TransUnion (TRU) Earnings

Management highlights

- Strategic Execution & Platform Modernization * 10th straight quarter of at least high-single-digit organic constant currency revenue growth, with Q2 10% organic growth exceeding the prior 8-9% guidance * 60% of U.S. batch activity and 30% of U.S. online credit customers (over 4,000 total U.S. customers) have been migrated to the OneTrue platform; full U.S. migration is on track to complete by end of 2026 with minimal customer disruption * OneTrue has been deployed in Canada, the UK, and India to support global product rollouts, including TrueIQ analytics, TrueValidate fraud solutions, and Trusted Call Solutions * 40 new products and AI-powered enhancements were launched in H1 2026, growing the sales pipeline; internal AI adoption has delivered 25% productivity gains for software engineers/data scientists and over 20% gains in consumer support operations - Diversified Growth Strategy (U.S. Financial Services Case Study) * Excluding mortgage, U.S. Financial Services has delivered 9% compound annual growth, outpacing 2% average growth in U.S. consumer credit originations and real GDP across market cycles * Core Credit represents ~two-thirds of financial services revenue, growing low double digits annually driven by leading trended data and share gains * Over one-third of financial services revenue now comes from non-traditional credit solutions: 12% from alternative data/analytics (TrueIQ, Factor Trust, growing low teens annually) and 24% from non-credit solutions (Trusted Call, fraud, marketing, growing high single digits annually, with Trusted Call growing over 50% annually) * This diversification reduces reliance on lending origination volumes and expands TransUnion's addressable market across the full customer lifecycle for clients - Capital Allocation & Balance Sheet * Q2 adjusted diluted EPS grew 13% year-over-year; leverage ratio declined to 2.6x, with a long-term target of under 2.5x * Year-to-date through July 2026, $150 million in share repurchases have been completed under the $1 billion authorization, with ample remaining capacity for the second half; second half repurchase pace is expected to be at least comparable to the first half, with a current bias toward returning capital to shareholders at current valuations - VantageScore Adoption * VantageScore inclusion in U.S. mortgage credit inquiries increased from under 5% at the start of 2026 to ~30% across over 900 lenders, with growing single-score usage (including for mortgages requiring private mortgage insurance); no revenue benefit from adoption is included in 2026 guidance

Guidance

- Full Year 2026 Guidance (Upward Revision from Prior Guidance): * Organic constant currency revenue growth: 8-9% (prior: 7-8%), or 5-6% excluding FICO mortgage royalties; total reported revenue growth of 12-13% to $5.127-$5.162 billion, with 4 percentage points of growth from acquisitions * Adjusted EBITDA growth: 10-11% to $1.807-$1.827 billion, with an adjusted EBITDA margin of 35.2-35.4%; underlying margins (excluding FICO royalties and acquisitions) are expected to expand 50-70 basis points * Adjusted diluted EPS growth: 11-12% to $4.75-$4.83 (prior: 9-11% growth) * Full year mortgage revenue guidance (28% total growth, 6% excluding FICO royalties) is unchanged from February, with conservative second half assumptions that assume mid-to-high single digit full year inquiry declines (low double-digit declines in H2) that can absorb modest further rate increases * If current market trends persist, management expects full year 2026 results to be at or slightly above the high end of the guidance range; the range is structured to absorb reasonable market softening - Q3 2026 Guidance: * Total revenue: $1.292-$1.310 billion, growing 11-12% year-over-year; 6-8% organic constant currency growth, or 4-5.5% excluding FICO mortgage royalties * Adjusted EBITDA: $455-$463 million, growing 7-9% year-over-year, with a margin of 35.2-35.4% * Adjusted diluted EPS: $1.18-$1.21, growing 7-10% year-over-year * The implied sequential deceleration in organic growth excluding FICO is entirely due to larger year-over-year inquiry declines in mortgage; non-mortgage organic growth is expected to remain at or slightly above Q2's 6% rate - Other Forward Assumptions: * Asia Pacific is expected to return to growth in H2 2026; India is expected to see accelerating growth in Q4 2026 on easier year-over-year comparisons

Segment performance

1. U.S. Markets: Revenue grew 11% organic constant currency year-over-year. U.S. Financial Services revenue grew 18% (10% excluding FICO mortgage royalties): core non-mortgage grew 8%, credit card/banking grew 6%, consumer lending grew 8%, auto grew 8%, and mortgage grew 37% (15% excluding FICO royalties, despite 7% inquiry declines, supported by pricing actions). Emerging verticals grew 9%: insurance grew double digits, tech/retail/e-commerce grew high single digits, public sector/media grew mid-single digits, tenant/employment returned to growth, telco declined modestly, and Consumer Interactive declined 3% in line with expectations. 2. International: Organic constant currency revenue accelerated to 6% year-over-year. India grew 8%, Canada grew 10%, the UK grew 9%, Latin America grew 5% (double-digit growth in Brazil), Africa grew 5%, and Asia Pacific declined 7% (rate of decline improved from Q1). The recently acquired TransUnion Mexico credit bureau is outperforming acquisition case expectations, with double-digit historical compound revenue growth.

Risks & headwinds

- Persistent macroeconomic uncertainty, rising interest rates (10-year Treasury yields are up ~50bps year-to-date to ~4.7%), and elevated inflation could pressure consumer loan demand and mortgage origination volumes, which are highly sensitive to rate increases - Higher than expected mortgage volume declines could create downside risk to revenue, despite built-in conservative assumptions in guidance - Slow progress on OneTrue platform migration or unexpected customer disruption could impact near-term performance and innovation velocity - Market adoption of VantageScore may proceed slower than currently expected, limiting long-term upside potential - Cross-market macroeconomic volatility could impact growth in emerging international markets including India and Asia Pacific

Analyst Q&A

• Q: Most of the guidance increase comes from stronger Mexico acquisition performance and unchanged full-year mortgage guidance. How is non-mortgage organic upside reflected in the new guidance? /

  A: Management maintained unchanged full-year mortgage guidance and built in conservative H2 mortgage volume assumptions to account for recent rate increases from lower levels in Q1. Non-mortgage businesses are seeing strong sustained momentum: core U.S. financial services delivered strong Q2 growth, emerging verticals grew 9%, and international markets saw strong growth in India, Canada, and the UK. The guidance range is prudently conservative to account for ongoing market uncertainty; if current trends persist, results will likely come in at or above the high end of the range, with built-in buffer for potential mortgage volume deceleration that still allows meeting the raised guidance. (317 characters)

• Q: How has AI adoption impacted customer demand for TransUnion's data sets, and which areas are seeing the fastest growth in demand? /

  A: AI adoption is a clear positive growth tailwind for TransUnion. AI models require more high-quality curated data to improve predictive performance, driving higher data consumption from existing customers. TransUnion's agentic AI layer built on top of its TrueIQ analytics foundation automates model building and prediction work that most lenders either do internally or do not complete at all, expanding TransUnion's total addressable market and allowing it to capture work from other players in the data and analytics ecosystem. (358 characters)

• Q: What is driving the expected acceleration in marketing solutions growth in H2 2026? /

  A: The acceleration is driven by two core factors. First, there is inherent seasonality in marketing services: fourth quarter brings high demand for annual market share and marketing effectiveness studies from large publishing clients, which TransUnion serves as a leading neutral measurement provider. Second, TransUnion has made strong inroads converting legacy marketing solution customers to the new OneTrue-native True Audience suite, which is a more powerful integrated product that enables cross-selling and up-selling, with growing booking momentum across identity, audience, and planning/measurement offerings. (363 characters)

• Q: After a strong sequential uptick in Q2, what is the outlook for India, and what trends are you seeing on the ground? /

  A: Market volumes have stabilized after recent macro shocks, with a floor reached in consumer unsecured lending and card originations, and government support programs driving improved commercial lending activity for SMBs. TransUnion delivered its largest ever quarter of new sales in India, driven by refreshed, more predictive credit scores, expanded data coverage from furnishers, and growing momentum for newly launched TrueIQ analytics and Trusted Call fraud solutions. Growth is expected to accelerate in Q4 due to easier year-over-year comparisons. (349 characters)

• Q: VantageScore mortgage adoption increased from under 5% to ~30% this year, with growing single-score usage. What is driving this acceleration, and what adoption trends are you seeing? /

  A: The increase in adoption reflects broad-based market experimentation and calibration across lenders, mortgage insurers, securitization players and GSEs, led by the largest market participants that stand to gain the most economic benefit from a more predictive, lower-cost scoring alternative. No revenue from VantageScore adoption is included in 2026 guidance, as the company remains focused on supporting market adoption. Single-score usage is still a small but rapidly growing share, with tailwinds expected to continue driving adoption in coming quarters. (362 characters)