Faiza Alwy: Great. Thank you so much.
Operator: Thank you. The next question comes from Jeff Meuler with Baird. Please go ahead.
Jeff Meuler: Yes. Thank you. Good morning. So Q2 guidance looks good. You just addressed mortgage, but maybe if you can more holistically kind of just address this concern that when rates moved higher kind of last summer, early fall, it created some incremental headwinds in various parts of your business. So just with rates moving higher recently, including again today, can you just talk about some other parts of the business where you saw headwinds last fall and maybe any sort of like changes in customer behavior or tone that you’re hearing more recently on the back of a rate increase? Thanks.
Todd Cello: Good morning, Jeff. Thank you for the question. So to start off in response to that, I think what’s important for everyone to remember that our initial guide back in February did not anticipate a benefit from lower interest rates. So we went into the year in essence, just very conservative. We didn’t want to get ahead of ourselves and that proves be a very good thing, right, as far as where interest rates appear to be headed. Trends in our core U.S. financial services business, I would say that they remain stable. You’ve heard from some of the bank earnings call, they used the words subdued. I think that we have appropriately captured these trends in our outlook. There’s no significant upside contemplated there. It’s more of a continuation of the trends that we’re seeing.
Some important reminders. TransUnion obviously, has a very diversified portfolio. And as a reminder, in 2022 and 2023, we grew 3% in both years. Now clearly, that’s not what that’s not what we plan for and at all we aspire for, but it shows the balance of business, and that’s intentional. So — and with that also, we currently believe that interest rates perhaps may have peaked or maybe they won’t go up much further. So what does that mean? Well, what it does is drives certainty that didn’t exist for our customers in the previous two years when interest rates were increasing in 2022 into 2023, our customers didn’t know how much higher that they were going to go. So there’s definitely some certainty there. Also, it’s important to call out that our International business just continues to have strong momentum.
In the February — in our February guidance, we called for high single-digit growth from that business. We’ve increased that, even though we’re maintaining in total. At the company level, we’ve increased to low double-digits for International just based on this strong momentum that we’re seeing in International. You flip back to the U.S. markets, emerging verticals, it’s important to call out there that many of those businesses are less dependent on interest rate movements. And this gets back to what I said at the beginning about the power of diversified portfolio that we have. And I would say, we’re seeing improving trends there. Nothing dramatic, but things are starting to get better. And then the last point I would make on this one is cutting across all of these businesses, TransUnion has a robust portfolio of solutions to help our customers no matter what the macro environment presents them.
ChrisCartwright: Yes. And look, if I can reinforce a couple of points. The volumes that we experienced in the first quarter, particularly in U.S. financial services are consistent with the fourth quarter of last year. The challenges, as you know, Jeff, in September of the of the third quarter last year, combination of increased rates and a real stress on bank positives led to a material step down in origination volumes, right? Well, that appears to be flattening. And therefore, our growth is going to improve because we’re not absorbing any material declines as we did in the second half of 2023.
Jeff Meuler: Thank you.
Operator: Thank you. The next question is from Manav Patnaik with Barclays. Please go ahead.
Manav Patnaik: Thank you for the disclosure on the emerging market or the emerging verticals, I guess, in your Appendix. I was just wondering if — just to follow up on that. In some of those four big categories in there. If you could just help us with how much they grew in 2023 and how we should think about what you factored in for 2024?
ChrisCartwright: Yes. Look, let me provide some quick color and I don’t — Todd may recall the specific growth rates per emerging segment in 2023, but I’m more 2024 focused. And look, overall, we’re expecting higher growth from the emerging verticals in 2024 than we experienced in 2023. Starting with insurance, I think I said on an earlier call that we expected insurance to grow faster in 2024, but not to return to the high single-digit growth that we’ve enjoyed consistently. So, it’s a healing process in terms of insurers returning to former marketing levels. We’ve seen some improvement in marketing. Of course, we’ve also had some really nice wins, particularly in the driver risk. So, insurance is solid. As we mentioned, we had a solid growth in media, and that’s because of the realization of some customer wins that we achieved last year.
Public sector, our fraud products are helping us grow there. And finally, Manav, we’re getting some nice growth in the collections area, right, as delinquencies rise, part of the compensation for our business model is increased collections. And of course, Trusted Call Solutions is a growth driver across all of these segments. In technology and real estate, in e-commerce, we’re lapping some major project revenue. We’re getting growth there, but it’s more like the low mid-single-digit type of growth. And communications is always a blend. It’s a combination of some heritage products that are either flat to declining slightly, but enhanced considerably by the Trusted Call Solutions suite. And then we are still working our way through some difficult comps on tenant and employment screening.
As you know, because of the consent order that we signed with the CFPB last year, we’ve had to take certain products, certain data that did not meet the enhanced requirements that the CFPB is imposed on the industry. We’re going to take those out of the we’ll lap that comp by the second half of the year. But for right now, it’s negative and a drag on emerging. So, hopefully, that helps Manav.
Operator: Thank you. The next question comes from Kelsey Zhu with Autonomous. Please go ahead.
Kelsey Zhu: Hi, good morning. Thanks for taking my questions. I was wondering if we can also talk a little bit about the growth we should expect for Sontiq and Argus in 2024 and how the margin profiles look like right now and kind of where you’re targeting for 2024? Thank you.
