Executive Summary / Key Takeaways

• TransUnion is executing a strategic transformation focused on technology modernization and operational optimization, aiming to accelerate growth and enhance profitability independent of credit cycle fluctuations.
• The company delivered strong first-quarter 2025 results, exceeding expectations with 8% organic constant currency revenue growth and 12% Adjusted EBITDA growth, driven by strength in U.S. Financial Services (ex-mortgage) and International segments.
• Key technological advancements, particularly the OneTru platform, are yielding tangible benefits, including faster processing speeds and enhanced fraud detection, strengthening competitive positioning and enabling new product innovation.
• Despite a strong start to the year, management maintains a prudently conservative full-year 2025 guidance (4.5-6% organic constant currency revenue growth), reflecting ongoing macroeconomic uncertainty and assuming muted lending volumes without the benefit of future rate cuts.
• TransUnion's diversified portfolio across solutions (credit, fraud, marketing, communications), industry verticals (Financial Services, Insurance, Public Sector), and geographies provides resilience against market specific headwinds and positions the company for long-term compounding growth.

The Evolution of Trust: TransUnion's Strategic Pivot

TransUnion, founded in 1968 as a credit reporting agency, has fundamentally transformed its business model over the decades. While its heritage remains rooted in providing essential credit information, the company has strategically expanded its capabilities and market reach. This evolution is evident in the changing revenue mix, where the U.S. Financial Services segment, once accounting for 60% of total revenue in 2007, now represents approximately one-third of the business. This shift reflects a deliberate strategy to leverage its foundational data assets and identity resolution expertise to offer a broader suite of information and insights solutions across diverse industries and use cases.

The company operates within the dynamic global data and analytics market, which continues to grow as businesses increasingly rely on data-driven decision-making. Key competitors include major players like Equifax (EFX), Experian (EXPGY), and Fair Isaac Corporation (FICO), each vying for market share in core credit, analytics, and emerging areas like fraud and marketing. While precise, directly comparable market share figures for all niche competitors are not publicly detailed, TransUnion holds an estimated 25-30% share in the U.S. credit reporting market. The competitive landscape is characterized by intense innovation, particularly around leveraging data, advanced analytics, and artificial intelligence. TransUnion's strategy is to differentiate itself by building a comprehensive, integrated platform that accelerates product development and enhances the value delivered to customers across its expanding portfolio.

Underpinning this strategic evolution is a significant, multi-year business transformation program. Approved in November 2023, this initiative builds upon prior efforts like Project Rise, which established a global cloud-based infrastructure. The current transformation focuses on two key pillars: optimizing the global operating model by centralizing functions in Global Capability Centers (GCCs) and accelerating technology modernization to consolidate platforms and enhance capabilities. These efforts are designed not only to drive efficiency and structural cost savings but, crucially, to accelerate the pace of innovation and enable the development of next-generation solutions that address evolving customer needs across a wider array of markets.

Technological Edge: Powering Innovation with OneTru

Central to TransUnion's transformation and competitive strategy is its investment in a modern, global technology platform. The company's core differentiated technology is embodied in its OneTru platform, built upon the OneDev infrastructure operating system. OneDev standardizes infrastructure services and developer tools, creating a cloud-agnostic foundation that enhances security, productivity, and resiliency while reducing third-party software and legacy technology costs.

OneTru serves as the core solutions enablement platform, centralizing data management, identity resolution, analytics, and delivery. This integrated platform allows TransUnion to unify data assets from credit risk, marketing, and fraud prevention into a single environment, enabling data scientists to access comprehensive data for rapid insight development. The platform's identity graphs link offline and online data for a consistent view of consumer identity, a critical capability for cross-product solutions. OneTru Analytics Services standardizes tools and models, facilitating the rapid deployment of advanced capabilities like AI and machine learning.

The benefits of this technology are tangible and, in some cases, quantifiable. In the U.S. Credit segment, migrating workloads to OneTru has demonstrated over 50% faster processing speeds compared to legacy platforms. For the FactorTrust short-term lending bureau, modernization to OneTru has shown substantial improvement in batch processing speed, reducing times from 24 hours to as little as one hour, enabling faster on-demand analysis. In fraud prevention, the integrated TruValidate suite, powered by OneTru, has shown a 30% plus increase in fraud detection and a 75% decrease in false positives in beta testing compared to current offerings. These performance metrics highlight a significant competitive advantage, allowing customers to protect themselves more effectively while providing a better consumer experience.

TransUnion is also actively investing in R&D and new technologies built on this foundation. The launch of OneTrue Assist, an AI-powered tool for developers, is already yielding a 20% to 50% lift in developer productivity by automating code generation and identifying vulnerabilities. The company is mobilizing teams for the migration of international bureaus in Canada, the UK, and the Philippines to OneTru starting in 2026, viewing OneTru as the global destination platform. This international rollout aims to replicate the efficiency gains and innovation acceleration seen in the U.S., further strengthening its competitive position against global rivals like Experian. The strategic intent behind these technological investments is clear: to build a more efficient, innovative, and scalable platform that enhances product quality, reduces time to market, and provides a strong competitive moat, ultimately driving higher revenue growth and improved margins.

Performance Reflecting Transformation and Resilience

TransUnion's recent financial performance demonstrates the early impacts of its strategic transformation and the resilience of its diversified portfolio in a challenging macroeconomic environment. In the first quarter of 2025, the company exceeded expectations, reporting $1,095.7 million in revenue, a 7.3% increase on a reported basis and 8% organic constant currency growth compared to the prior year period. Adjusted EBITDA grew by 10.9% to $397.1 million, resulting in an Adjusted EBITDA margin of 36.2%, up 1.2 percentage points year-over-year. Adjusted Diluted Earnings per Share rose by 15% to $1.05.

This performance was primarily driven by strength in the U.S. Markets and International segments. U.S. Markets revenue increased by 8.6%, with Adjusted EBITDA growing 12.3%. Within U.S. Markets, Financial Services revenue surged 14.7%, accelerating to 9% growth excluding the impact of mortgage. This growth was fueled by new business wins and volume increases across Consumer Lending and Card & Banking, price increases in Auto and Mortgage, and favorable non-triburo mortgage revenue. Emerging Verticals also contributed positively, growing 5.8%, led by strong performance in Insurance and improved trends across diversified verticals like Tech, Retail & E-Commerce, and Telecommunications. Consumer Interactive revenue saw a slight decrease of 0.8%, primarily due to lower breach remediation revenue compared to the prior year, partially offset by new business wins.

The International segment delivered 2.5% revenue growth (6% constant currency), with Adjusted EBITDA increasing 2.8%. Growth was broad-based across regions in local currency, driven by increased volumes from improving economic conditions and new product initiatives, although foreign currency translation presented a headwind. India, despite a reported decrease due to FX, saw higher local currency revenue from commercial volumes and new contracts, with management anticipating reacceleration throughout 2025.

Operational efficiency gains from the transformation program contributed to margin expansion. The decrease in selling, general, and administrative expenses was notably influenced by a $56 million reduction in legal and regulatory accruals related to the dismissal of a lawsuit. Cost of services increased, reflecting higher product and fulfillment costs, labor costs (including higher incentive compensation and stock-based compensation, partially offset by transformation savings), and technology investments. Depreciation and amortization also increased due to prior period capital expenditures related to the accelerated technology investment.

Liquidity remains sound, with $609.9 million in cash and cash equivalents as of March 31, 2025. Total debt stood at approximately $5.1 billion, resulting in a leverage ratio of 2.9x, down from 3.5x a year ago.

The company's capital allocation strategy balances investing in the business, deleveraging (targeting below 2.5x), and returning capital to shareholders. In Q1 2025, TransUnion repurchased approximately 63,000 shares for $5.4 million under its new $500 million repurchase program and paid quarterly dividends of $0.12 per share, totaling $22.6 million. Management expects to continue quarterly dividends and has an increased bias toward share repurchases at current valuations, while preserving capital ahead of the planned Mexico acquisition.

Strategic Initiatives Driving Future Growth

TransUnion's strategic initiatives are designed to build upon its core strengths and capitalize on market opportunities, aiming to accelerate growth independent of the credit cycle. The transformation program is central to this, focusing on:

• Enhancing the Global Operating Model: Refining operations and building scale by leveraging Global Capability Centers (GCCs). Recent key leadership hires, including a new Chief Operations Officer and Chief Global Solutions Officer, are aimed at improving operational efficiency and accelerating innovation across the global product portfolio.
• Completing Technology Modernization: Migrating core platforms to OneTru. Progress includes dual running U.S. Credit workloads and planning for international migrations. The quantifiable benefits already demonstrated on OneTru (speed, predictive uplift) are expected to drive further competitive wins and operational efficiencies as more applications and customers are migrated.
• Accelerating Innovation: Developing and launching new solutions across key growth areas. In Consumer Interactive, the planned launch of a new freemium offering by the end of Q2 2025, in collaboration with Credit Sesame, is a significant step to engage a broader consumer base and position the segment for sustainable growth. The acquisition of Monevo, completed April 1, 2025, enhances the company's credit prequalification capabilities, enabling personalized offers through online channels.

Beyond these core transformation pillars, TransUnion is expanding its presence in high-growth solution areas. Trusted Call Solutions (TCS) continues its strong trajectory, on track to deliver $150 million in revenue in 2025, up from $115 million in 2024. The TruIQ analytics suite and Advanced Acquisition tools are gaining traction, leveraging enhanced data and analytics capabilities. In fraud, the TruValidate integrated suite is onboarding new customers, demonstrating the value of consolidating capabilities on OneTru.

International expansion remains a key strategic lever. The announced agreement to acquire majority ownership of the consumer credit business of Buró de Crédito in Mexico is a significant move to deepen its presence in a key emerging market. The International segment's track record of outperforming underlying markets and its indexation to faster-growing economies position it as a vital component of TransUnion's growth story.

Outlook and Risks

TransUnion's outlook for 2025 reflects a balance between recent strong performance and ongoing market uncertainties. For the second quarter of 2025, the company guides for revenue between $1.076 billion and $1.095 billion, representing 3-5% organic constant currency growth. This includes an estimated 2 points of mortgage tailwind, implying 1-3% growth excluding mortgage. Adjusted EBITDA is guided between $375 million and $386 million, flat to up 3%, with margins expected to be 34.8-35.3%, a decrease from Q1 primarily due to expense timing shifts. Adjusted Diluted EPS is expected to be between $0.95 and $0.99.

For the full year 2025, TransUnion maintains its prior guidance, projecting revenue between $4.358 billion and $4.417 billion, or 4.5-6% organic constant currency growth. This includes a 1% headwind from lapping a large breach win in Q3 2024 and an estimated 2.5-4% growth excluding mortgage. Adjusted EBITDA is expected to be between $1.549 billion and $1.590 billion, up 3-6%, with margins ranging from 35.6% to 36%. Adjusted Diluted EPS is guided at $3.93 to $4.08, flat to up 4%, impacted by a 2% FX headwind and a 4% headwind from a higher adjusted tax rate (approximately 26.5%). Capital expenditures are expected to be around 8% of revenue, with $100 million to $120 million in one-time transformation charges anticipated as the program concludes. Free cash flow conversion is projected at roughly 70% of adjusted net income in 2025, expected to return to 90%+ in 2026 as transformation spend ends and CapEx structurally lowers to 6% of revenue.

Management's guidance assumes muted but stable lending volumes throughout 2025, without factoring in potential benefits from future interest rate cuts or a significant market recovery. While Q1 performance tracked at or above the high end of the full-year range, the decision to maintain guidance reflects a "prudently conservative" posture given macroeconomic uncertainties, including potential impacts from tariffs and trade policies on employment, inflation, and global growth.

Key risks to the outlook include the unpredictable macroeconomic environment, which could negatively impact consumer sentiment and credit demand. Legal and regulatory matters, such as the ongoing CFPB consideration regarding dispute handling practices, pose uncertainty regarding potential adverse outcomes. Competition remains intense, requiring continuous innovation and efficient execution. While debt levels are being managed down, they still represent a financial risk, particularly in a volatile interest rate environment. However, the company's diversified portfolio, operational flexibility, and cost mitigation plans are designed to provide resilience against these potential headwinds.

Conclusion

TransUnion is executing a significant transformation to evolve beyond its core credit bureau roots into a diversified global information and insights leader. The company's strategic investments in technology, particularly the OneTru platform, are yielding tangible benefits in operational efficiency and innovation, strengthening its competitive position against rivals like Equifax, Experian, and FICO by enabling faster processing, enhanced analytics, and superior fraud detection. This technological leadership, coupled with a refined global operating model and strategic acquisitions like Monevo and the planned Mexico expansion, positions TransUnion for accelerated growth.

Despite a macroeconomic backdrop characterized by uncertainty and muted lending volumes, TransUnion demonstrated resilience and outperformed expectations in the first quarter of 2025. While management maintains a conservative near-term outlook, the underlying business momentum, driven by diversification across solutions and geographies, and the anticipated benefits from the concluding transformation program suggest a path towards sustainable high-single-digit revenue compounding and improved profitability in the intermediate term. The company's focus on deleveraging and increasing shareholder returns further underscores management's confidence in the future free cash flow generation potential as the heavy investment phase concludes. TransUnion's story is one of strategic evolution, leveraging technology and diversification to unlock new avenues for growth and value creation in the dynamic information services market.