TransUnion (NYSE:TRU) Q4 2022 Earnings Call Transcript

Christopher Cartwright: Yes, probably the first comment to make on this question is about diversification across the portfolio and how that dynamic is playing out. Without a doubt, our lending lines of business has slowed materially in developed markets because of the effect of inflation, first, and then rising rates. And potentially, may have slowed a little extra because it just uncertainty, right? When there is uncertainty in the market, transaction volumes fall, right? And as certainty gets restored around the direction of inflation, around the direction of rates, we could see some improvements. But the negative is around the lending volumes. The positive and again, in the U.S., I’ll remind you that the emerging verticals are equal in size to the lending verticals, right?

And their growth is increasing. It increased from 1% in the third quarter, which we said was based on anomalous non-recurring factors, to 4%, and we expect it to improve again over the course of ’23. The international businesses, there was less fiscal stimulus, so they are not dealing with the same degree of elevated inflation. They continue to roll. That business is $800million. It’s grown €“ we’ve targeted to grow in the low double-digits. There’s a lot of momentum there, right? And it’s broad-based momentum because our footprint is more skewed. So that’s going to be growthful. And then direct-to-consumer because we’ve had a reset in process over the past 12 months, has been a material drag on our results, and we see that improving substantially over the fourth quarter.

Now again, I just want to reiterate in terms of the guidance. We didn’t model in a recession, and we didn’t model in economic improvement. We took a very challenging macro environment in our fourth quarter and we largely model off of that. Now again, there’s any number of puts and takes given the multitude of verticals and sub-verticals. But we think it’s a prudent guide, it’s not overly negative, but it’s also not founded on some back-end optimism. And again, the reason organic growth rates increased in the latter half of the year is because our comps are much, much easier, particularly in the fourth quarter.

Aaron Hoffman: Excellent. Chris, thank you, and thanks, everyone, for joining us this morning. There’s a lot to digest I think in our call. We hope we take the time to do that and let us know we can be of assistance as you contemplate the print today. So we hope you have a great day. Thank you.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.