TransUnion Announces First Quarter 2024 Results

TransUnion (NYSE: TRU) (the "Company") today announced financial results for the quarter ended March 31, 2024.

First Quarter 2024 Results

Revenue:

• Total revenue for the quarter was $1,021 million, an increase of 9 percent (8 percent on a constant currency basis), compared with the first quarter of 2023.
  

Earnings:

• Net income attributable to TransUnion was $65 million for the quarter, compared with $53 million for the first quarter of 2023. Diluted earnings per share was $0.33, compared with $0.27 in the first quarter of 2023. Net income attributable to TransUnion margin was 6.4 percent, compared with 5.6 percent in the first quarter of 2023.
• Adjusted Net Income was $179 million for the quarter, compared with $155 million for the first quarter of 2023. Adjusted Diluted Earnings per Share was $0.92, compared with $0.80 in the first quarter of 2023.
• Adjusted EBITDA was $358 million for the quarter, compared with $322 million for the first quarter of 2023, an increase of 11 percent (11 percent on a constant currency basis). Adjusted EBITDA margin was 35.1 percent, compared with 34.3 percent in the first quarter of 2023.
  

"TransUnion exceeded first quarter financial guidance, delivering the first $1 billion revenue quarter in our history," said Chris Cartwright, President and CEO. "U.S. Markets grew primarily due to mortgage and key Emerging Verticals such as Insurance and Media, as lending conditions remained largely consistent with the prior quarter. International again drove double-digit growth, led by India, Canada and Asia Pacific."

"We made important progress in our transformation program, adding significant headcount to further build out our Global Capability Center network and consolidating key applications onto our OneTru platform. These actions add to our confidence in delivering against our savings commitments while increasing the pace and breadth of our innovation."

"We are raising our 2024 guidance following first quarter outperformance and now expect to deliver 5 to 6.5 percent revenue growth for the year. We remain focused on driving strong results in a low-growth market environment, with no assumed in-year benefits from interest rate cuts."

First Quarter 2024 Segment Results

During the quarter ended March 31, 2024, the Company reorganized its operations to merge its Consumer Interactive operating segment with its U.S. Markets operating segment, moved the responsibility for certain international operations previously managed within the U.S. Markets segment to certain regions within the International segment, and moved responsibility for certain revenue in our U.S. Markets segment previously managed within our Financial Services vertical to our Emerging Verticals. We have recast our historical segment financial information to reflect this reorganization as further described in our Current Report on Form 8-K, filed with the Securities and Exchange Commission on April 23, 2024.

U.S. Markets:

U.S. Markets revenue was $789 million, an increase of 7 percent compared with the first quarter of 2023.

• Financial Services revenue was $352 million, an increase of 13 percent compared with the first quarter of 2023.
• Emerging Verticals revenue was $298 million, an increase of 4 percent compared with the first quarter of 2023.
• Consumer Interactive revenue was $139 million, a decrease of 2 percent compared with the first quarter of 2023.
  

Adjusted EBITDA was $285 million, an increase of 6 percent compared with the first quarter of 2023.

International:

International revenue was $236 million, an increase of 16 percent (15 percent on a constant currency basis) compared with the first quarter of 2023.

• Canada revenue was $38 million, an increase of 19 percent (18 percent on a constant currency basis) compared with the first quarter of 2023.
• Latin America revenue was $33 million, an increase of 14 percent (7 percent on a constant currency basis) compared with the first quarter of 2023.
• United Kingdom revenue was $54 million, an increase of 4 percent (flat on a constant currency basis) compared with the first quarter of 2023.
• Africa revenue was $15 million, an increase of 3 percent (12 percent on a constant currency basis) compared with the first quarter of 2023.
• India revenue was $71 million, an increase of 30 percent (31 percent on a constant currency basis) compared with the first quarter of 2023.
• Asia Pacific revenue was $25 million, an increase of 17 percent (17 percent on a constant currency basis) compared with the first quarter of 2023.

Adjusted EBITDA was $107 million, an increase of 22 percent (21 percent on a constant currency basis) compared with the first quarter of 2023.

Liquidity and Capital Resources

Cash and cash equivalents was $434 million at March 31, 2024 and $476 million at December 31, 2023.

For the three months ended March 31, 2024, cash provided by operating activities was $54 million, compared with $77 million in 2023. The decrease in cash provided by operating activities was due primarily to payments made for our operating model optimization program. For the three months ended March 31, 2024, cash used in investing activities was $62 million, compared with $104 million in 2023. The decrease in cash used in investing activities was due primarily to a decrease in cash used for investments in nonconsolidated affiliates. For the three months ended March 31, 2024, capital expenditures were $62 million, compared with $67 million in 2023. Capital expenditures as a percent of revenue represented 6% and 7% for the three months ended March 31, 2024 and 2023, respectively. For the three months ended March 31, 2024, cash used in financing activities was $31 million, compared with $122 million in 2023. The decrease in cash used in financing activities was due primarily to a decrease in debt prepayments. On February 8, 2024, the Company refinanced its Senior Secured Term Loan B-6 with Senior Secured Term Loan B-7.

Second Quarter and Full Year 2024 Outlook

Our guidance is based on a number of assumptions that are subject to change, many of which are outside of the control of the Company, including general macroeconomic conditions, interest rates and inflation. There are numerous evolving factors that we may not be able to accurately predict. There can be no assurance that the Company will achieve the results expressed by this guidance.

1. Additional revenue growth assumptions:
   1. The impact of changing foreign currency exchange rates is expected to have an insignificant impact for Q2 2024 and FY 2024.
   2. There is no impact from recent acquisitions for Q2 2024 and FY 2024.
   3. The impact of mortgage is expected to be approximately 3 points of benefit for Q2 2024 and 3 points of benefit for FY 2024. These impacts are calculated by removing the U.S. mortgage revenue from both the current year and prior year periods.
2. Constant currency growth rates assume foreign currency exchange rates are consistent between years. This allows financial results to be evaluated without the impact of fluctuations in foreign currency exchange rates.
3. Organic constant currency growth rates are constant currency growth excluding inorganic growth. Inorganic growth represents growth attributable to the first twelve months of activity for recent business acquisitions. There is no impact from recent business acquisitions in Q2 2024 and FY 2024.
4. Additional Adjusted EBITDA assumptions:
   1. The impact of changing foreign currency exchange rates is expected to have an insignificant impact for Q2 2024 and FY 2024.
5. For a reconciliation of the above non-GAAP financial measures to the most directly comparable GAAP financial measures, refer to Schedule 7 of this Earnings Release.
   

Earnings Webcast Details

In conjunction with this release, TransUnion will host a conference call and webcast today at 8:30 a.m. Central Time to discuss the business results for the quarter and certain forward-looking information. This session and the accompanying presentation materials may be accessed at www.transunion.com/tru. A replay of the call will also be available at this website following the conclusion of the call.

About TransUnion (NYSE: TRU)

TransUnion is a global information and insights company with over 13,000 associates operating in more than 30 countries. We make trust possible by ensuring each person is reliably represented in the marketplace. We do this with a Tru™ picture of each person: an actionable view of consumers, stewarded with care. Through our acquisitions and technology investments we have developed innovative solutions that extend beyond our strong foundation in core credit into areas such as marketing, fraud, risk and advanced analytics. As a result, consumers and businesses can transact with confidence and achieve great things. We call this Information for Good^® - and it leads to economic opportunity, great experiences and personal empowerment for millions of people around the world.

http://www.transunion.com/business

Availability of Information on TransUnion's Website

Investors and others should note that TransUnion routinely announces material information to investors and the marketplace using SEC filings, press releases, public conference calls, webcasts and the TransUnion Investor Relations website. While not all of the information that the Company posts to the TransUnion Investor Relations website is of a material nature, some information could be deemed to be material. Accordingly, the Company encourages investors, the media and others interested in TransUnion to review the information that it shares on www.transunion.com/tru.

Forward-Looking Statements

This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of TransUnion's management and are subject to significant risks and uncertainties. Actual results may differ materially from those described in the forward-looking statements. Any statements made in this earnings release that are not statements of historical fact, including statements about our beliefs and expectations, are forward-looking statements. Forward-looking statements include information concerning possible or assumed future results of operations, including our guidance and descriptions of our business plans and strategies. These statements often include words such as "anticipate," "expect," "guidance," "suggest," "plan," "believe," "intend," "estimate," "target," "project," "should," "could," "would," "may," "will," "forecast," "outlook," "potential," "continues," "seeks," "predicts," or the negatives of these words and other similar expressions.

Factors that could cause actual results to differ materially from those described in the forward-looking statements, or that could materially affect our financial results or such forward-looking statements include:

• macroeconomic effects and changes in market conditions, including the impact of inflation, risk of recession, and industry trends and adverse developments in the debt, consumer credit and financial services markets, including the impact on the carrying value of our assets in all of the markets where we operate;
• our ability to provide competitive services and prices;
• our ability to retain or renew existing agreements with large or long-term customers;
• our ability to maintain the security and integrity of our data;
• our ability to deliver services timely without interruption;
• our ability to maintain our access to data sources;
• government regulation and changes in the regulatory environment;
• litigation or regulatory proceedings;
• our ability to effectively manage our costs;
• our efforts to execute our transformation plan and achieve the anticipated benefits and savings;
• our ability to remediate existing material weakness in our internal control over financial reporting and maintain effective internal control over financial reporting and disclosure controls and procedures;
• economic and political stability in the United States and international markets where we operate;
• our ability to effectively develop and maintain strategic alliances and joint ventures;
• our ability to timely develop new services and the market's willingness to adopt our new services;
• our ability to manage and expand our operations and keep up with rapidly changing technologies;
• our ability to acquire businesses, successfully secure financing for our acquisitions, timely consummate our acquisitions, successfully integrate the operations of our acquisitions, control the costs of integrating our acquisitions and realize the intended benefits of such acquisitions;
• our ability to protect and enforce our intellectual property, trade secrets and other forms of unpatented intellectual property;
• our ability to defend our intellectual property from infringement claims by third parties;
• geopolitical conditions and other risks associated with our international operations;
• the ability of our outside service providers and key vendors to fulfill their obligations to us;
• further consolidation in our end-customer markets;
• the increased availability of free or inexpensive consumer information;
• losses against which we do not insure;
• our ability to make timely payments of principal and interest on our indebtedness;
• our ability to satisfy covenants in the agreements governing our indebtedness;
• our ability to maintain our liquidity;
• share repurchase plans; and
• our reliance on key management personnel.

There may be other factors, many of which are beyond our control, that may cause our actual results to differ materially from the forward-looking statements, including factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023, and any subsequent Quarterly Report on Form 10-Q or Current Report on Form 8-K filed with the Securities and Exchange Commission. You should evaluate all forward-looking statements made in this report in the context of these risks and uncertainties.

The forward-looking statements contained in this earnings release speak only as of the date of this earnings release. We undertake no obligation to publicly release the result of any revisions to these forward-looking statements to reflect the impact of events or circumstances that may arise after the date of this earnings release.

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