Fiserv’s Clover Notches 23% Revenue Growth
Fiserv’s latest results show that financial institutions and businesses are continuing to invest in payments modernization and digitization, boosting the company’s organic revenue growth rates.
To that end, the company’s earnings materials show that Clover, the company’s point-of-sale solution , logged 23% revenue growth in the quarter, where annualized GPV has grown 15% to $267 billion.
Merchant volumes and transaction growth were up a respective 1% in the quarter, helping push organic growth in the Merchant Acceptance segment to 14% in the quarter, and revenues were $2 billion.
Organic growth in the payments and network segment was 9%, underpinning revenues of $1.7 billion. Zelle transactions, as recorded for this segment, were up 44%.
CEO Frank Bisignano said of Fiserv’s clients that “customers’ spending and spending intentions remain healthy even as net interest margins narrow and lending activity eases.”
High Demand Services
He noted that payment services, digital banking, IT modernization and data analytics are “high demand services.”
Against that backdrop, the company is boosting its organic revenue growth to a range of 9% to 11%, up from 8% to 9% previously.
Drilling down into specific drivers, Bisignano pointed to the continued build out vertical specialized software solutions for retail and professional services, including partnerships to manage inventory and giving ISVs access to Clover hardware.
“Clover now accounts for approximately 25% of our merchant revenue and remains on track to reach 35% by 2025 in line without targets,” he told analysts. Carat has been posting revenue growth in the mid-teen percentage points, according to commentary on the call.
CFO Robert Hau said the company’s three international segments have been growing by double-digit percentage rates, and said that company-wide, Fiserv signed 40 ISVs in the past quarter.
With a nod to FedNow, Hau noted that the company went live with six banks in the pilot phase and more than 70 are committed to go live this year.
During the question-and-answer session with analysts, Bisignano said there is opportunity for growth in the months and years ahead as more software is embedded into Fiserv’s offerings and that the company is in “early innings” when it comes to enablement for card issuance and volume.
Asked on the call about a possible pipeline for mergers and acquisitions, Bisignano said that, with a history of deals such as the acquisition of BentoBox roughly two years ago, and others, “they’re no longer tuck-ins, they’re more horizontal leverage … we stay close to a lot of startups. We make minority investments in startups, we get to know them, and then we get a really good shot at turning them into way more value.
“You should expect us to do more of those [deals],” he told analysts, “as time goes on.”
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