TransUnion Announces Third Quarter 2024 Results
Exceeded third quarter 2024 financial guidance for revenue and earnings
Accelerated revenue growth to 12 percent, driven by U.S. Financial Services, Insurance, Consumer Interactive and International, while executing on technology modernization and transformation program savings
Voluntarily prepaid $25 million in debt, bringing total prepayments to $105 million in 2024
Raising 2024 financial guidance, we now expect to deliver 9 percent revenue growth for the year
CHICAGO, Oct. 23, 2024 (GLOBE NEWSWIRE) -- TransUnion (NYSE:TRU) (the "Company") today announced financial results for the quarter ended September 30, 2024.
Third Quarter 2024 Results
Revenue:
Total revenue for the quarter was $1,085 million, an increase of 12 percent (12 percent on a constant currency basis), compared with the third quarter of 2023.
Earnings:
Net income attributable to TransUnion was $68 million for the quarter, compared with a loss of $319 million for the third quarter of 2023. Diluted earnings per share was $0.35, compared with a loss per share of $1.65 in the third quarter of 2023. Net income attributable to TransUnion margin was 6.3 percent, compared with a loss of 32.9 percent in the third quarter of 2023. Our third quarter 2023 net income (loss) attributable to TransUnion, diluted loss per share and net income (loss) attributable to TransUnion margin were impacted by a $414 million non-cash goodwill impairment expense for our United Kingdom reporting unit in the period.
Adjusted Net Income was $205 million for the quarter, compared with $177 million for the third quarter of 2023. Adjusted Diluted Earnings per Share was $1.04, compared with $0.91 in the third quarter of 2023.
Adjusted EBITDA was $394 million for the quarter, compared with $356 million for the third quarter of 2023, an increase of 11 percent (11 percent on a constant currency basis). Adjusted EBITDA margin was 36.3 percent, compared with 36.8 percent in the third quarter of 2023.
"In the third quarter, TransUnion exceeded financial guidance," said Chris Cartwright, President and CEO. "U.S. Markets grew by double-digits against stable market conditions, driven by mortgage strength, improving non-mortgage financial services, accelerating insurance growth and large breach remediation wins. Our International segment delivered double-digit organic constant currency revenue growth across India, Latin America, Asia Pacific and Africa."
"We continue to progress well against our transformation program. We now expect to capture $85 million of operating expense savings in 2024, driven by strong execution against our operating model optimization to expand our Global Capability Center network. Additionally, our technology modernization is accelerating our pace of innovation with several new capabilities and products launched in the quarter, powered by OneTru."
"We are raising our 2024 guidance and now expect to deliver 9 percent revenue growth, reflecting third quarter outperformance, stronger mortgage volumes and broad-based strength across the portfolio."
Third Quarter 2024 Segment Results
U.S. Markets:
U.S. Markets revenue was $848 million, an increase of 12 percent compared with the third quarter of 2023.
Financial Services revenue was $367 million, an increase of 17 percent compared with the third quarter of 2023.
Emerging Verticals revenue was $307 million, an increase of 3 percent compared with the third quarter of 2023.
Consumer Interactive revenue was $174 million, an increase of 21 percent compared with the third quarter of 2023.
Adjusted EBITDA was $320 million, an increase of 9 percent compared with the third quarter of 2023.
International:
International revenue was $242 million, an increase of 11 percent (12 percent on a constant currency basis) compared with the third quarter of 2023.
Canada revenue was $39 million, an increase of 7 percent (9 percent on a constant currency basis) compared with the third quarter of 2023.
Latin America revenue was $33 million, an increase of 7 percent (13 percent on a constant currency basis) compared with the third quarter of 2023.
United Kingdom revenue was $58 million, an increase of 6 percent (4 percent on a constant currency basis) compared with the third quarter of 2023.
Africa revenue was $17 million, an increase of 12 percent (10 percent on a constant currency basis) compared with the third quarter of 2023.
India revenue was $68 million, an increase of 21 percent (23 percent on a constant currency basis) compared with the third quarter of 2023.
Asia Pacific revenue was $26 million, an increase of 11 percent (11 percent on a constant currency basis) compared with the third quarter of 2023.
Adjusted EBITDA was $110 million, an increase of 14 percent (15 percent on a constant currency basis) compared with the third quarter of 2023.
Liquidity and Capital Resources
Cash and cash equivalents was $643 million at September 30, 2024 and $476 million at December 31, 2023.
For the nine months ended September 30, 2024, cash provided by operating activities was $579 million, compared with $444 million in 2023. The increase in cash provided by operating activities was primarily due to improved operating performance, partially offset by employee separation payments and a penalty paid for the early termination of a facility lease, both of which were in connection with our operating model optimization program. For the nine months ended September 30, 2024, cash used in investing activities was $195 million, compared with $231 million in 2023. The decrease in cash used in investing activities was due primarily to prior year investments in non-consolidated affiliates and lower capital expenditures. For the nine months ended September 30, 2024, capital expenditures were $199 million, compared with $213 million in 2023. Capital expenditures as a percent of revenue represented 6% and 7% for the nine months ended September 30, 2024 and 2023, respectively. For the nine months ended September 30, 2024, cash used in financing activities was $220 million, compared with $375 million in 2023. The decrease in cash used in financing activities was primarily due to a decrease in debt prepayments.
Fourth 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.
Three Months Ended December 31, 2024
Twelve Months Ended December 31, 2024
(in millions, except per share data)
Low
High
Low
High
Revenue, as reported
$
1,014
$
1,034
$
4,161
$
4,181
Revenue growth1:
As reported
6
%
8
%
9
%
9
%
Constant currency1, 2
6
%
8
%
8
%
9
%
Organic constant currency1, 3
6
%
8
%
8
%
9
%
Net income attributable to TransUnion
$
65
$
77
$
284
$
295
Net income attributable to TransUnion growth
n/m
n/m
238
%
243
%
Net income attributable to TransUnion margin
6.4
%
7.4
%
6.8
%
7.1
%
Diluted Earnings per Share
$
0.34
$
0.39
$
1.45
$
1.51
Diluted Earnings per Share growth
n/m
n/m
237
%
243
%
Adjusted EBITDA, as reported5
$
360
$
375
$
1,488
$
1,503
Adjusted EBITDA growth, as reported4
10
%
15
%
11
%
12
%
Adjusted EBITDA margin
35.5
%
36.2
%
35.8
%
36.0
%
Adjusted Diluted Earnings per Share5
$
0.92
$
0.98
$
3.87
$
3.93
Adjusted Diluted Earnings per Share growth
14
%
21
%
15
%
17
%
Additional revenue growth assumptions:
The impact of changing exchange rates is expected to have an insignificant impact for Q4 2024 and FY 2024.
There is no impact from recent acquisitions for Q4 2024 and FY 2024.
The impact of mortgage is expected to be approximately 5 points of benefit for Q4 2024 and approximately 4 points of benefit for FY 2024.
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.
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 Q4 2024 and FY 2024.
Additional Adjusted EBITDA assumptions:
The impact of changing foreign currency exchange rates is expected to have an insignificant impact for Q4 2024 and FY 2024.
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.
For More Information
E-mail:
Telephone:
312.985.2860
TRANSUNION AND SUBSIDIARIESConsolidated Balance Sheets (Unaudited)(in millions, except per share data)
September 30,2024
December 31,2023
Assets
Current assets:
Cash and cash equivalents
$
643.2
$
476.2
Trade accounts receivable, net of allowance of $18.2 and $16.4
798.4
723.0
Other current assets
228.2
275.9
Total current assets
1,669.8
1,475.1
Property, plant and equipment, net of accumulated depreciation and amortization of $858.3 and $804.4
181.5
199.3
Goodwill
5,184.5
5,176.0
Other intangibles, net of accumulated amortization of $3,055.8 and $2,719.8
3,356.9
3,515.3
Other assets
661.1
739.4
Total assets
$
11,053.8
$
11,105.1
Liabilities and stockholders' equity
Current liabilities:
Trade accounts payable
$
319.4
$
251.3
Short-term debt and current portion of long-term debt
66.5
89.6
Other current liabilities
609.8
661.8
Total current liabilities
995.7
1,002.7
Long-term debt
5,134.9
5,250.8
Deferred taxes
481.8
592.9
Other liabilities
120.2
153.2
Total liabilities
6,732.6
6,999.6
Stockholders' equity:
Common stock, $0.01 par value; 1.0 billion shares authorized at September 30, 2024 and December 31, 2023, 201.4 million and 200.0 million shares issued at September 30, 2024 and December 31, 2023, respectively, and 194.9 million and 193.8 million shares outstanding as of September 30, 2024 and December 31, 2023, respectively
2.0
2.0
Additional paid-in capital
2,524.3
2,412.9
Treasury stock at cost, 6.6 million and 6.2 million shares at September 30, 2024 and December 31, 2023, respectively
(333.0
)
(302.9
)
Retained earnings
2,312.6
2,157.1
Accumulated other comprehensive loss
(289.5
)
(260.9
)
Total TransUnion stockholders' equity
4,216.4
4,008.2
Noncontrolling interests
104.8
97.3
Total stockholders' equity
4,321.2
4,105.5
Total liabilities and stockholders' equity
$
11,053.8
$
11,105.1
TRANSUNION AND SUBSIDIARIESConsolidated Statements of Operations (Unaudited)(in millions, except per share data)
Three Months Ended September 30,
Nine Months Ended September 30,
2024
2023
2024
2023
Revenue
$
1,085.0
$
968.7
$
3,147.0
$
2,876.9
Operating expenses
Cost of services (exclusive of depreciation and amortization below)
448.7
368.8
1,261.7
1,136.8
Selling, general and administrative
305.7
290.8
922.1
867.7
Depreciation and amortization
133.6
131.3
400.5
391.1
Goodwill impairment
—
414.0
—
414.0
Restructuring
40.5
—
66.8
—
Total operating expenses
928.6
1,205.0
2,651.0
2,809.6
Operating income (loss)
156.4
(236.3
)
495.9
67.3
Non-operating income and (expense)
Interest expense
(66.6
)
(72.7
)
(203.2
)
(217.2
)
Interest income
7.8
5.0
19.9
15.1
Earnings from equity method investments
4.7
3.7
14.0
11.7
Other (expense) and income, net
(5.4
)
8.7
(26.2
)
(16.3
)
Total non-operating income and (expense)
(59.6
)
(55.4
)
(195.4
)
(206.8
)
Income (loss) from continuing operations before income taxes
96.8
(291.7
)
300.5
(139.5
)
Provision for income taxes
(24.9
)
(22.2
)
(68.9
)
(60.1
)
Income (loss) from continuing operations
71.9
(313.9
)
231.6
(199.6
)
Discontinued operations, net of tax
—
(0.5
)
—
(0.7
)
Net income (loss)
71.9
(314.4
)
231.6
(200.3
)
Less: net income attributable to the noncontrolling interests
(3.9
)
(4.3
)
(13.4
)
(11.9
)
Net income (loss) attributable to TransUnion
$
68.0
$
(318.8
)
$
218.2
$
(212.2
)
Basic earnings (loss) per common share from:
Income (loss) from continuing operations attributable to TransUnion
$
0.35
$
(1.65
)
$
1.12
$
(1.09
)
Discontinued operations, net of tax
—
—
—
—
Net income (loss) attributable to TransUnion
$
0.35
$
(1.65
)
$
1.12
$
(1.10
)
Diluted earnings (loss) per common share from:
Income (loss) from continuing operations attributable to TransUnion
$
0.35
$
(1.65
)
$
1.11
$
(1.09
)
Discontinued operations, net of tax
—
—
—
—
Net income (loss) attributable to TransUnion
$
0.35
$
(1.65
)
$
1.11
$
(1.10
)
Weighted-average shares outstanding:
Basic
194.6
193.4
194.3
193.3
Diluted
197.0
193.4
196.3
193.3
As a result of displaying amounts in millions, rounding differences may exist in the table above.
TRANSUNION AND SUBSIDIARIESConsolidated Statements of Cash Flows (Unaudited)(in millions)
Nine Months Ended September 30,
2024
2023
Cash flows from operating activities:
Net income (loss)
$
231.6
$
(200.3
)
Less: Discontinued operations, net of tax
—
0.7
Income (loss) from continuing operations
231.6
(199.6
)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization
400.5
391.1
Goodwill impairment
—
414.0
Loss on repayment of loans
2.6
3.0
Deferred taxes
(94.1
)
(101.3
)
Stock-based compensation
85.6
72.9
Loss on early termination of lease
40.5
—
Other
17.9
13.1
Changes in assets and liabilities:
Trade accounts receivable
(88.9
)
(104.2
)
Other current and long-term assets
31.4
(42.4
)
Trade accounts payable
44.2
16.9
Other current and long-term liabilities
(92.8
)
(19.7
)
Cash provided by operating activities of continuing operations
578.5
443.8
Cash used in operating activities of discontinued operations
—
(0.2
)
Cash provided by operating activities
578.5
443.6
Cash flows from investing activities:
Capital expenditures
(198.7
)
(213.2
)
Proceeds from sale/maturities of other investments
—
63.9
Purchases of other investments
—
(43.7
)
Investments in nonconsolidated affiliates
(5.9
)
(36.9
)
Proceeds from the sale of investments in nonconsolidated affiliates
3.8
—
Payment related to disposal of discontinued operations
—
(0.5
)
Other
5.7
(0.1
)
Cash used in investing activities
(195.1
)
(230.5
)
Cash flows from financing activities:
Proceeds from term loans
934.9
—
Repayments of term loans
(927.9
)
—
Repayments of debt
(141.0
)
(310.9
)
Debt financing fees
(13.5
)
—
Proceeds from issuance of common stock and exercise of stock options
24.5
23.1
Dividends to shareholders
(61.7
)
(61.4
)
Employee taxes paid on restricted stock units recorded as treasury stock
(30.1
)
(17.6
)
Distributions to noncontrolling interests
(4.7
