Q1 2020 Earnings Call

Good morning, and welcome to the training in first quarter Twentytwenty earnings Conference call.

All participants will be in listen only mode should you need assistance. Please take only conference specialist by pressing Star then zero on your telephone keypad.

After today's presentation, there will be an opportunity to ask questions. Blackie question. The press Star then one on your telephone keypad to withdraw your question. Please press Star then too.

Also please limit yourself to one question to hop include more participants.

Now I'd like to turn the conference over to Aaron Hoffman, Vice President of Investor Relations. Please go ahead.

Good morning, everyone and thank you for joining us today I hope that all of you are safe and healthy on the call today, we have Chris Cartwright, President and Chief Executive Officer, and Todd Cielo Executive Vice President and Chief Financial Officer.

We posted our earnings release and slides to accompany this call on the trains Union Investor Relations website.

Our earnings release includes schedules, which contain more detailed information about revenue operating expenses and other items, including certain non-GAAP financial measures.

Reconciliations of these non-GAAP financial measures to their most directly comparable GAAP measures are also included in these schedules today's call will be recorded in a replay will be available on our website. We will also be making statements. During this call that are forward. Looking these statements are based on current expectations and assumptions and are subject to risk.

<unk> actual results could differ materially from those described in the forward looking statements because the factors discussed in today's earnings release in the comments made during this conference call. It in our most recent form 10-K forms 10-Q, and other reports and filings with the FCC, we do not undertake any duty to update any forward looking statement.

With that let me now turned over to Chris.

Thanks, Aaron I.

I want to welcome all need or call and extend our most sincere hope that you and your loved ones are healthy and say nothing is more important.

From the early stage of the covert pandemic. Our primary focus has been health and safety of our associates our customers in the wider communicate communities in which we operate.

We appreciate the work of legislators and regulators around the world for taking decisive significant actions to support consumers businesses and the economy in these unprecedent unprecedented times.

We especially appreciate in respect to heroic efforts of health care professionals first responders and other a central workers on the front line combating cobot 19, and supporting their communities around the world.

Let's begin this morning, with an overview of how our first quarter unfolded.

From January through the Middle of March trends Union tracked well ahead of its prior year volumes and meaningfully ahead of the revenue guidance provided in February.

We saw strength in the financial services insurance and public sector verticals in the U.S. as well as robust results in India, Canada in the UK.

In mid March most of the countries in which we operate implemented show through in place policies in order to slow the spread of Corona virus.

Absolutely necessary to protect public health this approach cost or dramatic reduction in economic activity curtailed consumer lending and triggered job losses unprecedented in their speed and scale.

The rapid increase in unemployment in the U.S. and many other markets has introduced uncertainty into consumer lending well beyond what was experienced in the great recession of 2008 in 2009.

Many lenders have pivoted from client acquisition, and overall growth strategies to risk management across their existing portfolios and assisting consumers through temporary forbearance arrangements.

Despite the sea change in economic activity that began in the second half of March the strength of the first two and a half month of the first quarter resulted in revenue and adjusted EPS for trends Union above the high end of our guidance and adjusted EBITDA in the middle of the range.

That said the sharp downturn and transaction volumes experienced in mid March has continued through April to date and present materially different business conditions across our portfolio than we expected in 2020.

Given this we're not able to maintain our previous and financial guidance for 2020 or provide new full year guidance.

Instead, we will focus today on the second quarter and the volume trends. We are currently experiencing in key verticals in markets around the world as well as our approach from engine trade Union through what we expect will be a prolonged and significant downturn before resuming trends unions previous trends for strong organic revenue grew.

Growth EBITDA growth and margin expansion.

Well the nature of this economic downturn is very different than what we experienced over 10 years ago entry into Union is a very different company.

I believe that the continuity of our management with demonstrated crisis leadership in this industry will allow us to successfully navigate this challenging time.

We intend to balance expense actions as required with ongoing investments in innovation and our technology operations and business portfolio.

We are implementing across our markets globally, a consistent playbook to help clients manage through this downturn.

We also expect to maintain our program to accelerate our technology evolution, albeit.

At a pace calibrated to current uncertain environment and our financial forecasts.

This investment is important to maintain our technological advantage and to support a return to the strong growth and relative outperformance. We've enjoyed these last six years.

Despite the near term impacts of this cobot 19, driven economic crisis trades unions business model and product in portfolio stream remain intact.

I will discuss the current volume trends across our primary verticals end markets.

Our quick transition to support the change needs of our clients and consumers in this downturn.

Although current market conditions present us from providing our usual financial guidance. The following slides illustrate the magnitude of the impact on their transaction volumes, resulting from builder in place policies and the global economic reset.

My commentary in any forward looking statements must be cautious measured and taken as directional given the recent C of the downturn and resulting uncertainty across our markets.

Once I cover the current market dynamics I'll hand over to Todd to discuss our detailed the first quarter results.

Once sheet strength and several financial scenarios for the second quarter based on the trends I will describe.

Let's first review the overall transaction volumes year to date for Us financial services, our largest vertical market.

As you can see performance was strong relative to 2019 through the middle of March one shelter in place guidelines have made their impact.

We continue to penetrate the market with our broad and leading data solutions and lending volumes remained healthy.

Since then we've suffered a considerable downturn against first quarter trends and the prior year result.

Over the two weeks prior to this call volumes have stabilized, perhaps as lenders adjust to working from home and look to support their clients beyond implementing the initial round of forbearance arrangements.

Now, let's review the components of your financial services.

In detail.

Beginning with mortgage.

Refinancing activity was very strong throughout the first quarter on the strength of low interest rates and further accelerated as the fed lowered rates in anticipation of a virus led slowdown.

While the surge has abated somewhat.

Refinancing demand exceeds lenders underwriting capacity, especially in this work from home environment and is above last year's volumes.

Strong demand for refinancing has kept mortgage rates slightly higher than they might otherwise be and we expect these conditions to continue in the coming month.

For monitoring the potential negative impact of increasing unemployment and payment deferral programs, which could lead to a smaller pool of consumers eligible for refinancing.

And despite the overall growth of mortgage activity.

New purchase mortgage activity has nearly halted due to quarantine provisions, which prevent consumers from visiting properties for sale.

We expect this trend to continue until the Lockdowns are lifted and consumers are willing to socially interact.

This could create pent up demand for homebuying, depending on broader economic conditions and create future upside opportunity.

Similar to new mortgage activity auto financing have fallen off as dealerships are closed in about half of the United States or only operating online and consumers postponed vehicle purchases.

As this chart shows in recent weeks, we've seen these trends improve as dealers have rapidly accelerated the move to online selling and lending based initiatives.

Vehicle lease expirations and general vehicle replacement needs also create continued minimum demand levels based on our experience in the great recession, we expect to recovering demand once consumers are able to return to dealerships and other normal activity resumes.

Credit card lending also slowed considerably in March but appears to have stabilized in recent weeks.

The decline in card volume results from issuers, reducing new client acquisition to focus on serving the needs of existing customers.

Im clients are reducing originations until they better understand the evolving risk or converting acquisition programs to lower cost channels like digital in order to save money on direct mail costs.

I would note that trade unions supports all card marketing channels and approaches.

Clients also our expanding their card portfolio reviews, given increasing consumer risk in need.

We're fully a reviews and event triggers using trended and alternative data are critical part of risk and account management efforts and we are increasing our focus on providing these services.

Finally, consumer lending has also experienced a material decline in volume, including within the Fintech space.

However, not all of the Fintech segments are reacting in the same manner.

Many of the traditional fintechs have focused on their direct to customer acquisition channels, while limiting partner Shanel volume.

You have ceased most lending until the crisis improves.

The retail point of sale Fintechs are experiencing a significant volume boom from increased online sales.

Short term lending volumes have declined substantially while lenders wait for more clarity regarding the U.S. employment situation.

However, as we saw after operation Chokepoint ended they are generally able to quickly ramp up when ramp up volume when markets expand.

Overall, we expect to financial services vertical to remain at lower volume levels until shelter in place orders, our east, allowing consumers to return to work and other normal activities.

This could take several quarters.

However, there are few mitigating factors to highlight.

First mortgage refit financing should continue to be strong with most banks experiencing backlogs as I mentioned previously.

Second we expect fraud mitigation solutions like I'd vision with innovation to perform well in this environment.

We have experienced minimal impact to our fraud business, thus far and are having very constructive conversations with a wide range of lenders as customers rapidly migrate homebound consumers to digital channels.

Lenders are concerned about.

And experiencing substantially increased incidences of fraud for log in and verification.

Well you US financial services is the largest end market for our fraud products. The story is the same in many international markets, which I will discuss shortly.

Third we expect increased account management demand to continue as lenders look to more effectively service their existing customers.

This will drive continued demand for a more advanced solutions, including event triggers.

The data and alternative data.

Finally, most of our contracts include volume minimums, and while they tend to be fairly low. They are valuable buffer contracts are also price volumetrically.

Such as that as volumes fall the price per transaction rises while this doesn't fully offset the lower volume it does help.

Now turning to our healthcare vertical which helps healthcare providers navigate the revenue cycle to help improve the patient financial experience and to maximize reimbursements for uncompensated care.

The front end to the cycle represents about one third of the revenue of the vertical and includes insurance eligibility checks identity screens and payment estimation.

As providers have shifted their focus to creating capacity in the healthcare system to prepare for the surge of covert related patients.

They canceled and delayed noncritical procedures.

Although copeland cases will surge in hotspot areas. The overall impact on health care system is a net decline in patient volumes. This started to impact the front end business.

In late March and we expect to see that decline persist through the second quarter.

The other two thirds of this vertical is the back end of the revenue cycle, where we help providers identify opportunities to recover lost reimbursement through.

Through various revenue recovery products and services.

Samples include lending missing insurance information.

Resolving claim denials and identifying Medicare bad debt disburse reimbursement opportunities.

By helping providers increase their revenue reduce uncompensated care and avoid bad debt write off.

We provide a critical source of cash flow and in some cases provide essential products and services to assist providers in maintaining financial solvency.

This is particularly important now as the reduction in elective and preventative care is severely impacting providers profitability.

And while government stimulus programs are designed to help offset some of this impact.

Many providers are having to lay off and furlough staff.

Fighters may see additional pressure, depending on how long the elective patient volumes are delayed and how successful the reopening process.

Our current view is that consumer sentiment around comfort and safety our mixed at best regarding resuming normal healthcare elective treatments.

Given the financial stress on health care providers, it's not surprising that back into our healthcare vertical has held up well, thus far and provides providers.

And most providers continue to be motivated and incented to continue their focus in this area to ensure their optimizing their billing processes and recovering the greatest amount of reimbursement possible.

The potential longer term risk. However is that there are fewer overall patients in the coming months in health care system, which could result in less overall opportunity for recovery of uncompensated care.

In any scenario our solutions continue to represent a valuable and essential part of the revenue cycle, helping provide helping providers reduce risk.

And increase their cash flow.

Our insurance vertical serves property and casualty life in commercial insurers with marketing in underwriting solutions as well as the analytics and investigative tools for claims.

Thus far and inline with our expectations insurance has seen a less severe impact the many other parts of our business.

Unlike many other industries insurers continue to provide services to their customers and to underwrite new business, regardless of the broader economic conditions.

Secondly, in auto insurance, which is the largest part of our vertical.

This consistent activity level is driven by expiring policies when consumers typically renew or shop for new policy.

In either case.

Customers use our data and solutions.

Only when the consumer chooses to let their policy lapse and not replace it does the industry see volume contraction.

That is clearly a risk given the rising number of unemployment Americans in idled vehicles.

However, we have seen many of the market leaders assisting their policy holders during this time through rebate programs.

Core underwriting activity took an initial debt in mid March when shopping activity declined as consumers process. The changes we've all experienced however in the recent weeks that trend to stabilized.

Customer marketing programs, thus far have continued as planned likely to help consumers understand the potential financial benefits of changing to a lower cost plan.

And these economic conditions consumer shop for lower rates to reduce their expenses.

Furthermore, the desire to roost reduce cost and improve efficiency at our insurance customers is leading to increased interest in our drivers risk solutions.

This solution helps to reduce the cost of motor vehicle reports, while providing more timely insights.

Our team has stayed in close contact with a more than 300 insurance customers with heightened interaction with our top tier account.

Our customer counterparts remain accessible and willing to engage in conversation about in motion and new opportunities, we continue to leverage our market leading capabilities.

To serve our insurance customers evolving needs.

Drowned out my discussion of the US market segment I wanted to touch on a few other verticals starting with collections.

While we certainly see this vertical as counter cyclical over time, the initial negative impact has been quite severe for three reasons.

First many collections customers were not equipped to have their collectors work from home.

This resulted in an immediate decline for several weeks, while collections firms developed capabilities to enable the workforce.

To work remotely.

Second in many states like New York in Nevada halted all collections activities for 30 day periods and several other creditors have instructed.

Agencies to suspend collection of their debt.

And third as part of the federal covert legislation certain consumers are being provided payment holidays.

While we absolutely agree with and support the second two items as they provide relief to embattled consumers. These actions do create an air pocket in our business and push out resumption of normal collections activity by a few quarters.

After that delinquent cases will be placed with collectors and activity should pick up over three to six month period.

And shifting to our public sector vertical which provides a variety of data driven solutions for federal state and local governments at this point, we've seen very modest impact government agencies continue to operate unabated in support of their constituents employees are largely able to work from home and are still engaged in on.

Going business opportunities and opened two new projects.

We already provide fraud mitigation and identification solutions to certain agencies and we are in active discussions with them more broadly around the trillions of dollars in Dispersals announced by the federal government.

We're also talking to various agencies about heightened insider threat monitoring capabilities.

Is that risk increases when employees are homebound and might be facing financial hardships.

Specific to combating cobot 19.

We're also having productive conversations about providing federal agencies with right party contact information to support contact Tracy.

This is the process to identify an alert people who have been in close contact with an infected individual by contacting and monitoring those with a higher potential to become infected public health officials Kim reduced the spread of the virus by keeping them from infecting others.

Having highly accurate right party contact data is critical for these efforts to be successful.

Through TLO XP, we're well positioned to support these efforts.

Conversely, we've seen a slowdown in some programs we support at the state level, though we've identified areas of potential upside, where we can further support our customers and their covisint related mitigation work.

As the preponderance of on the ground coated activity is taking place at the state level.

Our contacts are both distracted by these events and reluctance in some cases to proceed with certain activities like Homestead tax act violations that may be viewed as I'm of as of minor importance relative to the broader threat of Cove. It.

We expect these activities to increase once the crisis has passed and states search for much needed revenue.

At the same time, we do see an opportunity to support covenant relief efforts with our background screening solutions. It is critically important volunteers across all fields are properly vetted before engaging in these activities as we've seen in previous large crises like Hurricane Katrina.

Tenant screening is an area, where we've seen a sharp slowdown as consumers are not actively seeking to move often resigning with a current landlord instead of taking the risk of moving into a new location.

Similarly, with a stark reversal in employment trends.

We are seeing employment screening slowed substantially.

We expect both of these areas to present opportunities as economic conditions improve and both moving and hiring increase.

Finally in telecom, we've also seen meaningful slowdown as more than 80% of cellular retail locations are closed resulting in far fewer new plan and device sales along with the attendant credit checks that we provide.

We expect this trends persist.

So it may rebound very quickly as there is likely pent up consumer demand that will need to be satisfied when the lockdowns are lifted.

Now turning to consumer interactive.

Consumers continue to recognize the value of credit and identity protection credit monitoring and related financial education tools like those that we offer both directly and indirectly through partners.

Even as consumers are facing economic uncertainty in hardship. They are still demonstrating an interest in the tools and resources that help them manage their credit health and drive informed decisions.

As a result today, we've seen only a modest negative impact to our direct subscriber base.

We continue to tune, our marketing efforts to maximize acquisition and retention of high quality subscribers.

On the other hand at some of our indirect partners have curtailed their marketing programs likely resulting in decline in subscribers, which is the basis of our revenue model.

Positively we've had a number of substantive discussions with potential new partners that have expressed interest in building more robust consumer facing offerings like financial education in modeling tools for their clients, who may be facing difficult personal financial situations.

Across our international markets.

We have seen a pronounced slowdown as lockdowns have been implemented.

In varying degrees of severity and all of our geographies.

We're pleased to see that across all of our major markets, though governments and lenders are providing relief for distressed consumers as well as certain types of businesses.

Our international team has mobilized Swift response by providing customers with actionable insights that highlight differentiated solutions that we didnt have during 2008 in 2009 crisis.

These include.

Creditvision trended data.

View market, leading portfolio management insights and fraud solutions. This approach is positioned our business at the forefront of enabling our clients to shift from originations to portfolio and risk management.

In broad terms, we've seen developed markets like Canada, the UK in Hong Kong behave more like the U.S. with meaningful declines across each country or regions portfolio.

In the UK lending markets are under similar stress as in the U.S.

And that has and will weigh on our results.

On a positive note we've seen strong performance in several parts of our diversified portfolio.

Fraud solutions, which are about one third of our UK business are up significantly as consumers are accessing online services from government agencies that require authentication and identification.

This trend will likely continue into the second quarter, but will eventually taper off as all eligible consumers gain access to these sites.

Our differentiated affordability suite is proving to be attractive to customers monitoring income shock as unemployment has soared in the UK.

Also in the UK. We recently won several critical government projects that focus on the health and financial welfare of UK consumers and businesses during the code crisis.

In Canada, thus far it's looked more like the U.S. with a week underlying lending market that we expect to continue while lockdowns remain in place.

However, our first quarter results benefited from a number a breach remediation contracts that are not based on transactional inquiry volumes and thus are largely unaffected by coven.

This benefit will also continue into the second quarter.

We also benefit from portfolio diversification that includes fraud solutions direct to consumer offerings and insurance and government verticals in particular, we've seen a heightened interest in our direct to consumer solutions as our customers seek to strengthen their relationships with their customers.

In emerging markets the impact has been worse as consumers rely more on branch and other in person channels.

Across almost all of these markets, we see a pronounced lack of digitization along with more aggressive government lockdown restrictions in these geographies more aggressive tactics have resulted in a greater impact on our business.

In India, we have a fairly diversified portfolio that includes credit reports and scores, but also analytic and decisioning tools fraud solutions direct to consumer offerings and commercial credit business.

Our broader portfolio provides a buffer to the dramatic declines we've seen in lending inquiry volumes. The stark drop in activity is a result of the challenges Indian consumers have in transacting online and the severity of their lockdown restrictions.

In Latam, we serve a variety of markets and in general we've seen consumers challenge to transact remotely while lockdowns have largely not then the strict is in some of our other markets, notably in Brazil, We do not operate a credit bureau, but rather a data analytics business that largely serves the insurance industry and that provides.

A modest buffer against the declining lending activity there.

The South African economy was challenged prior to Covance and is now projected to be down low to mid single digits.

Lockdown actions are less severe than countries like India in the Philippines, our business in South Africa is diverse and has a large component that serves the insurance industry.

And Hong Kong, where we saw the impact of covered the earliest has stabilized at lower revenue run rate.

We are encouraged to see that leveling off as the economy is slowly reopened.

Our business has benefited from an increase focused on portfolio and risk management tools fraud mitigation solutions and should be furthered further aided overtime by the resumption of our direct to consumer channel in early April.

Rounding out a APAC the Philippines is facing significant headwinds much like India with a very aggressive locked down program that is shuttered much of the economy.

As we contemplate a recovery we expect developed markets to have a faster rebound as these governments tend to have more capability and capacity to implement stimulus to drive economic growth.

In light of the current situation our new reality is that many of our markets are likely to face extended periods of locked down or other socialist and thing.

Ill walk you through our new downturn playbook that proactively addressing the issues our customers face through three phased approach.

This is grounded in or understanding of these markets and our experience from past crises.

Phase one is focused on understanding and serving our customers needs in the midst of the covered crisis through our close partnership and engagement.

We've increased our customer engagement to accurately identify and segment needs that drive tangible easy to implement packages support them.

Given the immediacy of the needs the packages use mostly existing capabilities assembled to directly address the current circumstances. Examples of this include advanced portfolio management that leverages, our newest data assets.

Drivers gross solutions that reduce cost and offer a broader data to insurers.

E Commerce fraud mitigation tools.

Using both ovation and I'd vision.

And income in spending reviews in some of our global markets.

In the spirit, along with others in the industry.

We have advocated for continuation of clearing effective reporting of data so that customers and consumers remain confident in the data and are able to make well informed decisions in the future.

We've also come together as an industry to uniformly increase.

Consumers access to their credit reports at no charge from once per year to once per week during the cobot crisis.

Phase two of this program.

Is focused on helping customers emerged from the koby crisis, even as the timing will vary between markets and industries. In this phase, we will build new products to address specific industry and geographic needs.

Some examples may include new models that incorporate post covert trended and alternative data attributes.

Integrated fraud, and digital marketing solutions, and new underwriting frameworks in both phases will leverage our latest tools to support customers for example.

We can leverage our unique innovation lab to help customers worked through their own specific projects using our data and our industry experts.

In fact, we've already conducted virtual innovation labs with excellent customer feedback in the past those occurred at our headquarters.

These activities will all be coordinator and on the global level.

So that we best leverage new practices and approaches throughout the company.

In phase three we will address whatever new normal emerges from this crisis and we will ensure that our long term planning reflects the new challenges and opportunities.

While we believe that are long term strategy is more relevant than ever.

We will revisit it based on what we learn from phases, one and two of this downturn playbook.

Our comprehensive approach addresses both the near term reality that we and our customers face, while keeping trend juniors well position for future success.

The next element of our downturn playbook involves managing our cost structure to adapt to both changing macro landscape and the impact it's having on our business.

Most companies are traveling entertainment expenses will drop substantially as we shelter in place.

We're also maintaining or head count.

Freezing hiring with the exception of certain key strategic programs and tell we have better visibility into the shape and speed of the likely recovery.

We've addressed some other discretionary costs by canceling internal meetings and prioritizing our capital spending.

We have some additional opportunities to address costs and Todd will talk to you about these in a moment.

We have quickly imprudently taken appropriate cost actions that are helping mitigate the impact on our margin even as revenues expected declined sharply in the second quarter.

Just as our downturn playbook addresses our cost structure. We've also prioritized our investments to focus on innovation operational efficiencies and our accelerated technology investment, which we renamed project rise.

And we discussed in great detail during our last earnings call.

We will continue to invest appropriately under the circumstances to support our customers as they deal with unprecedented market challenges, while also taking steps to bolster our long term growth prospects.

The takeaway from these comments is that we're proactively working with customers and consumers to help them manage through the current environment, while we manage our costs and prioritize our investments.

This gives us confidence that we will successfully navigate the current situation and the company will be well positioned when markets rebound.

Our strategy and portfolio positioning remain intact, allowing us to continue to deliver industry, leading long term top and bottom line growth.

More specifically, we will still benefit from being innovators with attractive market positions across key geographies and strategic verticals.

We will still leverage our enterprise growth playbook to engage with clients to offer value added solutions.

We will still possess the same powerful and proprietary and third party data assets.

And we will still operate.

And industry, leading technology platform that is only going to get stronger through project rise.

Transunions cultural remain the same focused on customers with individual accountability and performance.

And we will continue to practice sound financial management and be good stewards of shareholder capital.

That point marks a good transition for me to turn the call over to Todd who will talk more about our strong balance sheet and cash flow position, our first quarter performance and our scenario based view of the second quarter.

Over to you Todd.

Thanks, Chris first I want to extend my best wishes to all of our associates customers consumers investors and analysts I Hope you and your families are safe and healthy.

Now to build off Chris his comments about the long term health of our business I want to start with and stress that we have a strong balance sheet and are taking all appropriate actions.

Ensure that remains the case going forward.

We finished the quarter with $306 million of cash on the balance sheet. During the first quarter. We had a number of annual cash obligations like bonus payouts debt service and tasks related to the vesting of restricted shares that limited our ability to conserve cash.

However for the foreseeable future and until we better determined the depth and duration of the coal the crisis, we will focus on building cash on the balance sheet.

As many of you know in recent years, we've actively managed our portfolio of debt, leaving us in a very good position today.

First over the past roughly 16 months.

We prepaid $400 million of debt.

Second last fall, we successfully refinanced our entire portfolio of debt, resulting in lower interest expense and meaningfully extended terms with no scheduled maturities until December 2024.

Third in February we executed executed a new hedge instruments to replace the one that will expire in June of this year, thereby locking in very favorable interest rates for the next five years.

And finally, we continue to have access to a 300 million dollar undrawn revolver, and we'll use that facility should we need it.

In terms of debt covenants, only our revolver and term loan eight which represent $1.1 billion of our $3.6 billion of debt have restrictions related to our leverage ratio.

Covenant stipulates that the ratio of net debt to adjusted EBITDA must not exceed 5.5 times on a trailing 12 month basis.

Our leverage ratio was 3.1 times at the end of the first quarter.

We test our ratio at least quarterly and we currently has no concerns that we would breach our leverage covenant.

Turning to our priorities for cash they are to run the business without interruption in all geographies.

Service, our debt continue to invest as Chris discussed paying our dividend and retain excess cash.

There are few considerations regarding our capital allocation.

Yes.

We don't expect to prepaid that or buy back shares in the current environment.

Second while we are comfortable paying the dividend at this time, if circumstances deteriorate meaningfully beyond what we currently are able to forecast.

Then we would consider recommending that our board temporarily reduce our suspending way, but I want to be transparent about our thinking.

Taken together, we have a strong balance sheet and have proactively position the company to leather these challenging times.

Going forward, we're committed to taking all prudent actions to preserve our liquidity.

I'll now walk you through our consolidated results and for the sake. Its simplicity all of the comparisons I discussed today will be against the first quarter of 2019, unless noted otherwise and all revenue discussions relate to adjusted revenue.

Starting with the income statement.

First quarter consolidated revenue increased 10% on a reported basis and 11% in constant currency.

Revenue from acquisitions contributed slightly that less than half a point of growth in the quarter related to the May 2019 acquisition of true signal.

So organic growth in constant currency would have grown 11%.

Adjusted EBITDA increased 10% on a reported basis and 11% in constant currency.

Our adjusted EBITDA margin was 38.3% flat with a year ago quarter.

First quarter adjusted diluted EPS grew 22% with a 23.6% adjusted tax rate.

Now looking at segment financial performance.

As markets revenue grew 14%.

The impact of the true signal acquisition had a nominal impact.

Our financial services vertical revenue grew 22% on a reported and organic basis.

As Chris mentioned, we experienced very strong overall trends in this vertical through mid March, particularly related to mortgage refinancing activity.

In fact without the benefit of unusually strong mortgage volumes financial services revenue would have still growing approximately 13% to 14%.

Emerging verticals combined grew 6% in 5% inorganic basis, and we're tracking even better through mid March.

Insurance health care in public sector were particularly strong a number of the sub segments of our diversified markets businesses, notably collections telco tenant and employment screening or weaker as co that affected these end markets rapidly and severely beginning in mid March.

Adjusted EBITDA for US Mark is increased 21% on both the reported and organic basis.

Well my comments about international all comparisons will be in constant currency.

The total segment revenue grew 9%.

As we mentioned that our February Paul we divested a small business in the UK Calder Cipro.

Excluding that divestiture international revenue would have grown 10%.

Regional results were negatively impacted by coven. Nonetheless, we still saw mid teens growth in several markets.

In Canada, we benefited from a number of onetime breach remediation opportunities with our customers as Chris previously mentioned.

In India, we had anticipated lower than normal revenue growth as we were comparing against 51% growth in the year ago first quarter, and we were still close to our expectations of mid teens growth.

UK grew 7% and 10% excluding the impact of domestic reciprocal.

We saw growth in all other markets, including Asia Pacific, which includes Hong Kong, where the impact of cultivated was experienced the earliest and longest during the quarter.

Adjusted EBITDA for international declined 4% as a result of weaker than expected revenue due to colder driven lockdowns.

And the comparison to a reversal of reserve in the or they'll corridor.

Consumer interactive revenue increased 3% driven by growth in both the indirect indirect channels.

Adjusted EBITDA for consumer interactive was down 5% as we increased marketing behind the direct channel during the quarter and continue to see good returns on that investment.

As Chris mentioned earlier, given considerable uncertainty about the impact of coal that across all our geographic and vertical markets.

At this time it is prudent to suspend full year 2020 guidance related to revenue EBITDA and diluted EPS.

Overtime, we will revisit this decision and at the appropriate time with sufficient visibility reinstate full year guidance.

Given this decision I wanted to comment on the three year outlook that we provided in March 2019.

At that time, we indicated that we would grow revenue on average 7% per year from 2019 to 2021.

That outlook contemplated a normal use centered recession, but not a global pandemic with truly unique characteristics.

As such the view that we could grow and hold margins through that sort of normal recession doesn't hold up in the current environment.

Actual revenue growth in 2019, the first year that outlook was stronger than the average up 9%.

Now seems highly probable that 2020 is going to be below the average.

And it is surely too soon to make a call on 2021.

As we have so little clarity about the potential depth and duration of the call the crisis.

We will provide an update in the future as we gain additional clarity.

Now I do want to offer some directional thoughts about some of our annual guidance items.

First we expect our tax rate to be lower than the previous guidance of 25.5% as a result of lower forecasted foreign earnings and lower state taxes due to lower forecasted domestic earnings.

Second it total depreciation and amortization is expected to be lower than the previous guidance of $375 million.

Excluding the step up in subsequent M&A portion depreciation and amortization should be lower than the $180 million. We provided last quarter. The changes primarily due to the impact of foreign exchange rates and a projected reduction in overall capital expenditures.

Our net interest expense should be lower compared to our previous guidance of $140 million as a result of a reduction of the forward LIBOR curve.

And finally, while capital expenditures may still be around 8% of revenue in 2020. This will be on a lower base and thats, a lower absolute dollar spend than we previously expected.

Turning to the second quarter of 2020.

Like many companies the lack of visibility uncertainty, resulting from call. It means that we were unable to provide the more specific guidance we normally do.

Instead, we believe that providing you with a range of potential outcomes along with the scenarios around each is far more instructive and valuable at this time.

The state the obvious scenarios like these are not predictions about what is likely to happen rather they are intended to help you frame possible outcomes.

And our call today, we've provided additional detailed trend information to illustrate how cold it has impacted transunions.

We expect to continue the software these details during the pandemic to help investors.

We have spent considerable time with every business over the past month and a half as the Kobin situation has unfolded. These conversations have focused on identifying quantifying in mitigating risk while also addressing cost containment actions investment prioritization and marketplace plans to support our custom.

Mers and consumers.

We believe it is scenarios represents our best possible view based on the information trend analysis and marketplace intelligence that we have available right now.

The base case is a continuation of the trends Chris previously outlined we provided you with daily volumes for our financial services end markets additional comments on other major verticals and all our geographic markets, we serve as a starting point for.

For the scenarios that I will take you through.

If these trends hole, we believe that adjusted revenue would decline 13% to 18%.

There was about one point of FX headwind that we're facing this quarter.

At the segment level, we would expect us markets would be down mid teens percent international declined low twentys percent.

In consumer interactive would be down mid single digits.

Adjusted EBITDA would fall, 33% to 38% also with one point of FX headwind.

Adjusted diluted EPS was likely decline more than adjusted EBITDA due to the adjusted EBIT dollar decline, having a larger percentage impact on adjusted diluted EPS, which is only partially offset by lower interest expense and tax rate.

I want to spend a minute here building on Chris his comments about cost mitigation.

When we think about addressable or discretionary cost, we think more broadly than just fixed versus variable.

We think about four categories. The first two.

Variable product costs, and non variable product costs related to changes up or down in our revenue base and track very closely to that.

Third is depreciation and amortization, which we have little ability to effect in the short term.

The fourth our fixed costs and we have address certain portions of this group as Chris discussed with a plan to address certain other areas further if necessary.

I don't want to get into specifics at this point Bill will provide details if we need to travel that pass.

Wrapping up the base case scenario, we wouldn't expect any liquidity issues and cash on the balance sheet would remain relatively stable.

Leverage which is calculated as net debt over a trailing 12 month adjusted EBITDA would rise slightly but be at or under three and a half times in very far from the 5.5 times Covenant trigger I mentioned earlier.

Furthermore, in this scenario, we would currently expect revenue and adjusted EBITDA declines to moderate through the back half of the year, assuming the recovery unfolds in a somewhat linear fashion.

The upset the upside case is formulated often earlier, albeit slow start to the recovery in may or June.

If that were the scenario, we would intest anticipate revenue falling less than 10% and adjusted EBITDA declining less than 25%.

And again adjusted diluted EPS would likely be worse than adjusted EBITDA.

Cash on the balance sheet, but actually build slightly and leverage would increase only modestly.

The downside case contemplates a meaningful deterioration in the trends that we've articulated.

That would result in adjusted revenue declining more than 20% and adjusted EBITDA falling more than 45% with adjusted adjusted diluted EPS again down by a larger percentage.

In this case, we would use cash on the balance sheet and would have additional discretionary actions available if necessary.

So to wrap up despite the challenges from coded that we face late in the quarter. We delivered good results that reflect the strong momentum we achieved prior to social distancing requirements. We have now turned our attention to managing through unprecedented times and believe the strength of our business and our balance sheet.

We will allow us to weather this situation.

I'll now turn the call back to Chris for some final comments.

Okay. Thanks, Todd So to conclude this morning, we've laid out a comprehensive transparent and realistic view of our business and of the markets that we serve.

We've outlined our plants proactively address the situation.

With our cost structure and in the investments that we're making for the near and long term.

While we clearly we'll face some short term challenges our portfolio and strategy remain intact and will be its powerful and differentiated after the cobot pandemic as they were before.

Most importantly.

We're going to continue to prioritize the health and wellbeing of all of our associates and of the broader communities in which we operate in globally.

And with that I'll turn it back to Aaron Thank you.

Thanks, Chris and that concludes our prepared remarks for the Q1 day, we ask that you east each ask only one question. So that we can include more participants and so now we'll be glad to take those question.

We will now begin the question and answer session to ask the question unique press Star then one on your telephone keypad.

If you are using a speakerphone please pick up your handset before pressing the key.

Yes. It anytime your question has been a dress and you would like to withdraw your question. Please press Star then to.

At this time, we will pause momentarily to assemble our roster.

First question comes from.

Yep.

Nick of Barclays. Please go ahead.

Thank you good morning, guys.

My question was more just around.

The tech and Thats been program.

Innovation product new product, that's paying interest in terms of how you think you can scenarios impact that and how you shift into maybe a different focus which is what they said before.

Okay. This is Chris Manav good morning.

I'll handle that question first but just a quick caveat, obviously, Todd and I in air and are doing this from home. So if there's any pause or awkwardness and handling of the questions. It's just.

Due to due to that fact.

As I mentioned, we're going to continue to invest in the strategically critical initiatives that we had talked about in the last earnings call.

And in various Investor Relations Communications, we done over the last quarter of last year, the acceleration of our tech investment our evolution. If you will is foremost among those.

It is part an acceleration of the migration of certain apps.

In the cloud but.

As I also mentioned it was the implementation of a streamlined technology architecture.

Across our core product portfolio.

As well as.

Just a reduction of some of the sprawl that has accumulated through the years and around the world.

As our revenues declined starting in mid March.

We look to be expense base, we we prioritize our capital spending and.

And we maintained a good level of spend.

In this area because we feel like we can execute very effectively in a work from home environment and of course, it's important for our medium term and long term success.

That will do a lot for product development agility, it'll also reduce our cost structure. So in this base case that weve outlined in our operating too.

Expect us to continue to invest in this program, we may not do it as aggressively.

At least in the initial month or so until we get more confidence.

Around the level of revenues that were going to have and of course, if we saw a material worsening in the environment. We would have to look at this area in other areas like personnel overall.

To determine how to appropriately size.

Those investments, but we want to maintain the program.

We think it's important we also continue to invest in innovation.

I can think of half a dozen major product categories that have.

Good plans.

Being executed to strengthen our positions and again I think we can execute effectively in these areas.

In this work from home environment in fact.

I have to say overall.

Our workforce has adapted very quickly to working from home I'm really comfortable in the level of service that we are delivering our clients and folks are engaged in productive.

And then thanks Manav.

Thank you all the next question comes from Gary Bisbee of Bank of America. Please.

Hey, guys. Good morning, I hope, you're all well, Chris you mentioned a couple of times the concept of extended recover.

If your market.

Acknowledging that that Theres a lot of uncertainty remaining ratio in the impact here can you just help us think through maybe what within the portfolio you think could recover more quickly or where you might see that concept of extended recovery b.

The most acute.

Okay Fair enough. So let me start.

At an overall level weve right a lot of detail around.

Our transactional volume performance, particularly in the U.S. markets.

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I believe that.

In the international markets.

You are largely in countries with emerging economies those countries when into deep shelter in place policies probably.

So weak the two weeks after the U.S.

And so the downturn there has been a bit more pronounced and I think it'll probably be another couple of weeks or so before and again I hope, we see that type of stabilization uneven recovery.

That we're seeing US there are also some challenges and some of those markets, where there is not the same degree of internet connectivity or digital penetration.

In general.

In consumer lending in originations and all of that so it could be a little bit curtailed Intel lock down he and physical movement has again possible, but I do know really across all the countries not portfolio. We he adaptations to the current circumstances, which I think bode well for.

Volume in the future.

In terms of particular categories that would rebound I mean think auto lending will rebound because.

Some folks will be able to visit dealers, even if you have to implement social distancing approaches.

The right now that's been a considerable locked down new home purchases.

Could benefit as well I think a consumer lending, which has endured I think the most pronounced impact of the different lending sub categories. Once those lenders get a sense of the performance of their own portfolio.

And in the current employment situation and the impact that the stimulus from the federal government as having that's a category that could also bounce back I think collections activity in the coming quarters could increase substantially I like the.

The way we're position in that space from a product in the capabilities perspective.

But as I mentioned in my comments.

[noise] collectors weren't geared up to work from home and there's a collection hiatus.

In place, but I do think that in the coming quarters.

Lenders will have to collect on delinquencies and you'll see quite a resurgence in those activities.

[noise]. Thank you.

We take the next question please.

Hello, operator, we're not hearing you.

All right I apologize everyone, we're going to quickly figure out what's going on here and we'll just we'll just hold for second we will get to the next question as soon as we can.

Yes.

Okay cyclical with US we are trying to sort through this and I may end up as your intermediary too.

So what I'd suggest is my friends NK cell site or Cuda go ahead and send me your question via email and I will read them into the group on your behalf.

Just to keep this move and as we want to make sure respectful of everyone's time.

Firewall and I'm going to get flooded.

Excuse me. This is the conference operator, I apologize for the.

Technical problem, there if you'd like I can go to the next question from Tony.

Viewers. Please.

Thank you.

And thank you probably capitalizing go ahead.

Thank you congrats on that strong quarter Im glad to hear that your I'll say.

My questions regarding the guidance and I understand wanting to be conservative, especially in the middle of set. Your line is there any time I know others have framing this in a similar way, but why is it fair base case that that current trends remain for the fall corridor in the second quarter States in country start to open up just maybe.

Astrazeneca frame likelihood around that different cases that you provided here. Thank you.

Okay. So the learning curve.

I'm going to pass it over to Todd but.

Who I think in tickets through the detailing are thinking and you are looking for some kind of probability I think of a b or C. So with that let me pass it over to Cogs.

Hey, Good morning, Hi, Tony Tony. Thank you for your question in regards to the outlook scenarios that we are providing.

As you as the base cases shelling.

We are taking the current trend.

That we are seeing in our us markets business as well is on international and consumer interactive.

And running those trends out, but as you can imagine on those trends are different in every one of the end markets that we operate and so in particular, you can see that im within the online volumes that weve provided for our us markets.

Annual services business sequence here, just a disparity.

Tweener in those groups.

You can also see that when you look at the commentary that we provided.

Our international business, as well too and where you see.

Relative.

Downturns in places developed markets like Canada UK.

Things are a little bit more pronounced on an emerging geographies I would like India and Latin America I.

I think the important takeaway in the base case that we are assuming we're not necessarily assuming linear for everybody. We do have different assumptions.

In that base case.

As to when those markets, we'll see some type of recovery.

So internally.

We are going through a very detailed bottoms up forecast will process that we put in place.

In mid March on so each segment presence in their respective finance teams.

Our presenting to me and Chris on a weekly basis, what those trends are on so we have a good sense as to where where things are going to ebb and flow and I think you'll Chris already.

We kind of answered just what end markets, we would expect omnicam that.

Sooner.

Rather than than later.

So that that's the base case, and that's what we see today I mean, the and we gave you the data through.

Equal to 20, Fourq as well on us market. So we tried to expand on that as far as we couldn't or being optimistic.

These trends on will continue.

However, we're not certain just like anybody else you know what the implications of that it's going to be.

So thats why we thought it would be prudent approach to provide scenarios on that we did.

So if you believe that the outlook that we're providing.

In our base case on is not optimistic enough that is why we provided you with an upside case.

Thats a so we're just not necessarily there at that point right now.

And to be balance.

We put in a.

Downside.

Scenario as well too just in the event that what we are experiencing right now.

As further deterioration or maybe their second surge.

Cases, we just don't now.

And thats very wide.

We take more parts that we have.

Let me pass it back to Chris for some other comments on that.

Yes, I just realized from kind of tops comment there that I forgot to answer part of an earlier question, which is our perspective on the nature of a recovery.

Theres.

Talk of the shape L. shapes U shaped et cetera, I think we feel like it's going it looks something like a Nike swim where the descent was pretty rapid and then there will be a slow and measured.

Rate of improvement overtime, but with some ups and downs along that trend line and that's because this is an economic crisis. That's brought about by health crisis, and we're still having to manage within the constraints of our ability.

To deal with the health crisis.

Then it's not as if we're all going to be able to just resume.

Our normal social and economic behavior that had produced a group that we are enjoying it's going to take some time, it's going to have to be measured and we're going to have to really get.

And disease transmission and treatment in all under control before we can get back to the way things work.

Thanks will you be willing to give probability is on the scenarios are now.

Well I.

I think I think we've given you our boss thinking landmarks and I feel pretty good that this is.

Very comprehensive as to how we're thinking about it internally.

We're we're literally sharing with you.

Where we're thinking right now so I think thats.

I think we'd be remiss to sit here and higher probability based on any of these scenarios.

Again Thats why we gave you the trends that we did.

Certainly the foundation tanker vessels.

Thank you.

The next question comes from Jeff Miller of Baird. Please go ahead.

Yes. Thank you for taking the question just I guess, a clarifying question on how you're characterizing.

The the stabilization our recovery relative to the trend data that you gave us and I.

I guess my view is from looking at great graft survival. The check that you gave that says that the year over year decline generally look like they're narrowing or improving across most of the U.S. financial markets products, you're talking about stabilization. So I guess just are you basically saying that there was this period of extreme freeze and stay at home.

I was implemented and then since then they've been stable in recent weeks just.

Just trying to understand why you're seeing stabilization year over year looks to be getting better and then this specific number that you gave us in those charts is that a April.

To date year over year trend or is that the April 24 specific daily volumes. Thanks.

Okay. So we'll tag team on this question.

But just to clarify our language just because we see stabilization doesn't mean flatlined necessarily.

Always means more it's not declining in its either flat to improving if you look at the trend over the past 10, plus business days, we see flat to improving in all of those financial services markets, which is encouraging and we're looking at our volume trends everyday from from markets around the world.

And somewhat to the earlier question, while we're not giving probabilities.

We we do feel good about our base case and that is what we are managing towards currently but we are prepared to pivot.

You know.

Are prepared to pivot and manage due to each of litigation that we outlined as for the April question, Let me hand Todd.

Yes, so Jeff good question, a nice for clarification on that so what that Grasberg shifting.

And the volume decline is a comparison of April 24th of 2022, the prior year. So it's not meant to be.

In summary, the trend or whatever it is it's just the point in time.

Where we were at the end of last week.

And where volumes were on that.

Thank you.

Okay.

Person comes from Andrew Steinerman of JP Morgan. Please go ahead, Hi, Todd could you just tell us in the base case scenario when the company says continuation of current trends.

Are you using that last week's number year over year like you just referred too or are you assuming all of aprils trends on average continue year over year in May and June.

Hey, Andrew Good morning, Thanks for the question.

Yeah, that's a good clarifying point to make too. So we are when we we extrapolate on the trends forward we are looking at.

The most recent data were not necessarily going back and looking at on an app on average a month April on as an example, but we are looking at maybe the most recent weak and were not as granular as saying Oh, well Friday with this.

Prior to 20 Park is that still then that must mean everyday is going to be like that going forward. There are some sensitivity.

That we put into it but by and large what we're carrying forward.

For me in May and June assumptions are taking on the current.

Volumes that we've been seeing over the last week, okay. Thank you.

Your next question comes from Andrew Jeffrey of Suntrust. Please.

Hey, good morning, gentlemen, I appreciate you taking the question.

Trended data has obviously been a pretty important driver for transient trends over the last few years.

And Tata sorry, Chris It I made some interesting comments about.

Demand for trended data can you opine, a little bit on perhaps and I'm thinking even in emerging markets have tried to data might help.

Risk management competencies that your customers is that something as we come out of this that could be a structural demand driver.

Yes, I think so I mean look from one of the we've talked a lot about trended data through the years and on these calls and we've succeeded in pushing yet.

Mostly to many of the markets in which we operate around the world.

And we think it's going to be especially helpful for.

Understanding the risk of existing portfolios.

And even new client acquisition in this.

In this more limited environment, one of the data attribute that's going to be especially helpful. For lenders is what we call aggregate excess payments.

Over time, what we can see is.

The.

The amount of debt service in excess of the minimum required that consumers are making.

And I think that speaks to several factors that speaks to you know to revenue were income and expenses getting to some type of a consumer free cash flow measure. If you will and then it speaks to their behavior their propensity to service their debt or take care of it which is.

More of a.

The behavioral characteristic and I think lenders will look at that when during their portfolio reviews were also coming up with.

New attributes that we've already rolled out that are.

Helping with more current signal that we're looking at.

How consumer trade lines are being reported in this environment and were able to characterize.

Those that have.

Forbearance or other hardship relationships.

Any disaster recovery codes.

And that some incremental current signal that all will go and help toward.

The risk assessment of current portfolio.

On top of that Theres, some signal in our alternative datasets, where their prior mainstream consumers are now dipping into the payday loan market that could be an indication address.

And also any negative demand deposit activity, we're fortunate in that we're able to see bounce checks and any other negative activity on demand deposit accounts nationwide in the us.

In some of our other markets, we actually get.

Current income information.

From.

The major banks and we have we pioneered that product in the UK. It's part of a debt leverage ratio that we have put out in that market for many years now that help banks determine which consumers will likely need some assistance and meeting their obligations.

Thank you very helpful.

The next question comes from Seth Weber of RBC. Please go ahead.

Hi, good morning, and thanks for all the all the information.

Yes.

And just curious about any one of two markets you have Hong Kong and the us that are kind of starting just better stabilizing and can you just talked to any.

Parallels that you've seen between I guess, Hong Kong was first and relative to us and.

Any parallels are differences and just how those markets have stabilized and started to recover thanks.

Yes sure.

I think I'll back cleanup on this one because before he was CFO of.

All of Threeg in Todd with CFO of international and he's got great detail on these markets. So.

How long do filament on the Hong Kong experience.

Okay.

Hi.

Thanks for question I'm happy happy to get into little bit of details I guess.

Comes to mind, when you asked that question about bringing or.

No the parallels to Hong Kong and in the last I guess.

First thing I think others.

On the very different businesses.

Our business in Hong Kong is predominantly.

Focused on our financial services, and nearly branched out Alan and some other verticals like direct to consumer.

As one example, but.

Yes, it's more broad based portfolio as I'm sure you can appreciate so the only difference in Hong Kong is the way that the.

Data is consumed.

It's by and large purchase on a.

Portfolio.

Basis, so meaning in batches as opposed to.

Just want to shop online our credit report on transactions, we do have that type of business in Hong Kong.

But predominantly.

No that the average Hong Kong is.

A lot more predictable because of the batch work on that we do so when we look at how that market has performed.

As of that mix of business and the predictability predictability of it we didnt.

C.

On the on such a steep.

Downturn on initially from it but then Conversely on the way back not seen any big.

Uptick ads as well too.

And I think it's.

Really important thing is just remember how different.

These markets are and how how credit can be.

He is on in that were obviously new less.

We're in the midst of it right now.

And I hope that we've given you some good color.

On the trend that we're seeing and answering previous question.

We have talked about what we feel like the recoveries are now look like in various end markets.

Yes, I'll hand, it back to you.

Yes, just two quick comments I mean, I guess in summary, the the difference in the product mix that we have or the weighting of the product mix in Hong Kong.

Lends itself to stability in that business has held up pretty well over the past year or 18 months than initially we had the protest and political instability, which caused some curtailment.

And then we had in fortunate in fraud situation in our direct to consumer business, which took that offline.

And then of course, the pandemic all that said, though.

It's still a strong business.

And.

It's also just given us insight as to how.

This pandemic and then also the recovery may develop.

Our employees have been going back to the office in Hong Kong, but in a measured and limited way we've got the teams in the between and we've extended the workday, we stagger some shifts.

We have one team in the office per day, and we try and limited to those that really need to be in the office. We've got a direct to consumer window that we have to manage their in Hong Kong. So, it's a little bit unique and and frankly employees were ready to get out and about.

And Thats, what I would expect is going to happen here in the US. We're just we're just a few weeks or more behind that.

Thats Super helpful. Thank you very much.

Our next question comes from George Mihalos of Cowen. Please go ahead.

Hey, guys. Thanks, Thanks for taking my question I, just wanted to delve in a little bit more on the international side.

Just curious if you have anything similar in terms of updated trends at a concrete level to what you sort of laid out in the financial services segment and maybe to the extent you can't get that granular.

We look at the base case assumptions for two Q international down kind of in the low Twentys can you maybe help ballpark for us what geographies, you're expecting to be worse than that or trending worse than that and which ones are doing better. Thank you.

Hey, George ill take that one.

Thanks for that thanks for the question. So again I think I'd refer you back to the slide that we pulled together.

Just to pick it's kind of our sentiments on.

The international business, and where we where we think things are.

I'm going to where the impact is now and where they will return.

In particular.

I think I answered this as well too when you look at more developed at the countries like the UK on in Canada.

Hey.

Hello.

Shelter in place.

That's similar to the U.S., so the and the impact is relatively about.

Same on as you know what we're seeing I think it's more.

The emerging geographies on the dilute it you previously in India, and Latin America, where the.

The lockdowns are little bit more severe on that we've seen.

More of an impact in the short term on that so.

So the reason that Joe to the base case, you'll also note that we are providing.

Outlook for each of our segments. So for the us markets for international and consumer Interactive, we typically don't do that as you know and the reason that we did that.

Was to just simply.

Give you a perspective as to.

How we are thinking on each of the businesses are going to perform so specific to your question on international ill talk about it being down.

Yes, as low twentys.

In the second quarter, we're taking into consideration all the points that I just made in the trend.

That we have articulated on that slide for each other major.

Geographies.

Okay.

Next question comes from Andrew Nicholas of William Blair. Please go ahead.

Hi, good morning.

Just sticking with international quick question on that I think you talk quite a bit about the different components of those businesses that add diversification outside of the core financial services business is it possible to ballpark what those.

Cyclical or maybe a cyclical businesses represent as a percentage of the total international business mix in the aggregate.

Thanks.

Yes I.

Andrew I'm trying to if I understand your question I think you're looking for.

In the international portfolio, where we would have counter cyclical players on is that right.

Yes, just trying to essentially the size of maybe that portfolio diversification column on slide 12, or just kind of ballpark of what might not be.

And as heavily influenced by by the economic trends.

Yes, I guess, it's a general general.

Overall in that I think.

Yes, typically when we when we've talked in the past about.

I was having businesses that were counter cyclical.

Our necessarily contemplating.

Global pandemic.

Enables comments on saying, okay. Thank back to discussions that we've had in the past about how trends you would perform in a recent recessionary environment, we talked about global businesses like insurance and healthcare in the U.S. would be countercyclical in our geographic footprint on the internationally on would help us.

Ill kind of unfortunately, what for what we're experiencing right now is it's broad base, even given the countercyclical plays as we've already articulated.

Our down maybe they're not down as much but nevertheless, they still are.

Specific to your question the line on international.

I would say that.

Predominantly on those businesses our financial services.

Okay.

With with some exceptions alright.

Fairly fairly good job diversifying.

The business in Canada as one example outside of financial services there.

Q4 positions in insurance and public sector as well as in direct to consumer I would say that.

Okay, South Africa has diversified in UK.

As well too.

But predominantly those geographies are.

Having financial services.

And the last question today will come from Bill Warmington.

Warmington of Wells Fargo. Please go ahead.

Thank you very much have been call worse so.

Thank you very thank you very sneaking me here at the.

Yes, no problem Bill.

So Bob you mentioned consumer interactive is trending down mid single digits.

How is that trending for direct versus indirect both trending mid single digit or is one channel doing significantly better than the other.

Yes.

I'll start with this and without getting specific numbers on it we're seeing the direct part of our business.

Hold up pretty well.

Consumers.

Value the service and there are keenly focused on their financial management right now.

Thats encouraging and we're maintaining our marketing spend.

Our marketing returns are very acceptable and we're going to continue to grow that segment of the business on the indirect side, it's a little bit.

Tougher sledding, if you will.

Most of those.

Most of the revenue comes from.

Lead aggregation business models.

And because financial services right now is paused a little bit in terms of new client acquisition or the volume of activities greatly diminished.

Our revenues from that segment have been more challenge in the direct side, but overall the direct to consumer segment.

This is performing quite nicely.

And we're encouraged by.

Got it thank you very much.

Great and that's going to bring us at the end of the call. We thank everyone for other time today and we want to just reiterate we hope everyone is healthy and say things and continues to be so have a have a very good day all the best from changing again good bye.

Yes.

Thank you conference. The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

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