TRU - Earnings call 4 2023

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Operator

Good day, and welcome to the TransUnion 2023 Fourth Quarter Earnings Conference Call. [Operator Instructions] Please note, today's event is being recorded. I would now like to turn the conference over to Aaron Hoffman, Senior Vice President of Investor Relations. Please go ahead.

Aaron Hoffman

Good morning, everyone, and thank you for attending today.

Joining me on the call are Chris Cartwright, President and Chief Executive Officer; and Todd Cello, Executive Vice President and Chief Financial Officer. We posted our earnings release and slides to accompany this call on the TransUnion Investor Relations website this morning, and they can also be found in the current report on Form 8-K that we filed this morning.

non-GAAP the information include and our will reconciliations about as will as and and contain schedules, other recorded, of release measures be comparable well detailed financial available GAAP measures be website. more revenue, certain most these earnings non-GAAP accompanying the replay to various slides on which items along financial Our with and their corresponding directly disclosures a operating call expenses measures. Today's

our information SG&A our In have earnings we month. this statements making undertake any statements from be XX-K, amendment Actual to do reporting related an forward-looking services also discussed the this current call and These most the correcting of statements will by the Form the a XX-K conference today's Forms expenses. forward-looking our and quarter We differ are during those XXXX uncertainties. factors XXXX of included release, in forward-looking. recent primarily other revision, We are in to during risks impairment are expectations with materially XX-Q We our noncash that early in today's third an results plan of could filed filings call and duty reports file on based and described XX-Q, in goodwill cost any subject not and U.K. to we our and assumptions the and January, to Form unit. and update on overstatement to to earnings because call SEC. end the made comments statement. Also of

the of out the turn time to over Chris. that with way, let So me

Christopher Cartwright

this from let and my welcome morning. share and our the agenda Aaron, add me Thanks, call

provide fourth the highlights First, XXXX quarter I our results. for will financial

value And with across our fourth XXXX grew with EBITDA results across revenue, and I and detail segments. Todd adjusted levels services up and drive third we first with detail our X% Revenue the in priorities exceeded growth volume. with lending quarter diluted an guidance our quarter, year financial guidance. In our remained constant XXXX no finally, seen on in the consistent along across basis, activity services, fourth markets will grew the X% late EPS. TU. will marketing X%. with quarter to quarter U.S. currency all verticals In Second, and strategic further at emerging full adjusted X% deterioration organic financial

the Communication our In double emerging both and growth growth. to improved verticals, insurance our Sector in quarter. In remains by and quarter, our accretive of expectations in year grew and call bookings to the Services subscription in delivered a with by remains Marketing mid-single-digit and XX% digits. new soft grew wins. offsets strong, Public driven line which revenues. transaction and were second still trusted standout Nuestar almost growth base the healthy business which solutions, in X% markets the Risk collections U.S. Solutions, half driven

in ownership. Neustar revenues margin of year, EBITDA XX%, X% adjusted expanded X up and the For years X,XXX points basis by grew our to

quarter, the fourth Our consecutive growth. the on XXth basis grew International XX% of constant by currency quarter a segment in double-digit

on of of Canada, while our as our growing network revenue XX% grew November, double center Asia continue capability phase technology Pacific because and led Africa India underlying global transformation digits outperform to our launched innovation, program adjacencies. with our enhancing and we We new gains into growth, next the capabilities. markets and expansion share well. In focused

total quarter million innovation by debt will during more deliver transformation of savings growth. We $XX significant detail while in on capital reduced $XXX share I of prepaid accelerating enabling expect a for and another this program XXXX, this and operating the expense to shortly. We XXXX. expenditures million

$X October refinancings We million interest by our reduce expense that will in annual February and completed in also XXXX.

we 'XX, markets. good of milestones the delivered our Looking and a of and environment year achieved results geographies many despite end for transformation key back challenging at full

our the geographic highlights innovative diversification. of business performance model our benefits and the relevance our of of resiliency innovations the product Our -- vertical and solutions

turn we create we strategic to believe X and our for value TransUnion will priorities XXXX, As and shareholders. significant

to is first accelerate and earnings The revenue growth.

The second leverage And to further. product to and is technology is capabilities initiatives announced. execute that the the transformation NuStar's third we

high adjusted growth. X% but will financial Todd to guidance, adjusted X% X% to revenue EBITDA full deliver XX% X% expect Now growth provide growth, diluted a at EPS level, X% to and we to

growth. and low interest economic wage to steady. Consumer beyond. rate expect XXXX in has the and are moderate in healthy has and to finances growth remain unemployment to Fed likely and moderated, cuts the volumes We lending remain due that Inflation real in U.S. XXXX indicated

uncertain. reductions consumers. Rate interest products, lesser the and rate-sensitive remain leveraged mortgage a and benefit and and personal magnitude auto particularly the lending loans, reduce extent, payments already most will Although timing to also to

credit Although for demand are cautious. remains standards healthy, still lending

market to over all Some slowing decade. outflows, our maintained requirements. rising this we our recent banks last landing, American also are caution many has echoed markets, expect In outperform. trends, over share expressing sizes of potentially positions countries India have enjoyed forecasting increasing continue pressure international and growth. TransUnion the economic deposit The Latin U.K., a to and experiencing of gains customers capital segment in across each loan earnings optimism Canada concerns modest the for lenders although strong faced largest delinquencies and during soft from but

this end bottom. We We expect or to believe their at of deliver near good markets our services are many results financial environment. in

lending activity their underpin For steady, our confidence. assumptions. Several lending remain to or XXXX, factors impact interest that Any potential upside assuming volumes. slower conditions our economic albeit cuts benefits from represents we stable are marketing on with rate and

solutions. sales the and excellent 'XX, verticals markets. new to services Despite and in winning for Customer XXXX subdued fourth our a strong job further benefits across our the team and across expect verticals year realize expect culminating business, in strong momentum financial strong did quarter XXXX. of we remains both an in in our diversified our of sales demand sales First, many U.S. volumes in

diversification growth independent vertical interest that moves. and lending levers and of provides rate are environment Second, orientation our the

marketing business and wins customers driven expect U.S. slowly largest We vertical, new in improving restoring spend. growth emerging our by insurance

and We have the meaningfully portfolio. depth also of our expanded product breadth

enhance in call new We is Nuestar our marketing which continue trusted potential fraud, TransUnion value to strengths solutions, and internationally. proposition and rapidly and with launch core scaling combine solutions expansion to credit for the

COVID. XXXX, over Third, IPO, XX% from benefit revenue revenues by due year in XXXX, with is XXXX, international, finally, organically since the to year grown since in more growth growth typical own and digits XXXX we except actions, in exception $XXX grew we largest contributing XX% roughly XXXX. And expect our has we to expect strong international third our every in India up grown every revenues expect market, to which and all our million X.X points XXXX double India of for to year, both almost and total pricing company geographies growth. We've parties. to from to this than contribute

highly prudent remain and management. also focused program addition cost profitability acquisition our in We by increasing on to driving synergies from savings transformation

key our is to integrate successfully. strategy Now growth continuing Nuestar to

expect Over margin the by scaled accretive been digits. its revenue last growth and XXXX, X years, In markets Nuestar stand-alone U.S. mid-single to we grow Nuestar rate to significantly. has has our

But soft account for from business, revenue. our Our XXXX. the subscription 'XX transactional of persist in in parts of to bookings XX% Nuestar's bookings volumes which revenue strong growth more guidance for and momentum continued assumes the

Nuestar margin in at EBITDA expect to be We roughly XXXX. XX% adjusted

to call investment and offerings, identity-based most potential allocating solutions across opportunities scaling our fast-growing are X TransUnion. dollars the and products We marketing high like of trusted exciting

markets the For this at more relevant progress statistic. U.S. reason, we as margin look at

target, of our And and savings synergies. transformation of cost run as does now rate benefits which include XXXX, deliver is not to time called by $XX million technology acquisition. continue at our the We program, $XX end the from above referenced the we platform, analytics of data already the Nuestar's and achieved material state-of-the-art enabled accelerated million plus This of OneTru.

across can that and milestones in growth XXXX key accelerate TransUnion and achieve to continue at beyond. Nuestar We

Now communication million TCS over or has or launch $XX the solutions on grow Since the its up $XX in prior TCS. call scaled 'XX, we XX% of in XXXX, year. strength solutions, expect trusted to million

XXXX. TCS robust, revolutionizing every and we to XX% to win over for inbound business vertical. across reducing outbound customers remains new grow rates, efficiency. answering improving and and We fraud expect continue customers, calling voice in the increasing Demand our is

U.S. U.S. rolling over including we're a business already needle is markets for the consumers, win AT&T with could logos for growth the a total term. and launched to clear highly-requested recently addressable calls displaying reach rates, company and and blocking see right we which longer believe in consumers. TCS to Additionally, out we in market before they billion enhancements, mover $X calls a what be spoof

data Nuestar largest We into broad TU in announcing be and we X graph. integrated additional and XX geographies see application soon identity across our new launch our international next TransUnion's several will marketing, markets. In of also unified assets

and graph is across entire now incorporates of data. enhances that our depth, customer unified Our best suite breadth online consumer It offline accuracy and channels. marketing data this utilizing the

consolidating starting with well With in capabilities XX-plus with cookie deliver privacy-enhancing increase integration This numbers on increase with in Cloud. In Web have the mitigation addresses. of marketable strong improved partnerships expect the e-mails, phone identity into such and XX-plus percent adult and in accelerating identity-centric reality of by which is transition, products they as contact our positioned authoritative first-party during and driven as Google the to growth of highly of limited invested validate Google risk We're our marketplaces as test this cookie approach publishers technologies Solutions, differentiating is to the demographic we data Nuestar's percent go-to-market targetable Services as newly capacity. center population half XX% clean third-party XXX-plus as our the identity we omnichannel cloud and of U.S. and seeing second fraud walled cover true serve with XXXX. resonating such with incrementally gardens well bookings deprecation, Snowflake, to are graph, a Amazon customers and rooms restrictions. We're direct contend Risk and attributes particularly in with customers,

for have scale, consumers. In to area programs. way initiatives. next transformation, operating and focus knowledge costs build of across step sharing streamlined initiatives of the complementary customers develop workflows announced strategic our I product, and world. and our Since better invested we executing reduce innovation, XXXX, the technology platforms we November, data X These accelerate create analytics in experiences across XXXX comprising our CEO user third global for and foster Our in standardized ongoing and became and operations, is transformation teams

upon expect XXXX, our strategy globe, to our roles across to geographies us XXXX transition over like will next and from global GCCs XXX and capability Rica. We First, services Costa talent-rich from X productivity more the driving grew in X,XXX allowing provide additional Africa we workforce and of X,XXX in over leveraging to centers employees the South over build our India, years.

key standardize global work the customer-centric are We the opportunity in to functions. and need balancing with for market centralize

by leveraging will capabilities we Rise Nuestar's cloud OneTru. to consolidate onto enablement technology common platform, enhance our Second, migration our innovation technology and our completing state-of-the-art a and Project product

material expect expect and operating realized this By revenue benefits. expense $XXX in deliver We of annual to million million cost XXXX, half to 'XX. of we to drive with $XXX that savings transformation

the CapEx of X% reduce million $XX annual equivalent expect our by to spend also We in to from the to $XX XXXX, cash historical savings. of X% million revenue

$XXX roughly In Now to ongoing of of $XX $XXX simple $XXX free already expect million for we to for achieve Project these inclusive savings, million to onetime flow of is incremental costs. costs. annual we benefit deliver of cash Rise. million communicated onetime expect This to $XXX million incur million terms,

the growth our will credit our innovation core Just bureau synergistic we're solutions. not marketing a of investments These are simply, rates. OneTru Put extending strategy fast-growing attempting will highly further markets as identity importantly, accelerate to X credit enable these in our with fraud markets. into space. OneTru play and particularly

ensure a and fuel infrastructure identity a consumer complementary our integrated resolution for serve architecture. OneTru bureau markets. OneTru fraud market marketing The believe credit, a credit OneTru capabilities growth data all the activating perspective, data We and marketing will along more are our developed next and innovation. quality enabling foundational assets analytics already built and global embedded of on hybrid to TransUnion to rails. The about the of time and in our will increasing to applying customers. believe security Rise of products, platform to save will consolidating capabilities platform. live our on the next will data is will services. Project generation nature that a X improve enhancing identity our innovation. From and X approach data across delivery. of are Nuestar's We data in years operating accelerate standardized solutions pace onto also to products, data time using will applications single technology TransUnion also with become We these efficiencies leverages a ingestion, model platform to focused analytics These compliance management speed innovation our and engineers and and that OneTru costs, destination products. the from us enabling cloud This and first all platform stack the is spend rationalize OneTru and guard allow product powering standardized families is across and more privacy through top cost fraud

to their of our insights from me sessions, our development engagement few host reducing customers The Now a and revenues. platform, labs, for into be TruIQ very let common scientists domains services products solve faster analytics leverage our analytics we've previously seamlessly the the and with OneTru analytics year, actions. In TruIQ ran been data, problems. Last interaction our across and data needs the highlight collaborate our to the infusing past, our our on on and multiple In quality a Clients labs our and feedback to OneTru expertise multi-day time suite, deployment. this business serve improve positive. siloed convert where real-time By platform. examples. and to we by we'll hands-on ongoing discussed of integrating model in benefited clients' these innovation analytics domain has we able with

advanced streamlines with launched OneTru audience and effective environment. control. an IP to recently prescreens, build learning in an enrichment OneTru ensure also along access to data and privacy-first marketing for sensitive access and we of on acquisition consolidating campaign also spend. We're marketing TruValidate a extract range mitigation integrated marketing fraud data TransUnion's development. Advanced offering single activation. and self-service AI accelerates platform customers' insights. their consumer acquisition credit media We data are The deployment products available definition, onto and TU combines the where which marketing products acquisitions and of TruIQ a the eliminates also tools in to the model capabilities a to Advanced apply from range provides tools, acquisitions client prescreen suite analytics TruValidate. enrichment new full that platform comprehensive called is within approach solution PU model leave our enrichment, including for instant credit-based combines and data need credit integrated batch solution. to powers data planning data, development deep Neustar signals This and measurement fraud fueled our a to machine identity globally and from with our by technology

improvement or Our substantial a result rather and in beta detection reduction and full -- positives. been the rollout release false summer. our the first fraud expect has in this testing currently result a We're

[indiscernible] of the addressable to offering customers will solutions solutions marketing customers enhancements serves testing use point of data rooms, that substantial finally, innovative roughly Our formerly advertising collaborations, against and by amplified market TruAudience will addition a offering It's beta today. And the we represents exchange but to $XXX thousands fraud enable suite data parties identity believe of currently analytics, creating new is clean integrated our to in the collaboration across many product solutions and patchwork directly by of multibillion-dollar see gain a in data, a called suite to best-in-class don't the in partners and opportunity fully must around revenues million we to We we're outperform share to market. want connect capabilities. which ecosystem. between next-generation which high-performance ongoing world that

provide further first fourth outlook. our year and our Todd, with financial quarter I'll over XXXX that, to it full details quarter who Todd? And turn will on results,

Todd Cello

and let me everyone. to Thanks, welcome my add Chris,

our impact financial revenue Fourth quarter, constant fourth organic and X% foreign on we benefit metrics. exceeded no a As consolidated a than acquisitions X% Chris quarter mentioned, the and currency There on basis. key all increased reported guidance currency. basis on in X% from less from an was

fourth mortgage currency grew a X% basis, reported from and excluding basis. X% both quarter business and the currency XXXX Our increased XXXX. on of Adjusted an constant organic EBITDA constant on

ago to XX.X% the which X%. year below XX% quarter was points quarter for guidance increased lower down diluted year, the services Our margin ahead U.S. XX.X% expectations financial basis due through. Fourth have margin XXX full but adjusted successful adjusted compared high EBITDA fourth was volumes, our XX% of efforts. to Adjusted our in flow EPS quarter rate tax the and tax effective due planning to

Finally, in we took to onetime fourth of our phase the quarter, $XX in next transformation. the million charges related

$XXX related a quarter with a million color on more employee what Rise. I program, These primarily were amount be charges provide expectations and expenses modest XXXX related section. first to inclusive The during closures. the to of in to $XXX will separation fourth to guidance we final expect of charges the and for year million office Project

get that I vertical Nuestar revenue Before we market structure. our within report reminder a U.S. into markets,

As we growth stand-alone previously, and rates providing XXXX, EBITDA adjusted Nuestar in we've margins. stated starting will stop quarterly revenue

updates will, to revenue progressing XXXX. and We how however, to our year full mid-single-digit in we achieve provide growth are targets

improvement levels X%, are has activity among cautiously for and late Looking declined EBITDA markets the ago EBITDA points quarter. but revenue to with Services remains customers Consumer batch markets X%. segment X% Adjusted anticipating our to fintech basis flat soft, financial U.S. adjusted quarter. grew fourth broadly the quarter. XX.X%. Financial seen Online that lending consistent the for was third was revenue year in seen and activity U.S. margin performance growth. assigned down XX was with some up at marketing players modest revenue the compared

was down credit card X%. and banking Our business

lenders activity deposit potential basis, tempered normalization with constraints. While and pressures issuance credit as is contend online capital batch and remains healthy on historical a

conservative institutions. more and a We are by customers smaller seeing our largest from approach stronger compared to activity mid-market

in our share and and fraud We retain identity continue customers across solutions. to with momentum win

of on the XX% -- prior in quarter. grew delivered year business auto X% growth Our top growth

totaled and the in million in face modestly which XXXX. The are of The used XXXX, XX% levels. declining in vehicles XX%, sales $XX.X XXXX annual pre-pandemic in but higher car for XXXX. car from but the almost and are U.S. to to Sales expected sales up to million car currently car new below sales were sales availability accounts U.S. replenish finance the still time affordability still used seen still prices continues above increase market roughly saw take XXXX, in XX% $XX market, the Used XXXX car will of New in of down to level challenges.

inquiry total For the rates mortgage, volume X% have limit year, X.X% XX% up since applications high for the XX%. in to levels throughout a pace and topping declines of late historical home XXXX. mortgage represented low to home decline On in activity. Average slowed was TransUnion volume revenue. below quarter which after of existing revenue year, the the XXXX combined elevated fallen range. Rates prices October the and X% weakest over were recent basis, sales but a XX% against XX-month of will basis, remain X% mortgage inventory trailing about in likely with were

we emerging Let XXXX. quarter. to year robust. in improving fourth activity remains of slowly adequacy and X grew progresses. After XXXX, as with consumer in year shopping with X% the years mid-single-digit spend marketing restore In Churn momentum as rate marketing verticals, fourth improves, with full activity, deliver the growth growth quarter. quarter X% We the we for expect me carriers in and the while expectations line our to expect contracting turn in which now stable delivered to and trends

trusted flat emerging drove other grew call screening recalibration and across while business Nuestar both Caller [ single e-commerce unemployment Solutions growth and in as core the powered new digits products soft. usage-based products and solutions. ] identity well as our telco of verticals, work collections and e-commerce in Across of our Solutions. Tech remains wins good was low services declined and e-commerce and volumes significant from and wins retail from Audience call history as digits. grew and fraud benefited deliver customers, solutions, Sentec both to telco. Media solutions strong driving like cross-selling by volumes TruVision through for our retail with successful sector as we growth ID continue innovative public and in Tech trusted double our We

working for increased the it consistent regulators possible, are We consumer-friendly advantage, and push we across a revenue will customer and to long-term believe large competitive benefiting X%, particularly more most vendors. Consumer Interactive as usage breach approach create from provide compliant data and win. a

business breach programs revenues be Reach cyber byproduct but the of are continue providers. recurring uneven cyber Syntec offerings. We through strength of the largely to proactively protection grow on our can increasingly selling companies insurance the to

engagements them and provide response each with opportunities programs. education protection cross-sell For engagements identity to into consumers with credit also new

declined and due XX.X%, expectations would breach the Adjusted in of of basis EBITDA line business. current have large breach X%, win. with to the were XXX the points Excluding margins revenue run win, down rate our the impact the primarily

continues as to higher-value we on direct to approach business marketing consumers. recalibrated Our decline focus our

So far, the seen revamped on good returns approach. we've

to We go-to-market to continue improve and in this business. strategy our work proposition value

Our year. indirect in XX% digits full business grew the led by the Santek, which for over and grew quarter fourth double

In digits. addition business to grew revenue, protection stronger-than-expected breach identity Santek's double

across customers credit market idiosyncratic utilizing Lenders be dynamics. the and marketing. selective our performance continue in aggregators products, offer other For for channels education varied based to traditional on

currency. For my be about comparisons revenue growth International, constant in all comments will

XX%, digits. For up the X X grew EBITDA points. our was XX by reported double segment, growing total margin basis XX% of Adjusted markets with revenue

specifics generally consumers. trends grew reflecting XX%, into each the and for dig let's India, Now strong region. we In healthy market

success strong to over continue offerings. our of performance expanding meaningful and generate commercial, the fraud, credit, to growth testament of taking the our lenders. This credit, of a playbook as India share of win across consumer direct-to-consumer and to credit-oriented Indian in outside revenue a X/X of marketing is core market. We credit now complemented with core solutions small an penetration medium increased suite by consumer We as growth well

India as our with to year like and challenged, trended banking market fintech U.K., wins but U.K. insurance products and see another gains was XXXX. In the growth flat. expect strong data revenue good continue consumer very we offerings. remains in and We TruVision, as The well from in share

outperforming declining despite XX% breach macro business services, growth. continued including gains to from direct-to-consumer, in in benefited momentum and in slightly financial strong Canadian market wins. a We tepid lending substantially and grew share growth telco flat insurance environment, Our recent

outsized Canada portion annualized growth came which be will XXXX. in sizable in share in of the XXXX from wins, Material fully

growth market For XXXX, mid-single-digit continued in we outperformance. expect healthy

revenue market. and and despite in the Brazil weakness America, our conditions growth by across Colombia we fintech market insurance. In and government online Latin Latin in another growth XX%, solid quarter Pacific, in In In we strong we and other American X%, was the with to wins softening quarter. was down up delivered penetration. financial good across batch due and very services, Philippines, Asia had where the grew growth Kong increased led also see customer Hong attractive market countries,

our Finally, markets. Africa challenging despite on based broadly strong XX% in of performance a increased several environment a largest

Turning $XXX to million ended We million a in roughly for in prepaying sheet. $XX quarter of the XXXX. $X.X quarter the billion with after debt of total the balance

with revolving we Term quarter of acquisition $XXX the Looking left $X.X about balance of October, million us the billion the finished ratio the back, on September sheet. debt. since announced facility Nuestar our leverage of of completed we and refinancing X.Xx. In A. with credit cash of we've in Loan That a We of prepaid XXXX,

XX Loan In $XXX for our prepay from X expense Last adjustment. removing rate and B of $X Loan is million, spread at effective billion X%. of our today's $XXX million of addition spread Loan points we million coupon billion. We The X. to reducing $X Loan repriced Term our to million cost maturities roughly debt our revolver in B the credit the credit raised our million A our XXXX to by and to $XXX we incremental annual expanded our $XXX to XXXX, used A X, these swaps, our basis Term Term combined results Term from $X.X roughly average extending refinancings of our higher SOFR savings. Net interest of week, impact from

the our can in updated debt of our You find presentation. appendix profile

We of no and to focus to integration our year. this have intention on continue the make acquisitions large-scale acquisitions recent

XXXX priority cash to is prepay Our flow. our debt with excess in

cash and the than prepayments XXXX outlays most However, expectations we Xx million payments adjusted Cash by to in related paid transformation the fourth onetime were to the lower actions related $XXX we our our be be ratio of of EBITDA quarter expenses expect to be our our generation, due range program. minimal, of onetime and we million to to cost our expect to for end XXXX. Based to on $XXX leverage low in XXXX. out cash expect

not our ending toward Xx to deleveraging do target debt for our the We incremental We term. prepayments an Xx. leverage and ratio of as view cash as continue of under over best point work view use the medium

wanted deliberately in October, Turning fourth conservative XXXX. a provided to explain guidance we XXXX When philosophy our to for guidance, I quarter we third very were first following challenging quarter.

Our guidance TransUnion more XXXX and reflects first for typical quarter full the year conservatism.

for guidance. XXXX. and conditions marketing the to interest We occur, are lending quarter of our the year. Should increased outlook persist assuming would brings cuts us the current slower current rate our drive That first throughout and activity that represent to upside

revenue impact to insignificant EBITDA. expect We and FX have an on adjusted

between currency come revenue as-reported We million up expect constant million and basis. X% organic to $XXX or an $XXX to X% in on and

up of business X% that point Our of to constant on we be organic tailwind revenue guidance includes an basis. currency approximately mortgage X will the our remainder X% expect from meaning

be X%. to to million EBITDA adjusted between expect million, up $XXX We X% $XXX and

international, adjusted down expect year-over-year EBITDA XX.X% India and We particularly XX of XX in to points. Margins Interactive. be as margin sequentially well expenses of the to as or due down Consumer to XX.X% to timing are basis expected

in margin the expansion U.S. markets quarter. expect We business first year-over-year in our

expanding to throughout savings the each year. build margins transformation our with lowest quarter expect as quarter first the We margin quarter be

We EPS $X.XX our a between range to adjusted diluted and X%. also to expect $X.XX be of up down X%

year. Turning the to full

revenue EBITDA. and adjusted FX from impact insignificant expect We on

X% We to as-reported in basis to or billion up about to on impact $X.XX expect up billion and and and mortgage. currency excluding revenue X.X%, organic the come an $X.XX constant of between X% X.X%

to to due our X% impact the we and scores inquiries pricing. XXXX, third-party of XX%, primarily revenues to roughly down increase For mortgage be roughly expect

expect XX% of the roughly in ease. half up inquiries the as and the We year to be down comparisons XX% first of roughly half second in the year

digit or mid-single low segments, digits, mortgage. low up We For digits financial to anticipate mortgage. excluding services we grow our expect be single mid-single up or single business digit, excluding U.S. to markets

verticals currency to driven Consumer We will in low We XXXX. expect we Interactive digits. decline we throughout single digits. constant digits terms, grow emerging high that And single by be low saw anticipate single same up expect to positive international trends that the

Turning back company to total outlook.

adjusted adjusted to X%. being XX expect would and XX.X% EBITDA basis adjusted to points. $X.XXX be to $X.XX, We up diluted $X.XXX XX%. to between X% up or to billion, anticipate We margin in EPS XX.X% XX billion X% up $X.XX result be to EBITDA to That

to be our We we from expect amortization amortization million, acquisitions approximately approximately our in about control adjusted be and million. expense full SOFR. lower be to interest excluding down step-up year-over-year, and expected subsequent refinancings $XX tax change be the XXXX the year, portion anticipate net $XXX about primarily for expect over and million due million XXXX Depreciation prepayments, We to rate our will $XXX and $XXX to is recent XX.X%. debt

$XXX We expect expect charges million program are expected $XX of Combined through to of in total our XXXX total of $XXX related in to we take in costs, $XXX $XXX which an with million completed in million spent to be a to XXXX. fourth charges transformation to million XXXX million the compared program. incremental onetime roughly quarter, roughly

adjusted be growth key of XXXX. roughly our high to adjusted expect our EBITDA guidance, expectations capital of up want of revenues A by adjusted on $XXX inclusive business. we expect investment EBITDA EBITDA about is some expenditures and with revenue the by $XX We million. the revenue. I from continued wrap driver in of detail to about additional for in grow end flow-through X% to higher Based million

margin targeted to dollars, to support core mix as strong incremental is due absolute growth well incremental our When we outside the growth of to up, than revenue While we in typical investments, adding the are strong lower margins. primarily credit activity adjusted International as expect of see segment. picks EBITDA lending

deliver program, is $XX commitment million positive our from benefit, which roughly we line in savings Second our expect with transformation in in to November.

throughout benefit year. to We expect savings the the build

addition resetting is offsetting costs XXXX. Partially incentive synergies We as acquisition well increases. Santek below-target $XX annual annual in of XXXX benefit costs positives continued a and in our also to million to payout in Nuestar in Argus expect as after $XX million to integration merit target compensation reduced from these

together, and back volumes. I'll now additional expect transformation if upside in savings the final any we for for to good Taken EBITDA adjusted a expected some Chris turn to come step-up still year comments. with call further we credit growth see

Christopher Cartwright

exceeded you, driven growth stable Todd. To and robust by in and U.S. marketing fourth we wrap Thank from conditions up, quarter international. the expectations, lending

for accelerating We growth. adjusted and revenue diluted growth, Nuestar's year further for single-digit product a and mid-single-digit focused executing high leveraging earnings capabilities with to on priorities 'XX create EPS and technology growth strategic revenue expect our X year transformation the in value We're and strong initiatives. on

the decided happy working retirement. We're retire in out at Finally, a as instrumental building Bardi, in know, and and personal years, a TransUnion before our to been the Investor has him X has sell-side Greg lucky from last and note, wish been to Aaron him Relations over in leading management on we our TransUnion have on many Hoffman that. forward. Aaron of to covered to Aaron going you to investors a these and Investor also March. years team last been alike. excited function Relations has been with who has valuable these TU We've have resource X

me let the to Now over turn Aaron. time

Aaron Hoffman

much. thanks kind and that words. those appreciate Chris, very Thanks, for I

that operator, prepared And today. the Instructions] can conclude begin does [Operator remarks now. we Q&A the So

Operator

[Operator Please Instructions] today's to question go . comes Jeff ahead. And Miller there. first was

Unknown Analyst

or clients to bounce are see guess in need said Pallecon back? they Stephen Nuestar improve revenue to is I transactional Jeff. for or need to your for This do see you order what what if

Christopher Cartwright

think has headwind marketing hitting growth beyond the answering back. the targets start been mid-single the there in transactional Yes, portfolio. economic start the to on and activity Jeff, Stephen. Yes. our front, components digits has the difficult decline that, In I'll more pulled environment, so a advertising new I of

right, slowdown, we've addition reduce with to In costs, seen the relying working to data. on clients first-party volume and data more

services. for compensated We've a of on by So identity more cutback our bit side been both first-party the have to record the sales. and hygiene those headwinds resolution selling data

provide So the guidance It's to of guidance those that floor areas intended over and year. consistent guidance that a with course we we overall able I think, be in really, this to exceed some stable conservative, activity. is, what to constructive pushing period. rebound do and hope our we be Nuestar the need The is yet in we're perhaps we'll

Operator

question from JPMorgan. today our And Steinerman next with comes Andrew

Andrew Steinerman

on do 'XX? the maybe . and jump assuming for into to expect inside numbers, you expand you could Chris, to are when growth guide of interactive for indirect direct Consumer Interactive And the more than what you Just just consumer expectations in are what your the growth? return terms then numbers.

Christopher Cartwright

Yes.

course market which a we decline or Andrew, months in has because the an business area business, now year, more some marketing XX that of navigating towards the adjustments in mid-second practices. neutral a marketing kind the the the we the practices like. equilibrium part most over is been consumer to is decliner. Where a but past getting been of we're of obviously, price of pronounced combination and see So probably have also of direct That benefits pivot at Part the our it annual demand state the sometime shifting premium, over can so. the been our in reaching increase has in of and quarter, enjoying on

of the -- And We over our to dimension that I'm organic guide corporate will look, we it's Again, I of total to well. conservative a is intend particularly consistent business of end compete big think consumer TU the the with like. really consumer and return to this high doing across steering premium and is to the an kind important full in had the protection, things. And back sorry, year. acquisition protection last of Neustar through strong expect protection course, to single-digit overall acquisition year, grower breach low [indiscernible] the the indirect of It remain in identity quarter. right, guide, of over XX% a context think grew in course fourth we're the that space towards growth just believe we the and offerings, we identity emphasize where of be in positive whether regard opportunities, more

Operator

today And Bank. our with comes Deutsche Alwy from question next Faiza

Faiza Alwy

Financial and I assuming wanted the there for U.S. you were about ask XXXX. Services that growth to

And we Argus. lending. we on Just color then some about around consumer think touch give us card, how auto should

what So your expectations curious are there?

Christopher Cartwright

Sure.

with mean, certain know, demand was experienced as the of not led there only we in a higher rate. Financial modeled in in September which a of see. slowdown that deterioration interest in we're We 'XX, dealing the as much to and that, I the slowdown that fourth quarter. That because in So a the of conservative, continuation slowed outflows a that material turned that of year look, Services, were of deposit quarter, last instability can segments was impact that you from in turmoil with fact, inflation a out rate, bit we banking we U.S. It in we also year. overperform second dealing from and that,

near 'XX, for most Turning not right? services course of over to we the services, the but So improvement, budgeted the of assuming these subcategories we're kind year. of we across think the U.S. volume steady floor in a we're at or any in financial different of

actions of of price easier half you to forecast, uplift the going reductions the in are the half. the we're second both the are from a half, third any getting rates in of course, parties. the will. own Fed. potential if not kind because improve rate it's comparables benefit But steady sailing second full and growth We're And by of Now in second by for building interest our

Operator

with comes Stanley. from today Morgan Kaplan question next our And Toni

Toni Kaplan

talk you you're expectations the through seeing, about 'XX. fintech batch improvement that challenges talked the in Terrific. environment in but some I was know still hoping your about for you modest I could U.K.

more fintech to go hoping here. just color you from get see a particular little on in So where

Christopher Cartwright

borrowing in of concerns last largely of the the also material the year. Again, And our an but are more marketing think in which in the roughly we're activity I this probably funding. the an difficult Well, pretty consumer that assumptions fourth fell that quarter increase some from We seeing, steady XX% about uptick some especially from guide. was quarter. of and haven't we're difficulty will there saw of health a forward. one suggests that or encouraged here costs in more getting stability U.S. the volumes Yes. year that segment space, the for modeled FinTech, by much third batch last by we're the the optimism reduction for in activity because 'XX less and the be too That encouraged experienced we into we

Todd Cello

just Toni, to And FinTech. on sizing some that, just to provide to add for

i last year, last to saw in down million million. that -- we're it U.S. bought $XXX talked down You about talking year. XXXX in the we about did $XXX about come it we we

of spoken revenue. to. The are out XX% of as is relationships. bringing fintechs less very the revenue whole referring seeing that's that And a has great So we've with Chris for about TransUnion job it's that position than that company's some reason our those and scheme in X% building overall the nice the

We and that. tremendous wanted growing us those So for we're make response believe appropriately a sized path inflection. as I to just we certain of opportunity, to advantage your was on best though, again, customers to to that that see are that, take in positioned

Christopher Cartwright

[indiscernible] mentioned difficult had mean, even was year more clearly, also I the you And U.K., you Yes. it a

[Audio Gap]

Operator

Kelsey question Company. next Autonomous from our comes today Zhu And with

Kelsey Zhu

of getting their your in revenues prequalification expecting I mortgage to peers really 'XX similar expensive. TransUnion? for you're revenues if prequalification mortgage wondering Once how XXXX have for in highlighted and space in [indiscernible] big that headwinds headwinds would was because be

Christopher Cartwright

followed due about you're FHFA I I technical Kelsey, but We the rollout think think question. of prequalification a had a bit sponsored. bureau has glitch here, headwinds to the that a of little the I mortgage single talking

that modeled have assumptions. We into our

the is guide we So have into baked that provided. it

factor estimating our volume factored that's mortgage it of expect X volumes deterioration. But process be. will -- into make that's some will cause well, We where in we again, that just

this. adjustments prequalification. some historical of an the information, at we look we talked all industry-wide got the for stores we our so And at poll of bureau adoption to advisory single available of And trajectory made We've have board. client publicly a then

Operator

RBC question from with next Sabadra our And Ashish . Capital comes Markets.

Ashish Sabadra

emerging wanted just down further little to the focus I verticals. a on on

and takes rest puts You you can in there. win mentioned talk some verticals, the in good should for the the and But And we about how 'XX? puts momentum insurance the about think and of emerging pretty takes?

Todd Cello

from Sure. take I'll one that you.

way year already alluded -- we segments. And of way about think emerging a low question different any assuming new your in really provided a expecting to you verticals I -- in comes we up to to down and had insurance, clients. it, as the as the verticals we're is we has good that heart look team signed guidance we're at be tough The digits insurance that. to So think the the that in the single break the for emerging really The XXXX. different

business new significant wins there's that So fruition in to year. will come the

optimistic about remarks, slowly, strong. shopping remains but activity our cautiously in so prepared improving and marketing spoken that is we've about we're As

the So our a public solutions that's we've on And the coming a in of meaningful growth call where trusted vertical. digits all, verticals, of year, emerging growth. Also we're growth in that growth. And star as mid-single from obviously, seen that sector the with all good lot we're as acquisition. insurance, is well in and good probably in expecting in services expecting a collections significant came capability

of and public the verticals those in the about So collections services of XX% X insurance, [indiscernible] revenue. represent sector

out So those growth other talk expecting of XX%, X. the about we that good leaves

have our we to and the the talk [indiscernible] [indiscernible] business. in So the XX%, other

I more [indiscernible] you're with maybe space. the But of calibrate bit we growth expectation due the to think the sent time little year second that have probably to that that in of the half to signed as aware, Here, back order opted products a CFTV, provide our [indiscernible] well it's reports provide to the a soon. we

Second verticals for now a us was is telecom. that say, for the [indiscernible] of so vertical spoke start expectations important growth been the tempered XXXX. What also a also -- and the [indiscernible] it's generation that's about rate. And So out in earlier Chris That's see is has trends capabilities to thing you a example, [indiscernible] also volume. [indiscernible] you kind to on media of think business to of needless and to color the bigger provide where communication point bunch flattish we

coming the in a to here provided consistent X a we're it if guidance the at what little [indiscernible] I those And quarter expectations we we've are that provide marketing side, So X are being go over time as recovery this the our something [indiscernible] with just forward. bit that because is those take would X [indiscernible] the be highlight where there's on a that

Christopher Cartwright

We services solutions profitable news. certain think and emerging driving good signed those to lap continued very has A we're we mature, the they where subsequently to that [indiscernible] negative were CFPB consent The couple a return find. overall communications we it's COPD other to that's importantly, going information go. we're adopt order think products. trusted thing I of players tightly industry And the the the we seeing similar and we issued points call of this they're providing. And wallow we to changes, generation type while as order leveled on conforms for field. had once that that turned would guidance to playing these Then the employment industry tenant time that of consent revenue feed to is we really provide, curtailments mention, the adjustments stock

Operator

next with Manav Patnaik Barclays. question our comes today from And

Manav Patnaik

I of the kind the just mortgage The in seems down in on just I continuation of a plus quarter. first like had fourth guess. saw pricing, half, question what XX% you that

half. Was the XX% second Just that purely comp. wanted to in confirm plus the

more to I think on much. own party, I know third-party So but have up want is other I in up then some in your and there? And going assumption is there prepared said made and pricing think going we clarity third your you've from you in how pricing where your just remarks, some the

Todd Cello

Can is me you Manav, okay? hear Todd. . this

Manav Patnaik

heard can It's you a you talking, hear I but while now, little right you're fine. I now. muffled

Todd Cello

Okay. Great.

speak So I'll to -- louder. going I'm

X% volumes, as the and first assumption be down for The grow we're we then pertaining have to the -- we we're going just year. second our half, across same, It's XX% for the in up recovery any are assumptions multidimensions. we're is mortgage. to more little that, assuming just half. I'm in we're year. full no assumptions comparisons far that as of not on going of provide that when reiterating, the So but in type XX% the of to context half down purely to There's kind the this right? And looking on just on build more banking mortgage, our at bit a in the -- the second we

our they're team seeing and own being first the in The market. what

mortgage and a to then advisory customers as sources this being the it what data you second we our outside third The area board, their pertains at from we're just do. are. And where directly expectations look where is is hearing like

example, the So Mortgage Bankers for Association.

take we those how and up that's our you So guide. with come X elements,

[indiscernible] model. was part second The

Christopher Cartwright

Yes.

price weigh couple you hear pricing is the years. biggest in I'll it. third-party pricing. in the because been The as I obviously, second Manav, part mortgage I the for of increases and here was know, last of has mean, driver about well didn't

Fed our practices. pricing, then comment volumes or would all should Our it our mortgage And some we of more lower own area the annual to see probably consistent first rates, less we were as know, pricing about you the if uptick. is as think again, where

Operator

with And our Lau next Oppenheimer. question today from Owen comes

Kwun Sum Lau

mean incremental please you the Can that currently? also pricing X, just rate now is even more your and to there are rent right market like cuts back about go it's assumption? assuming in X the benefit in than should if think we fat no or XXXX? EPS cut How I'm the in. rate rate what I projecting

Todd Cello

cuts. assumption, interest rate from it interest Yes. assuming our rate business to any we pertains Owen, are that not as gives the benefit

to rates lending, this is think there interest provided upside as the we an all and So morning. be guidance that in the come uptick would of that if that

Christopher Cartwright

operating, what range. And and cuts, this in high are odds And Look, Clearly, to the we in feel outperformance. nature I towards is that to on of Yes. to wanted increases modeling end steering I Todd just volume we us context more we're due environment the again, of X% be think, X% the rate clarification which we're and towards to be business given all upside. will would an guidance provide the not organic. opportunity, the be hope for conservative that the some we're

Operator

Andrew And William our next question Blair. with from Nicholas today comes

Andrew Nicholas

a wanted specifically, target. previously, guess just you XX% I year, I guided talked you ask or to about on Neustar I think margin margins this XX% to historically,

the of an realm of will get up already What Just that that level, million medium there take term? gotten run the the you've recognizing rate? over the of helpful. if to it would kind plus savings that's within still update $XX be expectations wondering cost to in Just

Christopher Cartwright

for sure. Yes,

points. enterprise, the We've peak a X- basis cost X it. million yet. to the $XX in level look, right? year. And We're So to guiding years we context the added this margin the not toward guide juice to headed X,XXX more of squeeze, had margins speak. to We're of so performance in at least we've reductions, getting of XX% X-year achieved think period, We've the while more was not Nuestar the We're there's to full formalizing ownership. in to

side, initial other is revenue marketing assuming rate factor us enjoy we material get conditions The growth flattish to up margins in our through the get to start market higher drive going of to going upside the suite, the innovation that's increases done going fraud the margin that help on that's guide. mitigation as on uplift to side risk to we've all give and we're that post-acquisition with some Nuestar, flow-through

Aaron Hoffman

day brings the call of of And bumping busy us hour to up Great. for earnings everyone. very the end the we're as of the that top a now, towards today

the today I for to your wish much. a you day. rest and time So thank everybody want you Thank good of very

Operator

you. today's for today's We call. you attending conference concludes thank Thank all This presentation.

wonderful a lines, have may your and You day. now disconnect

TransUnion (TRU) 13 Feb 242023 Q4 Earnings call transcript