Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

This quarterly report contains “forward-looking statements” intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include those that express a plan, belief, expectation, estimation, anticipation, intent, contingency, future development, outlook, or similar expression, and can generally be identified as forward-looking because they include words such as “believes,” “anticipates,” “expects,” “could,” “should,” “confident,” “likely,” “plan,” or words of similar meaning. Statements that describe our future plans, objectives or goals are also forward-looking statements.

The forward-looking statements in this report involve significant risks and uncertainties, and a number of factors, both foreseen and unforeseen, could cause actual results to differ materially from our current expectations. The factors that may affect our results include, among others, the following: our ability to compete effectively against new and existing competitors and to continue to introduce competitive new products and services on a timely, cost-effective basis; changes in customer demand for our products and services; the ability of our technology to keep pace with a rapidly evolving marketplace; the success of our merchant alliances, some of which we do not control; the impact of a security breach or operational failure in our business, including disruptions caused by other participants in the global financial system; losses due to chargebacks, refunds or returns as a result of fraud or the failure of our vendors and merchants to satisfy their obligations; changes in local, regional, national and international economic or political conditions, including those resulting from heightened inflation, rising interest rates, a recession, bank failures, or intensified international hostilities, and the impact they may have on us and our employees, clients, vendors, supply chain, operations and sales; the effect of proposed and enacted legislative and regulatory actions affecting us or the financial services industry as a whole; our ability to comply with government regulations and applicable card association and network rules; the protection and validity of intellectual property rights; the outcome of pending and future litigation and governmental proceedings; our ability to successfully identify, complete and integrate acquisitions, and to realize the anticipated benefits associated with the same; the impact of our strategic initiatives; our ability to attract and retain key personnel; volatility and disruptions in financial markets that may impact our ability to access preferred sources of financing and the terms on which we are able to obtain financing or increase our costs of borrowing; adverse impacts from currency exchange rates or currency controls; changes in corporate tax and interest rates; and other factors identified in "Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023 and in other documents that we file with the Securities and Exchange Commission, which are available at http://www.sec.gov. You should consider these factors carefully in evaluating forward-looking statements and are cautioned not to place undue reliance on such statements, which speak only as of the date of this report. We undertake no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this report.

Management’s discussion and analysis of financial condition and results of operations is provided as a supplement to our unaudited consolidated financial statements and accompanying notes to help provide an understanding of our financial condition, the changes in our financial condition and our results of operations. Our discussion is organized as follows:

• Overview. This section contains background information on our company and the products and services that we provide, acquisitions and dispositions, and the trends affecting our industry in order to provide context for management’s discussion and analysis of our financial condition and results of operations.

• Changes in critical accounting policies and estimates. This section contains a discussion of changes since our Annual Report on Form 10-K for the year ended December 31, 2023 in the accounting policies that we believe are important to our financial condition and results of operations and that require judgment and estimates on the part of management in their application.

• Results of operations. This section contains an analysis of our results of operations presented in the accompanying unaudited consolidated statements of income by comparing the results for the three and six months ended June 30, 2024 to the comparable periods in 2023.

• Liquidity and capital resources. This section provides an analysis of our cash flows and a discussion of our outstanding debt at June 30, 2024.

Overview

Company Background

We are a leading global provider of payments and financial services technology solutions. We serve clients around the globe, including merchants, banks, credit unions, other financial institutions, corporate and public sector clients. We help clients

achieve best-in-class results through a commitment to innovation and excellence in areas including account processing and digital banking solutions; card issuer processing and network services; payments; e-commerce; merchant acquiring and processing; and the Clover® cloud-based point-of-sale (“POS”) and business management platform. Most of the products and services we provide are necessary for our clients to operate their businesses and are therefore non-discretionary in nature. We serve our global client base by working among our geographic teams across various regions, including the United States of America (“U.S.”) and Canada; Europe, Middle East and Africa; Latin America; and Asia Pacific.

We aspire to move money and information in a way that moves the world. Our purpose is to deliver superior value for our clients through leading technology, targeted innovation and excellence in everything we do. We are focused on driving growth and creating value by assembling a high-performing and diverse team, integrating our solutions, delivering operational excellence, allocating capital in a disciplined manner, including share repurchase and merger and acquisition activity, and delivering breakthrough innovation. Our long-term focus is to meet our financial commitments; continue to build high-quality revenue; deepen client relationships with an emphasis on digital solutions and value-added services; deliver innovation and integration enabling differentiated value for our clients; and generate integration value, including cost and revenue synergies from acquisitions.

Effective in the first quarter of 2024, we realigned our reportable segments to correspond with changes in our business designed to further enhance operational performance in the delivery of our integrated portfolio of products and solutions to our financial institution clients (the “Segment Realignment”). Our new reportable segments are the Merchant Solutions (“Merchant”) segment and the Financial Solutions (“Financial”) segment. Segment results for the three and six months ended June 30, 2023 have been recast to reflect the Segment Realignment.

The businesses in the Merchant segment provide commerce-enabling products and services to companies of all sizes around the world. These products and services include merchant acquiring and digital commerce services; mobile payment services; security and fraud protection solutions; stored-value solutions; and pay-by-bank solutions. The businesses within the Merchant segment consist of the following:

*•*Small Business – provides products and services to small businesses and independent software vendors, including Clover®, our point-of-sale integrated commerce operating system for small business clients

*•*Enterprise – provides products and services to large businesses, including CaratSM, our integrated commerce operating system for enterprise clients

*•*Processing – provides products and services to financial institutions, joint ventures, and other third party resellers which have direct relationships with merchants

We distribute the products and services in the Merchant segment businesses through a variety of channels, including direct sales teams, strategic partnerships with agent sales forces, independent software vendors (“ISV”), financial institutions and other strategic partners in the form of joint venture alliances, revenue sharing alliances and referral agreements.

The businesses in the Financial segment provide products and services to financial institution, corporate and public sector clients across the world, enabling the processing of customer loan and deposit accounts, digital payments and card transactions. The businesses within the Financial segment consist of the following:

*•*Digital Payments – provides debit card processing services; debit network services; security and fraud protection products; bill payment; person-to-person payments; and account-to-account transfers

*•*Issuing – provides credit card processing services; prepaid card processing services; card production services; print services; government payment processing; and student loan processing

*•*Banking – provides customer loan and deposit account processing; digital banking; financial and risk management; professional services and consulting; and check processing

Corporate and Other supports the reportable segments described above, and consists of amortization of acquisition-related intangible assets, unallocated corporate expenses and other activities that are not considered when we evaluate segment performance, such as gains or losses on sales of businesses, certain assets or investments; costs associated with acquisition and divestiture activity; certain services revenue associated with various dispositions; and postage reimbursements.

Acquisitions and Dispositions

We frequently review our businesses to ensure we have the necessary assets to execute our strategy. We expect to acquire businesses when we identify: a compelling strategic need, such as a product, service or technology that helps meet client demand; an opportunity to change industry dynamics; a way to achieve business scale that enables competition and operational efficiency; or similar considerations. We expect to divest businesses that are not in line with our market, product or financial

strategies. The results of operations for the following acquired and divested businesses are included in our consolidated results from the respective dates of acquisition and through the respective dates of disposition.

Acquisitions of Businesses

On October 9, 2023, we acquired Skytef Solucões em Captura de Transações Ltda (“Skytef”), a distributor for ISV partners and merchants of our Electronic Funds Transfer payments software. Skytef is included within the Merchant segment and expands our distribution network and POS applications. On November 1, 2023, we acquired Sled S.A. (“Sled”), a provider of instant payment solutions. Sled is included within the Merchant segment and expands our direct payment service capabilities. We acquired these businesses in Latin America for an aggregate purchase price, including hold-backs, of $17 million.

Dispositions of Businesses

On July 25, 2023, we sold our financial reconciliation business, which was reported within the Financial segment, for cash proceeds of $235 million, and recognized a pre-tax gain of $172 million on the sale in the third quarter of 2023.

Other Transactions

On September 25, 2023, we acquired the remaining 49% ownership interest in European Merchant Services B.V., a Netherlands-based merchant acceptance business, for $56 million. We previously held a majority controlling financial interest in this subsidiary, which continues to be consolidated and reported within the Merchant segment.

Industry Trends

The global payments landscape continues to evolve, with rapidly advancing technologies and a steady expansion of digital payments, e-commerce and real-time payments infrastructure. Because of this growth, competition also continues to intensify. Business and consumer expectations continue to rise, with a focus on speed, convenience, choice and security. To meet these expectations, payments companies are focused on modernizing their technology, expanding the use of data and enhancing the customer experience.

Merchants

The rapid growth in and globalization of mobile and e-commerce, driven by consumers’ desire for simpler, more efficient shopping experiences, has created an opportunity for merchants to reach consumers nearly anywhere, through any device, which often requires a merchant acquiring provider to enable and optimize the acceptance of payments. Merchants are demanding simpler, integrated and flexible systems to enable them to serve customers and help manage cash flow and everyday business operations. When combined with the ever-increasing ways a consumer can pay for goods and services, merchants have sought modern end-to-end solutions throughout their growth lifecycle to streamline the complexity. Furthermore, merchants can now search, discover, compare, purchase and even install a new system through direct, digital-only experiences. This direct, digital-only channel is a source of new merchant acquisition opportunities, especially with respect to smaller merchants.

Additionally, there are numerous software-as-a-service solution providers in the industry, many of which have chosen to integrate merchant acquiring into their software as a way to generate revenue from existing client relationships. Such providers are independent software vendors, typically referred to as ISVs, and we believe there are numerous potential distribution partnership opportunities to cross-sell multiple value-added solutions available to us.

We believe that our merchant acquiring products and solutions create compelling value propositions for merchant clients of all sizes, from small and mid-sized businesses to medium-sized regional businesses to global enterprise merchants. The depth and breadth of our omnichannel solutions, and flexibility to serve clients across various channels and geographies, drives higher product attach rates with new and existing clients across all verticals. Furthermore, we believe that our strength in distribution, our progress growing software and services, and our value-based pricing as we continue to invest in our operating systems, gives us a solid foundation for growth.

Financial Institutions

Financial services providers regularly introduce and implement new payment, deposit, risk management, lending and investment products, and the distinctions among the products and services traditionally offered by different types of financial institutions continue to narrow as they seek to serve the same customers. At the same time, the evolving global regulatory and cybersecurity landscape has continued to create a challenging operating environment for financial institutions. These conditions are driving heightened interest in solutions that help financial institutions win and retain customers, generate revenue, comply with regulations and enhance operating efficiency. In addition, the focus on the customer experience, including through mobile

and online engagement, by both financial institutions and their customers, as well as the growing volume and types of payment transactions in the marketplace, continues to elevate the data and transaction processing needs of financial institutions.

Financial institutions must be able to serve their customers with tailored solutions, delivered how and when those customers want. In addition, financial institutions are striving for this single, integrated view of a customer’s activity. This requires financial institutions to not only process customer transactions, but to integrate financial institutions’ products and services to give customers easy access to integrated solutions. We believe that the integration of our products and services creates a compelling value proposition for our clients by providing, among other things, new sources of revenue and opportunities to reduce their costs. We have invested in integrating our platforms and value-added solutions to make it easy for a client to buy across our full product suite.

We expect that financial institutions will continue to invest significant capital to process transactions, manage information, maintain regulatory compliance and offer innovative new services to their customers in this rapidly evolving and competitive environmental shift from traditional to digital banking. We believe that economies of scale in developing and maintaining the infrastructure, technology, products, services and networks necessary to be competitive in such an environment are essential to justify these investments, and we anticipate that demand for products that facilitate customer interaction with financial institutions, including a unified, seamless customer experience across mobile and online channels, will continue to increase, which we expect to create revenue opportunities for us.

Our focus on long-term client relationships and recurring, transaction-oriented products and services has reduced the impact that consolidation in the financial services industry has had on us. Rather than reducing the overall market, these consolidations transfer accounts among financial institutions. If a client loss occurs due to merger or acquisition, we typically receive a contract termination fee based on the size of the client and how early in the contract term the contract is terminated. We believe that our sizable and diverse client base, combined with our value-added software and services-led model, and our position as a leading provider of non-discretionary, recurring revenue-based products and services, gives us a solid foundation for growth.

Recent Market Conditions

Global macroeconomic conditions, including rising interest rates, inflation, disruptions in the global supply chain, changes in consumer spending, the effects of international hostilities, political conditions, and regulations restricting trade or impacting our ability to offer products or services, could have a material adverse effect on our business, results of operations and financial condition. Personal consumption and consumer savings growth in the U.S. may also negatively impact our business and financial results. We actively monitor and manage our business in response to these unpredictable geopolitical and market conditions, as they may adversely impact our operations and financial results.

In addition, our operating results in certain foreign countries in which we operate may be adversely impacted by fluctuations in exchange rates for currencies other than the U.S. dollar, including the Euro, British Pound Sterling and Argentine Peso. The strengthening of the U.S. dollar against certain foreign currencies in countries in which we operate would negatively impact our revenue and earnings. We also have exposure to risks related to currency devaluation in certain countries, which may negatively impact our international operating results if there is a prolonged devaluation of local currencies relative to the U.S. dollar or if the economic conditions in these countries decline. While the majority of our revenue is earned domestically, we actively monitor the foreign exchange rate environment and may enter into derivative instruments and utilize other non-derivative hedging instruments with creditworthy institutions in an effort to manage these risks.

The operations of our Argentina subsidiary are experiencing higher interest rates and inflation as compared to historical averages. The anticipated benefits of higher transitory revenue from above-average interest and inflation may be offset in whole or in part by, or may be less than, foreign currency exchange losses related to a significant devaluation of the Argentine Peso.

Changes in Critical Accounting Policies and Estimates

Our unaudited consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the U.S., which require management to make estimates, judgments and assumptions that affect the reported amount of assets, liabilities, revenue and expenses. In our Annual Report on Form 10-K for the year ended December 31, 2023, we identified our critical accounting policies and estimates. We continually evaluate the accounting policies and estimates that we use to prepare our consolidated financial statements, including for recently adopted accounting pronouncements, and base our estimates on historical experience and assumptions that we believe are reasonable in light of current circumstances. Actual amounts and results could differ materially from these estimates. For example, we estimate the fair values of identifiable assets acquired and liabilities assumed in connection with acquisitions and may record purchase accounting adjustments during the measurement period, which may be up to one year from the acquisition date. Additionally, we review the carrying value of goodwill for impairment by comparing the estimated fair value of our reporting units to their carrying values. Determining the fair value of a reporting unit involves judgement and the use of significant estimates and

assumptions, which include assumptions regarding the revenue growth rates and operating margins used to calculate estimated future cash flows, risk-adjusted discount rates, and future economic and market conditions. There have been no material changes to our critical accounting policies and estimates from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023.

Results of Operations

The following table presents certain amounts included in our consolidated statements of income, the relative percentage that those amounts represent to revenue and the change in those amounts from year to year. This information should be read together with the unaudited consolidated financial statements and accompanying notes. The unaudited financial results presented below have been affected by acquisitions, dispositions, and foreign currency fluctuations. Segment results for the three and six months ended June 30, 2023 have been recast to reflect the Segment Realignment.

			Three Months Ended June 30,
			2024						2023						Percentage of Revenue (1)												Increase (Decrease)
(In millions)						2024						2023						$						%
Revenue:
Processing and services			$	4,140					$	3,924					81.1		%				82.5		%				$	216					6		%
Product			967						832						18.9		%				17.5		%				135						16		%
Total revenue			5,107						4,756						100.0		%				100.0		%				351						7		%
Expenses:
Cost of processing and services			1,343						1,351						32.4		%				34.4		%				(8)						(1)		%
Cost of product			639						578						66.1		%				69.5		%				61						11		%
Sub-total			1,982						1,929						38.8		%				40.6		%				53						3		%
Selling, general and administrative			1,697						1,696						33.2		%				35.7		%				1						—		%
Total expenses			3,679						3,625						72.0		%				76.2		%				54						1		%
Operating income			1,428						1,131						28.0		%				23.8		%				297						26		%
Interest expense, net			(285)						(232)						(5.6)		%				(4.9)		%				53						23		%
Other expense, net			(5)						(26)						(0.1)		%				(0.5)		%				(21)						(81)		%
Income before income taxes and (loss) income from investments in unconsolidated affiliates			1,138						873						22.3		%				18.4		%				265						30		%
Income tax provision			(221)						(181)						(4.3)		%				(3.8)		%				40						22		%
(Loss) income from investments in unconsolidated affiliates			(8)						3						(0.2)		%				0.1		%				11						n/m
Net income			909						695						17.8		%				14.6		%				214						31		%
Less: net income attributable to noncontrolling interests and redeemable noncontrolling interest			15						12						0.3		%				0.3		%				3						25		%
Net income attributable to Fiserv, Inc.			$	894					$	683					17.5		%				14.4		%				$	211					31		%

(1)Percentage of revenue is calculated as the relevant revenue, expense or income amount divided by total revenue, except for cost of processing and services and cost of product amounts, which are divided by the related component of revenue.

			Six Months Ended June 30,
			2024						2023						Percentage of Revenue (1)												Increase (Decrease)
(In millions)			2024						2023						$						%
Revenue:
Processing and services			$	8,140					$	7,597					81.5		%				81.7		%				$	543					7		%
Product			1,850						1,706						18.5		%				18.3		%				144						8		%
Total revenue			9,990						9,303						100.0		%				100.0		%				687						7		%
Expenses:
Cost of processing and services			2,697						2,756						33.1		%				36.3		%				(59)						(2)		%
Cost of product			1,290						1,178						69.7		%				69.1		%				112						10		%
Sub-total			3,987						3,934						39.9		%				42.3		%				53						1		%
Selling, general and administrative			3,394						3,300						34.0		%				35.5		%				94						3		%
Net loss on sale of businesses and other assets			—						4						—		%				—		%				(4)						n/m
Total expenses			7,381						7,238						73.9		%				77.8		%				143						2		%
Operating income			2,609						2,065						26.1		%				22.2		%				544						26		%
Interest expense, net			(546)						(434)						(5.5)		%				(4.7)		%				112						26		%
Other expense, net			(12)						(46)						(0.1)		%				(0.5)		%				(34)						(74)		%
Income before income taxes and loss from investments in unconsolidated affiliates			2,051						1,585						20.5		%				17.0		%				466						29		%
Income tax provision			(374)						(305)						(3.7)		%				(3.3)		%				69						23		%
Loss from investments in unconsolidated affiliates			(16)						(9)						(0.2)		%				(0.1)		%				7						(78)		%
Net income			1,661						1,271						16.6		%				13.7		%				390						31		%
Less: net income attributable to noncontrolling interests and redeemable noncontrolling interest			32						25						0.3		%				0.3		%				7						28		%
Net income attributable to Fiserv, Inc.			$	1,629					$	1,246					16.3		%				13.4		%				$	383					31		%

(1)Percentage of revenue is calculated as the relevant revenue, expense or income amount divided by total revenue, except for cost of processing and services and cost of product amounts, which are divided by the related component of revenue.

			Three Months Ended June 30,
(In millions)			Merchant						Financial												Corporate and Other						Total
Total revenue:
2024			$	2,410					$	2,379											$	318					$	5,107
2023			2,206						2,245												305						4,756
Revenue growth			$	204					$	134											$	13					$	351
Revenue growth percentage			9		%				6		%																7		%
Operating income (loss):
2024			$	882					$	1,093											$	(547)					$	1,428
2023			745						1,028												(642)						1,131
Operating income growth			$	137					$	65											$	95					$	297
Operating income growth percentage			18		%				6		%																26		%
Operating margin:
2024			36.6		%				45.9		%																28.0		%
2023			33.7		%				45.8		%																23.8		%
Operating margin growth (1)			290		bps				10		bps																420		bps

(1)Represents the basis point growth in operating margin.

			Six Months Ended June 30,
(In millions)			Merchant												Financial						Corporate and Other						Total
Total revenue:
2024			$	4,663																	$	4,664								$	663								$	9,990
2023			4,202																		4,468									633									9,303
Revenue growth			$	461																	$	196								$	30								$	687
Revenue growth percentage			11		%																4		%																7		%
Operating income (loss):
2024			$	1,651																	$	2,101								$	(1,143)								$	2,609
2023			1,337																		1,971									(1,243)									2,065
Operating income growth			$	314																	$	130								$	100								$	544
Operating income growth percentage			23		%																7		%																26		%
Operating margin:
2024			35.4		%																45.0		%																26.1		%
2023			31.8		%																44.1		%																22.2		%
Operating margin growth (1)			360		bps																90		bps																390		bps

(1)Represents the basis point growth in operating margin.

Operating margin percentages are calculated using actual, unrounded amounts.

Total Revenue

Total revenue increased $351 million, or 7%, in the second quarter of 2024 and increased $687 million, or 7%, in the first six months of 2024 compared to 2023. The revenue increase was driven by higher global processing revenue in both our Merchant and Financial segments, partially offset by a 9% and 10% decrease due to foreign currency exchange rate fluctuations in the second quarter and first six months of 2024, respectively.

Revenue in our Merchant segment increased $204 million, or 9%, in the second quarter of 2024 and increased $461 million, or 11%, in the first six months of 2024 compared to 2023. In the second quarter and first six months of 2024, Small Business contributed 8% and 9% to segment revenue growth, respectively, driven by an increase in payment and transaction volume, partially offset by foreign currency exchange rate fluctuations. Small Business revenue growth also includes contributions from our Clover operating system and the expansion of our merchant relationships through value-added services. Additionally, Enterprise contributed 2% in both the second quarter and first six months of 2024, primarily driven by transaction growth, while Processing negatively impacted Merchant segment revenue growth by 1% in the second quarter of 2024.

Revenue in our Financial segment increased $134 million, or 6%, in the second quarter of 2024 and increased $196 million, or 4%, in the first six months of 2024 compared to 2023. Digital Payments contributed 3% to segment revenue growth in both the second quarter and first six months of 2024, primarily driven by an increase in transaction volume and new client wins. Issuing contributed 2% and 1% to segment growth in the second quarter and first six months of 2024, respectively, primarily driven by an increase in active accounts, primarily in our international regions, while Banking contributed 1% in the second quarter of 2024.

Revenue at Corporate and Other increased $13 million, or 4%, in the second quarter of 2024 and increased $30 million, or 5%, in the first six months of 2024 compared to 2023, primarily due to increased postage revenue.

Total Expenses

Total expenses increased $54 million, or 1%, in the second quarter of 2024 and $143 million, or 2%, in the first six months of 2024 compared to 2023. Total expenses as a percentage of total revenue decreased 420 basis points to 72.0% in the second quarter of 2024 and 390 basis points to 73.9% in the first six months of 2024 compared to 2023. Total expenses as a percentage of total revenue were favorably impacted by operating leverage across our various businesses, as well as a reduction in amortization of acquisition-related intangible assets of approximately 120 basis points in both the second quarter and first six months of 2024.

Cost of processing and services as a percentage of processing and services revenue decreased to 32.4% in the second quarter of 2024 compared to 34.4% in the second quarter of 2023 and decreased to 33.1% in the first six months of 2024 compared to 36.3% in the first six months of 2023. Cost of processing and services as a percentage of processing and services revenue was favorably impacted by strong operating leverage accompanying scalable revenue growth in the second quarter and first six months of 2024.

Cost of product as a percentage of product revenue decreased to 66.1% in the second quarter of 2024 compared to 69.5% in the second quarter of 2023 and increased to 69.7% in the first six months of 2024 compared to 69.1% in the first six months of 2023. The cost of product as a percentage of product revenue in the second quarter and first six months of 2024 was impacted by revenue mix, including an increase in high margin license revenue in the second quarter of 2024 compared to 2023.

Selling, general and administrative expenses as a percentage of total revenue decreased to 33.2% in the second quarter of 2024 compared to 35.7% in the second quarter of 2023 and decreased to 34.0% in the first six months of 2024 compared to 35.5% in the first six months of 2023. Selling, general and administrative expenses as a percentage of total revenue was favorably impacted by a reduction in amortization of acquisition-related intangible assets of approximately 90 basis points in both the second quarter and first six months of 2024, as well as a reduction in acquisition and integration related expenses of approximately 20 basis points and 30 basis points in the second quarter and first six months of 2024, respectively.

Operating Income and Operating Margin

Total operating income increased $297 million, or 26%, in the second quarter of 2024 and increased $544 million, or 26%, in the first six months of 2024 compared to 2023. Total operating margin increased 420 basis points to 28.0% in the second quarter of 2024 and increased 390 basis points to 26.1% in the first six months of 2024 compared to 2023. Total operating income and total operating margin benefited from scalable revenue growth, along with a reduction in amortization of acquisition-related intangible assets.

Operating income in our Merchant segment increased $137 million, or 18%, in the second quarter of 2024 and increased $314 million, or 23%, in the first six months of 2024 compared to 2023. Operating margin increased 290 basis points to 36.6% in the second quarter of 2024 and increased 360 basis points to 35.4% in the first six months of 2024 compared to 2023. Operating income and operating margin growth in our Merchant segment was primarily due to operating leverage and productivity.

Operating income in our Financial segment increased $65 million, or 6%, in the second quarter of 2024 and increased $130 million, or 7%, in the first six months of 2024 compared to 2023. Operating margin increased 10 basis points to 45.9% in the second quarter of 2024 and increased 90 basis points to 45.0% in the first six months of 2024 compared to 2023. Operating income and operating margin growth in our Financial segment was primarily due to operating leverage and scalable revenue growth.

The operating loss in Corporate and Other decreased $95 million in the second quarter of 2024 and decreased $100 million in the first six months of 2024 compared to 2023. The operating losses in the second quarter and first six months of 2024 were favorably impacted by a reduction of $60 million and $118 million in amortization of acquisition-related intangible assets, respectively, partially offset by a $12 million facility impairment in the first six months of 2024.

Interest Expense, Net

Interest expense, net increased $53 million, or 23%, in the second quarter of 2024 compared to 2023 and increased $112 million, or 26%, in the first six months of 2024 compared to 2023 due to higher outstanding borrowings, including as a result of our public offering and issuance of $2.0 billion of senior notes in March 2024, as well as increased variable rate borrowings associated with our settlement advance cash program in Latin America compared to the prior year periods.

Other Expense, Net

Other expense, net decreased $21 million in the second quarter of 2024 and decreased $34 million in the first six months of 2024 compared to 2023. Other expense, net includes foreign currency transaction gains and losses, gains or losses from a sale or change in fair value of investments in certain equity securities, and amounts related to debt guarantee arrangements of certain joint ventures. Other expense, net in the second quarter and first six months of 2024 included $6 million and $27 million, respectively, related to gains on the sale and remeasurement of certain equity securities. Net foreign currency transaction losses decreased $10 million and $1 million in the second quarter and first six months of 2024 compared to the second quarter and first six months of 2023, respectively.

Income Tax Provision

Income tax provision as a percentage of income before income taxes and income (loss) from investments in unconsolidated affiliates was 19.4% and 20.7% for the three months ended June 30, 2024 and 2023, respectively, and was 18.2% and 19.2% for the six months ended June 30, 2024 and 2023, respectively. The effective income tax rate for each of the six months ended June 30, 2024 and 2023 included discrete tax benefits from equity compensation.

Income (Loss) from Investments in Unconsolidated Affiliates

Our share of net income (loss) from unconsolidated affiliates accounted for using the equity method is reported as income (loss) from investments in unconsolidated affiliates, and the related tax benefit is reported within the income tax provision in the consolidated statements of income. Income (loss) from investments in unconsolidated affiliates, including acquired intangible asset amortization from valuations in purchase accounting, was $(8) million and $3 million in the second quarter of 2024 and 2023, respectively, and $(16) million and $(9) million in the first six months of 2024 and 2023, respectively.

Net Income Attributable to Noncontrolling Interests

Net income attributable to noncontrolling interests and redeemable noncontrolling interest relates to the minority partners’ share of the net income in our consolidated subsidiaries. Net income attributable to noncontrolling interests, including acquired intangible asset amortization from valuations in purchase accounting, was $15 million and $12 million in the second quarter of 2024 and 2023, respectively, and $32 million and $25 million in the first six months of 2024 and 2023, respectively.

Net Income Per Share – Diluted

Net income attributable to Fiserv, Inc. per share-diluted was $1.53 and $1.10 in the second quarter of 2024 and 2023, respectively, and was $2.76 and $1.99 in the first six months of 2024 and 2023, respectively. In addition to the favorable impacts to net income attributable to Fiserv, Inc. described above, our diluted weighted average outstanding shares were reduced by 5% and 6% in the second quarter and first six months of 2024, respectively, compared to 2023, due to our share repurchase program.

Liquidity and Capital Resources

General

Our primary liquidity needs in the ordinary course of business are to: (i) fund normal operating expenses; (ii) meet the interest and principal requirements of our outstanding indebtedness, including finance leases; and (iii) fund capital expenditures and operating lease payments. We believe these needs will be satisfied in both the short and long term using cash flow generated by our operations, along with our cash and cash equivalents of $1.2 billion, proceeds from the issuance of U.S. dollar and Euro commercial paper, and available capacity under our revolving credit facility of $1.1 billion (net of $4.9 billion of capacity designated for outstanding borrowings under our commercial paper programs, senior notes due within the next twelve months and letters of credit) at June 30, 2024.

The following table summarizes our net cash provided by operating activities, or operating cash flow, and capital expenditures:

			Six Months Ended June 30,												Increase (Decrease)
(In millions)			2024						2023						$						%
Net income			$	1,661					$	1,271					$	390
Depreciation and amortization			1,581						1,605						(24)
Share-based compensation			185						199						(14)
Deferred income taxes			(207)						(186)						(21)
Net loss on sale of businesses and other assets			—						4						(4)
Loss from investments in unconsolidated affiliates			16						9						7
Distributions from unconsolidated affiliates			19						30						(11)
Non-cash impairment charges			14						—						14
Net changes in working capital and other			(1,097)						(924)						(173)
Net cash provided by operating activities			$	2,172					$	2,008					$	164					8		%
Capital expenditures, including capitalized software and other intangibles			$	768					$	679					$	89					13		%

Our operating cash flow was $2.2 billion in the first six months of 2024, an increase of 8% compared with $2.0 billion in the first six months of 2023. This increase was primarily attributable to increased profitability and corresponding cash flows, partially offset by higher working capital use compared to the first six months of 2023, including increased accounts receivable corresponding to revenue growth.

We maintain investments in various affiliates that are accounted for as equity method investments. Total distributions from unconsolidated affiliates, including those classified as cash flows from investing activities, were $58 million and $109 million in the first six months of 2024 and 2023, respectively.

Our current policy is to use our operating cash flow primarily to fund capital expenditures, share repurchases, acquisitions and to repay debt rather than to pay dividends. Our capital expenditures were approximately 8% and 7% of our total revenue for the first six months of 2024 and 2023, respectively.

Share Repurchases

We repurchased $3.0 billion and $2.5 billion of our common stock during the first six months of 2024 and 2023, respectively. On February 22, 2023, our board of directors approved a repurchase authorization for up to 75.0 million shares of our common stock. As of June 30, 2024, we had approximately 31.8 million shares remaining under our existing repurchase authorization. Shares repurchased are generally held for issuance in connection with our equity plans.

Acquisitions and Dispositions

Acquisitions of Businesses

We acquired Skytef in October 2023 and Sled in November 2023 for an aggregate purchase price, including hold-backs, of $17 million. We funded these acquisitions by utilizing available cash. The results of operations for these acquired businesses are included in our consolidated results from the respective dates of acquisition.

Dispositions of Businesses

We sold our financial reconciliation business in July 2023 for cash proceeds of $235 million. Net proceeds from the sale were primarily used to pay down indebtedness and repurchase shares of our common stock.

Other Transactions

In September 2023, we acquired the remaining 49% ownership interest in European Merchant Services B.V., in which we previously held a majority controlling financial interest in this consolidated subsidiary, for $56 million. We funded this transaction by utilizing a combination of available cash and proceeds from the issuance of commercial paper.

Indebtedness

Our debt consisted of the following at:

(In millions)			June 30, 2024						December 31, 2023
Short-term and current maturities of long-term debt:
Foreign lines of credit			$	794					$	442
Finance lease and other financing obligations			314						313
Total short-term and current maturities of long-term debt			$	1,108					$	755
Long-term debt:
2.750% senior notes due July 2024			$	2,000					$	2,000
3.850% senior notes due June 2025			900						900
2.250% senior notes due July 2025 (British Pound-denominated)			664						672
3.200% senior notes due July 2026			2,000						2,000
5.150% senior notes due March 2027			750						—
2.250% senior notes due June 2027			1,000						1,000
1.125% senior notes due July 2027 (Euro-denominated)			535						555
5.450% senior notes due March 2028			900						900
5.375% senior notes due August 2028			700						700
4.200% senior notes due October 2028			1,000						1,000
3.500% senior notes due July 2029			3,000						3,000
2.650% senior notes due June 2030			1,000						1,000
1.625% senior notes due July 2030 (Euro-denominated)			535						555
5.350% senior notes due March 2031			500						—
4.500% senior notes due May 2031 (Euro-denominated)			857						889
3.000% senior notes due July 2031 (British Pound-denominated)			664						672
5.600% senior notes due March 2033			900						900
5.625% senior notes due August 2033			1,300						1,300
5.450% senior notes due March 2034			750						—
4.400% senior notes due July 2049			2,000						2,000
U.S. dollar commercial paper notes			667						418
Euro commercial paper notes			1,273						1,321
Revolving credit facility			—						74
Unamortized discount and deferred financing costs			(152)						(145)
Finance lease and other financing obligations			658						652
Total long-term debt			$	24,401					$	22,363

In March 2024, we completed the public offering and issuance of $2.0 billion of senior notes, comprised of $750 million aggregate principal amount of 5.150% senior notes due in March 2027, $500 million aggregate principal amount of 5.350% senior notes due in March 2031 and $750 million aggregate principal amount of 5.450% senior notes due in March 2034. We used the net proceeds from this senior notes offering for general corporate purposes, including the repayment of a portion of our commercial paper notes and for share repurchases, and in July 2024, the repayment of a portion of our 2.750% senior notes.

At June 30, 2024, our debt consisted primarily of $22.0 billion of fixed-rate senior notes and $1.9 billion of outstanding borrowings under our commercial paper programs. Interest on our U.S. dollar-denominated senior notes is paid semi-annually, while interest on our Euro and British Pound-denominated senior notes is paid annually. Interest on our revolving credit facility and commercial paper notes is generally paid weekly, or more frequently on occasion.

At June 30, 2024, the 2.750% senior notes due in July 2024 and 3.850% senior notes due in June 2025 were classified in the consolidated balance sheet as long-term, as we have either subsequently refinanced or have the intent to refinance this debt on a

long-term basis, and the ability to do so under our revolving credit facility. Outstanding borrowings under the commercial paper programs are also classified in the consolidated balance sheet as long-term, as we have the intent to refinance this commercial paper on a long-term basis through the continued issuance of new commercial paper upon maturity, and also have the ability to refinance such commercial paper under our revolving credit facility.

Variable Rate Debt

Our variable rate debt consisted of the following at June 30, 2024:

(In millions)			Maturity						Weighted-Average Interest Rate						Outstanding Borrowings
Foreign lines of credit			various						31.623%						$	794
U.S. dollar commercial paper notes			various						5.560%						667
Euro commercial paper notes			various						3.843%						1,273
Total variable rate debt									12.327%						$	2,734

We maintain various short-term lines of credit and other borrowing arrangements with foreign banks and alliance partners primarily to fund settlement activity associated with operations in Latin America, including an annually renewable term loan facility to fund settlement advance cash payments in Brazil. This term loan has a notional value of 514 million Brazilian real ($93 million USD equivalent) at June 30, 2024 and bears interest at a variable Certificado de Depósito Interbancário (CDI) Rate, plus a specified margin per annum. In February 2024, this term loan facility was amended, which amendment extended its maturity date to April 2025 and decreased the specified margin to 1.25% per annum.

The following table provides a summary of the outstanding borrowings and weighted average interest rates of our foreign lines of credit and other borrowing arrangements by country at June 30, 2024:

			Outstanding Borrowings (in millions)						Weighted-Average Interest Rate
Argentina			$	575											40.363		%
Brazil			105												11.612		%
Uruguay			50												10.277		%
Other			64												2.825		%
Total			$	794											31.623		%

We maintain unsecured U.S. dollar and Euro commercial paper programs with various maturities generally ranging from one day to four months. Outstanding borrowings under our commercial paper programs bear interest based on the prevailing rates at the time of issuance.

We also maintain a senior unsecured multicurrency revolving credit facility, which matures in June 2027 and provides for a maximum aggregate principal amount of availability of $6.0 billion. Borrowings under the credit facility bear interest at a variable base rate, determined by the term and currency of the borrowing, plus a specified margin based on our long-term debt rating. There were no outstanding borrowings under the revolving credit facility at June 30, 2024. We are required to pay a facility fee based on the aggregate commitments in effect under the credit agreement from time to time.

Debt Covenants and Compliance

The indentures governing our senior notes contain covenants that, among other matters, limit (i) our ability to consolidate or merge with or into, or convey, transfer or lease all or substantially all of our properties and assets to, another person, (ii) our and certain of our subsidiaries’ ability to create or assume liens, and (iii) our and certain of our subsidiaries’ ability to engage in sale and leaseback transactions. We may, at our option, redeem the senior notes, in whole or in part, at any time and from time to time, at the applicable redemption price.

The revolving credit facility contains various restrictions and covenants that require us to, among other things, limit our consolidated indebtedness as of the end of each fiscal quarter to no more than 3.75 times our consolidated net income before interest, taxes, depreciation, amortization, non-cash charges and expenses and certain other adjustments during the period of four fiscal quarters then ended, subject to certain exceptions.

During the first six months of 2024, we were in compliance with all financial debt covenants. Our ability to meet future debt covenant requirements will depend on our continued ability to generate earnings and cash flows. We expect to remain in compliance with all terms and conditions associated with our outstanding debt, including financial debt covenants.

Debt Guarantees

We maintain noncontrolling ownership interests in Sagent M&C, LLC and defi SOLUTIONS Group, LLC (collectively, the “Lending Joint Ventures”). The Lending Joint Ventures maintain variable-rate term loan facilities with aggregate outstanding borrowings of $432 million in senior unsecured debt at June 30, 2024 and variable-rate revolving credit facilities with an aggregate borrowing capacity of $83 million with a syndicate of banks, which mature in April 2027. There were $19 million of aggregate outstanding borrowings on the revolving credit facilities at June 30, 2024. We have guaranteed the debt of the Lending Joint Ventures. We maintained a liability of $26 million at June 30, 2024 for the estimated fair value of our non-contingent obligations to stand ready to perform over the term of the guarantee arrangements. Such guarantees will be amortized in future periods over the contractual term of the debt. In addition, we maintained a contingent liability of $19 million at June 30, 2024, representing the current expected credit losses to which we are exposed. This contingent liability is estimated based on certain financial metrics of the Lending Joint Ventures and historical industry data, which is used to develop assumptions of the likelihood the guaranteed parties will default and the level of credit losses in the event a default occurs. We have not made any payments under the guarantees, nor have we been called upon to do so, and do not anticipate that the Lending Joint Ventures will fail to fulfill their debt obligations.

Cash and Cash Equivalents

Investments, exclusive of settlement assets, with original maturities of 90 days or less that are readily convertible to cash are considered to be cash equivalents as reflected within our consolidated balance sheets.

The table below details our cash and cash equivalents held at:

(In millions)			June 30, 2024						December 31, 2023
Available			$	609					$	450
Unavailable (1)			586						754
Total			$	1,195					$	1,204

(1)Represents cash held by our joint ventures that is not available to fund operations outside of those entities unless the board of directors of the relevant entity declares a dividend, as well as cash held by other entities that are subject to foreign exchange controls in certain countries or regulatory capital requirements.