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.