FISV
#I think, <UNK>, what we said is that historically, where we have been meaningfully outperforming our margin guidance, that to the extent that it makes sense for us and our shareholders and our clients, if there are ways that we can further invest and still ensure that we meet our financial commitments, we take a look at that.
I think <UNK> was also talking about some of the timing of expenses that we believe that will hit us in Q4.
But that said, one of the things that we have talked about over time is the combination of the revenue model that we are building and the benefit of the operational effectiveness program really gives us more capacity to invest and grow the business.
Or frankly, not invest and let it flow through to the bottom line.
So we're looking at that all the time, quarter on quarter, year on year, month on month, depending on what is going on.
Now, you know well that we don't make large ---+ it's hard for us to decide in a heartbeat to make a big capital investment.
Most of our investment is through our P&L.
It is length of labor, so you have to hire people.
So you can't make big decisions to change ---+ I can't make a big decision to change my expense trajectory next week.
But you can be sure that we have investments keyed up that we have an idea that where it makes sense, that maybe we should deploy money in a different way.
We have seen more activity in the larger end of the base in 2015 than we have probably in the last ---+ at a minimum, in the last five or six years.
There is more discussion and movement on the real-time core processing side of the house.
We are not seeing a lot more activity below that level.
We are seeing a lot of competition in that ---+ in the smaller ---+ in the $1 billion and below, in the below space, and so there is a lot of activity there.
But we are seeing processes, RFP processes, evaluation processes going on.
We have been pleased that we have been involved in that.
We have actually been down selected once or twice in pretty big evaluations, which is something that we would not have been able to do, frankly, had we not acquired DNA.
So we are seeing some activity there.
I think that will manifest over time.
One of the beauties to that is the institutions that are doing the evaluation tend to know us because maybe they are a Corillian client, they are very likely a bill pay client.
In that space, we've got a number of really important solutions, Pep Plus clients, so they are using our technologies and so we have a relationship with them.
Whether that will ultimately get us over the finish line, we will see.
But we do think it has them give us some more consideration than if we were one of the new kids on the block.
Thanks.
I would say, I will take it first, and then turn it over to <UNK>, <UNK>.
I think we are seeing a tick-up, clearly.
We didn't have this activity in the first half of the year, and clearly in the third quarter it's building as we anticipated.
So we did $10 million of EMV ---+ incremental EMV manufacturing in the third quarter, which was much more significant than the second.
We had to defer $9 million of that to future periods.
But as we laid out on Investor Day, as Mark laid out, this 2015 is going to be the low water point and it is building nicely as we look out into 2016 and 2017.
And so that's the way I would phrase that.
But <UNK>, I don't know if you wanted to add something else to that.
Yes, the way ---+ probably just a little bit more context.
So the $9 million that we ended up deferring, we ended up deferring it ---+ first of all, we had to defer it because it was the first time we had really meaningful EMV activity.
But if you think about the $10 million of production for the quarter, before the deferral, 10 times 4 is 40, that's $40 million in a year.
If you go back and look at what we laid out for Investor Day, that would have been the start of a very attractive run for us.
So the answer is yes, we saw a lot more production.
We ended up needing to defer the $9 million of the $10 million, and we believe that deferral will stay constant for a while.
And so if you look through that, we would expect to be able to recognize a more normal amount of revenue moving forward.
Yes.
It does.
Actually, I would say it does more than change the competitive landscape; I think it's quite a positive move for the landscape in general.
Early Warning is famous for having very high quality risk and analytics, and they do a great job.
We announced a partnership with them at our Investor Day.
We're doing some very interesting work on the real-time side.
They have not traditionally been in the real-time payment world.
They are in the real-time data exchange world, and they're going to build out some capabilities.
We are building a nice partnership with them, and we expect this to be quite positive for the industry.
Remember, clearXchange is really the back end of the process, where they are enabling some of the engines for those institutions.
Those institutions still need front-end applications.
A number of those institutions that are in clearXchange as well as another 2,000, more than 2,000 are on the system use our front end.
So I am hopeful and optimistic that this will move the industry closer to more ubiquity in allowing consumers to move money at the speed of their choice.
So we are quite excited about it.
We would expect to be live.
I would say at this stage, because it has taken a little bit longer to get this first contract signed, it is a little bit more difficult when you are building a business from scratch, subject to all the regulatory approvals and everything else.
But I would expect us to go live in the first half of next year with multiple clients.
So we're really excited about that.
Thanks, <UNK>.
Thank you.
I would say in the financial segment, as you are aware, the larger share of our revenue comes from the core processing areas.
So clearly, that is growing faster than our areas like check processing, which is in decline.
So that is correct.
I think the other areas that we have in there, lending has been growing nicely.
But we have been impacted, our international business is in there, so our currency has negatively impacted that segment.
And we should, over time, continue to see international contribute to that.
But to your point, item processing is a bit of a drag.
The core is the big piece of growth that is in that particular area, along with our lending area.
I would say, just for clarity, that we have both seen some good growth trends coming out of the lending businesses.
And that we would expect, over the next couple of years, to see lending, itself, be an important part of how financial institutions are obviously going to drive revenues.
So those trends we think will look better moving forward than they have historically, as people have not really been spending in that space.
Thanks, everyone, for joining us this afternoon.
We appreciate your attention and support.
If you have additional questions, feel free to contact our IR team.
Have a great day.
