Mortgage Revenue & Margins
Q: What were mortgage revenues and margins in Q4 and expectations for 2024?
A: Mortgage revenue accounted for 15% of total revenues in Q4 and 19% for the fiscal year. " In the first quarter of 2024, it's expected to be around 20%. " The blended gross margin on mortgage is approximately 65%, though this depends on product mix. " Incremental mortgage margins remain very high despite some compression due to vendor price increases. "

Nonmortgage Growth Guidance
Q: How should we interpret the 8.5% nonmortgage growth guidance for 2024?
A: The 8.5% nonmortgage growth is within their target range of 8% to 12% and is considered strong. " Despite pressures in the Talent market and the ERC impact, they do not anticipate upside beyond this guidance and view it as a solid growth rate. "

Capital Deployment Priorities
Q: What are the capital deployment priorities regarding leverage, dividends, buybacks, and M&A?
A: Near-term priorities in 2024 include reducing CapEx as they complete their cloud migration, leading to increased free cash flow. " They plan to continue disciplined bolt-on M&A. " Looking ahead to 2025 and 2026, they expect significant excess free cash flow to potentially restart the dividend and engage in meaningful stock buybacks. "

Government Business TAM Increase
Q: What's driving the increase in Government TAM from $4B to $5B?
A: The Government business's Total Addressable Market has grown due to expanded opportunities in government social services verification. " Significant growth potential exists at federal, state, and local levels, particularly in income and employment verification for social programs. " Integration of the insights business has broadened their product set, contributing to the increased TAM. "

Margin Expansion Outlook
Q: What is the outlook for margin expansion and cost savings?
A: They expect margin improvements throughout 2024, with a net benefit of about 30 basis points for the year due to cost reductions from the cloud migration. " Significant cost savings are anticipated in the second half as duplicative costs and migration expenses decrease. " They remain consistent in expecting margins to expand as the year progresses. "

Mortgage Inquiry Trends
Q: How are mortgage inquiry trends shaping up for 2024?
A: Slight improvements have been observed in the last 60 days, suggesting the mortgage market may have bottomed. " While inquiries are better than anticipated when guidance was given in October, these trends are already factored into the down 15% forecast for mortgage inquiries in 2024. "

Delinquencies in Subprime
Q: Is there concern that rising subprime delinquencies will spread to near prime or prime?
A: Management does not believe rising subprime delinquencies will spread to near prime or prime, primarily because unemployment remains low and employment is high, enabling consumers to meet their financial obligations. " Subprime pressure is mainly due to inflation affecting that demographic, but it's a small part of the overall financial ecosystem. "

VantageScore Pricing in Mortgage Vertical
Q: How are you thinking about pricing for VantageScore 4.0 in the mortgage vertical?
A: Pricing decisions for VantageScore are pending as regulatory changes are still in a comment period. " If a mandate requires both FICO and VantageScore for mortgages, it would be a positive development, allowing them to sell a second score for every mortgage. " However, they haven't included this in their 2024 framework due to uncertainty about timing and impact. "

Volume Assumptions in Talent Business
Q: What are the volume assumptions for the Talent business in 2024?
A: They anticipate the hiring market to be down about 10%, based on current Bureau of Labor Statistics data. " Despite this, they expect to significantly outperform the market by over 10 points, feeling confident in their ability to grow Talent despite the challenging hiring environment. "

Assumptions on Other Areas (Auto, Kount, Consumer)
Q: What are the volume assumptions for Auto, Kount, Consumer, and other areas?
A: No significant changes are expected in these verticals for 2024 compared to the second half of last year. " Markets like cards, auto, and personal loans are stable. " Fintech impacts have stabilized, and large financial institutions continue to originate due to strong consumer trends. "

Impact of Medicaid Redetermination
Q: What contribution is expected from Medicaid redetermination in the first half of 2024?
A: While not providing specific dollar amounts, Medicaid redetermination continues to be a benefit and is expected to contribute positively in the first and second quarters. " Redetermination is an ongoing process, and they anticipate sustained revenue from this area beyond 2024. "

Incremental Margins on Mortgage Revenues
Q: What are the incremental margins on mortgage revenues in the 2024 guidance?
A: The blended gross margin on mortgage revenues is about 65%, though this varies based on product mix. " Incremental margins remain high but have decreased from previous levels due to a significant vendor price increase that impacts gross margins but is marked up to maintain EBITDA margins. "