Fiserv, Inc. (NYSE:FI) Q3 2023 Earnings Call Transcript

Fiserv, Inc. (NYSE:FI) Q3 2023 Earnings Call Transcript October 26, 2023

Operator: Welcome to the Fiserv 2023 Third Quarter 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. At this time, I will turn the call over to Julie Chariell, Senior Vice President of Investor Relations at Fiserv.

Julie Chariell: Thank you, and good morning. With me on the call today are Frank Bisignano, our Chairman, President and Chief Executive Officer; and Bob Hau, 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 the reconciliation of those measures to the nearest applicable GAAP measures. Unless otherwise stated, 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. And now I’ll turn the call over to Frank.

Frank Bisignano: Thank you, Julie, and thank you all for joining us today to discuss how Fiserv continues to deliver very strong results. For the third quarter, we posted 12% organic revenue growth with margin expansion of 290 basis points to 38.1% on an adjusted basis. These results reflect an acceleration in our Merchant Acceptance and Fintech segment organic revenue growth to 20% and 6%, respectively. While all three segments contributed to higher margin, adjusted earnings per share of $1.96 was up 20%. Cash flow was strong as well with $1.3 billion of free cash flow in the quarter and $2.7 billion year-to-date. Once again, strong quarterly results point to full year performance ahead of our prior guidance. In the closing month of 2023, market projections in consumer spending and card account growth in the U.S. point to consistency versus third quarter levels, which would mean some softening year-over-year.

Macro uncertainty remains high, but we are confident in our ability to continue to add new clients, grow with and retain existing ones and expand our share of wallet with all of them. Because of this, we expect to close the year with growth similar to the year-to-date results. We also look to the more durable characteristics of our business to support our optimism. Nearly half of our volume in our Merchant business is in nondiscretionary spending categories. Approximately 85% of our financial institutions revenue is recurring. Our solutions in both areas service essential functions for our clients. Our customer base and distribution network are industry-leading. Our incremental margins are high, and our expense base benefits from technology-driven efficiencies and discretionary investment that we can adjust to match market conditions.

It is these characteristics that helped us deliver 37 consecutive years of double-digit adjusted earnings per share growth, and 2023 year-to-date results point to this being our 38th year. Our strong execution across these factors leads us to raise our guidance for the remainder of the year. We now expect 2023 organic revenue growth to reach 11%, the top end of our prior range of 9% to 11%; and our adjusted operating margin to improve more than 175 basis points this year, up from our prior expectation of at least 150 basis points of expansion. With this, we are raising our full year adjusted earnings per share guidance to a new range of $7.47 to $7.52, up $0.05 at the midpoint and representing growth of 15% to 16% over 2022. We are also raising our free cash flow guidance from $3.8 billion to approximately $4 billion this year.

The third quarter marked our tenth consecutive quarter of double-digit organic revenue growth, and we are focused on sustaining this momentum. Last quarter, I talked about five powerful opportunities that can help us do this. So I’ll share some proof points we achieved in the third quarter. Let’s start with Clover, our market-leading cloud-based SaaS operating system for small and medium-sized businesses. Revenue growth accelerated in the third quarter to 26% from 23% in Q2 on $272 billion in annualized payment volume, up 15%. We released a new Clover dashboard with improved user experience that expedites navigation to our top apps, including reporting and analytics. We added other features that speeds the buying process Clover.com and improved the application process for new merchant prospects.

We expect this functionality to open opportunities for Clover with a long tail of merchants growing our addressable market. Value-added solutions penetration continues to grow, reaching 17% in the quarter. We see plenty of white space still ahead, including with vertical-specific solutions, horizontal value-added services and software in international markets. We’re retaining line of sight to an acceleration of revenue growth that results in $3.5 billion-plus in Clover revenue by 2025, the target laid out at our March 2022 investor presentation. Moving to Carat, our unified commerce offering for omnichannel merchants. We added several new enterprise clients and relationship extensions, including a large petrol seller and a major grocery chain, adding to our nondiscretionary spending categories.

We continue to drive value-added solutions with enterprise clients. And wins in the quarter came from products addressing feedbacks and platforms, foreign currency translation, fraud and hotel and restaurants with BentoBox. We’re pleased to announce that PayPal has selected Fiserv as its core U.S. partner for payment services across both PayPal and Braintree assets. This is a new direct strategic multiyear partnership covering several products and services and millions of merchant locations that builds on a long-standing base of business between our two companies. International expansion continues with Carat, and we had several wins in the quarter across our regions. In EMEA, we won a competitive bid to help Compass Group, the world’s largest contract foodservice company, built unattended food retail services across 14 countries in Europe.

We are providing acquiring, local payment methods and real-time inventory data across our single Carat omnichannel platform for Europe. Our differentiation was in our functionality around data normalization, real-time access, visualization and reporting depth and breadth. Asia Pacific, we extended our global merchant acquiring relationship with Avis Budget, one of the world’s largest car rental providers, into Australia and New Zealand. And lastly, an emerging opportunity for us in the enterprise space is Open Data. We logged two important wins in this area in the third quarter that demonstrate strong demand for access to our vast alternative data assets. One of the major credit bureaus will use our account-level data to add micro-indicators to a consumer’s credit profile, particularly relevant for the underbanked.

Secondly, we’re partnering with Dun & Bradstreet to add information from our merchant volume database to supplement its small business credit reports. This solution can optimize credit decisioning for lenders and access to capital for small businesses. Finally, in the area of Payments in open banking, we signed a deal with Plaid for API access to bank data, allowing the company to move further away from screen-scraping and generating revenue for us and our connected banking credit union clients. We can further penetrate this data market opportunity by contributing in areas such as ID verification, account verification, loan origination and security and fraud services. Latin America represents another standout growth opportunity. The region is about 6% of total company adjusted revenue, and in Merchant Acceptance, it’s 10% of adjusted revenue.

It’s largely driven by Argentina and Brazil, followed by Mexico, Colombia, Uruguay and the Caribbean. Argentina inflation anticipation revenue have grabbed much of the attention here. But our business in the region is well diversified with multiple growth drivers across products and countries. Even as we look to presumably less inflation and slower anticipation growth in Argentina next year, we see plenty of opportunities for strong growth in the region. These include instant payments in Brazil and Argentina, revenue growth on our Software Express rails for expanding the payments functionality for this leading retail software business that we acquired in 2018. We expanded on this opportunity earlier this month when we acquired Skytef, the largest distributor of Software Express in Brazil.

With it, we added hundreds of ISV partners, 27,000 merchants and the ability to cross-sell multiple value-added solutions: Ramping up new business with Caixa Bank, including acceptance at 13,000 bill payment facilities across Brazil; rolling out Clover more broadly in Brazil next year; and expanding our issuer processing footprint with FirstVision in Brazil, Mexico and Argentina. Elevated inflation and high interest anticipation revenue in Latin America have contributed to the high teens growth we are posting this year in our Merchant business, well ahead of our medium-term guidance of 9% to 12%. The macro forces contributing to this greater than anticipated growth will likely ease over time, and this assumption is fully incorporated in our plan to achieve $10 billion of Merchant revenue by 2025.

And finally, in the area of digital payments, we were very happy to introduce yesterday our partnership with Melio, a leading B2B payments platform. This marks a significant step forward for Fiserv in this very large and growing market. Together with Melio, we will enable financial institutions to better meet the payment needs of small businesses and level the playing field with emerging software-led competitors. We will combine Melio’s well-known, easy-to-use accounts payable and receivable workflows with Fiserv’s market-leading biller and merchant network, plus payment capabilities. By summer 2024, we will go to market with CashFlow Central by Fiserv, an integrated accounts payable and receivable solution for small businesses through Fiserv financial institution clients.

This exclusive distribution agreement includes more than 3,500 FIs currently using check-free from Fiserv for bill payment and will allow the solution to scale rapidly. Furthermore, in the near future, we will reach merchants directly with this product through Clover and our ISV channel. Now let me turn the discussion over to Bob for more detail on our financial results.

Robert Hau: Thank you, Frank, and good morning, everyone. If you’re following along on our slides, I will cover details on total company and segment performance, starting with our financial metrics and trends on Slide 4. As Frank said, our third quarter was very strong. We are confident in our new 2023 outlook and ability to continue to deliver attractive levels of growth and profitability. Total company organic revenue growth was 12% in the quarter with strong growth across Merchant Acceptance and a solid recovery in growth in the Fintech segment. Year-to-date, total company organic revenue grew 11%, led by the Merchant Acceptance segment, which grew 17%. Total company adjusted revenue of $4.6 billion grew 8% for the quarter despite a meaningful foreign currency headwind.

Adjusted operating income grew 17% in the quarter to $1.8 billion, resulting in adjusted operating margin of 38.1%, an increase of 290 basis points. Year-to-date, adjusted revenue grew 8% to $13.4 billion, and adjusted operating income increased 16% to $4.8 billion, resulting in adjusted operating margin of 36.1%, an increase of 250 basis points. Adjusted earnings per share for the quarter increased 20% to $1.96 compared to $1.63 in the prior year. Year-to-date, adjusted earnings per share increased 16% to $5.34, at the high end of the 14% to 16% annual prior guidance range. Our adjusted earnings per share growth is particularly noteworthy given the impact of foreign currency translation. Mostly due to the sharp devaluation of the Argentine peso relative to the dollar, our earnings per share includes a headwind of $0.24 for the quarter versus prior year.

Free cash flow reached $1.3 billion for the quarter, up 48% versus the prior year and $2.7 billion for the first 9 months of the year, up 29%. We are raising our free cash flow guidance and now expect to reach $4 billion this year, reflecting the typical strength in our cash flow generation in the second half of the year. Now looking to our segment results starting on Slide 5. Organic revenue growth in the Merchant Acceptance segment was a strong 20% in the quarter and 17% year-to-date. We now anticipate organic revenue growth to be in the high teens for the full year. Adjusted revenue growth was 12% in the quarter and 11% year-to-date. Organic revenue growth in this segment is running well ahead of our medium-term guidance for 9% to 12% growth, driven by growth in Clover, our ISV channel and our international businesses as well as several transitory factors that we expect will ease in future years.

The elevated Argentine inflation, which is running well above 100% this year, contributed about 2 points of organic growth for the segment on a year-to-date basis. Additionally, high interest rates in Argentina have contributed to a stronger growth in anticipation revenue. But even as rates normalize, we expect demand for these prepayments to be healthy given the extended settlement periods here as well as in Brazil and Uruguay. Turning to volume performance in the quarter. Merchant volume grew 2% overall and 6% excluding wholesale processing. Similarly, transactions grew 1% overall and 9% excluding processing. Recall that a large portion of our volume comes from traditional wholesale processing. However, over the last several years, we’ve been evolving from providing processing services alone to offering full acquiring services and more recently software and other value-added solutions.

This transition changes our business model for the better. Our SMB and enterprise acquiring businesses carry much higher revenue per dollar volume compared to the wholesale processing business. So as acquiring grows and wholesale processing becomes a smaller portion of our volume, we are seeing a widening positive spread with revenue growth outpacing volume growth in large part due to value-added services. Going forward, processing volume will ebb and flow. As a reminder, we projected $10 billion of revenue in this Merchant Acceptance segment in 2025 with processing revenue roughly flat from 2021 to 2025. We expect overall revenue growth will continue to outpace volume growth as we increase penetration of software and services, which means more revenue per unit of volume.

Clover continues to build on the strength of its growing product offering, distribution partnerships, expanded direct sales and value-added solutions. It posted a strong 26% revenue growth for the quarter and 23% year-to-date. Quarterly Clover GPV was $68 billion or $272 billion on an annualized basis, up 15%. Value-added services penetration was 17%, over 2 points above year-ago levels and on track to achieve our 25% target by 2025. Carat, our omni-commerce operating system for enterprise clients, grew 14% excluding the loss of a large merchant aggregator, as discussed last quarter. On an unadjusted basis, Carat revenue grew 2%. We had two large wins that included our Commerce Hub product, the new single orchestration layer that enables easy access to all our products and services.

First with Curb Mobility, the taxi-hailing service; and second, with Autobooks, an accounting and bookkeeping system provider to small business. Adjusted operating income in the Acceptance segment increased 24% to $757 million in the quarter, and adjusted operating margin was up 350 basis points to 35.9%. Year-to-date, adjusted operating income improved 22% to $2 billion and adjusted operating margin grew 300 basis points to 33.8%. Turning to Slide 6, the Payments and Network segment. Organic revenue growth in the segment was 6% in the quarter and 9% year-to-date. Adjusted revenue growth in the quarter was 5% and 8% year-to-date. Growth drivers in this segment include North American credit active accounts on file, though growth here slowed a bit to 3%.

And Zelle transactions grew 44%, which continued to benefit from new uptake of Zelle for Business. Our debit networks, STAR and Accel, added several new merchant customers, including some household names in e-commerce, in part to take advantage of Reg II benefits. These and prior new client adds represent a strong pipeline of prospects for the Merchant Acceptance business. We also won a deal to support Pinnacle, a $42 billion bank by assets, in a combined debit processing and network win, demonstrating our ability to successfully support and sell to larger banks. Outside the U.S., we closed a 5-year deal with a Tier 1 U.K. bank to support the launch of a new buy now, pay later solution to be delivered using a combination of our FirstVision processing technology and our new suite of digital solutions.

We also won a contract with Bandhan Bank, India’s eighth-largest bank, further cementing our position as a market leader in credit processing in India, bringing the number of Indian banks on our FirstVision processing platform to 10. As we’ve said, we expected tougher comparisons through the second half of the year given the anniversary of the onboarding of several large clients through mid-2022. We continue to anticipate the full year organic revenue growth rate to be toward the high end of our medium-term outlook of 5% to 8%. Adjusted operating income for the segment was up 12% to $832 million and adjusted operating margin was up 270 basis points to 48.6% in the quarter, driven by favorable mix and greater productivity. Year-to-date, adjusted operating income was up 14% to $2.3 billion, and adjusted operating margin was up 260 basis points to 46.7%.

Moving to Slide 7, the Financial Technology segment. Organic revenue growth in the segment was 6% in the quarter and 3% year-to-date. Adjusted revenue growth in the quarter was 4% and 1% year-to-date, impacted by the divestiture of our financial reconciliation product announced at the beginning of the quarter. For the year, we expect organic growth to reach the low end of our guidance range of 4% to 6%. Adjusted operating income was up 11% in the quarter to $291 million and up 5% to $856 million year-to-date. Adjusted operating margin in the segment increased 260 basis points to 36.7% for the quarter. For the first 9 months, the segment’s adjusted operating margin grew 130 basis points to 36.1%. We added eight new core account processing clients in the quarter, including three wins with financial institutions whose assets exceeded $1 billion.

Two wins came from growing credit unions, including Noble-Federal, that saw the benefits of upgrading to DNA, our industry-leading cloud-enabled core for both credit unions and banks. The adjusted corporate operating loss was $120 million in the quarter and $384 million year-to-date. The adjusted effective tax rate in the quarter was 19.2% and was 19.6% for the first 9 months. We continue to expect the adjusted effective tax rate to be approximately 20% for the full year. Total debt outstanding was $23.3 billion on September 30, and the debt to adjusted EBITDA ratio dropped to 2.8x. During the third quarter, we issued $2 billion of 5-year and 10-year senior notes to replace the notes that matured in October and reduced our commercial paper program balances.

Variable rate debt sits at 7% of total. During the quarter, we continued executing capital allocation strategy, repurchasing 9.6 million shares for $1.2 billion and 31.4 million shares for $3.7 billion over the last 9 months. We had 60.5 million shares remaining authorized for repurchase at the end of the quarter. We are fully committed to our long-standing disciplined approach to capital allocation, which includes investing in our business organically, maintaining a strong balance sheet, returning cash to shareholders through share repurchase and pursuing high-value and innovative acquisitions. And wrapping up on Slide 8. Year-to-date, organic revenue growth is at the top end of our prior guidance for the full year, and we expect the level of business activity in the fourth quarter to be similar to the third.

While consumer spending is forecast to be slower in the second half of the year relative to the first, the consumer has remained resilient and unemployment levels remain low. Bank and credit union IT spending continues at a healthy pace as higher interest rates have been a tailwind for profitability. The combined scenario gives us confidence to raise our full year organic revenue growth to 11%, the top end of our previous guidance range of 9% to 11%. Based on this higher anticipated organic revenue growth and strong third quarter results, we are raising our full year adjusted EPS guidance range once again from the previous $7.40 to $7.50 to a new range of $7.47 to $7.52, representing growth of 15% to 16% over 2022. This includes a higher adjusted operating margin, now expected to improve more than 175 basis points this year, up from our prior guidance of at least 150 basis points.

We look forward to seeing you at our Investor Day on November 15. Space is limited, so for those of you who cannot attend in person, please take advantage of the webcast from our Investor Relations website. With that, let me turn the call back to Frank.

Frank Bisignano: Thanks, Bob. I’ll provide a brief update on our CSR activities and most recent recognitions before we wrap up and move to Q&A. During the quarter, we continued to expand our focus on minority depository institutions, or MDIs. In September, we hosted our inaugural MDI Advisory Council meeting, where we discussed future save products and strategies and how to better integrate Fiserv solutions at council members’ banks to help them grow and better serve their clients. We were active on the back-to-business front as well. So far this year, Fiserv’s back-to-business program has funded almost 200 grants totaling nearly $2 million for small, diverse merchant businesses. Also, in the third quarter, our leadership position in Fintech was affirmed when IDC ranked Fiserv number one on its top 100 ranking of global financial technology providers.

CNBC also named us a top Fintech company. And Time Magazine included Fiserv on its list of World’s Best Companies in 2023. I’d like to conclude my formal remarks with what to expect from our upcoming investor conference on November 15. This will be our first full business review in 3 years. Our work to integrate First Data and Fiserv is not only done, but is driving real value in the marketplace across merchants and financial institutions in a way that only this combined company can. Our assets are now unmatched when you consider that we have a large and diverse client base from financial institutions of all sizes, to small businesses, to large enterprises around the world, spanning all sectors and containing many leaders in their respective industries; a global footprint in over 100 countries organized by region and known for deep local expertise; a modern stack computing environment with private and public cloud capability; scale-based leadership in merchant acquiring, driven in part by a superior distribution model; the largest SMB SaaS payment platform by volume with Clover; the leading credit card issuing platform offering cutting-edge cardholder experiences; the number three debit network; our NOW network that optimizes connections between our bank and credit union clients and payment rails of all types, from cards, to ACH, to real time; the best bank and credit union account processing platforms; and the broadest set of value-added surround solutions.

And finally, cross-platform opportunities that expand our addressable market and that Fiserv is uniquely positioned to deliver. This includes our new SMB accounts payable and receivable market opportunity and our embedded finance offering, where our newest Fintech platform, Finxact, is enabling banking services offered by merchants, starting with one of the world’s largest retailers. We’ll expand on these opportunities and more in a few weeks’ time, and we’ll share a compelling 3-year forward plan that will help you understand how we intend to defend and extend our lead in Fintech. Thank you to our teams who come to work every day and build and deliver on this plan. And thank you all for your time and attention today. And now operator, please open the lines for questions.

Operator: Thank you. We would now like to open the phone lines for questions. [Operator Instructions] Our first question comes from Timothy Chiodo from UBS. Please go ahead.

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Q&A Session

Timothy Chiodo: Thanks a lot for taking the question. I want to touch on enterprise e-commerce competition, very topical in the market right now, and you mentioned many new Carat wins. Maybe you could talk a little bit about STAR and Accel and how bundling those networks is helping you to win share? But not just STAR and Accel, some of the other services that are more frequently appealing to the enterprise e-comm merchants as you win these RFPs, I would appreciate that.

Frank Bisignano: Thank you, Tim. Good to hear from you. I’d start at the top, right? We committed to the build-out of our omni-channel capability and we brought in Commerce Hub as fundamentally a centerpiece of that. And that really gets to the point that you bring, which is what I would call more value-added services than just fee account volume. Our debit routing capability is very, very strong, and it allows us to, also with the debit network, to be able to give our clients the opportunity to work on lowering the cost of acceptance, a platform that we’ve thought about across the business for a very long time. Created other value-added services, like our prepaid products and gift, also gives us what we believe is a strategic advantage.

So in many of our businesses, you’ll hear us talk about it across – we’ll have the fundamental processing capability and acquiring capability, but then bringing across the other value-added services. And that’s the benefit of this company, it gives us a strategic advantage. So I think about it in those aspects, really. And I think when you look at PayPal and the like, it gives us a really good hand to be able to do more with them besides only e-comm, and also for other clients, it’s the omnichannel experience that we bring to them across the enterprise.

Timothy Chiodo: Excellent. Thank you, Frank.

Frank Bisignano: Thank you.

Operator: Next, we’ll go to the line of Dave Togut from Evercore ISI. Please go ahead.

David Togut: Thank you. Good to see the acceleration in Clover revenue growth and the increased penetration of value-added services. Could you just drill down into what you see as the biggest drivers of growth in value-added services going forward, taking you to the model you’ve laid out for 2025?

Frank Bisignano: I mean, for us, it’s software stacks against verticals, and then there’s a horizontal capability. Obviously, employee management, everything from timekeeping systems to the way, in fact, they’re managing their workforce is a capability that gets used horizontally. If you look at other pieces, it will be inventory for some specific businesses. And I think if you look at our penetration rate, it continues to grow because the bundles continue to get stickier. You heard us then today announce Melio – or yesterday announce Melio, I should say. And that will be another – it goes beyond Merchant, and we can talk about that later if you all like. But it will be in their offering to our merchant base in total, and that would be an example of bringing in capabilities that we didn’t have for them before that we will.

So I think we started – if you remember, we started Clover with the concept of an app store. We converted that into understanding what are the natural characteristics of specific verticals and then what is the horizontal capability that we will bring across it. And we feel good about the growth and we see the trajectory of both signing up new merchants and also the ability to bring more product to our current merchants.

David Togut: And just as a quick follow-up. Bob, good to see the free cash flow up 48% year-over-year in the third quarter. CapEx was down 17%. Are we moving toward lower capital intensity going forward? Or is this just a function of an easy comparison?

Robert Hau: Yes. I would definitely, David, point to really timing of the capital spending and comparisons. I would expect full year 2023 to be in line with last year’s spending overall. And I think we’ve said in the past, as we look forward, we think the capital levels that we’ve got right now are about correct going forward. We’ll see a growth in revenue, and therefore, as a percent of revenue, perhaps some easing. But order of magnitude, that $1.5 billion for the full year is right in line with what we’d expect.

David Togut: Thank you very much.

Operator: Next, we’ll go to the line of Tien-Tsin Huang from JPMorgan. Please go ahead.

Tien-Tsin Huang: Thank you. Great results here. On the Acceptance side in Lat Am specifically, I’m curious with the anticipation revenue likely to ease there, and you gave some disclosure. I’m just curious, what do you see replacing that growth in Lat Am? How does the deal pipeline look there?

Robert Hau: Yes. Tien-Tsin, I think, we pointed out in our prepared remarks, we’re definitely seeing some “transitory benefits” in Latin America, particularly in Argentina, around higher-than-normal inflation and higher-than-normal interest rates. That is definitely giving us a lift from an anticipation standpoint. I think we basically are anticipating cash into the merchant. We’re in the middle of the payment flow. And so we’re able to provide that as a service to our merchants so that they can settle their transactions earlier than the typical 30-day cycle in that region. Interest rates, we get a spread on the interest. And of course, we’re able to borrow at a cheaper rate than our merchants might be able to borrow.

So that’s a good business for us, very low risk because we’re in the middle of that flow. If you anticipate interest rates to ease into the future, which I would expect they will, you’ll see some easing of the revenue, but not in the spread. And so it remains a very good business for us. And of course, the debate will be at what rate does either inflation and/or interest rates ease. An important element, though, is a very correlated number to both inflation and interest rates is FX. And while, from an organic standpoint, we don’t have FX because our organic results are at constant currency, it’s certainly in our adjusted revenue and our EPS. And so we’ll see some easing of that transitory inflation and interest impact will also see some easing about FX impact, net-net.

Overall results on an adjusted revenue basis and an adjusted EPS basis will remain strong. About Latin America, it’s a tremendous franchise for us, not only in Argentina, but in Brazil. We continue to grow and expand in Uruguay and Mexico, in the Caribbean. It’s a tremendous capability for us and providing a good growth in the recent history and expect it to continue into the future.

Tien-Tsin Huang: Glad to hear, Bob. Just real quick, if you don’t mind me asking another one just on Fintech. You mentioned medium bank – and overall bank spending has been healthy on the IT side. How about new deal activity, large deals, et cetera? Do you see that continuing here as we cross into the new calendar year? I’m just curious where the appetite is for new spend in the banking community.

Frank Bisignano: I think – yes. I think the dialogue is robust. I think Finxact has definitely added to that dialogue from where we were before. In my prepared remarks, I talk about our platform serving bank and credit union. I have a deep belief, and I think the market has a deep belief, that DNA and Finxact are industry leaders in capabilities. We had always talked about going further up market. Obviously, I think if you look at total banks that run on a system, we’re the market leader. But we’re also driving north and I think those two assets really help us. And there’s lots of robust dialogue, now we need to turn the robust dialogue into closed deals and then we’ve got to convert it. But I feel good about the long term.