Earnings call transcript: TransUnion Q2 2025 earnings beat expectations

TransUnion reported its Q2 2025 financial results, surpassing market expectations with an adjusted earnings per share (EPS) of $1.08, compared to the forecasted $0.99. This 9.09% positive surprise was accompanied by revenue of $1.14 billion, beating the anticipated $1.1 billion. Following the earnings release, TransUnion’s stock climbed 7.86% in pre-market trading, reaching $102, reflecting investor optimism. According to InvestingPro data, the company maintains impressive gross profit margins of 59.78% and currently trades at a P/E ratio of 52.17, suggesting a premium valuation relative to its peers.

Key Takeaways

• TransUnion’s Q2 2025 EPS of $1.08 exceeded expectations by 9.09%.
• Revenue reached $1.14 billion, surpassing forecasts by 3.64%.
• Stock price surged 7.86% in pre-market trading.
• Full-year 2025 guidance was raised, indicating confidence in ongoing growth.
• The company launched several new products and innovations.

Company Performance

TransUnion demonstrated robust performance in Q2 2025, with a 10% increase in consolidated revenue and an 8% rise in adjusted EBITDA, achieving a 35.7% margin. This growth was driven by strong demand across its product offerings and strategic innovations. The company’s continued expansion in markets like India and its leadership in Trusted Call Solutions further bolstered its competitive position. InvestingPro analysis reveals the company operates with a healthy current ratio of 2.05 and maintains a moderate debt level, with a debt-to-equity ratio of 1.18.

Financial Highlights

• Revenue: $1.14 billion, up 10% year-over-year.
• Earnings per share: $1.08, up 9% year-over-year.
• Adjusted EBITDA: Increased by 8% to a 35.7% margin.

Earnings vs. Forecast

TransUnion’s Q2 2025 results exceeded expectations with an EPS of $1.08 against a forecast of $0.99, marking a 9.09% surprise. Revenue also outperformed at $1.14 billion, beating the forecast by 3.64%. This positive performance reflects the company’s strategic initiatives and market strength.

Market Reaction

Following the earnings announcement, TransUnion’s stock experienced a significant increase, rising 7.86% in pre-market trading to $102. This movement reflects positive investor sentiment, as the stock approaches its 52-week high of $113.17, indicating confidence in the company’s future prospects. With a market capitalization of $19.13 billion and a beta of 1.63, TransUnion shows higher volatility than the broader market. Based on InvestingPro’s Fair Value analysis, the stock appears slightly overvalued at current levels.

Outlook & Guidance

TransUnion raised its full-year 2025 guidance, now expecting revenue between $4.432 billion and $4.472 billion and adjusted EPS in the range of $4.03 to $4.14. The company anticipates organic constant currency revenue growth of 6-7%, up from the previous 4.5-6%, supported by ongoing product innovations and market expansion.

Executive Commentary

CEO Chris Cartwright highlighted the company’s strong performance, stating, "We grew 8-9% organically in the first two quarters." He also emphasized the potential in the Indian market, noting, "India represents an enormous long-term opportunity with the potential to grow over 20% annually." Cartwright expressed confidence in the company’s conservative guidance, saying, "We are being prudently conservative with our guidance."

Risks and Challenges

• Potential lending slowdown could impact future growth.
• Market saturation in developed regions may limit expansion.
• Macroeconomic pressures could affect consumer spending and lending.
• Currency fluctuations might impact international revenue.
• Regulatory changes could pose challenges to operations.

Q&A

During the earnings call, analysts focused on the recovery in FinTech lending and the opportunities in VantageScore mortgage underwriting. The potential for growth in the Indian market and the impact of the transformation program were also discussed, providing insights into TransUnion’s strategic direction and future growth prospects.

Full transcript - TransUnion (TRU) Q2 2025:

Conference Operator: Good day and welcome to TransUnion’s Second Quarter twenty twenty five Earnings Conference Call. All participants will be in listen only mode. After today’s presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would like now to turn the conference over to Mr.

Greg Barty, Vice President of Investor Relations. Please go ahead.

Greg Barty, Vice President of Investor Relations, TransUnion: Good morning 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 eight ks that we filed this morning. Our earnings release and the accompanying slides include various schedules, which contain more detailed information about revenue, operating expense and other items as well as certain non GAAP disclosures and financial measures along with their corresponding reconciliations of these non GAAP financial measures to their most directly comparable GAAP measures. Today’s call will be recorded and a replay will be available on our website.

We will also be making statements during this call that are forward looking. These statements are based on current expectations and assumptions and are subject to risks and uncertainties. Actual results could differ materially from those described in the forward looking statements because of factors discussed in today’s earnings release, in the comments made during this conference call and in our most recent Form 10 ks, Forms 10 Q and other reports and filings with the SEC. We do not undertake any duty to update any forward looking statement. With that, let me turn it over to Chris.

Chris Cartwright, President and Chief Executive Officer, TransUnion: Thanks, Craig. Let me add my welcome and share our agenda for the call this morning. First, I’ll provide the highlights of our second quarter twenty twenty five results and an overview of market conditions. Second, I’ll discuss progress toward our 2025 strategic priorities including a spotlight on our fast growing Trusted Call Solutions business. Finally, Todd will detail our second quarter results and updated 2025 guidance.

In the second quarter, TransUnion exceeded all key financial guidance metrics. For a sixth straight quarter, we delivered high single digit organic revenue growth, highlighting our strong execution in a stable, but still subdued market and the benefits of our accelerating pace of innovation. Revenue grew 9% on an organic constant currency basis, well above our 3% to 5% guidance. Excluding mortgage, our growth of 6.5% also exceeded expectations. U.

S. Market segment delivered 10% growth in the quarter. Financial services grew 17% and growth excluding mortgage accelerated to 11%. Across all lending types, we continue to outperform overall market growth by driving new business wins across our solutions suites. Consumer lending and auto grew double digits and card and banking grew mid single digits.

We experienced robust activity from FinTech lenders supported by healthy funding and heightened consumer demand for debt consolidation products. Mortgage was up 29% compared to flat inquiries both modestly above expectations. Earlier this month, the FHFA announced it would allow lenders to use VantageScore four point zero for conforming mortgages and that the TriMerge credit report requirement will remain in effect. We believe these policies will provide choice for lenders and enhance safety and certainty within mortgage markets benefiting home buyers, lenders and tax payers over the long term. Emerging verticals grew 5%.

Insurance grew double digits driven by a gradual recovery in marketing and healthy consumer shopping activity in addition to new wins across our solutions. We also grew across our diversified verticals led by communications and tech, retail and e commerce. Consumer Interactive grew 2% organically driven by the successful launch of our freemium solution marking a key step in our turnaround strategy. International grew 6% on an organic constant currency basis. India’s growth accelerated to 8% as anticipated.

We experienced a modest pickup in consumer lending and delivered strong growth in our non consumer businesses. Within the remainder of the international portfolio, Canada and Africa were standouts each growing double digits. Supported by our strong financial results, our leverage ratio declined to 2.8 times. We believe we’re positioned to delever to 2.5 times before funding our planned Mexico acquisition, which we expect to close by the end of this year. We also opportunistically accelerated our share repurchases in the quarter.

Through mid July, we have repurchased $47,000,000 in shares. We expect that our financial results will further support disciplined capital deployment throughout the year. Now our second quarter results reflect a strong performance in stable, but still muted market conditions. U. S.

Credit volumes in the second quarter were slightly above expectations particularly in consumer lending. Activity in cards remained steady while auto and mortgage activity is below historical trends. Based on our over performance in the first half of the year, we’re increasing our twenty twenty five full year revenue and adjusted diluted earnings per share guidance. Even with this increase, we believe our updated guidance remains prudently conservative to accommodate ongoing macro uncertainties as we will detail later in the call. In The U.

S, consumers and lenders remain sound and resilient supporting stable lending activity. Consumers are benefiting from low unemployment, modest but positive real wage growth and manageable inflation. Consumer sentiment in June improved from low levels earlier in the year reflecting a better outlook for the economy inflation and personal finances. Major lenders reported solid second quarter earnings with strong profitability, adequate capital and good credit performance. Now in April, we noted that trade and fiscal policy proposals added uncertainty to employment levels, inflation, interest rates and economic growth.

The U. S. Has reached trade agreements with several countries since then and more expected soon. However, the recently passed U. S.

Fiscal package extends the twenty seventeen rate cuts, increases the deficit and raises the debt limit. This has raised concerns about higher inflation and interest rates, which could negatively impact economic and lending conditions. The ten year U. S. Treasury rate remains elevated, although below its mid January peak.

And we will continue to monitor the impact of these policy changes on rates consumers and our customers. In July, I attended the TransUnion Cibble Annual Credit Conference in India celebrating Cibble’s twenty fifth anniversary. The event drew over 2,500 clients including more than 100 CEOs from major Indian lenders and key Reserve Bank of India regulators. We discussed future innovations to increase financial inclusion and introduce new solutions and market insights. This event reinforced Civil’s strong reputation and the positive impact it has on the Indian economy.

Our India strategy reflects our vision to foster trust in global commerce between consumers and businesses. We recognize significant opportunities in India supported by our scale, well known brand, high quality data, innovative products and strong relationships with bankers and regulators alike. Our future innovation aims to expand credit access for underserved markets such as small and medium sized businesses, new to credit consumers and microfinance, all identified by India’s government as vital economic drivers. After the event, I’m even more confident that India represents an enormous long term growth opportunity for TransUnion with the potential to grow over 20% annually over the medium term. In the near term, lending in India is experiencing a gradual volume recovery due to manageable delinquency levels, lower interest rates and the return to market of non bank lenders who were sidelined by the Reserve Bank last year.

The RBI has reduced interest rates by 100 basis points thus far in 2025 and is balancing lending safety with economic growth. We anticipate our growth in India will accelerate later this year as lending volumes continue to recover resulting in nearly 10% organic constant currency revenue growth for the full year and with fourth quarter growth in the high teens. We also continue to transform the company by modernizing our technology, enhancing our global operating model and accelerating innovation across our product suites. I’ll detail our recent progress. In the quarter, we accelerated U.

S. Credit customer migrations and further enhanced the core capabilities of OneTrue, our global configurable cloud native platform. Our customer migrations are focused on minimizing conversion disruptions while delivering our targeted savings within the committed investment levels. To achieve this, we strengthened One True’s functionality to manage our most complex and customized batch and online workloads. We’re achieving notable performance and innovation improvements on the new platform, including over 50% faster processing, robust cybersecurity and compliance controls and rapid development of new scores, attributes and models.

We also migrated several key consumer indirect customers to our new global consumer technology platform. The scalable platform enables faster product releases, seamless multi region deployment and reduced operational complexity. To further enhance OneTrue’s capabilities, we have augmented its underlying identity graph with our comprehensive public records database. This integration enhances data fidelity and introduces more robust attributes related to addresses, phone numbers and emails. Our Identity Graph now encompasses a wide array of TU’s proprietary data assets, including traditional credit header information, public records, communication and device identifiers, streaming data and other unique data sources.

Together, these elements enable industry leading consumer identity resolution, improved data onboarding, more targeted marketing and optimized fraud prevention and risk management. During the quarter, we successfully transitioned over 20,000 specialized risk clients to the enhanced One True Identity Graph, resulting in significant performance gains for these customers. We also expanded adoption of our AI driven developer tool, One True Assist, which employs advanced language models to automate repetitive coding tasks, facilitate code translations and detect and address security vulnerabilities. One True Assist supports the entire One True software development life cycle and has contributed to 20% to 50% productivity increases for developers. Additionally, we recently launched OneTrue AI Studio, which provides low code and no code AI workflow solutions for broader non engineering use cases.

We’re improving our global operating model as well by strengthening product development practices and our leadership. In Q2, Brian Silver joined us as Head of Marketing Solutions under Mohammad Abdel Sadek bringing significant digital marketing experience. We continue to refine our approach to product management to better align resources, streamline decision making and accelerate new product iterations. These changes will improve commercial outcomes by integrating our geographic and vertical led go to market strength with enhanced product development expertise. Our technology stack and operating model are contributing to faster innovation and growth across our six global solutions families.

We’ve increased the pace of new product introductions while also completing technology modernization. Factor Trust customers can now use OneTrue with its improved processing times, expanded scores and attributes and more rapid model development. Factor Trust growth rates have reached double digits due to competitive wins and with a strong pipeline of new opportunities. In fraud, we launched new models using our materially enriched identity graph and our analytics and machine learning capabilities. Additionally, we developed a solution to identify consumers who dispute credit trade lines by falsely claiming to be fraud victims.

Early demand for this solution is strong, representing a cross sell opportunity into credit customers. Marketing Solutions reported stronger retention and increasing sales momentum, particularly within Audience and Identity products. Within U. S. Consumer Solutions, we rolled out a new freemium offering with updated web and app experiences, resulting in strong growth in the number of new free users.

We plan to further expand these capabilities in our offer inventory. In with Manivo, we integrated lenders underwriting criteria to personalize pre qualified offers through online publishers and improve consumer experience and ad conversion. We will continue to build this marketplace by adding new publishers and top tier lenders to the platform. Now I’ll conclude my remarks with a deeper dive into the innovation and growth of our communication solutions, particularly Trusted Call Solutions or TCS. We entered the communication solutions market through our NuStar acquisition, which leveraged its relationships with telco companies to build a suite of data driven authentication solutions.

Our communication solutions help make trust possible in the phone experience by authenticating and clarifying the purpose of phone calls. Our customers report better answer rates and higher consumer satisfaction when using this service. The use cases typically combine fraud mitigation and brand identification to improve consumer engagement. Now Communications Solutions overall has grown 10% plus per annum since 2022 and should achieve $320,000,000 in revenue in 2025. Trusted Call Solutions has grown from $50,000,000 in revenue in 2022 to an expected $150,000,000 this year.

Financial Services accounts for almost 30% of TCS revenues with the remaining 70% spread across our emerging verticals. The remainder of Communication Solutions includes legacy products such as landline caller ID and listings management. These products embed us with telco companies and provide the data necessary for new products such as TCS and are very profitable, although the revenue growth is flat to declining slightly. In sum, we believe Communication Solutions can deliver at least high single digit growth driven by the sizable market Trusted Calls. Now, I’ll detail how TCS works, why we’re the market leader and how we will build on our momentum.

Trusted Call Solutions enhances the phone channel closing the user experience gap of digital channels. As most businesses rely on phone calls for important communications and consumers prefer them for urgent matters, unanswered calls and robocalls remain major issues. Over 80% of outbound calls go unanswered and consumers receive 55,000,000,000 robocalls annually leading to $12,000,000,000 in fraud. Our solutions adds caller name, logo and call context to outbound calls. It authenticates inbound calls to block fraudsters and leads to better engagement, brand protection and financial results.

Customers across industries report improved contact and conversion rates. Now TCS integrates TransUnion into the mobile call ecosystem, establishing an essential framework that benefits telecommunications carriers, enterprises and end users. Enterprises serve as our primary clients. We authenticate and onboard their phone numbers and enriched call data into our comprehensive data management platform. Telecommunications carriers are our strategic partners.

When a call is initiated via a mobile network, the carriers access verified rich call data such as name, logo and contextual information from TransUnion to present on the recipient’s device. Enterprises compensate TransUnion for displaying authenticated information and we in turn provide royalties to the carriers. Consumers benefit from an enhanced and trustworthy calling experience enabling them to make informed decisions when responding to calls. LTCS is positioned at the forefront of the industry addressing an estimated opportunity exceeding $1,000,000,000 in The U. S.

Alone. We’ve identified several sustainable competitive advantages that underpin our success in this market. First, TCS covers 94% of U. S. Wireless consumers through our exclusive relationship with AT and T and strategic partnerships with First Orion and TNS.

This collaboration enabled the delivery of 5,000,000,000 authenticated branded calls across the top three carriers in 2024. Leveraging our broad phone coverage and scale, we partnered with AT and T this year to introduce branded call displays featuring call reasons and providing context to phone calls and improving consumer engagement. Our innovation roadmap includes upcoming releases such as omni channel capabilities and advanced fraud detection signals. Second, we steward expansive and authoritative data sets to rigorously verify enterprises and telephone details, which enable us to authenticate and enrich calls. Our robust industry relationships and integration with over 800 carriers enabled us to develop TCS.

Third, we possess extensive distribution channels through TransUnion that allow us to deploy TCS in numerous vertical markets. We see significant interest and strong sales across all sectors we cover including financial services, insurance, healthcare and the public sector. And finally, TCS integrates seamlessly with our market leading fraud solutions to safeguard against data breaches, account takeover attempts, phishing and other impersonation related threats. Collectively, TCS enhances TU’s long term growth prospects providing a pathway toward near $250,000,000 in revenue by 2028. As the market leader, we maintain robust integration with telecom companies and businesses positioning us to capitalize on a large market opportunity in The U.

S. Our strategy includes deeper penetration of our core verticals, scaling existing solutions and broadening the product portfolio. Furthermore, we believe that we can take this solution to many of our markets globally in the coming years. Recently, we launched a branded call display in Canada, developed in collaboration with TELUS, a leading Canadian telecommunications provider. And we have introduced initial solutions in Brazil and France and are evaluating additional opportunities in markets such as India.

We will continue to provide updates on our progress as we scale TCS in the coming quarters. And with that, I’ll hand it over to Todd.

Todd Cello, Executive Vice President and Chief Financial Officer, TransUnion: Thanks, Chris. And let me add my welcome to everyone. As Chris mentioned in the second quarter, we exceeded our guidance across all key financial metrics driven by broad based outperformance in our U. S. Market segment led by financial services.

Second quarter consolidated revenue increased 10% on a reported and 9% on an organic constant currency basis. The Monivo acquisition contributed 0.5% to growth. Most of Munevo’s revenue is recognized in The UK with the remaining U. S. Revenue recognized in Consumer Interactive.

The impact from foreign currency was immaterial. Our business grew 6.5% on an organic constant currency basis excluding mortgage from both the 2024 and 2025. Adjusted EBITDA increased 8%. Our adjusted EBITDA margin was 35.7%, ahead of our 34.8 to 35.3% guidance due to flow through on stronger revenue growth. Adjusted diluted earnings per share was $1.08.0.9 dollars ahead of the high end of our guidance and an increase of 9%.

Finally, the second quarter, we took $29,000,000 of one time charges related to our transformation program, dollars 5,000,000 for operating model optimization and $23,000,000 for technology transformation. To date, we have incurred $315,000,000 of planned one time transformation expenses over the course of the program and remain on track for $355,000,000 to $375,000,000 in one time expenses by the end of twenty twenty five. Looking at segment financial performance for the second quarter, U. S. Markets revenue was up 10% compared to the year ago quarter.

Adjusted EBITDA margin was 37.9%, down 110 basis points due to the timing shift of investments from the first quarter to the second quarter as we discussed in April. Financial Services revenue grew 17% or 11% excluding mortgage. Credit Card and Banking was up 5% against flattish online volumes. We saw good growth from alternative data sales and trusted call solutions as well as healthy batch activity. Consumer lending growth accelerated to 18%.

We experienced further strengthening in marketing and online volumes from FinTech and point of sale lenders. We also delivered strong factor trust growth. Auto grew 19% driven by pricing of our data and third party scores as well as good growth in our communications and marketing solutions. Volumes remained elevated in April likely due to a pull forward of demand ahead of tariffs, but normalized in May and June towards levels seen early in the year. For mortgage, revenue grew 29% despite flat inquiry volumes benefiting from third party score pricing and non tri bureau revenue.

Mortgage accounts for about 12% of TransUnion’s trailing twelve month revenue. Emerging verticals grew 5% led again by double digit growth in insurance, Tech, Retail and eCommerce, Telco and Tenant Employment all grew mid single digits. Media was flat and Public Sector and Services declined. We expect Media growth to improve in the second half as marketing wins convert to revenue and Public Sector to return to growth later in the year. In Insurance, we delivered another strong quarter supported by stable market conditions.

Marketing activity continues to recover as insurers benefit from improved rate adequacy especially in personal lines auto. Consumer shopping also remained active. We delivered broad based new business wins including in core credit and driving history as well as trusted call solutions and our modern marketing products. Turning to Consumer Interactive, revenue grew 2% on an organic constant currency basis. Both our direct and indirect channels grew in the quarter.

Excluding the impact from lapping a large breach remediation win in the third quarter twenty twenty four, we expect growth in the direct and indirect channels in the second half of the year. For my comments about international, all revenue growth comparisons will be in organic constant currency terms. For the total segment, revenue grew 6%. Adjusted EBITDA margin was 42.7%. Looking at the specifics for each region, India growth accelerated to 8% as anticipated and up from the 1% growth in the first quarter.

Commercial credit, direct to consumer and new products like our API marketplace drove growth offsetting still muted consumer credit volumes. Our UK business grew 5%. Batch and online activity remained healthy for our largest banking customers and we continue to ramp new business wins across our verticals. In Canada, we grew 10% in a muted market. We drove growth through sales of our innovative fraud, identity and consumer indirect solutions, share gains across financial services, auto and insurance and increased portfolio review batch activity.

We also benefited from some one time revenues in the quarter. In Latin America revenue grew 4% with modest growth in Colombia and Brazil and high single digit growth in our other Latin American countries. In Asia Pacific, we declined 8% as we lapped one time consulting revenue in the prior year. Philippines growth remains strong, while Hong Kong faces a softer economic backdrop. We expect Asia Pacific to return to growth in the second half of the year.

Finally, Africa increased 14% with broad based growth across financial services, retail and insurance. Turning to the balance sheet, we ended the quarter with $5,100,000,000 of debt and $688,000,000 of cash. Our leverage ratio at quarter end was 2.8 times. We have repurchased $47,000,000 in shares year to date through mid July in line with our balanced approach to capital deployment. We remain focused on delevering to under 2.5 times leverage ratio.

Throughout the remainder of the year, we plan to balance debt prepayment and share repurchases based on market conditions. We also plan to preserve capital ahead of our TransUnion to Mexico acquisition, which we expect will close by year end. Turning to guidance. As Chris mentioned, we are raising our guidance for the full year primarily to account for strong first half results as well as continued business momentum. Even with the guidance raise, we maintained a prudently conservative posture for the remainder of the year to account for ongoing market uncertainty.

We believe we can manage some level of U. S. Lending activity softening within our guidance range. Should current conditions persist, we would expect to deliver results at or above the high end of our guidance range. That brings us to our outlook for the third quarter.

We expect FX to be less than 05% headwind to revenue and adjusted EBITDA. We expect Munevo acquisition to add 1% to revenue. We expect revenue to be between $1,115,000,000 and $1,135,000,000 or up 2% to 4% on an organic constant currency basis. These growth rates include a 4% headwind from lapping the large breach remediation win in last year’s third quarter. Excluding the breach comparison, our organic constant currency growth guidance would be six to 8%.

Our revenue guidance includes approximately two points of tailwind from mortgage. In the third quarter, we expect mortgage inquiries to decline modestly. We expect adjusted EBITDA to be between $3.97 and $411,000,000 up 1% to 4%. We expect adjusted EBITDA margin of 35.6% to 36.2%, down 10 to 70 basis points. Our margin expectation for the third quarter is consistent with our results in the first half of the year as well as our expectation for the full year.

We expect our adjusted diluted earnings per share to be between $0.99 and $1.04 down 5% to flat. Turning to the full year, we anticipate FX to be less than 0.5% headwind to revenue and adjusted EBITDA and the Munivo acquisition to contribute 05% to revenue. We expect revenue of between $4,432,000,000 and $4,472,000,000 We expect organic constant currency revenue growth of 6% to 7%, an increase from our prior guidance of 4.5% to 6%. Excluding mortgage, we expect organic constant currency growth of 4% to 5%. These growth rates include a 1% headwind from lapping the large breach win from last year’s third quarter.

Specific to our segment organic constant currency assumptions, we expect U. S. Markets to grow mid single digit both including and excluding mortgage. We anticipate financial services to be up low double digits or high single digit excluding mortgage. We expect mortgage revenue to increase by over 20% against modest declines in mortgage inquiries.

We expect emerging verticals to be up mid single digit. We anticipate consumer interactive decreasing low single digit, but increasing low single digit when excluding the impact of last year’s large breach win. We anticipate international growing high single digit. Turning back to the total company outlook. We expect adjusted EBITDA to be between 1,580,000,000.00 and $1,610,000,000 up 5% to 7%, an increase from our prior guidance of 3% to 6%.

That would result in an adjusted EBITDA margin of 35.7% to 36%, down 30 basis points to flat. We anticipate adjusted diluted earnings per share to be $4.03 to $4.14 up 3% to 6% also an increase from prior guidance of flat to 4% growth. Our expected adjusted diluted earnings per share growth reflects strong underlying performance and is inclusive of a 400 basis point headwind from foreign exchange and a higher tax rate in 2025. We expect depreciation and amortization to be approximately $570,000,000 We expect the portion excluding step up amortization from our 2012 change in control and subsequent acquisitions to be about $285,000,000 as technology modernization initiatives go into production and start to depreciate. We now anticipate net interest expense will be about $200,000,000 for the full year.

We expect our adjusted tax rate to be approximately 26.5%. Capital expenditures are expected to be about 8% of revenue. We continue to expect to incur 100,000,000 to $120,000,000 in one time charges in 2025 related to the last year of our transformation program. Given those investments, we expect our free cash flow conversion as a percentage of adjusted net income to be 70% in 2025 before improving to 90% plus in 2026. In closing, we delivered strong results and are quickly approaching a period in 2026 and beyond that we believe we’ll see stronger free cash flow generation and a leverage ratio within our target range.

This will enable disciplined and shareholder friendly deployment of capital similar to our approach throughout the first half of the year. I will now turn the call back to Chris for final comments.

Chris Cartwright, President and Chief Executive Officer, TransUnion: Thanks, Todd. In summary, we delivered a robust second quarter surpassing our guidance across all key financial metrics and marking our sixth consecutive quarter of high single digit organic revenue growth. Based on our strong performance in the first half of the year and sustained business momentum, we’re raising our 2025 guidance, now anticipating 6% to 7% organic constant currency revenue growth. And we continue to make substantial progress toward our strategic priorities. Following several years of investment, our current focus is on execution and value creation.

Our growth playbook which has historically emphasized differentiated vertical market engagement and geographic expansion has driven our industry leading growth over the past decade. As a result of our transformation, we are equipped with an expanded suite of solutions for our customers. Product innovation is an increasingly essential component of our growth playbook complementing our established vertical and geographic strategies. We are confident that our strategic investments and our disciplined execution will further enhance our product offerings and customer experience positioning us for another phase of industry leading growth. And with that, let me turn over the time to Greg.

Greg Barty, Vice President of Investor Relations, TransUnion: That concludes our prepared remarks. For the Q and A, we ask that you each ask only one question so that we can include more participants. Operator, we can begin the Q and A.

Conference Operator: We will now begin the question and answer session. Our first question comes from Faiza Alwy from Deutsche Bank.

Greg Barty, Vice President of Investor Relations, TransUnion: Please

Faiza Alwy, Analyst, Deutsche Bank: go Hi, thank you. Good morning. Chris, you mentioned in your prepared remarks that across all lending types, you’re outperforming the overall market driven by new business wins. And I’m curious sort of is this more customer mix or is it related to some of the new technology and product innovation, or something else you’re doing? Just would love a little bit more color there.

Chris Cartwright, President and Chief Executive Officer, TransUnion: Yes. Sure, Faiza. Well, I would say it’s a combination of some of those elements. On the customer mix side, consumer lenders have come back strong in recent quarters as we expected. Funding is flowing again to the space and they’re addressing an attractive market opportunity to consolidate revolving card balances at lower rates.

It’s what they’re really good at. And as we know consumer lending, FinTech in particular was really bruised during the market slowdown in 2022 and 2023, but now they’re back and they’re back in force. And it’s going to benefit us disproportionately because we have very large share there. We are comfortably above two thirds of the market in terms of market share and they had a standout quarter and they’ve got good momentum. I would say, we’re also selling into these financial services subcomponents, whether it’s mortgage, consumer lending, card, auto, a broad array of products.

Remember, these are market segments for us. They’re not products. So, we’re selling credit and credit analytics, but we’re also selling trusted call solutions. We’re selling marketing solutions. In particular, in the auto vertical, we posted really great growth in the second quarter, less than half of that was the price benefit from the SCOR price increases and it was just a little bit from volume.

The rest of it is coming from the performance of our product suite in the auto segment. So I think it’s an important thing to mention there. But look, we’ve got good momentum in financial services as you can see from Q2 and the whole first half and that’s allowed us to raise the guide materially for the year, while still maintaining a very conservative posture.

Conference Operator: The next question comes from Andrew Steinerman of JPMorgan. Please go ahead.

Andrew Steinerman, Analyst, JPMorgan: Hi. Just two quick questions. One, I definitely noted the momentum at Factor Trust and other kind of alternative bureaus in the marketplace. Could you just give us a comment of why there’s good momentum right now to the alternative data bureaus? Is that tied to stronger key loan growth?

And then let me just give you my second question. About the Mexico acquisition, how is that asset performing now? And just remind us why it takes kind of a longer period of time to close, meaning longer than a traditional U. S. Acquisition?

Chris Cartwright, President and Chief Executive Officer, TransUnion: Yes. For sure, Andrew. Okay. So regarding alternative credit data, of which Factor Trust is a market leader, for us it’s really a story of re platforming and innovation and then relaunching Factor Trust. We acquired Factor Trust some years ago.

It’s a great data set with good coverage, but it was on an antiquated technology platform. And so we prioritized moving it to One True. In the process of re platforming it on One True, one, of course, we did prove out that we could handle credit at volume with real time reporting and the various complexities on the One True platform. But we also considerably innovated on the analytics side. We implemented a better identity spine underpinning the data.

We added a lot of data attributes. We enabled our TrueIQ analytics solution for rapid modeling. And as a result, we’re just winning more business with Factor Trust than we did previously. And we have a very robust pipeline. So I think the momentum in Factor Trust is going to continue.

Perhaps we’re getting some benefit selling it as an add on into some of these other segments. Consumer lenders are the FinTech guys do like this alternative data. Anybody with a subprime focus is also interested in the subprime data. And we posted some nice sales of Factor Trust in the auto vertical as well. Now in terms of the time for Mexico or just the performance, the asset continues to perform well.

It’s on plan. And we’re still on plan in terms of clearing the government review and regulatory hurdles to closing the acquisition. We are targeting and hoping to close the deal before the end of the year. And look, some of this just takes a bit of time, but the fact that it takes time shouldn’t raise any concerns. That’s just the operating standard in Mexico, but we’re getting a great asset at a really fair price, and we’re going to bring a ton of innovation to the Mexican market that I think is going to sustain and increase the growth rate for many years to come.

Conference Operator: Our next question comes from Jeff Moeller of Baird. Please go ahead.

Jeff Moeller, Analyst, Baird: Yes. Thank you. So on the CI freemium and marketplace rollout, it sounds like it’s a little bit staggered or there’s kind of like a beta period. So what are the most important initial learnings? And then what’s the timeline to more fully integrate capabilities and build out marketplace?

And then I guess finally, are you willing to share anything on what you now expect intermediate term for growth out of the Consumer Interactive business? Thank you.

Chris Cartwright, President and Chief Executive Officer, TransUnion: Yes, yes, for sure. So look, it was a solid quarter for the Consumer segment overall. The direct business and the indirect business both grew low single digits. As you know and everybody on the call knows, we’ve been investing heavily in this space for several years now to add the capabilities that you need to grow in this current environment. We’ve launched our new freemium solution that means new user interface, integrating subscription offerings and integrating a full complement of loan of consumer loan offers, as well as identity protection and breach remediation.

We exited the beta period in the first quarter. In the second quarter, we’ve been converting our core customer base and we’re probably plus 75% at this point. And we’re converting over the offer inventory to the new platform and that’s probably at 75% or 80% too. But right away you can see that it’s going to have a positive impact on the growth rates of the business, particularly on the direct side where we’ve been working hard to mitigate the decline. I think we’ve got that behind us now and our goal is to kind of stabilize this low single digit growth in the coming quarters as we start to optimize these different elements that we’ve got now offers, freemium, integrated offering of subscription freemium, breach, all of these things coming together, the interplay, we’re going to be optimizing our marketing, optimizing our customer flows and conversion, if you will, the pricing, all of this stuff.

And then look over time, we’re going to bring more and more lenders and offer types onto the platform. It won’t be so card focused. There’ll be a lot of different opportunities for consumers to engage with TransUnion in a freemium way and get the full range of consumer lending and insurance offers and other opportunities there. And in terms of the guide, look, right now, we’re just executing on a whole bunch of goodness, bringing it together and returning this $600,000,000 chunk of business to consistent growth. In the intermediate term, mid single digit growth.

And I think once we’re firing on all cylinders, we would expect to push even beyond mid single digits. So hopefully that clarifies.

Conference Operator: The next question comes from Toni Kaplan of Morgan Stanley. Please go ahead. Thank

Toni Kaplan, Analyst, Morgan Stanley: you. I was hoping to talk about the consumer lending environment. I think late last year and early this year, you had talked about it being a stable but muted environment. Now it seems like you’re seeing it’s a little bit better than expected and better than that. And when I look at U.

S. Financial Services, you grew double digit ex mortgage. So just it sounds like you’re still being a little bit cautious on how the environment plays out just with potential for deficits and inflation and that potentially impacting lending. But maybe just talk through where you like how much better is it now? Where do you think for the remainder of the year we sort of are in terms of market strength and into next year and just the puts and takes around all of that?

Thanks.

Chris Cartwright, President and Chief Executive Officer, TransUnion: Yes. We’ll give you some flavor there around financial services. So, yes, it’s stable, but muted. I think that’s a fair assessment, although perhaps a little bit less so than it has been in recent quarters. I mean, as you can see consumer lending is coming back and I’ve already talked about that opportunity.

Card is still a more tempered environment, kind of flattish online volumes. And we are selling in alternative data and trusted call solutions into cards. The big banks all reported over the past couple of weeks and their commentary on card was a bit more optimistic, I think than we’ve seen. And we’re starting to see some nice positive batch activity in card, which means card lenders are moving more toward the front foot, if you will, which is good. But it’s far short of saying happy days are here again.

Auto, I talked about the volumes are still net positive a bit. A lot of that is the pull forward because of tariff fears, but we’re selling a lot of products into the auto vertical, which is great in driving our revenue growth. And look mortgage is bouncing along what I think is a bottom. This is kind of like industry existential volume levels. The tenure rates remain elevated and they’re still, I don’t know, kind of neutral in terms of whether they’re going to go up or whether they’re going to go down.

We’re going to have to see how that plays out. And so I don’t expect a big refinance boom to happen anytime soon. And asset affordability is still a challenge because of the supply side of the housing equation. But what it really shows is one, as an industry we’re trading on rather tempered volume levels because of all of the rate increases that happened in the 2022, early twenty twenty three time period as we’ve said. And so if you get just a little perk up in volume activity, you get nice growth rates.

It also speaks to the portfolio diversification that we’ve achieved. Again, we talk about consumer lending or card or auto, these are market segments. We’re not just selling credit products. We’re selling analytics. We’re selling alternative data, marketing fraud, phone solutions, right.

And the breadth of the offering is appealing and we’re putting good points on the board.

Conference Operator: The next question comes from Manav Patnaik of Barclays. Please go ahead.

Manav Patnaik, Analyst, Barclays: Thank you. Yes, I was just hoping for maybe a quick update on your FinTech exposure, how that’s performing, some of this positive business momentum they’re talking about, how much of that is from that customer category?

Chris Cartwright, President and Chief Executive Officer, TransUnion: Sure. So Manav, I’ve touched a couple of times on consumer lending. And while the category is broader than just FinTech, FinTechs are an important part of that. And as you can see from the results of the larger players, they’re doing much better. In fact, they’ve recovered.

The stability that we see in the market environment even at an elevated interest rate, allows funding to flow back into the market and that takes care of the supply side of things. The demand side is good because during the COVID era when credit scores artificially were inflated, a lot of cards were issued to a lot of consumers that might not have qualified for them previously and they took advantage of that and they levered up and they’re revolving those balances and that creates a great demand side opportunity for loan consolidation. So we’re definitely seeing a pickup in FinTech within consumer lending. But look, I just want to emphasize, it’s more than just consumer lending. The growth is great.

We expect it to continue, but we’re really doing solid performance across all of the financial services subcategories.

Conference Operator: Our next question comes from Ashish Sabadra of RBC Capital Markets. Please go ahead. Apologies, Ashish, I seem to have lost your line. We will be going with the next question and answer, Scott Wirtzl from Wolfe Research. Please go ahead.

Chris Cartwright, President and Chief Executive Officer, TransUnion: Hey, good morning guys.

Scott Wirtzl, Analyst, Wolfe Research: Thank you for taking my question. I just wanted to touch on the mortgage side and specifically on the prequal environment. I’m just wondering if you could speak to what you’re seeing in the market from general shopping activity to also the competitive dynamics in that space? Thanks.

Todd Cello, Executive Vice President and Chief Financial Officer, TransUnion: Hey, Scott. Good morning. Thanks for the question. I’ll jump in here with that. As far as mortgage is concerned, I think what we’ve been pleased with the performance that we’ve seen to date.

In general, through the first half inquiries have been in line. And as a reminder, when we talk about our inquiries, we’re talking about pre qualification as well as tri merge. So in the second quarter in particular, we were roughly flat. I mean this goes to what Chris just said in a previous response that there is we believe we’re at a bottom here and that there should be upside in the space. The revenue that we saw did outperform specifically to your question due to pre qualification.

We have seen good traction with our customers in that space especially after the change last year with the early access program. So we’ve been able to maintain our position if not even gain on what we have there. But in mortgage, we’ve outside of just pricing that we all know about and what drives the majority of the 29% revenue increase that we saw. We’ve also had some success selling other parts of our product portfolio such as batch marketing as well as trusted call solutions which we obviously covered in-depth on the call here today. So as we look to go forward into the second half of the year, I mean, all intents and purposes, we’re pretty much holding to the guidance that we’ve been providing thus far.

So that will call for the second half for inquiries to be down modestly and then for the full year also be down modestly as well too.

Conference Operator: All right. Once again, I will introduce Ashish Sabadra of RBC Capital Markets as our next question asker. Please go ahead.

Greg Barty, Vice President of Investor Relations, TransUnion0: Thanks for taking my question. I just wanted to go back to India. Obviously, we saw some pretty material acceleration in India. From 1Q to 2Q, you’ve talked about 20% plus growth in the over the midterm. I was just wondering if you could provide some color about the second half of the year, how should we think about the puts and takes there?

Thank you.

Chris Cartwright, President and Chief Executive Officer, TransUnion: Yes. I just got back from a week in India. It was very exciting, invigorating in fact. First, it’s great to see the business pick up materially as it did increasing from 1% to 8% organic. I feel like consumer lending momentum is returning in that market as we expected.

Now that the posture of the Reserve Bank is pivoted to balancing growth as well as safety and soundness. The team there is still confident that for the full year we can hit a 10% growth rate. And that means by the fourth quarter, we should be back to high teens organic growth. And then that sets us up to a return to probably low 20% kind of compounding and potentially better. As I mentioned, I was over there because we were celebrating the twenty fifth anniversary of our bureau over there.

It’s called Cibill. And I interacted with just a ton of CEOs and a ton of senior regulators. And they confirmed that because of the actions of the RBI, they expect consumer lending to return full force over the next four quarters. And so that’s in addition to this improvement in volume that translated into 8% growth for us in the second quarter. And look, the reasons are the RBIs cut rates by 100 bps already, very focused on stimulating economic growth.

Inflation is lower in India than it has been in quite a number of years. That’s encouraging too. So that’s part of the pro growth stance. The RBI has also indicated that they’re comfortable with deposit ratio in consumer lending currently and with the lending practices of certain key non bank financial players who were sidelined over much of the past six quarters, but have now come back into the market and are beginning to resume lending. And look delinquencies overall are holding up nicely.

They’re manageable. They’re within historical standards. So we’re really setting up for the recovery in consumer lending in India that we expected. It took about six quarters for India to slow down to the bottom in Q1. It will probably take about six quarters until they are fully back rolling along and we’re two quarters in.

But look, India represents an enormous long term opportunity. What’s exciting about being over there is regulators and lenders, they really appreciate the value of credit reporting agencies and having a foundation of objective and quantitative data to base their lending practices on. They’ve only had a functioning score in that market for about twenty years. And these CEOs can tell you what it was like lending to consumers previously, which is they were very conservative, they were very cautious. And they recognize that in working with us over this period, they’ve been able to bring literally hundreds of millions of Indian consumers into mainstream consumer finance.

So financial inclusion has been great that’s helped drive their economic growth. And in addition to all the secular tailwinds of great demographics, further financial penetration potential, the continuing digitalization of commerce there and urbanization trends, there’s a ton of growth opportunity. And we’re maintaining our market share in the low 70s, which is great. We have a data quality advantage. And I think it sets us up for at least 20% compounding over the longer term.

It’s also a diversified portfolio with all this growth potential in consumer, consumer is 60% of our revenues today. And there’s a lot of opportunity for innovation there in microfinance, agrolending, lending to small and medium businesses. Plus we’re setting up to bring marketing and fraud solutions to India on One True. And we just launched the TrueIQ analytics platform there and completed our first innovation lab. And there’s an enormous appetite for more analytics in the Indian market.

We partnered with this customer, we earned several $100,000 worth of consulting fees. Now we’ve got their data business for the long term and there’s great potential. And I guess the last thing I would say is look, I had the privilege of meeting with the Governor of the Reserve Bank of India, while I was there, my team and I, and really their focus is all about how they can bring more of the Indian population into the mainstream lending economy. While they’re pleased that there are now hundreds of millions of folks participating in that, there are still hundreds of millions of people particularly in rural areas that want access to capital on more favorable terms. And they want to understand how they can leverage all of this alternative data that they’ve created with their federal registry for wealth, for real estate, for the data that’s flowing through their universal payment interface.

And we’re positioned to help them think through the opportunity and partner on the execution. So India is indeed a very bright growth opportunity for us and we’re fortunate to have it.

Conference Operator: The next question comes from Kelsey Xu of Autonomous. Please go ahead.

Greg Barty, Vice President of Investor Relations, TransUnion1: Hi, good morning. Thanks for taking my question. With the recent announcement from the FHFA in terms of validating the usage of Vantage four point zero in mortgage underwriting. I was just wondering how you really think about the strategy to gain share for VantageScore not just in mortgage, but also in non mortgage verticals? Thanks a lot.

Chris Cartwright, President and Chief Executive Officer, TransUnion: Yes. Fair enough, Kelsey. So look, first I would just say that, we appreciate and we support the clarification around policy that the FHFA has made recently with their pronouncements around the mortgage tri merge and score competition. We think they’re the right decisions for consumers, for the GSEs and for just the safety and soundness of the mortgage economy overall. And basically they’re just founded on the principle that more data, particularly when the data is accurate, curated and predictive will result outcomes across the board.

And look that was our positioning all along on the mortgage tri merge, right. The bureaus have differences in their data and a mortgage decision is enormously important for the typical American consumer. It’s not only a quality of life issue, it’s one of the best wealth building opportunities and we should bring to bear all of the accurate curated data that’s available to make the best possible decision for behalf of that consumer as a borrower, but also on the behalf of all those consumers who are also taxpayers and ultimately bear the risks of the GSE. So maintaining the tri merge makes ton of sense. Regarding scores and score competition, clearly we think it’s time to modernize scoring.

The current score that has been in effect since 2004 can be improved and it also relies on point in time credit data, right. And for over a decade now, the entirety of the consumer lending industry has been pivoting to trended credit data. Now we led that with the introduction of our credit vision, trended credit data in The U. S. In 2012.

But all of the bureaus have trended credit data. All of the clients across all lending categories are using trended credit data and it’s so much more predictive and effective that all the clients pay a material price premium to use it. So for the purpose of evaluating whether a mortgage application qualifies as conforming or not for the GSEs, by all means, let’s pivot to credit scores that are based on trended data and let’s encourage competition. The competition leads to innovation, it leads to sharpening the pencil on price. And so we’re very supportive of the policy decisions.

Now look, with any major policy pivot like this, it’s going to take some time until all of the operational nuances are ironed out. The regulators are working hard on that now. And look, are standing at the ready along with Vantage to complete whatever analytics or comparisons that they want between the various score that are out there in the market. And look, we hope that the GSEs will pursue that. We know that they’re interested and we know that we’re willing.

And we’ll just have to see how this plays out because it is a complex industry and a complex situation. But I’m confident that the right policies are in place for the right reasons and that ultimately it’s going to benefit the overall mortgage economy.

Conference Operator: Our final question this morning comes from Jason Haas of Wells Fargo. Please go ahead.

Greg Barty, Vice President of Investor Relations, TransUnion2: Hey, good morning and thanks for taking my question. I wanted to follow-up on some of the figures that you’ve given around the investment you expected that benefits from the cost savings program. So you’ve called out 100,000,000 to 120,000,000 of investments this year. Can I confirm that next year, the expectation is that, that goes to zero? And then alongside that, the expected benefit is 120,000,000 to $140,000,000 of OpEx savings.

Are you able to give me a sense for how much is will be incremental for next year? So from yes, so how much versus this year? And then yes, that will be it. Thank you.

Todd Cello, Executive Vice President and Chief Financial Officer, TransUnion: Hey, Jason, this is Todd. I’ll take that question. So the answer to the first part of your question is as it pertains to the investment, you’re referring to the one time cost for both the optimization of our org model as well as our technology transformation. We committed to a spend of up to $375,000,000 We are on track to hit that number and be in probably not even exceed it. We’ll be right around it.

And the expectation is that it’s going to stop at the 2025 as we committed to. The benefits from that program as we shift into 2026, what we’re focused on is the free cash flow benefit. And if you remember when we announced the transformation program in November, we committed to a $200,000,000 free cash flow benefit going forward in 2026 and we have really good line of sight to that. As a reminder on the operating expense savings from the program, we achieved a significant portion of that in 2024. It was about $85,000,000 The remainder of those cost saves are going to largely come in 2026 because in 2025, we always planned to complete our tech transformation work and that’s what we’re in the midst of doing right now.

Last component of this is capital expenditures. We are running at about 8% of our revenue which has been historically where TransUnion has ran at. The commitment for 2026 and beyond is that capital expenditures will drop down to 6% of our revenues. And a lot of that just pertains to moving our computing environment to a cloud where the a cloud based environment where the expense shows up in the P and L as opposed to being capitalized. So the net net of all of this is the free cash flow conversion.

This significant progress in improving the free cash flow conversion to 70%. And what’s most important with those free cash flow savings that I already talked about in 2026, we are committing to 90% plus on the free cash flow conversion. Yes.

Chris Cartwright, President and Chief Executive Officer, TransUnion: And so look, the net of it is the program is on track. We are very confident that we’re going to deliver the savings that we articulated and that we’re not going to spend more than the investment that we articulated and it’s going to happen within the timeframe that we targeted. And so that’s great and that’s all the kind of financial savings aspect of it. But again, this modernization is also leading to a real acceleration in our innovation. And that’s why in my comments I talked about the retooling of FactorTrust and how we’re getting great commercial value out of that.

The launch of our TrueIQ analytics in multiple markets around the world including data enrichment, innovation in fraud, innovation in our identity graph. This is all being enabled by this one true platform that we’re creating and we’re going to get tremendous leverage about it. And look, I’d be remiss if we ended the call, if we didn’t just reinforce that we have put forth improved guidance for 2025 and we firmly believe that it is conservative guidance. We grew 89% organically in the first two quarters. And if you do the math, which I’m sure all of you smart analysts have, our guide still assumes that we are decelerating in the third quarter and particularly in the fourth quarter.

And the reason we’re doing that is because we’re being prudently conservative. We want to have guidance that while elevated would still allow us to support and offset a slowdown in lending that may or may not arise. What I do want to be clear is that this slowdown is not reflected in our current business momentum, right. We’re almost done with July. July is a continuation of the strength that we saw in the second quarter.

And unless there’s a slowdown in lending or a slowdown in the economy generally, we would expect to exceed the high end of the guidance that we’ve provided today. And that’s true not only on revenue, but EBITDA and all the different financial metrics. So I just want to be clear on that before we end the call.

Greg Barty, Vice President of Investor Relations, TransUnion: Perfect. That’s a good place to end. Thanks for all your questions today and have a great rest of the day.

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