Q1 2023 TransUnion Earnings Call

April 25, 2023

In addition, there will be an opportunity to ask questions.

To ask a question you May press Star then one on a touchtone phone.

To withdraw your question. Please press Star then two please.

Please note. This event is being recorded I would now like to turn the conference over to Aaron Hoffman Senior Vice President Investor Relations. Please go ahead.

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.

Our earnings release and the accompanying slides include various schedules, which contain more detailed information about revenue operating expenses and other items as well as certain non-GAAP disclosures and financial measures along with the corresponding reconciliations of these non-GAAP financial measures to their most directly comparable GAAP measures.

Today's call will be recorded and 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 risks and uncertainties actual.

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

With that let me turn the time over to Chris.

Thanks, Aaron and let me add my welcome mature our agenda for the call. This morning first I'll discuss the macroeconomic conditions and trends in markets around the World then I'll provide an overview of our strong first quarter financial performance I will also review the continued progress with neustar to accelerate revenue growth achieve target savings.

And Leverages technologies across the enterprise finally, Todd will detail, our first quarter results along with our second quarter.

And full year guidance.

Inflation in our developed markets around the world remains elevated although with signs of subsiding as central banks have raised interest rates to slow consumer demand and returned to long term inflation targets.

Higher prices and higher rates have pressured consumer finances, and economic growth has slowed as a result, however, thus far developing economies have been less impacted by these factors lending volumes in our emerging markets of India Asia Pacific South Africa, and Latam have remained strong.

In the U S consumers remained healthy relative to historical norms with modest spending growth high employment levels and some real wage increases.

Credit performance metrics have continued to normalize and remain within the range of pre pandemic and historical levels.

Against this backdrop, we've seen increased caution from banks, while their financials are still strong and consumer demand for credit is healthy banks are concerned that theyre markets might slow further and as a result have tightened lending standards reduced marketing and originations increased loss reserves, thus far we've seen some limit.

The impact on our business from these changing conditions, however, like our customers we remain cautious about the rest of 2023.

And I'd note that the recent failure of a few lenders should not cause the lending system to contracted materially we are confident that even if certain institutions slow their pace of origination other lenders will take advantage of the situation to garner new business and satisfy strong consumer demand.

And given this confluence of concerns and despite our outperformance in the first quarter, we will maintain our full year guidance at this point to account for market uncertainties.

I'll walk you through the details later of our second quarter and full year guidance and expectations for each of our markets and verticals.

Now turning to first quarter highlights we beat our guidance on revenue adjusted EBITDA and adjusted diluted earnings per share.

Our financial services vertical performed slightly ahead of our expectations down, 1% organically and flat excluding the impact of mortgage.

Auto lending increased due to the easing of supply chain constraints and strong new business wins.

Card was flat despite comparing.

To continued very strong originations for over a year.

Although consumer lending declined it also faced challenging comparisons over exceptional growth last year and mortgage was down mid single digits, but better than expected.

U S emerging verticals delivered moderate growth in line with our expectations given the comparison to strong year ago performance importantly, we've seen early signs that the temporary issues, we faced intended unemployment employment screening and.

And insurance are abating, setting us up for a good full year.

Our international segment again grew constant currency revenue by double digits for the eighth consecutive quarter led by 32% growth in India and double digit growth in Asia Pacific Africa, and Latin America.

We continue to outperform our underlying markets as a result of strong lending growth market share gains and our successful innovation.

As I'll detail in a moment, we had another good quarter integrating new star and continue to see strong customer adoption of our platforms and solutions.

Finally, we continue to point, our free cash flow toward reducing our debt levels and in the first quarter, we prepaid $75 million of debt with intent to make additional prepayments in the second quarter and the second half of the year.

No new store delivered 3% revenue growth largely in line with our expectations as we compared against last year's strongest growth quarter.

For the full year, we continue to expect high single digit revenue growth at a 32% margin fueled by the revenue growth and achieving our aggressive integration cost savings. We have line of sight to the revenue growth based on our strong bookings and the momentum achieved by joint sales teams aligned buyer market verticals.

We also enjoy a favorable portfolio effect from the broad range of new store solutions, our customers are challenged by compliance with privacy and regulatory requirements.

And also increasing focus on cost management and vendor consolidation all of which play to our strength as a scaled platform provider of identity based solutions.

Our solutions are highly relevant regardless of the macro backdrop as we help customers unlock value in their first party data reach consumers in a cost effective manner.

The return on their marketing investment mitigate fraud and improve communication effectiveness.

We see this relevance playing out with meaningful new business wins across our verticals, including a top 10 traditional lender a large fintech player a major auto manufacturer and a large used vehicle retailer.

Yeah.

Now this next slide illustrates the key new store integration and.

And innovation initiatives.

Made significant progress on each with meaningful path to deliver more value as we complete each initiative.

As we execute our plan, we have identified substantial incremental opportunities for cost reduction and commercial success on.

On previous calls we've shared important progress on many of these initiatives.

Infrastructure savings have been driven by data consolidation.

Rather data center consolidation and the migration of New Star is cloud computing to the Google Cloud, which supports improved performance at a lower cost.

This enables a stronger cyber security stance, the opportunity to eliminate redundant tools and cost savings.

We've also made meaningful progress and are already seeing valuable lift and cost savings from combining transunion and new star data.

Underlying the integration of Neustar is the combination of its data assets with to use.

Bringing on.

Our data together on a common tech platform has given us 15% greater coverage of all adults in the U S. A 10% increase in email coverage and a 15% improvement in telephone number coverage at the same time.

By bringing more datasets in house, we're realizing cost reductions and superior performance.

Work is underway to bring together additional datasets like offline household data real time digital interactions and phone signals, which should yield incremental uplift in performance when we complete this year.

Importantly, all of our U S verticals in all product types of benefit from these improvements.

Greater value in our data assets is achieved by connecting them into a more complete and powerful identity graph.

Where each company previously had its own identity graph per product. We now have one that performs considerably better.

With this work well underway, we are beginning to deploy the single identity graph across all products I'll offer you some compelling examples in a minute.

At the same time, bringing all of our data together is just the start.

Underpinning putting all of this progress is a single enterprise data and analytics platform one I'd.

We benefit from improved data ingestion speeds and the ability to quickly link and matched the data. We can also deliver superior analytics rapidly to our customers. This is all done in a highly privacy compliant manner to support both regulatory and customer specific requirements.

From there.

We've made progress in expanding and improving our customer data analytics enablement.

We're migrating the promo platform onto <unk> I'd.

Where it will combine with <unk>.

<unk> clean room functionality to.

To create the next generation of advanced analytic capabilities.

All of this work has allowed us to consolidate products into integrated platforms like the true audience marketplace enhanced call center capabilities and the combination of all of our best in class fraud solutions.

So let me spend some time on the significant progress we've made in aligning relevant to you and new star platforms.

In the first quarter.

We announced a key milestone in the integration of new star with the launch of true audience marketplace.

We married the expansive consumer data and identity resolution audience building and targeting capabilities of Teu and new star.

Into a comprehensive and interoperable site of privacy enhanced marketing solutions. Additionally.

Additionally, the product suite now offers closed loop marketing measurement and attribution and credit informed marketing solutions, which werent previously available.

Through audience enables clients to improve.

Marketing effectiveness by increasing audience reach improving the quality of consumer insights and leveraging more accurate and up to date identity data across all marketing and measurement activities climb.

Clients have reported seeing a 40% reduction in duplicate CRM records and a 30% increase in conversions from higher performing audiences.

Like the true audience marketplace enhanced call center capabilities and the combination of all of our best in class fraud solutions.

Through audience now leverages, the proprietary data ecosystems of Teu of New star spanning 200, authoritative data sources, including data from over 16 billion monthly phone signals offline consumer data covering over 125 million U S households.

So let me spend some time on the significant progress we've made in aligning relevant teu in new star platforms.

In the first quarter.

We announced a key milestone in the integration of new star with the launch of true audience marketplace.

We married the expansive consumer data and identity resolution audience building and targeting capabilities of Teu and new star.

And data spanning 10 billion real time digital interactions daily.

Additionally, true audience combined trans unions direct media and technology partnerships across the TV and streaming media world with new stores integrations across the walled garden and digital media ecosystem to ensure clients can reach and measure consumers across the channels that matter most.

Into a comprehensive and interoperable site of privacy enhanced marketing solutions. Additionally.

Additionally, the product suite now offers closed loop marketing measurement and attribution and credit informed marketing solutions, which werent previously available.

This includes partnerships with over 250, leading media owners and publisher networks and more than 100 advertising data management and cloud providers as well as social and retail media platforms AD servers demand side and sell side platforms and customer data platforms.

Through audience enables clients to improve.

<unk> have reported seeing a 40% reduction in duplicate CRM records and a 30% increase in conversions from higher performing audiences.

In communications, our innovative family of trusted call solutions, which includes branded called display and color name optimization continues to provide differentiated growth while.

Through audience now leverages, the proprietary data ecosystems of Teu and new star spanning 200 authoritative data sources, including data from over 16 billion monthly phone signals offline consumer data covering over 125 million U S households.

While landline color I'd continues to decline we are more than offsetting that headwind with considerable growth in tcs, which delivered a very strong first quarter and is expected to grow almost 50% in 2023.

And data spanning 10 billion real time digital interactions daily.

In the first quarter, we on boarded one of the largest retailers in the U S to our trusted call suite.

Additionally, true audience combines trades unions direct media and technology partnerships across the TV and streaming media world with New stars integrations across the walled garden and digital media ecosystem to ensure clients can reach and measure consumers across the channels that matter most.

A key part of the growth is the expansion of branded call display, which should triple in size. This year and then represent about half of all Tcs revenue.

We're in the early days of penetrating the market with branded call via but we're scaling rapidly we quadrupled the number of customers using the solution over the past year.

This includes partnerships with over 250, leading media owners and publisher networks and more than 100 advertising data management and cloud providers.

In addition to the impressive Tcs growth, we continue to realize considerable cross sell revenue from call Center solutions, most notably with financial services and insurance customers.

As well as social and retail media platforms AD servers demand side and sell side platforms and customer data platforms.

<unk>.

We are creating a blended phone are pinned that will lead to best in class right Party contact solutions, leveraging our contact center and specialized risk data assets.

In communications, our innovative family of trusted call solutions, which includes branded called display and color name optimization continues to provide differentiated growth.

And in fraud, we continue to push toward the completion of a single integrated platform that marries all of our best in class solutions, including those acquired from Neustar.

Early testing has shown substantial lift.

In match rates.

Reduction in false positives and an increase in identification of fraudulent activity driven through the combination of <unk> and new star data.

In the first quarter, we on boarded one of the largest retailers in the U S to our trusted call suite.

A key part of the growth is the expansion of branded call display, which should triple in size. This year and then represent about half of all Tcs revenue.

We expect to have this fully formed offering in market by the end of this year.

Just as we've integrated and redefined our solutions, we also announced an important rebranding of our global business solutions.

We're in the early days of penetrating the market with branded call but.

But we are scaling rapidly we quadrupled the number of customers using the solution over the past year.

We organize thousands of existing <unk> products and dozens of brands into seven solution lines globally defined by business need and unified by a promise to deliver a true picture of consumers a robust multi layered and actionable view of each person steward it with care.

In addition to the impressive Tcs growth, we continue to realize considerable cross sell revenue from call Center solutions, most notably with financial services and insurance customers.

Further.

We are creating a blended phone are pinned that will lead to best in class right Party contact solutions, leveraging our contact center and specialized risk data assets.

Youll find explanations of each of the new brands on this slide.

He used.

Branding clarifies, our product offerings and better demonstrates our expertise in our heritage and new markets, while also making it easier for customers to find what they need.

And in fraud, we continue to push toward the completion of a single integrated platform that marries all of our best in class solutions, including those acquired from Neustar.

After almost 20 acquisitions in the last decade. This rebranding is a logical step in the company's evolution. We can now offer more powerful consumer insights than ever before allowing us to meet the needs of our customers in more ways and at a much deeper level.

Early testing has shown substantial lift in match rates.

Reduction in false positives and an increase in identification of fraudulent activity driven through the combination of <unk> and new star data.

We expect to have this fully formed offering in market by the end of this year.

I want to conclude by noting that we recently published our annual sustainability and diversity reports, which can be found on our investor Relations website.

Just as we've integrated and redefined our solutions, we also announced an important rebranding of our global business solutions.

In both cases, you will find expanded disclosure and meaningful progress against important topics like diversity representation, among our associates and more comprehensive ESG reporting.

I encourage all of our investors to read these important documents as.

As a reflection of our progress Newsweek recently named Transunion, one of the 500, most responsible companies.

Youll find explanations of each of the new brands on this slide.

That wraps up my comments on our market conditions first quarter performance progress in integrating new star, our global rebranding and our ongoing commitment to diversity and ESG.

He use rebranding clarifies our product offerings and better demonstrates our expertise in our heritage and new markets, while also making it easier for customers to find what they need.

Now Todd will provide you with further details on our first quarter financial results second quarter outlook and the full year 2023 outlook over to you Todd.

Thanks, Chris and let me add my welcome to everyone I'll start off with our consolidated financial results first quarter consolidated revenue increased 2% on both the reported and organic constant currency basis.

At a much deeper level.

Rguest added about two points to inorganic revenue, while foreign exchange was a two point headwind our business grew 2% on an organic constant currency basis, excluding mortgage from both the first quarter of 2022 and 2023.

I want to conclude by noting that we recently published our annual sustainability and diversity reports, which can be found on our investor relations website and.

In both cases, you will find expanded disclosure and meaningful progress against important topics like diversity representation, among our associates and more comprehensive ESG reporting.

Adjusted EBITDA declined 4% on a reported basis and was flat on an organic constant currency basis our.

I encourage all of our investors to read these important documents as.

Our adjusted EBITDA margin was 34, 3% down 200 basis points compared to the year ago quarter as we had expected excluding the impact of Rguest, our organic constant currency adjusted EBIT margin was 35, 4% or down about 90 basis points year over year.

As a reflection of our progress Newsweek recently named Transunion, one of the 500, most responsible companies.

That wraps up my comments on our market conditions first quarter performance progress in integrating new star, our global rebranding and our ongoing commitment to diversity and ESG.

First quarter adjusted diluted EPS declined 13% as a result of lower adjusted EBITDA and higher interest expense.

Now Todd will provide you with further details on our first quarter financial results second quarter outlook and the full year 2023 outlook over to you Todd.

Before I get into U S. Market's results. A reminder, that we are now reporting new star within our vertical market structure to drive accountability and internal reporting clarity and.

Thanks, Chris and let me add my welcome to everyone I'll start off with our consolidated financial results first quarter consolidated revenue increased 2% on both a reported and organic constant currency basis.

And we will discontinue providing standalone new style reporting at the end of 2023.

Now looking at segment financial performance for the first quarter U S markets revenue was up 3% compared to the year ago quarter.

Organic revenue was flat in the quarter and was up 1% excluding mortgage.

Adjusted EBITDA declined 4% on a reported basis and was flat on an organic constant currency basis our.

Adjusted EBITDA for U S markets declined 8% on an as reported basis and declined 6% on an organic basis.

Our adjusted EBITDA margin was 32, 2%.

Or 33, 9% on an organic basis.

Financial services revenue grew 5% as reported and was down 1% organically excluding Argus.

Excluding mortgage organic revenue growth was flat.

First quarter adjusted diluted EPS declined 13% as a result of lower adjusted EBITDA and higher interest expense.

Spite comparing to a 21% growth rate in the first quarter of 2022.

Implying.

Sure.

Before I get into U S. Market's results. A reminder, that we are now reporting new star within our vertical market structure to drive accountability and internal reporting clarity and.

10% two year growth CAGR.

Looking at the individual end markets consumer lending revenue declined low double digits against a mid <unk> growth rate in the year ago quarter.

And we will discontinue providing standalone new style reporting at the end of 2023.

As expected lenders are pulling back and investors continue to be selective but activity remains solid relative to historical levels, particularly in the BNP L space, where we continue to see strong activity and new entrants.

Now looking at segment financial performance for the first quarter U S markets revenue was up 3% compared to the year ago quarter.

Organic revenue was flat in the quarter and was up 1% excluding mortgage.

We are in an advantaged position to focus on strategically extending and expanding existing relationships.

Adjusted EBITDA for U S markets declined 8% on an as reported basis and declined 6% on an organic basis.

<unk> offerings that we can provide allows us to further penetrate existing accounts with solutions like fraud mitigation marketing call Center management and advanced analytic capabilities.

Our adjusted EBITDA margin was 32, 2%.

Or 33, 9% on an organic basis.

Many of these capabilities are the result of recent acquisitions, especially new star.

Financial services revenue grew 5% as reported and was down 1% organically excluding rguest.

Our credit card business was flat against mid Twenty's growth in the prior year quarter.

Excluding mortgage organic revenue growth was flat.

Issuers continue to market with a focus on gaining top of wallet share with consumers, helping to drive origination activity there.

Spite comparing to a 21% growth rate in the first quarter of 2022.

Implying a 10% two year growth CAGR.

We are also benefiting from our relationships with larger firms that are aggressively utilizing digital marketing.

Looking at the individual end markets consumer lending revenue declined low double digits against a mid <unk> growth rate in the year ago quarter.

Our auto business delivered 8% growth in the quarter on the strength of continued share gains strong prequalification volumes the impact of cross selling new star marketing and call Center solutions in.

In addition to improving market conditions.

For mortgage revenue was down only 6% in the quarter, despite origination volumes falling about 47%.

We are in an advantaged position to focus on strategically extending and expanding existing relationships.

The volume declines were offset by pricing.

Strong HELOC and marketing activity.

The breadth of offerings that we can provide allows us to further penetrate existing accounts with solutions like fraud mitigation marketing call Center management and advanced analytic capabilities.

At this point refinancing activity is almost nonexistent, while the purchase market has maintained decent origination levels and been helped by recent so modest declines in mortgage rates.

Many of these capabilities are the result of recent acquisitions, especially new star.

On a trailing 12 month basis mortgage represented about 6% of total transient revenue.

Our credit card business was flat against mid Twenty's growth in the prior year quarter.

For 2023, we now expect the inquiry market to be down roughly 20% and our revenue to increase in the mid twenties.

Issuers continue to market with a focus on gaining top of wallet share with consumers, helping to drive origination activity.

In addition, as slightly improved volume expectations, we are seeing a higher share of volume from smaller end user customers.

Also benefiting from our relationships with larger firms that are aggressively utilizing digital marketing.

Our auto business delivered 8% growth in the quarter on the strength of continued share gains strong prequalification volumes the impact of cross selling new star marketing and call Center solutions.

Which are facing higher third party pricing markups this year.

Let me now turn to our emerging verticals, which grew 1% in the quarter. Despite a tough year ago comparison.

In addition to improving market conditions.

Insurance delivered another good quarter importantly, we are seeing carriers receive approval for rate increases and beginning to pass those increased prices to consumers, which is driving a recovery in shopping activity.

For mortgage revenue was down only 6% in the quarter, despite origination volumes falling about 47% the.

The volume declines were offset by pricing.

At this point insurers have largely limited their marketing activity to brand oriented campaigns and have yet to substantially reactivate personalized marketing to drive new applications.

Strong HELOC and marketing activity.

At this point refinancing activity is almost nonexistent, while the purchase market has maintained decent origination levels and been helped by recent so modest declines in mortgage rates.

We remain confident that this recovery will come to fruition over the course of the year and improve the already attractive growth for our insurance vertical.

On a trailing 12 month basis mortgage represented about 6% of total Trans Union revenue.

Tenant and employment screening growth again improved as a result of early signs of a recovery in the tenant market with month over month declines in rental rates.

For 2023, we now expect the inquiry market to be down roughly 20% and our revenue to increase in the mid twenties.

Increases in move rates and an increasing supply of rental units as new construction comes online.

In addition, as slightly improved volume expectations, we are seeing a higher share of volume from smaller end user customers.

This growth was somewhat offset by a softer employment screening market as employers take a more cautious approach to hiring.

Are facing higher third party pricing markups this year.

Let me now turn to our emerging verticals, which grew 1% in the quarter. Despite a tough year ago comparison.

Our media vertical declined in the quarter as a result of some market softness.

Despite that.

Just on the new business wins, we've achieved we continue to expect the vertical to deliver growth for the full year.

Insurance delivered another good quarter importantly, we are seeing carriers receive approval for rate increases and beginning to pass those increased prices to consumers.

Consumer interactive revenue declined 5% adjusted EBITDA margins were 49, 2% up 310 basis points as a result of reduced advertising spending.

Which is driving a recovery in shopping activity.

At this point insurers have largely limited their marketing activity to brand oriented campaigns and have yet to substantially reactivate personalized marketing to drive new applications, we remain confident.

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

Thus far we're seeing good returns on the revamped tactics with better than expected customer acquisition stats.

Confident that this recovery will come to fruition over the course of the year and improve the already attractive growth for our insurance vertical.

At attractive cost to acquire.

Tenant and employment screening growth again improved as a result of early signs of a recovery in the tenant market with month over month declines in rental rates.

And our indirect business, we grew in the first quarter on the strength of new business wins, and a modest improvement with some of our partners that offer paid monitoring.

Increases in move rates and an increasing supply of rental units as new construction comes online.

Importantly, we continue to make progress fully integrating <unk> into our global operating model, which we believe will facilitate increased cross sell opportunities with existing customers and continue to provide us differentiated features in the market.

This growth was somewhat offset by a softer employment screening market as employers take a more cautious approach to hiring.

Our media vertical declined in the quarter as a result of some market softness.

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

Fight that based on the new business wins, we've achieved we continue to expect the vertical to deliver growth for the full year.

For the total segment revenue grew 12% with four of our six reported markets growing by double digits.

Adjusted EBITDA margin was 43, 6% up.

Consumer interactive revenue declined 5% adjusted EBITDA margins were 49, 2% up 310 basis points as a result of reduced advertising spending.

80 basis points as a result of our strong revenue growth now.

Now, let's dig into the specifics for each region.

In the U K revenue declined 8% <unk>.

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

Excluding the revenue related to one time contracts.

Including with the UK government.

We would have grown about 2% in the quarter, despite a challenging macro environment.

Thus far we're seeing good returns on the revamped tactics with better than expected customer acquisition stats at attractive cost to acquire.

We continue to see strong demand for consumer loans and large banks staying active to satisfy this demand at.

And our indirect business, we grew in the first quarter on the strength of new business wins, and a modest improvement with some of our partners that offer paid monitoring.

At the same time, we have seen good performance for our affordability and credit trended credit solutions to help lenders SaaS portfolio risk.

Our Canadian business grew 9% in the first quarter driven by material business wins with a large bank a major fintech lender and deepening credit use case and adjacent markets, which contributed to offset a generally softer demand for consumer credit.

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

In India, we grew 32%, reflecting strong market trends and generally healthy consumers.

For the total segment revenue grew 12% with four of our six reported markets growing by double digits.

The diversity of our portfolio remains a real strength in India.

Adjusted EBITDA margin was 43, 6%.

We saw meaningful growth in both consumer and commercial credit markets as well as from fraud employment screening and direct to consumer offerings.

Up.

80 basis points as a result of our strong revenue growth.

Now, let's dig into the specifics for each region.

In the U K revenue declined 8% excluding.

In Latin America revenue was up 11% with broad based growth across our markets, including another quarter of double digit growth for our largest market Columbia.

Excluding the revenue related to one time contracts.

Including with the UK government.

We would've grown about 2% in the quarter, despite a challenging macro environment.

While macro conditions have softened in the region. Our teams continue to win new business in financial services.

We continue to see strong demand for consumer loans and large banks staying active to satisfy this demand.

Particularly with Fintech, and Neil banks insurance government and telcos.

At the same time, we have seen good performance for our affordability and credit trended credit solutions.

We also continued to see strong adoption of credit vision and our fraud solutions.

To help lenders SaaS portfolio risk.

Our Canadian business grew 9% in the first quarter driven by material business wins with a large bank a major fintech lender.

In Asia Pacific, We grew 25% from continued good performance in Hong Kong, driven by new business with Fintech players and exceptional growth in the Philippines, which is now running well ahead of pre COVID-19 levels as the economy has now fully reemerged from Covid and resumed its strong growth.

And deepening credit use case and adjacent markets.

Which contributed to offset a generally softer demand for consumer credit.

In India, we grew 32%, reflecting strong market trends and generally healthy consumers the.

The trajectory.

Finally Africa increased 14% based on broadly strong performance across the portfolio and the region. Despite.

The diversity of our portfolio remains a real strength in India, we saw meaningful growth in both consumer and commercial credit markets as well as from fraud employment screening and direct to consumer offerings.

Despite a challenging environment in several of our largest markets.

In South Africa core business growth was augmented by continued strength in fast growing verticals like telco and gaming.

In Latin America revenue was up 11% with broad based growth across our markets, including another quarter of double digit growth for our largest market Colombia.

<unk> South Africa, we continue to see very strong revenue growth in markets, like Kenya, and Zambia, particularly with micro and Fintech lenders.

While macro conditions have softened in the region. Our teams continue to win new business in financial services, particularly with Fintech and Neil banks insurance government and telcos.

We ended the quarter with roughly five $6 billion of debt after prepaying $75 million in the quarter.

That left us with $439 million of cash on the balance sheet.

We also continued to see strong adoption of credit vision and our fraud solutions.

We finished the quarter with a leverage ratio of three eight times.

At this point, we intend to prepay additional debt in the second quarter and the full year.

Looking back.

Since we announced the acquisition of New Star in September of 2021, we prepaid about one $3 billion of debt.

And to reiterate our previous comment at this time, we have no intention to pursue any large scale acquisitions and even smaller bolt on acquisitions are not currently in our plans. We are focused on integrating maximizing the growth potential of neustar contact and Rguest.

<unk> trajectory.

Finally Africa increased 14% based on broadly strong performance across the portfolio and the region.

<unk> a challenging environment in several of our largest market.

In South Africa core business growth was augmented by continued strength in fast growing verticals like telco and gaming.

That brings us to our outlook for the second quarter.

In the second quarter, we expect about one point of headwind from FX on revenue and adjusted EBITDA.

Outside of South Africa, we continue to see very strong revenue growth in markets, like Kenya, and Zambia, particularly with micro and Fintech lenders.

For revenue there is no impact from acquisitions.

We expect revenue to come in between 948, and $958 million or flat to up 1% on an as reported basis and up 1% to 2% on an organic constant currency basis our.

We ended the quarter with roughly five $6 billion of debt after prepaying $75 million in the quarter.

That left us with $439 million of cash on the balance sheet.

Our revenue guidance includes an approximate one point tailwind for mortgage meaning that we expect the remainder of our business will be flat to up 1% on an organic constant currency basis.

We finished the quarter with a leverage ratio of three eight times.

At this point, we intend to prepay additional debt in the second quarter and the full year.

Looking back.

We expect adjusted EBIT to be between 330, and $335 million, a decrease of 4% to 6%.

Since we announced the acquisition of New Star in September of 2021, we prepaid about one $3 billion of debt.

We expect adjusted EBITDA margin to be down 200 to 220 basis points.

And to reiterate our previous comment at this time, we have no intention to pursue any large scale acquisitions and even smaller bolt on acquisitions are not currently in our plans. We are focused on integrating and maximizing the growth potential of new star <unk> and Rguest.

As a result of the impact of revenue mix.

We also expect our adjusted diluted earnings per share to be between 81 and 83.

A range of down 15% to 18%.

A result of lower adjusted EBITDA and higher interest expense.

That brings us to our outlook for the second quarter.

Turning to the full year most of our guidance remains largely unchanged. We expect about one point of headwind from FX on revenue and adjusted EBITDA for revenue, we anticipate less than 1% of benefit from the acquisition of Argus we.

In the second quarter, we expect about one point of headwind from FX on revenue and adjusted EBITDA.

For revenue there is no impact from acquisitions.

We expect revenue to come in between 948, and $958 million or flat to up 1% on an as reported basis and up 1% to 2% on an organic constant currency basis a.

We expect revenue to come in between 3825, and $3.885 billion or up 3% to 5% on an as reported basis.

Our revenue guidance includes an approximate one point tailwind for mortgage meaning that we expect the remainder of our business will be flat to up 1% on an organic constant currency basis.

And in organic constant currency basis.

And up 2% to 4%, excluding the impact of mortgage.

For our business segments on an organic basis, we expect U S markets to grow mid single digits, but low single digits without the impact of mortgage.

We expect adjusted EBITDA to be between 330, and $335 million, a decrease of 4% to 6%.

We expect adjusted EBITDA margin to be down 200 to 220 basis points.

Anticipate financial services to be up low single digits and down low single digits excluding mortgage.

As a result of the impact of revenue mix.

We also expect our adjusted diluted earnings per share to be between 81 and 83.

While the overall guidance for financial services is unchanged, we have modestly reduced our expectations for consumer lending and card to reflect an uncertain lending environment.

A range of down 15% to 18%.

A result of lower adjusted EBITDA and higher interest expense.

We expect emerging verticals to be up mid single digits.

You can see the benefits of our diversified portfolio of playing out and allowing us to maintain our full year revenue guidance.

We now anticipate that international will grow low double low double digits in constant currency terms up from high single digits and driven by ongoing strength in emerging markets.

We expect revenue to come in between 3825, and 3.885 billion or up 3% to 5% on an as reported basis.

And we continue to expect consumer interactive to decline low single digits.

And in organic constant currency basis.

Turning back to total company outlook.

And up 2% to 4%, excluding the impact of mortgage.

We expect adjusted EBITDA to be between 1388, and one $4 billion to $1 billion.

For our business segments on an organic basis, we expect U S markets to grow mid single digits, but low single digits without the impact of mortgage.

Up 3% to 5%.

That would result in adjusted EBITDA margin being flat to up 30 basis points with the significant benefits of the new star cost savings, partially offset by the inclusion of Argus is relatively lower margin in the first quarter and some up and some revenue mix considerations.

We anticipate financial services to be up low single digits and down low single digits excluding mortgage.

While the overall guidance for financial services is unchanged, we have modestly reduced our expectations for consumer lending and card to reflect an uncertain lending environment.

We anticipate adjusted diluted EPS.

Being flat to declining 4%.

With higher interest expense offsetting adjusted EBITDA growth.

We expect emerging verticals to be up mid single digits.

And we continue to expect our adjusted tax rate to be approximately 23%.

You can see the benefits of our diversified portfolio, playing out and allowing us to maintain our full year revenue guidance.

Depreciation and amortization is expected to be approximately $525 million and.

And now anticipate that international will grow low double low double digits in constant currency terms up from high single digits and driven by ongoing strength in emerging markets.

And we expect the portion excluding step up amortization from our 2012 change in control and subsequent acquisitions to be about $225 million.

And we continue to expect consumer interactive to decline low single digits.

We anticipate net interest expense will be about $275 million for the full year down slightly from our previous guidance due to our debt prepayment and a modest reduction in the forward LIBOR curve.

Turning back to total company outlook.

We expect adjusted EBITDA to be between 1388, and one $4 billion to $1 billion.

Up 3% to 5%.

And we expect capital expenditures to come in at about 8% of revenue.

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

Thank you Todd.

To wrap up we had a good first quarter and we're holding our full year guidance out of an abundance of caution given the level of uncertainty in the market.

We anticipate adjusted diluted EPS.

At the same time, we continue to make meaningful progress integrating new star and.

Being flat to declining 4%.

And delivering business wins from the combination.

With higher interest expense offsetting adjusted EBITDA growth.

Now, let me turn it over to Aaron.

Thanks, Chris and that of course, it concludes our prepared remarks today for the Q&A as always we ask that you. Each ask only one question. So that we can include more participants operator, we can begin the Q&A now.

And we continue to expect our adjusted tax rate to be approximately 23%.

Depreciation and amortization is expected to be approximately $525 million and.

And we expect the portion excluding step up amortization from our 2012 change in control and subsequent acquisitions to be about $225 million.

We will now begin our question and answer session.

Just a question you May press Star then one on your Touchtone phone.

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

We anticipate net interest expense will be about $275 million for the full year down slightly from our previous guidance due to our debt prepayment and a modest reduction in the forward LIBOR curve.

If at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.

In the interest of time, please limit yourself to one question.

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

And we expect capital expenditures to come in at about 8% of revenue.

The first question today comes from Andrew Steinman with J P. Morgan. Please go ahead.

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

Thank you Todd.

Okay.

To wrap up we had a good first quarter and we're holding our full year guidance out of an abundance of caution given the level of uncertainty in the market.

Could you just speak about.

Three sub segments.

New star in terms of new store revenue growth both in the first quarter actual and 2023.

At the same time, we continue to make meaningful progress integrating new star and.

<unk> of <unk>.

High single digits and also if there's anything else to talk about with new star in the first quarter in terms of the revenue growth deceleration. Besides for the year over year comparison could you just give us a little more color on that.

And delivering business wins from the combination.

Now, let me turn it over to Eric.

Sure Good morning, Andrew.

Yes, I guess, let me, let me address our full year first.

We will now begin the question and answer session.

And I'll start by reaffirming that we hit our plan.

Good question Tommy.

Warner for New Star.

Thats Star then one on your Touchtone phone.

3%.

Prior year comp and the order of about 9%, which was the high watermark for new starts growth in 2022.

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

Is it any time your question has been addressed and you would like to withdraw your question. Please press Star then two.

We feel like we've got good confidence and good line of sight in the high single digit organic growth for the full year for new Star and.

In the interest of time, please limit yourself to one question.

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

In large part because.

It is largely 80% plus of subscription business retention rates have been strong.

The first question today comes from Andrew Steinman with Jpmorgan. Please go ahead.

Okay.

Plus we're layering in we're ramping up on a very good year of sales and the good news.

Could you just speak about.

Three sub segments of new Star in terms of new store revenue growth both in the first quarter actual and 2023.

The bookings are continuing to be strong this year, so we're going against.

<unk> of <unk>.

Additional in year, and our revenue momentum and then look all three lines of business grew nicely in the first quarter I expect them to grow well for the full year.

No marketing.

Sure Good morning, Andrew.

Despite having a cyclical component, which is the audience generation piece of it.

Yes, I guess, let me, let me address our full year first.

But mark can you looks good.

And I'll start by reaffirming that we hit our plan.

Communications.

Data assets.

Warner her new star.

All around trust and call a brand called display.

3%.

Prior year comp and the order of about 9%, which was the high watermark for new store growth.

As you can see from our commentary, they're doing really well.

And I expect that to continue for the foreseeable future and of course fraud is doing well.

'twenty two.

We feel like we've got good confidence and good line of sight in the high single digit organic growth for the full year for new Star and.

As you would expect so I would say strength across the board and Tom can elaborate that.

Sure.

More specifically on the numbers themselves as Chris already said.

In large part because.

It is largely 80% plus of subscription business retention rates have been strong.

Neustar met our expectations in the first quarter and what I would say is across communications marketing and risk we saw all three product lines grow.

Plus we're layering in we're ramping up on a very good year of sales and the good news.

In the corner.

The bookings are continuing to be strong this year, so we're going against.

Slipped back too.

All year.

As we've said in our prepared remarks.

<unk> in here and our revenue momentum and then look all three lines of business grew nicely in the first quarter I expect them to grow well for the full year.

<unk> high single digit growth.

What we are seeing in communications marketing and risk solutions.

All three of those will grow.

Marketing continues to do.

Hi.

Despite having a cyclical component, which is the audience generation piece of it.

For the full year and that's our expectation.

Yes.

And continue to looks good communications.

Question comes from Calgary Q with autonomous. Please go ahead.

Data assets.

All around trust and call a brand called display.

Thanks for taking my question.

For our mortgage Darren quite a bit of outperformance compared to your peers and you talked about price volume and strong performance.

As you can see from our commentary Youre doing really well.

And I expect that to continue for the foreseeable future and of course fraud is doing well.

And additional marketing products can you just give us a little bit more color on what's going on there.

As you would expect so I would say strength across the board in task can elaborate that.

Yes sure.

Yes.

Specifically on the numbers themselves as Chris already said.

I mean, you are right.

Number of variables that.

Neustar met our expectations in the first quarter, what I would say is across communications marketing and risk we saw all three product lines grow.

Tribute to overall revenue growth and a vertical right. So the mortgage vertical for us.

It can be pricing it can be sure it can be volume and it could be just the broader basket of services that we're now marketing.

In the quarter.

Slipped back too.

The full year as we as we've said in our prepared remarks, we are expecting.

Net net while.

Magnitude of decline in the quarter was less than we expected most of the outperformance you're seeing is coming from the pricing impact that we're seeing them roll through.

High single digit growth.

What we are seeing in communications marketing and risk solutions.

All three of those won't grow.

High single.

A combination of third party pricing and some pricing from Transunion as well and it's really the mix implications right.

For the full year, that's our expectation.

Yes.

The next question comes from Calgary Q with autonomous. Please go ahead.

Assumed mix.

Versus the actual mix is a little bit different in the first quarter. It was more skewed towards smaller lenders.

Thanks for taking my question.

For mortgage there is quite a bit of outperformance compared to your peers and you talked about pricing and strong performance.

Typically pay higher unit prices.

It may be because.

Compensation of mortgage volume was more toward purchases.

And additional marketing products can you just give us a little bit more color on what's going on there.

And to be broadly distributed in a representative across the market as opposed to refi, which is more weighted to higher end of the market, but I would say, it's really the story.

Yes sure.

I mean, you are right.

Number of variables that.

Tribute to overall revenue growth and FERC right. So the mortgage vertical for us.

Our performance on a pricing dimension.

It can be pricing it can be sure it could be volume and it could be just the broader basket of services that we're now marketing.

The next question comes from Jeff Mueller with Baird. Please go ahead.

Yes. Thank you good morning, So I can certainly respect the prudence of.

Net net while.

The.

Not flow in Q1 upside into our full year guidance raise in this macro.

Magnitude of decline in the quarter was less than we expected.

Most of the outperformance you're seeing is coming from the pricing impact that we're seeing roll through.

But as it relates to I guess U S financial markets and I think your language was an abundance of caution of what could come.

A combination of third party pricing and some pricing from Transunion as well and it's really the mix implications right.

How much of this is about.

Whats possible versus what you've seen already so have you seen much.

Client response yet.

The assumed mix.

Marketing spend origination criteria, I guess, <unk> bookings and pipeline progression or conversion. Thank you.

Versus the actual mix is a little bit different in the first quarter and it was more skewed towards smaller lenders.

Typically pay higher unit prices.

Yes, it's a good question Tom I'll weigh in on this together, but let me start.

That may be because.

Composition of mortgage volume was more toward purchases, which tend to be.

Yes look it's one of those situations I guess, we're we've outperformed if we were to.

We distributed a representative across the market as opposed to refi, which more weight at the higher end of the market.

Beat and raise the guidance for the year and half the market would say oh, well that's risky.

I would say, it's really a story.

If we take a more prudent approach like I think we.

Our performance on a pricing dimension.

We have.

Some might argue it's too conservative.

Look it's an uncertain market.

The next question comes from Jeff Mueller with Baird. Please go ahead.

We.

We can all agree.

And in terms of the impact, particularly from the bank and stability that we have.

Yeah. Thank you good morning, So I can certainly respect the prudence of not flow in Q1 upside into full year guidance raise in this macro.

Had about a month ago.

Well, we may have had some wobble in the daily volumes and in our conversations with clients. We know that they are going to continue to be cautious about new originations.

But as it relates to I guess U S financial markets and I think your language was an abundance of caution of what could come.

<unk>.

And they are more cautious in terms of marketing and origination activity.

How much of this is about.

Whats possible versus what you've seen already so have you seen much.

Still pretty good Paul.

And pretty good demand as we forecasted.

Client response yet.

Marketing spend origination criteria, I guess, andrew or bookings and pipeline progression or conversion. Thank you.

Across the remainder of the year in keeping with the methodology that we talked about on the last call. We didn't try and declare when a recession might happen or the depth and duration of the recession.

Yes, it's a good question Tom I'll weigh in on this together, but let me start.

Forecasted from the current subdued market characteristics and <unk>.

Yes look it's one of those situations I guess, we're we've outperformed if we were to.

In applied.

On top of that based on what we've seen in the first quarter, but at this point I cant say that the market has become materially more cautious and it's marketing and origination posture.

Beat and raise the guidance for the year and half the market would say oh, well that's risky.

If we take a more prudent approach like I think.

We have.

Some might argue it's too conservative.

Already was.

Look it's an uncertain market.

We.

Can all agree.

Okay.

The next question comes from Patrick Parker.

And in terms of the impact, particularly from the bank and stability that we.

Please go ahead.

Thank you Chris I was hoping you just maybe along the same lines talk a little bit about your fintech customer base and it has a lot of chatter of course, given the specific banks that failed and whether that's.

We had about a month ago.

While we may have had some wobble in the daily volumes and in our conversations with clients, we know that theyre going to continue to be cautious about new originations.

A great exposure for those customer base.

Are more cautious in terms of marketing and origination activity.

Do you have and you have a unique insight into them to can you just share some.

Still pretty good volume.

Whether they are struggling or some of them have to shut down or just whats going on there and how that impacts your business with them.

Good demand.

We forecasted across the remainder of the year.

Keeping with the methodology that we talked about on the last call, we didn't try and declare when a recession might happen or the depth and duration of the recession, we just forecasted from the current subdued market characteristics.

Hey, good morning Manav.

I'm going to take that question. So first of all as it pertains to the.

Silicon Valley Bank signature bank failures.

Transunion.

Actually no revenue.

And applies a bit of caution on top of that based on what we've seen in the first quarter, but at this point I cant say that the market has become materially more cautious and it's marketing and origination posture.

Either a bank I think what's important to remember as well too as that transient customer.

Customer base and our core financial services.

Excluding new star and Rguest.

About a third of our revenues come from our top 20 customers.

Already was.

Another <unk> come from our 21st to 100 customers.

Okay.

The next question is from thank you.

And then another part of those come from thousands of other customers on the point Erez.

Patnaik with Barclays. Please go ahead.

Thank you Chris I was hoping you just maybe along the same line stock a little bit about your fintech customer base. There's a lot of chatter of course, given the specific banks that failed.

We have a very nice diversified base of customers were not necessarily Paul.

<unk> training with one particular customer.

And to that.

Whether that's.

Failures.

Great exposure for those customer base that you have and you have a unique insight into them to can you just shed some whether they're struggling or some of them have to shut down or just whats going on there and how that impacts your business with them.

I would say and.

Transunion sought no direct impact of it.

However, we did see and interact.

And that's a tightening tighter lending.

Chris has already articulated and we talked about in our prepared remarks. This morning, and particular interest again as a reminder, the caution.

Hey, good morning, Manav. This is Todd I'm going to take that question. So first of all as it pertains to the Silicon Valley Bank signature bank failures.

That we're taking with current consumer lending.

<unk>.

Which would be reflected in our RF guy.

Saying that transunion.

Guidance when.

Actually no revenue.

When we look specifically.

Either a bank I think what's important to remember as well too.

At our consumer lending.

B within financial services.

Transient customer remains in our core financial services.

Consumer lending.

Our <unk> guidance is probably most.

Excluding new Star Rguest.

I think what's important to remember adherence.

At a third of our revenues come from our top 20 customers.

Growth trajectory.

Consumer lending business has been particularly strong in 2021.

Another third coming from our 21st to 100 customers.

And then another part of those come from thousands of other customers on the point areas.

Really strong growth in 'twenty, two that growth continued in the mid teens.

We have a very nice diversified base of customers were not necessarily Paul.

And right now, we're calling for a high single digit.

Decline.

Concentration with one particular customer.

With that customer base, so what does all that mean, what it means.

Add to that.

The failures.

On a compounded annual growth rate basis.

I would say at Trans Union sought no direct impact.

We're talking about a mid teen.

Performance.

However, we did see an indirect effect and that's a tightening tighter lending.

This customer base for the last three years.

It was pretty exceptional and I think what is important also to remember with a fantastic.

Chris has already articulated and we talked about in our prepared remarks. This morning, and particular interest again as a reminder, just caution that.

It's not a linear business.

But what they will do is they will outperform overall lending.

We are taking with card consumer lending.

Market.

Our time.

Couple of other things I think are important to call out with this customer maintenance.

<unk>.

Which will be reflected in our updated guidance.

There is still demand.

We look specifically.

Customer side as well as on the consumer side and capital is available.

At our consumer lending.

We're living through right now is that.

In financial services.

Sumer lending.

Customers are just being more selective as well as our investors are.

<unk> guidance is probably most.

And what's encouraging to us.

I think what's important to remember adherence.

We've embraced and tax.

Trajectory.

At the very beginning.

Consumer lending business has been particularly strong in 2021.

And the customers are in this space have gotten more sophisticated.

And they want to buy our broadband solution suite.

Really strong growth in 'twenty, two that growth continuing in the mid teens.

We've only done.

And right now, we're calling for high single digit.

Nothing but enhance due to our recent acquisitions of <unk> and Rguest analyze.

Decline.

Last point here.

That customer base, so what does all that mean.

The NPL.

Bart.

This area is still growing nicely.

<unk>.

On a compounded annual growth rate basis, we're talking about a mid teen.

Yes.

Performance.

The next question comes from Faiza <unk>.

This customer base for the last three years, which is pretty exceptional and I think thats. It.

With Deutsche Bank. Please go ahead.

Yes, hi, good morning, Todd.

Important also to remember with deferred tax and this is not a linear business.

Todd I wanted to ask about the margins in the back half of.

But what they will do is they will outperform overall lending.

Your <unk> guide is indicating that we're going to see huge margin expansion in the back half and I think you've talked about.

Market.

Our time.

A couple of other things I think are important to call out with this customer bases there is still demand.

New store and others synergy coming through in the back half, but maybe give us a bit more color around what are some of the puts and takes to think about.

Customer side as well as on the consumer side and capital is available.

We're living through right now is that.

Customers are just being more selective as well in there.

I'd be happy to thank you for the question. So just.

Investors are.

And what's encouraging to us is we've embraced.

Got it.

And the numbers.

Our margin in the first quarter was 34.3.

Tax since the very beginning.

And the customers are in this space have gotten more sophisticated and they want to buy.

3%.

And the guidance that we just provided for Q2.

Contemplating 34, 35% on the margin and the fall here.

Broadband solutions suite.

We've only done.

Nothing but enhance due to our recent acquisitions.

36, <unk> 30.

<unk> 36.

And artists.

So if you take the.

Last point here.

The NPL.

Hi.

Part.

One of that and figure out what the second half would be roughly estimating that we need about a 38% adjusted EBIT margin in the second half. So it's about 300 basis points higher and the high end of our Q.

This area is still growing nicely.

Yes.

The next question comes from Faiza <unk> with Deutsche Bank. Please go ahead.

Yes, hi, good morning, Todd.

And so how are we going to do that first and just that revenue.

Todd I wanted to ask about the margins in the back half of the year or.

<unk>.

Without saying with the SEC.

<unk> guide.

Part of that.

Indicating that.

The synergies are pertaining to new style.

To see.

Huge margin expansion in the back half and I think you've talked about.

Spoke about that during our February call.

We upped the number we initially said that the overall synergies when we announced the acquisition.

New star and other synergies coming through in the back half, but maybe give us a bit more color around what are some of the puts and takes to think about.

In December 2021.

$70 million.

I'd be happy to buy it and thank you for the question so just to kind of.

Fury, we increase the number.

$8 million just based on what we have accomplished and the.

Around us and the numbers are.

Our margin in the first quarter was 34.3.

Pretty good line of sight that we have in achieving that.

In addition to the revenue and the synergies we're also.

3%.

And the guidance that we just provided for Q2.

Being very proactive on the cost management side on this we're navigating a very uncertain market.

Planning 34, 35% on the margin and the fall here.

First we're focused only on making critical hires in areas of strategic importance to us.

36% to 36.6.

So if you take the.

Kind of the high one.

We've tightened our travel and entertainment and we eliminated significant one time span nonspecific consulting.

Of that and figure out what the second half would be roughly estimating that we need about a 38% adjusted EBITDA margin in the second half. So it's about 300 basis points higher than the high end of our Q right.

Management. In addition to all of that but also it gives us the conviction in the margin and we're also.

Seeing the early benefits.

And so how are we going to do that well. The first is just a revenue.

Our global approach.

Operator.

Expectation.

Transunion.

<unk>.

Through our global capability centers.

Without saying.

As well as <unk>.

Second part of that.

That we're continuing to enjoy.

The synergies pertaining to new style, we spoke about that during our February call.

Our technology transformation.

Right.

<unk>.

The number we initially said that the overall synergies when we announced the acquisition.

The next question comes from Toni Kaplan with Morgan Stanley . Please go ahead.

2021 and $70 million back in February we increased our number $80 million just based on what we have accomplished and the <unk>.

Thanks, so much.

<unk> you could put a finer point on the trajectory of the market trends.

Good line of sight that we have in achieving that in.

What are you seeing in terms of consumer demand and lender.

In addition to the revenue and the synergies we're also.

So far in April versus January or February and also just to get a directional sense April versus second half of March.

Being very proactive on the cost management side, yes, we're navigating a very uncertain market. So.

So first time focused only on making critical hires.

Sure.

Areas of strategic importance to us.

Tony will try and offer you.

We've tightened our travel and entertainment and we eliminated significant one time spend in specific consulting.

A little bit of color.

On that.

And then going back to the to the.

Period of Bank <unk>.

Any that we.

Managements.

<unk>.

To all of that but also it gives us the conviction in the margin and we're also.

About a month back.

I think.

<unk> seen the early benefits.

Certainly the bank failure.

Our global approach towards operating Trans Union.

Failures that we experienced and then some of the incremental pressure.

And that's unfortunate there was really.

Through our global capabilities centers.

It was really more share growth and I think in.

Well as the early.

Benefits that we are continuing to enjoy.

And amplify.

Across our many media touch points.

Our technology transformation project.

From what I've read since.

From what we have seen.

While there could be.

The next question comes from Toni Kaplan with Morgan Stanley . Please go ahead.

Implications on.

Quantity.

Just available capital to loan from the conventional banking segment.

Thanks, so much.

<unk> you could put a finer point on the trajectory of the market trends.

It's likely to be kind of small.

I think as I mentioned earlier in and around the crisis.

What are you seeing in terms of consumer demand and lender.

We saw some wobble in daily volume figures, but.

Credit so far in April versus January or February and also just to get a directional sense April versus second half of March.

Wouldn't say it was material and ore than it's been particularly material.

Thanks.

I think it's also important to understand that demand for credit from consumers remains strong.

Well, Toni we will try and offer you.

A little bit of color.

And I agree that it can't be satisfied from conventional.

On that.

And then going back to the to the.

Conventional bank lenders alternative funding sources.

Period of bank and stability.

Experienced.

Are going to come into the market.

About a month back.

They may replenish.

I think.

Certainly a bank failure.

Available funding in the Fintech space, we have seen this.

Failures that we experienced in some of the incremental pressure.

Yes.

We've experienced several times, particularly with the Fintech lenders, where whenever there is market uncertainty.

It is unfortunate they originally.

It was really more driven I think in amplify.

Fintech pulse back very quickly.

Across our many media touch points.

It takes a period of time from.

From what I've read and.

From a supply side do you decide which lenders they want to come back and to what degree and what price right, but I would expect that to be a kind of quarterly disruption.

From what we have seen.

While there could be some.

Implications on.

Quantity.

Just available capital alone from the conventional banking segment.

And supplier meeting demand and Thats going to correct itself.

It's likely to be kind of small.

Going to continue to see that.

I think as I mentioned earlier in and around the crisis.

Consistent level of lending activity over the course of this year.

Saw some wobble in daily volume figures, but.

By the turmoil in the bank segment and just the general uncertainty in the environment.

I wouldn't say it was material and ore than it's been particularly material.

Thanks.

The next question comes from Ashish <unk> with RBC capital markets. Please go ahead.

I think it's also important to understand that demand for credit from consumers remains strong.

And to the degree that it can't be satisfied from conventional.

Thanks for taking my question I, just wanted to focus on the emerging vertical and the acceleration that we had expected I was wondering if you could provide some color on the cadence in and in terms of driver is it right for us to think about a lot of the growth is really coming from new start accelerating through the rest of the year.

Conventional bank lenders alternative funding sources.

Are going to come into the market.

They may replenish.

Available funding.

In the Fintech space.

We have seen this.

But also some other puts and takes around employment screening tenant screening and insurance will be helpful. Thanks.

We've experienced several times, particularly with the Fintech lenders, where whenever there's market uncertainty fintech pulse back very quickly.

Yes.

Thanks for that question.

It takes a period of time from.

Emerging did grow in the first quarter about a point and a half.

From a supply side do you decide which lenders they want to back and what degree and what price right, but I would expect that to be a kind of quarterly disruption.

Starting point in the story for the year those to point out that it was growing over an almost 10%.

Organic comp.

In the same quarter.

Our year and that was again the high watermark.

And supplier meeting demand and that's going to correct itself.

The expectation is over the course of the year.

Youre going to continue to see.

One comps are going to ease as we've said and that kind of underpins our forecast in its entirety. It's also true on the emerging segment so easier comps.

That consistent level of lending activity over the course of this year.

Despite the turmoil in the bank segment and just the general uncertainty in the environment.

And accelerating growth in a.

A few areas where for idiosyncratic reasons.

The next question comes from Ashish <unk> with RBC capital markets. Please go ahead.

Mark and reasons I think.

<unk> fell below where we would typically expect.

Certainly tenant screening we talked a lot about the dynamics there are produced move volumes because of high prices.

That has eased quite a bit in the recent quarter or so and then there is also an expectation of $1 million additional housing units rental housing news to come on the market action.

But also some other puts and takes around employment screening tenant screening and insurance will be helpful. Thanks.

Give us back more toward normal volumes and normal revenues, we're also seeing a recovery.

Yes.

Thanks for that question.

Emerging did grow in the first quarter about a point and a half.

Insurance business, it's probably the largest single segment it is within.

Turning point in the story for the year those to point out that it was growing over an almost 10% organic.

The emerging verticals and it was.

Organic comp.

Subdued because.

In the same quarter prior year and that was again the high watermark.

Tours needed higher prices to compensate for increased.

Repair and replacement cost that's largely worked itself through the system, we're seeing volumes there improve as well retail and E. Commerce are showing some some nice strength a lot of that has to do with the sales of trusted call solutions branded call display.

The expectation is over the course of the year.

One comps are going to ease as we've said.

And Im underpins our forecast in its entirety. It's also true on the emerging segment, so easier comps and accelerating growth.

And public sector.

A few areas where for idiosyncratic reasons.

Public sector is kind of a big deal driven and so can be lumpy.

Mark and reasons I think.

And of course, we had the comp some contract where there was diminished volume for.

Gross.

Hello, where we would typically expect.

So again, maybe give us some credit reasons, but we expect public sector to come back as well so.

Certainly inherent tenant screening we talked a lot about the dynamics there of reduced volumes because of high prices.

No.

Got pretty good confidence in the forecast of revenue acceleration over the remainder of the year.

That has eased quite a bit in the recent quarter or so and then there is also an expectation of $1 million additional housing units rental housing.

The next question comes from Heather <unk> with Bank of America. Please go ahead.

On the market in action.

Give us back more toward normal volumes and normal revenues, we're also seeing a recovery.

Hi, Good morning. Thank you for taking my question I was hoping to touch on consumer interactive.

And it sounds like Youre pulling back on some of your products and just cleaning up the mix. There can you talk about what's happening in that segment.

Our insurance business is probably the largest single segment it is within.

The emerging verticals and it was subdued because.

<unk> needed higher prices to compensate for increased.

Yes.

Well I would say that consumer directed.

As we know it is a challenge for about the past 18 to 24 months.

Market dynamics are such where.

Productivity of our direct to consumer marketing.

Efforts decline.

I think some of that has to do with structural shift towards premium.

And public sector there were just some.

Public sector is kind of a big deal driven and so can be lumpy.

Some of it may have to do with just the economic environment consumers pairing subscriptions, but.

And of course, we had to comp some of contract where there was diminished volume for.

But that was and remains the drag in our overall direct to consumer business last year, we were in the indirect side of the business lapping some contract restructuring.

So again, maybe give us some credit reasons, but we expect public sector to come back as well so.

So we've got pretty good confidence in the forecast of revenue acceleration over the remainder of the year.

<unk> fully in the rearview mirror now.

The indirect piece, which is materially larger.

The next question comes from Heather Bellini with Bank of America. Please go ahead.

Is it a return to the expected growth levels, which is great.

Hi, Good morning. Thank you for taking my question I was hoping to touch on consumer interactive.

<unk> has given us new and exciting capabilities that continues to grow kind of low double digits, we're feeling good about that and in total.

And it sounds like Youre pulling back on some.

Some of your products and just cleaning up the mix. There can you talk about what's happening in that segment.

Of course of this year youre going to see.

The.

Rate of organic decline lessen that's mainly going to be because.

Yes.

Well I would say that consumer directed.

I would take an indirect are going to perform well in line with expectations and the indirect piece of it is going to become less and less negative as we get to kind of equilibrium with our new level of marketing spend.

As we know it is a challenge for about the past 18 to 24 months.

Market dynamics are such where.

Productivity of our direct to consumer marketing.

Efforts declined.

I think some of that has to do with structural shift towards premium.

The next question comes from Seth Weber with Wells Fargo. Please go ahead.

Some of it may have to do with just the economic environment consumers pairing subscriptions, but.

Hey, good morning.

Just wondering if your guidance your full year outlook kind of contemplate any changes in the student loan forgiveness landscape. There is some discussion that that could really cause some pickup in delinquencies just how youre thinking about that thanks.

But that was and remains.

The drag in our overall direct to consumer business last year, we were in the indirect side of the business lapping some contract restructuring.

<unk> fully in the rearview mirror now.

Well, what I would say generally is.

The indirect piece, which is materially larger.

The former lenders, who run our financial services business to a granular build up.

Is it a return to the expected growth levels, which is great.

<unk> has given us new and exciting capabilities that continues to grow kind of low double digits, we're feeling good about that and in total.

Trajectory and pipeline from every type of lender.

And they would have included any potential impact from the student lending space at this point that doesn't figure prominently on my risk radar.

Of course of this year youre going to see.

The.

Rate of organic decline lessen that's mainly going to be because.

So I feel like we're in pretty good shape with that.

<unk> that we've reiterated today.

I would take an indirect are going to perform well and in line with expectations and the indirect piece is going to become less and less negative as we get to kind of equilibrium with our new level of marketing spend.

The next question comes from Andrew Nicholas with William Blair. Please go ahead.

Hi, Good morning, Thanks for taking my question given the increased traction in headlines around.

The next question comes from Seth Weber with Wells Fargo. Please go ahead.

Artificial intelligence and maybe generative AI more specifically I was hoping you could spend some time talking about how you are leveraging AI at transunion today, and maybe what some incremental opportunities might be to leverage it further going forward and maybe how that could impact growth your margins in the medium term. Thank you.

Hey, good morning.

Just wondering if your guidance your full year outlook kind of contemplates any changes in the student loan forgiveness landscape. There is some discussion that that could really cause some pickup in delinquencies just how youre thinking about that thanks.

Great question, Andrew actually Todd and I are on vacation today, and you're interfacing with an internal AI bot.

Well, what I would say generally is.

The former lenders, who run our financial services business do a granular build up.

No kidding aside of course.

Yes.

We have been in.

Credit reporting agency in transient business transient in particular.

Trajectory and pipeline from every time.

<unk>.

We've been using.

Using machine learning and some AI capabilities for some time.

And they would have included any potential impact from the student lending space at this point.

We're excited about the potential for <unk>.

Doesn't figure prominently on my risk radar.

Improving efficiency that technology step forward represents.

So I feel like we're in pretty good shape with that.

Guidance that we've reiterated today.

I think there are various internal processes and dispute resolution comes to mind, where we can see some really material impacts over time as we applied as to service consumers more effectively.

The next question comes from Andrew Nicholas with William Blair. Please go ahead.

Hi, good morning, Thanks for taking my question.

Given the increased traction in headlines around artificial intelligence and maybe generative AI more specifically I was hoping you could spend some time talking about how you are leveraging AI at Trans Union today, and maybe what's some incremental opportunities might be to leverage it further going forward and maybe how that could impact growth your margins in the <unk>.

In terms of actual credit modeling and the like.

And no doubt has a role but I think we have to remember that our data.

And the needs that we serve are highly regulated and.

And privacy and information security really comes out of premium. So we're not going to for example, and credit information over the public web to interface with chat GPT or anything like that.

Thank you.

Great question, Andrew actually Todd and I are on vacation today, and you're interfacing with an internal AI bot.

We will continue to invest in kind of AI and large language models that are tuned to credit needs.

No kidding aside of course.

Yes.

We have been.

A credit reporting agency in transient business transient in particular.

Privacy and security requirements.

That's something that's going to evolve over time, but.

We've been using machine learning and some AI capabilities for some time.

He will be.

Investing in this area as appropriate and I think it's going to be an enhanced in general related to our ability to provide services.

And we're excited about the potential for.

Improving efficiency that technology step forward represent.

I think there are various internal processes.

Great and we're going to wrap up the call here at the bottom of the hour I know, it's a very busy earnings day, and then Austin.

Cute resolution comes to mind, where we could see some really material impact over time as we apply this to service.

At this time in the quarter, so I want to be respectful of everybody's time on the call and we will try to a close there. Thanks, everyone for your time today and we look for.

Tumors more effectively.

In terms of actual credit modeling and the like.

Speaking with you soon.

No doubt has a role but I think we have to remember that our data.

All of that.

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

And the needs that we serve are highly regulated.

<unk>.

And privacy and information security really comes out of premium. So we're not going to for example, send credit information over the public web to interface with chat GPT in or anything like that.

We will continue to invest in kind of AI and large language models that are tuned to credit needs.

Privacy and security requirements.

And thats, something thats going to evolve over time, but we will be.

Investing in this area as appropriate and I think it's going to be an enhancement in general related to our ability to provide services.

Great and we're going to wrap up the call here at the bottom of the hour I know, it's a very busy earnings day, and then Austin.

Second quarter. So we wanted to be respectful of everybody's time on the call and we'll try to a closing there. Thanks, everyone for your time today.

Look forward to speaking with you soon.

All of that.

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

[music].

Okay.

[music].

Q1 2023 TransUnion Earnings Call

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