Essex Property Trust Q1 2026 Market Resilience and Rent Growth Outlook

Summary answer

Fiserv’s plan to leverage AI spend and capital expenditures (capex) to achieve mid-single-digit revenue growth in 2026 is primarily about using AI to (1) improve client-facing operations and application productivity, (2) create and monetize new “agentic” capabilities that expand addressable markets (TAMs), and (3) fund these initiatives with disciplined capital allocation and operational efficiency actions that free up resources to invest. Management also links the revenue growth target to a broader One Fiserv execution program that is intended to be fully visible in 2026 results. ¹²³⁴

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1) What Fiserv says AI spend is supposed to do for growth (not just cost)

AI is positioned as a revenue enabler via new “systems of collaboration” and new TAMs

Fiserv explicitly frames AI as transforming its offerings from “systems of record into systems of collaboration,” creating new TAMs, and increasing efficiency—actions management says “together…will support” the company’s mid-single-digit adjusted revenue growth target discussed since last fall. ¹

Project Elevate (AI at the center) is expected to drive both revenue uplift and efficiency

Management states that with Project Elevate—where “AI [is] at the center”—the teams have identified hundreds of opportunities to:

• drive revenue uplift,
• reduce expenses,
• increase simplicity, and
• improve productivity,
  and they are moving “with urgency to operationalize them.” ¹³

AI revenue use cases are described as agentic capabilities in both Merchant and Banking

Management says it is focused on four AI areas (including revenue sources/TAMs and enhancing client service). ⁵ Specifically, it calls out agentic as the next phase for revenue-side leverage in both:

• Merchant: “new agentic commerce capabilities” enabled through partnerships and targeted to the Clover customer base without Clover needing to build all backend systems itself. ⁵⁶
• Banking (Financial Solutions): a “governed AI operating layer” to allow financial institutions to use agents across front/middle/back office functions “using any LLM,” with pilots “live with…2 financial institutions” and multiple additional use cases (e.g., “loan originations, compliance in call centers”). ⁵

Implication for the 2026 revenue goal: management’s public linkage is that AI initiatives are intended to produce (a) more effective client service and (b) new monetizable product/application capabilities (agentic commerce and agentic banking functions) that expand TAM and drive revenue uplift—core mechanisms for mid-single-digit growth rather than purely expense reduction. ¹⁵

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2) How Fiserv intends to connect capex and investment to growth (and not let it derail margins)

Investments are “fully funded and fully resourced,” but Fiserv expects financial results to lag execution due to transition-year dynamics

Fiserv describes 2026 as a “transition year” where reported results may not yet show operating improvement because it is still:

• lapping a higher mix of nonrecurring revenue,
• absorbing incremental expenses from investments that will drive long-term growth, and
• dealing with lingering impacts from prior client service challenges. ²

Management also states that “the efforts we need to get there are fully funded and fully resourced,” tying the plan to the execution needed to reach a mid-single-digit grower profile. ⁴

Capex discipline and modernization are part of the funding story

While the excerpts don’t provide a numeric capex forecast, Fiserv emphasizes disciplined capital allocation and points to modernization activity that requires technology investment. For example, management notes it completed migration of “all customer activities from a significant data center” as it continues modernization. ¹

Implication for the 2026 revenue goal: the strategy is to invest in modernization and AI-enabled operating capabilities while ensuring those investments are supported by disciplined capital allocation and offset by efficiency actions (below), so growth investments don’t permanently impair profitability or cash generation. ¹⁴

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3) The resource side: efficiency actions to fund AI and capex without sacrificing growth

Fiserv pairs AI-led initiatives with multiple operational efficiency moves intended to reduce cost structures and increase execution capacity—freeing resources that can be directed toward growth investments.

Specific efficiency actions already taken

Management cites actions taken in Q1 including:

• closing 2 subscale offices,
• exiting underperforming Merchant businesses in India,
• reducing management layers, and
• implementing more aggressive performance management. ¹

Fiserv also indicates further cost/productivity opportunity through AI across operations and call center services and other areas, noting it has already achieved “significant gains” by leveraging automation and sees additional opportunity through AI (including incremental generations). ⁷

Evidence of operational improvements that support revenue conversion

Fiserv reports operational service improvements that are consistent with the idea that AI investments can improve client experience and productivity:

• time to resolve client inquiries down 27% year-on-year, ²
• high-impact client incidents down nearly 60% year-on-year, ²
• launching AI initiatives to enhance performance of its primary client portal and call centers in Financial Solutions. ²

Implication for mid-single-digit growth: improved service/resolution times and reduced incidents can support revenue retention/upsell and reduce leakage, while AI productivity gains support the cost base needed to sustain investment for growth. ²⁷

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4) Why 2026 is expected to be the “mid-single-digit visibility” year

Management frames 2026 as the year where execution improves before being fully visible

Fiserv states that execution is improving across businesses, but progress is “not yet visible” in reported financial results due to transition-year comparables and incremental investment expense. Management expects operating performance to be “more fully visible” in 2H 2027 (and into 2027 more broadly). ²

Yet management still anchors the growth target for 2026

At the same time, management reiterates that “Together, these actions will support the mid-single-digit adjusted revenue…growth” they have discussed previously. ¹ Management also confirms the company’s 2026 organic revenue range guidance (1%–3%) and discusses Merchant/FS growth characterization (Merchant mid-single-digit; FS flat to slightly down), implying that the “mid-single-digit” framing is primarily about “adjusted revenue” rather than organic revenue and is tied to ongoing execution. ⁸⁹

Interpretation consistent with the excerpts: AI spend and capex are not presented as a single one-year “ROI flip,” but as part of a structured transformation (One Fiserv/Project Elevate, modernization, client service improvements) where the revenue uplift mechanisms (agentic capabilities, client service enhancement, productivity gains enabling reinvestment) are intended to support mid-single-digit adjusted revenue growth during 2026 while comparables/investment timing affect how quickly the improvements show up in reported results. ¹²⁵⁸

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5) Conclusion: the explicit linkage Fiserv provides

From the excerpts, Fiserv’s plan to use AI spend and capex to reach mid-single-digit revenue growth in 2026 rests on four linked elements:

1. AI is central to Project Elevate, with hundreds of opportunities identified to drive revenue uplift, not just efficiency. ¹
2. AI is aimed at revenue-side product evolution—especially agentic commerce for Merchant/Clover and governed agent layers for Banking pilots and use cases. ⁵
3. Investments are funded and resourced, but reported results may lag due to transition-year comparables and incremental investment expenses. ²⁴
4. Capex/technology modernization and disciplined capital allocation are paired with cost and operational efficiency actions (office closures, exits, management-layer reduction, performance management), with additional AI-driven productivity opportunities. ¹⁷

Together, management states these actions support the company’s target of mid-single-digit adjusted revenue growth in 2026, with additional investor-day detail to come for the financial targets tied to Elevate. ¹³

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