Fiserv, Inc.

Welcome to the FISERV 2020 Second 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, I will turn the call over to Peter Pullian, Senior Vice President of Investor Relations at FISERV.

Thank you, and good afternoon. With me on the call today are Jeff Yabuki, our Executive Chairman, Frank Bisognano, our President and Chief Executive Officer, and Bob Howe, our Chief Financial Officer. Our earnings release and supplemental materials for the quarter are available on the investor relations section of Fiserv.com. Our remarks today will include forward-looking statements about, among other matters, the impact of the COVID-19 pandemic on our business, expected operating and financial results, strategic initiatives, and expected benefits and synergies from the first data acquisition. 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. Please refer to our earnings release and supplemental 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 stated otherwise, performance references made throughout this call are year-over-year comparisons, and all references to internal revenue growth are on a constant currency basis. Also note that non-GAAP financial measures in our earnings release and supplemental materials include the three and six months ended June 30th, 2019 results for First Data, which have been prepared by making certain adjustments to the sum of historical First Data and Fiserv GAAP financial information. Lastly, we're holding an investor day on December 8th in New York City to share our strategic vision. While we intend to host the event in person with appropriate protocols as circumstances allow, We'll also prepare to broadcast the content for those who prefer that approach. We look forward to seeing you at this important event. And now I'll turn the call over to Jeff.

Thanks, Peter, and good afternoon, everyone. A lot has changed at Vyserv since we announced Q1 results. Coming off tremendous financial performance in January and February, we hit the COVID-19 cliff in the second half of March, which further worsened in April. At our May 7th call, we shared our thesis that April would be the likely trough, and we expected to see gradual improvement from there. And that is exactly what has happened. Each month, revenue has improved sequentially from the lows of April and culminated with a return to internal revenue growth in July. Clearly, the results are not what any of us expected prior to the pandemic. However, we are quite pleased with our overall performance the resilience and strength that produced nearly $900 million of free cash flow in the quarter, and tremendous sales momentum, which reinforces our market-leading value propositions and further positions us for accelerated growth. We successfully completed the dissolution of the BAMS joint venture on July 1st. As part of this, we welcomed nearly 120,000 direct clients to Fiserv, and inked a new processing agreement with the bank as their provider for merchant services. We are grateful to Bank of America for their partnership and are excited about our future. On July 29th, we marked the one-year anniversary of closing our historic merger. We've made tremendous integration progress while continuing to invest in our future. We've also gained significant confidence in the size and scope of the opportunity and wrapped up a series of first-year accomplishments, including generating $3.5 billion of free cash flow. We allocated more than $1.7 billion to share repurchase, well ahead of schedule, and also repaid $1.1 billion of debt. We raised our cost synergy target by a third to $1.2 billion and increased our revenue synergy goal by 20% to $600 million, And of that, in the first 12 months, we've actioned $750 million of cost synergies and $160 million of revenue synergies. Interest expense has been reduced by nearly $290 million annually, which, when combined with synergies actioned, is more than $1.1 billion of run rate pre-tax earnings in the first 12 months of what was originally set as a five-year journey. And sales, as measured in annual contract value, grew 15% over the prior year, supporting the power of our combined value proposition. Overall, these proof points are representative of our commitment to delivering on the promise of Fiserv in the client's office, harnessing the power of the best associate team in the industry, and delivering sustained above-market returns for our shareholders. And last, we effectuated a seamless CEO transition to Frank on July 1st. Seamless because Frank and I have been working closely together since the transaction was announced, as we are today. And seamless because Frank continues to bring his leadership and commitment to deliver superior results against our proven Fiserv shareholder value creation strategies. As both an advocate and large shareholder, I assure you that the company is in fantastic hands with Frank at the helm. With that, let me turn the call over to our new CEO.