Experian plc (EXPN) Earnings Call Transcript & Summary

Good day and welcome, everyone, to the Experian Q3 Trading Update Conference Call hosted by Brian Cassin. My name is Christophe, and I'm the operator for the call today. [Operator Instructions] I would like to advise all parties that this conference is being recorded for quality monitoring purposes. And with that, I'll hand it over to Brian. Please proceed.

Thank you very much. Hello, everybody, and welcome to our Q3 trading update call. I hope you're all keeping well. I'm here, as usual, with Lloyd. He will take you through the trading performance after my opening remarks. So overview of Q3. While economic conditions have gotten a little harder, Q3 was another solid quarter. Total revenue growth was 7% at constant exchange rates, and organic revenue growth was 6% against a tougher prior year comparable. All regions delivered growth with a double-digit performance again in Latin America. By segment, Consumer Services, where we now reach 149 million free members globally, delivered 10% organic growth and B2B was up 5%. In all, Q3 came in line with the expectations we discussed with you in November. Let me now touch on some of the regional Q3 highlights, starting with North America where organic revenue growth was 5%. While mortgage continues to be quite weak and there has been an uptick in credit delinquencies, it's still concentrated in some categories with others like card still below pre-pandemic levels. We do generally see a more cautious stance and tightening of criteria, but overall lender behavior seems more precautionary than as a direct result of consumer credit stress, other than in the sub-prime categories. The market is still quite segmented with lenders looking to acquire in prime. Most banks, in fact, continue to hire and lend, and this is supported by the U.S. labor market which is still very tight. When mortgage is excluded, the core bureau delivered growth in the quarter. Ascend continues on a very positive trend with more modules coming to market with high levels of client interest and healthy pipelines. We're also making good progress on verifications with record count growth, new clients signed for Verify as well as for employer services. And also contributing positively are our other verticals. The performance in health was very good, especially when you adjust for the strong prior year comparable. Automotive is holding up well. Targeting is a notable call-out, advancing strongly in the quarter. And this business is making a lot of progress in its digital portfolio, taking advantage of secular shift into digital channels like advanced TV and the growth in identity management. Consumer Services had another strong quarter. The investment we put into new products is paying off, as is our natural countercyclicality, which is starting to kick in. We are seeing tighter credit criteria in the card and loan market, but our marketplace still delivered another strong quarter of growth. Many lenders continue to grow with us because our traffic is growing and because we support them to target their offers more precisely, and we're doing that using a new capability rolled out called Experian Activate. Insurance is also adding to our growth, and we're starting to see good pickup in premium enrollments, which is a typical feature of our model. Turning now to Latin America, which delivered another really strong performance, delivering organic revenue growth of 16%. In Brazil, positive data products. Ascend, Decisioning, they're all growing well. We're also making progress in key end markets and new verticals. Our SME channel is growing, and the agri business vertical is also building from a small base. Spanish Latin America, where we've been steadily building our position with selected Bureau acquisitions, delivered another strong performance also. Consumer Services in Brazil had a very strong quarter, up 40%. Q3 is when we hold our Limpa Nome fair, and it was a big success. Consumers in Brazil need help to manage and resolve outstanding credit. Serasa is very well positioned to do this. Our consumer platform is also adding to its free member count. And tuck-in acquisitions like PagueVeloz are helping us to further diversify the sources of growth. Of all our regions, the U.K. and Ireland has probably faced the most economic turbulence, particularly in October. Against this backdrop, our performance here is really quite encouraging with organic revenue growth up 6%. And within this, B2B was up 10%. While the external narrative in the U.K. has been negative, the position is actually quite complex and also presents us with growth opportunities. There has been some resilience in credit markets with lending continuing. And households are being obviously quite conservative about their spending decisions, which helps affordability measures. U.K. banks are also well capitalized with strong liquidity positions. Although as they are in the U.S., they are adopting a more cautious stance and tighter lending standards. And all of this is driving demand for detailed analysis, careful segmentation of portfolios to understand risk at an ever more granular level and to help them to continue to lend where appropriate and manage customer indebtedness. And this drives demand for products like triggers, flags and other analytical products, which we can obviously help them with. Other factors supporting our B2B performance and new business wins, we discussed in November, and the successful execution of our transformation program. We felt the impact more on U.K. Consumer Services, which had a tougher quarter. Revenues were impacting marketplace and in premium subscriptions. EMEA/Asia Pacific delivered organic revenue growth of 1% with the majority of our markets contributing. We are making good progress on our plan to strengthen our core business and scale for growth and be turning our attention to the growth plan as we head into FY '24. And with that short overview, I'm going to hand it over to Lloyd to take you through the financials.

Great. Thanks, Brian. Good morning and happy New Year, everyone. As you've seen, we had a good quarter in line with our expectations with Q3 organic revenue growth of 6%. Excluding headwinds for mortgage and one-off health revenue in the prior year, organic revenue growth was 8%. Our core Bureau of businesses have remained resilient, and Consumer Services delivered another strong quarter. Organic revenue for Consumer Services was up 10%, whilst B2B was up 5%. Including acquisitions, our total revenue growth at constant exchange rates was 7%. Exchange rates were a 3% revenue headwind in the quarter, bringing total revenue at actual exchange rates to 4%, mainly attributable to movements in sterling relative to the U.S. dollar. Turning to the performance by region, beginning with North America, where organic revenue was up 5% with B2B up 2% and Consumer Services up 9%. Within B2B, Data was up 2%. Bureau revenue, excluding mortgage, grew 5% as we lapped a strong prior year holiday lending season. Mortgage declined 42%, in line with expectations, and we expect a similar level of decline in Q4. Ascend continued to perform well, delivering another quarter of double-digit organic revenue growth as we secure new clients and signed new key renewals. And we continue to make good progress in the employment and verification space with increasing confidence in delivering over $150 million of revenue this year. Decisioning was up 5% with good growth in both Health and Decision Analytics. The Health business lapped one-off COVID-related revenue in the prior year. And excluding this, Health growth would have been 11% in the quarter, reflecting strong underlying trends in collections and payments. Decision Analytics had a good quarter of growth across both software and analytics. Consumer Services was up 9% with growth from all product lines. Marketplace handled well against the backdrop of tightening credit supply and grew 30% in the quarter. Subscription enrollments have continued strong, whilst partner solutions also delivered good growth, helped particularly by data breach services. And moving on to Latin America where organic revenue was up 16%. At constant exchange rates, total revenue was up 17%, including acquisitions. And including the FX tailwind during the quarter, revenue grew 21%. B2B was up 11% organically, while Consumer Services delivered organic growth of 40%. Data grew 10% organically as our clients continue to adopt more positive data features. Our Ascend platform grew well, and we're making good progress in our agribusiness vertical where revenues doubled in the quarter. Consumer Services grew strongly and across all areas. Q3 is when we host our annual Limpa Nome fair, which allows consumers to renegotiate their debt, both online and in person, and it was a particularly successful event this year. We continue to make good progress in marketplace and in premium services, and payable also grew well during the quarter. Turning to the U.K., which saw 6% organic revenue growth. B2B grew 10%, whilst Consumer Services was down 8% on last year. Data grew 7% during the quarter. Whilst lenders have tightened credit policies, they continue to lend, and we benefited from growth across all of our main business units. Affordability and eligibility products performed very well, providing much needed insight for lenders to support credit decisions. Decisioning was up 15% organically with a strong contribution from software and analytics. And Consumer Services declined by 8% as marketplace softened due to lenders tightening credit criteria and, in some cases, removing products with specific disruption to lending markets following the mini-budget. Towards the end of December, we soft-launched our new product feature for subscription customers, CreditLock. It empowers consumers by enabling them to lock their credit report, preventing new lines of credit being added and then unlock when they apply for credit. Moving on to EMEA and Asia Pacific where organic revenue grew 1%. In Decisioning, we grew 16% with good growth across most of our markets, whilst Data was down in the quarter. Turning now to our near-term expectations. Whilst the economic environment continues to be more challenging, with 1 quarter to go, our full year expectations are unchanged from those we discussed in November. We continue to expect organic revenue growth for the year to be within the range we previously discussed of 7% to 9% with a further 1% from acquisitions. And our margin guidance is also unchanged where we expect to deliver modest margin expansion at constant currency. And with those short remarks, I'll hand you back to Brian.

Thanks, Lloyd. And so to summarize, we delivered a solid performance in Q3. We did have some tough comparables and market conditions have softened in some segments, but our performance is pretty encouraging. Our strategic growth initiatives and the countercyclical features of our model are a key factor in this. And with 1 quarter to go, we're confident we will deliver the year within the range we set out in May last year. So with that, we will open up the line for questions. So back to you, operator.

[Operator Instructions] And our first question is coming from Paul Sullivan from Barclays.

I'm going to bore you with some macro and sort of near-term questions, I'm afraid. Firstly, given the comps, it sounds like fourth quarter should be better than Q3. Could you -- or can you run through where you would expect improvement and where you see risk to the downside into the fourth quarter? And then specifically on U.S. Bureaux mortgage slowing to 5%, how do you assess the risks to that slowing further? And then finally, any thoughts on how we should be thinking about the shape of overall guidance into next year? Is mid-single digit still is better to get in your view?

Paul, thanks for the questions. So Lloyd, do you want to deal with the Q4 versus Q3 and then the U.S. Bureau question?

Yes, happy to. Paul, so I think as we move into Q4, clearly, the 2 one-off items that we referenced in the comms drop away. So we see that helps Q4. I think that's a good reason why Q4 is likely to be a little bit better than Q3. Clearly, we're trending into slightly tighter credit market. So that might be a little bit more challenging in Q4 than it's been in Q3 on the trend really of economic growth. But I think your analysis of Q4 being a little bit better than Q3, I think, is good and then finishing the year well in that guidance of 7% to 9% organic. I think as you stand back at the trends of this year into next, we clearly started this year with some questions around how the economy would develop this year. I think you've seen we've held our guidance, so we performed really well given that backdrop. Looking ahead, I think most economists think growth will be a bit lower next year. So things will be a bit tougher for us. But you see in our -- across our businesses, a lot of resilience. Brazil growing well, the Targeting business doing well, Health growing double digit if you exclude the comp. And I think all of those things, we've talked about previously as to why we would expect this portfolio to be even more resilient in any downturn than we saw previously, where we continue to grow through the GFC. So I think all of that supports the outlook that we've given in a downturn scenario. Brian, do you want to add anything?

No, I think you covered it.

And anything specifically on U.S. Bureaux mortgage? I mean you sort of...

No, I think you've got the very strong holiday season that we had last year. And then clearly, just some of the comments we're making about just a gradual tightening of some areas of the market. I think when we look at the business, the fact the marketplace in the U.S. continued to grow 30% in the quarter, that tells you that there is both strong demand for credit on the consumer side and supply and the willingness to lend. I think if you look in the U.K., despite all of the disruption that we saw in lending markets in the quarter, the fact that the B2B business grew 10% shows you the diversity we have in the different products that we offer into the market. So again, just all pointing to resilience in a downside scenario and a lot of growth in our business from all the investments that we've been making.

The next question is coming from Kelsey Zhu from Bernstein Autonomous.

My first question is on Brazil. I'm just wondering if you can provide a little bit more color on how the recent political development might affect your operations or your near-term outlook in Brazil? And then could you talk a little bit more about the competitive dynamic between the 4 players in that market and how you envision the competitive landscape might change with the latest announcement from Equifax to acquire Boa Vista?

Yes, sure. So the first one, I think the question, I didn't quite hear, I think it's about the -- whether the impact of the elections would have any impact on our business. I think the answer is no, we don't see anything. Of course, there's no real policy announcements yet from new government, so pretty early days. But we'll see what happens, as and when new policy announcements come forward. But really, I think as we commented in November, most of what's driving Brazil is really related to all of the market changes that have happened over the last decade with the introduction of positive data, a drive for increased financial inclusion. And we don't really see that the new administration is going to change any of that because it's sort of really driving the economy forward and bringing a lot more people into mainstream financial services, which is a key objective. So we expect that to continue. And then secondly, the competitive dynamic, I mean the biggest impact on competitive dynamic in Brazil over the last decade, again, is positive data. And I think you can see the performance of our business in that context has been outstanding. So we're in a great position, and I don't really expect that to change even though the makeup of some of the competitors may change. So no change, really.

Got it. Super helpful. My second question is on North America. You've booked really strong growth in autos and targeting this quarter, up 7% and 14%. I'm wondering if that's more in line with what you've seen in the underlying market or is that mainly attributable to share gain? And if it's share gain, how sustainable is that development?

Well, I think we said in November that we expected auto to hold up quite well. And actually, I think we also said that we were a bit surprised ourselves at how resilient it's been. But we have to give great credit to our auto team because they were right, and our maybe a little bit of skepticism towards them is wrong. Then they're just seeing, as we said at the time in November, some opportunities within the marketplace. They continue and have continued to take market share for quite a long time. That's actually not a one-off thing. It's how the business is built. So while conditions are tough, they are finding areas of new growth with really new products and position the business quite well. And targeting is definitely outgrowing the market. And I think that's being driven really by our push into the digital landscape with the creation of a newer business with the acquisition of Tapad a few years ago. We have a very strong position in addressable TV. That's growing very strongly. It also has given us enhanced capabilities in identity management. We're seeing great opportunities there as well. So really, when you look at that underneath and unpack it, the traditional kind of targeting data sets would be growing lower, sort of lower single-digit growth, and the growth is really all coming from those newer verticals. We expect that to continue, actually, so we don't really see any change there.

The next question is coming from Justin Forsythe from Credit Suisse.

Just a couple for me. I wanted to circle back to the question around Brazil and the competitive landscape regarding Equifax. I guess the company talked to mid-teens growth in that market in the B2B business. Just wondering if we compare that across the Brazil business, understand you disclose on a geographic basis, not on a country-specific basis, but would you characterize yourself as share gainers in that market as well, the way that they've characterized their recent acquisition? And I guess maybe talking more structurally about the Brazilian market, I think you've talked in the past about penetration being very low with credit solutions in that market. I guess how long of a runway do you believe that market has, if you do agree with that mid-teens growth rate? And separately, I wanted to talk a little bit about -- you noted you just started rolling out Experian Activate. Maybe you could just provide a little more color on the uptake you've seen there and how you expect that to roll into the rest of the product suite.

Yes. On Brazil, I got to go back to the previous point, which is our business has been growing double digits in Brazil and our business is by far and away the largest business in that space in that market. So I think you can see the extent of success that we've had. And if I track back a few years ago, most of the commentary was with the introduction of positive data, our competitive positioning was going to be challenged. Actually, the opposite has been true. With the introduction of positive data, our position has been strengthened, largely because of the actions that we've taken in terms of the products that we've introduced and the capabilities that we now have in market, which actually gives us a much bigger market to address because of the expansion of the market alongside that data set. So we don't see that changing. It's a once-in-a-multi-generation-change in the market where you have tens of millions of new consumers suddenly being scorable, which weren't previously, a much more competitive underlying financial services marketplace, driving much greater demand not just for data but for -- in the areas where we really excel, which is data plus all of the sophisticated products and services that go alongside that. And you can see that the performance of our U.S. business with all of the capabilities that we have there, they're now all in Brazil. You probably would have struggled to sell something like Ascend in Brazil 5 years ago. Now we're selling it, and the pipeline is building precisely because of those trends I've discussed. So we continue to see Brazil as a fantastic opportunity going forward.

And now on Experian Activate, that's a new launch in this quarter. So it's particularly focused in helping the lenders on our marketplace to really understand and segment their markets to be able to produce offers. So it plays out really in higher conversion for clients and then obviously greater monetization for us. So fresh rollout this quarter, but it gives you a sense of the increasing pace of innovation across the consumer business. And as we get into next year, clearly, we'll be scaling our insurance proposition as well. So a lot of different avenues for growth in the consumer business.

Got it. And that's super helpful. I guess just a quick follow-up on marketplaces. Of course, you called out weakness in the U.K. earlier in your remarks and also just now in the Q&A around the growth in U.S., around 30%. I guess, is that just because penetration is so low the solution? Or what are you seeing, the differences? Is there a difference in, say, sub-prime cohorts amongst the kind of users of marketplace in the U.K. versus the U.S.? Maybe you could parse through the delta there and the growth.

Yes, I think we -- in the second quarter, first quarter, we saw strong growth in the U.K. marketplace. In the U.K., in the third quarter, that dropped away because of all the disruption that we had around the mini-budget and lending markets and how those affected. So if you look, that minus 8% that we reported in the quarter, if you adjust out that disruption, it would have been about where we saw Q2, so flat, maybe down minus 1%, minus 2%, with good growth in marketplace. So that's really the difference when you look at the individual quarter. If you look at the trends over the last couple of years, we've seen very strong growth in marketplace in both the U.S. and the U.K., supported by the same trends, really, which is the shift of evermore complex lending products to digital origination. That's the underlying growth driver in our consumer business.

Got it. So just to be clear, though, it seems like you're not seeing any of that idiosyncratic weakness from the U.K. in the U.S. marketplace business, indicating consumers are kind of much stronger there? Is that fair?

No -- yes, they didn't have the mini-budget. So that particularly focused the effect in the quarter.

Yes. I think the other thing I would add is that it's tempting to think these things are completely in sync, but we find there are often differences quarter-by-quarter in these businesses. So in the generality, you can look at trends, but you can't, I think, measure like-for-like across 2 different markets over a short period of time.

The next question comes from Sylvia Barker from JPM.

Maybe just quickly to follow up on that U.K. point. So it seems like a lot of the products were just not available anymore in the marketplace around the disruption and then they were probably launched back. So can you just comment anything around the exit rate within the U.K. B2C business? Secondly, on Decisioning, very strong in the U.K., and you do mention client wins. Could you maybe discuss kind of whether that's a few client wins, whether it's more of a trend and maybe more widely on Decisioning. Is some of the countercyclical growth now actually going through Decisioning rather than maybe B2B data? Are you seeing clients kind of buy more solutions as they're preparing for a potential slowdown? And to what extent has that been an impact in the quarter? And again, on Ascend specifically, a slightly longer-term one, what is -- how do you think about your penetration internally with your clients? I know that you sell that as a bundled product. So what is the penetration today? Where could it get to? If you can comment on that.

Okay. Sylvia, a lot of questions there to deal with the U.K. One, again, I think what we saw in October was a period of a couple of weeks where literally everybody stopped offering products because they didn't know how to price them. And then once we had a bit of stability, our products came back onto the market. But as you'd expect, they didn't all come sort of flooding back, and they were substantially repriced. So there was a bit of dislocation, and that sort of gradually improved as we've gone through. But if you compare today versus pre, say, well, say, September, there are less products available in the marketplace and they are more expensive. So I think you've seen that impact play out quite specifically. Anything you'd add to that?

No, I think probably just to say, the way to think about the marketplace, consumer demand is always strong for credit. So what really drives the growth in the marketplace business is these 2 things. One, in the short-term supply, so supply availability. So what you saw in the U.K., as Brian said, around the mini-budget was that restriction of supply as people try to reprice or understand how to place into the market. The second is the secular growth driver of product shifting digital. And that's, of course, why this market is of such interest to us, to have a relationship with consumers and to be able to support them in their financial needs and product needs digitally, which is, of course, the lowest cost for our B2B clients.

Yes. I guess onto the Decisioning, I think a lot of our decisioning products are sold alongside data. And I think what you're seeing really is just a broad good performance across the B2B business there, which is lifting all of our product categories. Client wins, we called out in November. We continue to do very well there. And I think we're really pleased with that B2B performance in the U.K. In Q3, it's probably surprised everybody posting double-digit growth there. So I think it's just a reflection of great progress in the business on an underlying basis. And then in your final question, which was on Ascend, we think that the runway for growth for Ascend is very long, and we think the market opportunity is very large. So we still have a long way to go. Even in the U.S., which has obviously been a runaway success and is the largest area, would be a renewed focus for us. You can see the number of references we're making to Ascend in Brazil and other places. So we're starting to see traction on a much broader geographical footprint with that product now.

And just on Ascend then, so would all of the large U.S. lenders, for example, use Ascend in some shape and form? Or do you still have a lot of client-by-client penetration to go for? Or is it more just that that's it? Kind of interesting how you think about it.

Yes, it's not -- I mean Ascend is not one product. So I think this is sort of we're creating sort of opportunities for ourselves here really. And when we first introduced it, it was really a Sandbox, and our estimate of who would use that might have been large-scale U.S. banks. As it turns out now, we've morphed that into Ascend data services and marketing services. So we have many more interpretations and models of Ascend and many more products that are built on the back of the platform capability. So there's still plenty of runway of growth really across the whole landscape. Again, these things don't often sort of develop a little bit differently to what you expect. We thought that the biggest opportunity once we penetrated Tier 1 clients would be in the mid-market. Actually, it turned out to be once we've penetrated Ascend Sandbox across a good representation of Tier 1, the biggest opportunity was still in Tier 1. So we still have quite a long runway to go, not just in Tier 1, but also below that in midsized regional banks and so on.

The next question is coming from Arthur Truslove from Citi.

I guess question one, so just on the Latin American business, clearly sort of decelerated trend-wise quarter-on-quarter, particularly on the B2B side. I just wondered sort of why that was. Question two, U.S. or North American mortgage was down 42%. I just wondered how that compared to your expectations. My recollection, which may not be right, is that you were expecting the sort of worst year-over-year decline to be in Q2, but obviously, 42% worse than that. I just wondered how that compared. And then the third question was just on the North American consumer business. Just wondered if you could sort of break out how the subscription business, the marketplace business and anything else sort of grew within the quarter.

Okay. Maybe I'd run through each of that. So on Latin America, you can see we've been in pretty consistent growth overall in the Brazil business for the last couple of years. The B2C business is growing very strongly. Some quarters, it's 20%. Some quarters, it's 40%. Similarly, the B2B business, based on timing of contract wins, can jump around a little bit. This quarter, we had the World Cup and an election, so a bit of distraction in the market, but very strong trends. Pipeline is very, very strong. So as we look out, we -- as the comments Brian made earlier, we see a lot of runway in Brazil. On mortgage, at Q2, we said that mortgage was declining a little bit, more than we thought earlier in the year. And we said for the full year, it would be in the range of 35% to 40%. So we've now said 42% for the second half of the year. That would make the overall decline for the year 38%, so in line with what we said at the half year. And then on consumer, we already said that the growth in the marketplace business was about 30%. The subscription business grew low single digit, about 2% in the quarter. Within that, we've got the churn coming off from the subscribers who joined during COVID. But new subscribers has been quite elevated, and we mentioned that at the half year. From about August time, we saw that really start to tick up and it's continued through the third quarter, which is the behavior you'd expect as you move. You get some of those countercyclical inflows. And then the partnership solutions business grew consistently high single, low double digit during the quarter.

The next question is coming from Andrew Ripper from Liberum.

Well done on the numbers. Two questions from me. First of all, can you just revisit M&A strategy? And Lloyd, I'm not sure whether you're prepared to comment on what the leverage is likely to be at the -- for '23. Just wondering as the market slows down, whether you might -- and valuations come down, whether you might be a bit more proactive on M&A. And then the second question, going back to sort of FY '24, the last couple of years, you've had very good growth from new products and services. Do you see, at a very high level, that contribution being just as good in '24 as it has been the last couple of years?

Andrew, yes, so first question, M&A, I'm kind of probably going to sound like a broken record here. I think that we are in a very good position. M&A is a key part of the strategy going forward. If the valuations and opportunities arise, we'd look to be more proactive. We thought last year would be difficult because valuations really in the private markets didn't adjust in the way they did in the public markets. So it's quite difficult to get anything done. But again, we have a continued focus on that, and we'll see what we're able to get over the line this year. I think on FY '24, I mean we do expect a strong contribution from new products next year. It's difficult to be as precise as your question would like us to be, and will it be the same or more. But what I would say is that the strength of new product innovation and product introduction has actually gotten better and better as we've gone on. So we have no reason to assume that that's going to slow down in FY '24.

Yes. And on gearing, Andrew, I think we'll be a little bit below the bottom end of our gearing range, our gearing guidance range at the end of this year, as you'd expect, as we're looking at the market and making sure that we see those valuations in the private market align with the new world environment. I think it's -- this has been a period where we're making sure that we see that before we maybe make some other acquisitions. So I think it gives us a lot of opportunity as we look ahead to next year with valuations that we think we aligned. And also, just a reminder, we also outlined at the half year, we've fixed a lot of our debt out. So we don't have a lot of near-term rate refinancing risk as well, which gives us a good financial place to be as we look into next year.

Yes. And just in terms of sort of priorities, strategically, Brian, are there any particular areas of interest for you M&A-wise?

The same ones that we've always outlined, which is where we can sort of solidify an existing position, acquire new data assets, acquire -- looking to acquire in the areas of fraud and identity. None of that really has changed. They'll all be really opportunities which are at the core of what we do.

And the last question is coming from Andy Grobler from BNPP Exane.

Just 2 quick ones from me, if I may. Firstly, on verification, you talked about good progress in that business. Can you talk through whether that is through winning new clients, growing your record count or sort of expanding revenues with clients you already have? And then secondly, just on subscription, you've talked to this a couple of times, but I just wondered why you were -- or if you could give a bit more detail on why you're doing so well when some of your competitors are much more cautious about that market? Do you think you're winning share? And if so, why?

Yes. Well, just on the -- I think on the second point, Andy, if I could take that one first, I think if you look across the market, there's actually quite a mixed performance amongst the sort of major competitors. So I don't think you can draw an exact read across. We're doing, I think, very well in marketplace. We're also seeing the subscriptions pick up, as you point out. Some of that is just due to sort of continue to build that business. Secondly, we introduced new products, particularly Experian Activate, which gives us a much more precise targeting capability to really sort of prequalify opportunities for lenders in a much more precise way. That's helped us. So I think there are different circumstances which impact different companies. And I think you're seeing quite a mixed performance across the board, actually. Lloyd, on verification?

Yes. So I mentioned in my remarks that increasing confidence in being over $150 million of revenue this year, and that's driven by all of the things really that you mentioned, Andy. So the record count now is up to 45 million records, so good progress during the quarter. We continue to sign more contracts, and the vast majority on the Verify side of those contracts put us top of the waterfall. So you can see good progress in our entry into that market. And just to add on the subscription question, as we've gone through and we've really built this business over the last few years, the unique strength we think we have actually is in the diversity and the fact that we have that subscription business, the partner solutions business and the diversity of -- a growing diversity in the marketplace business with insurance being added. That I think -- we think that drives a pretty unique position for us versus our competition.

We don't have any further questions in the queue. So everyone, that concludes your conference call for today. You may now disconnect. Thank you for joining, and enjoy the rest of your day.