Fiserv, Inc.

Welcome to the FISERV 2020 First 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. You may begin.

Thank you, Ivy, and good afternoon, everyone. With me on the call today are Jeff Yabuki, our Chairman and Chief Executive, Frank Pizzignano, our President and Chief Operating Officer, and Bob Howe, our Chief Financial Officer. Our earnings release and supplemental presentation for the quarter, which includes slides on our updated revenue and cost synergy targets announced in March, 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 materials for today's call 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 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 included in our earnings release and supplemental materials include the first quarter of 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. And now I'll turn the call over to Jeff.

Thanks, Peter, and good afternoon, everyone. To say we are living in interesting times is an understatement. As an example, Bob and I are here in Milwaukee, appropriately social distanced. Frank and Peter are joining from separate locations in New York, and many of you are likely at home. We are all adapting to this transitory time as we approach a new normal. We're incredibly proud of how the FISERV team has responded. protecting your company while executing on our number one priority, keeping associates and clients safe. We activated our business continuity plan quickly, starting in Asia and continued around the world. Today, about 85% of our associates are working remotely, and the remainder are following rigorous safety protocols to protect the health of the team. Additionally, hourly associates whose jobs cannot be performed remotely have received a 25% increase in pay while we navigate the COVID crisis. We are supporting clients by providing them with the leading edge solutions they need to serve their customers. Our account sales and service teams are adjusting to the changes required in this new world, including travel by tech, connecting with clients through individual and team-based video capabilities. The substantial majority of our implementations are progressing as scheduled, and sales in the quarter held up reasonably well, coming in just shy of the prior year. We entered Q2 with a solid pipeline, and in fact, our preliminary sales results for April were up more than 20% over the prior year. We have a strong, resilient business model, which is buttressed by the delivery of mission-critical solutions to financial institutions, corporate clients, and merchants around the world. We also believe leadership matters. and having more than our fair share of experienced executives who have successfully navigated the global financial and economic events of the last 30 years will contribute to even stronger results as we navigate these changing economic times. In early March, we communicated meaningful increases to our five-year synergy targets, including a 20% increase in revenue to at least $600 million, and on the cost side, we increased our target by $300 million to a total of $1.2 billion, which, as you will recall, does not include our sizable interest expense benefits. From day one, we believed that our significant synergies would help mitigate the potential adverse impacts of a recession. In addition to the quantum, we are intently focused on the speed to attain those synergies, all of which Frank will discuss later. The financial results for the first 10 weeks of the year were quite strong, even with some limited weakness outside the U.S. The last two weeks of the quarter got progressively worse as shelter in place and other restrictions ramped up around the world. The majority of the business displayed resilience, with the largest negative impact in the merchant business, along with pressure in our debit-oriented transaction businesses not seen in previous downturns. The circumstances also spurred some incremental growth across several areas, including payments and digital. Global merchant transactions are generally on the upswing, with some variability by country, but with meaningful improvements from the lows seen in late March and early April. In the U.S., we've seen early signs of recovery in later April and May to date, with comparative transactions down in the low double digits after declining nearly 30% in the last week of March. Since then, we've been seeing continuing gradual improvement in merchant transaction recovery, including into May. U.S. debit transactions were pressured but also showed improvement in the second half of April, finishing the month with low double-digit declines, a substantial improvement from the approximately 20% drop we saw in the last week of March and into early April. Overall, we are quite optimistic about the improvement we are seeing in the current trends, I believe we will see further acceleration as shelter-in-place restrictions are eased in the US and around the world. Given the uncertainty around COVID-19, we are withdrawing our previously communicated 2020 financial outlook. Consistent with the trends we have seen, we expect meaningful pressure on Q2's results and anticipate improvements throughout the second half of the year. Given the strength and resilience of our business model, including the significant synergy opportunities, We see a solid, actionable path to achieve double-digit adjusted earnings per share growth again this year. You will recall that we had expected our first quarter's results to be the weakest of the year due to a difficult compare and the ramping of synergies throughout the year. Given that, along with the impact of COVID-19, we produced solid results, including internal revenue growth of 4%, adjusted earnings per share growth of 16%, and free cash flow increasing to $760 million for the quarter. Our capital allocation strategy was in full force, including closing the sale of a 60% interest in investment services, adding to our merchant capabilities through two small acquisitions, and repurchasing 8.6 million shares in the quarter. Importantly, we are making excellent progress on integration with a focus on value creation across strategic, operational, and financial fronts. The privileged relationships we have in our account processing businesses continue to expand, adding 12 new clients in the quarter, including five on DNA, such as John Darke Credit Union in Massachusetts, with $1.5 billion in assets, and Nelnet, an existing output solutions client that selected DNA to support its mission of helping students make their educational dreams possible. Clover growth payment volume started strong, up 40% through February, and despite the COVID hit, still ended up 29% for the quarter. Clover devices' shift was up about 25%, and the adoption of add-on software services such as Virtual Terminal and our new Order Ahead functionality continues to expand rapidly across the base. We saw important momentum in e-commerce, adding 36 new direct clients globally, including Total Wine & More, the country's largest independent retailer of fine wines, the U.S. Army Installation Management Command, USA Technologies, and Regus Salons, the largest hair salon chain in the world. We also added the German grocery chain Tagut and MediaMarkt Saturn Retail Group, Europe's largest consumer electronics retail chain with over 1,000 stores in 14 countries. E-commerce transactions remain strong in the quarter, up 26% in the US and 20% globally, reflecting our market position and opportunity in digital commerce. Our integrated payments value proposition also continued to expand, growing partners more than 20% in the quarter. Impressively, ISV revenue grew more than 55%, even in the face of late March weakness. We continue to see strong opportunities to grow in this important space. Overall, total contracted merchant locations globally grew 12% in the quarter. We also had very strong Zelle results, implementing eight times more clients in Q1 compared to the prior year, and payment volume skyrocketed, up nearly 90% in the quarter. And we saw even stronger growth in the second half of April as people looked for new ways to pay in this new environment. We continue to see a significant value creation opportunity at the intersection of cards, DDA-based payments, and our merchant scale around the world. Importantly, we remain fully committed to deploying our $500 million innovation investment. We've identified important opportunities in areas such as enterprise digital, card, merchant e-commerce, ISV, and Clover. We also see expanded opportunities across the data horizon including risk fraud and decisioning with a specific emphasis on authorization rates, network innovation, and next generation integration. We will continue to invest in 2020 and over the next several years to ensure that we are focused on where the market is going and what we need to do to win. Lastly, as you have seen, we announced our CEO succession plan earlier today. which elects Frank Bisognano to succeed me on July 1st. I will serve as executive chairman for the remainder of the year, working closely with Frank to ensure a smooth transition. We will also work closely together to continue advancing our longer-term strategy, which will be heavily based on the well-honed capital allocation discipline, which is embedded in the DNA of the company. Given my 15-year tenure, The board and I have been engaged in deep succession planning conversations for a number of years. It has been my long-held belief that organizations benefit from changes in leadership and have used that principle to maintain a fresh approach over my time at Fiserv, including most recently through the first data acquisition. My conviction has gotten even stronger given the current pandemic and resultant need to manage and lead differently. Frank will bring new energy and perspective to the company, while fully embracing the strategic foundation of Fiserv's value creation playbook. I've had the pleasure of working closely with Frank over the last 18 months, and it will be two years since the announcement when I ultimately depart. In addition to the things that you know, such as Frank being an accomplished executive with vast experience in large, complex organizations, including doing a fantastic job as CEO of First Data, He's further established himself with our team, leading our businesses and integration, exceeding goals on our synergies, and working closely with me to establish the foundation for our future success. The board and I feel great about Frank, and he has our unanimous support as Fiserv's next CEO, only the first fourth person in our 36-year history. I'm incredibly happy for Frank and his family. and offer my heartfelt congratulations to him as a business partner and my friend. It has been an honor and privilege to lead your company for what now amounts to a quarter of my life. Over that time, we have transformed Fiserv into a global leader in payments and FinTech and have been named a world's most admired company for seven consecutive years, all while building a sustaining culture of delivering differentiated value for clients, associates, and you, our shareholders. My primary objective has been to leave the company stronger than when I found it. And while some may say we accomplished that objective, I firmly believe that the best days for Fiserv lie ahead. With that, let me turn the call to Frank.

Thank you, Jeff. Good afternoon. I can't tell you how much I've enjoyed these 18 months. and how much I look forward to all the things we're going to do right here in the future. So first of all, let me say how honored I am to be elected the next CEO at Fiserv, the company with a great history and a bright future. My thanks to Jeff for his partnership and leadership to create one of the world's most admired companies. Jeff's vision for a company which invests for the future growth and allocates capital for the benefit of shareholders is the platform from which the company will continue to execute. This strategy will continue to serve our shareholders, associates, and clients extremely well for the long term. We have jointly assembled a world-class team and will continue to drive innovation and excellence, allowing us to be known as the greatest FinTech on the planet. I greatly appreciate Jeff and the board's confidence in me leading the company. I feel privileged and tremendously humbled to serve our clients, our communities, our shareholders in this great company. Now on to business. A lot has changed since our last call, and while we've made great progress on integration, we have put even more focus on ensuring business continuity, protecting the health and safety of our associates, and delivering on client commitments in light of the COVID-19 crisis. The team has come together beautifully, and I am incredibly proud of the company. As Jeff mentioned, Fiserv was well prepared to serve our clients through a well-tested and robust business continuity plan and an experienced and seasoned leadership team. A crisis waits for no one. whether moving 40,000 people to remote work environments, securing over 200 global locations, proactively managing credit risk, or introducing alternative ways for merchant acceptance. Urgency, certainty, and expertise are critical ingredients to a successful outcome. Delivering value to our clients is why we exist. Over the past several weeks, COVID has presented a number of unique opportunities to serve clients with speed, agility, and innovation. Let me provide a few examples of how our solutions are helping our clients navigate these uncharted waters. Through both our Clover platform and our financial institution clients, we've processed tens of thousands of loans to enable small businesses to share in PPP funding. We are enabling a variety of expedited use cases through our Money Network prepaid card solution, including supporting the National Institute of Health's C-19 research project and enabling not-for-profits to provide funds for those in need. In Argentina, we're working closely with government-owned banks to enable the distribution of benefit and subsidy payments. We've partnered with NIC to offer a walk-in bill payment services across 28 states to enable payments outside of government offices. Through our spend trend solution, we are providing proprietary data and insights to merchants, financial institutions, and governments to enhance the understanding of economic implications across business segments and geographies. At Clover, we expedited the delivery of our new order ahead capability, which since launched in early April, is already being used by nearly 1,800 restaurants. As Jeff mentioned, implementations have generally continued as scheduled, as technology agendas for our clients remain very important. One terrific example, using a virtual teams approach, Moneta Money Bank in the Czech Republic recently completed a full migration of the bank's credit and debit card portfolios to our outsourced First Vision service during a full quarantine period. Moneta Money Bank highlights the new ways to deliver great service which are emerging in this challenging time. I'll focus now more than ever. is to consistently deliver high-value services. Our engagement model is at an all-time high with an enhanced focus on daily client service requests and prioritizing resources. In March, we communicated significant increases of our synergy targets, moving the cost side up by a third. from $900 million to $1.2 billion, or roughly 12% of our total cost base. We also took our revenue synergy target up 20% by $100 million to $600 million over the five-year period. While we are pleased with the progress to date, the synergy work is not complete. We remain fully committed to unlocking additional opportunity where possible across both revenue and cost pools as we work toward being the best FinTech and payment companies on the planet. The enhanced cost synergies include additional opportunities in vendor efficiencies, contractor replacements, infrastructure, and operational leverage. First, we've had great results working with our vendor partners to identify cost efficiencies for the combined company as well as acquiring new capabilities which will have the dual benefit of avoiding internal investment and reducing capex. As a result, we have increased our expectations on procurement primarily in technology, by about $200 million. Second, we expect to achieve additional synergy benefits from shifting original FIRST data's outsourced offshore operations to original FISERV's captive. The primary savings are from converting third-party contractors, which generates cost arbitrage, improved operational efficiency, and most important, no loss of knowledge as we rebadge existing third-party resources. Last, we're identifying even more savings from the consolidation of real estate, data centers, and back office systems. We've also had success extending the sophisticated call center operations of original first data including an AI-based virtual agent and enhanced self-service capabilities, all geared to meaningfully improve the overall experience. We have also packaged these capabilities to help supplement our clients while delivering revenue for us. We are moving more quickly to accelerate cost synergy timing as a way to offset some of the coronavirus revenue pressure. Our original expectation was more than $300 million this year. We now expect $500 million of full year synergy savings with an annualized exit rate of more than $700 million entering 2021. We feel great about our progress and will continue to look for ways to add even more value. As we mentioned, on the revenue side, we raised our initial target 20% or $100 million, based primarily on anticipated outperformance in bank merchant and new opportunities in areas such as digital disbursements, payment innovation, and much stronger momentum outside the U.S. than we expected. We are seeing continued strength in linking the account processing privileged relationships with our market leading Clover solution to create unique value for our clients. To that end, we signed 55 new bank merchant clients in the quarter. with 42 of those wins through the end of February. We've now signed 109 new FI clients since the start of the program with competitive takeaways at about 40% and an even higher percentage in the larger bank space. Although sales activity has slowed due to the COVID disruption, Interest remains very high with nearly 400 institutions in the pipeline. While we expect the current environment will moderate the pace of near-term revenue realization, we have raised our current expectations 15% to $230 million. In addition, we also signed another 16 institutions to our bank merchant program outside of our synergy efforts over the period, not including the expansion of non-bank partners. Although we have recalibrated the expected timing of our revenue synergies given the current economic situation, we are still expecting $75 to $100 million of revenue synergy in 2020. Our integration is building an organization that will sustainably provide unique value. This is a critical time for the market and we believe Fiserv with highly differentiated market leading solutions is the best place for clients, associates and you, our shareholders. Now let me pass the call to Bob for a view of our financial results.

Thank you, Frank, and good afternoon, everyone. I will discuss our results utilizing our new reportable segment structure included on the 8-K filed on April 1st. We have three business segments. Merchant acceptance, which we may refer to as acceptance or merchant, is primarily the global merchant acquiring business of original first data. Financial technology, or FinTech, comprises original Fiserv's core account processing businesses along with digital banking, financial and risk management, and other software-oriented solutions. And finally, payments and network, or payments, is the most blended segment between the original companies and is primarily global debit, credit and prepaid card issuer processing, print and card production services, and electronic payment services such as bill payment, biller, and Zelle. As you heard, the company had very strong performance through mid-March, well above our original expectations. And even with the significant decline in the last two weeks, still achieved 4% internal revenue growth. The results are even better when considering that result was against our most difficult quarterly comparison, as Q1 2019 included a high level of non-recurring and periodic revenue. Revenue synergies were a strong $27 million in the quarter. Adjusted operating income, which includes the grow-over impact of the investment services transaction, increased 1% to $968 million in the quarter, with adjusted operating margin up 10 basis points to 27.8%. Operating margin was lower than anticipated due to the sharp decline in revenue in the second half of March and expected lower one-time and periodic revenue, partially offset by about $90 million of expense synergies in the quarter. Adjusted earnings per share was up 16% to 99 cents compared to the 85 cents in the prior year as it adjusted for the investment services transaction that closed this quarter. Internal revenue growth in the merchant acceptance segment was a very solid 6% for the quarter. These results were buoyed by our geographical breadth, diverse industry verticals, and broad payment capabilities. North America internal revenue growth was 5% for the quarter after being up double digits through February. Our international business grew 7% on a constant currency basis, even as COVID impacts were seen in Asia and Europe earlier in Q1. We continue to make great progress on the dissolution of the BAMS joint venture. Consistent with our internal revenue growth methodology beginning this quarter, we are excluding the 51% share of BAMS acquiring revenue from our internal revenue growth calculation due to the planned dissolution at the end of June. We will incorporate our new direct BAMS revenue as we would in any acquired business beginning one year post the close of the transaction. We look forward to continuing to serve this important client. Adjusted operating income in the acceptance segment decreased 17% to $283 million in the quarter. and adjusted operating margin declined 440 basis points to 21.2%. Two issues drove the unusual margin decline, led by roughly 270 basis point headwind primarily related to the very sharp COVID volume decline at quarter's end, with roughly two-thirds of that amount from our higher growth international business. Next, the comparative negative impact of brand assessment fees, along with the expiration of a 10-year deferred revenue item in BAMs, which ended in Q2 last year, pushed margin down by another 200 basis points. Although we were able to outgrow the revenue decline in March, the resulting mix changed served to compress operating performance in the quarter. We anticipate the segment operating margin to remain under pressure in Q2 due to the COVID-19 impacts. The payments and network segment delivered internal revenue growth of 3% in the quarter. Growth was led by card services and output solutions, including revenue synergy benefits, partially offset by lower growth in biller solutions and prepaid, as well as the negative impact of the COVID-19 at the end of the quarter. Transactional businesses performed well in the first 10 weeks of the quarter, but saw a significant fall-off at the finish. Debit transactions were up mid-single digits for the quarter, which includes the impact of double-digit declines in late March, which also carried into early April. As you heard, we've seen improvements through April as some markets reopen and stimulus payments hit in the U.S. P2P transactions, which include both PopMoney and Zelle, continued their rapid growth, nearly doubling versus Q1 last year, and up 14% sequentially. The number of clients using Zelle has increased nearly tenfold compared to a year ago, and is up 44% from Q4'19. We've also been seeing even stronger performance in Zelle and TransferNow over the last couple of weeks, as we believe consumers are expanding their use of safe and secure digital money movement. Adjusted operating income for the segment was excellent, growing 10% to $575 million in the quarter, and operating margin was up 280 basis points to 41.2%. The increase was primarily from growth in high-quality revenue, synergy benefits, and productivity gains. The FinTech segment saw internal revenue growth of 1% as gains in high-quality recurring revenue was partially offset by the expected decline in periodic revenue. Revenue in this segment tends to be quite resilient and less subject to variation due to the macroeconomics. We saw strong interest in demand for a broad array of digital solutions in the quarter. Mobility ASP subscribers increased 9% in the quarter to more than 9.2 million, and Architect, our single digital platform, had year-over-year growth of 34% to 4 million users. We also saw a measurable increase in digital interactions along with a greater use of underlying functionality. Adjusted operating income was flat in the quarter at $204 million and adjusted operating margin was up 30 basis points to 28.3%. The underlying results are stronger than they appear given a meaningful decline in license and termination fee revenue in the quarter. Core performance was driven primarily by higher recurring revenue along with cost and operational efficiencies. The adjusted corporate operating loss in the quarter improved 10% to $94 million due to the benefits of cost synergies. The adjusted effective tax rate was up 80 basis points to 17.5% due to the combination of lower discrete tax items and reduced stock-based compensation benefits in the current year resulting from the first data transaction. We continue to expect an adjusted effective tax rate of 22% to 23% for the full year. Free cash flow was up 3% to $760 million in the quarter, driven by strong operating results, despite an approximate $100 million year-over-year headwind associated with merchant settlement timing. Free cash flow conversion was 111% in the quarter. We repurchased 8.6 million shares for $885 million in the quarter, which included redeploying just over $500 million of net proceeds from the majority sale of investment services. We bought more shares than anticipated under our 10b-5-1 plan due to the volatility in the quarter and do not anticipate repurchasing shares at the first quarter's level for the remainder of the year. As of March 31st, we had 674 million shares outstanding and over 13 million shares remaining authorized for repurchase. Total debt outstanding, which is about 75% fixed rate, was $22 billion, and debt to adjusted EBITDA was 3.8 times as of March 31st. We are on track to return to our historic level of leverage within 18 to 24 months post-first date of merger through a combination of debt repayment and EBITDA growth. Additionally, we anticipate refinancing some of our current debt as we have an $850 million bond maturing this quarter. Our balance sheet and liquidity positions are very strong, and we continue to expect we will generate significant free cash flow even in this economic downturn. We repaid $123 million of bank debt in the quarter and expect to repay more than $1 billion over the remainder of the year. While we are uncertain as to the full impact of COVID-19 on our near-term business results, the combination of a resilient business model, a well-honed capital allocation strategy, $1.2 billion of anticipated cost synergies, and a very experienced management team provides us with confidence that we will create sustained value for clients and shareholders through any economic cycle. With that, let me turn the call back to Jeff.

Thanks, Bob. Given the crisis, we are pleased with our sales results for the quarter, down only about 1% to the prior year, as travel limitations and pandemic actions took center stage. We are seeing very few deals being canceled, but did see a bit more deal slippage than normal. We are pleased to see how quickly our sales and account teams have adopted virtual selling and how well market engagement has held up in this unique time. Our pipeline is solid with good visibility into Q2, including a number of recent COVID-related opportunities. We are also seeing our larger deals in the pipeline continue to progress, as clients remain completely committed to their technology agendas. For example, on April 30th, we expanded our relationship with OXO, the largest and fastest growing chain of convenience stores in the Americas, with presence in Mexico, Colombia, Chile, and Peru. In Mexico, OXO is by far the convenience store leader with more than 19,000 locations, and these stores also offer bill payment, money transfers, and a financial inclusion product used by millions of people. Our significantly expanded relationship will begin with their Mexico-based fintech business providing account and card processing services through our first API and first vision solutions. We are very excited to partner with OXO to help them even better serve their customers. As mentioned, we are withdrawing our 2020 outlook given the uncertainty in the environment. And although we don't provide quarterly guidance, we expect meaningful pressure on Q2 revenue and earnings results compared to the prior year. However, given our strong business model and accelerated cost synergies, we see a solid path to achieve our 35th consecutive year of double-digit adjusted earnings per share growth. This path generally incorporates two COVID-19 macroeconomic assumptions. First, that April, and therefore Q2, are the transaction and volume low points followed by a measured recovery through the balance of the year and that we are not subject to a sweeping second wave of social distancing and shelter orders which create further economic duress. While we don't have enough clarity to call this formal outlook, we expect far more visibility at our second quarter call and will provide further directional clarity on our full year financial outlook. Your company is performing well in the midst of this once-in-a-century event. We are enhancing our already resilient business by accelerating integration, enhancing services for clients, and developing strategies that will allow us to lead the industry regardless of the economic environment. We will also invest to ensure that we not only win now, but emerge from this transformational time stronger and better positioned to to deliver value for many, many years to come. Let me also say thank you to the 44,000 people of Fiserv who have made us all so Fiserv proud, navigating this unprecedented time with a single focus, to serve clients with excellence and commitment each and every day. It's an honor for all of us to work with you. With that, let's open the line for questions.

Thank you. We would now like to open the lines for any questions. If anyone does have a question, please press star 1, unmute your phone, and record your name clearly when prompted. If you would like to withdraw your question, you may use star 2. Again, that is star 1 to ask a question. Our first question is from David Cohn from Baird. Your line is open.

Yeah, hey, thanks, and Jeff, sad to see you go, but congrats to everybody.

Thanks, Dave. Really appreciate it.

Are you thinking of running for president? I'd vote for you.

Dave, right now I just want to do a great job on this quarterly call.

There we go. All right. Well, I guess my first question, just on the merchant segment, you know, when we think about some of it, you gave a lot of really good metrics, clearly doing well. It felt like you were saying maybe low double digits were kind of the trends the last couple weeks in revenue. Is that kind of what you're saying?

In transaction volumes. We're seeing an improvement from kind of think about it in the 30s and has improved by about two-thirds. And we've continued to see improvement really as that started towards the end of April, but really since then has continued all up to and including yesterday. And we're kind of seeing that gradual improvement happening.

Great. Okay. And I guess just my follow-up, maybe you could talk a little more about in the merchant segment, you know, revenue was flattish year over year just on a pure reported basis. Obviously, you grew better than that organic. But EBIT was down, I think, $60 million. You talked a little about periodic revenue. There's also probably a lot of benefits from synergy. So maybe you could just parse out why EBIT was down $60 million or so.

Yeah, Dave, it's Bob. I think we tried to get some color in the prepared remarks around that. From a synergy standpoint, recall that the merchant acceptance segment is largely comprised of the original first data merchant business, and so you're not seeing a lot of straight natural synergies of overlap that you might, first of all, in the corporate segment, as well as in our payments and network business, where you see more of the synergies, particularly in the early stages post-merger.

Okay. Okay. Well, thank you.

Thanks, David.

Next, we have Darren Peller from Wolf Research. Your line is open.

Hey, thanks, guys. Glad to hear you're doing okay. And congrats also, Frank and Jeff, to both of you.

Guys, thanks. Yeah, thanks. Listen, I wanted to just hone in for a minute on the merchant segment because, you know, clearly outperformed what we've been seeing across the industry and Curious if you could just give us a little bit more color on the mix. When we think about the trends on 6% for the quarter, it clearly shows like the end of the quarter was better for you guys than others. And then you're talking about it reaccelerating to some degree as well. Clover, I know you commented on. And then, you know, I guess the mix on discretionary versus non. Any further color you can give us would be great. No, I would. Darren, let me take a shot at it, and then Frank and Bob will add as needed. I would say that one of the things that's most interesting in all of this crisis is there are macro factors that really matter. So what geographies are you operating in and what is going on in those countries? And then probably at least as important, what are the industries in which you are serving and where may you have concentrations? And so if you are highly concentrated in, in industry verticals like travel, airlines, things like that, you're obviously going to see a different mix than if you are, say, serving retail, grocery, those kinds of things. And the same thing applies even in e-commerce. E-commerce, the idea, it still depends on where it is you are laid out. And I think one of the things that's important is because of of where we sit geographically, even in some of the early stages of this that we were seeing around the world when it was starting in Asia and moving around, our concentrations are such that we weren't getting beat up as bad early as we were seeing in some other places. I think the second thing is our vertical coverage in the most impacted areas is probably more favorable for us, and so we don't have those high concentrations. Then the third piece that I would throw in there is we've continued to grow in ISB, continue to grow in e-commerce, in some of the digital areas. We talked about the wins that we had, and last year we had 80 or so wins. That all creates an aggregate benefit. Then lastly, some of our larger merchants, if you look at our top merchants, They tend to be more resilient, were maybe less impacted on a relative basis than others. And so all of that, I think, is added up to us having better results. By the same token, we obviously have SMB exposure in clover. That we were impacted in ways that were similar to others. I think based on some of what we were hearing, we might be seeing slightly better improvements over the last few weeks, And we're looking at it very closely every day to see how it's coming together. But it's all speculation, not knowing what's inside of other people's books. We're pretty certain about what's in our book. We like the way it's trending. And we are seeing absolutely when states or countries open up, you can literally see the lights come back on in places where they were not on before. And that's a benefit. to our numbers. And again, we're tracking that very closely. Sometimes it feels like every minute of every day. Yeah. All right. That makes a lot of sense. You know, when we, and just my quick follow-up is really structural. I mean, you know, I think when we look at Clover Ecom integrated, you know, or even on the FinTech, on the core banking side, I mean, where do you think you come out of this pandemic where, you know, you gained market share and

because of your technology differentiation, and maybe just touch on the inbound demand for some of those FinTech offerings versus what you would have seen before the pandemic. Thanks again, guys.

Sure. Thanks, Darren. I would say that, you know, one of the things that we think is most differentiating about Fiserv versus some of the other companies is we are not just a merchant business, we are not just a FinTech, and we are not just a payments company. We happen to have leading market positions in each of those verticals, as well as a very well-structured geographic presence that prior to this crisis was growing very significantly, and we believe and we're continuing to invest because we believe that's going to come back on that basis. But we were seeing towards the end of April, we were seeing a pickup in Zelle. We were seeing a pickup in TransferNow. We were seeing a pickup in RDC. So all of these things that are digitally oriented we have found to be quite valuable. The other thing that's interesting, and this is not meant to cast dispersions on FinTech because we love the fact that innovators are continuing to create what's going on, but there's been very little discussion about FinTech lately and much more discussion about scale, about certainty, about making sure we're there for the customers of our clients when it's needed most. I would say that idea, that idea of scale, if you take a microcosm like the merchant business, which is a very fragmented business with companies like us and others of our peers all the way through independent service organizations, smaller providers, and in those cases, whether they are long-established ISOs or brand-new innovators, scale matters, the ability to make good decisions on onboarding, how do you manage risk in a time like this, that's all very important. And we think that the team that we've assembled combined with the assets is going to leave us in a place where we will be a share gainer or we should be a share gainer, in this time, and we're certainly focused on making sure that happens. That's one of the reasons why we remain committed to $500 million of innovation, including spending money this year, which we think is very important when maybe others are putting the money back on the shelf. All right.

That's great to hear. Stay safe, guys, and thank you.

Thanks. Thanks, you too, Darren.

Thanks, James. Next, we have David Toggett from Evercore ISI. Your line is open.

Thank you. Good afternoon and congratulations, Jeff, on a great 15-year run. Thank you, David. And congrats to you as well, Frank, on the big promotion. I'd just like to start there if I could. Obviously, you've worked together for 18 months or so. Frank, what do you think you would do differently you know, as you take leadership of the company from what Jeff has done historically?

Well, you know, it sunk in that I'm the fourth CEO in a storied history. And I think if you look, we've been the world's most admired company most of 90% of this decade. And before that too. And what I've seen here and learned is a whole bunch of things. So I don't see us veering from any item that we were strategically driving. The innovation, we're very committed to that 500 million. Our capital allocation strategy, which is tried and true. It was aspirational for most companies and was something that I saw when I came here and fully subscribed to it. Jeff and I have worked really, really closely together. I think we brought the team together very well. And I think really it's about continuing the client initiatives, being in the client's office and continuing to innovate Our innovation really is coming from our clients. So I don't, there's, you know, look, this has been an honor and, you know, it was a bittersweet moment to not be doing it with Jeff, to be honest with you. And so I don't sit here and say, and never once have we said to each other, well, we're going to do that different. It's more about how we're just going to continue and, And his team has really come together fabulously. So I think it's going to really, you know, our best days are in front of us. So there's no big changes happening here.

Thanks for that. Just as a follow-up, could you put some guardrails around the growth trends you're seeing in financial technology, payments and network, Q2 to date? I think these segments historically would be seen as being more defensive in a downturn. How should we think about the range of possible outcomes around revenue for these two segments going forward?

So, David, I would say that the big difference in this economic dislocation versus anything that at least I've seen in my career is the manner in which the economic dislocation occurred. It wasn't a slanted line. It was a cliff. And what we have never seen is an inability for people to use their cards or use their phones to pay for things. So we did see more impact in the debit and credit space than we would have expected. And has this been a, quote, normal, which is probably an unfair way to say it, normal recession, not that there's any such thing as that, I think we would have seen the normal holdup there that we had seen previously. And again, we're seeing that same recovery that we were talking about earlier happening in this area, but that's primarily because if you Most of us here have been working at home largely for the last six or seven weeks. I don't fill my gas tank up very much when I don't drive it. And so it's just things like that that people don't have the opportunities to use their debit cards and maybe their credit cards a little bit less. So you have that. In the financial segment, or the financial technology segment, We're seeing exactly what we've always seen, David, and that is, you know, that's a transactionally oriented business. People are still using their – they're still processing transactions, things still getting posted to the GL. I think we – interestingly, I think we just did a quick scan, and there are literally hundreds of thousands of PPP loans have been boarded in our core systems. And that – those are new accounts. That will be part of the ecosystem. So all of those things will continue to create the stability. Debit will come back. So we feel very comfortable that we still have a business of which the substantial majority of the business is highly resilient. You know, think back to the 08, 09 days. Understood. Thanks so much, and congrats again.

Thank you.

Next we have Brian King from Deutsche Bank. Your line is open.

Hi, guys. Just wanted to ask about cost controls. Any additional controls you guys are putting in place to manage the margins, especially in this second quarter where the impact will probably be the greatest?

Yeah. I mean, you know, we've talked a lot about what we're doing on synergies and acceleration of synergies. But, you know, we obviously have taken other measures inside the company. and I think you'll see them come through as we go forward. You know, I mean, we stopped the 401K match as an example, which was a significant effort in the company, and you probably saw us do a filing on the stock plan. But more importantly, you know, I think during this horrible crisis, we've been able to have tremendous focus on every element of the company. So we're continuing to spend to innovate. I think, you know, we see more development hours, not less going on, but them going on in a very, very measured way, delivering for the client in a different manner. So, you know, as you know, both Jeff and I have always had a good eye on the cost, and we'll continue that. The synergies are forever, and we're very, very committed to those. And as you hear us talk about them, you can see our confidence continue to build. So I think you'll see us continue to do both very well. And stay, number one, focused on our clients and revenue.

And, Brian, I would say that, you know, we evaluated should we take steps, that would try to better align against Q2, because to your point, Q2 is gonna be a rough quarter. But we believe that as the economy opens back up, we will see that kind of slower but a gradual improvement, and doing things that damage the business for a quarter we don't think make sense. I'm sure you don't think they make sense. But there is a lot of discretionary opportunity to, as Frank said, reallocate effort, make sure that we are only doing things that are needed right now, and potentially redirect to places that we may have a better opportunity in the future. Again, on balance, You know, we see a very solid, actionable path to double-digit adjusted earnings per share growth this year. And so we're taking the steps to kind of center on that and being ready for the economic recovery.

And, Brian, the one thing I would add to kind of follow on and echo Frank's comment, one of the things we've talked about the last six months is should we end up in a recession, having – Now $1.2 billion of cost synergies ahead of us gives us an opportunity to pull levers harder. And you heard us talk about original expectation of $300 million of cost synergies now grown to 500 with an exit run rate of 700. That's permanent cost out. That is not damaging the business that is executing an integration plan a little bit faster than we initially planned. given the opportunity that we have to do that and reallocate resources. So we feel quite good about our ability to mitigate the downside during the COVID crisis, but more importantly, come out much stronger on the other side as we exit 2020 and exit 2021 and beyond.

Got it. And just a follow-up to that is on the merchant segments, Just thinking about the cadence of improving margins, is that as simple as just as volumes come back, we can get to more stable to potentially improving margins in the future?

The short, easy answer is yes. This business is a very intriguingly fixed-cost business where there are little nano-economics to process that next transaction. But when you need to add a mainframe or you need to take down more bytes in a cloud or whatever technology metaphor that you want to use, you're buying that in bulk. And so from that perspective, we've got to make sure that – I'm sorry. So from that perspective, as the revenue comes back on, it will flow through at a very high level. I think Bob talked about that. 270 basis points of impact in the quarter from that last very, very sharp off-the-cliff decline. And the other thing is the first quarter had the one-time, kind of these one-time assessment items and other things that we won't have to grow over. When we had given guidance, Brian, we knew that that was an issue. It's one of the reasons why we said, hey, Q1 is going to be weaker. So we knew that was there. We knew it was coming. And so as things come back, we will absolutely see the benefit. I would just throw one other thing in there. We have had lots and lots of conversation around what can we do systemically to better manage, not in a short-term way, but what are the transformational things that we can do to get better leverage and flexibility in the cost structure. The beauty of not wasting a crisis is what can you learn. We are seeing ways in which we think we can switch some of the cost structure from more fixed to variable, do different things so that when the revenue comes back that over time, this is not a 2020 thing, but over time we'll see an even bigger pickup in long-term margin accretion, which, as you know, is something that Fiserv has been famous for for a long, long time.

Great. Thanks so much, and stay safe and healthy.

Thank you, Brian.

You too. Thank you.

Next we have George Mihalos from Cowan & Company. Your line is open.

Hey, thanks for taking my question, guys, and congrats to both of you, Jeff and Frank. I guess to start off, Bob, if we can go back to that commentary in Merchant around the transaction bonds and now down, I think, sort of low double digits, so a big improvement there. Is the right way to think about that from a revenue impact that, you know, revenue will be down somewhat higher than that, given that I would think there's more of a shift to sort of, you know, larger merchants, versus SMBs. Is that the appropriate way to be thinking about it?

Yeah, I would say nominally higher, relatively close. And, of course, the other impact is in Q1 to Q2. Q1, we saw that rapid decline in just the last two weeks where we're dealing with the improvements. over a longer period of time. So we didn't bounce right back after just two weeks, although we've seen some nice improvement. We're still down that low double digits in the quarter.

George, I think where you might see more impact is less on the differential between transaction and volume. And I think you'd see that maybe play out more at the margin line only because these very large merchants are going to be priced in a different way. But, again, that's all accounted for when we think about how the recovery is structured and what the puts and takes are in that as we think about what do we need to do to achieve double-digit EPS growth.

Okay. That's very helpful and very impressive, frankly. One more question, if I may, just on the old issue of processing business within First Data. I'm just curious, do you guys see any sort of a push or early signs of any of your FI partners kind of pushing an account or card purge going on, or are things just sort of steady as they go?

Yeah, George, we have seen purges going on in different places, as you would expect. I mean, banks and FIs are managing their cost structure. just as tightly, if not more tightly than we are. But again, I mean, bankers are usually pretty good at this. I think the increment is not substantial, at least not for what we've seen so far. And, you know, we expect that as we start to see a little bit more stability, that you're going to see less of that because the last thing you want to do right now is is purge away for an FI to make money.

Got you. Thanks, guys. Appreciate it. Thank you.

Next, we have Jason Kupferberg from Bank of America. Your line is open.

Hey, good afternoon, guys. Hope you're doing well. Congratulations to both of you.

I wanted to just come back to the commentary around the line of sight to the double-digit EPS growth this year. Maybe we can just talk a little bit about the algorithm, the rough algorithm to get us there.

In other words, how much top-line pressure can this absorb and still get to those levels?

I guess it kind of comes back to those base case macro assumptions that you laid out near the end of the prepared remarks and to try and give us a sense of what sort of rough revenue growth range that would yield.

Yeah, it would be difficult to do that. Even though I'm appropriately social distanced from Bob, I think he would throw something at me or slap me if we gave that detail in the algorithm. I think we'll be in a better place in July when we announce Q2 to provide that data, but I will give you some qualitative. We have been looking at scenarios since very early April, and the scenarios have stayed fairly constant up until the last probably 10, 15 days, probably 15 days, where everyone was a little tentative as you started to see improvements, and you'd see up and down and up and down, but now we're seeing that trend come together. And, you know, one of the reasons why we pushed our call out, in fact, the primary reason why we pushed our call out was we wanted to have April data by the time we got together. And I would say that, you know, April outperformed where we thought it was going to be even as recent as two weeks ago. And so, you know, from our perspective, we feel like we are taking a realistic trend to how the revenue will come in. But I would also caution us all to say we are living in unpredictable times. So we think we have a fair level of assumptions that are not incredibly aggressive, but they don't imply that we stay where we are right now for the remainder of the year, right? It's that kind of moderate, gradual improvement that gets us nowhere near where we were in the first ten weeks of the year and nowhere near where we were last year in terms of growth rates. So we've taken that way down. We think it's fair and conservative. But the real reason why we're able to do this is, as Bob mentioned and Frank mentioned, we took our synergy targets up $300 million in March, and we had been working on that for quite a while. That was not new. And for us to, on a non-temporary basis, take our cost synergies up from more than $300 to $500 million with an exit rate of $700 million, while that took a lot of hard work of the team, and it's going to continue to take hard work of the team, we did not recreate the wheel. All we did was accelerate our synergy plan, make sure we were doing the things that we need to do, and as Frank mentioned, we have another layer of things that we're looking at, We're not done. We snapped the line. We took a picture. But we will continue to do that. And as the world evolves, we'll do everything in our power to make sure that we are moderating our cost structure to the extent that revenues do things that maybe we don't think they should be doing or we'd like them to be doing. So I apologize, Jason, for the longer answer. But that's at least the way we're thinking about it philosophically. And, again, we wouldn't have made the statement if we didn't feel like we had a good, solid path and an actionable path to get there.

Okay. So that's a good, thoughtful answer. Just a quick follow-up on Clover.

Wondering if you're seeing any significant uptick in terms of –

You know, chargeback risk, you know, as you think about the prospects for churn at the very low end, any qualitative or quantitative observations there would be great. Thanks.

No, we don't. I mean, relative to Clover, we want to see chargeback risk. And, you know, I think you heard us talk about what we did in terms of using a technical expertise to get that restaurant app out there pretty quick. I mean, we've also, you know, had tremendous growth right prior to what you saw at the end of March. But I think what you see in Clover is us continuing to invest in it, and you should expect us to have that continue to grow very nicely and the clients with a high satisfaction level. So full commitment, we don't see, you know, look at small businesses struggling and we're continuing to bring functionality that helped them through this difficult period.

And, Jason, I think we would also add, you know, from our perspective, and you heard this a little bit in the prepared remarks, you know, we have people who have been through all kinds of cycles. And one of the things that was so incredibly heartening to me was, is not only do we have people who work for us today, but Frank, through his very powerful Rolodex, I'm probably too old to use that word, but through his powerful Rolodex brought back people who have incredible G2, incredible experience. And we were able to very quickly get our arms around the exposures in the company. And we have been paying a lot of attention to what's going on, you know, whether they be around – industry verticals, refund levels, chargebacks, those kinds of things. And we feel like we are very appropriately reserved for where we are today, especially in Clover, in terms of the kind of exposures you have in areas like that are not nearly as meaningful as you would in merchant acquiring for industries that are on a deferred delivery basis. And most of what Clover does is a is a kind of right now or very near-end kind of service delivery.

Yep. Okay. Thank you, guys.

Thank you.

Next, we have Brett Huff from Stevens Incorporated. Your line is open.

Good evening, guys. Frank, we're looking forward to your leadership, and Jeff, you'll be missed.

Thank you, Brett. Thanks.

Two questions.

One is, Jeff, you kind of alluded to this, and I kind of think about it as an arms race, the $500 million pot of gold that you have that only a select few of FinTechs have.

You mentioned some priorities in terms of investments, and I think we're all familiar with those. But has anything really changed or has anything really popped up where you said, you and Frank talking about this, said, in this new environment, we're going to press our advantage in X. and really throw some more time and effort and money after this vertical, this product, whatever, because that's the thing where we can move the needle most coming out of this? Is there a big change, or is it just kind of more of the same? I would say, at least right now, we have not seen new innovations. This may be a little bit unfair, but new innovations, yes. that we would say let's shift our focus from this basket to this basket. However, I would say that there are several things that we have been working on that we are quite excited about, that we had planned to talk a little bit about at Investor Day, but areas that we think there's really significant opportunity in, And we, you know, at some point we'll be able to talk about it, but we don't necessarily think it would be prudent to do that right this second. But, Brett, there are some really interesting opportunities out there overall, probably in shades of the things that we've talked about before, but could have a real impact on revenue, margin growth, but most importantly, client value. That's helpful. And then follow-up, and I'm not sure if this is answerable, but

As you stand now, you talked about, you know, last 10 days outperforming in April versus what you thought just 10 days ago. So pretty remarkable changes between then and now. Knowing what we know now, and you have a lot of great data from Clover to big clients and et cetera, you know, where do you guys fall on the V versus U versus W versus swoosh?

You know, if you had to describe your base case, where would that fall in that kind of range of recovery? I would say it probably, not exactly sure what the economic variability is in a swoosh model, but if it stands for kind of a slow, gradual, moderate recovery over time, I would say we're more there than we would be any of the others. However, the difference is I think it likely is going to be more stair-stepped. I think you're going to see jurisdictions open. You'll see kind of a small amount of lift-up. You know, it'll feel like a B, and then it'll plateau, and then it'll feel like a B and it'll plateau, and it'll feel more stair-oriented than any of the other examples. And I don't think any of us yet know This was the comment about a second wave. I just don't think we understand yet how might that impact us and how will this fall out. But we do believe that we will ultimately get back to a place where people are going to work. And if people are going to work, they'll probably eat something. They'll probably stop at the convenience store. They might even buy gasoline. and maybe one day they'll take vacation. So we think over time we're going to get back, but none of us know yet what that new normal is going to be.

Great. Thanks for the time, guys.

Appreciate it. Stay safe.

Thank you, Brett.

Next we have Andrew Jeffrey from SunTrust. Your line is open.

Hi, guys. Appreciate you squeezing me in here toward the end. Frank, you've

We brought up Clover a few times and the world at the point of sale seems to be changing pretty quickly. Can you talk about some of the ways perhaps you're driving revenue beyond merchant discount, thinking about other software solutions and stickier offerings that you may be able to bring to bear given the advantage of owning the technology?

Well, I think one of the ways to think about it is specifically what we talked about. You know, as we bring in software apps to do things like Dynahead, that's a perfect example, and you see such a great pickup in it. I think, you know, we've been very, very successful in adding apps and SaaS fees So I think there's a great desire. We hone that skill over time and we've built a lot more there. But what you also find is, you know, the power of our data and information and clients' ability to use it, very, very powerful. So I think that, you know, Clover was always designed to be much more of a platform than be a point of sale only. So we feel very good about it. We've invested more there, and we see the application take-up rate very, very high. I think you're watching a change, and I think that change is pretty powerful. You see a virtual terminal expansion very, very high. You're seeing our ability to move more businesses around. to be online and physical than ever before, and I think you'll see that conversion continue, and we've seen very, very good strength on it.

I would say the other thing we're doing is, I mean, we, one of the things that we are quite interested in is given the assets that we have and the partnerships that we have, we see real opportunities to create ecosystems that create more value for the clover merchants. Expanding, going beyond point of sale and starting to create the idea of a control panel for the SMB or the the business owner to better run their overall business. We see as we have proprietary access to solutions that allow customers to move money, to transfer pay bills, all kinds of things, we think there's an interesting ecosystem opportunity there, which over time we expect to grow. It's one of the reasons why we went direct to Clover. to clover users to help them apply for PPP, the PPP program, and things like that. So just think about it as an ecosystem. We think there could be real value there, both in retention as well as incremental revenue on a per-terminal basis.

Okay, that's helpful.

And if I may, as we see also what might be an accelerating transition, to fintechs, especially around stimulus and PPP. Do you have a sense of urgency, feeling a sense of urgency from your bank customers to perhaps accelerate their investments in technology? Yeah, it's a good question, Andrew. I think the answer is yes. We do see people, especially over the last few weeks, if you think back to, it's hard to gauge time anymore, if you think back to mid-March, or the third and a half week in March when things really started to hit, there was a lot of focus on the digital experiences. No matter what size institution, everyone was very focused on that. We've seen that continue. We've seen more usage of mobile deposit. We've seen more usage of digital transfer. We've seen more usage of Zelle. All of that, I think, stokes the desire for institutions to do more. At this stage, we are being a little bit more measured in believing that demand will necessarily turn into incremental revenue this year, because if you look at interest rates, you can see that there's real pressure at the FIs, and so there's a balance. On one hand, we aren't seeing people abandon their technology agendas. On the other hand, I am hard-pressed to see people really decide to substantially increase their level of investment. So we're watching. We like the fact that projects are going. We're able to implement things virtually. We're actually learning a lot there. That could be quite an interesting way for us to change our expense structure, but more importantly, get technologies installed faster. So we'll just keep watching and monitoring what's going on.

Great. Appreciate it.

Thank you.

And our last question comes from Ashwin Sriviker with Citi. Your line is open. Thanks.

Hi, Jeff. Hi, Frank. Hi, Bob. Good to hear you all. And Jeff and Frank, congratulations to both of you. Maybe I can state both my questions up front. The first one is, as the exit, this sort of bottom here that's forming. What does normalized growth look like in each segment? And then the other question I had was, as you look at the various synergies and the categorization that you've kind of given, are there things that kind of hit nearer term versus farther out in terms of just the timing as you think of what hits this year versus, say, later on in that five-year timeframe?

Ashwin, let me take the normalized growth question, and then Frank and Bob can add on to that, and then we'll have Frank and Bob take the synergy timing question. On the normalized growth, I think the Probably the short answer to that is when will things be normal? I think it's way premature to call what normal is going to be. I don't think we have any belief that normal this year is going to feel like the growth rates that we saw last year on balance. I think given what we've already seen in Q2, I think it's not at all likely that that will happen. I think it's going to depend on things that are out of our control from a macro standpoint. Do we have good antibody testing? Do we have a vaccine? Until we see those kinds of protections in place that allow people to be more knowledgeable, I just think it's going to be hard to call normal. From our perspective, we do expect to be able to, over time, continue to win share and continue to Did it execute better than, or I'll just say execute well? And I think that will turn into a good, solid growth for us as a company. Frank, why don't you take the synergy timing question?

Yeah, thank you. I think, first of all, maybe we should start with, you know, we – Jeff and I saw the path to 900 very, very clearly and even more opportunity, and we probably made that clear as we were talking through it to you all over time. And as we peeled the onion and the teams came together, and I'd really say the ability to get stuff done from a team approach here has been very, very large. And I think the team saw the path to many more opportunities than Jeff and I actually saw with the initial group of players. And that was how we were also going to bring the best of both companies together. And people say that many times, but this is really where we're bringing that capability together. You heard it around the captive, and Jeff and I knew that one early on, We didn't really know that it would go quite as well as it is. We also think about the tools we have to manage the company. You heard about the call centers. You even look at other tools. And they have allowed us to accelerate and to also allow us to be able to increase and recognize, as you can hear in our voice, that there's more opportunity as the team keeps digging in. So we feel very, very good about that. I think it's important to recognize the revenue side of it because as you see on the bank merchant, you have to look at that and see us as the partner of choice. One that gets generally picked in most situations. and that people see Clover as a tremendous opportunity. But what we're seeing there as the teams once again are digging in is bringing the cross-section of the company together to even get more opportunity. And I would think about us continuing to expand on that. So time is getting compressed because our leadership is able to do that, and our teams are very committed. The opportunities have gotten larger, and we see a very, very good set of opportunities in front of us going forward.

Yeah, I think the only thing I would add is, you know, we've seen, as you saw in our results and in our projections, moved from $900 million to $1.2 billion over the five-year period quite quickly, ratcheted up the revenue synergies back in early March when we announced both the improvements, and you see in the Q1 results, for example, corporate expenses down 10% year over year. We assumed all along that the duplicate of corporate structure would be kind of the quote-unquote easiest to get at, and we've certainly seen that. We've seen nice improvement in acceleration and technology as well as in the operational efficiencies. If you looked at our slides that we included in the release today, And we've already executed actioned $565 million of costs, and so almost half of the $1.2 billion is actioned. And that's really across all three buckets, getting that quickly, the leadership team, grabbing hold of the opportunity and driving hard, particularly in light of the COVID crisis, to Jeff's earlier comment, not wasting the crisis, getting at the opportunity as quickly as we can.

Well, thank you. Thank you, Ashwin, for the final question. Thank you, everyone. I know this call went a little bit long. There's obviously lots to talk about with the world and the place that it is in. Be safe and healthy. Thanks for your support, and we'll look forward to talking to you soon. Have a good evening.

Thanks for joining us this afternoon. We appreciate your support. If you have further questions, please do not hesitate to contact our investor relations team, and have a good evening.