Christopher Cartwright: Yeah, look, let me just €“ this is Chris, and just the first question, let me just set level set here. The basis of our forecast in ’23 is heavily influenced by the challenging market conditions we saw in the fourth quarter, right? And so, while we’re not assuming a recession, we are also not assuming any particular recovery. Now of course, the growth rates are going to increase in the back half of the year, because the comparisons are going to ease substantially. And then as Todd said, the first quarter of the year, because of seasonality is typically our softest from a revenue standpoint and it just so happens that this year, we’re comparing against a very strong first quarter in 2022 where the enterprise grew 8%, financial services U.S. grew, I don’t know, I think it was in the mid-teens, right?
So things were quite robust then. But, over the course of ’22, with each passing quarter, we saw softening in our U.S. financial services business and also in the FS businesses in other developed markets. So, we took that endpoint, which we think is near a bottom and we extrapolated from that. Now we’ve also got some countercyclical benefits. As you saw, our acquisitions are delivering good growth and Neustar, which is a very material chunk of the revenue we’re guiding it to 8%. We exited the year at 8%.We’ve got a strong line of sight to that revenue, in particular, because as we’ve said before, it’s about 80%recurring and we had one of our best selling years ever last year, good sales volumes and momentum increasing with each passing quarter, right?
So we feel like we’ve got a nice momentum in Neustar, which is a big kind of diversifying and countercyclical force at this point.
Operator: The next question is from Andrew Steinerman of JPMorgan. Please go ahead.
Andrew Steinerman: Hi, Todd. I wanted to look at Slide 19. Slide 19, this is the margin slide, and particularly focus on the second red bar, the 45 basis point drag to formulate the ’23 margin. I was hoping you could break down and maybe explain a little bit more the three items that are highlighted there, incentive comp, royalties and continued investments, recognizing that these three items are offsetting the revenue flow through.
Todd Cello: Yes, good morning, Andrew. Thanks for the question. So specifically, to the margin and you see almost a 50 point decline there. A couple of factors go into that. First of all, from a compensation perspective, since the second half of last year, TransUnion has been very focused on ensuring that we are making our hiring decisions on important strategic priorities for us. So we continue to fill roles that have that importance for us. But when €“ and when we look forward, we’re very proud of the talented team that we have and all the work that they accomplished in 2022 with acquisitions and organic initiatives, we felt that it was important to make certain that we’re fully recognizing the extraordinary work of our people by providing the compensation necessary to increase for our merit and promotion pool as well.
In addition, we also needed to reset our variable compensation up to target levels when you compare to what the payouts were in 2022. . A second thing to cover here would just be when you think about our volumes in areas where we are experiencing year-over-year declines in volumes, it’s important to note that those declining volumes have a higher margin impact than any type of pass-through pricing markup that we would have on a higher royalty expense as an example. So that’s the second important factor to go into there and I think third, and really getting back to the point just on our people, we are continuing to invest in several organic initiatives. We’re not sacrificing the long-term growth potential of TransUnion. So we continue to have meaningful investments in initiatives.
