Revenue Growth Outlook
Q: How is revenue growth accelerating in 2024?
A: Management is excited to guide to an accelerated total company revenue growth in 2024, especially in the Banking Solutions segment. They feel confident due to lapping nonrecurring headwinds from 2023 and strong sales momentum in the back half of 2023 into 2024, which will contribute to revenue in late '24 and into '25.

Margin Expansion and Cost Savings
Q: What is the outlook for margins and operating leverage?
A: Management expects natural margin expansion as they shift sales toward higher-margin, technology-enabled solutions, particularly in Banking Solutions. The Future Forward program is outperforming expectations, offsetting dissynergies. They anticipate both Banking and Capital Markets segments to grow margins in 2024, marking a return to consistent margin expansion over time.

Free Cash Flow and CapEx Guidance
Q: What are the free cash flow conversion and CapEx assumptions for 2024?
A: They forecast free cash flow conversion of 85% to 90% for 2024, up from 80% in 2023. CapEx is expected to decrease by 1 point to settle in the 7% to 8% range, continuing to invest in the business while improving cash flow conversion.

Nonrecurring Revenue Reacceleration
Q: Timing and magnitude of reacceleration in nonrecurring revenues?
A: The nonrecurring and professional services revenues in Banking will see headwinds dramatically reduced compared to 2023. While recurring revenue will outperform adjusted revenue growth, nonrecurring revenue may still present a slight headwind, but alignment between recurring and total revenue growth is improving.

Recurring Revenue Growth Trends
Q: Why is recurring revenue growth decelerating in 2024?
A: The 7% recurring revenue growth in Q4 2023 was exceptionally strong due to an extraordinary payments performance and an easier prior-year comparison. Normalizing these factors, the trend rate is closer to 3% to 4%. Banking recurring revenue is expected to outperform adjusted targets, but 7% isn't fully representative for 2024.

Sales Momentum and Demand
Q: Where is sales momentum and traction coming from?
A: They're seeing strong demand in digital and money movement solutions, with banks focusing on enhancing digital capabilities to gather deposits. In Capital Markets, there's high demand across securities processing, commercial lending technology, treasury solutions, and ESG products, driven by needs beyond traditional financial institutions.

Sales Force Direction and Productivity
Q: How is the sales force shifting towards higher-margin products?
A: They restructured sales incentives to favor higher-margin, recurring revenue products, leading to an 80 basis point increase in the mix from low-margin to high-margin sales from 2022 to 2023. Sales productivity has significantly improved, contributing to confidence in revenue delivery in late 2024 and 2025.

Backlog and Growth Guidance
Q: How does backlog connect to organic growth guidance?
A: The backlog stood at $23 billion in Q4, up from $22.2 billion in Q3, indicating acceleration. While backlog is consistent and supportive of revenue growth guidance, management plans to provide better KPIs at Investor Day, as backlog is a complex accounting figure.

Strength in Capital Markets
Q: What supports the strength in Capital Markets and sustainable growth?
A: The strength comes from expanding total addressable market (TAM), which is growing at about 5%. Capital Markets operates in attractive verticals and is expanding into new ones, providing a favorable tailwind and clear line of sight to meet 2024 guidance.

M&A Opportunities and Risks
Q: Thoughts on M&A in the bank sector like Cap One-Discover?
A: Management views the Capital One-Discover deal as highlighting the strategic value of having diverse assets in the fintech ecosystem, which is critical for FIS. They have strategic relationships with both companies and see consolidation as a net positive, though future M&A activity is uncertain and dependent on regulatory environments.

FedNow Implementation Impact
Q: Any changes from FedNow implementation?
A: There's significant demand from financial institutions for FedNow, with a large pipeline. Banks are keen on enabling it for money movement offerings. However, adoption by end customers remains to be seen, and it's uncertain how quickly it will be adopted compared to other money movement solutions.

Segment Cadence and Modeling
Q: Guidance on revenue cadence by segment for modeling?
A: Capital Markets revenue is expected to be consistent each quarter in 2024. Banking is on an upward trend as sales pick up in the second half of 2023 flow through. For the non-controlling interest (NCI) contribution, the first quarter is lowest due to only two months of contribution, with subsequent quarters treated relatively equally.

Macro Assumptions and IT Spending
Q: What are the macro assumptions in guidance and IT spending trends?
A: Consumer spend in payments is assumed to remain consistent in 2024. Banks are reducing discretionary IT spend but continue investing in digital capabilities, money movement, and regulatory technology to enhance services and focus on deposit gathering. Overall bank IT spending is consistent but shifting toward these areas.

Merger Integration Costs
Q: When will integration costs decrease?
A: Integration costs are expected to remain elevated in 2024 and 2025 due to significant costs associated with the Worldpay separation, which could take up to 24 months. Other costs are being reduced to improve free cash flow conversion, but Worldpay separation is substantial.

Future EPS Trend and Dissynergies
Q: Is normalized EPS growth rate sustainable excluding dissynergies?
A: Management advises caution in projecting future EPS growth by simply excluding dissynergies, as the Future Forward contributions will decrease from current levels. Detailed earnings power, revenue growth, and margin potential will be discussed at Investor Day in a few months.