Fiserv, Inc. ($FISV)

All right. Good afternoon, everybody. I'm Jason Kupferberg, the payments processors and IT services analyst here at Wells Fargo. This is our last session of the day in the main room here at our Payments and Fintech Symposium. We're super excited to have Mike Lyons here, of course, CEO of Fiserv. A lot of ground to cover, and we're going to make the best use of our 35 minutes as we can. So thank you very much, Mike, for being here.

It feels to us like there's definitely been a general degree of, I'll call it, stabilization in your business. You took some time when you first took the seat almost a year ago, right. It's hard to believe, but almost a year ago. And then you did a reset in October, but it does feel like there's been some stabilization since then. Day-to-day blocking and tackling, I assume is kind of like the key every day. That's what everyone is focused on as you execute the turnaround. So you've got the refreshed senior leadership team as well. Talk about how you guys are just managing and monitoring progress against the pillars of the one Fiserv plan.

Yes. Well, first of all, thank you for having us.

Yes, sure.

My hometown, and we have a great partnership with Wells Fargo from not just on the client side, merchant and financial solutions side, but you are a big bank and big adviser to us. So it's good to be here and good to be with your people. Yes. So we took over in May. We did the -- what we talked about as a rigorous and comprehensive review of the company in the latter part of summer and throughout the fall, made the announcement in October that there really -- we learned a lot of different things, but we always summarize it to the four of -- we had some competitive and client service gaps that we needed to fill. But you put that aside, we had two great platforms, two great businesses in FS, Financial and the merchant that we see lots of ways to leverage both individually and together, that's the first thing. Second thing is we saw that we had to shift our focus and priorities towards client-driven recurring long-term sustainable revenues. The third piece, as you mentioned, we had to bolster the management team and make some changes to the Board, and we've completed both of those. And then the fourth is, obviously, we had to reset the long-term growth expectations of the company and be very clear about what the secular drivers of our business are versus cyclical drivers. And obviously, we've got a business that's got cyclical elements to it, and you can grow double digits for -- at a sustainable rate for 4 years. And that's there, and that hasn't changed, but the secular drivers, when you took away some of those cyclical factors, indicated that the business had been growing over the last 4 years at the same general rate range, which has been a very consistent narrow range for the last 30, 40 years since the company has been founded. So really, we found nothing changed. It had two great businesses, but we had some significant cyclical factors and some episodic revenues we had to address. Since then, we haven't learned a whole lot new.

Which I guess is a good thing.

It's a very good thing. And we understand our business fully, and we understand what the priorities are, and 100% of the focus is on executing against our plan. We call that the One Fiserv plan. It's got 5 pillars against it and an important element of executing well against the 5 pillars, just having a great management team to it. And I think if there's been a surprise we haven't blown away by how much talent wants to come and join the team. And we've been super pleased about, one, the desire to come join and then the quality of the team we put together. And by Investor Day and a big part of the Investor Day, we'll be able to showcase certainly Takis and Dhivya. And Paul, you obviously know Paul well, but the -- but below them is an unbelievable team. We had a strong team already, and we've complemented what was there with some incredible outside hires that we're still bringing in.

How do you prioritize your time on a just a day-to-day basis as you're trying to make sure that the organization performs the plan?

We're trying to -- literally, we're trying to -- if you're not working on 1 of the 5 pillars, the action plan, you're doing something that we don't want you to do. And obviously, we're really close to the 5 pillars, but run the company with a client-first mindset that goes to service, goes to resiliency and quality of our products, quality of implementations, quality of conversions. Second is really everything Clover, 5 sort of vectors to the Clover growth and experience story that we're working on there. The third is a broad bucket, but it's -- we've identified a series of modernization pieces of technology and some existing technology that we had discovered, implemented, started building the head and finish it. So this is experience digital. It's cash flow central. It's the modernization of our card -- the legacy card platform called Optus and the creation of a new modern API-based cloud-based program, sort of the Finxact for cards which is called Vision Next. It's our stablecoin platform. It's the embedded finance platform. We've identified 10 or 12 things that are fully funded. They're fully resourced. We're clear in how we're running towards the date. We made -- for a number of them we made very specific dates at the forum. They will hit, and we're managing the heck out of those projects. And if you're not in that, we're deep prioritizing capital to you because these are the most important things in the company. Fourth thing was Project Elevate, which is in full swing coming up on our first checkpoint there that is an inside look at our -- examining ourselves for opportunities to be simpler, more efficient and obviously, leverage modern technology and doing that. And the fifth piece is -- it ties into the third, but making sure we optimally manage every dollar of capital that you all have entrusted us with, and that goes where are we putting incremental capital in terms of $1.8 billion of CapEx, where are we not? What assets are we going to hold? What assets are we not? And then importantly, maintaining the investment-grade rating of the balance sheet. So if it's not 1 of those 5 things, which I'm not saying some of -- a lot to cover there. But if you're not in those 5, you -- we're not -- that's how we're keeping ourselves organized and focused.

So when you think about the 5 pillars of the One Fiserv plan, I mean this is late October is when you laid them out, right? Do you feel like any of them has become a shorter put or a longer put since then?

No. I think back to the earlier question, we were fully aware of what we needed to deal with coming out of it. Some of them are -- have more -- some of them have a finite life to them. Some of them, the Clover stuff we could be working on, maybe there's perpetual aspects of that. The Part 3 with all the modernization products and completion products, those will finish and they'll be recycled by a new set. So none of it is -- it's exactly what we thought it was. There are pieces of it that are harder than others, and that -- but it's not different today than what we thought in October.

Yes. I feel like people are kind of like waiting to hear like, oh, this -- but it's kind of steady as she goes, so far, no surprises.

No surprises. And I think Q4 sort of demonstrated that there was...

Yes. It was kind of down the middle, really.

I think back to the 4 big takeaways from the review we did, it's a very easy business to understand. We often get, "Oh, it's a big business, you get [indiscernible]. It's a very simple business to understand what we do. I mean we're a transaction and account-based processing company, that's what we do. So we have to understand that. And what -- going forward, the algorithms of underlying -- we get paid accounts on file, payments volume and transactions. And there should be a logical algorithm between the revenues and the activity levels, and you should be able to demonstrate that, and it's our responsibility, Walter and Paul's responsibility to point out anomalies as to what's -- what may cause the difference in those. Obviously, we've got a -- works through some noise to get to where that algorithm is clear. But the part of -- back to the execution part, we know exactly what we have. We have to know exactly what we have to do, and we're working on it.

Yes. And I mean the 2026 guidance that you provided last month, I mean, was very consistent with what you would kind of previewed on the third quarter call. So I don't think there was really surprises there. Maybe it's a little bit more back half loaded than people had understood it to be or had envisioned. So maybe just touch on kind of visibility on the second half acceleration. I mean clearly, especially by the time you get to Q4, you've got some easy compares, right, which we can see. But would love to get your perspective there. And then maybe just as part of that, we're asking every company at the conference just any Middle East exposure, we need to be cognizant of.

Yes. Couldn't get two more different questions backed in there.

Exactly. I wouldn't do this on an earnings call.

The path of -- the trajectory of how growth will play out in the year is largely related to the reset we did in the fall, which create comparable issue for the first half of this year versus the first half of last year. And what we've said is down low single digits, which we say is [ 1 to 3 ] in the first half on the top line. And there's just a lot of noise. And what we're trying to get you to is give you the underlying factors driving the growth algorithms while we work through comparability noise. And as you get in the back half of the year, there should -- those two should make a lot more sense. And the back half of the year will look a lot more what the go-forward company will look like. And between getting to those numbers and you being able to see them and then we'll talk through, we've said we're excited to present a constant compound or investment case. And you start to see the attributes of that are certainly in our business, and you start to see the manifestation of the numbers of that in the second half of the year. So a lot of the noise is just on that comparability. Nothing material in the Middle East side.

Okay. Good. I'm going to ahead to just check that box. So going back to the last earnings call, I think you've made some comments about attrition in the core banking business still somewhat higher than you'd like to see it, right? I think there's a perception in the investment community that Fiserv could be vulnerable to churn, depending how some of these platform updates or migrations progress. But what sort of counterargument should we be considering, right? Given that you've been very clear, you're not forcing any customers to convert.

It's -- say this, -- we love the core banking business. It's been the heart of the company since the founding of the company. It's a great business, and we're super proud to support a little over 3,000 credit unions and banks, we're the mitochondria of their operations every day, and it's a great business for us. Under the prior strategy, which really started in 2022, there was a deliberate effort to consolidate core starting with the credit union cores. And that decision to migrate the cores and move people off of one quarter to another happened in a period where our technology wasn't as resilient as it should have been. And our service isn't at a level that we would be -- that we'd want to run the service at. So if you take the aggregation of those 3 and not surprisingly, people were -- our clients were frustrated by that. So if you're in a hole and you want to get out, the first you do is stop digging. And what we said at the forum in September was that there is no core consolidation story, it's our customers, we respect our customers. And if they ever want to make a change off of their core technology, it's on their time line, not ours, and we will -- and we adjust our numbers and adjust our guidance to reflect that we would continue to keep all of our cores at a modern level. And there's some interesting developments around the technology front around that, that we can talk about today, and we'll talk about more at Investor Day. So there is no core consolidation story. What hasn't changed is there is a core modernization strategy. And again, there's -- technology gives us different ways to look at what's always been "Oh, you got to modernize one and move another to the modern one." There's different aspects and different approaches we're going to take to that from here. So we're excited about that. And obviously, time gives you a different perspective on everything. There's no core consolidation story. There's 100% of core modernization strategy. Back to the 5 pillars is a clear focus on improving service, and we've spent the money to do that, and we're focused on driving that experience change and helping our customers get the best out of the technology they've acquired from us. And there's clear introduction of new functionality, new capabilities that match exactly what our customers tell us they want. The feedback we're getting in the market is the technology is good. It's been good and they're super excited about the developments coming, but they want better service and want better resilience. So the latter two are addressable, fixable, and we've done it. We've taken the steps do that, and we've got to go through it. As you said, we've not been happy with the results in the banking business, and we projected, as a result of some of the activities from the past that, that pain would continue. We said it into the fourth quarter when we talked in October and you saw the results then. It's a better business than our numbers are showing right now, and we're making all the investments, great sense of urgency, great sense of focus to get it where it is. But it isn't a core consolidation story.

Okay. So when should investors be thinking that the banking -- call it the banking subsegment right, because it sits under Financial Solutions, when do we get back to positive growth there?

Yes. We've been low single digits, the wrong way, it should be low single digits the right way. There isn't -- I have the conversation all the time with investors, there's no magical demarcation line like after 6 months of great service. So we're working through that with the customers that anecdotal feedback we're getting is great progress, don't change what you're doing. We want to see sustainability and then as we continue to roll out and we have some exciting project announcements as we come through the first half of the year, more and more technology advances for our customers, more and more features for our customers. We believe that the shift is to that. So at the most important time, the backdrop for bank spend on technology is as good as we've seen in a long time. And that's driven by the fastest pace of change in bank technology we've seen in a really long time. And we want to make sure our customers don't make a service decision when they should be making a technology decision. And we stand behind and believe we have great technology. So we're fixing the part we can fix and focused on bending that curve. But there isn't some magical line you jump over in everything.

Right. Okay. So we'll continue to monitor that. So let's talk about the perception of all this AI risk out there, right, for some of the software-centric fintechs and obviously, Fiserv is in that category. I mean that's kind of your core competency, right? You build great software products for your clients. So I would love to get your perspective on kind of the moat there? And then on the flip side, I mean, talk about how Fiserv is actually embracing AI and where there are both revenue and cost opportunities actually.

Yes. I'd push back on the first part. As we talked about earlier, we're a transaction and account based company.

Yes, you're not -- right. You're not seat-based, right, but. Yes.

Yes. Right. We get paid on transactions, payment volume, accounts on file, and we operate mission-critical core architecture. Underlying that architecture is millions, if not billions of pieces of highly sensitive PII, proprietary data, deep regulatory requirements, accounting standards. Lots of embedded relationships between us and our partners and then highly interconnected networks. And so if you think about what we actually do, we settle transactions, authorized transactions, settle transactions, move funds, create auditable reports and maintain billions of business and financial records. So this is not on the surface of business that is logically susceptible to probabilistic model. So this has to be bank-grade high.

Yes. Got it. It's got to be perfect.

So what does that mean for us? It means we think we have a huge opportunity and need to capitalize on it and we're going after it to capitalize on AI, to make all of those processes easier, but we see ourselves much more as the last mile for AI to a really important and massive TAM for that industry. And that's the way we're thinking about it. How can we help our customers, either merchants or banks benefit from all of the capabilities that will come in various agents. But say, an agent wants to come to a bank and help them process data, you're just not going to let them into the core or let them into your payments network or let -- so how can we sit as an orchestration layer in between that and be the last mile to the customer. So we see that as a great opportunity to help our customers benefit from a credit financing world, but we got to bring that to our customers. It's going to be digestible, manageable and with a clear benefit and still bank-grade regulatory -- I say bank-grade, whether it's merchants or banks as a term bank, right? High-quality protection. So that's what we're doing. That is a commercial opportunity for us. We think in addition to providing a agentic commerce, letting Clover customers expose their goods into agentic showrooms and the like. And the other obvious commercial-less from the top line side is how do we use somewhat related to topline, is how do we more effectively get implementations done faster, reduce product development time, reduce fraud. We have agents watching our data centers for susceptibility and where there may be a weakness. So it just makes every part of the business better and there's a big focus on it and a big opportunity. We're not doing it just because it's new, we're doing it because it is actually really helpful. And then what we're just scratching the surface of what we can now potentially do with all the data we have. It's hard to argue anyone has better data in the world than us between the merchants and the -- what can we do with that and exploring opportunities around that, too. So if you sit it out, it's going to be a problem for any company in the world. We see it as -- we see ourselves as a great enabler of the technology.

So on agentic Commerce specifically, everyone's talking about it, but it hasn't really taken off yet, right, at least in terms of its kind of more fulsome form, right? Yes, we're using ChatGPT or other tools to do discovery, right, but to actually transact, we haven't really gotten there yet. I mean you guys have laid the groundwork with a number of partnerships, namely Google, Visa, MasterCard. So I'm just curious what -- when you talk to merchants, particularly enterprise merchants, I mean what's their appetite to kind of participate in agentic commerce? Does it feel like they're kind of being dragged in? Or are they running in on their own? Because it feels like it could be a mixed bag for them.

Yes. I mean what's being done agentically in commerce is amazing. Today, it's largely agentic shopping and planning and the like. And then obviously, at the end, it's still -- the vast, vast majority is still a just individually-decisioned payment merchant transaction. But just think about what technology has done to how you do it and I think our enterprise clients obviously want to be in a position to just support agentic commerce, and we're helping support them. I think the bigger opportunity is for the millions of small businesses we have when you say I want to buy a pair of cowboy boots, I don't know if you might be in the market. But how does a small business on Clover in whatever state, how do they -- and they're selling boots, how do their boots get exposed on an agentic shop floor. So they're asking as much as anybody else's. So I think what the end user, the consumer or the whatever -- whomever is a agentic shopping is going to get a way better experience with way better pricing, instantaneous, seamless benefit from massive thoughts instead of reading every review on a website. Just think of what you can do in planning. So it's amazing. And obviously, there's a ton of embedded value for the consumer or the end user, and it's going to survive and if we are able to you bring that all down to the actual payment experience and charge back policies and all that, there's a lot -- there's work to do there, but it's no different than the experience we had when [ e-comm ]. So we bridge these things. We know how to do it, but you got to build rules that work through and a lot of people are working on that. So it will be a thing. Today, it's not a big thing, but agentic is a super important part of the merchant world. And then the value that agents can bring to retailers. So small businesses now we're testing out agentic inventory management. So you're out of X in a restaurant, let us go shop for you the best, fastest, quickest stuff to get there. So the value is immense of the agentic world to the retailers, and they want to access it and understand it.

I wanted to switch over to Clover specifically for a minute. I would just like to get your latest view on Clover's competitive position really. And the two main verticals, obviously continue to be restaurant and retail. I mean I think some other players in the space have made some strides in terms of product and/or distribution. So what are you seeing on the ground? Has there been any intensification of competitive intensity in pricing, win rate, anything like that, that's been observable?

No major changes. It's always been a competitive space. We've got great competitors people come in, people come out, but there's a great base of competitors. And we continue to -- relative to FSBI or other small business metrics, we continue to gain share overall. And we have very -- as you said, we have a very solid share in the two core verticals we've always operated in and we continue to look for growth opportunities by expanding to new verticals, health care and professional services are the two that we talked about and expanding some of our restaurant products further up market and then -- so overall competitive story, not a material change. We think there's great white space out there. I encourage you when you go to a restaurant or some other place you look at how people are actually managing tables, seating, billing and stuff. There's still great opportunities out there. So I think sometimes when we talk to investors, it's a belief that it's only one in for one out. Any new win in Clover can only come from a competitor when there's all kinds of opportunities still to go after to help. And what we hear from small businesses, which we're trying to go from POS to OS. And that's a really important distinction because we hear from small businesses constantly both through our bank partners and directly to us is they're over-apped, right? They really have to do payroll, payment processing, accounting, employee management right, but they don't -- they prefer not to have [indiscernible] so we're trying to create an intuitive, easy-to-use application through Clover with an anchor on payment processing and great builds to partners like ADP, Homebase and others.

Like a one-stop shop, basically right?

Yes. An operating system versus a point of sale operating system. So that's not perfect for everybody as evidenced by the fact that we have $3.5 billion of Clover small business revenue, $4 billion of revenue that some people just want to use a box to pay for payments, and there's nothing wrong with that. It's just -- but we think over time, there's a great opportunity and a lot of white space for operating systems. And I think some of our competitors have shown that in very specific verticals that you can just run your businesses a lot better. And then what agentic does on top of that just explodes the opportunity to help them run their businesses better. Even simple aids like, "Can you tell me about February's results?" and it will go through. So that's our hope. We're pursuing growth in Clover through vertical expansion, horizontal expansion, both we just talked to. International expansion, which is a ton of white space a better user experience. We have an incredible user experience at the front end and the front door of Clover is very strong. And then we would like a better experience, especially around the first 90 days or so where -- and we're working on -- we have an entire team working on that, and that's part of the 5 pillars where we think we can deliver an even better experience around that front and then continue to build out. You mentioned that we continue to build out our distribution channels, which are diverse, incredibly broad-based and have taken years upon years to build the embeddedness and the nature of it.

Can you just elaborate on that improving the experience in the first 90 days, what was lacking, what's getting better?

It's around digital acquisition, digital set out -- self-starting, better from box to first payment, first billing experience. It's like -- it feels a little bit like the conversation we have earlier on with the bank experience it's like totally fixable stuff. You just got to do it and so we have a great team focused on that. They're making terrific progress, and we're seeing some really very favorable results in some of the pilots we're doing around the experience side.

So we have some medium-term targets for Clover, right, 10% to 15% volume growth, 15% to 20% revenue growth. So just thinking about the volume piece. And again, you talked about these 3 vectors of verticals, horizontals, right, your new geographies. Are each of those kind of starting to move the needle on the volume front this year? And are some of them a little further ahead than others?

Yes. We haven't broken it down in any type of analytical sense but -- and just to go back to 10% to 15%, where we stay at 10%, which is sort of our -- what we think of as our core number that doesn't have any success in terms of penetrating the $4 billion non-Clover SMB book. That's really where we've been running if you take out the gateway conversion that we've over discussed that if you go back over time, it's -- we run at about 10%, and we think that's a sustainable level. If you get above that and you go to the -- up towards the upper end of the 15%, that means that we've found real ways to penetrate and migrate in a way -- we don't want to migrate with customer attrition, we want to migrate in a way. And the only way you can do that is if you have a value-added solution for that non-Clover customer to bring them over. So we're not going to force that as we talked about. But if you're very successful [indiscernible]. But in terms of overall Fiserv, 10% is the number to look at and then it would just be a move over. And then fact at logical algorithms, we think there's 5 points of VAS and non-VAS related revenue that would take the 10% to 15%. And obviously, all those are sustainable. We're going to have -- as we've talked about earlier, there will be comparability issues in the first half of this year. So we'll call it like we did in the fourth quarter. We called out with the specifics of that, and we'll call it out and then as you get into next year, you see a more natural clean algorithm.

Right. You kind of lap everything. How do you go about deciding which of the back book clients the...

Non-clover SMB.

Yes. New nomenclature, non-Clover SMB. How do you kind of go through that process to prioritize to maybe push to move over...

The basic -- we're not pushing anybody. We're not in the consolidated -- forced conversion in any of our segments. There has to be a value proposition. The clients who want a POS system, we're happy to service them. They're with us for a long time. They're great customers. It's a great business. You would never push them to do something extraordinary unless you had a value proposition for them to go over. So we have to -- so there's a variety of ways to do that. You can build more verticals that apply to companies inside the $4 billion. You can develop more -- a broader set of VAS to offer them for potential services. Two, you can think about your hardware strategy, is it the cost of hardware that's holding them back? Is it how they process payments? Or is it an educational aspect that they could run their business more effectively? Well, as we said, we're going to be super, super careful and cautious because these are Fiserv customers who are happy and paying us they're being satisfied as to their needs. If there's something more for them to do, and we could -- and that would convert into more business with us, like any other cross-sell revenue yield opportunity, we take a very deliberate thoughtful approach to do it. But we are going to be very, very methodical and smart and studied and tested as we do this.

Yes, that makes sense. Yes, you'll see -- I mean, who can get the most bang for the buck from the operating system with Clover.

And when we say One Fiserv, it's an action plan, but it's also a mental state of the company. This is -- whether it's non-Clover SMB or Clover SMB, it's SMB for Fiserv.

Exactly. Okay. So I wanted to touch on VAS a minute. You mentioned it. So 27% of revenue in Q4, would just love to think about what sort of headroom you see there over time? I think you've called out Clover Capital as being kind of underpenetrated. So maybe talk about strategies you're using to kind of bring that penetration up to rates that you think might be more commensurate with peers?

Yes. I think as you go POS to OS, obviously, VAS the more services you can lay on to a VAS platform that help a small business, run their business better. That's a good thing and VAS can increase. We have talked about specifically about Clover Capital where we're less penetrated than our peers. And as part of the Clover growth efforts, Takis and his team are hiring greater expertise in that business, one, so it's an advanced lending type capital business. It's how we deliver -- so it's a broader understanding of the business, a commitment to do what we're doing. Thoughtful risk management policies around it and then a really great delivery system on all of it. And in each piece of that, we had room for improvement. And we also -- we dealt with some legacy stuff where was this interfering with our bank's partners business or not. And I think over time, that's become much less of an issue because, I mean, I came from one of the bank partners. Those aren't loans that we would do and it makes the small business stickier. So the small business become stickier to the bank partner and us, and we share revenues with our bank partners. So it's -- so it's a series of developments there and focus areas. But Takis and his team are all over it. And we want to do it the right way, and it will build over time and we think it's a great opportunity. Yes.

Yes. Okay. Good. I wanted to talk about the issuing business as well, just pipeline of new wins, pending implementations, how are you feeling about that? I mean your biggest competitor now has a new parent, if you will. So any shifts in competitive dynamics you might anticipate in that corner of your business?

Yes, nothing major. I mean, as you know, the major customers take the top 50 or so. It's a good split. There's a couple in-house, a good split between us and our competitors and -- we continue -- our focus continues to be deliver great experience. We have a significant investment going on, the Optum and Optus transformation. And then we're excited about Vision Next, which is think of it as I said earlier, think of it as Finxact for card cores and so significant investment going on in the business, both U.S. focused and outside the U.S., we continue to enhance and refine our VAS around that print, plastics and the like. And to deliver a great solution to our clients. We've had some nice wins and nice renewals lately. And it's also an area where a lot of our embedded finance opportunities run through. That's where the DoorDash relationship goes through. And then the DEX relationship, which will launch later this year, we'll run through there, leveraging our prepaid card platform and the Payfare acquisition, the orchestration layer that we bought last year. So we see a significant opportunity on the embedded finance piece, leveraging the issuing business.

Okay. And I'll ask you about stablecoins. I think you've been running some pilots. How have those gone? Use cases that you've seen. Emerge anything surprising on that front or where are we?

No. I think our journey with stablecoin started with our bank customers as the Genius Act, and now the Clarity Act progresses through D.C. and after a period where this wasn't allowed in the banking sector, really any parts of it were allowed in the banking sector, our customers came to us and said, "How are we going to be ready for this? How do we create a wallet?" So what we announced last year with the creation of FIUSD and the wallet product is if you're on a Fiserv core when the Clarity Act passes, obviously, we get all the final rules in place. that you'll have wallet capabilities in every DDA account and a customer of our banks or a member of our credit unions could carry money in fiat in account or they could carry money in their stablecoin account and obviously transact out of that. The next -- obviously, the merchant side of the business expressed interest into that. And we spent a lot of time working with them and educating them as to the payment capabilities around stablecoin. I thought that was a great transaction that Mastercard did yesterday where there is payment capabilities. We want to be ready for that, too. The next stage of our development and the next set of actions we did came out of the banks saying, "Well, what if deposits leave the system and go into the stablecoin system?" and that led us to the acquisition of StoneCastle. StoneCastle is two businesses, which is a deposit network and central omnibus accounts sits on Finxact with thousands of banks on the other side of it. You can take a large deposit, break it into FDIC $250,000 and under guaranteed deposits among our banking partners, so it satisfies that. And it also came with a stablecoin custody license. So now picture a customer of the bank, a customer of one of our customers wants to move some of their DDA to stablecoin. We mint the stablecoin for them at our custody business and then we back it dollar for dollar. We have to -- we then have to deposit those dollars somewhere, we can deposit back into the bank to create a closed loop of deposits for the bank. Now it won't be in the same customer's account, but the balance of deposits at the bank. So a lot of specifics, but our journey has been driven by the interest of our customers, both merchants and banks in making sure they understand the product or prepared to meet regulatory requirements. And then if there's threats to the business or [indiscernible] business, then we're helping them address those. And if there are opportunities, which we see many, it's fast, it's borderless, it's cheap. The custody and recordkeeping is unbelievable around it. So once we get into a world like -- we talked about agentic, once you get into a world where we start to do this, we think that there's -- stablecoin obviously has -- makes a lot of sense in a lot of ways because it has a lot of good to it. Our goal is to make sure we're there to deliver it for our clients. And we think we have a great central role to play for that.

Last question. Any broad strokes on what we should expect at Investor Day and maybe just share with us your general philosophy around providing medium-term financial targets?

Yes. Investor Day, May 14, first of all, we hope you'll come. We're excited [indiscernible]. So I think no major -- we're not setting the stage for some major change something. We laid out our findings in October, obviously, it was a volatile period and a difficult period for a lot of people. So we said -- we knew when we laid all that out, there's a lot of news there for people to digest and people to understand the business. So we set a target for the first half of the year to give a day where we can both expose our new leaders and help investors underwrite the same constant compounder thesis that we're underwriting and see the attributes of our business that detail against that and understand where we're placing our capital in terms of investments and where we're choosing not to. So I didn't expect anybody to absorb everything we observed in October 29, and this is a period -- a chance for us to spend some time and make sure you all understand all the great things we see about the business.

Great. Well, we'll look forward to that. Thank you so much for your time. I really appreciate it, Mike.

Yes. Thanks for having me.

Thank you.