TransUnion Q1 FY2025 earnings call

• Highlights of Q1: Exceeded financial metrics with 8% organic constant currency revenue growth, double-digit adjusted diluted EPS growth. US Market grew 9%, Financial Services 15% (excluding mortgage 9%).
• Transformation Progress: Refining global operating model with additions like Tiffany Chambers as COO and Mohammad Abdel Sadek as Chief Global Solutions Officer. Modernizing technology to a cloud-based platform, migrating US Credit customers to OneTrue and launching OneTrue Assist. Accelerating innovation across solutions, including reinvigorating Consumer Interactive with freemium offering, acquiring Menevo, and strong demand for various analytics and solution suites.

In the first quarter, TransUnion's US Markets revenue was up 9%. Financial Services revenue grew 15% (9% excluding mortgage). Consumer lending and auto grew double digits, card and banking mid-single digits. Mortgage revenue was up 27% but inquiries were down ~10%. Emerging verticals grew 6%, led by double-digit growth in insurance. Consumer Interactive declined 1%. Internationally, total revenue grew 6% on a constant currency basis. India grew 1% but is expected to reaccelerate. The UK grew 9%, Canada 7%, Latin America 7%, Asia Pacific 8% (modestly negative in Q2), and Africa 10%. Mortgage accounts for about 11% of TransUnion's trailing twelve-month revenue.

Maintained organic growth assumptions for 2025. Q2 revenue guidance: $1.076 - $1.095B, up 3%-5% organic constant currency. Full-year revenue: $4.358 - $4.417B, organic constant currency growth 4.5%-6% (excluding mortgage 2.5%-4%). Adjusted EBITDA: $1.549B - $1.590B, up 3%-6%. Adjusted diluted EPS: $3.93 - $4.08.

Macro uncertainties like tariffs, trade, fiscal policy impacting employment, inflation, interest rates, and global growth. Elevated US Treasury rates and Fed's cautious monetary policy pose risks to lending volumes and consumer sentiment.

Q: Jeff Meuler asked about confidence in reacceleration in India.

A: Chris Cartwright responded that it's due to RBI pivot, new analytic solutions, and improving consumer lending activity, expecting reacceleration quarter by quarter.

Q: Andrew Steinerman inquired about free cash flow conversion and US Markets financial services trend.

A: Todd Cello said free cash flow conversion is expected to be ~70% in 2025, and Chris Cartwright discussed financial services trends including consumer lending, card/banking, and auto performance.

Q: Toni Kaplan asked about resiliency in emerging verticals.

A: Chris Cartwright detailed resiliency in various emerging verticals like insurance, tenant/employment, telecommunications, etc., noting their performance in different economic scenarios.

Q: Jason Haas asked about mortgage revenue moderation.

A: Chris Cartwright explained mortgage revenue growth vs volume decline and continuation of trends.

Q: Ashish Sabadra asked about pull forward in other segments.

A: Chris Cartwright talked about consumer lending and fintech rebound as a result of debt consolidation opportunities.

Q: Andrew Nicholas asked about OneTrue migration and expense savings.

A: Chris Cartwright provided progress on OneTrue migration and outlook for expense savings.

Q: Manav Patnaik asked about bank mergers and True Work acquisition.

A: Chris Cartwright discussed relationships with banks and True Work acquisition details