TransUnion at RBC Conference: Strategic Focus Amid Challenges

On Tuesday, March 4, 2025, TransUnion (NYSE: TRU) presented at the RBC Capital Markets Global Financial Institutions Conference 2025. The company outlined its strategic direction, highlighting both opportunities and challenges. Positive consumer trends were noted, yet inflationary pressures on lower-income groups remain a concern. The company shared its revenue guidance, reflecting cautious optimism for the year ahead.

Key Takeaways

• TransUnion projects 2025 revenue growth between 4.5% and 6% on an organic constant currency basis.
• The company emphasizes its competitive edge through product innovation and the One True platform.
• Double-digit growth in the insurance vertical is driven by increased consumer activity.
• Regulatory challenges in India are expected to ease, with growth anticipated to reaccelerate later in 2025.
• The transformation program is on track to deliver cost savings in 2026, enhancing margins.

Financial Results

• 2025 Revenue Guidance:

- Projected growth of 4.5% to 6% on an organic constant currency basis.

- The guidance accounts for potential market downturns.

• Neustar Performance:

- Historical growth at a mid-single-digit rate.

- Future growth expected to reach high-single to low-double digits.

• Consumer Interactive Business:

- Maintains strong profitability with adjusted EBITDA margins between 40% and 50%.

• Sontiq Acquisition:

- Revenue increased from $95 million in 2022 to $165 million recently.

- Adjusted EBITDA margin improved by 90 basis points to 36% in 2024.

Operational Updates

• Mortgage Market:

- Impacted by Federal Reserve rate cuts and rising treasury yields.

- Fannie and Freddie’s pre-qualification changes have minimal market impact.

• Product Innovation:

- Replatforming fraud and marketing products on the One True platform.

- Launch of trusted call solutions contributing to growth.

• Insurance Vertical:

- Experiencing double-digit growth from consumer activity and marketing.

• Neustar Integration:

- Integrated products align with TransUnion’s core operations.

• Credit Sesame Partnership:

- Aims to enhance direct-to-consumer offerings with a freemium model.

• India Business:

- Regulatory restrictions affecting lending; growth expected to improve later in 2025.

• Canada Business:

- Sustains high-single-digit growth despite economic challenges.

• Transformation Program:

- Expected to yield significant cost savings in 2026.

Future Outlook

• 2025 Revenue Guidance:

- Anticipated organic constant currency growth of 4.5% to 6%.

• Emerging Verticals:

- Marketing expected to drive growth in media sectors.

- New business wins projected in the latter half of 2025.

• Neustar:

- Targeting high-single to low-double-digit growth.

• India:

- Modest growth in early 2025, with acceleration expected by year-end.

• Margins:

- Significant cost savings anticipated in 2026.

Q&A Highlights

• Mortgage Market Inquiries:

- Discussed the impact of interest rate changes on market activities.

• Competitive Positioning:

- TransUnion’s outperformance attributed to conservative guidance and execution.

• Emerging Verticals:

- Strong growth noted in insurance and marketing sectors.

• India Regulatory Issues:

- Restrictions by the Reserve Bank of India impacting lending.

• Canada Tariffs:

- No immediate impact observed from recent tariff announcements.

• Margin Outlook:

- Factors influencing 2025 margins and cost reduction strategies for 2026 discussed.

For a detailed understanding of TransUnion’s strategic insights and financial outlook, refer to the full transcript below.

Full transcript - RBC Capital Markets Global Financial Institutions Conference 2025:

Dan, TransUnion: There’s a lot of pressure, you know, on the mortgage market. Positively though, what we’re seeing, our consumers are, they have they’re paying their obligations on mortgages and, you know, the delinquency rates are are very low. So that, you know, that trend continues on. We look at our credit card and our banking customers. That group of customers also has been relatively stable, as well.

Impacted in 2023 by the deposit dislocation that happened in the aftermath of the Silicon Valley bank collapse, that has stabilized and we’ve seen the small, medium sized, you know, banks in essence, you know, be stable. And also important from the consumer side is we’re seeing, delinquencies, you know, modestly, you know, tick down. So the consumer’s, you know, living up to, you know, their obligations there. Consumer lending, this is where a lot of our fintech customers are at. We’ve seen that, get incrementally better as we exited 2024 and we get into, 2025.

Several of the larger fintechs, when they released their earnings, they had overall positive commentary and good results. And, you know, we’re seeing that. But remember, we serve the broader, you know, ecosystem there on the on the consumer lending side. But we’re encouraged by the marketing activity as well as the level of originations, you know, that are happening there. And then the last line of business is our auto, LOB.

And in auto, what we’re seeing is good new sales, new car sales, but there’s an extraordinary amount of shortage on the used car market that’s having an impact overall. So origination volumes are actually lower in auto than they were pre pandemic. But consumers are living up to their obligations and, you know, in essence, paying their bills, delinquencies are in a historical, you know, range. So when we think about, the just the overall health of our customers as well as, consumers, from a customer perspective, you know, what we’re looking for is that they have a good source of funding, whether that’s deposits or their ability to be able to get into the capital markets. And to this point, we haven’t really seen anything that’s been, you know, disruptive.

We also look at, you know, are they taking charge offs or any loan loss reserves and, you know, with the last earning cycle, that seemed to be, you know, modest, you know, at best. So that’s encouraging. When we look at things from the consumer side, the real driver on the consumers is employment. And unemployment, continues to be low as well as real wage growth is another indicator. And that continues, you know, to be, overall good.

And what that’s translating into is delinquency rates, for the consumers. As I already just talked through with each of the lines of business, they’re basically in line with, historical norms, you know, for the business. So we’re not really seeing anything, that would indicate, stress. If anywhere where there’s stress in the system, it’s with the lower income consumers where inflation has taken a bigger bite, you know, out of their, out of their incomes. So we’re seeing an overall, you know, healthy consumer.

As we think about, you know, the the news with, the announcement of tariffs, We need to see, you know, how things, you know, play out. You know, from the consumer perspective, if prices are passed through, what happens to their capacity to buy and then their willingness to be able to, to want to get into, a credit product. Right? So you need to understand the impact there. And then just from a business perspective, it’s really about understanding the what they’re gonna do with the higher input costs, with the tariff now, right, and how they manage their costs.

So those are the things that we’re we’re looking at, right now. Needless to say, the situation is is fluid. So in recognition of that, our guidance, that we put out for 2025, I mean, many of, the issues that we’re we’re hitting hit with right now, we knew that there was something that was coming. So we are guiding 2025 revenue to be between 4.56% on an organic constant currency basis. The 6% at the high end, think of that as more of the same, the continuation of the trends that we’ve experienced from late twenty twenty three throughout 2024.

The low end of the guidance is where we’ve modeled in a downside, you know, scenario. So for potential deterioration, on the factors that we just, you know, just discussed. So, you know, with that, you know, that that’s what we’re seeing. From a regulatory standpoint, you know, our regulator is the our primary regulator is the Consumer Financial Protection Bureau or the CFPB. Obviously, well publicized that, you know, they’re, you know, they’re pretty much on on pause.

I just wanna, you know, highlight that regardless if they’re on pause or not, you know, what what we’ve what we’re focused on at TransUnion is financial inclusion. So we have a lot of things in common with the CFPB. That doesn’t change, you know, for us. We put the consumer first and everything that we do. And then, you know, secondarily, we’ve had some consent orders and different agreements with the CFPB whether or not, you know, they’re active or not, we’re adhering, you know, to what we already agreed to, you know, from that standpoint.

So, as a result of that, that’s, you know, that’s we think that’s good business and, you know, good for our customers as well as for the consumer overall.

Ashish: That was very comprehensive response and you really covered the ground. My multi part, five part question, maybe switching gears a bit, let’s talk about mortgage. Obviously, the lower rate and wire or higher rates, but rates coming down off the highs is positive for the mortgage environment. A question that we get is, have you seen any change in the market dynamic in terms of the inquiries per origination? Pre call side, are you seeing anything from three b to one or two b on the consumer shopping side?

Are you seeing any change in trends there or in terms of the tri merge pulls, any shift in the number of pulls per mortgage? So a comprehensive questions on inquiries and how those are trending.

Dan, TransUnion: Okay. So let’s talk first just about, you know, mortgage underwriting first before we get into, you know, prequalification. When the Federal Reserve cut interest rates, for the first time in September, the the ten year treasury yield moved in tandem, you know, with the fed funds rate. And the thirty year, mortgage rate also went down. And we saw a significant amount of, you know, activity, whether it’s purchase, or refinance activity.

But as the fourth quarter continued on and the ten year treasury yield started to increase on inflation concerns and potentially higher interest rates, we saw that marketably slow down, as far as, you know, the pace of, activity. So and and that’s that’s really what we continue, to see. But we think that we’re starting to see consumers as well realize that maybe mortgage rates that we had seen historically aren’t the norm. So and and you really saw that again in the September, maybe early October timeframe where, we did see a significant amount of activity. And it was at rates, 30 rates that were higher, than, you know, we had been accustomed to over maybe the last five to, you know, ten years.

So the challenge with mortgage will continue to be housing prices are just simply they’re high right now. And then you couple that with interest rates that are as high as they are, it definitely is going to have an impact on the business. But now, conversely, you look at where the ten year yield is at today, and it’s come down rather significantly from where it was at the beginning of the year. And if that continues to come down in the thirty year rate comes down, we should benefit just like we did back in September. So we’re obviously watching that like everybody else.

The second part of the question, I think, is on the prequalification. And, you know, that that pertains to Fannie and Freddie making change to, what they call their, early, assessment, you know, program where in the past to be prequalified for a mortgage, you’d have to have a pull of three credit files and, you know, they’ve said, oh, two or one, would be sufficient. I would say what we’ve seen, to this point over the last year plus is perhaps some changes on the margin. Nothing significant, you know, has has changed yet. So, you know, our our focus is to make certain that our offering is, competitively positioned, you know, in the marketplace in the event that there is a rather significant change.

But right now, we’re not we’re not seeing much.

Ashish: That’s helpful. And just maybe on your competitive positioning, we’ve definitely seen your outperformance being significantly stronger compared to some of your peers. So can you just talk about what’s driving that strong outperformance? What that we’ve seen over the last few quarters?

Dan, TransUnion: Yeah. So the the outperformance, I mean, first of all, it’s, the guidance and our philosophy is making certain that what we put out in the market for investors to assess is something that we have a line of sight to. So we are, you know, maybe we’ll get knocked for this, but we’re conservative. And I I I would prefer that, you know, we we are that way. So we wanna make certain that we’re able to be within range that we provide, but we run the beating the high end, you know, of of the guidance.

So the only way that that happens is, just by, you know, solid execution of, you know, our product and our sales teams, to be able to leverage the product that we have in market and to be able to deliver on the commitment. So I think that’s the advantage that we’ve had. We’ve introduced a significant amount of product innovation, just over the last year, half a year to a year, with replatforming our our fraud products on the true true validate platform, our marketing products, and the true audience platform, as well as in communications, our our trusted call solutions. And all of those product capabilities are on our One True platform, and we’re getting some significant benefit. So being able, you know, to leverage the efficiencies from that platform with the new product innovation coupled with what I talked about with sales and the product people is really what’s given us the edge in the marketplace.

Ashish: That’s very helpful color. Maybe shifting gears a bit, just moving on to the emerging verticals. Can you talk about the dynamic there? You’ve continued to see really strong growth in insurance, double digit growth. How do you think about the trends in insurance going forward?

And then we’ll talk about other segments as well.

Dan, TransUnion: Sure. Yeah. So we’re we’re very excited about, our insurance vertical. Last year, double digit growth, you know, in that business. And, you know, when you looked at the performance of the business overall in ’twenty two and ’twenty three, still growth, but the growth was tempered.

And primarily what that was was, the impact of inflation on repair and replacement costs and insurance carriers not able to pass premium increases on, you know, to the, to the consumer because they needed regulatory approval to do that. So, by the time we got to the end of twenty twenty three going into 2024, a lot of the rate increases had been put into effect. So what we, enjoyed the benefit of is what we refer to as shopping activity. So if you see, you know, a premium increase, you may think that another carrier will be able to provide, a better, you know, premium to you. So that shopping activity drives inquiries, you know, on our on our credit file.

So that’s been a positive for us. But I think what’s more instructive about what’s been going on in the insurance vertical for us is, the marketing activity. So we’ve seen a meaningful uptick in in marketing throughout ’24 into early twenty twenty five, which means that the carriers are receptive to underwriting new business. So that that’s been a a positive, as well. So we’re enjoying, the benefits there.

But we’ve been in we’ve been in the insurance vertical for a number of years. And as our insurance customers have grown, we’ve grown with them. And we’ve provided, we’ve now we’re now providing products and services that really complement what we offer with credit and marketing type of products. Product that we call driver risk is something that is growing quite significantly for us. So that closeness to the customer, knowing what their pain points are and developing solutions, that that help their underwriting process has been, a particular advantage and a strength, for us in that vertical.

Ashish: That’s that’s helpful. And then, when we think about Neustar, I think Neustar did mid single digit growth in 2024. But again, Neustar is split again between the financial services and the emerging verticals. So maybe if you can just talk about what you’re seeing on the emerging vertical side in the retail, e com, telco, marketing fraud products.

Dan, TransUnion: Sure. So Neustar, this is our fourth year of ownership. So ’22 through 2024, Neustar grew at a mid single digit rate. When you exclude mortgage from our US markets business, that growth rate was higher than the rest of The US market. So it was accretive when you look at it on that basis.

But we didn’t buy NuStar to grow mid single digits. Right? Our expectation is that the business should be growing high single to low double digits. So we bought the company at a time when there was you know, some uncertainty. We, you know, talk about with, you know, interest rates and inflation, and it still performed well.

So we’ve taken, you know, the last three years to, really get the products aligned. And I already talked about what we’ve done with the fraud and the marketing products. So we feel that, you know, we’ve set up, you know, the the NuStar business, you know, quite well across our portfolio. In fact, it’s even funny for me to talk about the NuStar business because we’ve integrated it, you know, into, you know, what we do at TransUnion. It’s it’s actually really hard for us to pull it apart.

And I know you like to ask and as many of our investors do. Right? But it and that’s a good thing. You want us to have integrated, you know, this business. And that’s that’s really, you know, where, you know, where we’re at.

So when you think about the opportunity within the emerging verticals, you know, the true audience platform clearly plays, into our our media verticals. So we’re gonna expect, you know, the marketing business, you know, to drive some growth there. We’ve had some new wins. We’ll expect to see the benefit of that more in the second half of twenty twenty five. The fraud products, you know, cut across all of the other emerging verticals, you know, whether that’s our tech, retail, our ecommerce, you know, customers.

Fraud is, you know, a problem with our lives so digital. Our products are enabling, our customers to transact with confidence knowing who they’re interacting, you know, with on on the other side. And then, trusted call solutions. And this is a business that in a business a product line that in 2022 did $50,000,000 of revenue. And in 2025, we’re expecting that to be a 50,000,000.

So we’ve seen a significant amount of growth in trusted call solutions. And what trusted call is, in essence, doing, is it’s it’s bringing certainty to consumers that it’s actually, you know, someone that they do business with, whether it’s their bank or their mortgage provider. How often do you get a call on your mobile device? And if you don’t recognize the number from your contacts, you don’t pick it up. So what this is doing is it’s putting a branded it’s putting a logo and potentially even a reason for the call on the screen.

So we’ve seen a lot of, receptivity. So this is something when you think about, trusted call, it cuts across all of the the vertical markets. And and that and by design, that is why the vertical, the emerging verticals are set up. Right? They years ago, it was intentional for us to go into these adjacencies to be able to take the core of what we have in credit and be able to exploit that into other areas.

But what we’re able to do then is augment that with newer solutions like fraud and marketing and, you know, the communications. Now we’ve been talking about emerging verticals. That doesn’t mean that the products that I’ve just been talking about, they don’t have applicability for financial services. They do. Right?

We sell a significant amount of trusted call as well as, you know, marketing and fraud into financial services. But what’s probably even more exciting about the opportunity here is its global applicability in these products as well too. So when we looked and we did the NuStar acquisition, this wasn’t just to solve problems for our US customers. It was also a focus on could we export the IP, you know, to our international markets. So, you know, to the I know your question’s about emerging verticals, but there’s applicability, you know, to, the international areas as well too for those solutions.

Ashish: Yeah. Before we move on to international, I do want to discuss the recent partnership with Credit Sesame. What was the rationale behind it? How should we think about the evolution of your direct to consumer product going forward with that partnership?

Dan, TransUnion: So TransUnion has always had a particularly strong consumer business. But over the last couple of years, there was a capability that was missing in our overall portfolio and that pertain to freemium. So TransUnion historically has sold products that are premium, meaning, you know, credit monitoring or, you know, three bureau monitoring and scores. And, consumers, you know, coming out of the pandemic, really embraced, the freemium players. They were okay with seeing their credit and an offer alongside of it.

TransUnion, because of the power of the brand, we generate so much web traffic. And there were consumers that just come to the website that maybe they didn’t want a premium offering, and we didn’t have that freemium capability to engage with them and keep them in our ecosystem. So we decided to partner with a really good customer of ours, Credit Sesame, where, you know, to help where they helped us with the technology, but also provided the offer inventory as well too for us. So we’re really excited about the opportunity here. I mean, we used to report the consumer interactive business as a separate segment.

So those of you who are familiar with us know that this is a very profitable business for us. It had adjusted EBITDA margins in the mid forties to 50%. So we felt that, you know, it was important for us, you know, to be able to have a more comprehensive offering. And that and that was on the heels of the acquisition that we made of Sontiq in late twenty twenty one, which also filled a a gap in our portfolio at that time as it pertained to identity protection and, also breach services. And that’s a business that went from $95,000,000 and 22 to $165,000,000 last year.

So we’ve seen some good growth there. So we feel that, you know, we’ve we’ve filled all the gaps and we now have, a really good, solid offering, in the consumer interactive space. Oh, that’s great. Switching gears, talking about international business. Can you

Ashish: just talk about what’s going on with India? What’s going on on the regulatory side? What’s driving some of the softness that you have mentioned on fiscal year twenty five? And how should we think about the longer term growth trajectory there?

Dan, TransUnion: Yes. Absolutely. So in India, Late Twenty Twenty Three, the Reserve Bank of India was assessing as they do, the loan to deposit ratio in the market. And it got to an uncomfortably high level for the regulators. So they decided to impose some restrictions on the lending of the banks.

At the end of the day, I mean, it’s really it was about making certain that consumers didn’t get overstretched. So probably a prudent action, you know, that they took, you know, at at that time frame. It took throughout 2024 for that really to ripple through, you know, our business. And in the fourth quarter, you know, we did see, the consumer online, volumes actually declined. But we grew 18% in the in the fourth quarter.

And the reason we were able to do that, again, like the conversation we were just having with emerging verticals, we’ve designed the the portfolio for our India business, intentionally to not just be embedded within core credit, there’s that 60% of our revenue. The other 40%, you know, comes from, areas like our commercial database, our fraud products. We have an insurance vertical and direct to consumer capabilities. So while that part of the business while the consumer part of the business was slowing, our team in India did an outstanding job being able to leverage the full breadth of our portfolio, to continue to drive growth. And that’s how we were, you know, able to perform the way that we did.

However, we we flipped to 2025. We do expect modest growth in q one. But as 2025 moves on, we are expecting the trends to get better. The last meeting of the Reserve Bank of India, they cut interest rates by 25 basis points and also signal that they felt like they have accomplished what they wanted to as it pertained to slowing the lending and making certain that the delinquencies didn’t get too far ahead of themselves And now indicating that, okay, maybe we’re gonna, you know, perhaps loosen that, a little bit. So we’re starting to see, you know, activity, you know, incrementally get better.

So q one will be modest. Q two, will probably be a little bit better. And then the second half of the year, we think we’ll have a better trajectory. So the the 10% guidance that we put out for India, again, like I talked about at the beginning, I think we’re we’re being conservative, but prudent, to make certain that, you know, we we achieve, you know, what we put out into the market.

Ashish: Again, you have not given necessarily a guidance for the midterm to long term. But as you mentioned, as you exit the year, you expect the growth to reaccelerate. So that should that momentum should continue as we think about the next three to five years. Based on what we’re seeing as we sit here today, I think that would

Dan, TransUnion: be true. Right? But we need to, you know, see how, you know, just macro events play out throughout the rest of 2025.

Ashish: Makes sense. Makes sense. Maybe just a quick minute on Canada. You’ve been growing faster than the market in Canada as well, and we have to talk about Canada, our BC conference. But, just maybe a question on tariff there as well.

Any impact there you see just with some of the tariff announcements this morning?

Dan, TransUnion: No, we haven’t seen any impact yet. We have a terrific business in Canada. And that’s been intentional over the last ten years. I mean, we were a very distant player in that market and we put a concerted effort into customer relationships, perhaps maybe with even the sponsor of this conference, but driving innovation through those customer relationships. So our trend in credit, we’ve won a lot of market share.

So if you look at the Canadian economy overall last year, it was challenged. You know, and, our business grew in the high single digits throughout the year. And that’s really a testament, again, to the portfolio diversification, you know, that we have. So we’re not just entrenched in banks and financial institutions. We’ve also gotten into other verticals like insurance and direct to consumer, that have, and fintechs that have performed, you know, relatively well.

So we’re proud of what the team has been able to deliver in what we’d argue to be a challenging environment. But they have the tools as we go forward, similar to how I talked about India. Canada set up the same way to be able to persevere in a downturn.

Ashish: That’s great. Just shifting to the bottom line, margins. Can you talk about some of the puts and takes for margins in ’25? You’re seeing some headwinds in ’25 or not as much of a tailwind as we saw last year. How How do we think about those cost takeout initiatives going into ’26, but some of the other growth investments?

So a broader question on margins.

Dan, TransUnion: So we announced the transformation program in November of twenty twenty three, and the intention, always was that 2024 was going to have a significant increase in margin and that happened. We increased our adjusted EBITDA margin by 90 basis points to 36. We’re not done with the transformation program. We’re still we’ve still got the tech component that needs to get be completed as we’re moving US core credit to, the One True platform. So there’s still some one time, you know, spend that has to take place there.

And then when we’re done, we’ll get some savings going into 2026. So it was never our intention, you know, for 2025 to have another big step up like we did in in ’24. So that’s why we made that, you know, clear in the market. But assuming we deliver, the tech transformation on time, which all indications are that will will will be within that spend, there should be, you know, a meaningful amount of cost savings that we’ll be able to realize in 2026, and thus the margin should go up.

Ashish: That’s great. We’ll keep it there. Thank you, Dan.

Dan, TransUnion: Thank you for calling. Ashish. I appreciate it.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.