates to where that double digit then looks because we're basically run rating at that coming into the year. Then obviously we look at the book and go through all the analytics around what we anticipate, and our run rate supports that basically growth outlook.
That's how we approached it.
Okay.
No major changes, and the 10-15, this excludes the gateway conversion.
Gateway
We've talked about, and 10% is the number we said. It's obviously been the number we've been growing at. Ex the gateway is the base, no major changes. The upper end of it is only if you could get. We gave that as a long-term view. That's only if you're able to start converting non-Clover into Clover. It's not an organic growth rate at the top line.
Okay. All right. That's helpful. When we think about guidance for a moment, I mean, you know, Paul-
Yep
1%-3% was what you guys called for the year in terms of overall growth. From what you've explained, I know the low end is really just honestly easier comps to some degree, right? That should get you there. It's not a very high bar to reach the low end. To achieve the higher end, I think you need a lot of some of the newer initiatives to really kick in, if I'm not mistaken, right? Commerce Hub, CashFlow Central, which we've been excited about for some time.
Yep
to take hold in a bigger way. Maybe just touch on, again, the assumptions on your full year for a moment, the range of outcomes.
Yep.
Also, the cadence, 'cause I know you talked a little more about the first half and the second half having some differences, the way the trajectory works out for the year.
Yeah. A couple of things there. First, as we said, on the call that we do expect the 1%-3% for the full year. That basically does assume on the lower side that it's more business as usual or more run rate. I mean, there is clearly execution to deliver that, but we certainly have that as a much more achievable goal. On the top end, as you said, Darren, it requires us to have some good execution on the initiatives, many of which are already underway, but to have those deliver in a robust way. I would just say, you know, when we set our guidance, the midpoint of the guidance is where we expect to be for the full year.
The cadence is more dramatic this year than it would be in normal years. Because of the comparative challenges that we have in the first half, you know, we expect to be down in the low single digits, which we define as down 1%-3%, for the first half. We have also said that we expect more pressure on the growth rate in the FS side versus the MS side just due to those comparative challenges. As Mike said earlier, it's not a volume picture difference, it's just really more of a math kind of comparative challenge there. That would be the differential between the bottom end and the top end, and the cadence between the first half and the back half.
I would just make one other comment as it relates to margin, because we also have a first half, second half.
Sure
Dynamic as it relates to margin. Because of our investments that we're making in the business, which are largely baked in, we still have a step change to make in the first quarter. The marginal change in the business is first quarter, which we called out on the call, was we expect to be below 30%, right below 30% margin. First half, 31%-32% is our expectation. Then the 35%-36% being a much more run rate margin for us, which is what we expect in the back half, which it blends to roughly the 34% that we talked about on the call.
Okay. That's really helpful.
There's a lot of detail in that. The story is we reset the strategy in the third quarter. The third quarter will be the first comparable quarter strategy to strategy. In the midst of that.
Right
We're doing a lot of work on the franchise that we think makes sense to do for the long term. I think, you know, I didn't want to put it this way, but this opportunity has given us, especially at the pace of change we're seeing and the level of client demand we're seeing around new technology and the like; it is a great opportunity for us to. It was a bad reset, but we're trying to use it in a revitalizing way.
Right.
First half of the year is a bit of a mess, and then we, with a lot of noise between the two and then.
Right. We'll lose comps and dynamics there, yeah.
Yeah. I think you go back to the point I made is, and we hope to talk about this, you know, in the investor day and show the path to it, is we still have all the underlying characteristics of a constant compounder that the company's had forever. It just you gotta get rid of the noise to be able to see that come through in the back half.
Right
Of the year. All those elements are there. Cash flow conversion, natural organic leverage, ability to buy back stock and grow revenues in the mid-single digits.
Right.
Just Paul's telling you a path of how to get there.
Didn't you also back out, though, some of that noise? Speaking of backing out the noise, you guided to a level that you know is absolutely sustainable because you took out a lot of that noise. Realistically, whether it's
We're still bumping against the noise. It's the noise.
Right. I'm saying you still have. There's going to be data sales, there's going to be hardware sales, there's going to be data licensing or licensing, you know, sales at times. Some of that potential upside to the one to three, or is that actually just in there and it's maybe counted on less?
Yeah, I wouldn't count it as upside.
Okay.
I mean, that is, as you say, Darren, there's a part of our business that encompasses those things, but we factor that in when we build our guidance, and so I wouldn't call it necessarily upside.
Okay.
Yep.
Can we talk about the investments you're making? 'Cause there was a $675 million number that was implied at least, of incremental OpEx. It's a fairly sizable impact on margins, obviously, as you reset the margin. I think a lot of questions we get is this the new norm that you have to invest in to keep the story going?
Yeah.
Is this just more of a rebase or reset to get, you know, to invigorate the businesses?
Yeah, it's a really good question, Darren, and we do get this a lot. Is this just the beginning of more kind of incremental steps of investment? The answer to that is no. We've made largely the investments that we need to make. They're on the people side, and they're on the technology side. That goes back to what Mike talked about on One Fiserv. To support the initiatives of One Fiserv, we needed to make some additional OpEx expenses. With the exception of, as I said, this one more step that we need to make in the first quarter, as we get to the back half of the year, we're in a much more normalized expense growth picture in the back half of the year, certainly as the baseline to move forward into 2027. There isn't another wave-
2027
of additional OpEx that we'd be layering into the business to do what we need to do, or CapEx for that matter.
Okay. When we shift back to Clover for a minute, obviously, it's such an important, you know, asset for you guys, and we think about the algorithm for growth for it. You know, you're talking about this 10%-15% range. You know, how do we think about the components of it, whether it's same-store sales versus new merchants versus international? I also want to bring in the back book conversion. Walk us through the bridge to get there.
We haven't specifically gone into the front door, back door numbers. We'll give some more color around that at Investor Day.
Investor Day, yeah.
I think it's we've talked about the growth vectors along horizontal investments. Those are, you know, are we helping our businesses do certain parts of, you know, inventory management, employee management, home-based partnership, vertical investments. We launched the healthcare vertical in the first quarter, launched professional services in the first quarter to complement retail and restaurants. International investments and launches, and we talked about Japan. We've got the TD partnership in Canada. We've got Safra in Brazil. We've talked about a whole re-imagination of the experience of Clover on the backside of it, and I'll come back to that in a second. The final piece is continuing to invest across the distribution channels, build more banks, build more ISOs, build more direct sales. All that is tracking well.
You know, as Paul said, there's a significant investment around that to get to the place where we get to. On some of the metrics you specifically mentioned, we obviously track them. We feel very good about the front door, and we think we have some opportunities to enhance net growth, you know, GPV growth, by improving the experience, and that's that fourth part of that investment there. We'll give you same store is fine, front door is good, and then we can do a better job. There's nothing bad on the back door. You know, by fixing certain parts of the experience, we think we can raise overall growth and support the numbers that we gave you. That's the way I think about it.
Obviously, more U.S. than international, but international is starting to be a real meaningful part of the story.
Yeah. You've had some great success in Canada, right?
Great success in Canada.
Australia.
We're just getting going on TD.
Right.
And, um, uh-
Brazil also, right?
Brazil's been great. Australia's been fine. We're missing a great
Partner bank
just partner there. Then, yeah, we're excited about the partner we have. Two partners we have in Japan with Visa and SMCC, and that'll go out later this year. More U.S. than international, but one's growing much faster rate than the other, and
Yeah
We're getting good. It was quieter, but we launched a partnership with UniCredit, who's a tremendous bank in Europe, in Austria last year. We have a potential to expand that. We're taking a hard look at some of the partners. AIB has always been a great partnership, but we think we have good upside in our partnerships with Deutsche Bank and Lloyds Bank. It's the international pieces feel good.
Okay. Are trends year to date what you hope to see so far in terms of Clover's traction?
Yeah.
Yeah.
We have nothing new to say on any of the trends.
Okay
... from the fourth quarter. Everything is exactly as we presented it.
Core banking. Obviously, it's an area that, you know, you've shown relatively flattish type results on the fintech banking side for a few quarters, right? It's an area that we'd like to see grow a few percent, but I know you're going through-
Yeah
... a consolidation in cores to some degree, but help understand the strategy there, what you're really aiming to achieve and the timeline around it.
Yep. We are not going through a consolidation of cores. There was a consolidation of cores that began a number of years ago. I'll step back broadly. We love our core business. We love the banking business broadly. Core is just a part of it. Banks do a lot of stuff with us, and they're looking to do more and more stuff in the market. We're proud of the long tail of banks and credit unions that we support in the U.S. We're not happy with recent performance. How did we get here?
We got here, we had a strategy to consolidate cores, which got mixed with a declining service experience that our customers reported back to us now and some mixed performance around resilience in some of our tools. Those are all known knowns, and we're addressing all of them. If you go to Pillar One of the One Fiserv action plan, and you go to some of the investments Paul talked about, we know exactly what these are. They're not related to the quality of our core technology. We only hear good things about that. Where we have lost and suffered loss has been on the service side.
Okay
... on the smaller end. We're fixing service hard, and that some of that is just more day-to-day people on site with our banks and supporting them. It's better value-added services from the tools they bought us. Are they fully utilizing them? Then it's developing things like stablecoin and a stablecoin closed loop network that you know relieves the banks of the stress that the cash would leave the system with acquisitions like that. It's well you know new products that we're launching like CashFlow Central. It's obviously getting merchant products to their customers. We're continuing all that, but that's all part of this deliver a great service.
As part of that and the experience they went through, when that service was there and they were facing a potential consolidation, that triggered, you know, a period where they said, "Well, I might as well go. I don't love my service and I have this, so I might as well go check what the market has to offer." We are addressing the service part hard. We'll get there. We're building on the technology piece to continue our strong position relative to that, and we stopped the core consolidation process.
Okay.
There is no core consolidation process, and we have not stopped the core modernization process, and including building out products like CoreAdvance and the continued proliferation of Finxact, which is doing great. The customers, that wasn't an experience that they wanted where they had to. All customers can stay on their core as long as they want to do it. We factor that into our financial position, and we're looking for the technology opportunities available to us around management of the cores. Are expanding at such a fast pace that there are ways to get to core modernization that may not force people to actually even go through a conversion.
Yeah, I want to touch on that. That's a key message. I mean, you're not really consolidating.
We are not consolidating cores. We fight it every day because everybody else in the ecosystem prefers the other message that it's good for everybody else.
From a competitive standpoint.
For that message.
That's an important message.
Message to our clients is we're not consolidating cores.
They could stay on as long as they want, whatever they're on.
As long as they want. We are going after them with a sense of urgency to fix the service issues and make it a great experience to be with us, and that includes stuff like buying back Smith Consulting Group, which is a bunch of SMEs on our cores that were out there. Doesn't mean we bend the curve, and we've said the first half of the year, you know, there's a long tail of this stuff, so pain that was laid we'll realize now. We'll try to bend the curve going forward, and we think ours. What we're not hearing, which is good, is that they don't like the technology.
Right
They like the technology, they don't want to switch off of it, so we'll continue to invest in the technology and look for opportunities to modernize.
You know, there's been, you know, obviously advancements from Anthropic around COBOL coding, and so a lot of your systems still do have the foundation on COBOL. I'm curious, I mean, is this going to help you with upgrading your systems faster, or can it be a risk? Can someone else utilize it to make a transition away from Fiserv? It's a very sticky business typically.
Sure. Sure it is.
99% retention, you know?
Yeah. No, I think the opportunities, and we'll talk more about it in May to the extent that we have a more full picture there. What we see is the potential to do either a simultaneous operation and modernization without major conversions, either through orchestration layers or build once modularity on the different cores. People choose their cores 'cause they like their cores, and we want them to stay with, enjoy their cores. Can we modernize all the modulars below it while they're still operating on the core? Those are things that weren't possible, and maybe the core consolidation was the exact right path a number of years ago, but now you have new technology and new opportunities, so we're going looking hard at that.
As far as what the new technology's doing on our day-to-day stuff, everything we do, if we have to do a conversion, whether it's related to a win or to a merger or something, it's faster, implementations are smoother, the data's better. AI's making everything more adaptable, faster, it's shrinking the body of work, and we think it's great. The actual core of the core, as you know, is a highly trusted complex system of record that's got tons of proprietary data, lots of regulatory expertise. We get paid off transaction volume, payments volume, accounts on file. We think we're in the best position, either on behalf of the world of agents or with our own agents to bring the agents to the point of the data.
The concept of opening up your core to agents is a very difficult one to imagine given PII, regulatory, but you just can't let people. We think about the opportunity for us as can we be the last mile for large language models, AI agents, to deliver real benefits based on our clients' data and information and business, but to do that in a safe, responsible way that's still auditable, regulatable, legal and verifiable. We're every part of in addition to how we can be more efficient as a company, every part of what the new technology is offering us is exciting, and we'll keep building that out, and tell you about it more in May.
Okay. We're almost out of time, so I want to ask a couple of more quick ones.
Mm-hmm
Maybe leave time for one from the audience. Just from a product standpoint and what you're most excited about, product acceleration, you know, you have quite a bit on the agenda, whether it's digital banking or Commerce Hub, we mentioned CashFlow Central. Mike, what are you most excited about to see come into the company's run rate?
Well, I'd just say broadly, it's a great environment to work with right now. The banks. I've been in and around banks and payments my whole life. They're more forward-looking right now than we've seen them in a long time. They're in a good capital position, profitability's good, regulation's a tailwind, so it's a really good market to play into. What they're telling us, the long tail of other than four or five banks, the long tail banks are saying, "We want deposits, we want help winning the small business market, and we want help in further penetrating payments.
Yep.
We want to be more productive. If you go through that for us, obviously Clover's a big part of what we do. CashFlow Central, huge value basis if we can put those natively in the banks' platforms, huge penetration and gets that cycle going for us. Vision Next is going to be a great card issuing platform. Think of Finxact for the card core. We're excited about that. Obviously, Commerce Hub will be the enterprise, our enterprise or be really an omni-channel global gateway. Three or four products in there. Experience Digital.
Okay
We're excited about it 'cause 1,000 banks are in the pipeline, and they've wanted it.
Wow
... we haven't yet gotten it to them, so we're excited to finish that.
That's great.
get to them. It's good. There hasn't been any slowdown on the innovation front, the new product development front. In fact, we've used some of the reinvestment we did in the business to try to address what the customers want to do in the market.
Yep
Right now, which is a lot.
What do you want us to look forward to around the Investor Day in May? I mean, what would you hope to see as an outcome, and what investors walk away from it with?
Well, hopefully you all come. We look forward to having you there. I think you know, it's been. I recognize it's been a. There's a lot has gone on in the last six to eight months, and we're looking forward. There's no major strategy shifts or any of these things. We're just looking for the opportunity to introduce what we think is a great management team. You've seen a lot of Paul and me, but behind us are two great leaders of our businesses. We'd love you to understand that what we talked about early on, that it's safe for you to underwrite a constant compounder investment thesis for us, and we'd love to give you some insight into how the business is running.
We're afraid, based on questions we get, that there's a perception of disarray and confusion. The company's in great position, the balance sheet's in great shape. We got a great leadership team. We have endless amounts of talent asking to come work with us, and we just want a half of a mor-
Great.
Half of a day to show you what these businesses are about. You shouldn't go into it with the expectation that there's going to be some dramatic show or something. We laid out in October where we are. We identified the action plan we're going to do on it. We're going to tell you a lot about our businesses, the progress we're making upon that action plan, introduce our people, and
Okay.
Hopefully let you leave with some confidence and understanding of the business.
Thanks, Mike. Guys, maybe one question, and then we'll wrap it up. Oh, yep.
You had mentioned thinking about main concern and it being, you know, yesterday we heard that, you know, people are in a growth mode environment.
Yeah.
What are you seeing as kind of, you kinda mentioned it earlier, but maybe digging deep into what are you seeing as like the biggest focuses for banks right now?
Yeah. I would say it just at a high level, both sides of the business are in a growth mode, and both sides of the business, merchants and finance are at these major inflection points in both payment trends that in fact impact both of them and major inflection trends and obviously the technology world. We go into these meetings; we don't leave a meeting without a long list of stuff to work on. That's why I was saying it's exciting time. On the bank side, we hear small business, we hear deposits, we hear payments, we hear integrated, embedded pieces in it, and we hear how do we take a full advantage recognizing we have highly trusted, high PII systems and lots of regulation.
How do we take full advantage of the open technology world, and how can we help them do that? These are very constructive meetings, the most advanced thinking I've seen. I think it's the background. The sector's very bullish, and it's the sense of urgency in getting our service there so we can get to the really fun stuff to do. You know, I think there is a big difference, you know, with what the long tail of banks wants and what the top banks want, and we feel like we got the product mix to hit both of those. On the merchant side, it's just how things are being paid for, the embedded nature of how payments are changing. They want to move product, and they want to expose their product to agentic forms and showrooms.
It's great opportunities, great conversations, the fun part of what we do every day.
Definitely sounds like there's demand out there.
Yeah.
All right, guys.
Thank you for having us.
Thank you very much.
Yeah.
Appreciate it. Guys, we have Klarna on the stage right now. I'm going to invite them up. Mike, thank you so much.
Yeah, yeah. Thanks.