TransUnion Q2 FY26 Earnings Analysis

- Trusted Call Solutions (TCS) expected to grow from $27M in 2021 to $200M by end of 2026, and $300M by 2028 (p.13). - Overall company organic constant currency revenue growth guidance of 8%-9% for 2026, or 5%-6% excluding FICO mortgage royalties (p.5, p.4). - Mortgage revenue growth expected over 30% or 10% plus excluding FICO in 2026 despite mid-single-digit decline in inquiries (p.5). - Second quarter 2026 revenue guidance up 12%-13%, including acquisitions and stable volume assumptions (p.4). - Continued stable or improving volumes anticipated; modest declines absorbed within guidance, with upside if interest rates decline further (p.12). - AI adoption and innovation expected to accelerate demand for data and drive revenue growth across financial services (p.3). - Emerging markets expected to recover gradually in 2026, supporting mid-single-digit growth (p.4). - Conservative guidance maintained amid geopolitical uncertainties but positioned to outperform at high end of guidance (p.2, p.12).

- Full year 2026 adjusted diluted EPS is expected between $4.68 and $4.75, up 9% to 11%. - Adjusted diluted earnings per share expected to grow low to mid double digits over the medium term. - Adjusted EBITDA is projected to be $1.796 billion to $1.816 billion in 2026, up 9% to 10%. - Underlying margins anticipated to expand by 50 to 70 basis points in 2026. - Adjusted diluted EPS growth anchored in repeatable earnings model and momentum, not dependent on U.S. mortgage or other market recoveries. - Full year 2026 revenue guidance between $5.1 billion and $5.135 billion, up 11% to 12%, with organic constant currency growth at 8% to 9%. - Second quarter 2026 revenue guidance at $1.271 billion to $1.283 billion, up 12% to 13%, with organic constant currency growth of 8% to 9%. - Contingency maintained in guidance due to macro uncertainties (e.g., geopolitical risks).

- Capital expenditures (capex) are expected to be approximately 6% of revenue in 2026. - The company plans to incur one-time integration expenses related to the acquisitions of TransUnion to Mexico and the Mobile division of [Mural] Networks in 2026, which are not added back to adjusted EBITDA. - The acquisition of Mobile division of Real Networks aims to enhance trusted call solutions and address fraud in SMS/text channels, with integration and productization expected to take about one year. - Ongoing investments focus on scaling the business on a common technology and operating platform and deploying AI to drive productivity and innovation. - The transformation and AI deployment are part of a medium-term strategic framework for sustainable high single-digit organic revenue growth and margin expansion.

- No explicit mention of new fundraising through debt or equity in the current period. - The company ended Q1 with $5.6 billion of debt and $733 million cash. - Funded $660 million purchase for TransUnion New Mexico with $520 million drawn from credit revolver and cash. - Leverage ratio modestly increased to 2.8x; plan to return to long-term target of under 2.5x. - Capital allocation prioritizes debt prepayment and shareholder returns (e.g., $25 million share repurchases year-to-date, expected to accelerate). - No announcement of new debt or equity offerings; focus is on balanced capital allocation. - Medium-term strategy includes optimizing balance sheet and returning capital to shareholders, rather than raising new capital at this time.

- The company reported strong bookings and retention rates at the start of 2026 on an organic constant currency basis versus the prior year. - Financial Services revenue grew 24% (14% excluding FICO mortgage royalties), driven by products like TruIQ, alternative data, and trusted call solutions. - Organic constant currency revenue growth guidance for 2026 is maintained at 8% to 9%, with a high single-digit organic growth rate expected. - Second-quarter revenue guidance is $1.271 billion to $1.283 billion, up 12% to 13%, with acquisitions adding 4% growth. - The company expects to perform at or above the high end of its guidance if current trends continue. - There is a reasonable level of contingency built into the guidance to absorb potential market softening. - New product launches and enhancements are expected to drive future bookings and revenue growth.