TransUnion (TRU) Earnings Call Transcript & Summary

Hi. Good morning, everyone. Thank you for coming to our 41st Strategic Decisions Conference. My name is Kelsey Zhu. I'm the financial information services analyst at Autonomous. With me on stage today, we have Chris Cartwright, who is the CEO of TransUnion. Welcome back, Chris. Thanks for joining us again.

Always a pleasure. Thank you. Good to see lots of familiar faces this morning.

I thought given the current environment, it's probably only appropriate to start with macro conversations. So Chris, we're seeing a lot of mixed signals today, especially on the state of U.S. consumers as well as the state of U.S. consumer credit markets. So just curious to hear your views, things you're hearing from lenders as well as the latest credit data you can see, how healthy do you think U.S. consumers are?

Yes. I mean the way I would describe it is -- and I think this is very consistent with what you heard most of the big banks report after their first quarter. The state of the consumer currently is still pretty strong. I would say the consumer is healthy and all the various measures and metrics kind of support that. But I also would say the consumer is very worried, right? There's a lot of concerns about what's to come, what will the fourth quarter be like, given the implications of different trade policies that are being affected or fiscal policies that are being legislated currently, right? But look, the consumer is still highly employed. There's a reasonable level of new job creation. Inflation is in decent shape, although not back to the 2% long-term aspiration. The cost of credit is a little bit elevated from where it was at the end of the prior administration, but not that much. And also, I think consumers have become more habituated to paying a little bit higher prices for their borrowings than during the COVID era with all the 0 interest rates and all of that. And delinquencies seem to be reasonably controlled. Now that's all fairly positive, again, but there's just a tremendous amount of concern that the trade policies and the tariffs could increase inflation, could stress consumer finances, could lead to a borrowing slowdown. But -- with that said, as you can see, our first quarter performance was really strong. 2024, of course, was a strong year, 9% organic growth for us. Our volumes in the first quarter were consistent with what we saw in '24. April, as we've said publicly, held up as well. It's been a continuation. And so far, May performance has been a further continuation of the reasonable volume trends that we've been experiencing for some quarters now. In terms of the impact on our business, it's really going to depend on what -- how all of this eventually manifests itself in the economy. I mean I always use the example of -- it's like being at the beach on a relatively nice day. It's not the prettiest of days, but it's good enough. But everybody keeps talking about the storm that's brewing offshore. Some people think it's going to be terrible when it arrives, some people not so sure. And I think it's really going to depend on what the ultimate outcome of all of these tariff negotiations are. But as we've emphasized, the business is performing well. We have materially diversified. And we have a couple of points in recent history where the macro environment was very difficult for our industry, in particular, that would be '22 and '23 when inflation spiked and then interest rates spiked also leading to a real recession in lending volumes. And we were able to get through that with positive 3% growth in both of those years. And I would say at this point in '25, we're a much stronger business than we were then. We have accomplished a tremendous degree of integration of our acquisitions, Neustar and Argus and Sontiq over this period, and we brought real material innovation to the market. So in theory, we should hold up even better if we encounter similar type of macro headwinds.

Got it. That's super helpful color. Thanks for sharing, Chris. I have a couple of follow-up questions to that. So a couple of leading indicators we track. As an example, consumer confidence has really fallen off the cliff since the beginning of the year, which historically would likely translate to lower consumer credit origination growth. The other indicator we look at is Federal Reserve's senior loan officer survey, which if you look at the most recent survey, it does show tightening across both credit supply and credit demand. So just from this context, how should we think about consumer credit origination growth for the rest of 2025?

Sure. Well, that gets to the second part of my comments. So the consumer is healthy, but the consumer is worried and lenders are worried, too, and investors are worried. And I think you see that worry play out in a variety of areas. Look, lending volumes have been strong thus far, but we're still at fairly muted levels of loan transaction activity across -- for categories when compared to historical trend lines, even if you factor out kind of the bubble lending periods in and around the COVID era, right? So we're already at fairly muted volume levels. And therefore, that provides, I'm not going to say, a firm floor, but it's unclear how much further they would fall even in worsening conditions, right? Because there's some natural transaction volume that happens kind of independent of interest rate concerns or ideal mortgage rates and the like. Mortgages have to be refinanced and things like that. And so look, it's possible that we'll see some decline in lending volumes over the course of the year, but there are counterbalances to that, right? If GDP growth declines, presumably, that will take pressure off of inflation. That could allow for rate cuts, and this has been a more normalized recession scenario. Those rate cuts make loans more affordable. It also reduces the carrying cost of credit for a lot of consumers. And so there's a natural compensation and counterbalance there. I think one thing that's also different is that this is a very good time for loan consolidation, for debt consolidation lending. A lot of consumers, particularly subprime consumers were issued cards during the COVID era because their credit scores drifted up. We know those consumers used the cards, built balances and are now revolving to a high degree at high rates. That's a perfect example for fintechs to execute debt consolidation loans, which is really their sweet spot. And fintechs are on much more stable footing. They've been getting funding. They've been far more active in the market. And so that's kind of a volume counterbalance, if you will. But in terms of what we'll see over the remainder of the year and into next year, I don't know that anybody sees it 20/20 at this point because what is transpiring is kind of without precedent in recent years, it's hard to know what's going to become a permanent part of our economic and trade policies and what will be negotiated to a different outcome. But I just think that, that creates worry and risk, and therefore, it kind of dampens economic activity and even investor sentiment at this point.

Got it. And I think you gave us a lot of helpful colors around how TransUnion would perform in a recessionary environment. Maybe talk a little bit more about your expectations on how the business will perform in a stagflation environment.

Sure. Before I get to that, I should mention though that in terms of our guide and our prospects for this year, we came into the year with a conservative posture. That means we guided more conservatively on revenue growth, and we also had more kind of contingency or cushioning in our financial forecast, so we could weather certain bumps, if you will. We outperformed in the first quarter. We didn't raise guidance for the year. So essentially, we fortified ourselves further in anticipation of diminishing prospects later in the year. We also didn't assume any volume improvements in any of our lending categories, right? And if anything, coming out of the first quarter, we mitigated further some of the volume assumptions. So I feel like we're well positioned to weather some economic deterioration over the course of the year because of the initial contingencies, because of the further enhancements with the outperformance even before we get to cost mitigation levers that we might have to pull to preserve EBITDA and EPS if the lending environment turned considerably negative. Now you asked a question of what happens in a stagflation environment. I initially spoke about the typical recession, right, where there's a GDP slowdown, it takes pressure off of consumption, which mutes prices, which leads to lower rates and kind of a generalized healing. Stagflation would be a different animal and a more challenging environment, certainly. I think the best thing I could say is just pointing to '22 and '23, we had a GDP slowdown. It didn't go negative. The focus was all around soft landing and stuff. But in the lending industry and in our industry, providing data to lenders, we did operate in what was a stagflation-like environment, right? Inflation went up, interest rates went up tremendously and our volumes, our GDP, so to speak, fell, right? And because of the diversification of the portfolio, first across geographies, and if you remember, international continued to grow very well during that period and then market verticals within those geographies and then finally, the products that we actually sell, which are largely not procyclical, right, we were able to produce 3% growth. And then based on that, I would say we're in a better position. We're a stronger business than we are today. So I would assume some upside there.

Got it. And Chris, you mentioned the cost levers you can pull in case of a market downturn. And I know you touched on this a little bit in Q1 conference call as well, where you mentioned buckets like hiring, third-party spend, T&E, growth investments. I was also wondering if you could size each of these buckets so investors would have a better idea in terms of how big of a margin cushion TransUnion really has in the market downturn.

Sure. Well, look, I was trying to provide some directional guide to that when I spoke to our positioning for 2025 and how we've been conservative in volumes and all of that, but also just naturally plan more contingency and book the overperformance of the first quarter as contingency. So even if there's a slowdown, right, we're going to have some offsetting cushions, if you will, that will allow us to achieve our guidance, if not performing at the high end or even overperforming the guide, right? Beyond that, though, typically, you would look at your external consultant spending, your travel and entertainment and event kind of spending. But the single biggest short-term lever is your hiring, right, in your workforce. And so we are in an environment where we are expanding our employment to support growth, if you will. We would have to curtail adding new positions. We would then curtail filling positions due to turnover. We might further rebalance our portfolio around the work that's getting done in a local market with a higher cost toward perhaps our GCCs. And again, remember that we have been executing an aggressive next-generation restructuring program on both the technology and the workforce side that we're completing by the end of this year that's going to bring another wave of savings. In total, in the big, the program was $300 million invested in technology and workforce relocation and training to achieve a couple of hundred million in ongoing cost savings. And this is also driven in part by a reduction in our capital spending from 8% to 6% of revenues over time, right? So we would remain laser-focused on completing that this year because that's another cost reduction that's in the pipeline. So look, there's quite a few layers of cost defenses, if you will, that are going to allow us to maintain our EBITDA performance and our EPS performance even if the macro environment becomes more difficult.

In that transformation initiative, I think we are down to the last leg, which is the $45 million OpEx saving in '26 coming from costs around cloud migration and other technology infrastructure savings. Got it. Let's dive into each vertical of the U.S. markets for a second. I think on mortgage, what's most top of mind right now is really Director Pulte's comments around credit reports getting too expensive. And I was just curious to get your thoughts around how are you thinking about the ceiling on mortgage credit file pricing in light of Director Pulte's comments?

Well, a couple of things to level set on. I'll speak to TransUnion's pricing practices, let's say, over the past 5 years and just kind of the pricing and the economics of the data load that we provide to a mortgage transaction, right, and origination. Our pricing, and I think this is pretty consistent across the CRA industry, has been largely inflation and inflation plus a little bit over this period, right? So the CRAs provide the underlying trade line information upon which a score is then calculated. The score provider charges what they charge. And then we also charge a fixed percentage for calculating the score on our underlying data, right? So there's the data load, there's the score and then there's the calculation fee. Our pricing has remained largely unchanged. Our pricing philosophy during this period has been unchanged. Other elements, the score in particular, and also income verification, those prices have escalated a lot. They've escalated well beyond inflationary levels. Now that's a fact. It's not a judgment or a criticism. It's a fact. And if you look at Director Pulte's comments, they're largely targeted at the cost of scores, but then they get blended in with the overall cost of credit data, okay? So that's point one to understand. The other point that I think is essential is the efficacy of underwriting and financial inclusion is driven by the amount of underlying data that's used. And this gets to tri-merge versus bi-merge. Now the FHFA under the prior administration issued a press release saying we're going to go to bi-merge, and therefore, mortgage originators are going to save some money, which will help offset some of the other increasing costs in the mortgage data mix. Then a neutral third party, S&P, did an analysis. And essentially, the analysis showed that if you took away the data from 1 of the 3 bureaus, a substantial percentage of the U.S. population would no longer qualify for a mortgage or would only qualify for a more expensive mortgage, resulting in millions of dollars of additional interest expense over the life of the mortgage. That was an unintended consequence, right? And as a result, they decided to put on hold any move from tri-merge to bi-merge. Now Director Pulte and other voices have been active in recent weeks saying, "Hey, there have been a tremendous amount of price increases in mortgages." This is a difficult environment for mortgage originators. There's also increasing consumer shopping out there, really enabled by the changes of prequalification and conversion to soft pulls and all of that. And if you're a mortgage broker or a mortgage originator, that means that your look-to-book ratio, so to speak, the percentage of the mortgages that you quote on and have to pay a data load versus what you actually realize in your balance sheet has declined, right? And so there's extra sensitivity to the cost increases. Now it's hard to affect change in mortgage, right? It's a multitrillion dollar market. There's millions of transactions each year, and they are very sophisticated systems, technology infrastructure that's required to keep this machine running. And so it's great to have a tweet and to kind of publicize issues of concern to the industry, but I think it's the time for kind of like a broader reflection on what is really increasing the cost of mortgage origination, which is -- it's like $8,300, the average origination cost, of which the data payload is a very thin slice. And hopefully, that's going to happen before anything is promulgated.

I have three quick follow-up questions on this topic. The first one being, have you guys heard any time line updates or latest thinking from Director Pulte in terms of when are we expected to see the implementation from tri-merge to bi-merge, single score to dual score transition? The second question being, I think in the current proposal, bi-merge is optional. If it was strictly implemented, how are we thinking about TransUnion's competitive advantages versus Equifax and Experian?

No, what do you mean in the current proposal? Which proposal is that?

That tri-merge to bi-merge is optional, but we're moving from the classic FICO score towards FICO 10T plus Vantage 4.0. So that's announced by the last director of the FHFA.

Right. But then that was kind of put on hold because of the, I'd say, the unintended consequences of moving from 3 to 2 credit reports, right? If you remove data, fewer people get qualified, and that was really contrary to the mission of financial inclusion, but also does not help safety and soundness of the lending institutions and the ultimate owners of the securities. So that was all put on hold, right? And it has not been resurrected at this point. So it's unclear what the policy is or will be, although we're starting to get some tweets around it.

I guess going back to Director Pulte's tweets, if we are going through with the transition from 1 score to 2 scores, how are you thinking about the pricing for VantageScore, specifically in light of his comments around concerns on pricing?

Well, look, in terms of data in mortgage lending, there are a couple of variables that are changing. The first is on prequalification where the GSEs have said they will prequalify even if you just pull 1 mortgage, right? And so there was -- rather 1 score. And so there was a thought that the industry would go to one. I think what we're seeing is that that's not happening because the industry wants to make sure when they have a live prospect in front of them that they improve the odds of qualifying that prospect and thus getting revenue for the transaction. And that requires probably a couple of scores, a couple of scores plus. And look, we've competed well with our current data payload and expect to continue to compete well, right? Now the second component you talked about is competition in scores. And some years ago now, 7, 8 years ago, Tim Scott sponsored legislation, which was ultimately passed to create competition in mortgage credit scoring. And the VantageScore was approved as a permissible score. But that was not implemented by the FHFA or Fannie and Freddie, in large part because of concerns about the cost of adjusting their systems internally to support 2 scores, right? I think until that is addressed, it may be difficult for those players or the industry to adopt a second score and bring real competition. Now that can change, right? And again, we look forward to some clarity on that. And ultimately, competition will be good for consumers. Now as you know, under the FHFA under the prior Director, Sandra Thompson, they said we're going to use both scores, right? Now that would still require adaptation from the GSEs and the lenders, and it was unclear about the implementation requirements, how exactly they intended that to be implemented and how long that would take. And that was one of the reasons why this tri-merge to bi-merge got shelved for a period as the FHFA and the industry sorted out how they would really affect an implementation of that. I don't feel like that's any clearer at this point.

So to summarize, whether we're going to see the transition from tri-merge to bi-merge and whether we're actually moving from single score to dual score systems are both uncertain and TBD at this point.

I feel like it is TBD. Of course, we look forward to working with the FHFA or the GSEs to figure out how best to affect it. And look, the VantageScore is a very powerful score. It works extremely well. It qualifies more consumers in the U.S., I think, than any other score. But that said, I think, one, we need to understand what the current administration is thinking and intending, and it would be terrific to have the opportunity to engage and figure out the most sensible set of policies and a sensible path to implement this in what is a giant and high-volume market.

Got it. And talking about prequalification, one of your competitors recently launched a new product that combines income, employment and credit data in one single file. So I was just curious if you have seen any market impact from the launch of this new product? Or how are you thinking about TransUnion's competitive advantage in the prequalification space?

Yes. Well, first to clarify, it's a credit report combined with a flag on the credit report that indicates the existence of an income record within the Work Number data source, an income record that could be up to 3 years old, right? And just because the flag isn't there, it doesn't mean the consumer is not employed. And just because the flag is there, it's not clear whether it's current or old and all of that. And so that's what the product is. It's not a bundling of income verification and credit at this point. That would be a revenue risk, a cannibalization risk, I would think. With that said, right, it's a new product introduction. These things take time to manifest themselves in the industry. But if you look at our own positioning, look, as you can see from recent quarterly results, we've performed well in the prequalification space. A lot of that is because of our inherent strength as the bureau that has the deepest level of trended credit information because we were a first mover in the space by some years, if you will. So you can look at trended credit performance back longer with TransUnion than anybody else, right? We also have the highest share of reporting from the fintech industry. And up until this recent downturn or downturn in recent years, fintechs were a material part of new loan origination, right? So the power of our data load just from those 2 dimensions is material and helps explain our performance and our market share, right? So the addition, we'll have to see how it plays out in the marketplace, but understand there are other reasons why the industry would choose one bureau over another. All of our data isn't the same. And what you're describing is a legitimate competitive attempt to create differentiation, and we'll have to see how that differentiation is viewed versus the differentiation that other bureaus provide. The other element is just to consider the competitive dynamics. The company that you're referring to is the only credit bureau that also competes against the other mortgage data originators. So they are a competitor in tri-merge. They also provide the verified income and employment information and has been an aggressive price taker during this period. So there is some competitive preference to do business with a noncompetitor rather than a competitor. And look, that's an elaborate stew of competitive variables that are going to take time to play out in the marketplace.

Got it. Super helpful. Let's switch gears to talk about auto for a second. I think March and April volumes seem to have benefited from some demand pull forward ahead of any potential tariff implementation. Just curious to hear the latest trends you're seeing in May as well as how you think about auto origination growth for the rest of the year?

Sure. Well, look, I would just reaffirm that our volume experience through May is very consistent with our guidance, which is why we say the consumer remains healthy and lenders remain willing, if you will. And again, tremendous anxiety about what's to come, but it's not manifesting itself in the market currently. Yes, you are correct. We did have an auto volume pull forward. And I think we're going to continue to see probably higher demand for autos because of the concerns about the impact of the tariffs on the price of automobiles. And how long that persists is really going to depend on how long this uncertainty around the tariffs on auto imports and thus the price increase persists. But as I said before, we have been conservative in our volume estimates, and we've got a variety of buffers to work through before that would have any impact on our guide for our EPS.

Got it. Super helpful. Chris, let's talk about Neustar for a second. I think in -- over the last few quarters, we've seen a lot of success in Neustar based on the outperformance some of these U.S. markets verticals have delivered versus the underlying origination volume growth. In Q1's earnings call, you've also highlighted several wins in communication and marketing. So I was just wondering what's really driving the more recent success in Neustar? And if there's any updates around the thinking on the time line to achieve high single-digit type of growth for Neustar overall?

Yes, good question. So look, the intention behind the acquisition of Neustar as well as Sontiq and Argus, but really Neustar, which was the largest deal that we did was to increase the number of relevant and complementary services that we could provide our core lenders and insurers, namely to have a best-in-class suite of marketing solutions and fraud solutions and then also communications, right, but really marketing and fraud. It has taken us some time to complete all of the systems integration and consolidation on the underlying Neustar platform that those services ran on, which we then subsequently broadened to support all of TransUnion's data. So the value that we're getting from Neustar is in part the revenue growth and the free cash flow being generated by the Neustar products, if you will, marketing, fraud and communications. But also a substantial amount of technology savings that again is coming from leveraging that platform. Now the reason the revenue is working better now is simply because the products have been integrated onto OneTru. In some cases, credit is now integrated with marketing, right? So we can execute prescreen campaigns on the credit side that then flow over to marketing for client acquisition, if you will. So some of the integration between those related solutions has taken place. Because of all of the consolidation of the different marketing products onto the Neustar platform, it looks and feels like an integrated piece software for managing customer acquisition and integration. And it's, therefore, more appealing in the marketplace. Plus, we're getting our rhythm on selling this integrated suite of marketing solutions as well as the integrated suite of fraud solutions. And I think it's really just now starting to inflect. And look, over the period of ownership of Neustar, we've grown between, I'd say, 4.5% and almost 6% organically. That's the low and the high, let's say, 4% to 6%, that range, so mid-single digits over the period of ownership. The communication solutions, namely the Trusted Call, have been the strongest performer there. And then marketing and fraud have lagged a bit as we've done the technology reengineering and integration to create these integrated product suites. Now that we've done that, and good work continues, it's never done. But now that we've done a lot of that integration, revenue performance is improving.

Got it. Let's talk about Trusted Call solutions for a second. I think from a revenue perspective, it is guided to achieve $150 million in 2025, which is almost doubling from 2023 levels. So in your view, what has really contributed to the success of TCS? And which customer verticals are you seeing the most success in? And have you sized the total addressable market for this product?

Yes. So Trusted Call Solutions give consumers or businesses confidence in the counterparty or who they're dealing with on an inbound or an outbound phone call. And that is a problem that all of us can relate to because we're bombarded with marketing spam type of calls or spoof calls or calls with fraudulent intent. So there's a clear need in the marketplace. With Trusted Call Solutions, a business by licensing our service can declare itself with an outbound call and say, "Hey, this is my bank and we're -- here's my bank and my brand and my call purpose," and all of that. And it's shown that it improves pickup rate substantially. A business also operating a big call center, let's say, where bad actors are trying to engage agents and get information about consumer accounts that will then allow them to create a synthetic ID or to access those accounts through online channels. Well, they can authenticate that the inbound call from a consumer or a business is indeed that consumer or business, right? And so because it's a critical need in this marketplace, we're uniquely positioned to provide the solution, and it's just sold very well. Also, the time to realizing revenue is short with this. Some of the Neustar solutions like the effectiveness of a marketing campaign or multi-touch attribution, those are long lead time, analytically intensive consultative products. So if you sell those, that's great. That's good. But it doesn't take a while until the results show up. Branded call display and the like, much shorter time to realize revenue, very broad market need and a lot of pain out there. And look, we're going to try and broaden the product line over time. Right now, it's focused on phone interactions. There's a need for text authentication, too. And so that's something that will be part of our R&D, part of our product development pipeline over time. And we think this product has got a lot of legs to it.

Got it. Let's talk about emerging verticals for a second. I think emerging verticals can sometimes feel like a large collection of many different things. So just curious to get your thoughts on this, Chris. How should we think about a more normalized revenue growth for emerging verticals as a segment? And are there any verticals within the segment that you think are noncore currently? Or are there incremental other verticals that you would like to expand into?

Sure. So we have verticalized our approach to the U.S. market, which is the largest and in many ways, the most sophisticated and mature market that we compete in across 14-plus different verticals. Now 4 of them are in financial services and the rest in this emerging collection that you point out. The revenue split on that expanse of B2B revenue, it's 55% in Financial Services and then 45% in emerging. And I would say at this point in time, in this macro environment, that's a mid-single-digit organic grower, the collection, right? And so that's how I would think of it. Now it has upside potential, particularly as we improve our product lines, but that's where I would kind of guide in terms of the growth rate. The revenue that's coming out of that group of verticals, yes, there is credit, in particular, in insurance, but there's also a lot of marketing and fraud and communication spending. And when I say communications, it's not just Trusted Call, which is frankly distributed across all of our verticals in the U.S., it's also those core Neustar heritage kind of telephony operational revenues that are part of the communications vertical. So it's overweighted toward noncredit solutions, which is why it is not procyclical, if you will. It can produce 5% growth over time. Now at the segment level, it's anchored by our insurance business. Insurance is about 30% of emerging in total. It's recovered nicely. We've had some low double-digit growth in recent quarters after inflation mitigated and also the insurers were able to put through sufficient rate increases across the various states to begin originating policies again, right, or increase underwriting and marketing. But you should think of the insurance component as a high single-digit compounder. Sometimes it will be a little above, sometimes it will be a little -- but it's very steady and stable. We're doing well in tenant and employment screening. We, as you know, had to curtail that product line because of some judgments by the CFPB. It took a while for the industry to adapt, but now we're lapping that revenue diminishment, and we're back in growth mode. Up until this year, public sector has been a great driver of growth. It's still a relatively small piece of our overall revenue portfolio. It's not going to be as growthful this year because of uncertainties about funding capacity that delayed sales pipeline, right? Now those uncertainties are getting sorted out. And again, in an era where the administration is very concerned about fraud mitigation, we're well positioned because that's essentially what we sell into the federal government. There's just been a lot of noise around selling to the federal government. Technology, retail and e-commerce performing well. Media is back and growing. That's about 15% of emerging markets. That should perform better going forward given the improvement in our marketing product suite as well as just increasing our sales presence in that space and our sales effectiveness. That's kind of the landscape of the emerging markets, if you will.

That's very helpful. And Consumer Interactive, you talked about launching a new freemium product at the end of this quarter. I was just wondering how does that product compare to some of the existing products in the marketplace from Experian, Credit Karma and others? And does launching this product also mean increasing marketing spend for the segment?

Well, a few things to say about our consumer business is that as most of the folks in this room know, over the past 3 years, we've been doing some heavy lifting to retool the business because we lacked a couple of products that are essential to compete in this environment. The first was the ability to make offers to consumers that visited our web properties. So we didn't have an offer engine at that point in time. And we also didn't have identity protection and breach mitigation services. In recent years, through the acquisition of Sontiq, we added identity protection and breach mitigation to our premium credit and 3 bureau monitoring solutions. And then most recently, with the acquisition of Monevo, but also our partnership with Credit Sesame, we can now make offers to consumers. We have the freemium offering that's required. Now those 3 products have been brought together in a modern sleek interface that we have partnered with Credit Sesame to develop. And over the second quarter, we've been converting all of our subscribers to this new and improved product, right? So that is almost behind us. And the migration so far is going as expected, which is terrific. It's important to underscore, though, that we expect this product line when you adjust for the lumpiness of breach to return to low single-digit growth this year as a step on the path to get to mid-single-digit growth by next year, right? So that's a big shift in the trajectory of this segment of our business, and that has been a drag on our business performance for the past several years. But we think we're emerging from the other side of it, and we're going to return to growth and increased profitability. Now who are we most like? I would say we'll probably be most like Experian in terms of the range of products that we're offering to consumers. Karma is very freemium oriented, right? And clearly, those 2 players, much greater scale. However, we attract a pretty large stream of customers to our website. And up until now, we've only been able to offer them one product, and that was a paid subscription. Most of our visitors are looking for freemium access, right? They'll provide the information in exchange to being marketed to. Now we've got the full range of services. We've got a great user interface, and we have a way to have a relationship with these consumers even if they don't want to pay for a subscription. And they can move back and forth between start freemium and then perhaps go to subscription or downgrade from subscription to freemium. So we're going to be able to satisfy consumer needs more broadly and keep them in the TransUnion ecosystem.

Got it. And Chris, you've talked about the lumpiness of breach services in general. And I feel like it's almost like a love-hate relationship because some quarters, it really helped drive growth. In some quarters, it presented pretty difficult comps. And in general, for breach, over the last few years, we have seen more news reports coming out on data breaches and things like that. But in this market, who are TransUnion's core competitors? And how does TransUnion stack up versus competition in breach services?

Sure. Well, look, I think with the -- first of all, from a pure financial perspective, the Sontiq acquisition has been a very good deal for us. We've more than doubled revenue in the period of ownership. We've made the business substantially more profitable. And because of our large breach wins last year, we proved to the industry that we can handle the biggest data breaches and remediation cases out there. So we have arrived as a full service, very capable competitor. Now to your point, it's lumpy. But if you remove the large wins that are difficult to predict, we are still requiring the business and achieving low double-digit growth out of the underlying core, which is thousands and thousands of small breaches that occur over the course of the year. So it's very, very steady growth, although a $50 million breach job in 1 year is hard to replicate in the next year. It may happen, it may not, right? But the overlying or the overall trajectory of revenue is positive, underlying, there's nice growth, and we're well positioned to compete.

Got it. We have a few minutes left. I do want to touch on international markets, and let's start with India. So we've seen consumer credit growth decelerate through '24 and the early part of '25. However, I think the new RBI governor seems to be more growth oriented in general.

Correct.

There are some recent conversations around possibly we may see policy tightening around personal loans again. So just curious to get your thoughts on what you're seeing on the ground? How are you expecting the state of India consumer credit market to flare?

So to start at the highest level, I would reiterate that our revenue trajectory for India in 2025 is developing as we expected and as we guided. First quarter flat, second quarter improving and then accelerating over the 4 quarters to a high-teen exit rate at the end of the year, the fourth quarter, but achieving 10% organic growth year-over-year. So just as it took 5-plus quarters to decelerate loan volumes because of froth and just volatility concerns from the prior RBI, we think it's going to take a similar amount of time for India to return to its full lending growth. Now some of the conditions that led to a clamp down on consumer lending in India, namely a stretched loan-to-deposit ratio and some concerns that some large players were not doing sufficient affordability analysis before issuing loans, those have mitigated. The new RBI governor has said the loan-to-deposit ratio across the industry is satisfactory. They've injected liquidity into the lending space because they want to see the volume increase because they realize that they muted their GDP growth as a result of curtailing lending activity. And those certain important consumer lending players, kind of the unsecured personal loan players that had been put in the old hockey penalty box have been allowed to get back on the ice and start lending, if you will, hockey playoff season, sorry, guys. But you get the point, and they're back and they're ramping up their activities again. So all of this, I think, provides the momentum shift back toward growth that lead us to be confident in reiterating these expectations. And look, over time, we have a fabulous business in India, which is a fabulous market. There's tons of growth in supporting consumer lending, but also commercial lending. As India moves to the OneTru platform, they will get the best that TransUnion has to offer in analytics, in fraud mitigation and in marketing, and we'll build out those verticals. And under this new administration, there's just increasing energy about how TU India or CIBIL can partner with the government to score a higher proportion of the population so they can get agricultural loans, small dollar loans, et cetera. So we're super excited about the potential. The potential is still there despite the slowdown. And hopefully, everybody is clear on why the slowdown happened and why we're optimistic it's going to reverse.

And in the medium term, we're still thinking about 30-plus percent type of growth, even considering some of the constraints around jobs growth, wage growth...

Listen, I certainly hope we get back to 30%. Just to be clear, we never guided 30%, right?

That was my forecast, yes.

Yes. But we were achieving that level of growth. And I think, look, if you want to know what to model in the intermediate term, I think high teens, low 20s is probably prudent after we get out of this year. And hopefully, we will overperform that, but let's not get ahead of ourselves just yet.

Got it. This has been such a wonderful conversation. Thank you so much for sharing with us today, Chris, and thanks, everyone, for joining us.

All right. Thanks very much. Thank you.