We are really excited to host Todd Cello, CFO of TransUnion, and Aaron Hoffman, head of IR. Given it's a financial conference, we'll start off a conversation on consumer lending. I was wondering, Todd, if you could discuss the current trends on consumer lending, cards and autos. What do you see out there? Thanks. Sure. Okay. Well, good morning and welcome everybody. Ashish, I appreciate the opportunity to be able to present this morning. I think your first question is a good place to start because it's definitely a question that we get quite a bit just in regards to the U.S. markets financial services business. Let me, let me break it down into the three areas of, you know, that Ashish just listed out. First, in our credit card business, what we are seeing, I'd say is a resiliency of our the large credit card marketers, you know, to continue, you know, to market. Albeit maybe, you know, things softened a little bit in the second half of 2022. The customers still remained acquisitive because they're fighting for top-of-wallet share. you know, the dynamics that we're seeing just by looking at our database is we're seeing you know, consumers with increased utilization of their credit cards, which we think is you know, definitely a you know, a relationship to the high inflationary market that we're living through right now. we're also seeing card balances increase as well. there's opportunities then for TransUnion as that happens for us to help our customers be able to manage their book of business and to you know, mitigate risk there. There's about 166 million consumers in the U.S. have a credit card, which is pretty significant. What I think one of the most important things to look at in credit card is just the delinquency rates. Are people... You know, if utilization's up and balances are higher, what's going on with delinquencies? We're seeing delinquencies, you know, back at, you know, a pre-pandemic level. They got unusually low during the pandemic and through the recovery, and now they've ticked, you know, back up. All in all, credit card is performing okay at this time. If you move over to our consumer lending business, within consumer lending, this is where our fintech customers are as well. I'd say that, you know, the dynamic that we're seeing there is we're continuing to see the fintech players continue to grow their book of business. They're not as acquisitive as they were, you know, in the recovery. If anything, what they are doing right now is they're being more selective about, you know, who they engage with. What we're seeing there is I think there's about 22.5 million consumers have a consumer loan, which is, you know, up significantly. Probably no surprise, again, like I was just talking about with credit cards from a delinquency perspective, there's a clear dichotomy, you know, that we're seeing. Subprime consumers are showing a lot of delinquency, but the super-prime are actually paying better. There's definitely a big difference there in that market. Just to spend a minute on the fintechs, you know, themselves. I mean, for TransUnion, we sized it. This is a question we get quite a bit about the size of the fintech space and our exposure to it. We have relationships with 24 of the top 25 fintechs, and it represents about $175 million of our revenue. If last year, you know, we did about $3.7 billion, $175 million came from the fintechs. We're not necessarily concentrated with one customer, but I think what's most important about the fintechs is that the business isn't just growing because of volumes. If you were to go back to 2019, it was a $100 million business, right? We've grown it from $100 million - $175 million from 2019 to 2022, really as us being able to offer a full breadth of our offerings to the fintech, you know, customers. Like, the acquisition of Neustar and even Argus to a certain extent enables us to continue that. It's not just a pure volume play. What we're hearing from our fintech customers is that there's still demand for the loans that, you know, the loans that they get to, you know, run their business. It's just that the investors, needless to say, they're more selective right now in who they want, the book of business that they want to acquire. All in all, you know, there's definitely a resiliency there. As far as auto is concerned, you know, last year, obviously the new car sales was well documented, you know, throughout the press because of the supply chain challenges. The greater majority of TransUnion's revenues in the auto space do come from used car financing. Not saying that new car sales are not important to us, they are. What we're seeing is that the new car, you know, the supply chain has eased. I think the industry is calling for 7% growth in 2023. We'll clearly, you know, be able to, you know, play a meaningful role there in that space. Even in the used car market, a nice portion of our business is transactional, and it's based on shopping. If you're looking for a loan and, you know, you check for, you know, a loan with one lender and then go to another, that's typically, you know, good, you know, for us. I think overall the trends in auto are positive right now. That's great. That's very helpful color. Maybe switching gears, let's talk about Neustar. Neustar revenue growth accelerated in the fourth quarter, and you guided to a pretty strong momentum going forward. In particular, you called out pretty strong sales momentum. Can you just talk about, like, what's driving the sales momentum? Have you already started to see some of the synergies by either cross-selling or improved quality of the data? Any color on that front? Thanks. Yeah. No, for sure. The Neustar business throughout 2022, the revenue growth rate was increasingly better. Needless to say, we were very pleased with the exit of Neustar in the fourth quarter, you know, being able to post 8% growth for the whole business, and, you know, with the marketing business up, you know, almost up to 10%, and, you know, in a challenging market. That was, you know, obviously very reassuring to us because this is the conviction that we had when we made the acquisition, that we knew that the growth potential would be there even, you know, in a softer type of market, which clearly is what we're operating in right now. When we think about Neustar, last year, it was all about integration. We spent a significant amount of time, you know, just simply getting the teams to work together in one org. You know, we recast, you know, our revenues for Neustar at the end of the year. While that might seem like it's a reporting or an accounting type of issue, from an operational perspective, that was a big deal, because what that enabled us, enables us now to do is to push the targets for Neustar into all of our vertical P&Ls. There's a joint accountability in 2023, and that's really where the focus is at, is it's on cross-sell opportunities, you know, this year. Where last year we were focused on integration and Neustar was kind of carrying the momentum that they had at the end of 2021 into 2022, this year is about being deliberate with accountability across our U.S. markets business in driving cross-sell revenue. As we get into 2024, the focus will then be more on new products that we bring to market. We've spent a significant amount of time last year taking Neustar's OneID platform and taking what we consider to be superior technology with good data. Bringing TransUnion's non-credit data into the OneID platform is giving just better signal and overall stronger performance. We're excited about the product capabilities that will come from that. I guess the last thing I'd say on Neustar is the growth is coming across all three major product lines. I already talked about marketing, but the risk of the fraud business also performed very well and has got a good trajectory as we're in 2023 right now. Also the communications business had a very strong 2022. Their business has something that's called a Trusted Call Solution capability that is something that they launched in 2018 before TransUnion acquired the business. Last year, it generated $50 million of revenue. Just think about, you know, getting a mobile call and, you know, if it's not a contact in your, in your, in your phone, odds are you're not gonna pick it up. What this capability does is it verifies that the call is legitimate, and it has the opportunity to put a logo and, you know, better branding and, you know, an appropriate name, so you're more apt to pick up the call. We see a tremendous amount of opportunity there. That's what gives us the conviction on a high single digit guide, is that all the businesses are performing well, and focused on cross-sell and the accountability. That's very helpful color. That's great. Maybe just building on the Neustar, but also the other two acquisitions that TransUnion closed last year. Can you just talk about as we think about over the next three to five years, over the next midterm, how do these acquisitions either help you with increasing your wallet share with your existing customer or improving the moat within your existing customers? Does it also help you go expand your addressable market and go after customers which may not have been possible as a standalone TransUnion? On those three fronts over the midterm. Clearly the acquisitions that we made of Neustar, Sontiq and Argus, you know, were to, you know, build out our data capabilities first and foremost, when you think about what Neustar has the capability of as well as with, you know, Argus. You know, we bought these businesses, we talk about Neustar a lot and the cost synergies and the margins, we bought Neustar because of the growth potential that we saw for many years. Identity had been a focus within TransUnion as well as fraud. What we saw with Neustar is that they kinda checked both of those boxes for us and that they had superior capabilities in being able to resolve identity, whether that's for marketing purposes or fraud purposes. We see a tremendous amount of opportunity. As I was just mentioning in your previous question, just as the data comes together, that, you know, we're gonna be able to, you know, be more provide our customers with a clearer picture of the consumer to tailor offerings to make certain that they know who they're transacting with, right? And, you know, have that certainty. From Argus's perspective, you know, being able to have the credit card, you know, benchmarking data is just a natural fit with our financial services customers. You know, on your The first question you asked me, and we talked about credit card and, you know, being able to complement already a robust set of capabilities that TransUnion has with being able to help our customers know where they stand in the credit card ecosystem is incredibly powerful. You know, we're gonna re-platform, you know, Argus, you know, onto, you know, TransUnion's Prama application and make it a lot easier for our customers to be able to benchmark and see how they're performing. The business, you know, performed, you know, relatively okay, in line with our expectations in 2022. This is more about the future play and how we're able to bring those offerings together. With Sontiq, you know, the identity protection capability is something that TransUnion didn't have. We had a good capability with three-bureau credit monitoring, but we felt it was important to be able to complement that with identity protection services. What's great about Sontiq is the revenues aren't just from a direct-to-consumer or B2C point of view. The relationships that Sontiq has go with the financial services customers as well as insurance and employee benefit customers as well. Those relationships are longer lasting. They're not month to month. There's, you know, just some nice certainty, you know, with the revenue there. Being able to bring, you know, the Sontiq capabilities together, even from a B2B perspective with our financial services customers is a very powerful, you know, growth potential for us. That's great. Maybe switching gears now and talking about the cloud migration. You've talked about Project Rise. I was wondering if you could discuss where you are in terms of Project Rise, and particularly if you can talk about what you're doing on the cloud distribution front. On the recent call, you talked about how Neustar is using Snowflake application APIs, native APIs. I was wondering if you could elaborate on that front and where do you see or how does Project Rise really transform the business? Okay. Yeah. Project Rise, you know, is our technology transformation initiative that we launched back in 2020. We've committed to having that completed by the end of 2024. The end result of that will be a hybrid type of tech environment. We'll have some of our tech on-prem, and then we'll also have the other portion of it, needless to say, in the cloud, right? We made a tremendous amount of progress in 2022 with this tech transformation. You know, the highlights, I'd say first is, you know, specific to Neustar, 'cause when we acquired Neustar, we put Neustar into this tech transformation program. Clearly, we didn't know that that was gonna happen when we launched in 2020, right? It caused us to reprioritize there. We were able to close eight data centers last year with Neustar hand. That was a huge accomplishment for us and, you know, getting, you know, their work in the cloud. In addition, last year, we moved 30 of our applications to the cloud. That was a big accomplishment for us. When we look ahead to 2023, we're expecting to move another 100 applications to the cloud. You know, we've got a lot of good momentum, you know, that's, you know, going forward. We committed to spend up to $240 million through the end of 2024. I think we spent $110 million so far. This year in 2023 will probably be our biggest spend. Goes hand in hand with all those applications that I'm talking about that are going to migrate. I think what's most important though about the tech transformation is, Yes, there's definitely efficiency gains and, you know, we're definitely enjoying some cost benefits that are happening now in the program that we're able to either redeploy or save and push down to the bottom line. Really what this tech transformation's enabling us is to have efficiency with how we deliver our products and services. You know, for example, if you were to think about in the past when we would, you know, stand up a new product, it would be a pretty significant technology endeavor for us. You know, we'd have to set up a completely different physical environment, you know, to enable the product capabilities. A good example of that is what we've done in Brazil. About a year ago, we got a license from the government in Brazil to operate a credit bureau. We're now in the process of, you know, enabling that business. What we were able to do is we were able to build a credit reporting application in the cloud that we just simply deployed, you know, to the Brazil region. Like I said, if this was, you know, three or four years ago, we would have been having significant discussions around the expense of building another data center and all the infrastructure. Being able to deploy that quickly is a tremendous benefit, you know, for us. That's very helpful color. Again, we all know, how successful Project Spark was, so we're really excited to see how Project Rise will repeat that success as well. Maybe just following up on the comment on Brazil, just looking at international markets in general. Obviously, India has been a huge growth area for you. Can you talk about the sustainability of growth there? Also you recently introduced a new product in the Indian market. I was wondering if you could briefly touch on that as well? Yeah, sure. The India business is exciting, would be the way that I would describe it. It's a business that, you know, TransUnion has been around for over 20 years. We helped establish it with the banks, you know, in India. In 2014, we acquired enough of the business to be able to consolidate it all the way to today that we own 92% of it. You know, the opportunity, there, and, you know, what we thought 20 years ago, was, you know, the, just the dynamics in that market, the emerging middle class, and, you know, people aspiring for higher quality of life, we felt that, you know, TransUnion plays perfectly into that, enabling people, you know, to be able to, transact with confidence, you know, with their banks and vice versa, with the banks with, you know, consumers. Early on, you know, we before we even consolidated the business, we enabled the business to have some sophisticated tools for a business of, you know, that maturity. I mean, we're talking maybe 10 years old, by bringing analytic and decisioning capabilities, you know, to that business. What it's just grown to, you know, over the last several years is just truly remarkable. I mean, besides the core credit business, which is, you know, its legacy is called CIBIL. The brand is so strong in India that people refer to the score as, you know, did you get your CIBIL Score? Kinda like the way, you know, we would talk about like Kleenex or something for tissue, right? I mean, it's that well known. Core credit's where the origins are at, but the business also has got a great commercial database, as well as capabilities in direct-to-consumer, fraud and in even some of our vertical markets, you know, in insurance as well too, that, you know, we've been able to bring the know-how of these verticals that we've experienced in our global business, not just in the U.S., but, you know, in other parts of our portfolio, you know, to India. The opportunity there, as the middle class continues to expand, is just, you know, tremendous. You know, by us being able to bring more and more sophisticated offerings, we say, entrenched with the customer base there. A good example of that is in a partnership that we have to the last part of your question with an agricultural lender. I mean, obviously the economy in India is heavy on agriculture and being able to provide loans, you know, to the farmers is a nice growth opportunity for us. We've partnered with a business that uses satellite imagery, you know, to be able to look at the land that the farmers are on and, you know, be able to determine the right underwriting criteria to get into a loan. Just a, you know, it's just a great example of how we're even adapting to more local needs in that market. Also innovation, because it requires you to. For sure. ... a lot of alternate data like Crop Intelligence, which you talked about. Exactly. Switching gears, talking about Consumer Interactive. You briefly spoke about Sontiq acquisition, but just if you can talk about some of the challenges with the direct business there and the inflection that's expected in the second half. What's the driver for that inflection in the growth profile? Thank you. Yeah, sure. The Consumer Interactive business, you know, we operate in two primary channels. The direct business is where TransUnion sells directly to consumers like us. The indirect channel is where we work with providers like lead aggregators and freemium players. You know, an area that, you know, we've been heavily involved with for more than 10 years. The direct business performed very nicely in 2020 and into 2021. Had some really good growth profiles as consumers were concerned about monitoring their credit and their identity during the pandemic. What was happening at the same time is the prevalence of freemium offerings really started to take hold. That took a little bit of a hit on our revenues in the direct business. We still see a meaningful place for TransUnion to play in the direct business because there are consumers who are very interested in three-bureau monitoring products when they have a life event, like, you know, buying a house or buying a car. Consumers are, you know, apt to come to, you know, TransUnion to monitor credit, use our simulators and dashboards, you know, to get their score in a good spot for them to get an advantageous loan. With that being said, because the market dynamics have changed and they've shifted towards freemium, it's caused us to have to shift our advertising strategy and, you know, how we the consumers that we target and how we do that. All in all, we refine that, you know, quite well in that, you know, the consumers now that we are attracting to our services are having a higher retention, or less churn, it would be to say that. You could see that reflected in the adjusted EBITDA margins. The profitability for the business is around a 50% margin. Still pretty strong, you know, overall. The indirect business, that's where, you know, TransUnion plays meaningfully, as I said, in the indirect in the premium space and the indirect channel. You know, in that market, we expect that to come back to growth in 2023. We had some contract renegotiations that provided revenue certainty for TransUnion that were a headwind in 2022, and those have, you know, since resolved themselves. The other part of it is Sontiq, it becomes organic, right? Now it's, you know, embedded, you know, in our business. We're guiding the overall business to be down those single digits, but what we're seeing is the direct channel will probably hit an equilibrium point at some point later in the second half of the year, and the indirect business will show some nice growth. Sontiq is just adding on top of that. That's great color. Now talking about margins, you've guided to margins being flat to up this year. Can you just talk about some of the puts and takes there on the core or organic side? You're seeing some margin pressure. Can you talk about some of the headwinds there, obviously the tailwinds from acquisition synergies? Sure. From a margin perspective, we're guiding our margins to be flat to up 30 basis points in 2023. Excuse me. One of the positives is Neustar, which, you know, with the margin expanding from last year at, you know, 26.5%, we're expecting it to get to 32% this year. That obviously is providing a nice, you know, uplift, you know, in our margins. Counter to that, though, the acquisition of Argus didn't close until April of 2022. As a result, we have one quarter of a lower margin business when you do the comparison of 2023 back to 2022. That's a drag. Neustar provides about 100 basis points of margin, and Argus is about a 25 basis point drag, you know, on the margin, which pretty much leaves everything else, and that gets back to the organic margin. You know, the drivers there, you know, first, is compensation related. One of them is resetting our variable compensation targets back to a target amount or back to plan. So that's one driver of it. In addition, we also provided for, you know, merit and promotion increases, for, you know, our very talented workforce. So that, those are the two things on a compensation perspective. Another driver, impacting us is higher data and royalty costs from our partners, that, you know, impacted our margin in the year. When we think about the, you know, the uncertainty that lies ahead, you know, we feel, we feel pretty good about the 3%-5% revenue growth. We, we feel that, you know, being able to potentially expand margin by 30 basis points this year is a pretty solid outcome. This is a long game for us, right? When we think about, you know, uncertainty and going forward, the one thing that we feel very strongly about is that we control expenses. We might not, you know, have the control over revenue, but the expense side of things, we definitely control. As we look forward, beyond 2023, you know, we continue to expect to scale Neustar to a 40% adjusted EBITDA margin. You know, and the conviction there is we, you know, committed to $70 million of cost synergies. When we announced the deal, we just increased it to $80 million. You know, we've, I think in the third quarter, we said that we had line of sight in the $50 million. We had actually realized. Realized the 50s. On an annualized basis. That's right. Yeah. Exactly. That's positive. When you think about 2023 as the second year of Argus and Sontiq, there's one-time integration costs there that are gonna drop off when we go into 2024. That will provide a nice tailwind. The acquisitions themselves are, you know, gonna help out when you get into 2024. I think most importantly, it's what we're doing with TransUnion's global operating model and how we're we've been on a mission for the last several years to centralize and standardize, you know, our work. Or, you know, have a TransUnion way of interacting with our customers as opposed to disparate, globally. That is where the big opportunity with margin resides for us is being able to drive the efficiencies through our day-to-day processes, through our global capability centers that we have. There's a lot of exciting things on the margin front that gives us the conviction that we should be back to the 40% margin by the time we get into 2025. That's a great segue into. I know we only have 30 seconds left, but, the 2025 target, you reiterated that again on the recent earnings call. That implies a steep increase in earnings over the next few years. Yeah. I know you've talked about margins, but anything else that you would also like to flag? Yeah. I think that, you know, at this point, you know, we did the Investor Day in March of 2022, almost a year ago. Right. Like, literally within the next two weeks, the Fed started raising rates, right. The macro environment changed quite a bit. We could debate, you know, the revenue 'cause trust me, we debate it, you know, internally. We just didn't feel like it was appropriate at this point in time to pull back on it. The targets were only, they were less than one year old, and we never thought that it was gonna be linear. We always knew that there would be some type of, you know, macro environment, maybe not to the extreme that we saw. I've been around the business for a long time, and the characteristic about TransUnion that's most striking is how quickly this business rebounds, you know, after a period of slowdown. Look no further than what we experienced in 2021. I go back longer than that, and I can tell you is what we experienced in, you know, 2012, 2013, as we were coming out of the great financial crisis. This business has got those same characteristics. With that being said, if, you know, we feel that, you know, we need to change that, we will at the appropriate time. Right now, the organization is still focused on those targets. That's very helpful color. Thank you, everyone. Thanks, Todd. Thanks, Aaron. All right. Thank you.