Experian plc (EXPN) Earnings Call Transcript & Summary

Good day, and thank you for standing by. Welcome to the Experian's First Quarter Trading Update Webcast and Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to Mr. Brian Cassin, Chief Executive Officer. Please go ahead, sir.

Thank you very much, and hello, everybody, and welcome to our Q1 trading update call. I'm here as usual with Lloyd, who will take you through the trading performance after my opening remarks. So we started the year on a solid note. Business is holding up well. Total revenue growth was 5% at actual and constant exchange rates, and organic revenue growth was also 5%. All regions delivered growth with a double-digit performance again in Latin America and good progress in EMEA/Asia Pacific. By segment, Consumer Services, where we now reach 172 million free members globally delivered 4% organic growth and B2B was up 5%. In all, Q1 was in line with the expectations that we discussed with you in May. And let me touch on some of the regional Q1 highlights, starting with North America, where organic revenue growth was 4%. Our CI and BI businesses have been resilient. We have a diverse product line, and we saw good growth in many areas, which offset softness in core bureau services. We had a positive contribution from Ascend, Clarity, BNPL as well as in business credit. And we're very pleased with the adoption of Ascend Ops and other parts of our B2B portfolio also contributed favorably. Targeting performed well, particularly across digital channels, and Automotive and Health also delivered strongly. And while some lenders are adopting a cautious stance and some are still tightening, there has been a stabilization in supply compared to the uncertainty, which followed the regional banking stress, and that's now passed and conditions remain largely the same as when we spoke to you in May. Consumer Services saw some deceleration. Credit marketplace conditions remain tight, and we still see very strong demand for credit. Supply buffers has expected, weakened a bit. We've been successful in mitigating this impact by onboarding new partners and expanding adoption of Experian Activate, which increases approval lots for our members and has elevated our share of available credit offers. We saw higher revenues from premium services driven by higher enrollments. Insurance also had a very strong start to the year with a higher number of policies written in our marketplace and increasingly promising prospects. Turning now to Latin America, which delivered another strong performance with organic revenue growth of 13%. In Brazil, positive data, analytics and other software products have sustained the momentum. We're making very good progress in our agribusiness vertical and also in the SME channel. And we're very excited about the growth prospects we're seeing that are being driven by open data and open receivables. Spanish Latin America, where we've steadily expanded our position with selected bureau acquisitions also delivered another strong performance. Consumer Services had another strong quarter, up 26%. We've added new partners to Limpa Nome in Brazil, and we're making really great progress towards further business diversification with growing contributions from payments and premium services. Despite the economic backdrop, we sustained modest growth of 1% in the U.K. with progress in B2B offsetting reduced rate of contraction in Consumer Services. In B2B, the strong run of new business performance continues into this year. We have a lot of new products in the market. We're encouraged by the performance so far. Volumes have been impacted as rate rises have caused lenders to reassess credit offers. However, we are encouraged by the momentum we see in our innovation pipeline. This plus increased demand for affordability assessments and portfolio analysis have helped us withstand weaker acquisition and new credit origination volumes. On Consumer Services, business declined in the quarter, but at a lesser rate. Marketplace was impacted. But with several new lenders now joining our panel, we feel well positioned for when that market improves. We also saw gains in premium enrollments through the quarter helped by increased adoption of CreditLock where we continue to make significant enhancements to the consumer experience. Q1 was a very good quarter for EMEA/Asia Pacific, delivered a very good organic revenue growth of 8%, some notable call-outs, countries such as Italy, Australia, India, exhibiting really strong momentum and delivering double-digit growth. And while it's still relatively early days, we're making very good progress towards our ambition for stronger growth and margins in this part of our business. So with that short [indiscernible], I'm now going to hand it over to Lloyd for the financials.

Thanks, Brian, and good morning, everyone. As you've seen, we started the year in line with our expectations, with Q1 organic revenue growth of 5%. As Brian mentioned, our core lending markets in the U.S. and U.K. remain tight during the quarter, whilst our Latin America business continued to perform strongly and delivered double-digit growth and a number of our key verticals in North America delivered another good quarter. B2B globally grew 5%, while B2C grew 4%. In B2C, we continued our trajectory of strong membership growth, adding 4 million new members in the quarter, taking us to 172 million members. Acquisitions and exchange rates had a neutral impact on the revenue in the quarter, meaning total revenue at actual exchange rates was 5%. Turning to the performance by region and beginning with North America, where organic revenue was up 4%, with B2B up 4% and Consumer Services up at 3%. Data was up 3% with growth in all business units. The bureau business, excluding mortgage was up 2% as revenue from Core Bureau volumes was down modestly, and lenders were cautious around acquisition marketing. We continue to see strength elsewhere in the Bureau as Ascend delivered another double-digit quarter. Clarity services grew well in the tough subprime market, and we had another very strong quarter of growth in Employer Services and Verifications. As expected, mortgage revenue was down by 8% on a volume decline of 32%. And as a reminder, mortgage revenue is now only around 2% of group revenue. Automotive had a strong quarter, growing 8% as industry inventory supply improved. Targeting also performed well with growth of 9%. Decisioning was up 7%, with Health delivering another strong quarter of 9% growth, and Decision Analytics up principally due to strong software sales. Consumer Services was up 3% for the quarter. We mentioned in May that we expected the credit marketplace climate to be tougher due to tighter credit supply. Overall, U.S. marketplace declined by 4% against a very strong growth in the prior year. The Subscription business delivered another quarter of good growth of 6% following the member acquisition growth in the prior year. Partner Solutions grew modestly in the quarter. And as a reminder, we'll lap in Q2 and Q3, strong comparatives in the breach business for one-off breach for services. Moving on to Latin America, where organic revenue was up 13%. At constant exchange rates, total revenue was up 14%, including acquisitions. Factoring in an FX headwind during the quarter, revenue grew 12%. B2B was up 10% organically, while Consumer Services delivered organic growth of 26%. Data grew 9% organically as momentum from positive debt propositions continues with our clients digesting more data through new solutions. We've been leveraging our global capabilities and customer management tools, and you can see that in the Decisioning business where we grew 15% in the quarter. Consumer Services grew 26% organically. Limpa Nome continue to show strength, delivering another double-digit quarter as we expanded the service by adding new partners. Our payment service, PagueVeloz grew strongly as we engage more members and increased volume, including increasing cross-sell of integrated consumer journeys between Limpa Nome, PagueVeloz and eCred. Turning to the U.K., we saw 1% organic revenue growth. B2B grew 1%, while Consumer Services was down 2% from last year. Data grew 2% during the quarter and within this, the Bureau was up 1%. As expected, lending volumes were weaker during the quarter as interest rates increase and lenders remain cautious, whilst we saw more desire from clients for affordability propositions. Our new business wins and product innovation also continued to support growth. Decisioning was flat on last year as strong growth in analytics and marketing intelligence offset modest declines in the timing of deals in software and fraud. Consumer Services was down 2%. Marketplace revenue was down 7%, broadly stable sequentially and with where we ended last year as lenders remain cautious, the credit requirements for new lending remain tight. We're continuing to add new lenders to the panel and new approval propositions with key lenders are helping improve conversions. Subscription revenue also declined against last year but grew sequentially, benefiting from the adoption of new credit -- new features like CreditLock. Now moving on to EMEA/Asia Pacific, where organic revenue grew 8% with Decisioning growing 21% coming from our Australia and New Zealand and Southern Europe markets. We also saw good growth in the Bureau from India, Southeast Asia, Spain and Italy. And finally, turning to our near-term expectations. Our full year expectations are unchanged from what we discussed in May. We continue to expect core lending markets in the U.S. and U.K. to remain tight, while the rest of the group continues to grow well, in particular, our businesses in Latin America. Accordingly, we expect -- continue to expect organic revenue growth for the year as a whole in the range of 4% to 6%, and we expect Q2 to be in the range of 4% to 5%. Our margin guidance and modeling considerations remain unchanged. And with that, let me hand you back to Brian.

Thanks, Lloyd. And so to summarize, we've got a very solid start to the year, helped by the strength and diversity of our portfolio. We continue to make good progress with all of our strategic initiatives and the -- plus the countercyclical features of our model give us very good confidence that our business will continue to be resilient, and that will be able, as Lloyd said, to deliver on the full year expectations that we set out in May. So with that, we'll open up the line for questions. So back to you, operator.

[Operator Instructions] Question comes from the line of Andrew Ripper from Liberum.

A couple from me, if that's okay. Just following up, Lloyd, on your comments at the end there about the outlook. It sort of implies that the second half could be slightly better than Q2. Just wondering what sort of underpins that appreciate the delta is pretty modest, but are there any sort of swings that we should be aware about across the regions and businesses?

Thanks, Andrew. No, I think it is probably a [ usual week ] since we outlined the guidance for the full year. I think we talked then about the range of scenarios that might determine the top or the bottom of the range. We started pretty much in the middle of the range, similar expectations for Q2. And I think the second half is really going to be shaped by what we see in the economy. You can see our non-lending volume businesses continue to grow well, so it will really be the sentiment of that core lending that will shape the second half. So a bit too early to call. Good start to the year, I think.

Okay. And then just following up from that then, focusing on North America. Can you say what the growth rate is for employer and verification for the quarter? And for the businesses where you have got the benefits of investment and sort of countercyclicality, Health, et cetera, Auto, Targeting, obviously, also growing well. Do you see those growth rates being sustained in the second half?

So Employer Services and Verification grew strongly, somewhere between 20% and 30%, in line with the very strong growth rate we saw last year. I think the other businesses, they're all slightly different. I think clearly, the Health business has been a mid- to high single-digit grower consistently. I think we expect that to continue. If you look at the Targeting business, that's helped by the shift to digital marketing. Clearly, when you have more economic headwinds, some of the marketing budgets can be a little tightened. So we might see that soften a little, but we still expect good growth. And Auto is interesting because you've got the recovery of supply offsetting what would normally be a time when things are tighter. But just to remember that less than half our Auto business is around the credit cycle. We've been growing lots of other analytical services there that help us support growth. So if you take them all together, Andrew, we expect continued good growth from the non-volume businesses.

And then just finally, briefly, could you just remind me, Lloyd, on the central cost number, how much of that relates to the U.K., just thinking about the FX.

Yes. Something like 2/3 to 3/4 of that will be sterling denominated.

Now we're going to take our next question -- of Harry Martin from Bernstein.

A few questions, please. The first one is, at the full year numbers, you give your revenue from new product innovation and if you kind of take the sequential improvement, it looked like it drove more than half of the organic growth last year. I wondered if you could give any comments on how much of the 5% organic growth in Q1 is from that new product innovation KPI. The second one, just on the philosophy to launching new consumer marketplace products like insurance, when volumes in the marketplace are under pressure, would you have a delay the launch of some of those products? Or actually, do you accelerate them to try and drive some volume back? And then the final question, I think you've helpfully outlined the Brazilian Consumer business and that integrated model there. I wondered if you could give any color on the proportion of the members today in Brazil that are being monetized on more than 1 product area and potentially where that can go in the longer term?

Great, thanks for those questions. Let's deal with the philosophical one first. I think insurance is not something that we've launched actually this year. We introduced the insurance product some time ago, but we've been improving the product significantly, particularly the digital experience, which is crucial and also improving the panel of insurance products that are available to members. So it's really -- the factors that kind of determine what the right time to launch any particular product is going to be a combination of our own readiness with the proposition, obviously, market backdrop to a degree and when we feel that we can actually market the thing effectively. So I think it probably doesn't apply to insurance. So I don't think there's really a whole lot. We look at the sort of, for example, marketplace to be the area that you would think very carefully this year by a big push into a particular area because while you'll make the study, you can generate a lot of demand, the issue will be whether we'll actually be able to fulfill that demand, and so that kind of weighs on how you think about that business during a time like present. On the Brazil question, really, there's sort of very low penetration of the membership base from the point of view of multiple products. Most of the members today, the majority of the revenues come from Limpa Nome. We've seen significant growth in the other products. But to date, I think, limited in terms of that penetration. I think -- I'm not sure that would be our focus, to be honest, because we still see significant growth in each of the individual product lines. And while cross-sell is an opportunity, I think the bigger opportunity actually comes from just continuing to actually grow the individual product lines where we see significant potential ahead. Obviously, the point that Lloyd referenced around the utilization of the payment services on the Limpa Nome product is quite interesting. I think that was a strategic push that we made some time ago in buying that business because we felt that, that would make the Limpa Nome product much more effective, and that's proving to be the case. So that was, I think, the reference that Lloyd made about the utilization of those 2 services together. They were meant to be that way. And then I think on the new product, we don't give that split at a quarterly update. I'll be happy to give those updates at the half year and the full year.

And the next question comes from the line of [ Kelsey Zhu ] from Autonomous.

I have 3 quick ones on North America. The first one is on the core credit bureau business. I was wondering if you can talk a little bit more about the latest trends you're seeing across Card, Auto and fin-tech account. I understand that Auto is still holding up very strongly. But how do you view sort of origination trends going into second half of this year and early next year, in line of delinquency rates and rent-up rates now being back to 2019 levels is not exceeding 2019 levels? The second question is on Decisioning revenues. It's still up 7%, looks very strong. I was wondering if you can tell us a little bit about what's happening there? How much of that is driven by further share expansions from Ascend? My last question is on North America Customer Services. I was wondering if you can tell us a little bit more about this 3% growth? How would you break that down into sort of market growth versus any sort of visible share shifts in the market? Because obviously, some of your competitors have talked about the investing in that business?

Great. Thanks, [ Kelsey ]. Let's tackle those questions between us. And maybe I'll just give an overview response on the core bureau question and then some of the detailed growth breakdown, I'll hand on to Lloyd. I don't think that we see any change in the conditions when we took -- from when we talked to you in May. When we talked to you in May, I think we have and have been pointing out for some time that we expect the conditions to tighten and they haven't really changed. And I think we're in that period now where there has been a broad tighten of credit conditions. And we expect that to continue probably for a while certain -- so we actually see the sort of end of the Fed rate hike tightening cycle. And I think -- but I think we also see conditions in the marketplace actually in consumer economy being quite strong. So we don't -- although delinquencies are up slightly, as you pointed out, they're actually only back at the 2019 levels, wasn't anywhere near a sort of stressed level. And I expect that there will be continued caution, but not stress, if that makes sense -- not excessive stress. And I think it's our expectation that when some clarity about direction of where the economy is going -- comes, I think you'll probably see people getting back on the front foot. We think that's probably in the second half at some point. And then on the detailed questions, I think your second question is about Decisioning. Lloyd, do you want to...

Yes. Just a couple of things there, [ Kelsey ]. So Ascend is actually in Data, not Decisioning, but it highlights the point. I think the split between Data and Decisioning is becoming a little less relevant as we start to sell integrated propositions across Ascend and PowerCurve and fraud and identity. We're seeing really good momentum with those combined sales and our strategy is to tie together all of the different things that we can do inside the bank all the way from having the best data through the best onboarding, Decisioning, identity authentication and then customer management. So we see -- you're seeing that both in strength inside Data and in Decisioning. And then on Consumer, as we mentioned, the growth rates of the different pieces, so the Subscription business was up 6%. That was really the members that we added the second half of last year rolling through into revenue this year. Marketplace was down 4% and Partner Solutions was up 2%. I think when you look at differential growth rates in marketplace, I think you have to think about the different mix of customers and products. So we mentioned some of our competitors are more skewed to loans, others more skewed to cards, others to other products. And some of those have reacted a little bit differently to tightening credit conditions. The key thing about this market, though, is it changes quite quickly when people get back on the front foot. So I think this will be the first place we'll see growth return once people progress a bit on origination activity.

Question comes from the line of Justin Forsythe from Credit Suisse.

Brian, Lloyd, just a couple if you don't mind. First, more strategic question. Just wondered if you could talk a little bit about the 2-sided network flywheel that you're developing with the Consumer App alongside the core bureau business and other ancillary businesses. I mean you've got probably arguably one of the stronger consumer apps out there in this space with hundreds of millions of users. Obviously, that's feeding your products on the data side. I was just wondering if you could provide maybe a rough percentage or directional like quantifiable number on how much that bolsters your data coverage on the B2B side? I imagine perhaps there's a linkage with Experian Lift and some of the kind of unscorable folks, but maybe you could just provide a little bit more color there. And then secondarily, I wanted to circle back to the B2C business in LATAM. Obviously, that continues to grow quite nicely. Maybe you could refresh us on what the growth algo is there between free members, conversion into paid and higher engagement and where it is skewed amongst those 3 categories? And then perhaps if you're expecting law of large numbers that come into play, say, 2H this year or anytime going forward?

Great. Well, thanks for those questions. I'll go first and then ask Lloyd to add in. Just deal with the LATAM one first and just quick because it's mostly free in LATAM now because it's mostly focused on Limpa Nome, the eCred or marketplace business has grown significantly over the last few years, but it's still pretty small. And then the paid business in LATAM is actually relatively small. And I don't think that will be a primary focus for us to leverage free into pay. I think we'll be -- we see the bigger growth opportunities in marketplaces in Limpa Nome, so that will be our focus there. Going back to your question on the strategic position. I mean, obviously, this is a deliberate strategy that we set out quite some time ago. I think you can see the benefit most clearly in things like Boost, where we actually use the Consumer business to gain access to additional data from consumers and can use that to score them in a different way and give them potentially better offers and better outcomes. We think we're just really at the start of that. Our first sort of priority was to get scale in these memberships and relationships which we have, and then once we've reached that the last sort of few years, we've been now working on how we really leverage all that additional data that comes to us. And 1 really simple example would be in Brazil, where the data that we got through the Consumer Services business actually massively increased the accuracy of the file with things like e-mail addresses and just basic record hygiene, which sounds innocuous, but is actually really important. So that's point number one. Point number two, I think when you start to think about the volume of data that we're gathering in terms of e-mail addresses and contact details and their application across fraud and other areas, you start to sort of see quite significant potential there. So we're excited about that. That was deliberate in -- as we set out to build these businesses together. And I think it's a lot of opportunity to come on that. And Lloyd, do you want to add anything on Brazil?

Yes, just to help with the breakdown. So last year, we did a bit over $160 million in the Consumer business in Brazil, and that's been growing very strongly. About half of that, just over half is Limpa Nome. About 20% is PagueVeloz, the payments business, about another 20% is eCred, and about 10% is Fraud and other areas of Subscription. So you can see, as Brian said, the majority is Limpa Nome, but increasingly diversified. And the payments business that we acquired with PagueVeloz, offers us lots of interesting strategic choices alongside the Limpa Nome business, particularly. So very happy with progress there. And I think in a large market where we've got very strong brand presence, there's a lot of optionality in that business for us as we go forward.

And the next question comes from the line of Simona Sarli from Bank of America.

Probably if you can provide a little bit of granularity on the evolution of your organic growth rate throughout the quarter and probably an indication also of the exit rate? And in particular, if you could focus not only at group level, but also for North America.

We don't give monthly growth rates. I think probably the best way to answer it is we grew in line with our expectations in Q1 and Q2, we expect to be in the 4% to 5% range, might round to 5%, might round to 4%, but pretty similar growth rate -- in the range that we had the Q1. And lending criteria was pretty stable after it stabilized after the hiatus around the banking fails in the U.S. So no real discernible trends, I think, is probably the best way to describe it just now. And we'll see what the second half brings.

And the next question comes from the line of Anvesh Agrawal from Morgan Stanley.

I've got 2 questions. First, just on the mortgage trends. The volumes were down minus 32% and the organic growth was minus 8%. So just to clarify, minus 32% is the market volume or your own volume? And if that is the case, it seems like there's a massive pricing tailwind. So just some clarification there and when do you expect that to sort of annualized before? And then the second question is around the membership trends in the Consumer. I mean, as you sort of reach a significant penetration of the free members, the proportion of the adult population in your 3 big markets and that sort of sequential growth rate comes down. Do you expect your marketing and acquisition costs to come down as well? I mean that has seen a sizable pickup over the last 4, 5 years. Are we at a stage where it sort of start to flatten out going forward?

On mortgage, the difference between the volume decline, and that's our volume decline and revenue is really the pass-through of FICO's repricing. So I think you see that in all of us and our competitors, that difference is just the pass on of that pricing. That annualizes in calendar Q1 2024, so our Q4. But typically, you see annual price rises put through in that quarter. We don't know what they will be just now, but usually come forward at that time. Sequentially, the declines in mortgage are getting a bit better. They were 40-something percent last quarter, 30-something this. They'll will be 20 something, I think, next quarter. But overall, that's quite a small part of our business, as I mentioned. And then on membership and consumer, I think we've talked -- our end goal, obviously, is to have a relationship with everybody that we have data on the Bureau. But as we get further through that, the goal is to engage them. So making sure that we have multiple products that can help them in different aspects of their financial lives like the launch that we've made into auto insurance, the spread out of the different things that we can do to help people save money in the core credit-related products, so that's really the goal. And I think there's customer acquisition costs, but there's also member activation cost being able to maintain that brand awareness with customers into some of those propositions. In the long run, if we can have multiple products in multiple areas and engage consumers, then you're right. The overall activation and acquisition cost comes down and the lifetime value of the consumer goes up, but we've got to really build out the product set to get to that point.

The next question comes from the line of Karl Green from RBC.

I've got 2 related questions. Firstly, just on North America CI/BI Bureaux ex mortgage. Can you just give a bit of granularity about the respective organic growth trends between CI and BI there? And then relatedly, roughly what proportion of the combined 2% like-for-like growth was driven by Ascend in the quarter?

Okay. So the BI Bureau grew stronger than the Consumer Bureau. I mentioned the Core Bureau was modestly declining within that, you've got a strong growth or good growth actually from the BI Bureau. Prospectively -- sorry, what was your second question, Karl?

Contribution from Ascend.

From Ascend. So Ascend grew double digit in the quarter, that continued. So -- but its contribution inside that 2% would be less than 1%.

And the next question comes from the line of Arthur Truslove from Citi.

Yes. A couple from me, please. First of all, just in EMEA and APAC. And obviously, you've been transforming that business and doing some restructuring. And I just wondered where you think the margins can ultimately go over the sort of midterm in that line of business following everything that you've done? And then I guess the second one for me was around Brazil. in particular, on the B2B side, I mean, clearly, I guess the run rate has slowed a little bit from where it was in the first half of FY '23. And I just wondered what the sort of reason for that was and whether you expect it to accelerate as we get into the second half?

Thanks, Arthur. Yes, EMEA, APAC, we're pleased with performance there. No change really to the sort of margin targets that we've set out. And Lloyd, just to be honest here, when we spoke about this...

Yes. Mid- to high teens for the 5-year time horizon. So you'll see us continue to progress from here each year. I think the key to it is scaling those markets that we're now focusing on. And you can see that starting to come in the growth rate. So that's really the most important thing.

Yes. Then back on Brazil, no, I don't think you can read anything into the difference. I mean typically, we have our strongest quarters in the second half as we close out the year. I think the growth is still very strong, and we're still significantly outperforming everybody in the market. So we're very pleased with the progress there.

Next question comes from the line of James Rose from Barclays.

I've got 2, please. First is, could you talk to the countercyclical business lines of the bureau and any signs that those are starting to kick in and then help? And then secondly, on Brazil, not that we can see it in the numbers necessarily, but are there any signs of tied to credit conditions there impacting the B2B on the Consumer side?

Great. Thanks, Brazil. I mean Brazil [indiscernible] tougher credit conditions, maybe not to the same extent as we've seen in the U.K. and the U.S. But it's -- I think when we talked in May, we said it hasn't been an easy year from a credit perspective. But we've been doing extremely well based on the advanced and positive data and all the new products that we've been building on the back of that. And I think if you just look at the comparator, which is BoaVista in the marketplace, we're substantially outperforming them. So I think -- I don't think we see anything changing from that perspective. Anything actually, Brazil is now -- had the lowest inflation actually. We're in the rather bizarre position of Brazil and Latin America teaching the developed economies how to get inflation under control. So we might start to see interest rates moving in a different direction there much quicker. So I don't think that there's any change there. And I don't think that there's any sort of phase of further weakening or tightening. And it already has been to a certain extent, so I think that probably deals with the Brazil one. On the countercyclical products, I think I would just make the comment that the performance that we've been all throughout FY '23 and Q1 includes really the contribution from those countercyclical products, particularly in things like analytics as well as some of the other business units that are really not perfectly correlated with the credit cycle. So there's quite a big contribution from that.

Yes, I think if you think about volumetric businesses, James, the classic countercyclical one is collections, and we haven't [indiscernible]. And the reason for that is because delinquencies haven't really elevated. I think what you've seen is some other areas of service, the focus, as Brian said, analytics. We saw that really strengthen last year. We commented in the release about the increase of things like affordability services in the U.K., the strong growth in our short-term lending business, Clarity. That tells you that the lending is moving around a bit in the ecosystem as credit terms tighten. And of course, one of the joys of having a broad portfolio as we do is that we can pick up the demand wherever it lands.

And the question comes from the line of Oscar Val Mas, JPMorgan.

I have 2 questions. The first one is really on the insurance marketplace business you're building. Can you just give us some more details on how significant or how large that business can be over the next few years? And then on that business as well, just to give us more color. So the U.S. is quite different to the U.K. in terms of how auto insurance is purchased. Are you seeing anything in the U.S. market changing over time to resemble more the U.K. market? That's the first question, really on auto insurance. Then the second question is on pricing, and it's something we've discussed over the last few years, but you've talked about FICO putting up prices significantly. Your Core Credit Bureau is seeing flat growth. How should we think about pricing initiatives with your customers, given there's obviously some cost inflation coming through from people in Data. Is that a significant conversation you're having with your customers around pricing?

Great. Thanks for the question. We'll deal with them in turn. I think on insurance, you're right. It is quite a different marketplace when you look -- compared to when you look at something like the U.K. What I would say is that we think that the insurance market in the U.S. is on a journey towards digitization. There's a long way to go. We're very encouraged with what we see from a number of perspectives. One, consumer demand, which we think is very strong. Our own ability to actually create seamless propositions for consumers, which is much more complicated given the complexity of the U.S. insurance marketplace, but we're getting there. And three, the willingness of large insurers to actually be part of our panel. And we're seeing really good traction in that and we expect to make further progress. So I think this market is going to evolve in a -- very quickly. I mean, it will obviously evolve over a period of years. But we do think it's a very big opportunity, hence, the investments we've made in this. And I think we've got in a great position. In terms of sizing, Lloyd, if...

We have. I mean, clearly, if it's all tied to the transition that you're asking about. If we see a rapid transition to a more digitized market and the opportunity could be very material. I think building on Brian's point, we have audience. We have relevance. We have a big auto business with all of the data associated with it. Over 3 million consumers on our platform have parked their car in their virtual garage, which gives us permission to talk to them about auto-related products. And we've got a panel and a journey that can take them through a pretty seamless, low-friction auto insurance journey. So I think we feel quite positive about the potential of that business, exactly the pace of it. The direction of travel is very clear. The question really is the pace. And we plan to be a key part of that ecosystem as it develops.

And just on the pricing?

Yes. Book pricing. As we've talked about, we have pricing conversations with our clients. Often, they're part of a big bundle discussion in that we want to grow our relationship with clients into new product areas. So there's always a trade-off between the pass-through of inflation, the pricing of products and the growth of new innovation revenue. And we kind of see it as a single conversation rather than a separated conversation. Clearly, it's easier to have a discussion on price at times of high inflation. So you might expect [ there will be more ] conversations now than there have been in the last few years.

Thank you. Dear speakers, there are no further questions.

Okay. I think we're done with everyone's questions. So thanks, everybody, for joining today. Thanks for all the questions. I hope you all have a good day. And we look forward to speaking to you again in November for our half year results. Thank you.

That does conclude our conference for today. Thank you for participating. You may now all disconnect. Have a nice day.