Welcome to the Fiserv 2016 First Quarter Earnings Conference Call. [Operator Instructions] As a reminder, today's call is being recorded. At this time, I will turn the call over to Stephanie Gregor, Vice President of Investor Relations at Fiserv.

Thank you, and good afternoon. With me today are Jeff Yabuki, our Chief Executive Officer; Bob Hau, our Chief Financial Officer; and Mark Ernst, our Chief Operating Officer. Please note that our earnings release and supplemental presentation for the quarter are available on the Investor Relations section of fiserv.com. Our remarks today will include forward-looking statements about, among other matters, expected operating and financial results, anticipated benefits related to acquisitions and our strategic initiatives. Forward-looking statements may differ materially from actual results and are subject to a number of risks and uncertainties. Please refer to our earnings release for a discussion of these risk factors. You should also refer to our materials for today's call for an explanation of the non-GAAP financial measures discussed in this conference call, along with the reconciliation of those measures to the nearest applicable GAAP measures. These non-GAAP measures are indicators that management uses to provide additional meaningful comparisons between current results and prior reported results and as a basis for planning and forecasting for future periods. Unless stated otherwise, performance comparisons made throughout this call are year-over-year metrics. With that, I'll turn the call over to Jeff.

Thanks, Stephanie, and good afternoon, everyone. Let me start by welcoming our new CFO, Bob Hau, to his inaugural Fiserv earnings call. Bob has been with us for about 2 months and is quickly getting up to speed. We're excited about the skills and experience he brings to the company. Now, on to the results. We're pleased with our start as each of our key financial metrics were ahead of plan for the quarter. And importantly, we're right on track to meet our financial commitments for the full year. Internal revenue growth was a solid 4%, which included 170 basis points of drag from the timing of license-related revenue, EMV personalization deferral and the negative impact of FX in the quarter. Growth in adjusted earnings per share and free cash flow per share were stellar, each up 19% in the quarter. Adjusted operating margin was also strong, increasing 80 basis points over the prior year. We were again, for the third year in a row, named one of FORTUNE magazine's World's Most Admired Companies. For the first time, we were recognized as the top company for innovation within the financial data services category. We are honored by this three-peat, which recognizes our culture of driving value for clients, associates and shareholders. As you will recall, we shared 3 key priorities for 2016 to help you gauge our progress which, as a reminder, are: first, to continue to build high-quality revenue while meeting our earnings commitments; second, build and enhance client relationships with an emphasis on digital and payment solutions; and third, to deliver innovation and integration, which enables differentiated value for our clients. Our focus on building high-quality revenue translated to 4% internal revenue growth in the quarter. We saw strong performance in areas such as card services, electronic payments, lending and Output Solutions. We expect to see continued revenue acceleration throughout the year, notably being driven by strong performance in our recurring revenue businesses. Adjusted operating income was up 8%, largely resulting from growth in high-quality revenue and a continuing focus on operational efficiency. Adjusted EPS and free cash flow per share were both up 19% for the quarter, not including the $140 million cash distribution received from our StoneRiver joint venture. Again, we're on pace to achieve our financial goals for the year. Our second priority is to build and enhance client relationships with an emphasis on digital and payment solutions. We scheduled our earnings call a bit later this quarter to accommodate Forum, our Spring Client Conference held last week. We were pleased to have nearly 4,000 people experiencing Fiserv, including educational sessions, networking and over 170 technology solutions on display to help our clients deliver the experiences that their customers are looking for today. The convergence of mobile and convenience is having a meaningful effect on consumer expectations for speed, ease and access. Fiserv has been focused on innovation designed to address these burgeoning demands. Two new solutions, CardValet and Immediate Funds, were recipients of the 2016 PYMNTS.com innovation awards in their respective categories. These awards recognize potentially disruptive, highly differentiated technologies and are real-world examples of how our solutions enable clients to provide superior value to the customers they serve. Mobiliti ASP subscribers were up nearly 40% from the prior year and 9% sequentially to more than 4.5 million users, reflecting continuing strong demand for mobile services. We remain confident that mobile subscriber growth will be substantial over the next several years as adoption levels continue to accelerate. In addition, Mobiliti is a catalyst for driving value-added transactions such as mobile capture, bill payment and Popmoney. We're seeing strong demand for EMV issuance and expect that to continue for several years, especially with the eventuality of contactless technologies. And still, we've not yet reached the tipping point where card manufacturing and card personalization are equal. As a result, we deferred an additional $5 million of revenue in the quarter. We expect card personalization trends to continue improving in the second half of the year, which should lead to further acceleration in EMV revenue. Our third priority is to deliver innovation and integration, which enables differentiated value for our clients. Vibrant Credit Union became the 48th new DNA client to go live since the Open Solutions acquisition. DNA serves as the technology foundation for Vibrant to deliver differentiated products, services and experiences to its more than 41,000 members. Vibrant management cited DNA's superior agility, flexibility and speed of customization as key factors in converting from a well-known competitive offering, primarily serving larger credit unions. We expect this conversion to provide additional proof points to further fuel momentum in the large credit union space. Our DNA pipeline has continued to grow, with a bias to larger banks and credit unions as technology buyers see value in a real-time modern platform. Implementations are progressing nicely with more than 20 new DNA clients, including 8 institutions with assets greater than $1 billion expected to go live in 2016. Importantly, as new account processing clients tend to select broad suites of solutions, revenue in both segments should benefit as implementations come on throughout the year. Last week, we also announced an important partnership with AFS to integrate their sophisticated commercial lending services into our account processing platforms. We believe offering these market-leading capabilities in an on-demand, cost-effective manner will even further enhance our competitive position in the larger end of the market. Lastly, we closed 2 acquisitions we had previously announced during the quarter. In January, we completed a small biller solutions acquisition that expands our capabilities through our modern SaaS platform and provides access to new verticals for payment acceptance. And in early March, we closed the acquisition of ACI Worldwide's Community Financial Services business. This transaction adds digital banking clients and some unique capabilities, including Architect, an integrated online and mobile banking solution serving retail and business customers on a single platform. We expect these acquisitions to contribute $75 million to $85 million of adjusted revenue in 2016, and that the adjusted EPS contribution to be fairly minimal as synergies ramp late in the year and then into 2017. With that, let me turn the call over to Bob to provide more detail on our financial results.

Thanks, Jeff, and good afternoon, everyone. It's been an exciting couple of months learning the business, meeting people and looking for ways in which my experiences complement Fiserv's business. I really like what I've seen so far and look forward to meeting you in the near future as we continue to deliver value to clients, associates and you, our shareholders. Now turning to a little more detail in the first quarter results. Adjusted revenue grew 5% in the quarter to $1.3 billion and internal revenue growth was 4%. As Jeff mentioned, internal revenue growth performance was strong, especially considering several items that together negatively impacted internal revenue growth by 170 basis points in the quarter, 110 basis points from the timing of license-related revenue in the Financial segment, 40 basis points from the EMV revenue deferral and 20 basis points related to currency. Our high-quality revenue growth, combined with continued discipline and operating efficiency, drove an 8% increase in adjusted operating income to $399 million. Adjusted earnings per share for the quarter was up 19% to $1.06, and free cash flow per share was also up 19% to $1.31. Adjusted operating margin was strong in the quarter, up 80 basis points over the prior year to 31.9%. As you've seen, we're off to a great start in the Payments segment. Adjusted revenue, which includes a partial quarter contribution from our 2 recent acquisitions, grew 9% to $671 million. Internal revenue growth was up a strong 7% in the segment. Debit transactions grew in the high single digits over last year's comparable quarter, and we continue to gain traction in our bundled debit credit offering. Not only should this proposition drive the debit business but also extends our credit processing footprint to capitalize on the growth potential in our client base. Solutions such as CardValet and CardFree Cash enhance the traditional card-based value proposition and creates quality revenue for our clients. Looking beyond the point-of-sale, we added more than 80 bill payment clients in the quarter, signed nearly 100 institutions for Popmoney and saw P2P transactions grow 30%. Popmoney Instant transactions were also up 70% for the quarter. Our Output Solutions business recorded strong growth, even with the EMV personalization revenue deferral. As Jeff referenced earlier, we expect to see the revenue deferrals subside and potentially begin to reverse as we expect personalization to accelerate later in the year and into 2017. Payments segment adjusted operating income was up an impressive 18% to $225 million. Adjusted operating margin in the quarter expanded a very strong 230 basis points over the prior year. Synergies for our new acquisitions, which are included in the Payments segment, should ramp as we exit 2016. Therefore, we expect roughly a 60 basis point negative impact on the segment margin this year. Adjusted revenue in the Financial segment was up 1% to $599 million. Revenue growth in the segment was negatively impacted by 220 basis points due to a decrease in higher margin license-related revenue as compared to last year. On the plus side, we saw good performance in our lending and international businesses in the quarter. And we expect revenue acceleration in the second half of the year due to the rollout of new technology solutions, the timing of license-related revenue and new client implementations. Adjusted operating income in the Financial segment was $195 million and adjusted operating margin was 32.6%. Lower comparable results in the quarter were primarily from the timing of high margin license-related revenue, negative impact of FX and the timing of innovation-based investments in solutions, such as Agiliti and Notifi. We expect much stronger results in the second half of the year. Corporate adjusted operating loss in the quarter was basically in line with the prior year's results. Our adjusted effective tax rate was 33%, and we benefited from timing of expected discrete tax benefits, which when compared to the prior year provided about $0.03 of adjusted EPS improvement in the quarter. The Q1 rate is consistent with our 2016 guidance, and we continue to anticipate a full year adjusted effective tax rate of about 35%. Free cash flow grew 11% in the quarter to $298 million and was up 19% on a per share basis to $1.31. These excellent results are primarily due to high-quality revenue growth and disciplined capital allocation. We recorded a net gain of $146 million and received $140 million of cash distribution from our StoneRiver joint venture related to the sale of our business interest. Both the gain and related cash distribution are excluded from reported adjusted earnings per share and free cash flow. And since this venture was formed in 2008. We've realized $1.1 billion including the proceeds from the original sale of our 51% interest. Although there are only limited assets remaining in this venture, we're very pleased with its overall performance. Total debt as of March 31 was $4.4 billion or 2.4x trailing 12-month adjusted EBITDA. We repurchased 3.4 million shares in the quarter at an average cost of $92 per share for just over $320 million. At quarter-end, there were 223 million shares outstanding and 14 million shares remaining under our existing share repurchase authorization. With that, let me turn the call back to Jeff.

Thanks, Bob. Well done. Following our record sales performance in Q4, our results were somewhat slow, coming in at 70% of quota for the quarter. That said, activity levels continue to be very strong in the quarter, with our domestic pipeline up 14% since December 31 and up 26% year-over-year. We anticipate a number of significant wins over the next couple of quarters and fully expect to achieve our sales goals for the year. Integrated sales is a key part of our product distribution strategy and was up 10% to $48 million for the quarter, led by card services, bill payment and channels. We're in the first year of our new $250 million Operational Effectiveness program. Our goal for this year is $40 million, and we achieved $10 million of savings in the first quarter, driven primarily by procurement and labor optimization. We're also progressing very well in our data center program which we expect will provide meaningful operational savings in the future. Even as banks prognosticate on interest rate increases, we are seeing an important bias to action in driving online and mobile solutions. Customer expectations are ratcheting up, and that translates to opportunities to further differentiate our broad catalog of solutions, including channels, payments and account processing. Speaking of payments, we're seeing an increased focus on payments beyond the point-of-sale. As you know, we have been preparing for this movement, and we are encouraged by the industry dialogue with an emphasis across the largest banks. We expect these plans to solidify over the next 12 months and believe we will play an important role in the ultimate solution. As I mentioned, we are on track to achieve our full year financial objectives. We continue to expect internal revenue growth of 5% to 6%, which includes internal revenue growth acceleration in the second half of the year. We anticipate adjusted earnings per share will grow 12% to 15% in a range of $4.32 to $4.44. Given our strong start to the year, we now expect our full year results to bias above the midpoint of the range and that the adjusted EPS growth rate will be generally equivalent between the first and second halves of the year. We continue to expect adjusted operating margin to increase at least 50 basis points for the year, even with the approximately 30 basis points of acquisition margin pressure Bob mentioned earlier. And importantly, we still expect free cash flow per share for the full year to be at least $4.70. In conclusion, we're pleased with our start to the year. We expect to meet or exceed our financial and strategic commitments, including another step-up in our level of sustainable, high-quality revenue growth. Our ability to excel is based entirely on the dedication, commitment and innovation of our 22,000 associates who band together to achieve client excellence each and every day. With that, let's open the line for questions.

[Operator Instructions] Our first question is coming from Mr. Dave Togut of Evercore ISI.

You called out 220 basis points of pressure in the FI segment on internal growth from deferred software license sales or postponed software license sales. Can you give us a little bit more insight to that? And then more broadly could you talk about sort of spending intentions and budgets of your FI customers for this year?

Yes. David, let me clarify. We didn't say it was from postponed spending. What we said is that our license-related revenue was lower this quarter than it was last year. It was really much more around how strong last year's first quarter was relative to this obviously Q1 in '16, and we expect to see that come back. It wasn't that spending was postponed. It was really just the timing of last year's license-related revenue versus the license-related revenue that we expect for this year. On the question of spending, we're not seeing any change in the environment, certainly no negative change. And in fact, as you heard in our prepared remarks, we're actually seeing a pretty clear realization across all segments of the market that -- and this may sound a little bit funny, but that mobile is here to stay. And that the finding the right way to craft, whether you call it omnichannel or how to find the points of relationship management between mobile experiences and in-branch experiences and online experiences and teller, whatever other ways -- or I'm sorry, ATM, whatever other way they're coming together, that's a very big focus for the institutions. And that also links to the need to provide real-time information. It's putting -- we think it's actually helping us a lot on the modern platform side. So those platforms such as DNA that are modern, we're getting a lot of attention. So from that perspective, the spend trends are quite solid right now.

Understood. And then on your DNA point, can you talk about market share trends in the large credit union space.

Yes, we mentioned that we had the Vibrant Credit Union go live in the quarter. And we mentioned that, that was a competitive takeaway from one of our peers who tends to serve the larger credit union base. It was actually one of the first times we've had a client make that switch. And so we're quite excited about that, and we expect of that will build some momentum for us going forward.

Got it. And then on the EMV-related card personalization, I recall from the fourth quarter call you were pointing more toward 2Q and 3Q acceleration in EMV revenue growth. And now you seem to be a little more focused on second half. Am I understanding that correctly?

No. David, this is Mark Ernst. No, I think you pretty much have it. That hasn't really changed in our perspective. What we really are kind of noting is that the gap between manufacturing and personalization which, as you know, creates a requirement on our side because we do both pieces of that business to defer the manufacturing revenue until we personalize. We're seeing a little bit more of continued sort of pushback of the personalization activity. So we expect that there's going to be a little bit more deferral into Q2 and maybe even into Q3. But we think the tools start to balance out then in the second half.

Yes, and we still believe that the middle quarters, so Qs 2 and 3, will still be the strongest on a growth contribution basis. Same as we had believed in the middle of the year.

And it's really about the year-over-year compare. I mean we get some pickup now in Q1. There'll be bigger pickup in Qs 2 and 3. And then in Q4, we have a comparison to last year's Q4, which -- where we had started to see the EMV revenue coming in.

The other thing I'd add is the deferral has declined over the last 3 quarters $9 million, $7 million, now $5 million successfully. So we'll see that continue.

David, the other thing just to keep in mind is while we're talking a lot about how EMV is building this year, I mean, we're still quite early in our level of everything from personalization, which is kind of the last step. But if you back up the process even BIN enablement, we're still in the very early innings of that. So we do expect this to continue to contribute for a while. And then we do believe that come end of '17 into '18 that you would expect to see dual band or contactless start to have an impact as well.

Just 2 quick housekeeping questions. What was the term fee comparison in the quarter? And then how much revenue do you expect for the balance of the year from acquisitions completed?

So David, term fees were up just a few million dollars for the quarter. And then, of course, that's offset by, as we talked about, the license-related revenue which was down about $13 million.

And on the acquisition-related revenues, it's probably in the $75 million to $85 million for the year...

Full year. Full year. So we've got about -- figure, David, we have a little over a month of total contribution if you exclude the smaller biller acquisition. So the majority of that's coming in, in the last 3 quarters of the year.

Our next question is coming from Mr. Dave Koning of Baird.

And I guess first of all just on the payments margins, I know it's the first quarter that you had the acquisitions in there and EMV probably comes on at a little bit lower margins but they were incredibly strong in Q1 especially given Q1 is usually -- if we went back several years, usually it's the low bar for margins. What's kind of happening in the underlying basis there to drive such good margins? And maybe how do you see the rest of the year? Is Q1 the low point?

So that's a great question. And one of the things that we've been talking about for a while is that the beauty of these payments businesses is they tend to have network economics. And so when the payments businesses are growing in the right places, you're going to have higher incremental margins that are dropping through. So that's one point. We have been making, as you know, a lot of investments that are, -- as we bring on that revenue, that also helps us as we get to scale. So that's having a positive impact. And it's offset a bit by the -- we had a month of the ACI CFS acquisition. And -- but for that, I would say that we would continue to see that build, but we are going to get some pressure, as Bob mentioned in his prepared remarks, we'll get some pressure on that, about 60 basis points of pressure in the Payments segment from that during the year. Now we still expect that we'll achieve at least 50 basis points for the full year but we will have some pressure there. And then, Dave, as we anniversary that next year, we would expect to see that contribution come back on as well as the added benefit of the synergies from the acquisitions, which really will be very late in '16 and into '17.

Okay. Great. It seems you're set up well. And then I guess secondly the corporate expense line, the adjusted corporate expense was $21 million. It was the lowest in a long time despite the addition of the new businesses coming on. Is that going to stay a little bit of a lower run rate going forward?

Yes. Q1 was a bit lower than we've traditionally seen. I would anticipate the full year roughly in line with what we saw last year.

From kind of a trajectory of growth perspective, with a little bit, Dave, to your point, we'll have a little bit of excess expense coming in from the acquisitions.

Next question is coming from Mr. Tien-tsin Huang of JPMorgan. Tien-Tsin Huang: The sale's somewhat slow. Is that, Jeff, just a function of slow start of the year and sort of back to normal? I know you were at Fiserv Forum. I'm curious to hear what some of the decisions makers are saying.

Yes. Tien-tsin, as you know, we had record results in Q4. And we actually thought we were going to have a little bit of a stronger start to the year, actually. And as is often the case, these larger deals, they have a little bit of a path of their own, and they had -- we had some slippage. I think I put in our prepared comments that we expect to have some good size sales announced in Q2 and Q3. But I would tell you the pipeline itself, you could see the growth in the pipeline, the sequential growth, we had kind of mid-teens sequential growth in the pipeline and the year-over-year growth was in the mid-20s. So really good growth there. A lot of activity. And I'll tell you, we were really excited about the discussions we had at Forum. We -- in terms of both the innovative products as well as we had one of the highest numbers of prospects and attendance that we've ever had. In fact, it is the highest we've ever had. So a lot of good dialogue. And we're going to have to find that balance between predictability of when some of these larger transactions are going to happen and how that wraps into the quota. The good news for us is, as you and others know, the substantial majority of the sales revenue that would come -- or the sales-related revenue that would come in from these larger transactions has no effect on our current quarter and really very little effect on the full year. So that does give us a little bit of hope on the -- or I'm sorry, gives us a little bit of confidence on the offset. Just one last thing. I would say a couple of the larger transactions that we have in our pipeline that we expect to close in Q2 do have some seasonality benefits that we will actually -- will help us in the second half of the year. So we're feeling good about where we are from a sales standpoint. Tien-Tsin Huang: All right. It is good to know. Just on the bigger deals in general, the pricing, is it a little tougher from a pricing perspective to get these things over the finish line or not necessarily so?

Honestly, pricing is always pricing. And you've always had to find that balance in any kind of seller-buyer negotiation. That tends to not be the issue in these larger transactions. They tend to be far more around the readiness of the buyer to develop their plans enough because, as you know, a lot of the larger transactions for us tend to be big, mission-critical systems. And so it takes a long time for the buyers to get comfortable. And then there's always a lot of negotiation on normal Ts and Cs. So they just tend to take longer from that standpoint not from pricing. When pricing is a problem, that usually actually rears its head pretty early in the process. Tien-Tsin Huang: Got you. That's good to know. One more if you don't mind, just on the EMV front, I caught the timing. But I'm curious overall, is there like a halo effect of some sort from EMV kind of helping drive more bundled sales as you're assisting with these big decisions or could you even be the inverse, and that's sort of taking time away from other things you can have conversations about with your FI clients?

Yes. I got to say, I don't think we're seeing EMV factor into those kinds of conversations. I mean, it’s there, but I would say it's really playing into that discussion.

Yes, the other angle on that, Tien-tsin, where I thought maybe you were also asking is the fact that institutions are spending on EMV doesn't seem to be taking away from the other areas in which the institutions do need to spend. And we see that to be primarily around mobile and risk and cyber and those kinds of things. So we're...

And in most ways, EMV is sort of an operating cost to institution versus big CapEx for some of these bigger systems. So it's 2 different kind of problems.

Next question comes from Mr. Glenn Greene of Oppenheimer & Co.

First question. Maybe, Jeff, you could give us a little bit more color on sort of the drivers of the back half organic growth acceleration relative to the 4% and getting you into that 5%, 6% range for the year?

Sure. Yes, I mean, there's probably 4 or 5 big areas in which we're seeing that you can call out seeing the impact. As Mark was talking about earlier as he talked about prepared remarks, we see EMV being a good-sized chunk of that, both ramped-up demand as well as less of a differential between the manufacturing timing and the personalization timing. So we see that coming in as we mentioned in Qs 2 and 3 but also having a ramp effect in 4. Mobiliti subscriber growth is looking really strong. We were up 9% sequentially. We expect to see a significant amount of growth for that, as you know, with that service, as we put the users on the system, it becomes a bit of monthly subscription revenue, so that's good news. Next item is around DNA. As the DNA implementations continue to ramp -- but not just DNA, it's all account processing implementations. In fact at the end of Q2, our largest implementation of the year will go in. It's actually not a DNA implementation. So we're excited about that. And remember that, that brings in not only revenue in the Financial segment, but they tend to be bundled large transactions so they go across the enterprise. And then lastly, we have a series of new initiatives that are just gaining traction. Some of them that we talked about before, such as IPS that we’re seeing good growth, Bob mentioned that in his prepared comments. Agiliti, which we've talked about, is going quite well. And then something like Notifi, which is an alerting hub, an alerting capability across all of our solutions, which will go live in Q4. Any number of those we expect to help drive that growth. Now remember the difference between -- even between 4% and 5% is not that significant when you think about it on a quarterly basis. Roughly $10 million is 1 point. So it takes a fair number of things to come together, but there's no single one item that we're counting on, and so it's around the execution of the company. And then as these -- I guess the last thing I would say is as these larger -- we talked about both pipeline growth, as these larger transactions get closed, some of them have seasonality benefits. And obviously there'll be a bit of revenue coming in from all of them. And while no one of them is probably "worthy" of calling out individually, when they come together, they'll have some impact late in the year.

Okay. That's helpful. Next question on the Financial margins being down the way they were. It is simple as the $13 million year-over-year software decline? So first question was, is the license decline all in Financial? And does that the explanation for the Financial margin pressure? And was that also expected as you went through the year?

I think the answers are yes, yes, and yes.

Yes, correct.

Yes. I mean, we saw -- we obviously saw that coming in -- coming that we were going to have the license-related revenue blip in Q1 that we believe we would make it up as we move throughout the year in a more typical, call it, selling cycle. But that is the big -- I mean, that's the big animal in the segments, couple of hundred basis points of growth in the segment. And as you know, license revenue tends to have pretty high margin.

Okay. Makes sense. One more would be -- so the $75 million to $85 million, I think that's I guess for the portion of the year that you have the acquisitions. It seems a little bit low to me. Is -- are you being conservative? Have you baked in attrition? Or am I just sort of not thinking through the numbers right?

Well, we have -- if you compare it to the 8-K that ACI filed, we would say we have absolutely baked in the attrition that was already embedded in that asset, and we also have actually a good level of confidence that we will stem some of the attrition that was there. Obviously, ACI wanted to exit that business because it wasn't core to them and it probably wasn't getting enough attention. So from that perspective, we factored that in. The big dog in all of that is it's just 9 months of the year.

And don't forget, we were -- they were reselling some of our services. And so that reseller relationship does not come over in our revenues. So that's also...

That's a great point. They were reselling.

That's also a key factor.

That's a great point. Glenn, so they were reselling -- basically reselling RXP. And so that revenue that they were -- what they were showing as marked up revenue, we do not get credit for that.

Next question is coming from Ramsey El-Assal of Jefferies. Ramsey El-Assal: I had another question about the cadence of EMV revenue later this year. I mean, should we be thinking about this as a sort of pressure building? And how is that finally kind of gets pushed? Is it kind of a snapback? Or is it sort of more of a consistent, steady increased level of revenue that sort of persists for a longer period of time?

Well, it’s certainly going to be a level of revenue that persists for a longer period of time. We think that once it gets to a sort of steady state of revenue generation that we will see that be the stable kind of level going forward. So it's not something that we're going to get a big burst and then it's going to go away or it's going to diminish meaningfully. So I'd say that's the way we think about it. This mismatch on deferral of revenue between manufacturing and personalization is kind of a twist on the timing quarter-to-quarter. But we think by the end of '16, the effects of that will pretty much in the base numbers. And then the other thing I'd mention, Jeff referred to contactless a little bit earlier. We're hearing more conversations about contactless in the market. It's a little early to call that out as something that is necessarily out there. But that would be another kind of lift in the out years beyond the kind of the steady-state lift that we are seeing coming from EMV.

And Ramsey, remember that the other factor is we still have -- we -- all of the key dates of when the fraud switches has not yet happened, we still have gasoline and a couple of other areas that will swap. So we still don't have all -- and when debit -- that's a big user of debit.

And the other thing that we know that's going on in the market is the adoption rate of EMV at point-of-sale is still a little bit delayed. So while there's a lot of people pushing these cards out into the market, the issuer side is probably a little bit ahead of the acceptance or the merchant side. So we think that this just continues to kind of push the whole innovation or change in the methodology into the future.

And then I guess the last thing just as a reminder on that is, to Mark's point, it is -- and to your point, Ramsey, it is a continuing build. And we aren't anywhere near that peak yet. I mean as I mentioned, we still have a very low level of even BINs enabled. So there's still a lot of -- a lot of this is going to happen throughout all this year and frankly well into next.

And not to get into the weeds too much more, but don't forget, one of the key things that we know is there's kind of these additional fees for EMV transactions. So as the acceptance of EMV at point-of-sale becomes bigger and bigger, that benefits us in our card services business as well. Ramsey El-Assal: Okay. That's all very, very helpful. On a completely separate track, we haven't seen kind of large M&A from you guys in a little while. Is lack of getting a large deal done due to sort of a dearth of compelling opportunities? Or is it more a shift in your priorities? I know the market’s not looked terribly favorably on higher leverage levels more recently. Have you changed your kind of historic balance sheet prioritization strategy or is it just a question of not finding the right deals?

It -- I would say it's a question of not finding the right potential transactions at the right prices given the discipline that we use when we think about allocating capital. I mean, we continue to be very focused on what are the best ways for us to build value for our shareholders through -- last year I think we generated over $1 billion of free cash. So that's a really important part of our model. And so we continue to think about share repurchase as our benchmark. And acquisitions need to be compared against that on a risk -- kind of on a risk-adjusted basis. So for us, it's using that framework in the context of everything we would look at in the market. It's really not about leverage or anything else. It's about what's the right and best way to build shareholder value.

Next question is coming from Mr. Jim Schneider of Goldman Sachs.

Jeff, I was wondering if you could maybe give us an update on the number of DNA client wins that are set to come on board in 2016. Is that a number in the zip code of about 20 or so? And can you maybe just kind of give us an update on that deployment schedule.

Yes, it is, Jim. I think, in our script we said it was more than 20. It's a bit more than 20. And we've got I think 7 or 8 of them are assets greater than $1 billion. And again, that's just on the DNA side. We have -- we'll have many more implementations across the system on the account processing side of the house.

That's helpful. And then maybe just a quick follow-up. In terms of maybe an update on the overall client IT discretionary spend environment and what you're hearing from clients there, I mean, clearly there has been some -- there's been a little -- they're rocky this past quarter. So for some of the clients, can you maybe give us a sense about whether you're seeing any kind of incremental delays in new implementations or new business side?

Yes, we -- and it's interesting that you mentioned this -- you mentioned that. I mean, we are not seeing significant delays in -- let me say that in a different way. We are not seeing IT budgets have impacts on demand for the products and solutions that we're building. And so I think the good news is for the most part, our growth and the areas of our focus are tending to be in places that are -- have really good macros like Mobiliti as a trend. So it's being tailwinds that are making that happen. And then we have a lot of emphasis on solutions that are driving revenue for the financial institution. And then third is really using DNA as the poster child where you've got these modern technologies that I think there's just a belief across the financial institution system that the need to use more modern technologies given what's going on with Mobiliti is really important. So we're not seeing issues around there. Now as I mentioned in my discussion on our prepared remarks, sales cycles are still sales cycles and they're always going to take time. But we are really quite encouraged about what we see in the pipeline right now, both in size of deals, types of deals and, frankly, it’s seeding a lot of optimism and future growth opportunities for us.

Next question is coming from Kartik Mehta of Northcoast Research.

Jeff, you talked a lot about Mobiliti and the demand you're seeing from mobile from banks. I'm wondering, is that having any impact for demand on online banking? So my thought is, is the fact that banks want to invest in mobile shifting any money away from online banking?

Yes. Interestingly, that was one of the concerns that we had early on is that the world would go to a mobile-only world. And what's happened is we've gone to a mobile-first world but followed closely by online second. And in fact, we're seeing a lot more focus on institutions wanting to facelift and upgrade their online channel because of the pressure that mobile is putting on that. And you can see -- if you're doing industry reading and outside the industry, a lot of discussion on making sure that you have an online experience that is consistent with the tablet and mobile experiences. And that's really creating, we think, more opportunity for us, and frankly others, but really for us moving forward because of the pressure on the online channel to keep up with mobile. The other thing to always keep in mind is the reasons why people interact in certain channels are not the same. So checking my balance is something I might do on a mobile device. But a loan application, for the most part, I'm not going to do on -- my kids might do it on their mobile device but I'm not going to. Only to say that for a long time, although this is merging a bit, for a long time, we talked about mobile more as a snack metaphor and online being a little bit more of a meal metaphor. So you've got different kinds of activities and duration of experience going on in both of those places.

So I guess, Jeff, in aggregate, the spend is not less. If anything it's probably more for a bank. Is that a fair statement?

Yes.

Yes.

And then, Jeff, just out of curiosity, Popmoney, I don't think you mentioned in this call, and I'm just wondering maybe the progress you're making on that or if any delays or if anything happened in the marketplace that maybe is delaying the implementation or acceptance.

Sure. No, I think we -- I think actually Bob had in his prepared remarks. I think Popmoney transactions were up 30% in the quarter. Pop Instant transactions were up 70% in the quarter. We sold a good number of new institutions.

100 new institutions.

About 100 new institutions. So that's actually getting a fairly nice amount of play. Of course, we'd like it to be larger than it had been, but we are pleased that it's moving along. The other thing that we've done is we've moved -- you may remember, we talked about this IPS, this integrated payment strategy. That integrated payment strategy takes bill pay, Popmoney and account-to-account transfers and moves it into a single, unified experience for users. That will especially be important on mobile because it's hard to move through tabs and things like that. But on balance, we're getting exposure to many more users, and we're seeing a lot more interest in the product. And then lastly, there's a macro that's going on, where the larger banks are putting more and more emphasis on P2P. I think there is a movement in the industry right now to make sure, frankly, that P2P remains bank-centric. We've been pushing on that for several years, and we are absolutely committed to making sure that, that happens. So there's a lot of movement -- macro movement that haven't seen in a long time, and we're excited about it. We think it's going to play out in a pretty interesting way over the next year.

And then just one last question, Jeff. You talked a little bit about Tien-tsin's question on pricing. And I'm wondering, pricing on the renewals, I know in the industry that's always been an issue, some pressure on pricing on renewals. And I'm wondering if you're seeing anything different than you have in the past as far as renewals our concern.

No. I mean, not ever since that I've been here, little over 10 years now, and it's always been the case. You have compression on renewals and then they build back up because of the pricing -- the underlying pricing structure for the most part. So that continues. The point that I was making earlier was really a new sales point where we're seeing kind of what I would call more normal pricing. And that the issues in getting transaction closed are less around price than they are other factors.

But, Kartik, the one thing I would say, because I know one of our competitors referenced pricing pressure on renewals, I got to say we're not seeing anything to the degree that we would have called it out like that.

Our last question for today is coming from Mr. Ashwin Shirvaikar from Citigroup.

I guess my first question is with regards to same-day ACH, faster ACH. I mean, what sort of impact do you see in terms of attraction for your existing products, CardFree Cash or Popmoney or -- I mean, does it have roll-through traction for other products that you have?

Well, I mean there's a couple of different ways to think about that, Ashwin. Given we own PEP+, which is for the most part the de facto ACH standard in the U.S., I mean that's a good enhancement of that product. We've been working same-day ACH for several years. So we're happy that the industry is adopting it. We see a lot of great opportunity to use ACH in different ways. In terms of being able to meet the demands of consumers who are really far more focused on speed, ease and convenience, and ACH is a reasonable way to do that. We don't see ACH being really a viable point-of-sale alternative. What we do see, if you have a bill that you want to move quickly, we see that same day can be quite valuable there or emergency payrolls and all kinds of other things, so we're optimistic about that. I don't -- things like CardFree Cash will be working -- that will be going over the card network. So it's a little bit of a different animal. I do think that the plumbing, right, the entire infrastructure, the payments infrastructure is being kind of globally re-examined right now. And so there's -- in my mind, there's a lot of puts and takes on how we're all thinking about the plumbing. And I suspect over the next 5, 7 years that it'll play out in a way that looks a little bit different than it looks today.

I mean, I've got to say, I'd add to that. I think at this stage much of this is still about plumbing. I mean the use case is for the version of same-day ACH that's out there. I mean, we are clearly in those conversations. But people are working hard to find appropriate use cases for that solution.

And the fact -- but the cold, hard reality is as consumers become comfortable with moving money faster or have a desire to move money faster, that will play very well in products like Popmoney, where we’re -- somewhat like we’ve seen in products like Venmo, right. The viral capabilities of that -- the marketing capabilities are quite strong. And we do think that a bank-centric solution makes sense, that it will happen and that, that will create a lot of opportunity for those of us who are in that segment of the market.

Got it. And one quick follow-on is, you guys talked about the cadence of synergies from the acquisitions. I guess the part that I may have missed is if you carry forward to next year, could you size the ongoing benefit? I mean, it's a bit of a cost this year but when it swings, do you expect a greater than normal margin improvement next year if you can comment on that?

Well, we would certainly expect to see incremental margin improvement from that. I think when we announced that we were buying this, we indicated that we thought we would end up after tax -- including tax benefits that we ended up paying about 5x EBITDA at full run rate. So if you figure that a lot of that will come in, in '17. You'll have some bleed back into '18, of course. But by that time, we still feel like that's about the right number. Thanks, everyone, for joining us this afternoon. If you have any further questions, please don't hesitate to contact us. Have a good evening.

Thank you. And that concludes today's conference. Thank you for participating. You may now disconnect.