Eric Nelson - Vice President of Investor Relations Jeffery W. Yabuki - Chief Executive Officer, President and Director Thomas J.

Hirsch - Chief Financial Officer, Principal Accounting Officer, Executive Vice President, Treasurer and Assistant Secretary Mark A. Ernst - Chief Operating Officer and Executive Vice President

David Togut - Evercore Partners Inc., Research Division David J. Koning - Robert W.

Baird & Co. Incorporated, Research Division Glenn Greene - Oppenheimer & Co.

Inc., Research Division Brett Huff - Stephens Inc., Research Division Tien-Tsin T. Huang - JP Morgan Chase & Co, Research Division Ramsey El-Assal - Jefferies & Company, Inc., Research Division Ashish Sabadra - Deutsche Bank AG, Research Division

Thank you, and welcome to our first quarter call. With me today are our Chief Executive Officer, Jeff Yabuki; Tom Hirsch, our CFO; and Mark Ernst, our Chief Operating Officer.

Our remarks today will include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We will make forward-looking statements about, among other matters, adjusted revenue growth, adjusted internal revenue growth, adjusted earnings per share, adjusted operating margin, free cash flow, free cash flow per share, revenue and cost synergies, sales pipelines, 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, which can be found on our website at fiserv.com, for a discussion of these risk factors.

You should also refer to our earnings release for an explanation of the non-GAAP financial measures discussed in this conference call, and for a 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 future periods.

As a reminder, we will hold our Annual Meeting of Shareholders at 10 a.m. on May 22 at the Milwaukee Art Museum.

The meeting will also be broadcast live via our webcast. We hope you will join us.

With that, let me turn the call over to Jeff.

Thanks, Eric, and good afternoon, everyone. Our first quarter results were in line with our plan, and we're pleased with our start to the year.

As I shared in early February, this year is somewhat unique in that we expected a slow revenue start, and then to build sequentially each quarter for the remainder of the year. We're well positioned to achieve our full year guidance.

Adjusted revenue in the quarter grew 6% and internal revenue was flat. Adjusted earnings per share was up 13% to $1.33 and free cash flow in the quarter grew 33% to $1.72 per share.

Adjusted operating margin declined 30 basis points in the quarter to 28.4%. Comparatively, last year's first quarter, which included significant termination fees, was our highest growth quarter of the year.

We expect revenue to build each quarter as we onboard some of our larger sales transactions, particularly in the bill payment area. In this regard, our largest of the new bill payment clients, TD Bank, went live on CheckFree RXP at the end of the first quarter.

Sales were also up to a strong start, up 25% year-over-year. These results exclude the impact of Open Solutions, which will be included in the sales comparison next year.

It's been just 3.5 months since we acquired Open Solutions, and with each day, we gain confidence about the opportunities in the business. Open clients feel good about the strength and stability of their new technology partner, and have a strong desire to understand how they can benefit from our solutions.

In February, we established 3 key enterprise priorities to help you gauge our progress. This year's priorities are: one, to continue to build high-quality revenue growth and meet our earnings commitments; next, to extend market momentum into deeper client relationships and a larger share of our strategic solutions; and third, to deliver innovation and integration to enhance results for our clients with an important focus on Open Solutions.

Adjusted internal revenue was negatively impacted by approximately 3 percentage points in the quarter due primarily to lower termination and license fees, along with known drags such as the impact of the Bank of America renewal and the large account processing core deconversion. We expect the onboarding of new business, combined with current sales success, to drive substantial growth this year.

We expect the benefits of the Open acquisition to ramp throughout 2013, which also contributes to positive momentum in the second half of the year. And for those keeping score, we anticipate our Payments segment adjusted internal revenue growth will be within our long-term outlook of 4% to 8% for the remainder of the year.

Our second priority is to turn market momentum into deeper client relationships with the larger share of our strategic solutions. We recently held 2 of our larger client conferences, including Open Solutions, which tallied approximately 4,000 client and prospect attendees.

This provided a record number of Open clients with a firsthand opportunity to explore and evaluate Fiserv's suite of highly rated solutions. The feedback and sales activity from these events has been outstanding.

Sales of our market-leading Payments and Channel Solutions were solid in the quarter. We more than tripled the number of Mobiliti ASP users from the year-ago quarter, eclipsing the 1 million subscriber mark.

We also signed 90 new institutions for a total of nearly 1,500 clients to date on our Mobiliti solution. Our third priority is to deliver innovation and integration for our clients with an important focus on Open Solutions.

We continue to see the intersection of digital experience in Payments to me -- to be among the most innovative opportunities confronting us today. We continue to see great demand for Popmoney, signing 89 new institutions in the quarter, bringing the total to over 1,900 network member institutions.

Transactions, while still scaling, grew 68% over the last year's quarter. There's also strong interest in our SpotPay solution, which allows issuers to enable small merchants to accept credit and debit cards, driving value for their customer and fee revenue for the client.

We worked with Bank of the West in the quarter to launch Quick Balance, a first of its kind innovation among major U.S. banks, which enables the customer, if they choose, to check their account balance on a digital device without logging into the app.

We were pleased to announce at our client conference that PNC Bank intends to be the first major financial institution in the U.S. to offer Popmoney Instant Payments.

The service, which enables payments to be credited to a recipient's account within seconds, is available to financial institutions that offer Popmoney and also our members of ACCEL or the STAR network, which we also added in the quarter. Now thousands and thousands of financial institutions with tens of millions of consumers will have the possibility of realtime payments at their fingertips.

We remain keenly focused on providing differentiated offerings that provide rich user experiences for our clients and their customers. Finally, as I mentioned, we have good momentum with the Open Solutions integration, including sales of DNA.

In the quarter, we signed 5 new DNA account processing clients, both banks and credit unions, and more sales than any quarter since 2011. We like the STAR and are encouraged by the strength and quality of the sales pipeline.

We're making good progress in the Acumen transition and believe DNA, enhanced by unique Acumen capabilities, creates powerful realtime alternatives for text-savvy institutions in the U.S. Our Open synergy plans are being executed well.

Interest is strong from Open clients in areas such as bill payment, debit, Online Banking and mobile. While not yet final, our integration teams have identified expense and revenue synergy opportunities greater than our original run rate estimates of $50 million and $75 million, respectively.

We feel great about that progress. Now let me turn the call over to Tom to provide additional detail in the quarter.

Thanks, Jeff, and good afternoon, everyone. Before I get into the results, let me clarify a couple of items which have an impact on the comparability of our results in the quarter.

First, the Open Solutions results are for a partial quarter and include only the 2.5 months since the January '14 close. Second, we disposed of a small non-strategic business, Club Solutions, which is slightly dilutive to adjusted EPS, about $0.04 per share in 2013.

Our prior financial results have been adjusted for the divestiture and are included in the supplemental materials. We also disposed of a very small product line during the quarter, which has not been restated in our financial results.

As Jeff mentioned, our start to the year was consistent with our internal plan. Adjusted revenue increased 6% to $1.1 billion and adjusted internal revenue was flat.

Adjusted earnings per share increased a solid 13% in the quarter to $1.33. Adjusted operating income grew 5% to $308 million and adjusted income grew 8%.

Adjusted operating margin declined 30 basis points to 28.4% compared to the first quarter of 2012. Our internal revenue growth was negatively impacted by approximately 3 percentage points due to several factors, including lower termination fee and license revenue as compared to the strong first quarter last year.

And the headwinds we identified coming into 2013. Given the noise in the quarter, let me dissect the headline results to provide a better understanding of the solid underlying trends we are seeing.

We don't believe the 30-basis-point decline in operating margin tells the story of the quarter. Operating margin was negatively impacted by over 100 basis points due to the Open acquisition and higher expenses in the Corporate segment.

Most of our businesses performed well and, in fact, the Payments segment margin expanded by 90 basis points in the quarter. Including Open, processing and services revenue was up nearly 8% in the quarter, which positively contributed to further recurring revenue growth and sustainable margin expansion.

Now let me provide a bit more color on the segment results. Adjusted revenue in the Payments segment, which was all internal, increased 2% to $543 million.

Revenue in the quarter was driven by solid performance in debit, Biller Solutions and our Mobiliti businesses, partially offset by the Bank of America renewal pricing and lower license fee revenue in our risk businesses. We anticipate strong revenue acceleration in the segment for the remainder of the year.

Adjusted operating income for the segment increased 5% to $166 million in the quarter and adjusted operating margin was up 90 basis points to 30.5% in the quarter. The adjusted margin in the quarter was positively impacted by the scale benefits of our transaction-based businesses, largely in debit processing and digital channels, offset by the Bank of America pricing impact and lower license fees.

Debit volume in the quarter was up 13%, which reflects our strong market position. Transaction growth is moving in the right direction in bill payments, as volume increased 3% versus both a year ago and sequential quarters.

This is a great step forward, reversing the trend and recording our best transaction growth in the last 4 quarters. We also saw a notable return to growth in e-bill volume, which increased 5% in the quarter, matching the highest growth since 2009.

Adjusted revenue in the Financial segment increased 11% in the quarter to $555 million, driven by 2.5 months of Open Solutions results. Adjusted internal revenue declined by 2%, which includes significantly lower termination fees, reduction in license revenue and the migration of the previously discussed large account processing client, which anniversaries later this year.

All told, these items combined for about 4 percentage points of segment decline in the quarter. Segment operating income increased 9% to $165 million and the operating margin decreased 40 basis points to 29.8% in the quarter.

This margin decline included more than 200 basis points of impact related to the items I just mentioned and Open Solutions. Positive operating margin benefits in the segment came from Operational Effectiveness savings and strong performance in item processing.

The segment will see measurable benefits from Open transaction synergies during the second half of this year. Operating expense in our Corporate and Other segment was up $8 million over the prior year's quarter, primarily due to an unusually low 2012 compare, the timing of expenses and $3 million of incremental legal costs in the quarter.

Corporate results negatively impact overall operating margin by 70 basis points in the quarter. Our adjusted effective tax rate for the quarter was 34.7%, slightly higher than last year's first quarter rate of 34.5%.

We continue to expect our adjusted effective tax rate for 2013 will be approximately 35%, slightly better than the 35.7% rate in 2012. Free cash flow in the quarter was exceptional at $232 million, an increase of 28% from the prior-year period.

Free cash flow per share was up sharply to $1.72, an increase of 33% over the prior-year period. Free cash flow gains were driven primarily from an 8% increase in adjusted income and positive working capital improvements.

Total debt at March 31 was just over $4 billion or 2.7x trailing adjusted EBITDA. We repurchased 800,000 shares of stock in the quarter for approximately $67 million.

At quarter end, there were approximately 4.8 million shares remaining under our existing share repurchase authorization. Consistent with our guidance, we expect to allocate more cash to debt repayment in 2013 than last year.

And remain committed to allocating capital in a manner that builds substantial value for our shareholders. With that, I will now turn the call back over to Jeff.

Thanks, Tom. As I mentioned upfront, sales are off to a strong start even after finishing 2012 with record contract value.

Sales for the quarter, excluding Open Solutions, was up 25% over the prior year. Sales quota attainment in the quarter was 87% of straight line performance, which compares favorably to the 58% attainment in last year's first quarter.

Our sales pipeline remains very strong with a different mix than last year's results, which was led primarily by significant bill payment wins. We've set a 2013 Integrated sales target of $210 million, which as you will recall, reflects annualized revenue, and this total includes $8 million related to our Open Solutions clients.

During the quarter, we achieved $38 million of Integrated sales. Our 2013 Operational Effectiveness goal is $60 million, which includes $17 million of anticipated Open Solutions cost synergies.

For the quarter, we attained $14 million or 23% of our annual Operational Effectiveness goal. We've calibrated this year's objective to ensure we capitalize on the Open Solutions opportunity quickly and effectively.

Environmentally, regulatory actions continued to abate in 2013. Through the end of March, there were only 9 actions, less than half the number during the same period last year, which is indicative of the general stability in the industry.

On balance, institutions appear healthier and somewhat more optimistic. The majority of financial institution conversations are centered on mobile, payments and new ways to make more money, balanced by the unpredictability of the regulatory environment.

Our views on IT spend have not changed and we continue to see a bias to outsource solutions. Digital access, including tablet, smartphones and other devices, has gained a much more significant seat at the table, which is very well aligned with our strategic focus.

As for guidance, our 2013 growth remains on track, including the adjustment for the Club Solutions disposition. We still expect full year adjusted revenue to increase by more than 10% and that adjusted internal revenue will grow 3% to 4%.

Importantly, we expect to see sequential gains in revenue growth throughout the year. We expect adjusted EPS to grow in the range of 15% to 19% or $5.84 to $6.03 per share, which reflects a $0.04 per share impact from the divestiture.

And that operating margin will expand between 10 and 50 basis points for the full year. We expect free cash flow per share to increase by at least 18% or greater than $6.55 per share, which has also been adjusted slightly as a result of the divestiture.

We feel great about our start to the year and are well positioned to achieve our full year guidance. The Open Solutions integration is going well, and we see additional opportunities to unlock value beyond what we identified at the time of acquisition.

We expect the combination of sequential quarterly growth and meaningful strategic progress to provide momentum this year and into 2014. And last but not least, we thank our 21,000 associates around the world who are committed to enabling success for our clients each and everyday.

With that, let's open the lines for questions.

David, can I ask you a question before you ask a question?

Sure.

Did you hear me talk about guidance?

I apologize, because I was actually joining the call late from another call that was occurring at the same time.

Okay. We heard that there was some music being played during the guidance.

So what I'd like to do if it's okay, is go back and reread the guidance section and then we'll come back to you on the question, if that's okay?

Sure.

All right. So as for guidance, our 2013 growth remains on track, including the adjustment for the Club Solutions disposition.

We still expect full year adjusted revenue to increase by more than 10%, and that adjusted internal revenue will grow 3% to 4%. Importantly, we expect to see sequential gains in revenue growth throughout the year.

We expect adjusted EPS to grow in a range of 15% to 19% or $5.84 to $6.03 per share, which reflects a $0.04 per share impact from the divestiture, and that operating margin will expand between 10 and 50 basis points for the full year. We expect free cash flow per share to increase by at least 18% or greater than $6.55 per share, which has also been adjusted slightly as a result of the divestiture.

We feel great about our start to the year and are well positioned to achieve our full year guidance. The Open Solutions integration is going well, and we see additional opportunities to unlock value beyond what we identified at the time of the acquisition.

We expect the combination of sequential quarterly growth and meaningful strategic progress to provide momentum this year and into 2014. And last but never least, we thank our 21,000 associates around the world who are committed to enabling success for our clients each and everyday.

All right. So thank you for allowing us to re-go through that.

So David, are you still on?

Yes, I am, Jeff.

All right.

Just to start it off -- and again, I apologize if you addressed this in your opening remarks, but staying with the 3% to 4% organic growth outlook for the year despite sort of a flattish start in Q1, what gives you so much conviction that you can get up to that level, particularly after a disappointing fourth quarter as well?

Yes, a great question. Let me go through that.

We have 5 or 6 areas that we see that are going to drive our growth for the remainder of the year. The first is really around onboarding our significant bill payment wins, and you can see that start to show up in the transaction volume in both bill payment and in e-bill this quarter.

As I mentioned, we had TD that went online towards the end of the first quarter, and we actually have large installs coming in each quarter of the year from wins last year as well as actually a couple from the prior year. So we're quite excited to have those go live.

And then, of course, as we announced at the end of the last year, we had Wells. We have Wells going on in the first quarter of '14 but that will continue that momentum forward.

The secondary is really continuing strength in payments. We've had, as we've talked about, we've had strong results in debit, so in the card business.

We're seeing some acceleration in our CashEdge-oriented products. We talked about Instant Payments and Popmoney.

And as I mentioned, we do expect and have a high degree of confidence that our Payments segment growth will average 4% to 8% for the remainder of the year, well within our outlook, our long-term outlook. The next item is really around digital.

As I mentioned, we had good success, 90 new mobile sales in the quarter. We still have several hundred institutions and backlog.

Growth in ASP subscribers has been higher than we thought it would be and continues to be strong, over 1 million at the end of the quarter. We actually have a couple of large Online Banking customers coming online in the middle of the year.

Those are deals that at, least one of them, we've been working on for about 16 months, large hosted deals, so that will come online, and we'll start recognizing revenue from there. And we also have a new ASP tablet offering that will go live in the middle of the year.

Next item is really around current sales. We had a great sales start to the year, 25% increase year-over-year.

And we expect that, that will actually turn into revenue sooner because it's first quarter sales. And then we've got the headwinds that Tom referenced, and that we identified coming into the year that we knew would work against us.

We'll see that start to dissipate late in the year. So for all of those reasons, we have a good degree of confidence.

And then lastly, a little bit tangential but important, open Solutions will continue to come online as we move through the year and we expect to see some more license revenue come in there and we also expect to see some revenue synergies come online. So those are the reasons why we're confident.

We know that the fourth quarter last year was not where we wanted it to be, but it's really license revenue-based. And that part of that was the compare issue that actually impacted us, both last year in Q4, that Q4 of '11 was so strong that we actually had bleed into Q1 of 2012 and that worked against us.

So we do have a high degree of confidence. It's largely around recurring revenue.

Our plans this year do not show big ramps in license revenue. So for those reasons, we're actually highly confident in our results for the remainder of the year.

That helped. As a follow-up, what are the largest drivers of the $60 million Operational Effectiveness target, excluding the Open Solutions cost takeout?

Yes, I think, David, overall -- this is Tom. I think we continue to make progress in our globalization initiatives, as you all know.

We continue to drive improvements in our operational structure around our data center infrastructure. Those are probably some of the bigger items that we have there.

And we have some good pathway over the next several years also. But Open will be an important focus area and I think you may have missed this, but as Jeff indicated earlier, the initial view of the synergy benefits, we have visibility, and the more, as sit here today, we have to finalize that, but I think we've identified more as the work has gotten into a lot of details.

So we're pleased about that also.

And just a quick housekeeping question, Tom, do you have a quarter end share count?

Yes. 133.2, David.

I guess, my first question just on the Open revenue themselves. I think this quarter you said acquisition revenues came in at about $65 million.

Should that ramp through the year, including -- I would guess, first of all, you just pro rata that into Q2 and it might suggest $80 million or so of revs in Q2 since you'll have a full quarter. But is there any real seasonality or -- I think you said you expect some growth from that through the year?

Yes, absolutely, Dave. And this is Tom.

First of all, to your point, it was a partial quarter. So you do have to do that annualization.

Secondly, we are continuing to make a lot of momentum as far as the business goes. As Jeff highlighted, we had 5 new DNA sales in the quarter.

The pipeline continues to grow, so we anticipate a sequential improvement in that business as the year goes on, as we sell well with the integration with the clients and the prospects, et cetera. So we're on track but we did anticipate that we'd have quarter-over-quarter lift, both from a revenue standpoint and then clearly, the synergy benefits, which are going to kick in largely in the second half of the year, and that was factored into our plan.

I would say the only other -- to your question on seasonality, Dave, there is some seasonality in that business in that it tends to be a little bit more license heavy than the rest of Fiserv. And therefore, their sales to existing clients typically were biased towards the end of the year as institutions have a better handle on their budgets.

So we would expect to see that as well.

Okay, great. And then just my second question just interest expense.

That, I think that was $41 million in Q1. How -- I know there were some moving parts with Open that, that being pretty high during a small part of Q1 and Open coming on probably through the quarter, how do you kind of see interest expense normalizing over the next couple of quarters?

Yes, Dave, I don't think we're going to -- we have -- your question was around interest expense, right? Dave, I -- you let out a little bit early on so...

Yes, that's exactly right. Just kind of wondering after Q1, which had a few moving parts just kind of how we should see that progress through the rest of the year?

Yes, I don't think -- it might be slightly down as we continue to pay off a little debt, but I think it's going to be pretty close to sequential down, very slightly as we go through the rest of the year.

I guess, the first question, I wanted to drill down a little bit on the commentary around Open Solutions and the synergies and I think the direct quote has opportunity to unlock value more than you originally anticipated. And it sounds like you're talking about synergies now in the back half of the year.

What I think I remember from the fourth quarter call was that you were thinking about more the synergy will start in 2014. So maybe just a little bit of color about what you have observed and found that makes you more optimistic on the synergy side?

And am I right to be thinking that you're seeing the synergies you're going to realize them sooner than was earlier anticipated?

So you are right in terms of timing. I would say that our optimism in Open has come really in 3 baskets.

The first one is the teams have worked extraordinary well together, a lot of transparency, and so we are capturing some of the synergies earlier than we thought. And the synergies really come on both sides.

They come in terms of -- from the Open acquisition, as well as we pull some of our businesses together. So we're seeing some synergy benefits in terms of the timing.

And then in the second basket, we're also believing that the total synergy value on the cost side is going to likely be larger than the $50 million that we talked about. And that will also help us to have a little bit more benefit this year.

Now for clarity, I will say that our guidance for the year, right, the range, the 15% to 19% -- or 15% to 18% and now 15% to 19% range allowed for higher levels of synergy value. If you think about what the per share amounts are and that it's on a route, and you're not going to get a full year, it's impossible for us to get a full year of synergies on anything because of when we close.

So that is accounted for in there, but again it helps us to be even more confident about where we're going to land. And then the third basket, and I think the one that I'm most excited about, is the revenue opportunity is significantly larger than I thought.

And I believe we will see earlier wins than we really anticipated. And that's really a function of the comfort that the Open clients seem to have with us as a partner.

There was this palpable sense of relief that the clients felt in terms of knowing that their provider was going to be around. And then the opportunity to look at the full suite of solutions that we have that, frankly, Open did not have, and that was a core thesis to our acquisition.

But to see it live at our client conference with a record number of Open attendees and I've had the pleasure of meeting with a number of the Open clients one-on-one, I can honestly tell you that there is a very strong willingness to benefit from the bundles of value that we can bring in. So for those reasons, I think we will see both larger amounts of synergies and more benefit in this year than we anticipated.

And of course, the larger of the benefits will be in the cost side because revenue has to ramp and most of that will not occur really until the third and fourth quarters in terms of the actual revenue benefit this year.

All right. That's encouraging.

And then just to drill down on the sales commentary, the 25% sales growth, I mean, maybe you can help us. Give us a little color or maybe by segment maybe talk about the market environment.

I think you did have a relatively easy comparison but just try and understand like the macroenvironment, your sale success and where you really saw it.

Yes, that's great. On the macro side, I would say that the big winners were digital.

Our digital businesses were up substantially on a year-over-year basis, so thinking about mobile, online and the connected capabilities to those services. We also saw great success in international.

We had some nice international wins during the year. You may remember that about a year and change ago, we formed our -- an international business, where we had really been doing things I would say more opportunistically.

We have -- we put one of our strongest leaders on top of international and we're starting to see some momentum there, so we were excited about that, that sales performance. And then we had good progress actually on the bank solution side, so in the account processing wins, we had some nice wins there.

And then we had just a smattering of good deals in other places, but those are the big ones. And I would say, on the bill payment side, we were about even.

The larger pill payment wins really occurred later on in the year. So in the first quarter, we were kind of flattish on that side.

My 2 questions are, one, is a bigger picture one, which is how has the world changed now that you all have acquired Open? The TCI has swallowed a couple of folks.

We're starting to see some consolidation, I think people have been expecting for a while. Has that changed the way you look at the world, the opportunities you see or the way you're going to try and go-to-market?

Or just give us your thoughts on -- and if that has changed anything.

I would say that the way in which it's changed is for us, we have less competitors to consider. So on one hand, the competitors are potentially larger or -- not potentially, they are larger.

But instead of having -- I'm going to use this only illustratively -- instead of having 20 competitors, we have 10. So it's easier to know those 10 competitors than it is to know the 20.

So on that side, that's a good thing. We're not seeing -- in these newer consolidations, we're not seeing any pricing that is concerning, so that's good news.

And I would say, it's really a value proposition. As the market gets healthier, it's more of a value proposition, what are you bringing to bear?

As I mentioned at the Open thesis, we're seeing it play out quite well. And then the other piece of it that we're focused on really from a macro standpoint, Brett, is realtime.

I mean we really believe that the days of being able to cloak vast transactions in realtime will come to an end as consumers require information and access the way they are. And one of the interesting examples is even the Bank of the West Quick Balance technology.

Imagine a technology that allows you to check the balance without having to log in to that app. Now you have to authenticate through the device, but it's really requiring data to move in a much more clear and concise and quick fashion.

So from that macro, that's one of the reasons why we thought that Open was important as those technology demands change. But competitively, it's a competitive market.

It's going to continue to be a competitive market and we're excited to out there and compete everyday.

Great. And just one -- second question, in terms of Popmoney, it sounds like you're -- you've got PNC as a key partner going live with the newest realtime stuff.

And you mentioned I think really good transaction growth. What can you tell us about how you're seeing people use that, the use cases, are they sort of panning out as you thought they would?

Or was -- what's been surprising? Do you see pockets that you are -- that all of a sudden more interesting in terms of potential addressable market or others that are going away?

Any change now that we're deeper into that rollout?

I would say that if you -- we went through the use cases that we considered back in 2009 when we started ZashPay, and started to think about ZashPay, I would say that there are very little crossover between what we thought the primary use cases would be and why they are. And that's actually great news because the use cases that are developing are use cases that we've seen time and time again within our bill payment technology.

And a number of them are quite well-suited for realtime. The other thing that I like is what we're seeing on the Popmoney side is a merchant, customer, financial institution triumvirate in that there's value being exchanged equally between those 3 parties.

And I think there are ways for us to change that materially, increase the value for each of those parties, which as we talked about at Investor Day, we actually think is upwards around $10 billion of ultimately new financial institution fee revenue, but not crappy fee revenue and I mean that by not fees that are assessed on customers that, where they don't see value. These are fees that customers are going to be willing to pay, not unlike a foreign ATM charge where there is real value being exchanged.

So we have a lot of bullishness around social payments, around Popmoney. It's one of the reasons why we continue to push the number of what we are thinking about as member institutions in the Popmoney network.

And I think you're going to see a lot of movement on that front this year, at least from us. Signing STAR, bringing STAR into the value proposition and now allowing us to be ACCEL and STAR.

I mean that's a lot of coverage in a financial institution arena for realtime. So that, we think, Popmoney, by itself, is an interesting value proposition.

But Popmoney coupled with realtime is game-changing. And when you compare that to your point, to the use cases, there's a lot of opportunity out there and we're quite excited about it.

Let me ask about the bill pay ramp ups and just trying to make sure that those conversions are in-flight and any risk of sort of cold feet pushout by the banks? And I'm curious is there a way to set a high-level frame for us?

Once you fully implement everyone, including Wells, what that would add to your volume growth in bill pay? Just give us a perspective on the magnitude of those wins.

So it's easier for me to comment on the first one. And not surprising, we did check the status of each of the large implementations prior to the call.

And we are in great shape on the larger implementations. So I don't expect -- I mean, listen, there's always a shock that something will get moved, a month or a few weeks or whatever the case may be.

But I don't see any of these getting materially pushed. Now again, I'm not within the institutions but I don't see that.

Take TD, for example. TD, they did everything they can actually to move their installation that forward.

They're so focused on driving value through the bill payment technology that they were doing everything they could to pull it forward. And so we -- just given the momentum in the market, I don't see that happening.

As it relates to can we give guidance on the growth rates, I think it would be imprudent to do that right now because there will be movements in the quarters. But as you know, because you're so familiar with bill pay, as these institutions come on, we're going to have several years of growth, transaction growth, as they both use it to promote to new consumers and use it -- use -- kind of see each of the individual consumers come up to speed.

The other thing that we're focused on which will, we believe, be a little bit different than we've seen in other large institutions, the installs of the other large institutions, is we have grown our e-bill distribution a lot over the last couple of years. I think we've added multiple billion dollars -- multiple billions of bills for e-bill distribution.

So that is a much superior value prop that these new institutions will be able to experience or the customers of the institutions will be able to experience. So I think we will have significantly greater levels of transaction growth sequentially each quarter through the year, and we expect that momentum to continue into '14.

Obviously, Wells won't come on until January of next year, but we expect that to be important volume as well.

Yes, Tien, that TD went live at the end of March, so that is what is right now is the benefit that's going forward here in the second quarter and forward.

Got it. Got it.

And I'm sure they're facing and obviously, to take advantage of all those benefits, including, e-bill. So we'll just keep on that as they come aboard.

I know they're big ones. Just on the lower license sales again, couple of quarters in a row there.

I know enterprise software has been kind of tough for a lot of folks. How much of that is cyclical in your mind this quarter versus maybe just Fiserv being more focused on hosted solutions or focusing on the recurring stuff?

I'm just trying to understand if this is more than a cyclical issue? I think I may have asked this last quarter even.

Yes, I think you know that our license fees are now probably roughly about 4% of our total revenue and as you know, they fluctuate quarter-to-quarter. We did, in this quarter, have a tough compare to the first quarter of '12 because we had carryover from '11 so it made the little bit more difficult.

But there's clearly a trend over time, as you know, in the core comp processing, more trends to outsourcing versus licensed solutions. And clearly, even in areas such as Mobiliti, online, they're looking to host those applications versus license.

So I think there's always going to be that license revenue. But clearly, the trend is towards more outsourcing solutions and it's not a big number for us, so -- and clearly we've adjusted our plan appropriately in '13 given what we had in '12 from a license standpoint.

But we're pleased actually with that trend. I mean, it generates recurring revenue, more scale, more opportunities to distribute more of our products and it's really beneficial over the long haul.

Yes, one of the interesting examples of that is I mentioned we've got a couple of larger online clients coming or Online Banking clients coming online in the middle of the year. And one of them would have had very material license revenue -- been very material license and professional services revenue that we have been unable to recognize any revenue because we agreed to host that solution for the client, which have better -- it's better cash flow, it's longer, it will allow us to actually be in better shape as it relates to other products.

We expect to actually add mobile to that client this year, which will be a very material add. However, it changes the nature in which we are able to recognize that revenue.

So I do think there is a secular edge do that. And to -- honestly, to the extent that we have the opportunities to create more NPV, we're going to bias to that even if it impacts us in the short run.

The majority of the license revenue though that we saw impacting us in Q4 and this Q1 are not giant enterprise licenses. They're smaller licenses.

We've had a couple of refreshes in our risk portfolio and some other areas that will come back online later on this year. So there is some cyclicality to that as well.

But as you know, we're strongly biasing the processing and recurring revenue. And so we're going to always look for those opportunities where we can find them.

First, I wanted to touch on you've been really bullish on the realtime capability. Can you provide some detail around the different channels that you might target with this capability?

I guess I'm most interested in any kind of non-FI use cases. I mean, are you considering potentially powering merchant, decoupled debit programs, or anything to do with retail consumer payments as opposed to just P2P or bill payment.

How disruptive basically you're willing to get with this pretty powerful capability.

So I guess the way we think about our priorities is we believe we have an obligation to make technologies available to financial institutions, to issuers first. That's our #1 desire.

That's our #1 focus and we are doing everything we can to make sure financial institutions have an edge versus non-financial institutions and other competitors. However, within our segment orientation, we said we have 3 primary focus areas.

Financial institutions, billers and consumers. And so we are always looking for ways in the market in which we can deliver technology solutions that help improve the quality of the services or in some cases, the lives of consumers everyday.

So for example, we have a consumer direct site called MyCheckFree, where we have a couple of million consumers who work with us every month to pay bills electronically, and certainly, we are looking for opportunities to enhance those experiences and make those available, make realtime available in places such as that. So I would say that as it relates to things like decoupled debit, I would say that's pretty low on our priority list.

Again, we have an allegiance to financial institutions but we also understand that in order to win over time, everyone wins if there's more network and more ubiquity. And so we're looking for different ways to distribute outside that channel where it makes sense.

Okay, great. That's really helpful.

My second question has to do with the Open Solutions integration. How difficult has the process been of switching the legacy Acumen customer to DNA?

Had there been any sign of client loss when you proposed converting to DNA? Did you have to go back and resell DNA to Acumen customers who won't rollout yet?

I mean, basically, has the conversion been sort of clean or messy?

Ramsey, this is Mark Ernst. Let me take that one.

It's a little early to fully answer that. We've, obviously, been having very deep discussions with each one of the Acumen clients, both those who have been live and as well as those who are in process.

I would characterize the conversations we've been having thus far as very positive. We have been very happy with the reaction that we're seeing from the clients, who were formerly committed to Acumen, and they've gotten to know the DNA product all over again.

As we have described DNA as a product, it was in many ways, sort of the equivalent of what Acumen was building. So I think the buyers of Acumen, who are buying both for the technology as well as for the stability and the long-term partnership of Fiserv, are finding that the DNA technology is very comparable and therefore -- and a bit more mature.

So therefore, they're pleased so far with what they're seeing with DNA. They like the partnership aspects of Fiserv.

So all in all, I'd say it's going very well. It's just that we -- these are complex conversations with a whole host of different parties, so we are working through those one at a time.

And I would say many cases, just to accentuate Mark's point, in many cases where people selected Acumen, it came down to 2 choices and Acumen was usually #1 or it was sometimes #1 and DNA was almost always the #2 because it was the only other kind of what I would call, technologically advanced system in the market. So from that perspective, people are generally familiar.

And in many cases, what they did not have, what Open did not have is they didn't have the stability of the partner of the company so there was concerns about their financial viability. But they also didn't have all of the different solutions within their own family that they could deliver in a single integrated bundle.

And that's really where we're driving value today. Interestingly, and one of the things that we've learned more about is Open had been out doing a fair amount of work replicating some of the Acumen capabilities that we were winning in the market.

It's exactly what you would expect a competitor to do. So in some of the early releases that we expect to put out this year, some of those capabilities are already embedded.

So the good news is as the Acumen clients are fairly pleased with that. The only other comment I should make is, and I should have thought about this earlier, is on the license revenue comment, one of the reasons why license revenue was down year-over-year is because of the Acumen clients, which in many cases were tending to be in-house clients.

That license revenue, we were not getting that at the end of last year and we've actually not -- we're not getting it this year either yet. So that's one of the other benefits of making these DNA or getting these DNA conversions done is we'll get back to bringing some of that revenue back in.

This is Ashish calling on behalf of Bryan. A quick follow-up question on Acumen and the DNA discussion.

I was just wondering, is your decision to migrate from Acumen platform to DNA, is that affecting or creating any kind of confusion in the marketplace? And has that impacted license sales in or -- yes, any color that you can give on that front?

No, I would say actually -- and Mark, you should fill in if I'm missing something. I mean, we actually wanted to make it extraordinarily clear at the time of the acquisition that DNA was going to be our go-forward platform.

And while at times, some of the Acumen clients clearly were not happy with that, and we understand why 100%, we want to make it very clear to the market what our go-forward platform was going to be and we did that. So that's actually been quite helpful in terms of making sure there's good market clarity and allow us to really focus, not on a debate on which platform is the right platform, but how can we move people forward.

I think the only confusion that we heard of early on was some confusion because Acumen is really a credit union-focused platform and DNA service both credit unions and banks. There was some confusion or at least some question about whether we were altering the positioning of DNA.

But I think we've worked hard to clarify that we see a position in the market for both DNA in the bank market, as well as DNA in the credit union market, so we will continue to support both those different industry types.

Okay. Okay.

And a quick question on gross profit and specifically the product cost. If my numbers are right, I see that the product cost has gone up slightly, is that related to Open?

And how do you expect the gross profit to trend through the rest of the year, if you could just provide some color on that front?

Yes, I think if you look at the press release, we did take a -- we had write-off in cost of product that was the impairment, non-cash impairment charge, that went through that line item. As you see in the P&L, it's a footnote on the bottom.

So when you take that out, it's really comparable on a year-over-year basis.

And so expectations for going forward, was this a onetime charge?

That's correct.

Yes, we'll take it back. And we'll get that back to normal in the second quarter.

Great. Thanks, everyone, for joining us this afternoon.

If you have any further questions, please don't hesitate to contact our Investor Relations team. Have a great day.

Thanks.