During a Wednesday presentation on first quarter earnings, Brookfield, Wisconsin-based payments company Fiserv said global revenue for its Clover operating system for small and medium-sized businesses grew 39%
Clover, Fiserv’s operating system for small and medium sized businesses, continues to build on the strength of its product offering “to attract and retain more merchants and expand relationships with them,” said Fiserv CFO Bob Hau during Wednesday’s call. In the first quarter, Clover’s quarterly gross payment volume was $49 billion, Hau said.
Fiserv’s merchant acceptance segment is “poised to deliver full year revenue growth at the high end of its medium-term outlook” of 9% to 12% growth, with Clover expected to account for about 25% of the segment, Cowen Analyst George Mihalos wrote in a note to clients.
Merchant acceptance made up the biggest share – 42% – of Fiserv’s $15.4 billion adjusted revenue mix in 2021, the company shared during a March 8 presentation on that aspect of its business. Payments and network accounted for 38%, while its financial technology segment made up 20%.
The company expects merchant acceptance – which generated $6.5 billion in adjusted revenue in 2021 – to become a $10 billion business by 2025. Clover in particular, which counted 560,000 merchants last year, generated $1.3 billion in revenue, and that’s expected to reach $3.5 billion by 2025.
To further Clover’s growth, Bisignano said during that March presentation Fiserv has targeted restaurants “because of the size and scale of that vertical,” while pursuing retail and professional services, too. “We think that covers a large population, and that’s why those are the verticals that we’re investing in,” he said.
Independent software vendors and launches in Australia, Brazil and India also will aid growth, executives said in March.
Hau noted Wednesday the merchant acceptance growth seen was “a great first quarter out of a five-year projection,” and there’s “lots left to do.” Still, the company is “in very good shape” when it comes to executing on its growth plans for Clover and Carat, he said.
More broadly, Hau said the company feels it’s “prudent” to keep its 2022 outlook unchanged, given that it’s early in the year and the macro-economic factor remains uncertain. Analysts noted margins were lower for the quarter, and Hau said the company is focused on expanding those with improvement expected in the second half of the year.
By Caitlin Mullen on April 28, 2022
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