Q4 2023 TransUnion Earnings Call

Okay.

Speaker Change: Good day and welcome to the changes in 'twenty, two 'twenty three fourth quarter earnings Conference call.

Operator: Good day, and welcome to the TransUnion 2023 fourth quarter earnings conference call. All participants will be in listen-only mode.

Speaker Change: All participants will be in listen only mode.

Operator: Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then 1 on your telephone keypad. To withdraw your question, please press star then 2.

Speaker Change: Should you need assistance. Please signal our conference specialist by pressing the star key followed by Europe.

Speaker Change: After todays presentation, there will be an opportunity to ask questions.

Speaker Change: Ask a question you May press Star then one on your telephone keypad.

Speaker Change: So enjoy your question. Please press Star then two.

Operator: Please note, today's event is being recorded. I would now like to turn the conference over to Aaron Hoffman, Senior Vice President of Investor Relations. Please go ahead.

Please note today's event is being recorded.

Speaker Change: I would now like to turn the conference over to Aaron Hoffman Senior Vice President of Investor Relations. Please go ahead good morning.

Aaron H. Hoffman: Good morning everyone, and thank you for attending today. Joining me on the call are Chris Cartwright, President and Chief Executive Officer, and Todd Cello, Executive Vice President and Chief Financial Officer. We posted our earnings release and slides to accompany this call on the TransUnion Investor Relations website this morning, and they can also be found in the current report on Form 8K that was filed 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 reconciliation of these non-GAAP financial measures to their most directly Today's call will be recorded, and a replay will be available on our website.

Aaron H. Hoffman: 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've posted our earnings release and slides to accompany this call on the Transunion Investor Relations website. This morning, and they can also be found in the current report on form 8-K that was filed this morning.

Yeah.

Aaron H. Hoffman: 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 reconciliation of these non-GAAP financial measures to their most directly comparable GAAP measures.

Aaron H. Hoffman: Today's call will be recorded and a replay will be available on our website.

Aaron H. Hoffman: 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 uncertainty. Actual results could differ materially from those described in the forward-looking statements because of factors discussed in today's earnings call, 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.

Aaron H. Hoffman: 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 results could differ materially from those described in the forward looking statements because of factors discussed in today's earnings call and the comments made during this conference call and in our most recent form.

Aaron H. Hoffman: <unk> 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.

Aaron H. Hoffman: Also, in early January, we filed an amendment to our third quarter 2023 Form 10-Q, correcting an overstatement of the non-cash goodwill impairment of our UK reporting unit. In today's earnings release, we have included information on a revision primarily related to our cost of services and SG&A expenses. We plan to file our 2023 10-K by the end of the month. So with that out of the way, let me turn the time over to Chris.

Aaron H. Hoffman: Also in early January we filed an amendment to our third quarter 2023 Form 10-Q, correcting an overstatement to the noncash goodwill impairment of our U K reporting unit in today's earnings release, we have included information on our revision primarily related to our cost of services and SG&A expenses, we plan to file our 2023 10.

Aaron H. Hoffman: By the end of the month, so with that out of the way, let me turn the time over to Chris. Thanks.

Christopher A. Cartwright: Thanks, Aaron, and let me add my welcome and share our agenda from the call this morning. First, I will provide the financial highlights for our fourth quarter 2023 results. Second, I will detail our 2024 strategic priorities to drive value across TU. And finally, Todd will detail our fourth quarter results along with our first quarter and full year 2024 guidance. In the fourth quarter, we exceeded our guidance across revenue, adjusted EBITDA, and adjusted diluted EPS. Revenue grew 5% on an organic constant currency basis with growth across all segments. U.S. markets grew 3%, with financial services up 3% and emerging verticals at 2%. In financial services, lending and marketing activity remained consistent with a level seen late in the third quarter, with no further deterioration in volume.

Christopher A. Cartwright: Thanks, Aaron and let me add my welcome insurer agenda for the call. This morning first I will provide the financial highlights for our fourth quarter 2023 results.

Christopher A. Cartwright: Second I will detail, our 2024 strategic priorities to drive value across to you.

Christopher A. Cartwright: And finally, Todd will detail, our fourth quarter results, along with our first quarter and full year 2020 for guidance.

Christopher A. Cartwright: In the fourth quarter, we exceeded our guidance across revenue adjusted EBITDA and adjusted diluted EPS.

Christopher A. Cartwright: Revenue grew 5% on an organic constant currency basis with growth across all segments.

Christopher A. Cartwright: U S markets grew 3% with financial services up 3% in emerging verticals at 2%.

Christopher A. Cartwright: In financial services lending and marketing activity remained consistent with the level seen late in the third quarter with no further deterioration in volume.

Christopher A. Cartwright: And emerging verticals.

Christopher A. Cartwright: Okay.

Christopher A. Cartwright: Insurance improved to mid-single-digit growth driven by new business wins. Services and Collections and Public Sector both grew double digits. Newstart delivered 4% growth in the quarter, in line with our expectations and accretive to our U.S. market's growth. Communication remains a standout, driven by trusted call solutions, which grew almost 50% in the quarter. In marketing and risk solutions, our subscription base remains healthy, and bookings in the second half of the year were strong, which offsets Still Soft Transaction Revenue. For the year, Newstart grew revenues by 5% and expanded its adjusted EBITDA margin to 31%, up 1,000 basis points in our two years of ownership. Our international segment grew by 13% on a constant currency basis in the fourth quarter, the 11th consecutive quarter of double-digit growth.

Christopher A. Cartwright: Insurance improved to mid single digit growth driven by new business wins services in collections and public sector, both grew double digits.

Christopher A. Cartwright: Neustar delivered 4% growth in the quarter in line with our expectations and accretive to our U S markets growth.

Christopher A. Cartwright: Communication remains a standout driven by trusted called solutions, which grew almost 50% in the quarter.

Christopher A. Cartwright: In marketing and risk solutions, our subscription base remains healthy and bookings in the second half of the year were strong, which offsets still soft transaction revenues.

Christopher A. Cartwright: For the year, New store grew revenues by 5% and expanded adjusted EBITDA margin to 31% up 1000 basis points in our two years of ownership.

Christopher A. Cartwright: Our international segment grew by 13% on a constant currency basis in the fourth quarter, the 11th consecutive quarter of double digit growth. We continue to outperform our underlying markets because of innovation share gains and expansion into new Adjacencies, India led with 30% revenue growth while cam.

Christopher A. Cartwright: We continue to outperform our underlying markets because of innovation, share gains, and expansion into new areas. India led with 30% revenue growth, while Canada, Asia Pacific, and Africa grew double digits as well. In November, we launched the next phase of our transformation program, focused on growing our Global Capability Center network and enhancing our technology capability. We expect this transformation to deliver significant operating expense savings and reduce capital expenditures by 2026, while accelerating innovation and enabling growth. I will share more detail on this program shortly. We prepaid another $25 million of debt during the quarter for a total of $250 million in 2023.

Christopher A. Cartwright: Asia Pacific and Africa grew double digits as well.

Christopher A. Cartwright: In November we launched the next phase of our transformation program focused on growing our global capability Center network and enhancing our technology capabilities.

Christopher A. Cartwright: We expect this transformation to deliver significant operating expense savings and reduced capital expenditures by 2026, while accelerating innovation and enabling growth.

Christopher A. Cartwright: I will share more detail on this program shortly.

Christopher A. Cartwright: We prepaid another $25 million of debt during the quarter for a total of $250 million in 2023.

Christopher A. Cartwright: We also completed refinancings in October and February that will reduce our annual interest expense by $8 million in 2024. Looking back at the full year of 23, we delivered good results and achieved key transformation milestones, despite a challenging environment for many of our geographies and in-markets. Our performance highlights the resiliency of our business model, the relevance of our innovative solutions, and the benefits of our vertical product and geographic diversification. As we turn to 2024, we believe three strategic priorities will create significant value for TransUnion and our shareholders. The first is to accelerate revenue and earnings. The second is to leverage NewSTAR's product and technology capabilities further. And the third is to execute the transformation initiatives that we announced in November. Let me spend a bit more time discussing each.

Christopher A. Cartwright: We also completed refinancings in October in February that will reduce our annual interest expense by $8 million in 2024.

Christopher A. Cartwright: Looking back at the full year of 'twenty three we delivered good results and achieved key transformation milestones. Despite a challenging environment for many of our geographies and end markets. Our performance highlights the resiliency of our business model the relevance of our innovations innovative solutions in the benefits of our Virtu.

Christopher A. Cartwright: Gold product and geographic diversification.

Christopher A. Cartwright: As we turn to 2024, we believe three strategic priorities will create significant value for transunion and our shareholders. The first is to accelerate revenue and earnings growth. The second is to leverage new stores product and technology capabilities. Further in the third is to execute the transformation initiatives that we announced.

Christopher A. Cartwright: In November let me spend a bit more time discussing each.

Christopher A. Cartwright: Now Todd will provide full financial guidance, but at a high level, we expect to deliver 3-5% revenue growth, 4-7% adjusted EBITDA growth, and 6-11% adjusted diluted EPS growth. We expect economic growth to moderate in 2024 and lending volumes to remain steady. Consumer finances in the U.S. remain healthy due to low unemployment and real wage growth. Inflation is moderated, and the Fed has indicated that interest rate cuts are likely in 2024 and beyond, although the timing and magnitude remain uncertain. Rate reductions will benefit the most rate-sensitive lending products, particularly mortgages and, to a lesser extent, auto and personal loans, and also reduce interest payments to already leveraged consumers. However, although demand for credit remains healthy, lending standards are still cautious. Some lenders have faced pressure from deposit outflows, rising delinquencies, and concerns over potentially increasing capital requirements.

Christopher A. Cartwright: Now Todd will provide full financial guidance, but at a high level, we expect to deliver 3% to 5% revenue growth, 4% to 7% adjusted EBITDA growth and 6% to 11% adjusted diluted EPS growth.

Christopher A. Cartwright: We expect economic growth to moderate in 2024 and lending volumes to remain steady consumer finances in the U S remain healthy due to low unemployment and real wage growth inflation has moderated and the fed has indicated that interest rate cuts are likely in 2024 and beyond although the timing and magnitude.

Christopher A. Cartwright: <unk> remain uncertain.

Christopher A. Cartwright: Rate reductions will benefit the most rate sensitive lending products, particularly mortgage into a lesser extent auto and personal loans and also reduce interest payments to already leveraged consumers.

Christopher A. Cartwright: Although demand for credit remains healthy lending standards are still cautious some lenders have faced pressure from deposit outflows rising delinquencies and concerns over potentially increasing capital requirements. The largest banks echoed this caution during recent earnings expressing optimism for a soft landing, but forecasting modest loan.

Christopher A. Cartwright: The largest banks echoed this caution during recent earnings, expressing optimism for a soft landing but forecasting modest loan growth. TransUnion maintains strong positions across customers of all sizes and has enjoyed share gains in each market segment over the last decade. In our international markets, the UK, Canada, and many of our Latin American countries are also experiencing slowing economic trends, although we expect India to continue to outperform. We expect to deliver good results in this environment. We believe many of our financial services in markets are at or near their bottom.

Christopher A. Cartwright: Growth.

Ranjan you maintained strong positions across customers of all sizes and has enjoyed share gains in each market segment over the last decade.

Christopher A. Cartwright: In our international markets, the U K, Canada, and many of our Latin American countries are also experiencing slowing economic trends, although we expect India to continue to outperform.

Christopher A. Cartwright: We.

Christopher A. Cartwright: Spec to deliver good results in this environment, we believe many of our financial services and markets are at or near the bottom for.

Christopher A. Cartwright: For 2024, we are assuming that economic conditions remain stable with steady, albeit slower, lending volume. Any benefits from potential interest rate cuts and their impact on lending or marketing activity represent upside to our assumption. Several factors underpin our confidence.

Christopher A. Cartwright: For 2024, we are assuming that economic conditions remained stable with steady, albeit slower lending volumes.

Christopher A. Cartwright: Any benefits from potential interest rate cuts and their impact on lending or marketing activity represents upside to our assumptions.

Christopher A. Cartwright: Several factors underpin our confidence.

Christopher A. Cartwright: First, we expect to realize the benefits of a strong sales year in 2023 and expect further momentum in 2024. Despite subdued volumes across many of our verticals in 2023, our U.S. sales team did an excellent job winning new business, culminating in strong sales in the fourth quarter for both financial services and our diversified market. Customer demand remains strong across our verticals and solutions. Second, our vertical orientation provides diversification and growth levers that are independent of the lending environment and interest rate moves.

Christopher A. Cartwright: First we expect to realize the benefits of a strong sales year in 2023 and expect further momentum in 2024.

Christopher A. Cartwright: Despite subdued volumes across many of our verticals in 'twenty three our U S sales team did an excellent job winning new business, culminating in strong sales in the fourth quarter for both financial services and our diversified markets.

Christopher A. Cartwright: Demand remains strong across our verticals and solutions.

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

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

Christopher A. Cartwright: We expect improving growth in our largest U.S. emerging vertical, insurance, driven by new business wins and customers slowly restoring marketing spending. We have also meaningfully expanded the breadth and depth of our product portfolio. We continue to enhance our value proposition in core credit and to launch new fraud, marketing, and solutions, which combine TransUnion and New Star strengths. And Trusted Call Solutions is scaling rapidly with the potential for expansion internationally. Third, we expect strong revenue growth from International, which has grown revenues organically by double digits every year since our 2015 IPO, except for in 2020 due to COVID. India is our largest international market and grew revenues to almost $220 million in 2023, up over 30% and contributing roughly 1.5 points to total company growth. We've grown more than 30% in India every year since 2017, with the exception of 2020. We expect all geographies to contribute to growth in 2024. And finally,

Christopher A. Cartwright: We have also meaningfully expanded the breadth and depth of our product portfolio.

Christopher A. Cartwright: We continue to enhance our value proposition and core credit and to launch new fraud marketing solutions.

Christopher A. Cartwright: Solutions, which combine transunion and new star strengths and trusted call solutions is scaling rapidly with the potential for expansion internationally.

Christopher A. Cartwright: Third we expect strong revenue growth from international which has grown revenues organically by double digits every year since our 2015 IPO except for in 2020 due to Covid.

Christopher A. Cartwright: India is our largest international market and grew revenues to almost 220 million in 2023 up over 30% and contributing roughly one five points to total company growth.

Christopher A. Cartwright: We have grown more than 30% in India every year since 2017 with the exception of 2020.

Christopher A. Cartwright: We expect all geographies to contribute to growth in 2024.

Christopher A. Cartwright: And finally.

Christopher A. Cartwright: This year, we expect to benefit from typical pricing actions, both our own and third parties.

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

Christopher A. Cartwright: This year, we expect to benefit from typical pricing actions, both our own and third-party. We also remain highly focused on increasing profitability by driving savings from our transformation program and acquisition synergies, in addition to prudent cost management. Now, key to our growth strategy is continuing to integrate NewSTAR successfully. Over the last two years, New Star has been accretive to our U.S. market's growth rate and has scaled its stand-alone margins significantly. In 2024, we expect New Star to grow revenue by mid-single digits. Our guidance assumes strong subscription revenue growth from our 23 bookings and continued bookings momentum in 2024, but for soft volumes to persist in the more transactional parts of the business, which account for 20% of New Star's revenue. We expect the adjusted EBITDA margin at Newstart to be roughly 32% in 2024.

Christopher A. Cartwright: Now key to our growth strategy is continuing to integrate new STAAR successfully.

Christopher A. Cartwright: Over the last two years, new store has been accretive to our U S markets growth rate and has scaled it standalone margin significantly in 2024, we expect new star to grow revenue by mid single digits. Our guidance assumes strong subscription revenue growth from our 23 bookings and continued bookings momentum in 2024.

But for soft volumes to persist in the more transactional parts of the business, which account for 20% of new stores revenue.

We expect adjusted EBITDA margin that new store to be roughly 32% in 2024.

Christopher A. Cartwright: We are allocating investment dollars to scaling fast growing and high potential products like trusted call solutions and our identity based marketing offerings two of the most exciting opportunities across transunion.

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

Christopher A. Cartwright: We continue to deliver cost synergies and as of the end of 2023, we achieved our $80 million plus run rate target already above the $70 million referenced at the time of acquisition.

Christopher A. Cartwright: We are allocating investment dollars to scaling fast-growing and high-potential products like Trusted Call Solutions and our identity-based marketing offerings, two of the most exciting opportunities across TransUnion. For this reason, we look at margin progress in U.S. markets as the more relevant metric. We continue to deliver cost synergies, and as of the end of 2023, we achieved our 80 million plus run rate target, already above the 70 million referenced at the time of acquisition. This does not include the benefits of material technology savings from our transformation program, which is enabled and accelerated by NewSTAR's state-of-the-art data and analytics platform, now called OneTrue.

Christopher A. Cartwright: This does not include the benefits of material technology savings from our transformation program, which has enabled and accelerated by new star State of the art data and analytics platform now called one true.

Christopher A. Cartwright: We continue to achieve key milestones that can accelerate growth at new star and across Transunion in 2024 and beyond.

Now, we expect communication solutions to grow on the strength of trusted call solutions or Tcs.

Christopher A. Cartwright: Since its launch in 2018, Ccs is scaled to $80 million in 'twenty, three up $30 million or 60% over the prior year, we expect the business to grow over 40% in 2024.

Christopher A. Cartwright: We continue to achieve key milestones that can accelerate growth at New Star and across TransUnion in 2024 and beyond. Now we expect communications solutions to grow on the strength of trusted call solutions, or TCS. Since its launch in 2018, TCS has scaled to 80 million customers in 23, up 30 million, or 60% over the prior year. We expect the business to grow over 40% in 2024. PCS is revolutionizing inbound and outbound voice calling for our customers, improving answering rates, reducing fraud, and increasing efficiency.

Christopher A. Cartwright: Tcs is revolutionizing inbound and outbound voice, calling for our customers improving answering your rates, reducing fraud and increasing efficiency.

Christopher A. Cartwright: Demand remains robust and we continue to win new customers across every vertical.

Christopher A. Cartwright: Additionally, we are rolling out highly requested and enhancements, including displaying logos for business calls to consumers, which recently launched with AT&T and blocking spoof calls before they reach consumers.

Christopher A. Cartwright: Tcs is already a needle mover for U S markets and total company growth rates and we see a clear right to win and what we believe could be a 1 billion addressable market in the U S over the longer term.

Christopher A. Cartwright: Demand remains robust, and we continue to win new customers across every vertical. Additionally, we're rolling out highly requested enhancements, including displaying logos for business calls to consumers, which recently launched with AT&T, and blocking spoof calls before they reach consumers. DCS is already a needle mover for U.S. markets and total company growth rates, and we see a clear right to win in what we believe could be a $1 billion addressable market in the U.S. over the longer term. We also see broad application across several geographies, and we'll soon... be announcing our next international launch in one of TransUnion's largest markets. In marketing, we integrated 22 additional TU and New Start data assets into our new unified identity graph. Our entire marketing suite is now utilizing this unified graph that incorporates our best data. It enhances the depth, breadth, and accuracy of

Christopher A. Cartwright: We also see broad application across several geographies and will soon.

Christopher A. Cartwright: Be announcing our next international launch in one of <unk> largest markets.

Christopher A. Cartwright: In marketing, we integrated 22 additional teu in new start data assets into our new unified identity graph.

Christopher A. Cartwright: Our entire marketing suite is now utilizing this unified graph that incorporates our best data.

Christopher A. Cartwright: It enhances the depth breadth and accuracy of consumer data across offline and online customer channels.

Christopher A. Cartwright: With a newly improvement in in the graph, we cover 98% of the U S. Adult population with 700, plus demographic attributes and are seeing a 20% increase in marketable phone numbers and E mails and 50 plus percent increase in targeted will addresses.

Christopher A. Cartwright: This identity centric approach is resonating with customers, particularly as they contend with the reality of third party Cookie deprecation.

Christopher A. Cartwright: Consumer Data across offline and online customer channels. With the newly-improved Identity Graph, we cover 98% of the U.S. adult population with 700-plus demographic attributes and are seeing a 20-plus percent increase in marketable phone numbers and emails and a 50-plus percent increase in targetable addresses. This identity-centric approach is resonating with customers, particularly as they contend with the reality of third-party cookie deprecation, which Google is starting. Limited Test of Cookie Restriction

Christopher A. Cartwright: Which Google is starting.

Christopher A. Cartwright: Limited test of Cookie restrictions.

Christopher A. Cartwright: We are well positioned to serve our customers. During this transition differentiating with our highly authoritative first party identity data.

Christopher A. Cartwright: As well as direct integration into walled gardens and publishers.

Christopher A. Cartwright: With privacy enhancing technologies, such as clean rooms, and partnerships with cloud marketplaces.

Christopher A. Cartwright: Such as Snowflake, Amazon Web services and Google Cloud.

Christopher A. Cartwright: We're well positioned to serve our customers during this transition, differentiating with our highly authoritative, first-party identity data, as well as direct integration into Walled Gardens and Publishers, with Privacy Enhancing Technologies such as Clean Rooms and Partnerships with Cloud Marketplaces, such as Snowflake, Amazon Web Services, and Google Cloud. In risk solutions, we expect accelerating growth driven by strong bookings of our contact center products in the second half of 2023 We're consolidating NewSTAR's risk capabilities onto TrueValidate to deliver omni-channel fraud mitigation and have invested incrementally in go-to-market capacity.

Christopher A. Cartwright: In risk solutions, we expect accelerating growth driven by strong bookings of our contact center products in the second half of 2023.

Christopher A. Cartwright: We're consolidating new stars risk capabilities onto true validate to deliver omnichannel fraud mitigation and they've invested incrementally in go to market capacity.

Christopher A. Cartwright: Our third strategic focus area for 2024 is executing our ongoing transformation initiatives since I became CEO in 2019, we have invested in global platforms across our product operations technology and data and analytics teams to build scale foster knowledge sharing.

Christopher A. Cartwright: And develop standardized way of operating across the world.

Christopher A. Cartwright: These initiatives accelerate innovation streamlined workflows reduce cost and create better user experiences for customers and consumers.

Christopher A. Cartwright: Our third strategic focus area for 2024 is executing our ongoing transformation initiative. Since I became CEO in 2019, we have invested in global platforms across our product, operations, technology, and data and analytics teams to build scale, foster knowledge sharing, and develop a standardized way of operating across the world. These initiatives accelerate innovation, streamline workflows, reduce costs, and create better user experiences for customers and consumers. In November, we announced the next step of our transformation, comprising two complementary programs. First,

In November we announced the next step of our transformation comprising two complementary programs.

Christopher A. Cartwright: First.

Christopher A. Cartwright: We will build upon our strategy of leveraging our global capability centers across the globe, driving workflows workforce productivity and allowing us to provide more services from talent rich geographies like India, South African Coast Rica.

Christopher A. Cartwright: We grew our Gcc's from 400 employees in 2019 to over 4000 in 2023 and expect to transition over 1000 additional roles over the next two years.

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

Christopher A. Cartwright: We will build upon our strategy of leveraging our global capability centers across the globe, driving workforce productivity, and allowing us to provide more services from talent-rich geographies like India, South Africa, and Costa Rica. We grew our GCCs from 400 employees in 2019 to over 4,000 in 2023 and expect to transition over 1,000 additional roles over the next two years. We are balancing the need for customer-centric work in the market with the opportunity to centralize and standardize key global functions. Second, we will enhance our technology capabilities by completing our Project RISE cloud migration and leveraging NewSTAR's technology to consolidate our product and innovation enablement onto a common, state-of-the-art platform. One True.

Christopher A. Cartwright: Second we will enhance our technology capabilities by completing our project rise cloud migration and leveraging new stores technology to consolidate our product innovation enablement onto a common state of the art platform one true.

Christopher A. Cartwright: We expect this transformation to drive material revenue and cost benefits by 2026, we expect to deliver $120 million to $140 million of annual operating expense savings with half of that realized in 'twenty four.

Christopher A. Cartwright: We also expect to reduce.

Christopher A. Cartwright: Our capex spend from the historical 8% of revenue to 6% by 2026.

Christopher A. Cartwright: The equivalent of $70 million to $80 million in annual cash savings now to achieve these savings we expect to incur $355 million to $375 million of one time costs. This is inclusive of 65 million already communicated for project rise.

Christopher A. Cartwright: We expect this transformation to drive material revenue and cost benefits. By 2026, we expect to deliver $120 to $140 million of annual operating expense savings, with half of that realized in 2024. We also expect to reduce our CapEx spend from the historical 8% of revenue to 6% by 2026, the equivalent of $70 to $80 million in annual cash savings. However, now to achieve these savings, we expect to incur $355 to $375 million of one-time costs.

Christopher A. Cartwright: In simple terms, we expect to deliver roughly $200 million of ongoing annual free cash flow benefit for $300 million of incremental one time costs just as importantly, these investments, particularly one true will accelerate our innovation rates.

Christopher A. Cartwright: <unk> will enable our growth strategy of extending further into marketing and fraud solutions. These two fast growing markets are highly synergistic with our core credit markets.

Christopher A. Cartwright: Put simply.

Christopher A. Cartwright: We're not a credit bureau attempting to play in the identity space. We are a consumer identity Bureau, applying these capabilities to credit data, along with marketing and fraud solutions to serve our customers.

Christopher A. Cartwright: This is inclusive of 65 million already communicated for Project R.I.S.E. In simple terms, we expect to deliver roughly $200 million of ongoing annual free cash flow benefit for $300 million of incremental one-time costs. Just as importantly, these investments, particularly One True, will accelerate our innovation rate. One True will enable our growth strategy of extending further into marketing and fraud solutions. These two fast-growing markets are highly synergistic with our core credit markets. Put simply,

Christopher A. Cartwright: We believe the complementary nature of credit marketing and fraud will fuel growth across all three markets.

Christopher A. Cartwright: <unk> will become the destination platform for activating our data assets in a single integrated technology stack across all global Transunion product families from data ingestion data management and identity resolution to analytics and delivery.

Christopher A. Cartwright: The platform is built on top of our foundational hybrid cloud infrastructure developed through project rise and Leverages new stores architecture.

Christopher A. Cartwright: We're not a credit bureau attempting to play in the identity space. We are a consumer identity bureau applying these capabilities to credit data, along with marketing and fraud solutions to serve our customers. We believe that the complementary nature of credit, marketing, and fraud will fuel growth across all three markets. One True will become the destination platform for activating our data assets in a single integrated technology stack across all global TransUnion product families, from data ingestion, data management, and identity resolution, to analytics and delivery. The platform is built on top of a foundational hybrid cloud infrastructure developed through Project RISE and leverages NewSTAR's architectures.

Christopher A. Cartwright: <unk> is already live and powering transunion products.

Christopher A. Cartwright: In the next two years are about enhancing capabilities and consolidated more products data and analytics onto the platform.

Christopher A. Cartwright: We believe that <unk> will improve our data quality.

Christopher A. Cartwright: Speed, our time to market and accelerate innovation from a cost perspective, one true will also save cost enabled us to rationalize applications and standardized services.

Christopher A. Cartwright: These efficiencies will allow our engineers to spend more time focused on innovation.

Christopher A. Cartwright: <unk> standardized operating model will also ensure a compliance and privacy first approach using embedded security guard rails.

Christopher A. Cartwright: The laundry platform is increasing our pace of innovation and enabling the next generation of products. Let me, let me highlight a few examples.

Christopher A. Cartwright: And our true IQ analytics suite, we leverage one through to improve the quality of our analytic services by reducing the time to insights and actions in the past we've discussed our true IQ innovation labs, where our scientists.

Christopher A. Cartwright: One True is already live and powering TransUnion products, and the next two years are about enhancing capabilities and consolidating more products, data, and analytics onto the platform. We believe that OneTrue will improve our data quality, speed our time to market, and accelerate innovation. From a cost perspective, OneTrue will also save costs, enabling us to rationalize applications and standardize services. These efficiencies will allow our engineers to spend more time focused on innovation. This standardized operating model will also ensure a compliance and privacy-first approach using embedded security guardrails. The One True Platform is increasing our pace of innovation and enabling the next generation of products. Let me highlight a few examples.

Christopher A. Cartwright: Collaborate with customers and multi day hands on sessions infusing, our data analytics and domain expertise to solve their business problems.

Christopher A. Cartwright: Last year, we ran a host of these labs on the luxury platform clients benefited from real time interaction with our data and.

Christopher A. Cartwright: In analytics for faster model development and deployment. The feedback has been very positive by integrating our products on this common platform will be able to serve clients needs across multiple and previously siloed domains and convert our engagement seamlessly into ongoing revenues.

Christopher A. Cartwright: We also recently launched true IQ data enrichment, which provides instant access to teu data from within the customers technology environment.

Christopher A. Cartwright: In our TrueIQ Analytics Suite, we leverage One True to improve the quality of our analytic services by reducing the time to insights in action. In the past, we discussed our TrueIQ Innovation Lab, where our scientists collaborate with customers in multi-day, hands-on sessions, infusing our data, analytics, and domain expertise to solve their business problems. Last year, we ran a host of these labs on the One True platform.

Christopher A. Cartwright: This privacy first approach to data enrichment eliminates the need for sensitive client IP to leave their control.

Christopher A. Cartwright: The solution streamlines access to credit and marketing data and accelerates model development.

Christopher A. Cartwright: Clients benefited from real-time interaction with our data and Analytics for faster model development and deployment. The feedback has been very positive. By integrating our products on this common platform, we'll be able to serve clients' needs across multiple and previously siloed domains and convert our engagement seamlessly into ongoing revenue. We also recently launched TrueIQ Data Enrichment, which provides instant access to TU data from within the customer's technology environment. This privacy-first approach to data enrichment eliminates the need for sensitive client IP to leave their control.

Christopher A. Cartwright: Advanced acquisitions is a new offering that combines data enrichment with our credit and marketing capabilities for an integrated credit based pre screen solution.

Christopher A. Cartwright: Advanced acquisitions powers, a full range of consumer acquisition tools, including self service batch pre screens acquisition campaign model development and deployment and marketing audience definition build and activation.

Christopher A. Cartwright: <unk> unions media planning and measurement tools are also available on the <unk> platform to ensure effective marketing spend.

Christopher A. Cartwright: We're also consolidating our fraud mitigation products globally onto one through in an integrated suite called true validate to validate combines our comprehensive identity data along with fraud signals from a range of new star in Teu products in a single platform, where we apply.

Christopher A. Cartwright: The solution streamlines access to credit and marketing data and accelerates model development. Advanced Acquisitions is a new offering that combines data enrichment with our credit and marketing capabilities for an integrated credit-based pre-screen solution. Advanced Acquisitions powers a full range of consumer acquisition tools, including self-service batch prescreens, acquisition campaign model development and deployment, and marketing audience definition, build, and activation. TransUnion's media planning and measurement tools are also available on the OneTrue platform to ensure effective marketing spend. We're also consolidating our fraud mitigation products globally onto OneTrue in an integrated suite called TrueValidate. TrueValidate combines our comprehensive identity data along with fraud signals from a range of NewSTAR and TU products in a single platform, where we apply advanced analytics fueled by machine learning and AI to extract deep insights.

Christopher A. Cartwright: Advanced analytics fueled by machine learning AI to extract deep insights.

Christopher A. Cartwright: Our result.

Christopher A. Cartwright: Rather the result has been a substantial improvement in fraud detection and a reduction in false positives.

Christopher A. Cartwright: We're currently beta testing, our first release and expect a full rollout. This summer our fraud product suite serves thousands of customers around the world and represents roughly $300 million of revenues against a multibillion dollar addressable market.

Christopher A. Cartwright: We see substantial opportunity to gain share by offering a high performance integrated suite of solutions amplified by best in class analytics, which we believe will outperform the patchwork of point solutions that many customers use today.

Speaker Change: And finally.

Speaker Change: We're creating new and innovative marketing solutions. In addition to the ongoing enhancements to our identity capabilities.

Speaker Change: True audience data collaborations, which we formerly called clean rooms is a next generation offering to enable data collaboration between parties that don't want to directly exchange data, but must connect partners across the advertising ecosystem. It's currently in market in beta testing and will fully launch later this year.

Christopher A. Cartwright: Our result, or rather the result, has been a substantial improvement in fraud detection and a reduction in false positives. We're currently beta testing our first release and expect the full rollout this summer. Our fraud product suite serves thousands of customers around the world and represents roughly $300 million of revenues against a multi-billion dollar addressable market. We see substantial opportunity to gain share by offering a high-performance integrated suite of solutions amplified by best-in-class analytics, which we believe will outperform the patchwork of point solutions that many customers use today. And finally... We're creating new and innovative marketing solutions in addition to the ongoing enhancements to our identity capability. True Audience Data Collaborations, which we formerly called CleanRooms, is a next-generation offering to enable data collaboration between parties that don't want to directly exchange data but must connect to partners across the advertising ecosystem.

Speaker Change: Client feedback as enthusiastic and we're working with the walled gardens to drive adoption.

Speaker Change: I look forward to providing you updates on these product advancements in the coming quarters and with that I'll turn it over to Todd who will provide further details on our fourth quarter financial results, our first quarter and full year 2024 outlook Todd.

Todd M. Cello: Thanks, Chris and let me add my welcome to everyone as Chris mentioned in the fourth quarter, we exceeded our guidance on all key financial metrics.

Todd M. Cello: Fourth quarter consolidated revenue increased 6% on a reported basis and 5% on an organic constant currency basis.

Todd M. Cello: There was no impact from acquisitions, and a less than 1% benefit from foreign currency.

Todd M. Cello: Our business grew 4% on an organic constant currency basis, excluding mortgage from both the fourth quarter of 2022 and 2023.

Todd M. Cello: Adjusted EBITDA increased 1% on a reported and constant currency basis.

Christopher A. Cartwright: It's currently in market, in beta testing, and will fully launch later this year. Client feedback is enthusiastic, and we're working with the Walled Gardens to drive adoption. I look forward to providing you updates on these product advancements in the coming quarters. And with that, I'll turn it over to Todd, who'll provide further details on our fourth quarter financial results and our first quarter in full year 2024 outlook.

Todd M. Cello: Our adjusted EBIT margin was 34, 2% ahead.

Todd M. Cello: Ahead of our expectations, but down 140 basis points compared to the year ago fourth quarter due to lower U S financial services volumes, which have high margin flow through.

Todd M. Cello: Fourth quarter adjusted diluted EPS increased 2%.

Todd M. Cello: Thanks, Chris, and let me add my welcome to everyone. As Chris mentioned, in the fourth quarter, we exceeded our guidance on all key financial metrics. Fourth quarter consolidated revenue increased 6% on a reported basis and 5% on an organic constant currency basis. There was no impact from acquisitions and a less than 1% benefit from foreign currency.

Todd M. Cello: Adjusted effective tax rate was 21, 4% in the quarter and 22% for the full year below our 23% guidance due to successful tax planning efforts.

Todd M. Cello: Finally in the fourth quarter, we took $78 million in one time charges related to the next phase of our transformation.

Todd M. Cello: Our business grew 4% on an organic constant currency basis, excluding mortgages from both the fourth quarter of 2022 and 2023. Adjusted EBITDA increased 1% on a reported and constant currency basis, but the margin was 34.2%, ahead of our expectations but down 140 basis points compared to the year-ago fourth quarter due to lower U.S. financial services volume, which has a high margin flow. For the fourth quarter, adjusted diluted EPS increased 2%. The adjusted effective tax rate was 21.4% in the quarter and 22% for the full year, below our 23% guidance due to successful tax planning efforts.

Todd M. Cello: The first expenses and what we expect to be a $355 million to $375 million program.

Todd M. Cello: Inclusive.

Todd M. Cello: The final year of project rise.

Todd M. Cello: These fourth quarter charges were primarily related to employee separation with a modest amount related to office closures.

Todd M. Cello: Provide more color on expectations for charges in 2024.

Todd M. Cello: The guidance section.

Before I get into U S markets.

Todd M. Cello: A reminder, that we report new star revenue within our vertical market structure.

Todd M. Cello: As we've stated previously starting in 2024, we will stop providing standalone, new star quarterly revenue growth rates and adjusted EBITDA margins.

Todd M. Cello: We will however provide updates and how we are progressing to our full year targets to achieve mid single digit revenue growth in 2024.

Todd M. Cello: Finally, in the fourth quarter, we took $78 million in one-time charges related to the next phase of our transformation. The first expense is for what we expect to be a $355 to $375 million program, inclusive of the final year of Project RISE. These fourth-quarter charges were primarily related to employee separation, with a modest amount related to office closures.

Todd M. Cello: Looking at segment financial performance for the fourth quarter U S markets revenue was up 3% compared to the year ago quarter.

Todd M. Cello: Adjusted EBITDA for U S markets was flat in.

Todd M. Cello: And adjusted EBIT margin was down 80 basis points to 33, 2%.

Todd M. Cello: I will provide more color on expectations for charges in 2024 during the guidance section. Before I get into U.S. markets, a reminder that we report New Star revenue within our vertical market structure. As we've stated previously, starting in 2024, we will stop providing stand-alone New Star quarterly revenue growth rates and adjusted EBITDA margins. We will, however, provide updates on how we are progressing to our full-year targets to achieve mid-single-digit revenue growth in 2024. Looking at segment financial performance for the fourth quarter, U.S. market revenue was up 3% compared to the year-ago quarter. However, the adjusted EBITDA for U.S. markets was flat, and the adjusted EBITDA margin was down 80 basis points to 33.2%.

Financial services revenue grew 3%.

Todd M. Cello: With activity broadly consistent with the levels seen late in the third quarter.

Todd M. Cello: Consumer lending revenue declined 3%.

Todd M. Cello: Online activity remains soft, but batch marketing has seen some modest improvement among our fintech customers.

Todd M. Cello: Assign that players are cautiously anticipating growth.

Todd M. Cello: Our credit card and banking business was down 5%.

Todd M. Cello: While issuance is healthy on a historical basis.

Todd M. Cello: Online and batch activity remains tempered as lenders contend with credit normalization deposit pressures and potential capital constraints.

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

Todd M. Cello: Financial services revenue grew 3%, with activity broadly consistent with the levels seen late in the third quarter. Consumer lending revenue declined 3%. Online activity remains soft, but batch marketing has seen some modest improvement among our FinTech customers. That's a sign that players are cautiously anticipating growth. Our credit card and banking business was down 5%, while issuance is healthy on a historical basis. Online and batch activity remains tempered as lenders contend with credit normalization, deposit pressures, and potential capital constraints.

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

Todd M. Cello: Our auto business grew delivered 1% growth on top of 16% growth in the prior year quarter.

Todd M. Cello: New car sales in the U S totaled.

<unk> 5 million in 2023 up 12%, but still below the roughly $17 million of annual sales seen from 2015 to 2019.

Todd M. Cello: Sales are expected to increase modestly in 2024.

Todd M. Cello: The higher level of new car sales will still take time to replenish the used car market, which saw a declining sales in 2023 and continues to face availability.

Todd M. Cello: We are seeing stronger activity from our largest customers compared to a more conservative approach by mid-market and smaller institutions. We continue to retain and win share across our customers, with momentum in fraud and identity solutions. Our auto business grew, delivering 1% growth on top of 16% growth in the prior year quarter. New car sales in the U.S. totaled $15.5 million in 2023, up 12 percent, but still below the roughly $17 million of annual sales seen from 2015 to 2019.

Todd M. Cello: And affordability challenges.

Todd M. Cello: Used car prices were down in 2023.

Todd M. Cello: But are still 30% above pre pandemic levels.

Todd M. Cello: The used car market currently accounts for almost 60% of finance vehicles in the U S.

Todd M. Cello: For mortgage revenue was up 34% in the quarter against inquiry volume declines of 11%.

Todd M. Cello: The pace of volume declines slowed throughout the year, but for the year applications, where over 50% below 2019 levels and existing home sales were the weakest since 1995.

Todd M. Cello: Sales are expected to increase modestly in 2024. However, the higher level of new car sales will still take time to replenish the used car market, which saw declining sales in 2023 and continues to face availability and affordability challenges. Used car prices were down in 2023, but they are still 30% above pre-pandemic levels. The used car market currently accounts for almost 60% of financed vehicles in the U.S. For mortgages, revenue was up 34% in the quarter against inquiry volume declines of 11%. The pace of volume decline slowed throughout the year, but for the year, applications were over 50% below 2019 levels, and existing home sales were the weakest since 1995. Average mortgage rates, after topping 8% in late October, have fallen to the 6.5% to 7% range.

Todd M. Cello: Average mortgage average mortgage rates after topping 8% in late October have fallen to six 5% to 7% range.

Todd M. Cello: Rates remain high and our recent historical basis, which combined with elevated home prices and low inventory will likely limit activity.

Todd M. Cello: On a trailing 12 month basis mortgage represented about 7% of total transunion revenue.

Todd M. Cello: Let me now turn to our emerging verticals, which grew 2% in the quarter.

Todd M. Cello: Terence delivered mid single digit growth in the fourth quarter and 4% for full year 2023 with.

Todd M. Cello: With trends stable and in line with expectations in the fourth quarter.

Todd M. Cello: In 2024, we expect to deliver improving growth with momentum as the year progresses.

Todd M. Cello: After two years of contracting marketing activity, we expect carriers to slowly restore marketing spend as rate adequacy improves and while consumer shopping activity remains robust.

Todd M. Cello: Rates remain high on a recent historical basis, which combined with elevated home prices and low inventory will likely limit activity. On a trailing 12-month basis, mortgages represented about 7% of total TransUnion revenue. Let me now turn to our emerging verticals, which grew 2% in the quarter. Insurance delivered mid-single-digit growth in the fourth quarter and 4% for full year 2023, with trends stable and in line with expectations in the fourth quarter. In 2024, we expect to deliver improving growth with momentum as the year progresses. After two years of contracting marketing activity, we expect carriers to slowly restore marketing spend as rate adequacy improves and while consumer shopping activity remains robust. We continue to deliver significant new business wins across our core products as well as innovative products like TruVizion Driving History and successful cross-selling of NuSTAR and Sontiq solutions. However, tech, retail, and e-commerce, and telco both grew in low single digits. Tech, retail, and e-commerce benefited from Trusted Call Solutions wins and good fraud and identity volumes from e-commerce customers, while caller ID drove growth in telco. However, media was flat as usage-based volumes for our audience solutions remained soft.

Todd M. Cello: We continue to deliver significant new business wins across our core products as well as with innovative products like true vision driving history.

Todd M. Cello: And successful cross selling of new Star and <unk> solutions.

Todd M. Cello: <unk> retail.

Todd M. Cello: And E Commerce and telco.

Todd M. Cello: Both grew low single digits.

Todd M. Cello: Tech retail and e-commerce benefited from trusted call solutions wins, and good fraud and identity volumes from e-commerce customers, while color I'd.

Todd M. Cello: Drove growth in telco.

Todd M. Cello: Media was flat as usage based volumes for our audience solutions remained soft.

Todd M. Cello: Across our other emerging verticals services and collections in public sector. Both grew double digits powered by strong growth in trusted call solutions.

Todd M. Cello: And in an employment screening declined as we work through the Recalibration of our solutions.

Todd M. Cello: We are working to provide the most customer and consumer friendly approach possible.

And we believe it will create a long term competitive advantage, particularly as regulators push for more consistent and compliant data usage across vendors.

Todd M. Cello: Consumer interactive revenue increased 7%.

Todd M. Cello: Benefiting from a large breach when.

Todd M. Cello: We continue to grow our breach business largely on the strength of the <unk> offerings.

Todd M. Cello: Across our other emerging verticals, services and collections and public sector both grew double-digits, powered by strong growth in trusted call solutions, and employment screening declined. As we work through the recalibration of our solution, we are working to provide the most customer and consumer-friendly approach possible, and we believe it will create a long-term competitive advantage, particularly as regulators push for more consistent and compliant data usage across vendors. Consumer Interactive revenue increased 7%, benefiting from a large breach.

Todd M. Cello: <unk> revenues can be uneven.

Todd M. Cello: But are increasingly the byproduct of proactively selling recurring cyber protection programs to companies through cyber insurance providers.

Todd M. Cello: For each response engagements also provide new engagements with consumers with opportunities to cross sell them into credit education.

Todd M. Cello: And identity protection programs.

Todd M. Cello: Excluding the large breach win.

Todd M. Cello: Revenue would have declined 2%.

In line with our expectations and the current run rate of the business.

Todd M. Cello: We continue to grow our breach business largely on the strength of the Sontag offer. Reach revenues can be uneven, but are increasingly the byproduct of proactively selling recurring cyber protection programs to companies through cyber insurance providers. Breach response engagements also provide new engagements with consumers, with opportunities to cross-sell them into credit education and identity protection programs. Excluding the large breach win, revenue would have declined 2% in line with our expectations and the current run rate of the business; adjusted EBITDA margins were 45.5%, down 580 basis points, due primarily to the impacts of the Breach Wind. Our direct business continues to decline as we recalibrate our marketing approach, focusing on higher-value consumers.

Todd M. Cello: Adjusted EBITDA margins were 45, 5% down 580 basis points due primarily to the impact of the breach win.

Todd M. Cello: Our direct business continues to decline as we recalibrated, our marketing approach to focus on higher value consumers.

Todd M. Cello: So far we've seen good returns on the revamped approach.

Todd M. Cello: We continue to work to improve our value proposition and go to market strategy in this business.

Todd M. Cello: Our indirect business grew.

Todd M. Cello: Led by <unk>, which grew double digits in the fourth quarter and over 20% for the full year.

Todd M. Cello: In addition to stronger than expected breach revenue Phanteks identity protection business grew double digits.

Todd M. Cello: For our traditional credit education products.

Todd M. Cello: Performance across customers varied based on the idiosyncratic market dynamics.

Todd M. Cello: Lenders continue to be selective and utilizing offer aggregators and other channels.

Todd M. Cello: For marketing.

Todd M. Cello: For my comments about international all revenue growth comparisons will be in constant currency.

Todd M. Cello: So far, we've seen good returns on the revamped approach. We continue to work to improve our value proposition and go-to-market strategy in this business. Our indirect business grew, led by Sontag, which grew double digits in the fourth quarter and over 20% for the full year.

Todd M. Cello: For the total segment revenue grew 13% with four of our six reported market is growing by double digits.

Todd M. Cello: Adjusted EBITDA margin was 44% up 20 basis points.

Todd M. Cello: Now, let's dig into the specifics for each region.

Todd M. Cello: In addition to stronger-than-expected breach revenue, Sontag's identity protection business grew double-digit. For our traditional credit education products, performance across customers varied based on the idiosyncratic market dynamics, and selective in utilizing offer aggregators and other channels for marketing. For my comments about international growth, all revenue growth comparisons will be in constant currency. For the total segment, revenue grew 13%, with four of our six reported markets growing by double digits. Justin Evett, the margin was 44% up 20 bases.

Todd M. Cello: In India, we grew 30%.

Reflecting strong market trends and generally healthy consumers.

We continue to win share in core consumer credit with an expanding suite of credit oriented solutions as well as increased penetration of small and medium lenders.

Todd M. Cello: This strong core performance is complemented by a meaningful growth across commercial credit fraud marketing.

Todd M. Cello: And direct to consumer offerings.

Todd M. Cello: We now generate over a third of our India revenue outside of consumer credit.

Todd M. Cello: A testament to the success of taking our growth playbook to the Indian market.

Todd M. Cello: Now let's dig into the specifics for each region. In India, we grew 30%, reflecting strong market trends and generally healthy consumers. We continue to win share in core consumer credit with an expanding suite of credit-oriented solutions, as well as increased penetration of small and medium lenders. This strong core performance is complemented by meaningful growth across commercial, credit, fraud, marketing, and direct-to-consumer offerings. We now generate over a third of our India revenue outside of consumer credit, testament to the success of taking a growth playbook to the Indian Market. We expect another very strong year from India in 2024. However, in the UK, revenue was flat.

Todd M. Cello: We expect another very strong year from India in 2024.

Todd M. Cello: In the U K revenue was flat.

Todd M. Cello: The UK Fintech market remains challenged but we continue to see good growth in banking and insurance.

Todd M. Cello: As well as share gains and wins with products like true vision trended data.

Todd M. Cello: And our consumer offerings.

Todd M. Cello: Our Canadian business grew 14%, despite a tepid macro environment substantially.

Todd M. Cello: Substantially outperforming flat to slightly declining lending market growth.

Todd M. Cello: We benefited from share gains in financial services.

Todd M. Cello: Strong growth in telco and insurance and continued momentum indirect to consumer including recent breach wins.

Todd M. Cello: The U.K. fintech market remains challenged, but we continue to see good growth in banking and insurance, as well as share gains and wins with products like TruVizion, Trended Data, and our consumer offerings. Our Canadian business grew 14% despite a tepid macro environment. Financial, which Outperforms Flat to Slightly Declining Lending Market Growth, benefited from share gains in financial services.

Todd M. Cello: Material portion of the outside outsized growth in Canada in 2023 came from sizable share wins, which will be fully annualized in 2024.

Todd M. Cello: For 2024, we expect healthy mid single digit growth.

Todd M. Cello: Continued market outperformance.

Todd M. Cello: Strong Growth in Telco and Insurance and Continued Momentum in Direct to Consumer, including recent breach winds. A material portion of the outsized growth in Canada in 2023 came from sizable share wins which will be fully annualized in 2024. In 2024, we expect healthy mid-single-digit growth and continued market outperformance. In Latin America, revenue was up 5%. Brazil is down in the quarter due to weakness in the fintech market.

Todd M. Cello: In Latin America revenue was up 5%.

Todd M. Cello: <unk> was down in the quarter due to weakness in the Fintech market.

Todd M. Cello: In Colombia, and our other Latin American countries, we delivered good growth across online and batch despite softening market conditions with wins across financial services government and insurance.

Todd M. Cello: In Asia Pacific, We grew 13% led.

Todd M. Cello: Led by very strong growth in the Philippines.

Todd M. Cello: Where we see attractive market growth and increased customer penetration.

Todd M. Cello: In Colombia, and our other Latin American countries, we delivered good growth across online and batch despite softening market conditions, with wins across financial services, government, and insurance. In Asia-Pacific, we grew 13%, led by very strong growth in the Philippines, where we see attractive market growth and increased customer penetration. Hong Kong also had another solid quarter. Finally, Africa increased 11% based on a broadly strong performance.

Todd M. Cello: Hong Kong also had another solid quarter.

Finally Africa increased 11% based on a broadly strong performance despite a challenging environment in several of our largest markets.

Todd M. Cello: Turning to the balance sheet, we ended the quarter with roughly $5 $3 billion of debt after prepaying $25 million in the quarter for a total of $250 million in 2023.

Todd M. Cello: Looking back since we announced the acquisition of New Star in September of 2021, we've prepaid about one $5 billion of debt.

Todd M. Cello: Despite a challenging environment in several of our largest markets, Turning to the balance sheet, we ended the quarter with roughly $5.3 billion of debt, pre-paying $25 million in the quarter for a total of $250 million in 2023. Looking back, since we announced the acquisition of New Star in September of 2021, we've prepaid about $1.5 billion of debt, which left us with $480 million of cash on the balance sheet. We finished the quarter with a leverage ratio of 3.6 times, refinancing our revolving credit facility and Term Loan A, in addition to extending our maturities from 2024 to 2028. We expanded our revolver from $300 million to $600 million and our term loan A from $1 billion to $1.3 billion.

Todd M. Cello: That left us with $480 million of cash on the balance sheet.

Todd M. Cello: We finished the quarter with a leverage ratio of three six times.

Todd M. Cello: In October we completed the refinancing of our revolving credit facility and term loan a.

Todd M. Cello: In addition to extending our maturities from 2024 to 2028 weeks.

Todd M. Cello: We expanded our revolver from $300 million to $600 million and our term loan a from $1 billion to $1 3 billion.

Todd M. Cello: We use the incremental $300 million raised for our term loan a to prepaid $300 million of our higher coupon term loan b six.

Todd M. Cello: We use the incremental $300 million raised for our Term Loan A to prepay $300 million of our higher coupon Term Loan B6. Last week, we repriced our term loan, B6, by reducing our credit spread by 25 basis points and removing the credit spread adjustment. The combined impact of these two refinancings results in roughly $8 million of annual interest expense savings.

Todd M. Cello: Last week, we repriced our term loan B six.

Todd M. Cello: Reducing our credit spread by 25 basis points.

Todd M. Cello: And removing the credit spread adjustment.

Todd M. Cello: The combined impact of these two refinancings results in roughly $8 million of annual interest expense savings.

Todd M. Cello: Net of our swaps.

Todd M. Cello: Net of our swap, our average effective cost of debt at today's SOFR rate is roughly 5%. You can find our updated debt profile in the appendix of our presentation. We continue to focus on the integration of our recent acquisitions and have no intention to make large-scale acquisitions. Our priority is to prepay debt in 2024 with our excess cash. However, we expect prepayments to be lower in 2023 due to the one-time cash payments related to our transformation program.

Todd M. Cello: Our average effective cost of debt at today's sulfur rate is roughly 5%.

Todd M. Cello: You can find our updated debt profile in the appendix of our presentation.

Todd M. Cello: We continue to focus on the integration of our recent acquisitions and have no intention to make large scale acquisitions. This year.

Todd M. Cello: Our priority is to prepay debt in 2024 with our excess cash flow. However, we expect prepayments to be lower than 2023 due to the onetime cash payments related to our transformation program.

Todd M. Cello: Cash outlays related to our fourth quarter cost actions were minimal, and we expect most of our $355 to $375 million of one-time expenses to be paid out in 2024. Based on our expectations for adjusted EBITDA and cash generation, we expect our leverage ratio to be in the low three-time range by the end of 2024. We continue to work toward our leverage ratio target of under three times. However, we do not view three times as an ending point for deleveraging and view debt prepayments as the best incremental use of our cash over the medium term.

Todd M. Cello: Cash outlays related to our fourth quarter cost actions were minimal.

Todd M. Cello: And we expect most of our $355 million to $375 million of one time expenses to be paid out in 2024.

Todd M. Cello: Based on our expectations for adjusted EBITDA and cash generation, we expect our leverage ratio to be in the low three time range by the end of 2024.

Todd M. Cello: We continue to work.

Todd M. Cello: Toward our leverage ratio target of under three times.

Todd M. Cello: We do not view three times as an ending point for deleveraging and view debt prepayments as the best incremental use of our cash over the medium term.

Speaker Change: Turning to guidance I wanted to first explain our philosophy for 2024.

Todd M. Cello: According to guidance, I wanted to first explain our philosophy for 2024. When we provided fourth-quarter 2023 guidance in October, we were deliberately very conservative following a challenging third quarter. Our guidance for the first quarter and full year 2024 reflects more typical TransUnion conditions. We are assuming the current slower conditions persist throughout the year, but should interest rate cuts occur and drive increased lending and marketing activity, that would represent upside to our current guidance. That brings us to our outlook for the first quarter of 2024. We expect FX to have an insignificant impact on revenue and adjusted EBIT.

Speaker Change: When we provided fourth quarter 2023 guidance in October we were deliberately very conservative following a challenging third corner.

Speaker Change: Our guidance for the first quarter and full year 2024 reflects more typical transunion conservatism.

Speaker Change: We are assuming the current slower conditions persist throughout the year.

Speaker Change: Should interest rate cuts occur and drive increased lending in marketing activity that would represent upside to our current guidance.

Speaker Change: That brings us to our outlook for the first quarter of 2024.

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

Speaker Change: We expect revenue to come in between 971900 $80 million or up 3% to 4% on an as reported and organic constant currency basis.

Todd M. Cello: We expect revenue to come in between $971 and $980 million, or up 3% to 4% on an as-reported and organic constant currency basis. Our revenue guidance includes approximately one point of Tailwind from mortgage, meaning that we expect the remainder of our business will be up 2 to 3 percent on an organic constant currency basis. We expect adjusted EBITDA to be between $324 and $331 million, up 1% to 3%. We expect an adjusted EBITDA margin of 33.4% to 33.8% or down 50 to 90 basis points. Margins are expected to be down sequentially year over year due to the timing of expenses in international, particularly India, as well as Consumer Interactive.

Speaker Change: Our revenue guidance includes approximately one point.

Speaker Change: Tailwind from mortgage meaning that we expect the remainder of our business will be up 2% to 3% on an organic constant currency basis.

Speaker Change: We expect adjusted EBITDA to be between 324, and $331 million up 1% to 3%.

Speaker Change: We expect adjusted EBITDA margin of 33, 4% to 33, 8% or down 50 to 90 basis points.

Speaker Change: Margins are expected to be down sequentially and year over year due to the timing of expenses and internationally International particularly India.

Speaker Change: As well as consumer interactive.

Todd M. Cello: We expect year-over-year margin expansion in our U.S. markets business in the first quarter. We expect the first quarter to be our lowest-margin quarter, with margins expanding each quarter as transformation savings build throughout the year. We also expect our adjusted diluted EPS to be between 79 cents and 81 cents, a range of down 2% to up 1%. Turning to the full year, we expect an insignificant impact from FX on revenue and adjusted EBITDA.

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

Speaker Change: We expect the first quarter to be our lowest margin quarter with margins expanding each quarter as.

Speaker Change: As transformation savings build throughout the year.

Speaker Change: We also expect our adjusted diluted EPS to be between 79 and <unk> 81.

Speaker Change: A range of down 2% to up 1%.

Speaker Change: Turning to the full year, we expect insignificant impact from FX on revenue and adjusted EBITDA.

Speaker Change: We expect revenue to come in between $3, 96, and $4.02 billion or up 3% to 5% on an as reported and organic constant currency basis.

Todd M. Cello: We expect revenue to come in between $3.96 and $4.02 billion, or up 3% to 5% on an as-reported and organic constant currency basis and up about 1.5 to 3.5%, excluding the impact of mortgage. For 2024, we expect mortgage inquiries to be down roughly 5% and our revenues to increase roughly 25%, primarily due to the impact of third-party scores pricing. We expect inquiries to be down roughly 15% in the first half of the year and up roughly 10% in the second half of the year as comparisons ease.

Speaker Change: And up about one five to three 5%.

Speaker Change: Excluding the impact of mortgage.

Speaker Change: For 2024, we expect mortgage inquiries to be down roughly 5% and our revenues to increase roughly 25% pri.

Speaker Change: Primarily due to the impact of third party scores pricing.

Speaker Change: We expect inquiries to be down roughly 15% in the first half of the year.

Speaker Change: And up roughly 10% in the second half of the year as comparisons ease.

Todd M. Cello: For our business segments, we expect U.S. markets to grow mid-single-digit or low-single-digit, excluding mortgage, to be up mid-single digits or up low-single digits, excluding more. We expect emerging verticals to be up low single digits. We anticipate that International will grow in high single digits and constant currency terms, driven by the same positive trends that we saw throughout 2023, and we expect Consumer Interactive to decline in low single digits. Turning back to the total company outlook, we expect adjusted EBITDA to be between 1.398 and 1.398. 441 billion dollars, up 4 to 7 percent. That would result in an adjusted EBITDA margin of 35.3. 35.8% or up 25 to 75 bases. We anticipate adjusted diluted EPS to be $3.57 to $3.74, up 6% to 11%. We expect our adjusted tax rate to be approximately 22.5%. Amortization and depreciation are expected to be approximately $530 million.

Speaker Change: For our business segments, we expect U S markets to grow mid single digit or low single digit excluding mortgage.

Speaker Change: We anticipate financial services to be up mid single digits or up low single digits excluding mortgage.

Speaker Change: We expect emerging verticals to be up low single digits.

We anticipate that international will grow high single digits in constant currency terms driven by the same positive trends that we saw throughout 2023 and.

Speaker Change: And we expect consumer interactive to decline low single digits.

Speaker Change: Turning back to total company outlook, we expect adjusted EBITDA to be between $1 398, and one point.

Speaker Change: $441 billion.

Speaker Change: Up 4% to 7%.

Speaker Change: That would result in adjusted EBITDA margin being 35 three to.

Speaker Change: To 35, 8% or up 25 to 75 basis points.

Speaker Change: We anticipate adjusted diluted EPS to be $3 57.

Speaker Change: The $3 74 up 6% to 11%.

Speaker Change: We expect our adjusted tax rate to be approximately 22, 5% Dupree.

Speaker Change: Depreciation and amortization is expected to be approximately $530 million.

Todd M. Cello: And we expect the portion excluding step-up amortization from our 2012 change in control and subsequent acquisitions to be about $245 million. We anticipate net interest expense will be about $245 million for the full year, down over $20 million year over year, primarily due to our 2023 debt prepayments, recent refinancings, and lower SOFR. We expect to take an incremental roughly $200 million in one-time charges in 2024 related to our transformation program. Combined with $78 million of charges in the fourth quarter, we expect a total of roughly $280 million spent through 2024, compared to $355 to $375 million of total program costs, which are expected to be completed in 2025. We expect capital expenditures to be about 9% of revenue.

Speaker Change: And we expect the portion excluding step up amortization from our 2012 change in control and subsequent acquisitions to be about $245 million.

Speaker Change: We anticipate net interest expense will be about $245 million for the full year.

Speaker Change: Down over $20 million year over year, primarily due to our 2023 debt prepayments recent refinancings and lower sulfur.

Speaker Change: We expect to take an incremental roughly $200 million in one time charges in 2024 related to our transformation program.

Speaker Change: And bind with $78 million of charges in the fourth quarter, we expect a total of roughly $280 million spend through 2024 compared to $355 million to $375 million of total program costs.

Speaker Change: Which are expected to be completed in 2025.

Speaker Change: We expect capital expenditures to be about 9% of revenue.

Todd M. Cello: I want to wrap up with some additional detail about our expectations for adjusted EBITDA in 2024. The key driver of adjusted EBITDA growth is flow-through from higher revenue, inclusive of continued investment in the business. Based on the high end of our guidance, we expect to grow revenues by roughly $190 million and Adjusted EBITDA by $65 million. While we are adding absolute adjusted EBITDA dollars, the lower-than-typical incremental margin is due to a mix of revenue growth outside of core credit, as well as targeted investors, primarily to support the strong growth in our international segment.

Speaker Change: I want to wrap up with some additional detail about our expectations for adjusted EBITDA in 2024.

A key driver of adjusted EBIT growth is flow through from higher revenue inclusive of continued investment in the business.

Speaker Change: Based on the high end of our guidance, we expect to grow revenues by roughly $190 million and adjusted EBITDA by $65 million.

While we are adding absolute adjusted EBIT of $1 lower than typical incremental margin is due to mix of revenue growth outside of core credit.

Speaker Change: As well as targeted investments primarily to support the strong growth in our international segment.

Todd M. Cello: When lending activity picks up, we expect to see strong incremental margins. The second positive is savings from our transformation program, which we expect to deliver roughly $65 million in benefits, in line with our commitment in November. We expect the savings benefit to build throughout the year. We also expect $20 to $25 million of benefits from continued NuSTAR acquisition synergies as well as reduced SONTIC integration costs in Argus in 2024. Partially offsetting these positives is resetting our annual incentive compensation costs to target after a below-target payout in 2023, in addition to Annual Merit. Taken together, we expect a good year for adjusted EBIT growth with expected additional transformation savings still to come and further upside if we see any step up in credit volume. I'll now turn the call back to Chris, and final.

Speaker Change: When lending activity picks up we expect to see strong incremental margins.

Speaker Change: Second positive as savings from our transformation program, which we expect to deliver roughly $65 million in benefit.

Speaker Change: In line with our commitment in November.

We expect the savings benefit to build throughout the year.

Speaker Change: We also expect 20% to $25 million of benefit from continued new star acquisition synergies as well as reduced scientific in Rguest integration costs in 2024.

Speaker Change: Partially offsetting these positives is resetting our annual incentive compensation costs to target after a below target payout in 2023.

Speaker Change: In addition to annual Merit increases.

Speaker Change: Taken together, we expect a good year for adjusted EBIT growth with expected additional transformation savings still to come in further upside if we see any step up in credit volumes.

Speaker Change: I'll now turn the call back to Chris for some final comments. Thank you Todd.

Christopher A. Cartwright: To wrap up, we exceeded fourth quarter expectations, driven by stable lending and marketing conditions in the U.S. and robust growth from international markets. We expect a strong year in 2024, with mid-single-digit revenue growth and high single-digit adjusted diluted EPS. We're focused on three strategic priorities for the year to create value for TU, accelerating revenue and earnings growth, leveraging NewSTAR's product and technology capabilities further, and executing on our transformation initiative. Finally, on a personal note, as many of you know, Aaron Hoffman has decided to retire from TransUnion in March. Aaron has been instrumental in building out the investor relations function at TU and has been a valuable resource to our management team and to investors alike. We've been lucky to have him over these last eight years, and we wish him a happy retirement.

Christopher A. Cartwright: To wrap up we exceeded fourth quarter expectations, driven by stable lending and marketing conditions in the U S and robust growth from international.

Christopher A. Cartwright: We expect a strong year in 'twenty four with mid single digit revenue growth and high single digit adjusted diluted EPS growth.

Christopher A. Cartwright: We're focused on three strategic priorities for the year to create value for Teu accelerating revenue and earnings growth, leveraging new storage product and technology capabilities further and executing on our transformation initiatives.

Christopher A. Cartwright: Finally on a personal note as many of you know Aaron Hoffman has decided to retire from <unk> in March.

Christopher A. Cartwright: Aaron has been instrumental in building out the Investor relations function at Teu and has been a valuable resource to our management team into investors alike. We've been lucky to have them over these last eight years and we wish him a happy retirement.

Aaron H. Hoffman: We're also excited to have Greg Barty, who has been working with Aaron these last three years and covered TransUnion on the sell side before that, leading our investor relations going forward. Now, let me turn the time over to Aaron Hoffman. Thanks, Chris, and thanks for those kind words. I appreciate that very much. So that concludes the prepared remarks today. And for the Q&A, as always, we ask that you ask only one question so that we can include more participants. Operator, we can begin the Q&A now. Thank you for joining us.

Christopher A. Cartwright: We're also excited to have Greg Bardy, who has been working with Aaron. These last three years and cover Transunion on the sell side before that leading our investor relations going forward.

Christopher A. Cartwright: Now, let me turn the time over to Eric.

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

Eric: That does conclude the prepared remarks today and for the Q&A as always we ask that you ask only one question. So that we can include more participants and operator, we can now begin the Q&A now.

Speaker Change: Thank you.

Operator: Thank you. And ladies and gentlemen, as a reminder, if you would like to ask a question, please press star than one on your telephone keypad. If at any point your question has been answered, and you'd like to withdraw your question, please press stars 1 and 2.

Speaker Change: And gentlemen, as a reminder, if you would like to ask a question. Please press Star then one on your telephone keypad.

Speaker Change: If at any point your question has been addressed you'd like to withdraw your question. Please first star then two.

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

Speaker Change: And today's first question comes from Jeff Mueller with Baird. Please go ahead.

Operator: At this time, we will pause momentarily to assemble our roster. And today's first question comes from Jeff Mueller with Baird. Please go ahead. Yeah, thank you. This is Steven Policon for Jeff.

Stephen Polygon: Yes. Thank you this is Stephen polygon for Jeff.

Stephen Polygon: I guess.

Christopher A. Cartwright: I guess, what do you need to see, or what do your clients need to see in order for New Star Transactional Property to improve or bounce back? Yeah, good morning, Jeff. I think I'll start answering that. Thank you so much, Toby and Steven. Yes, on the Newstart front, the headwind to hitting our growth targets there beyond the single digits has been the decline in the transactional components of the portfolio. In a more difficult economic environment, marketing and advertising activity have pulled back. In addition to the volume slowdown, we've seen clients working to reduce data costs and relying more on first-party data. So both of those have been headwinds to our sales. We've compensated a bit for the cutback on the data side by selling more first-party record hygiene and identity resolution services. So really, what we need is, I think, a stable floor in those areas and perhaps some rebound in activity. You know, the guidance that we provide at NewSTAR is consistent with our overall guidance for this period. It's intended to be conservative yet constructive.

Stephen Polygon: What do you need to see or what are your clients, we need to see.

Stephen Polygon: Order for new Star transactional property, Chad can improve or bounce back.

Stephen Polygon: Yes, good morning, Jeff I think I'll start answering that.

Jeffrey P. Meuler: Hello, Steven.

Steven: Yes, so on the new storefront the headwind to hitting our growth targets. There beyond mid single digits has been a decline in the transactional components of the portfolio.

Steven: In a more difficult economic environment marketing and advertising activity has pulled back.

Steven: In addition to the volume slowdown we've seen in volumes.

Steven: Working to reduce data costs, right and relying more on first party data.

Steven: So both of those have been headwinds to our sand to our sales.

Steven: We've compensated a bit.

Steven: The cutback on the data side by selling more.

Steven: First party record hygiene and identity resolution services.

Speaker Change: What we need is I think.

Speaker Change: He will floor in those areas and perhaps some rebound in activity.

Speaker Change: The guidance that we provided new star is consistent with our overall guidance. This period. It is intended to be conservative you have constructive.

Christopher A. Cartwright: You know, we're pushing to exceed that guidance, and we hope we'll be able to do so over the course of the year. Thank you. And our next question today comes from Andrew Steinerman with J.P. Morgan. Please go ahead.

Speaker Change: We're pushing to exceed that guidance and and.

Speaker Change: And we hope we'll be able to do over the course of the year.

Speaker Change: Thank you and our next question today comes from Andrew Stott <unk> with Jpmorgan.

Christopher A. Cartwright: Hi Chris, could you jump into the Consumer Interactive Guide for 24, just maybe expand on what your expectations are more than just the numbers, and then inside the numbers, you know, what are you assuming in terms of indirect growth for Consumer Interactive and when do you expect direct to return to growth? Yeah. So obviously, Andrew, you know, we have been navigating a pivot in the consumer business over the past 18 months or so. Part of that is the direct business, which has been in decline, in part because of market demand shifting more toward freemium, but also some adjustments in our marketing practices. That area has been the most pronounced decliner.

Andrew Jeffrey: Go ahead hi.

Andrew Jeffrey: Chris could you jump into the consumer Interactive guide for 'twenty four just maybe.

Andrew Jeffrey: And what your expectations are more than just the numbers and then inside the numbers.

Andrew Jeffrey: What are you assuming in terms of indirect growth for consumer interactive and when do you expect direct to return to growth.

Andrew Jeffrey: Yes.

Christopher A. Cartwright: So obviously, Andrew we have been navigating a pivot in the consumer business.

Christopher A. Cartwright: Over the past 18 months or so.

Christopher A. Cartwright: Part of that is the direct business, which is in decline.

Christopher A. Cartwright: Part because of market demand shifting more towards the premium but also some adjustments in our marketing practices.

Christopher A. Cartwright: Aaron has been most pronounced decliner.

Christopher A. Cartwright: Where we're at now is we can see it getting to kind of a neutral state.

Christopher A. Cartwright: Where we're at now is we can see it getting to kind of a neutral state over the course of the year, sometime probably mid-second quarter, a combination of, you know, reaching an equilibrium on our marketing practices and enjoying the benefits of the annual price increase and the like. We expect Indirect to remain kind of a low single-digit grower over the course of the year. And, of course, breach protection and identity protection through our New Star acquisition.

Christopher A. Cartwright: Over the course of the year sometime probably mid second quarter a combination of.

Christopher A. Cartwright: Reaching an equilibrium of our marketing practices and enjoying the benefits of the annual price increase and the like.

Christopher A. Cartwright: We expect indirect to remain.

Christopher A. Cartwright: The low single digit grower over the course of the year.

Christopher A. Cartwright: And of course.

Christopher A. Cartwright: Breach protection and identity protection.

Christopher A. Cartwright: Our new store acquisition.

Christopher A. Cartwright: I'm sorry, their assignment acquisition is doing particularly well, grew over 20% last year, and had a really strong fourth quarter. Again, think of the consumer guide in total in the context of an overall conservative corporate guide, right, where we're steering more toward the high end of things. And look, I think it's important just to emphasize the big picture with regard to TU in the consumer space that, you know, we believe we will return this business to consistent, positive, organic growth. And we intend to compete across the full dimension of opportunities, whether that be identity protection, premium offerings, Thank you. Thank you. And our next question today comes from Faiza Alwy of Deutsche Bank. Please go ahead. Yes, hi, good morning.

Speaker Change: I'm sorry.

Speaker Change: She is doing particularly well.

Speaker Change: Grew over 20% last year had a really strong fourth quarter.

Speaker Change: Yes.

Speaker Change: Yeah.

Speaker Change: <unk>.

Speaker Change: <unk> guide in total in the context of our overall conservative.

Speaker Change: Our guide right, where we're steering more toward the high end of things.

Speaker Change: And look I think it's important just to emphasize in the big with regard to you in the consumer space.

Speaker Change: We believe we will return this business back to consistent positive organic growth and we intend to compete across a full dimension of opportunities whether that be.

Speaker Change: Any protection.

Speaker Change: <unk> offerings.

Speaker Change: Oh.

Speaker Change: And the like.

Speaker Change: Thank you and our next question comes from.

Deutsche Bank: With Deutsche Bank. Please go ahead.

Deutsche Bank: Hi, Good morning. Thank you I wanted to ask about U S financial services.

Christopher A. Cartwright: Thank you. I wanted to ask about US financial services and the growth that you are assuming there for 2024. Just give us some color around what we should think about, you know, auto card consumer lending. And, you know, and we didn't touch on our goods.

Deutsche Bank: And the growth that you are assuming there for 2020 or just give us some color around how we should think about auto card consumer lending.

Deutsche Bank: And we didn't touch on are good so curious what your expectations are there.

Christopher A. Cartwright: I am so curious what your expectations are there. Thanks. Sure. So, in U.S. financial services, I mean, look, as we know, there was a year of turmoil in 23. Not only were we dealing with the impact of inflation and much higher interest rates, which slowed demand, but we were also dealing with deposit outflows from certain segments in banking because of the instability that we experienced in the second quarter. That led to a material slowdown in September of last year. We modeled a continuation of that slowdown in the fourth quarter, in fact, a deterioration from that rate.

Deutsche Bank: Sure.

Deutsche Bank: In U S financial services, because we know it.

Deutsche Bank: There was a year of turmoil in 'twenty three.

Deutsche Bank: Not only will be dealing with.

Deutsche Bank: The impact of inflation and much higher interest range, which.

Deutsche Bank: Slowing demand.

But we're also dealing with.

Deutsche Bank: Deposit outflows from certain segments in banking because of the stability that we experienced in the second quarter that led to a material slowdown in September of last year.

Model.

Deutsche Bank: The integration of that slowdown in the fourth quarter in fact, a deterioration from that rate.

Christopher A. Cartwright: It turned out that, you know, that was a bit conservative, and we overperformed that, as you can see. Turning to 24, we think we're at or near a four in most of these services, but we're not assuming any improvement, right? So, we've kind of budgeted for steady volume across the different subcategories of financial services in the U.S. over the course of the year. Now, growth rates are going to improve in the second half because comparables are easier in the second half, and, of course, by the second half, we're getting the full benefit of price actions by both our own and third parties. But it's kind of a steady sailing forecast, if you will. We're not building in any uplift from the potential for interest rate reductions by the Fed.

Deutsche Bank: It turned out that that was a bit conservative and we own all of that as you can see.

Deutsche Bank: Turning to 'twenty four.

Deutsche Bank: We think we're at or near a floor.

Deutsche Bank: And most of these services, but we're not assuming.

Deutsche Bank: Any impact right.

Deutsche Bank: Kind of a budgeted for steady volume across.

Deutsche Bank: Within the sub categories of financial services in the U S over the course of the year.

Deutsche Bank: Now growth rates are going to improve in the second half becomes comparables are easier in the second half and of course by the second half we're getting.

Deutsche Bank: A full benefit of price actions are both our own and third parties.

Speaker Change: But it's kind of a steady failing forecast if you will.

Speaker Change: We're not building in any uplift from that.

Speaker Change: The potential for interest rate reductions by the fed.

Speaker Change: Thank you.

Christopher A. Cartwright: Thank you. And our next question today comes from Toni Kaplan with Morgan Stanley. Please go ahead.

Speaker Change: Question today comes from Toni Kaplan with Morgan Stanley. Please go ahead.

Christopher A. Cartwright: Terrific, thank you. I was hoping you could talk about your expectations for the FinTech environment through 24. I know you talked about some modest improvement in the batch that you're seeing, but still challenges in the UK. So just hoping to get a little more color on where you see FinTech in particular going from here. Thanks. Yeah, well, last year was an especially difficult one for FinTech, largely because of, you know, the increase in borrowing costs and the difficulty of getting, you know, funding. And I think there are also some concerns about the health of the consumer.

Toni Kaplan: Perfect. Thank you.

Toni Kaplan: I was hoping you could talk about your expectations for the Fintech environment through 'twenty four I know you talked about some modest improvement and batch that youre seeing but still challenges in the U K. So just hoping to get a little more color on where you see fintech in particular it go from here. Thanks.

Speaker Change: Yes, well last year was an especially difficult one for fintech largely because of the.

Speaker Change: The increase in borrowing costs.

Speaker Change: And the difficulty of getting funding and I think also some concerns about the health of the consumer.

Christopher A. Cartwright: From the third quarter forward, we saw a pretty material reduction here in the US; that segment probably fell roughly 20% last year. Again, our assumptions for 24 are more or less steady from the volume that we experienced in the fourth quarter. You know, we're encouraged by the stability that we're seeing, and we're encouraged by the uptick in some batch activity, which suggests that there will be more marketing activity in the space, but we haven't modeled too much of that optimism into the guide. And just to add to that, Toni, just to provide some sizing for FinTech, we talked about in 2022 that we did about $175 million last year in the U The reason for bringing that up is TransUnion has a very nice position with Fintechs that we've spoken about, and our team's done a great job building those relationships, but in the whole scheme of our revenue, it's less than 4% of the overall company's revenue, so just wanted to make certain that that was appropriately sized in response to your question.

Speaker Change: From the third quarter, four we felt pretty material reduction here in the U S that segment, probably fell roughly 20%.

Speaker Change: Last year.

Speaker Change: Again, our assumptions for 'twenty four.

Speaker Change: More or less steady from the volumes that we experienced in the fourth quarter.

Speaker Change: We are encouraged by the stability that we're seeing and we're encouraged by.

Speaker Change: Kick in some bache activity, which suggests that there will be more marketing activity in that space, but we haven't modeled too much about optimism into the guide.

Speaker Change: And just to add on to that Tony and provide some sizing.

Tony: You talked about.

Tony: In 2022, and about $175 million last last year.

Tony: We're talking about.

Tony: <unk>.

Tony: He bought it last year, we saw it come down to $140 million at 20%.

Tony: Yes.

Tony: Right.

We're bringing that out into Transunion had a very nice additional impacts that we've spoken about in funding.

Tony: Building those relationships and in the whole scheme.

Tony: Our revenue.

Tony: It's less than 4% the overall company's revenues. So just wanted to make certain that that was appropriate in science and in response to your question, we see tremendous opportunity for us as we believe that those customers are on a path.

Christopher A. Cartwright: We see tremendous opportunity, though, for us. We believe that those customers are on a path to growing again, and we're in the best position. Yeah, and you also mentioned the U.K. I mean, clearly, it was even more difficult.

Tony: Growing again.

Tony: Positioned to take advantage of that.

Tony: Also mentioned the U K I mean, clearly it was even more difficult.

Christopher A. Cartwright: You had a number of players that exited the market. That impacted our overall... said in the UK, you know, we're continuing. I think we'll get you through. Thank you. And our next question today comes from Kelsey Zhu with Autonomous Company. Please go ahead. Hi, good morning.

Tony: Okay, you had a number of players that exited the market.

Tony: <unk> of our overall.

Tony: Third in the U K, we're continuing.

Speaker Change: Hi, Brian.

Speaker Change: Okay.

Brian: Thank you and our next question today comes from <unk> Xu with autonomous.

Xu: Please go ahead.

Xu: Hi, good morning, Thanks for taking my question.

Todd M. Cello: Thanks for taking my... One of your peers has highlighted hat wins in their mortgage pre-qualification revenues in 2024 because soft polls are getting really expensive. I was wondering if you're expecting similar hat wins in that space in 2024 and how big pre-qualification revenues would be for mortgages for TransUnion. So, Kelsey, I think I follow the question. We had a little bit of a technical glitch here, but I think you're talking about mortgage headwinds due to the rollout of the single bureau prequalification that the FHFA has sponsored. We have modeled that into our assumptions, so it is baked into the guide that we have provided. We expect that it will cause some volume deterioration, but again, that's factored into – well, that's just one factor in our process of estimating where we think mortgage volumes will be. We look at all of the publicly available information.

Xu: One of your peers has highlighted headwinds to their mortgage prequalification capital from 2024, because they're.

Speaker Change: We're getting really good.

Xu: I was wondering if you're expecting similar to happen in that.

Xu: April 24.

Xu: And how big Prequalification of wrapping it would be.

Xu: For mortgage for Transunion.

Xu: <unk>.

Speaker Change: I think I follow the question, we had a little bit of a.

Speaker Change: Technical glitch here, but I think you are talking about mortgage headwinds due to.

Speaker Change: Rollout of the single Bureau Prequalification.

Speaker Change: <unk>.

Speaker Change: The FHFA has sponsored.

Speaker Change: We have modeled that into our assumptions.

Speaker Change: So it is baked into the guide that we provided we expect that it will cause some volume deterioration, but again, that's factored into what answers one factor in our process.

Speaker Change: Estimating where we think mortgage volumes will be and if we look at all of the publicly available information.

Todd M. Cello: We talk to our client advisory board. We've got the historical trajectory of this, and then we have made some adjustments for an industry-wide adoption of a single bureau pull at prequalification. Thank you. And our next question comes from Ashish Sabadra with RBC Capital Markets. Please go ahead.

Speaker Change: We talked to our client Advisory board.

Speaker Change: Got the historic recent historical trajectory of this and then we have made some adjustments for an industry wide adoption of <unk>.

Speaker Change: Europe OLED prequalification.

Speaker Change: Thank you and our next question comes from Ashish <unk> with RBC capital markets. Please go ahead.

Todd M. Cello: Thanks for taking my question. Just wanted to focus a little further on the emerging verticals. You mentioned the win in insurance and pretty good momentum there. But how should you think about the puts and takes?

ashish: Thanks for taking my question just wanted to focus down on drill down further on the emerging verticals you mentioned the win and insurance and pretty good momentum there, but how should we think about the puts and takes and for the rest of the emerging verticals can you talk about some puts and takes in 2004.

Todd M. Cello: And for the rest of the emerging verticals, can you talk about some puts and takes in 2021? term. Thank you. Thank you. Ashish, I'll take that one from you.

Speaker Change: Sure.

Speaker Change: Hi.

Speaker Change: I'll take I'll take that one so.

Todd M. Cello: So, you know, I think the heart of your question really comes down to the guidance that we provided for the emerging verticals and, you know, that. I think we can absolutely be both single digits. And really, the way to think about that, the way we look at it... We break down the emerging vertical because we have many different segments, as you alluded to already, insurance. We're expecting insurance to have a good year. The team has signed many new clients, so there are significant new business wins that will come to fruition in the year. As we spoke about in our prepared remarks, marketing is improving slowly, but we're so cautiously optimistic about that, shopping at TransUnion.... All in all, insurance, we're expecting a good year, probably in the mid-single digits of growth. Also, in the emerging verticals, we're expecting good growth in services and collections, as well as in our public sector. A lot of that growth is coming from Trusted Call Center, meaningful growth, and obviously that's Star Acquisition. So those three verticals of insurance services and collections and the public sector represent about 40% of revenue.

Speaker Change: At the heart of your question.

Speaker Change: That we provided.

Speaker Change: On the call.

Speaker Change: Does that work.

Speaker Change: Yes.

Speaker Change: Cingal.

Speaker Change: And we think about that.

Speaker Change: We look at it.

Speaker Change: We break emerging vertical.

Speaker Change: Okay.

Speaker Change: And you alluded to writing insurance.

Speaker Change: We're expecting insurance.

Speaker Change: Of the year.

Speaker Change: 24.

Speaker Change: Sign of.

Speaker Change: Any new clients, so theres significant new business wins that will come to fruition in the year.

Speaker Change: We spoke about in our prepared remarks marketing is improving slowly, but we are and so we're cautiously optimistic about that and shopping activity remains strong.

So all in all insurance, we're expecting good year, probably in the mid single digits.

Speaker Change: Also in the emerging verticals.

Speaker Change: Good growth in services and collections as well as in our public sector verticals and a lot of that growth.

Speaker Change: From constant call solutions are we've seen significant.

Speaker Change: Meaningful growth and obviously, that's a capability that game.

Speaker Change: On the acquisition so those three verticals of insurance services and collection public sector represent about 40% of the word.

Speaker Change: So that leaves the other 60%.

Todd M. Cello: So that leaves the other 60% we talked about. Secondary Growth Outlooks, Outlooks 3, and then the other 60%. You know. It's great to be here. Thank you. We are tenants here, as you're well aware. Calvary. Due to a consent order that was signed with the CFPB.

Speaker Change: Talk about.

Speaker Change: Secondly growth Atlas III so.

Speaker Change: The other 60%.

Speaker Change: Got it.

Speaker Change: Our tenant.

Speaker Change: It's nice.

Speaker Change: As youre well aware.

Speaker Change: Yes.

Speaker Change: Calibrate.

Speaker Change: Due to a second order of that.

Todd M. Cello: Thank you, up to the bottom. Sports. Thank you. But I think it's a little bit of a little bit of time. I'll give you more, maybe in the second half of the year.

Speaker Change: With the CFPB.

Speaker Change: Yeah.

Speaker Change: Yeah.

Speaker Change: Update our audits.

Providing.

Speaker Change: These reports.

Speaker Change: Space.

Todd M. Cello: Thank you. Thank you for joining us. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you, of the Communication Verticals, where a bunch of

Speaker Change: But I think it's a little bit of time.

Speaker Change: Yeah.

Speaker Change: More maybe in the second half of the year.

Speaker Change: You bet.

Speaker Change: Get back to the growth.

Speaker Change: Sam.

Speaker Change: Again.

Speaker Change: Yeah.

Speaker Change: It is.

Speaker Change: The communication vertical blinds, where.

Speaker Change: Yes.