2024 Merchant Growth Guidance
Q: Are you being conservative with 7-8% Merchant growth?
A: Management expects Merchant organic growth of 7% to 8% in 2024, slightly lower than last year's exit rate of 8%, reflecting a cautious view of the macroeconomic environment and potential consumer weakness. "

M&A and Capital Allocation
Q: Will there be portfolio pruning or large acquisitions?
A: They might consider portfolio pruning in 2024, not included in the current outlook. M&A remains strategic, but any deals must offer competitive returns versus buying back stock. They plan to balance capital allocation, prioritizing debt reduction to a net leverage of 3x and considering share repurchases. " "

Margin Outlook and EVO Integration
Q: What's behind the up to 50 bps margin expansion?
A: Margin expansion reflects a balance between reinvesting in the business, including the EVO integration, and bottom-line benefits. Excluding EVO's lower margins, overall margins would rise about 75 basis points, with Merchant margins approaching 60%. "

Competitive Positioning and POS Rollout
Q: How is the competitive environment and opportunities?
A: Management feels confident in their strategic positioning, especially with their integrated U.S. business and upcoming next-generation POS software launch enhancing competitiveness. They are also optimistic about international markets by introducing advanced products where competition is less intense. "

Medium-Term EPS Growth Outlook
Q: How should we think about medium-term EPS targets?
A: While not providing a new cycle guide, management targets 7%+ revenue growth and 14%+ EPS growth for 2024, reflecting high single-digit top-line growth and mid-teens EPS growth, consistent with sustainable expectations, tempered by macroeconomic caution. "

Commerzbank JV Contribution
Q: What will the Commerzbank JV add this year?
A: The joint venture with Commerzbank is a greenfield opportunity in Germany, starting from a small base to grow over time. Its 2024 contribution is minimal and not material to guidance. "

U.K. Business Stabilization
Q: Is the U.K. market stabilizing?
A: There are signs of stabilization in the U.K., with inflation aligning with expectations. Management is optimistic and has introduced new products, including POS solutions, to compete effectively. "

Free Cash Flow Conversion
Q: How is free cash flow conversion so strong?
A: They achieved 100% free cash flow conversion for the year and expect roughly 100% in 2024, excluding timing changes in R&D tax credits. They anticipate add-backs to decrease, improving GAAP earnings relative to adjusted earnings. "

Earnings Growth Pace Through 2024
Q: Will earnings accelerate after anniversarying EVO?
A: Yes, they expect EPS growth of 11%-12% for the year, accelerating in the second half as they anniversary Netspend and EVO, reaching 12%-13% growth in Q3 and Q4. "

Merchant Volume and Pricing Expectations
Q: Are volumes and pricing aligned with forecasts?
A: They expect volumes to align with revenue growth and maintain consistent pricing strategies, focusing on fair value without unusual pricing actions. "

Vertical Software Investments
Q: Where are opportunities in vertical solutions?
A: They focus on owning software in verticals with large addressable markets, strong payments nexus, and international applicability, leveraging investments across the business. "

Issuer Business Renewals
Q: How are yields and renewal terms in Issuer?
A: They've renewed two flagship customers, included in guidance, and continue investing in modernization to open new revenue channels, aiming to sustain and accelerate growth over time. "