TransUnion (TRU) Earnings Call Transcript & Summary

Good morning, everybody. Thanks for being here. My name is Manav Patnaik. And I cover information services at Barclays. We're very pleased to have with us here today Chris Cartwright, who is the CEO of TransUnion. So Chris, thank you for being here.

Chris, just maybe just the first question is just tied to the macros. Obviously, there's a lot of debate out there on the rate environment and what needs to happen but you guys have a very unique view on the consumer at least. And so from your perspective, where are we, I guess? I don't want to use the word cycle but I guess where are we in the cycle, if that's how you look at it?

Sure. So commenting first, the macro things that we were informed of by the market and there are things that we see uniquely in our dataset around origination volumes and delinquencies and the like. I would say that the consumer and household finances are still in pretty good shape, although they have been under pressure since the Fed started aggressively increasing rates in the second quarter of '22. Employment is still high, although job growth, less robust, if you will and employment has picked up a bit. And while the consumers had to endure price inflation over this period, there's been a lot of offsetting wage increases. And I don't know if that every segment is entirely whole but at the lower end, in the middle parts of the job spectrum, there have been some pretty considerable wage increases that offset. But of course, higher interest rates means higher debt servicing costs on any debt that's existing and its floating and consumers have certainly felt that pressure. And what we've seen over this period is, I would say, an overall downward trend in origination volumes, exacerbated, of course, by mortgage, which has fallen off a cliff and we think it's like 60% below its trend line at this point. But really the only category that held up well is card and card originations, until in recent quarters, that started to decline. Where I think we are is, after the very difficult third quarter that the industry and we faced in '23, that was the result of both these macro pressures on households but also disruption in the deposit base amongst lenders around Silicon Valley, safety and soundness concerns, if you like. It feels like we've hit a floor and for the last 3 quarters, we've kind of been bouncing in and around this level of muted but stable origination activity within this context of a consumer that's under pressure for macro trends. Well, I think where we're at now is, the Fed has still so strongly indicated that they're going to make a rate reduction. We may be entering an environment where we can get some rate cuts. And I think those cuts mean consumers -- the pressure on the households starts to alleviate and also refinancing opportunities are going to arise in multiple categories, not just mortgage but auto loans. And those consumers that are revolving a significant amount of credit debt and many of them are, should have an opportunity to refinance that through debt consolidation, perhaps through the fintech segment that is going to get revitalized with lower rates.

Got it. And you pointed out last year in the third quarter that kind of came as a surprise, I guess, towards the end there. And I think you already pointed out a couple of differences but just to reiterate, like this time around versus last year, is it just that the consumer is expecting lower rates? Or -- and is less of that deposit outflow pressure? Is there something else you would call out? The macro environment today versus...

So why do I feel it's more favorable in this third quarter than last third quarter?

Yes. Yes.

Well, first, you're right, lending volumes fell off a cliff in September of last year, right? And so far, we're comfortable with what we're seeing in the third quarter of this year versus the guide. I think deposit stability amongst the mid-tier and the community banks is the big difference, right? And last year, what happened is you had this disruption caused by Silicon Valley and some other stresses within the banking segment in the second quarter but you still had an inventory of loans in process. But new originations really slowed as banks began to both [indiscernible] their deposit base against potential instability and it's a deposit base that was already under pressure because it was starting to migrate to fixed income. Since then, those pressures have alleviated. Most of the banks have rebuilt their deposit bases to the prior levels and they're going to have to put that capital to work increasingly. So I think that's why we feel so much better in this third quarter and also the fact that we've had 3 quarters of relative stability up until now.

Got it. If I can just hone in on a couple of the categories, so starting with auto. We -- you've already got a couple of questions. I think you said about -- [ Ally ] reported this morning talking about delinquencies rising, credit worsening. Is there anything that you're seeing on your end that would suggest this is an increasing worry on the auto side?

Honestly, not sure. That's hot off the press news and I've been in meetings this morning, although I have heard about it. I mean, look, we have seen delinquencies normalizing over this rate adjustment period. They went from being unrealistically low because of all the benefits of low interest rates and fiscal stimulus and forbearance and all of that to more normalized levels across the multiple lending categories, right, so mortgage, consumer, auto and bank cards. And it felt like they were stabilizing. Even though they were -- delinquency was increasing, it was still within tolerance. And then overall, if you step back, household leverage is still very manageable against historic standards. So I can't really comment about anything new in auto. We haven't seen it up until now.

Got it and then let's just put mortgage to the side for a second. But you alluded earlier that once rates get cut, many categories will benefit. Can you just talk a little bit about how the categories benefit and perhaps even how quickly they might benefit?

Sure. So if you assume a scenario of quarterly rate cuts of 0.25 point between now, over the course of next year, right and I'm not speculating or prognosticating this thing. If one assumed that, what you're going to see is that loans will reprice and there will be multiple opportunities to refinance a mortgage, an automobile, a revolving card balance that's at a particularly high rate into a debt consolidation loan. And you may see it multiple times, right? And I think that is going to be good for households and help households lower their overall debt service cost and certainly good for the bureaus who need transaction volume to drive their revenues.

Got it. Okay. Fair enough. And then just on the mortgage side, I think we all know the market is close to a trough, hopefully and it rebounds, et cetera. Just 2 questions. One is the pricing dynamics in the mortgage market. Can you just talk about -- obviously, there's been the third-party scoring benefit but within your mortgage vertical exposure, like, do you take your own pricing with new products? Or is that a focus for you guys?

Yes. So there are 2 components of our pricing. The first would be what we charge to calculate a score on during a mortgage transaction on the underlying credit data. And that has been a constant throughout this period of price increases. Of course, given that the price of that mortgage score has been increasing, our fixed percentage means more dollars for us in an absolute sense and that's why we've had this benefit. We also price our credit scores independent -- I'm sorry, we price our underlying credit data independent of the score and the processing. And we have more or less continued to take price increases where we can, consistent with historic practices.

Okay. Fair enough. And then the other component is just the whole FHFA and the potential Tri-Merge to Bi-Merge and VantageScore, so maybe [indiscernible] about. The VantageScore implementation should be positive to the bureaus. Just how would you frame the benefit there?

Yes, look, there's a lot that's going on in the pricing space. Both Vantage and FICO are -- have launched next-generation scores. The VantageScore has been analyzed by a lot of different parties, GSEs, Federal Reserve banks, et cetera. And they know it's performing better than the heritage scores that are in market across industry competitors. That's good. Fannie and Freddie has said, or rather the FHFA has said that towards the end of next year, they'll start requiring both scores. That would be a net positive for the bureaus, right? We would be selling one additional score. Now whether that happens, it's still a matter of some discussion and question, I think. And for how long that persists, again, is an unknown at this point.

Got it. And so just to quickly add, so is it the -- is the debate that it might not happen or just the timing of when it happens when you have to pull the VantageScore, right?

Look, it's all -- I would say that all scenarios are possible at this point with the FHFA. They have stated what their intent is. I know they're working with industry players on implementation issues that have to be worked through. But their intent is to require those scores and selling 2 instead of 1 is certainly additive for the bureaus.

Got it. And so that probably someone answers my next question, which is the whole Tri-Merge to Bi-Merge which is, which is not a mandate but more just a -- or I guess, you can if you want to do it. Do you think that it's feasible?

Yes. Good question. There are 2 flavors of 3 to 2, if you will. One is on qualification and the other -- which is the beginning of a mortgage origination and the other is on the underwriting. And if you look back 1 year or so, the FHFA was advocating a move to the Bi-Merge at underwriting. And what the data showed is that, unsurprisingly, when you take a dataset away, scoring and pricing deteriorate. And the impact was material enough on U.S. consumers that the FHFA decided to pause to study it further. And I think it's uncertain at origination whether we will ever go from 3 to 2, right? But again, the landscape is still a little bit cloudy. But clearly, they paused and they listened to the feedback from the industry. Now in terms of qualifying a consumer to enter the mortgage process, there have always been a variety of practices, some pulled 3 credit reports, some did not, right? But what the FHFA has said is, they will purchase the loan off your books if you buy -- if you have 1 credit score. And so there was a concern that the industry would rapidly and exclusively migrate to 1 credit score and that there could be pricing pressure there. What we have seen is less of a migration than we thought and probably less pricing pressure than we budgeted, which is why we really outperformed our guide on this part of our revenue in the first quarter and then raised it for the full year. And what you have to understand is the tension between, if you're a lender and you have a chance to underwrite a consumer, you want the business, right? And of course, you want to minimize your data acquisition cost. And that may take more than 1 score to optimize processing the business that comes your way. So I think you're going to see multiple pulls, maybe not 3 per, probably not but maybe more towards 2 per to make sure that you're not turning away business that you could otherwise underwrite if you pull the second bureau and got a higher [indiscernible] threshold score.

Got it. Okay. Thank you for that update. Just to wrap up the macro piece of question. Obviously, rates coming down should help lending categories. But if it comes down too much, that means something is strong with the economy. And so the question is more around recession resiliency and your perspective on how you would characterize TransUnion's portfolio? Because it was interesting last week, [indiscernible], he spoke and he said, you're more resilient to a recession than to a rising rate environment. So I was just hoping to get your perspective on how you would allocate the portfolio in terms of recession resiliency?

I can second Mr. [indiscernible], his opinion on that. I mean, look, in my view, our industry has been through a pretty serious recession since the Fed moved aggressively to increase rates by 500 points. We hit almost like an air pocket of demand, if you will, given the increase in price of loans. And then also concerns about deterioration of household finances and rising delinquencies and then exacerbated by the deposits. So I think the 18-month period that we've just been through is about as tumultuous as I would expect, right? Now if the economy slows down further, if unemployment picks up, that will have an impact. But if rates are dropping in order to provide relief to the consumer, that relief manifests itself in the lower borrowing costs and presumably better availability on the deposit side. That's good for my business. So my business is far more sensitive to rates than it is the general economic and employment GDP trends, although rates and GDP are highly interrelated.

Got it. And are there any particular countercyclical parts of your portfolio that would help you in the eventual recession?

Yes. Certainly. If you look at our business today versus 15 years ago, we're far more diversified geographically and across market segments. We were very financial services previously. Now we've got 4 key different segments that we compete in, in the U.S. And there's also been a ton of product diversification. And so despite the difficulties over the past couple of years, we've still managed to grow 3% and 3% organic. And that's not consistent with the long-term guide but it does show a certain floor of growth and profitability despite the fact that it was a very challenging volume environment and also that our mix was shifting toward less profitable products during this period. So I think the fact that we are geographically, vertically and product diversified makes us a lot more resilient to macro variations.

Got it. If we can just shift to Neustar for a minute. We're approaching, I think, 3 years now of Neustar. I think considering the perfect storm you described on rising rates, et cetera, the shock to the economy, I think you delivered a mid-single-digit growth for the last 3 years, which is short of your expectations, really, right and initial. So maybe just help level set your learnings over the last 3 years, the reason for falling short and then a follow-up would just be your -- the outlook going forward for that piece of the business?

Yes, for sure. So you're right. When we acquired Neustar and it closed at the beginning of December of '21, so to '24, that's 3 years of operating it. It had come off a couple of years of high single-digit growth and the marketing business was low double digits, right? And there's a lot of strength around their planning and measurement of marketing spend that was very -- that really positioned them well as well as their identity resolution capabilities. Unfortunately, our timing wasn't great, right? You had this macro sea change that started to pressure the various product lines within Neustar. And instead of high single-digit growth that we hoped for, we got mid-single-digit growth. Now that, of course, is a shame but it was still a high level of growth than the core credit business was performing. So it did help lift up overall enterprise growth. The other thing that happened during that -- this period is, we sold less marketing and we sold some less risk solutions but the portions of our communications portfolio really took off, the Trusted Call Solutions. And so those have been compounding at around 40% a year. Now that's fantastic and it's helped keep us in the mid-single-plus range of growth in total but there's lower margin on those products. So it profit pressured Neustar as well. That said, we've been able to increase the EBITDA out of Neustar from [ 1.15 ] a year when we acquired it to [ 2.25 ] as a floor for this year's profitability. And that was a result of certainly revenue fall-through but also really executing well on the $80 million plus cost takeout, which we're completing this year. And then I think the other real upside for investors on Neustar is that it has given us a state-of-the-art technology destination platform to migrate our credit, along with their marketing and our fraud solutions around this integrated core of physical and digital identity. And that's going to, well, one, produce a lot of cost savings, which we've talked about in our near-term restructuring transformation. We may chat about that in a bit but really accelerate the pace of innovation. So from the first time we announced the Neustar deal, we've said we really like the OneID platform. We think it's a next generation beyond just migrating existing applications to the cloud, which much of our industry has been focused on doing. That's a good thing to do but it's much better if you can start consolidating within the cloud from multiple points of [ light ], multiple fragmented systems into consolidated next-generation platforms. And that's the work that we're delivering on now.

Got it. And I want to get to the tech stack in a bit but going back to just the Neustar and the growth dynamics. So assuming TCS can keep up its 40% growth rate and correct me if I'm wrong but the other pieces of business, it sounds like the environment has already been challenging and you're growing at that particular level. So if the macro holds up or gets better, that's where you see the upside?

For sure and thank you for bringing me back to that point. So despite the difficulties in mid-single digits, as we move from integrating Neustar to really innovating on this OneTru platform and bringing all those products together and we've reached a floor in the marketplace with potential improvements. My belief is that we can grow it at high single digits and even get to low double digits, particularly on the marketing side. I think fraud is positioned to accelerate and we're doing a lot to ride this communications momentum where we've proven there's a great product market fit.

Okay. Maybe shifting gears a bit to the technology initiative, the OneTru. Maybe just for the benefit of the audience, a quick kind of -- and it's not a quick answer, just to the extent you can help simplify what is OneTru? I think in the last call, you spent a bunch of timing on it with some slides out there but just help us frame that a little bit.

Well, I think, the place to start is, what is a cloud migration for an information services company because many of us have been pursuing it. And if you look at any of these scale global players who've built a portfolio of products over time, you're going to see fragmentation and redundancy across the myriad of software products and a lot of potential overlap. If you migrate it all to the cloud, that's probably a good thing to do because the cloud providers run very sophisticated and secure and variable data operations. But what you have to do is, take an individual application, migrate it onto a foundation of enabling tech that is compatible with a given cloud provider. Now we had over 600 applications at the beginning of our Project Rise migration and if we continued on that path, we would have ended up with 600 applications running in Amazon or a split between Amazon and Google or something like that, right? The problem there is that you haven't benefited from consolidation on single platform that can support multiple different applications. And so again, periodically in business, you have a chance to take that white sheet of paper out and redesign things in an ideal way. The OneTru platform presented that opportunity because Neustar had invested in the OneID platform, which had a series of common technology services and microservices, as they're called, that support the standard information and analytic product. And we took those services, we made sure that they could handle the workload of credit, the computational intensity and the like. And we said this is going to be the core piece of enabling technology in our product ecosystem that will handle all data ingestion, organization around the consumer or identity resolution, all enrichment and analytics and then deployment of whatever data it is, credit, marketing or fraud, upstream to the specific product families. And in the last earnings call, that's what we kind of -- that's what we outlined so the market would understand that. Built on a common foundation of enabling tech, was this intelligence layer of OneTru, that does all the common data processing across credit, marketing and fraud and analytics and then pumps it upstream into the specific product suite. So that's what OneTru is. And so at the end of the journey, we don't have 30-plus different credit bureau applications and God knows how many marketing and fraud applications proliferated in the universe. We've got it all consolidated, all of the data, all of the analytics and intelligence into a single platform. And any country bureau that runs on that platform avails themselves to the entirety of our IP across the product lines.

Got it. And so I guess a few follow-ups. So one, I think you said next year, U.S. and India will move on to OneTru. And I'm sure you've done some testing in other areas before. So can you just give us an example and what the results of that have been, which gives you confidence in this OneTru strategy?

Well. A lot of dimensions of the testing but in terms of performance, almost any workload that we have moved from the heritage founded platforms to OneTru is performing orders of magnitude faster. So big credit batch analytics jobs, which used to be let's turn off the lights and go home and come back in the morning to look at, they're running in 1 hour or 30 minutes. And when we interact with clients, we can actually build models real time, hit the button, grab a cup of coffee, whereas before, it would have taken 1 day or 2 to get the results of that. So the processing speed and efficiency is just dramatically better. But we've really moved past this integration into an innovation period with our products on Neustar. So some examples of that are, we have replatformed our payday lending credit business in the U.S., FactorTrust, from its independent legacy technology onto OneTru, proving out that we can run credit at scale there. Marketing already runs on OneTru. That was the origin of the application. And we recently released our first version of our global integrated fraud solution on OneTru. So the proof of concepts that we've achieved and the work that we've done to migrate to OneTru this year would include replatforming FactorTrust in credit, launching the next-generation integrated fraud, launching the next generation of marketing audiences, we just did that 2 weeks ago. And launching a series of analytic and data enrichment products that's kind of greatly improved our ability to compete in that segment. On top of that, we've been testing extensively the U.S. credit data on the OneTru platform and starting to plan our client migrations, which will happen over the course of next year. And by the end of this year, we will have moved all of our data and all of our analysts and all their analytic models onto OneTru. About half of them are already operating on the platform and we're just going country by country and doing the migration. So there's lots of heavy lifting, lots of delivery and lots of innovation that's already taking place.

Got it. So this might oversimplify it but the end game is, on the cost side, it's faster, it's better, it's more cost efficient, I guess. And then the revenue side is really dependent on the innovation cadence that you have in the company?

Exactly. And we will greatly accelerate the innovation cadence because we're not dealing with legacy and fragmentation. It will also allow us to repurpose a lot of our engineering resources. Imagine, we have 30 different teams of people maintaining credit applications around the world. As we move a given country onto OneTru, we free up most of those engineers. Now we can either take that, the profits, which in part we will, or we'll use it to fund other innovation in other areas of the business that have got potential. So by getting to OneTru in the U.S. and in India, we're going to really unleash this ability for continually improving our cost and the speed of our delivery.

Got it. And this is a slightly tough question but your peers and a lot of other companies talk about this thing in kind of ambition at least. Is there anything to point out that kind of distinguishes OneTru or makes it stand out versus...

For sure. So let me reiterate a point I tried to make earlier, lots of the industry, not just the credit bureau industry but across information services, talks about the cloud migration. And again, we had over 600 applications running, our own proprietary applications around the world. If we simply settled for replatforming or putting the data in a common foundation, we'd still have 600. Instead, we have 1 global configurable state-of-the-art credit, marketing and fraud platform, all that functionality, 1 platform, integrated around ID that's configurable for the needs of each different country. That's going to greatly defragment what we're doing to take costs out beyond what I think -- certainly take a considerable amount of costs out but also allow a lot more rapid innovation because all of our engineers can be pointed to 1 code base. That's how you get -- you scale innovation.

Got it. And this might be the answer to my next question but I think the Neustar strategy was about, you had the credit risk analytics, they had the customer acquisition capabilities, loosely speaking and combine them, right? And the way you explain the strategy, it makes some sense. But -- so will the main barrier to this not being done before just basically the technology that you're referring to today? Or why wasn't the bureaus already doing this, like, before Neustar?

Well, the bureaus have long participated in marketing client acquisition. So look, the bureaus basically do 3 things. We help for credit and for marketing, which is across lenders but also insurers, if you will. We help them acquire customers, manage those outstanding relationships and collect if the loans become delinquent. Within the acquire-the-customer bucket, there were 2 highly interrelated processes run by different competitors. The bureaus did the, "Hey, we'll help you understand the market, identify attractive segments and drill down to specific consumers that you would be willing to make a loan to, that meet your lending criteria." The next part of the process was to understand more about those consumers, who are they from a demographic, psychographic behavioral standpoint and then to create specific audiences to help you go find the consumers, whether you're sending them e-mail, a direct mail or presenting ad somewhere in the Internet, right? We didn't do that part but our data enabled that part. So when you went across to the marketing side, those marketing prospect databases are organized on a foundation of credit header information. Lots of the matching and identity resolution had been provided by TransUnion and the other bureaus. And in recent years, we built out a top quality marketing enrichment file. So all we lacked at that point to be full service and marketing was the audience and then the planning and the measurement. We got that with Neustar and we added it to the series of small deals that we've done kind of toe in the water experimentation previously and now we're bringing those 2 parts. But again, you know the competitive space well, you know some of our competitors also have significant marketing businesses and are -- they aspire to consolidate and have articulated that in the way that we're doing.

Got it. If we can move on a little bit to the insurance business at TransUnion. It's a sizable vertical, I guess, for you guys.

Sure.

Can you just talk about some of the dynamics going on in there with your different products and the whole auto shopping and marketing and there's been a lot of noise out there, so just how you look at the setup today?

Yes. Look, it's our largest vertical in our diversified market segment in the U.S., it's about 25% of revenue. And we've become accustomed to it growing high single digits and sometimes low double digits. It was impacted by inflation, kind of idiosyncratically, where the replacement cost of the damaged asset became much higher than the premiums charged. And so the insurance industry had to go through the process state by state of getting regulatory approval for higher prices. And that's taken 2-plus years and we're now reaching a point where they've kind of healed their policy unit economics. They can charge enough for the risk that they're undertaking. And so they're moving back into marketing to acquire customers more aggressively. Now there have been significant rate increases during this period that caused a sticker shock and the consumers are like, holy cow, I need to go find alternatives. That drives more shopping, which drives more credit pulls. I think the environment we're in now, where it's, the insurance industry is substantially healed, although perhaps not ideally just yet. Many players are willing to market more aggressively but consumers will still shop because the rates are just very high and not everybody has had the opportunity to mark their rates to market, if you will. So in sum, I think that is a more robust insurance environment than we've had these past couple of years.

Got it. And so just, the insurance business is always a pretty nice high-single-digit growth business. I guess, does rates matter in that business as well? Like when do we return to that kind of trajectory?

Well, look, as I've said before, I think this will be a healing year, meaning we're going to go from low-single-digit growth to something mid- and maybe even better and we'll see how the year develops. But I do feel like we are on the path to recovering those former growth rates, whether we achieve it this year or in the next year, not quite sure. But the underlying components, variables that drive the growth are returning to normal and so that's -- we're encouraged by that.

Got it. Well, let's talk about the business. It's already growing pretty nicely, which is India. We had Todd Skinner at our [indiscernible] last week and he went through a lot of the dynamics, why. But just from your perspective, it's been an amazing business, strong growth. There's been some slight deceleration but like can we expect that growth to just continue?

Well, we've been growing in the low 30s for a while, which is awesome. But we have been cautious in our guides in saying, over the intermediate period, let's put a floor around 20% plus growth, if you will. So we're still highly confident about that. And of course, we're going to aspire to perform as well as we possibly can in that space. The recent slowdown we speak of is, the RBI in India became a bit concerned that there was froth in the unsecured lending market, particularly from nonbank players. And they started to apply the brakes, if you will. And even in the banking side, they required a higher loan-to-deposit ratio, which took some of the growth momentum out of it. The good news, though, is those loans remain very healthy. The delinquency levels on those loans are at all-time lows. So it would suggest that perhaps enough has been done in the name of caution and prudence. But look, we've got a great position in consumer lending. The big factors around population growth, economic growth, financial penetration and innovation, all look very good. Plus, we are bringing more and more analytics to the Indian market. We're bringing, or enabling new categories of consumer lending like agricultural lending, which is very big in India. The state banks are required to put 20% of their capital toward ag loans. Currently, we don't get much business there but we've got new products that will allow that to become in scope, if you will and then micro lending. And then one of the reasons we chose to replatform India onto OneTru is we want to bring the range of our marketing and fraud capabilities to India as well as credit and all of the U.S. analytic approaches to managing credit. So again, because all of our services are on the single platform and with a unified identity layer underpinning it, any country that moves their business to that platform benefits from all of the services that are available within TransUnion on the platform. So it's a way that we can really launch a lot of new ships, if you will, on our growth journey within the Indian market.

Got it. Are there any other geographies out there that have similar characteristics of India? I understand they're probably not going to become as big perhaps but just in your portfolio?

Yes, we're excited about what's going on in the Philippines, right? We had a presence in the Philippines. Now we're really starting to grow rapidly. That's also going to move to OneTru. I think that could -- I mean I don't think we're guiding today about how big it can become but it can become a very substantial international geography. There are also different opportunities across the Latin America, Latin countries that have great growth characteristics. But now India is a growth unicorn but there are other attractive geographies that we will pursue.

Fair enough. And then just to end with capital allocation. I guess, about 3 years ago, you did 3 deals. Just going forward, like your priorities in terms of M&A versus deleveraging, buybacks, et cetera.

Yes. Look, again, I think the consternation around that was, again, a timing issue, right? We sold 1 division and then we acquired 3 other businesses. We levered up into the low [ 4s, 4.3, 4.4 ], I think, at the peak. And it was the second time that we had done that in our public history, which started, I guess, in the summer of 2015, if you will. The good news is that we have shown that we could rapidly delever both times. And now we're down to the 3.5x, we're charting a course toward 3x-ish by the end of this year. And depending if the rate environment persists, we want to go even lower, although I think at that point, we'll also look and see if buybacks make sense if we continue to have a discounted multiple versus where we think it is, we'll have some flexibility there. But we have been very focused on delevering. As I've said before, the acquisitions that we made give us the fodder for a generation of growth. The challenge is to do the integration and the innovation to really start generating the top line growth that we believe is there and then to be very selective on any other deals that we would do. I mean clearly, if a bureau in an attractive geography presents itself, we would pursue that. Other than that the bar remains high.

Got it. All right. Well, I think we just -- we have very little time left. So let's just end it there. Thank you so much, Chris. I appreciate your thoughts.

Always a pleasure, Manav.

Thank you, guys.