TransUnion (TRU) September 2026 Conference Transcript

All right. Good morning again. Thank you for being here. I'm happy to have Chris Cartwright from France Union, who's the CEO of France Union. So, Chris, thank you for your time. Always a pleasure. A lot to talk through. Maybe I'll start a little bit high level just from a macro perspective. You know, you guys have some unique insights into what's going on in the lending environment, the consumer. You know, we've got oil above 100, filling up the car, the gas tank is not cheap, rates above 7. So just, you know, your route of the consumer and how that impacts kind of your current guidance and assessment of your financials.

Yeah, for sure. It's a good place to start. It's a bumpier world than I think we all wish that it was. Over the course of the third quarter, you know, we expect that, you know, we're well positioned to achieve the guidance that we issued in Q2. Even with the upgraded targets that we outlined for the market, you know, as you'll recall, all we really did in the upgrade was to flow through the goodness from overperformance in the second quarter. And then we're also very cautious about not changing our mortgage estimates for the full year because we just felt like the balance of risks was more toward rate increases and some diminished mortgage volume. So mortgage is our most rate-sensitive product, and higher rates are not helpful. But as you know, we're at, like, historic volume lows in the mortgage industry currently. So we're kind of at a floor level of transaction with perhaps occasionally a little bump above that for some refi activity. That's likely to diminish. I don't really expect that volumes will be materially impacted in card, auto, consumer lending, fintechs. They are far more insensitive to rates. There's just more spread and more opportunity to either recalibrate the rates or shorter durations, right? Right. Net-net, I feel like the guidance that we provided, which is to achieve at or above the high in the third quarter and for the full year, we still feel pretty good about that.

Okay. And then how about, when you think about your medium-term or your longer-term guidance, how important is mortgage to those numbers? Like, if things just stay flat for the next year, two years, does that pose a risk to those numbers?

Yeah, well, as you know from our investor day earlier this year, any improvement in mortgage volumes beyond the current level of activity we've been experiencing previous, that was upside to the medium-term guide. Now, look, if we do get some increased stability and some rate improvements and the like, and refi volumes pick up or purchase volumes pick up, that is very additive to the top line and the flow through is very good. And let's hope that happens at some point during this kind of three-year period. But we don't need rates to drop, and we don't need a big influx of volume to compound the top line, high single digits.

Some of the other categories where you said you don't expect to see much impact today, at least, maybe let's talk to the trends, starting with auto. What have been the trends? I mean, you've been outperforming the market growth, so what are some of the reasons for that as well?

Yeah, well, running through the other ones, I mean, auto will probably continue to be about a mid-single-digit grower. In the 23-24 timeframe, there was some demand pull forward, fear of tariffs and the like to continue. On the hard side, again, it's also kind of a low-to-mid single-digit grower during this period. I think it's steady there. In particular, the fintechs started to revitalize or reinvigorated with rate to continue, although perhaps over by quarter, given the higher comps that they're growing over. But things look good in consumer lending. I mean, I think the appetite on unsecured consumer loans is steady to growing. There's a lot of capital. And the fintech players have kind of diversified their product lines and diversified, so I feel like they're in a much better position to weather changes in rates.

And before I touch on fintech real quickly, Last week, Todd had talked about how the financial services ex-mortgage had been growing high single digits for many, many quarters now. And I guess the volumes have been more low single digits-ish college. So what are the key factors driving that outperformance for you guys?

Sure. Well, I feel like we've been competing really effectively. So we do have some share benefits there, which is nice. But also, we have more products that we can sell into the financial services segments. That would be our expansion into marketing and the fraud and the trusted call phone services and the like. And also, our analytics platform, TrueIQ, has really gained a lot of momentum in recent quarters. Now that it's complete, now that it's on the OneTrue platform, it's really solidified and, you know, capped it.

Got it. And then just on FinTech, I guess the question was more just help us, you know, how big is FinTech today? I know you had peaked kind of a few years ago, but just curious where you are.

Yeah, we peaked at about $175,000, and that was back toward the end of the low-rate environment. $22,000, $23,000 certainly changed that, and the fintechs kind of went into hibernation mode, if you will, limited to no originations. Now it's about $145 million. Yeah, that's it. And, you know, look, it's really come back in the $24,000, $25,000 timeframe. but as I just mentioned the space is healthy and you're actually having good success in cross-selling into the syntax I mean our credit and credit analytics have always been our strength there in combination so it's kind of an exciting time for us okay and I know we haven't asked this question for the last few years but I think people are starting to get nervous again but the recession risks and your ability to you know even grow during a recession you've

highlighted that in prior investor days. Maybe if you could just help us, you know, how you think about how you can counter if we do get into one of those situations.

Yeah, well, look, the last three years, not recessionary, kind of okay, stable to sideways market volumes, if you will. And we've been compounding net of FICO, seven, eight percent top line, right? If there's a recession, there could be a step down, but I think, you know, and diversified and resilient than it's ever been. Part of that is the geographic expansion. And in the last kind of lending recession in the 22-23 timeframe, you really saw the benefit of that geographic diversification. The U.S. went down a lot, but the international portfolio grew mid-teens for a while and carried out. There's also been good product line diversification. And even within core credit, great growth versus in our credit offerings. It's not origination, volume dependent. We're doing a lot of proficiency and collection tactics and just generally can grow, even in more difficult market conditions.

Got it. One of the other areas people like kind of the macro update on is in India. It's obviously, you know, one of the gems of your business. It, you know, was growing north of 25%, even higher than that at the time. It was compounding in the low 30s for a period. and now it's kind of slowed down, picking back up a bit. But just maybe rehash why it slowed down and what do you think the trajectory from here on is?

Yeah, so the first cause of the slowdown from a couple of years of low 30% organic growth was the RBI became concerned that there might be a bit of froth in the online unsecured lending market. And so they wanted to ensure that appropriate on those loans and that those loans weren't being granted, and consumers then speculating in the equity market about that. On the reserves, and they increased the level of deposit reserves you had to have against those types of loans, which slowed the market down tremendously. We also had some banks that looked at the profitability of recent origination vintages in CARD and decided to cut back a bit. And those two product lines, unsecured lending and CARD, reset things lower, but our volume has been growing back up over that. In addition, recently, on the commercial side, the Indian government has had inside businesses that have led to increased lending volumes in commercial as well as the consumer rebound. The fact that we will grow high single digits and maybe double digits exiting the year in India, and medium-term expectation for India's growth is kind of mid-teens.

Okay, and that mid-teens growth, Is there any way to break that out by pricing, volume, innovation, the kind of breakout that we usually do?

Yeah, I think it's going to be driven a lot through a number of innovations, right? One, we've been in our consumer credit file. We've expanded the number of banks and the volumes of trade lines furnished. We've enhanced the amount of data we're collecting from each of the banks. We recently rebuilt our primary in India. And then we've been investing heavily to become a leading player there. We've gotten outsized growth in commercial credit. On top of that, now that the tech transformation that we've done and a lot of the new products that we've built on our OneTrue platform are available, we're moving them into the Indian market. So we moved our analytic sandbox, TrueIQ, into India in the early part of the year extremely well. There's a ton of interest and opportunity in that market. We've expanded our trusted call solutions into India. Now, it's pre-revenue right now, but we have struck deals with all of them, and we're going to become the branded and trusted call authentication provider in that market, and that's been a huge grower here in the U.S., as you know. And then our fraud mitigation platform, which we call True Validate, that's also being brought into India, and an introductory version of the marketing suite. So we're taking all of these global products that we've built on the OneTrue platform, and we're migrating them into India and also to other few key markets around the world right now.

And maybe just one last one in India. In terms of the competitive environment, I know Sibyl, which is your brand in India, has 70-plus percent market share. Sounds like that's sustainable, and all these new features you talked about is probably a differentiator, or are you seeing competition do similar?

Yeah, look, it's all competition forces innovation. And, yes, we've got an advantage, but we can't rest on our laurels. So those improved quality of the credit data as well as the scores, that's all about, you know, maintaining and expanding our competitiveness in the core consumer part of credit. And the rest of it is just, you know, leveraging the innovation that we've created centrally and pushing it out into all the markets where it's applicable.

Got it. And then talk about competition, maybe we'll switch countries to Mexico. Equifax is about to close a deal to get into Mexico. You guys just, you know, bought the majority in Mexico. So maybe the first question is just, is it a two-bureau market? What is the competitive dynamic? I know also you bought consumer. They bought commercial as well. So just curious how you think about the competitive positioning there.

So the business that we acquired that we have owned 26% of since the mid-'90s was the consortium of the major banks and the major and other lenders contributing their trade lines to the Bordeaux de Mexico. What Equifax acquired is called Circulo de Credito, and it was Mexican families, and it concentrated more on fintech and less on positive data from the central banks, right? So we are, you know, the market leader trade lines contributed by all the key mainstream consumer lenders in the Mexican market. And that's proprietary to us. And we've had a fairly limited focus on the fintech sector in Mexico. As you would imagine, when the mainstream bank, it's a little bit dicey or sensitive. That was more what Circulo did. Now, the fintechs have been growing very rapidly in Mexico, and you can see that in their growth rate. But our business has grown extremely. That's beyond what we've forecasted for 27. And I'd rather be a little bit cautious because in the first year of ownership, you know, there's a lot of changes that are taking place, cultural, organizational, technological. And so I want us to weather that. All parts of the Mexican, you know, lending ecosystem, including the fintechs. We understand fintechs. We're very good at that. We'll be bringing a lot of our know-how from the U.S. into the Mexican market. We're already hosting some of those clients in Chicago doing innovation labs and the like to show them how powerful our data is and how it can improve their lending operations.

But just on the trade line, the 6-7 trade lines, I guess that does not include fintech? Was that your point?

There's a very limited amount of fintech.

And then just in terms of timing, like you said, you've owned 20-something percent of this for a long, long time.

Yeah, I think you invested in 96. I'm sorry.

The question was why acquire it today? What is it about the Mexican market that made you think now is a good time?

Well, you've got to make hay when the sun is shining, right? And we've been trying to acquire Mexico since 96 because we think it's a great and growthful market with a large and growing population and also underpenetrated along the financial products. So it's got all the characteristics that you want when you enter into a new marketplace. It also has just a very basic bureau. This is like the Bureau 1.0, and I think more developed countries are on to the 3.0 version of a credit reporting agency. We think we can infuse all of that innovation and goodness into Mexico in short order, and that will be very good for the Mexican market and for Mexican consumers. So the banks were ready to exit, and we had a right of first refusal, and we also had a lot of experience in that marketplace. and we're excited to be there.

And then maybe just a broader question on international geographies generally. I mean, you are in a bunch of others, but is it just whenever kind of the dominant bank-owned bureau is up for sale, you'd be interested in that, or how should we think about where you want to be globally?

Yeah, absolutely. And, I mean, then you get down to just, you know, what are the growth characteristics of a given market? How well is it being serviced? Can we buy our way in at an appropriate price? And do we believe that our platform, our know-how, our innovation can give us, you know, an upside to the growth and profit that's currently, you know, being produced?

Got it. Maybe we can switch to the one true migration and the platform and everything. So maybe first question, where are we in terms of that, you know, migration? I think in your last call you said by your end you'll have all the U.S. batch completed of sorts. So just the quick update there in the timeline.

Right. So we are currently in the process of migrating all of our credit customers in the U.S., our batch API credit customers, onto the OneTrue platform. It's going well. We're more than halfway there now, and we will complete the migration in full by the end of this year. And, you know, the U.S. credit alone is almost 40 percent of global revenues. high confidence that that's going to be done by the end of the year, the OneTrue platform versus the Heritage platform. It will probably take another 27 until all of the U.S. marketing customers and fraud have been converted fully onto OneTrue. And even if we don't get like perfect 100% conversion, we're able to compress and consolidate the legacy tech stack to minimize of the spend and allow all of our engineers to focus on one true in the go forward and then I'm guessing international will be after that or in conjunction so the next four countries that we're rolling out as the UK in India and then we're also going to do the Philippines so it's five countries aside once we do those next four countries that's 95% of the revenue of TransUnion now we've already stood up instances of one true in each of the next four countries and we're working with understand the fit gap and to plan the migration Institute 95% of our global volume running on one true okay look the benefit of doing that is once you're running on one true but you get a whole series of products that you can launch in the market relevant products that they don't have the day so we can really lean into ultra validate marketing, which is true audience, and push all of that into, you know, build it once and then push it into the major markets around the world.

Got it. And then from a customer standpoint, once the one true migration is done, what is the largest improvement that they will notice?

Yeah, a couple things to say about kind of the customer experience. Well, first of all, when I talk about the migration, some folks ask, you know, is that going to be difficult like an ERP software migration? It's not like that we don't have licensed installed software for the most part that runs on a sophisticated text to a different API. And then, of course, monitor traffic and make sure everything is calibrated and appropriate. So that conversion is not that difficult. But in terms of what the client gets, they get five nines availability. They get a dramatic increase in response time. And they get a whole bunch of integrated analytic identity and product functionality that all rest on top of the OneTrue platform. So it's much easier for them to constructs beyond the – and it's much easier for us to show them the value and to cross-sell all of those products into their marketplace, or rather into their demand.

Okay. So from a revenue perspective, it sounds like it's NPI, it's cross-sell, it's cut, copy, paste into other countries. Yeah, stability. From a margin perspective for yourself, like how should we think about once OneTrue is done, how much of an incremental margin benefit is it?

Of increasing scale within the organization. The starting point before OneTrue, 30 countries, 30 independent tech stacks, 30 fully vertically integrated management teams. As we have created this form, if you will, as OneTrue, we can build things once and then rapidly deploy them around the world. We'll save a ton on infrastructure. We'll be able to free engineering capacity up from maintaining all these 30 legacy systems to concentrating on innovation on the OneTrue platform and all the products that rest on the platform. And there will be efficiencies that we can push to margin. Now, as you know, we've committed over the next three years to enhancing margin 50 to 75 bps per year. This is an important way in which we can do that in addition to just steady high single digit or beyond revenue compounding and the natural fall through to profit.

Got it. And maybe this can be a broader answer, but how important is AI, Gen AI, all the new technologies to one true and to these margin targets that you've set out?

Yeah, look, applying AI is, for us, additive to our financial targets, both on the revenue and on the cost side. Now, I would expect, I mean, look, we're already kind of a rapid adopter of AI. You've seen the analytics orchestrator framework, the agentic framework that we've created to take our data and to rapidly develop all of the predictive models that are built over the lending cycle on that data. I think that's going to give us a productivity boost, but it's also going to help us drive more analytic revenues across our customer base. The software development organization, the data science organization, they're productive right now. And then we're working across the entire landscape where we've got a lot of employee concentration, whether it's customer operations or consumer dispute management operations, to apply AI to drive productivity. So I think there will be material net savings as we roll AI out across the entirety of our organization. Some will take to margin. Some will reinvest to further accelerate revenue.

Got it. Okay, let's shift gears to some of the regulatory noise out there. By one count, Director Pultee over the last few weeks has tweeted almost 40-plus times now. So just your understanding of, you know, what's going on at the FHFA, what Director Pulte is trying to achieve. I know you talk to his teams a lot, but just curious how you would kind of assess broadly what's going on here.

Yeah, a lot of communication from the director on a lot of topics, you know, some directly related to bureaus and bureau data, some related to scoring, and really the whole landscape of mortgage services and mortgage data, right? I would say, you know, broadly, the director is intent on modernizing the FHFA and the GSEs and has been an advocate for change, including, you know, competition, price competition and scoring, if you will. Our engagement with the FHFA and the GSEs is frequent and it is productive. And it's a different world, right, where regulators and politicians are frequently tweeting these things. Sometimes it's helpful. Sometimes it can confuse. What I will say, you have to tip your hat to the director for having the courage to take on score competition. The Vantage score has existed for 20 years, and he's the first regulator that said, we're going to shake things up in the market, and we're going to push the market to accommodate different. And recently, one of the sweets, he signaled that the GSEs may begin to publish a great idea. I mean, the market and the GSE score is for TATIVE, and we would be happy to partner with that. So I think all of this is, look, it's net good because the score to be modernized using trended data and alternative data, Vantage does, will do that, and that's a net benefit to the market. And if the GSEs start publishing and commercializing their own scoring logic, on some of the other issues, a couple of ways to think about this, policy perspective, and then from a trans-union impact perspective. You know, my sense of Washington is that the tri-merge is still appreciated by many parts in the industry and is viewed as the gold standard. And we know analytically from work that we have done, that our competitors have done, that S&P did back during the Biden administration, that in the coverage of the three bureau credit, food one of the population would not qualify for a mortgage or would be materially impacted in terms of their pricing. S&P sized that at a couple of million of mortgage applicants each year, right? And even a small variation in the interest rate over time can mean thousands of dollars of increased interest against the savings of $11.50 on a bureau report, right? So you have to be very – but, again, the context is it's tough out there for mortgage lenders. Volumes are at – of what the nation needs, and borrowing costs are growing up. So it's hard to meaningfully impact affordability unless you do something about those, you know, two foundational elements of affordability. From a policy perspective, though, more data, we're going to see that empirically, about $5.25 billion in our headline mortgage revenue is about $750, on which there's, you know, no margin. Another good chunk of that is related, you know, credit data consumption. And so you're left with maybe 200. Of that 260, about 37, the FHFA, the VA, the Department of Agriculture, other government entities providing mortgage partnerships, jumbo loans. So maybe we have $100 million, maybe a bit north of $100 million in revenue that's tied to maybe half of a business that's growing at 7% or 8% organically. Maybe it costs us, say, slime. And it will be very much like the early assessment requirements. In fact, they said you could only pull one credit report, and they would give you the indication on whether the GSEs would buy the mortgage. After three years, the market's kind of settled down on two-plus transaction. And so I think you'd probably see something similar if we went to a buy-merge. Net-net, the best policy for the U.S. mortgage market and U.S. consumers is, preserve the tri-merge.

A profit impacted trans-union, we could easily absorb that in a given year and continue to And, you know, the prior FHFA administration had considered bi-merge as well, and it was an optional. So, you know, to your point, if the industry believes in tri-merge, they'll do that. But the question is, direct support has also been tweeting a lot about a single-file pull. That sounds a lot more draconian type scenario. Like, is that even something the industry would, do you think, support there?

Well, I don't think so. I mean, again, there's a lot of economic pressure because of volume, and there are certain advocates for buy, merge, or single pull. But even the MBA did a recent analysis, their own analysis, and they are a principal advocate for the single pull. And it showed that one-third of the time you're going to misclassify consumers, and that's going to impact via the LLPAs in selling. I mean, in the analytic universe, only getting it right two out of three times is not very good. I kind of didn't know whether they were advocating our position or their position. I think a single pull is not responsible policy.

Fair enough. You know, the 40 to 60 point difference you talked about between whichever combination of two reports you pull creates like the gaming opportunity. And I think your point is the industry will still keep pulling three reports. So kind of a similar question on the score side. I mean, there's some big differences in some of the scores you get from Vico and Vantage. So do you think in order – I mean, it sounds like there will be some gaming in some corners, but do you think that will also be a two-score market, like people will pull both scores?

Well, it could, particularly during this transition period. And, look, as you know, in 26, this transition, there's a lot of two-scores being pulled. and I think that's good and that's kind of mortgage ecosystem participants that are on this learning curve once we're through the transition period and the market is enjoying the benefits of some techniques on trended data and incorporating alternative data sets when they're available about the gaming because the status quo is a score that really hasn't evolved in 30 years now we're moving to competing scores FICO and Vantage that are modern and much more performant, and I wouldn't worry too much about the gaming risk there, not from an inclusion perspective or a safety and soundness perspective.

Got it. You narrowed down the exposure of TransUnion to a buy and merge pretty nicely. The one thing you didn't factor in, of course, was let's just say we do move to a buy and merge or a single pull, your ability to take share so that it's not like you lose one-third simply. What are some of those things you can do to differentiate in that scenario to, you know, not lose a third, I guess?

Yeah, I think what you're saying is what's unique and special about our credit while relative to our competitors? Well, look, each of the three bureaus puts forth, you know, a high-quality predictive product. Our advantage has been, we've been in terms of printed data, and we go back the furthest in time. We go back two and a half years. And because we were first to the market by three years, we've had more time to develop the analytic attributes that sit on top of the core credit data that make our data very predictive and performed and expanded our coverage in the payday lending market, in the unsecured lending market. And so we've got a great complement of trade lines there that provides us with an advantage. Our fintech market sharing coverage is considerable. It's best in class. It's well above 50%, 70% by some estimates. That's a differentiator as well. We've got good rental coverage, improving utility coverage. There's a lot, right? And so, again, each of the bureaus I know can tell their own story about the uniqueness of their proprietary bundle. We've got a good story, and we've competed very well in the mortgage market for a long time.

Okay, in the last few minutes we have left, maybe let's touch on capital allocation. You know, you guys have, you know, the capital allocation has transformed a lot over the years, and now it's become a much more balanced policy. So just, you know, what's changed and how do you think about capital allocation today?

Over this period of transformation, capital to acquisition, to acquiring and broadening our value proposition, and then some capital to technology modernization and modernizing our org and our workforce, that spend is largely, you know, behind us. So our leverage ratio was 2.6 times, even with the acquisition of Mexico at the end of the second quarter. and we're very confident we'll be at our two and a half times target or better by the end of this year, right? So that gets the balance sheet in very good shape. Free cash flow of 90% again. So if you look forward to the next three years, we're going to generate a lot of cash. In my opinion, in the opinion of many people in the room, you know, our shares are material for a number of reasons, regulatory tweeting and uncertainty and certainly the macro environment. So buying back shares is a really good use of the free cash flow that we've got. We'll continue to, you know, acquire relevant innovation when we think it's smart and we can get it at a reasonable shareholder-friendly valuation. We'll do that. We don't see any need to do anything really big or transformative. We did that. We're still digesting and realizing the benefits from a lot of that. One true is a real manifestation of that. So I don't think shareholders should worry or think about any of that type of activity. So the prudent balance between acquiring shares, managing the debt load, and the occasional strategic acquisition for innovation's sake, or maybe entering an attractive country, that's the capital allocation landscape we see.

Okay, and just maybe one follow-up on the, you know, you talked about potential AI risks hitting your stock. You know, in terms of the software components of your business, you know, your UK peer has been suffering because they have a huge software business and they talk about it and people think that could be at risk. Just help us appreciate how much of your software business is tied to that contributory data set that you have that's hard to replicate versus sitting alone and could be at risk of vibe coding?

Yeah, sure. Look, vibe coding is not a risk for us. We are a data and analytics business and revenue coming from annuity-based analytics solutions today. That said, when you think of our overall value proposition, the stack, It's very concentrated in data and attributes and scores and basic analytics today. We call that the intelligence layer. We've taken that intelligence and brought it to market in some point solution software and some integrated suite software, but it's really all about delivering the data functionality. But in this era of, you know, agentic commerce and AI, we've got the opportunity to start doing a lot more work, placing their own people. That's why we created the analytics orchestra, why I think we can really excite vibe coding and other threats. I mean, it's still, you have a lot of domain knowledge. You've got to bring a lot of proprietary data and know-how. And we think we can scale up that aspect, and that is additive to our business.

Well, that's a good place to leave it. We're out of time. So thank you for being here and thanks everybody as well. Thank you. Thank you