TransUnion (TRU) Q4 2025 Earnings Call Transcript

Image source: The Motley Fool.

DATE

Thursday, February 12, 2026 at 9:30 a.m. ET

CALL PARTICIPANTS

• President & Chief Executive Officer — Christopher Cartwright
• Executive Vice President & Chief Financial Officer — Todd Cello
• Senior Vice President, Investor Relations — Gregory Bardi

TAKEAWAYS

• Revenue -- Total revenue grew 13% reported and 12% organically on a constant currency basis, with U.S. Markets increasing 16% organically.
• Adjusted EBITDA -- Adjusted EBITDA increased 10%; the margin was 35.6% for the quarter.
• Adjusted Diluted EPS -- Adjusted diluted earnings per share reached $1.07, representing 10% growth and exceeding the top end of guidance by $0.05.
• Shareholder Returns -- Share repurchases totaled $150 million in the quarter and $300 million for the year; $390 million was returned to shareholders via buybacks and dividends in 2025.
• Dividend Increase -- The quarterly dividend was raised by 9% to $0.125 per share.
• U.S. Financial Services -- Revenue grew 19% overall and 11% when excluding mortgage, supported by strong performance in mortgage, consumer lending, and auto, all of which grew double digits.
• Emerging Verticals -- Growth accelerated to 16% in the quarter from 7% in Q3, with insurance recording its first $100 million revenue quarter and double-digit growth across multiple verticals.
• Marketing and Fraud Solutions -- Marketing solutions grew 15% and fraud solutions grew 14%, representing the best growth since the Neustar acquisition.
• Trusted Call Solutions (TCS) -- TCS revenue increased over 30% year over year to $160 million, with expectations to exceed $200 million in 2026.
• Consumer Interactive -- Segment revenue grew 8% organically, driven by indirect channel growth and breach remediation wins.
• International Segment -- Organic constant currency revenue increased 2%; Canada grew 13% and the U.K. 10%, while India declined 4% and Asia Pacific decreased 11%.
• India Outlook -- India is anticipated to deliver mid-single-digit growth in 2026 after a 4% decline in the quarter and 2% growth for the year; management expects a return to double-digit growth longer-term.
• Transformation Program -- The company completed its transformation investment program on time and within the $355 million to $375 million budget, yielding $200 million in free cash flow savings, with $130 million from operating expense reductions.
• Free Cash Flow -- Free cash flow conversion is expected to reach 90% or greater of adjusted net income in 2026 and beyond.
• Debt & Liquidity -- Total debt at quarter-end was $5.1 billion with $854 million in cash, and leverage decreased to 2.6x.
• Acquisitions -- The $660 million acquisition of a majority stake in Trans Union de Mexico is targeted for completion in the first half of 2026, funded by cash and debt.
• 2026 Outlook -- Revenue is guided for 8%-9% organic constant currency growth (5%-6% excluding FICO mortgage royalties) and adjusted EBITDA growth of 7%-8%, with adjusted diluted EPS expected to rise 8%-10%.
• Margin Expansion -- Excluding FICO mortgage royalties, adjusted EBITDA margin is expected to expand by 70 basis points at the high end of 2026 guidance.
• Mortgage Revenue Guidance -- Reported mortgage revenue is expected to reach $750 million in 2026 (up 28%), including FICO royalty; underlying mortgage revenue excluding FICO royalties is guided to $425 million with 6% growth.
• Pricing Actions -- For 2026, VantageScore is offered at $4, a 60% discount to FICO, and the price of credit data plus VantageScore is held flat at $15.
• Capital Expenditures -- CapEx is planned at about 6% of revenue for 2026.
• Innovation and Platform Migration -- Over 100 U.S. credit customers migrated to the OneTru platform by year-end; Canada, the U.K., and the Philippines are targeted for migration in 2026.
• AI Enablement -- Agentic AI and TruIQ analytics capabilities have been implemented across key markets and business processes, with further product launches planned in 2026.

Need a quote from a Motley Fool analyst? Email pr@fool.com

RISKS

• India declined 4% in the quarter and is described as below expectations due to a reset year for unsecured lending and credit card originations, with management noting continued lender caution and a tempered recovery embedded in 2026 guidance.
• Latin America revenue declined 3%, attributed to softer economic and lending conditions. and uncertainty from trade and immigration policies; management forecasts similar dynamics in early 2026.
• Asia Pacific revenue declined 11%, with Hong Kong faced soft volumes and a year-over-year comparison against prior consulting revenue; continued weak trends are expected to persist in Q1 2026.
• First quarter 2026 adjusted EBITDA margin is forecasted to contract by 140 to 160 basis points year over year, even though management expects later improvement.

SUMMARY

TransUnion (NYSE:TRU) reported double-digit organic revenue growth and posted its strongest U.S. market expansion since 2021, with the U.S. Financial Services segment achieving 19% growth. Management emphasized that both revenue and profit guidance for 2026 assume conservative market conditions, with potential upside if current trends persist or improve. The firm completed its major transformation investment program, realizing significant cost and cash flow benefits and expects continued operating leverage through ongoing cost efficiencies and technology modernization. The $660 million acquisition of Trans Union de Mexico is set to extend international reach, though it is not included in current year guidance. Guidance for 2026 positions the company for another year of high single-digit organic revenue growth, increased margin excluding low-profit FICO royalties, and higher EPS, with additional value drivers anticipated from accelerating adoption of AI-powered solutions and platform migration.

• Management stated, "We now generate roughly half of our U.S. markets revenue outside of core credit," supporting the durability and diversity of revenue streams.
• Executive comments described record retention rates and new sales in U.S. markets, attributed to new product launches and solution enhancements.
• Company guidance assumes no contribution from VantageScore adoption or direct-to-consumer initiatives in Mexico, representing future potential upside.
• TransUnion maintains a "high degree of confidence" in annual guidance and typically orients toward the high end if momentum holds steady.
• India's declines were influenced by Reserve Bank of India tightening and U.S. trade action, but the company expects gradual volume recovery and resumed double-digit growth after 2026.
• TransUnion’s AI-enabled OneTru platform and the Analytics Orchestrator are highlighted as strategic advantages, with further demonstration and details promised at the upcoming Investor Day.

INDUSTRY GLOSSARY

• OneTru: TransUnion's global cloud-based technology and data platform supporting credit, marketing, and fraud solutions.
• Trusted Call Solutions (TCS): Suite of products focused on voice channel fraud mitigation and customer engagement using proprietary device and identity data.
• TruIQ: Advanced analytics and data capabilities integrated into TransUnion’s solutions for credit risk, marketing, and fraud, often utilizing AI/ML.
• FactorTrust: An alternative data provider acquired by TransUnion, specializing in non-prime and underbanked consumer credit data analytics.
• FICO mortgage royalties: Fees passed through to FICO for use of their mortgage credit scoring models, itemized in reported revenue but with no profit contribution for TransUnion.
• VantageScore: A competing consumer credit scoring model to FICO, jointly developed by the three major credit bureaus; offered at a lower price point.
• Analytics Orchestrator: Newly announced AI-enabled analytics platform designed to speed and improve the creation of risk, marketing, and fraud models for client workflows.

Full Conference Call Transcript

Christopher Cartwright: Thank you, Greg, and good morning, and welcome, everybody, to the call. Kind of excited to share our fourth quarter results with you today. We had a really good quarter, as you can see, and it was a great capstone to another strong year of growth and profitability at TransUnion. So I'm going to start focusing on the fourth quarter results themselves and also provide an overview of our 2025 accomplishments. And then we'll get into the 2026 guide and our strategic priorities. And then I'll pass it over to Todd, who's going to give you the full financial details on Q4, as well as providing the first quarter guide and the full year 2026 guide.

So 2025, we finished very strongly again, exceeding revenue, adjusted EBITDA and adjusted diluted EPS in the fourth quarter. In total, revenues increased 12% organically and the U.S. market grew 16%, and both of these are some of our strongest underlying performance since 2021. We grew adjusted diluted EPS by 10% in the quarter, actually in the mid-teens, 14% if you exclude the impact from the tax rate reset this year. And with robust business fundamentals and strengthening cash flow, free cash flow, we continue to emphasize shareholder-centric capital deployment, particularly at the current valuation level. So we repurchased roughly $150 million of shares in the quarter for a total of $300 million over 2025.

And of course, we retain ample capacity under our recently increased $1 billion repurchase authorization. And we also raised our quarterly dividend by 9% to $0.125 a share. Now the fourth quarter results demonstrate continued execution against our growth strategy across our solutions, our market verticals and our geographies. Within the U.S., Financial Services grew 19%, 11% excluding mortgage. Mortgage, consumer lending and auto were all double-digit growers. Across all lending types, we outpaced volume growth through new business wins across our solutions suite. Emerging Verticals accelerated from 7% in the third quarter to 16% growth in the fourth, with insurance, media, tenant and employment screening, tech, retail and e-commerce all growing double digits.

And across U.S. markets, our core B2B solutions families grew double digits. Marketing and fraud grew 15% and 14%, respectively. Now this is our best quarter of growth for both of these since the Neustar acquisition. Our results reflect the power of our streamlined product suites, the accelerated pace of innovation, and our improved go-to-market activities. Our innovative solutions are really resonating with our customers, and they're driving new levels of growth for TransUnion. So internationally, we grew 2% on an organic constant currency basis. Canada and the U.K., our 2 most established markets, they both grew double digits, and they continue to outperform their overall market significantly.

Our emerging markets continue to navigate some moderating economic conditions and some credit volume -- moderating credit volume conditions. India declined 4%, below expectations in what we're viewing as a reset year for unsecured lending and for credit card originations in the Indian market. Now we believe that we are experiencing a bottoming of unsecured lending and card volumes in 2025 and probably early into '26 as well, but we expect a slow and steady improvement in volumes over the course of 2026, supported by using capital restrictions and now with the U.S.-India trade agreement, a lot less uncertainty. We anticipate mid-single-digit growth in India in '26, and a return to double-digit growth thereafter.

And again, India is an immense growth opportunity for us, driven by their favorable economic and demographic trends and our unique market position and the coming deployment of all of our global products and IP into this marketplace. Todd is going to provide a more comprehensive review of India in our fourth quarter results shortly. So 2025 marked a milestone year for TransUnion. We delivered strong financial results. We accelerated the pace of our innovation, and we executed very well on our business transformation. So in 2025, we delivered our second straight year of high single-digit revenue growth and double-digit adjusted diluted EPS growth or mid-teens excluding the impact of the tax rate reset.

We also expanded adjusted EBITDA margin by 50 basis points in the year, excluding the impact of FICO mortgage royalties. And this underscores the underlying operating leverage in our business. We significantly outperformed the high end of our initial guidance in February by $183 million on revenue and $56 million on adjusted EBITDA and $0.22 per share adjusted diluted EPS. Our strong earnings and free cash flow enabled a thoughtful and accretive capital deployment throughout the year. We returned in total $390 million to shareholders through buybacks and dividends. We completed the acquisition of Monevo, our new credit offers engine, and we announced our agreement to acquire majority ownership of Trans Union de Mexico. Now moving to our solutions.

Our complementary and scalable solutions have really powered diversified revenue growth that is very durable. We now generate roughly half of our U.S. markets revenue outside of core credit. And in international, we generated over 1/4 of our revenue from noncredit solutions, but with expansive opportunity as we deploy fraud marketing and consumer solutions in our countries around the world. Slide 7 provides the 25-year breakdown by solution family. This is our second year of providing this breakdown, and we simplified the reporting around 4 strategic solutions areas of credit, fraud, marketing and consumer. Our communications products, which include Trusted Call Solutions, are now largely reported within our fraud mitigation solutions.

We also allocated our market-specific solutions, including our investigator tools to these main solution families. On '25, we drove accelerated innovation and growth across solutions. We launched over 30 major enhancements and new products, by far the largest cohort ever, and we have a significant pipeline and long-term revenue growth potential. In addition to driving strong new business, these solutions and enhanced go-to-market supported record retention rates and record new sales in U.S. markets. So to highlight our growth drivers in each solution family. So Credit Solutions grew 13%, driven by U.S. nonmortgage volumes, consistent pricing, sales acceleration in FactorTrust and TruIQ analytics.

Marketing solutions accelerated from flat growth in '24 to 7% organic growth in '25, enabled by our tech replatforming, an integrated and simplified solution suite as we've gone from over 90 products down to 30 and, of course, a strengthened leadership team. So we drove robust bookings in identity, increased sales and usage of our audiences and strong retention in our measurement solutions, setting up marketing solutions for another strong year in '26. Fraud solutions grew 8%. Trusted Call Solutions or TCS, led the way, growing by $40 million or over 30% year-over-year to $160 million.

We expect TCS revenue to exceed $200 million in 2026, and our recently announced tuck-in acquisition of the mobile division of RealNetworks is expected to close in the first half of the year and only adds to this potential growth. The acquisition augments our TCS voice channel capabilities with highly complementary messaging solutions to fight fraud and improve customer engagements. So our fraud and other products are poised for accelerating growth with strong demand from our new AI-powered fraud models for synthetic fraud detection and credit washing. Finally, consumer solutions grew 6%, excluding the large breach win in 2024. Our indirect channel grew well and direct-to-consumer freemium offerings continues to add users at a healthy pace.

We also continue to see strong growth and demand for our consumer solutions across international markets. Our ambitious business transformation enabled us to accelerate our pace of innovation and growth. Through several years of investment in execution, we have built a truly scalable global technology and operating platform. In '25, we strengthened our global operating model with key talent additions and process improvements. So first, we added several new solutions and operations leaders throughout the year. Most recently, Francesca Noli, who previously led Capital One's CreditWise product has joined us as the Head of Consumer Solutions.

We also standardized our global product management best practices to better align our resources, streamline decisions and enable a faster pace of product development and introductions. We significantly advanced our tech modernization in '25. We migrated over 100 U.S. credit customers to OneTru by year-end, proving the platform's ability to deliver the most complex and sophisticated use cases. We augmented our underlying OneTru capabilities, including integrating additional identity data such as our public records to strengthen our industry-leading coverage and density. We also implemented agentic AI across core processes such as data onboarding, identity resolution, analytics and delivery. And globally, we deployed key TruIQ analytic capabilities into the Indian, Canadian and U.K. markets.

So these achievements reflect the results of our disciplined multiyear investment. The fourth quarter marked the completion of our transformation investment program on schedule, on budget, and we're going to realize the full target savings in 2026. So in '26, we expect to deliver another year of strong financials. We anticipate growing 8% to 9% organically in constant currency for revenues, 7% to 8% adjusted EBITDA growth, and 8% to 10% adjusted diluted EPS growth. The high end of our guidance implies a third consecutive year of at least high single-digit revenue growth and double-digit adjusted EPS growth.

And our guidance assumes continued healthy operating leverage with 70 basis points of adjusted EBITDA margin expansion when excluding the FICO mortgage royalty payments. So our initial guidance maintains our prudently conservative approach. We expect modest U.S. lending growth similar to recent quarters and a gradual recovery in our international markets. Now assuming a continuation of these current trends, we would again expect to deliver toward the high end of our range. Our strategic focus on '26 is to build on our momentum and to drive innovation-led and scalable growth. The priority is really turbocharging our innovation. We expect that the pace of major product enhancements and introductions will accelerate further in '26.

Across our portfolio, we are launching new AI-powered solutions to boost product predictiveness and capture more value within a customer's workflow. In credit, we're embedding role-based AI agents in TruIQ analytics for faster data exploration and easier accessibility. In fraud, advanced machine learning and AI already power our newest models and will support rapid development of customized models for clients at scale. In marketing, we're enhancing our robust identity data with AI models to create advanced consumer behavioral models. And in our international markets, we continue to deploy our fastest-growing U.S. solutions, including TruIQ analytics and Trusted Call Solutions into target local markets.

We believe our broader solution suite will enable continued outperformance in mature markets like Canada and the U.K., and adds to our growth potential across our attractive emerging markets. Our solutions portfolio is the strongest it's ever been, and it's only gaining momentum. And to ensure commercial momentum, we continue to sharpen our go-to-market approach and have added specialized sellers capable of selling our newest solutions. So we're unlocking the full potential of our global technology and operating platform to fuel these innovations and growth. We're on track to complete U.S. credit migrations onto OneTru by midyear.

And further, we plan to migrate credit and analytic capabilities for Canada, the U.K. and the Philippines onto OneTru over the course of '26. From an operating standpoint, we remain focused on continuous improvement, standardization and automation. Scaling our technology and operating platform, we also anticipate ongoing cost savings that will boost margins and support future growth investments. And finally, I wanted to finish with a few thoughts on AI, given the recent noise in the information services and software space. So AI raises concerns about commoditization, especially for information services companies that manage more readily accessible and unregulated data.

However, I believe that TransUnion's data assets are protected from this risk because they're broadly sourced, they're proprietary, they're highly regulated, and they're continuously enhanced by [indiscernible] from providing services across our networks. And this creates a significant entry barrier. Now with our market-leading identity resolution, we integrate all of this data to enable advanced analytics and deliver great predictions of credit and fraud risk to clients as well as marketing effectiveness. This helps our clients make smart decisions about their resource allocation. Also, AI can accelerate our growth by increasing the data consumption by our clients to improve their AI-enabled models, but also by substantially automating our internal analytic processes.

And I'll remind you that today, our most AI-enabled clients also consume the most data. So we think we're in an advantageous position. We have a ton of domain-specific data and a position in our customer workflows that's going to allow us to drive substantial value and be enabled by AI rather than [ erode it. ] So if I can double-click a bit. I'd start with our credit solutions and remind you that these are broadly sourced proprietary data. In the U.S. alone, at any point in time, we have 12,000 to 14,000 active lenders furnishing data. This represents individual contracts and individual ongoing supervision for each one of these data contributors.

Additionally, they can only contribute the data to authorized reporting agencies, and we can only use it for very specific and highly regulated purposes. Before we provide this information to a customer, we have to research them. They go through an elaborate credentialing process. They can only use the data for specific uses. We have to monitor their usage of the information on an ongoing basis. Credit information is deeply important to consumers, each year the bureaus handle millions of consumer inquiries and thousands of regulatory inquiries. And unfortunately, credit reporting is also one -- receives like the highest volume of litigation from consumers of any industry in the U.S.

So obviously, the combination of the broad sourcing networks, the proprietary and highly regulated nature and all of the challenges around selling this information and supporting its usage in the market create quite a barrier to entry. Our fraud and marketing solutions also leverage fast contributory networks of data and an industry-leading data craft. Most of this information is proprietary and sourced from industry consortiums. For instance, our fraud models use data from our device consortium alongside with anomalies that we did [indiscernible] and in credit files or from our public records business. This device consortium represents hundreds of corporations around the world and has engaged with over 14 billion devices over the last 15 years.

In marketing, our measurement solutions capture information on consumer interactions with ads across hundreds of leading e-commerce entities. And this includes the walled garden, streaming platforms, most of the prominent publishers out there. And these entities provide us with this data because we represent multibillions of dollars of brand spending from their consumers, rather from their customers. And they're looking to us for independent and entrusted measures of advertising effectiveness.

And so our marketing identity solutions, they take in all of this data input, plus they gather additional information from our clients' range of internal systems and they bring it all together to assess, to provide insights into the effectiveness of a client's marketing initiatives and just assess the probability that a prospect is going to convert within the marketing funnel. So we're also actively leveraging AI internally, and we're seeing some enormous benefits, driving software development productivity, speed of product development, improving our customer experience and the consumer experience and operations, and just allowing us to do a lot more with less. AI is enhancing each phase of our analytic data insight process within OneTru, empowering our newest products.

So net-net, I think AI is going to be a revenue and profit growth enabler for TransUnion. And I'll remind you that our most AI-enabled customers consume more data than our traditional customers and adopt our newer solutions more quickly. So increasingly, TransUnion can capture value with AI agents by performing the work that's done upstream, either by internal client teams or encroaching on automation in workflow solutions that rest upon our data and analytics. So I'm sure we'll get some questions on this in the Q&A. I look forward to that. But now I'm going to hand it over to Todd for more depth on the financials.

Todd Cello: Thanks, Chris, and let me add my welcome to everyone. As Chris mentioned, we exceeded guidance in the fourth quarter, led by U.S. financial services and emerging verticals. Consolidated revenue increased 13% on a reported and 12% on an organic constant currency basis. The Monevo acquisition added 0.5% to growth. The foreign currency impact was immaterial. Mortgage contributed 3 points to growth. Adjusted EBITDA increased 10%. Adjusted EBITDA margin was 35.6%, in line with our expectations as we made targeted investments in the quarter behind strong revenue growth. Adjusted diluted earnings per share was $1.07, $0.05 ahead of the high end of our guidance and an increase of 10%.

In the fourth quarter, we incurred $25 million of onetime charges related to our transformation program, $6 million for operating model optimization and $19 million for technology transformation. The fourth quarter marked our last quarter of onetime charges related to our transformation program. Looking at segment financial performance for the fourth quarter, U.S. markets revenue grew 16% on an organic constant currency basis versus the prior year. Adjusted EBITDA margin was 37.9%. Financial Services revenue grew 19% or 11% excluding mortgage. The environment remains positive. Lenders have sufficient capital, credit performance is strong and consumers continue to show resilience due to low unemployment and rising wages. We continue to outperform underlying volumes on the strength of our broad-based solution suite.

Credit card and banking rose 3%, with healthy lending volumes and good demand for our alternative data, fraud and marketing solutions. Consumer lending rose 21% as fintechs and personal lenders continue to expand activity. Delinquency trends remain stable even with the pickup in activity and fintech funding remains strong. FactorTrust finished the year well and grew nearly 20% for the year. Auto grew 12%, driven by volume growth, pricing and new wins. Mortgage revenue grew 37% against inquiries up 4% due to third-party scores pricing and non tri-bureau revenue. Mortgage represented 13% of TransUnion's 2025 revenue. Emerging Verticals accelerated to 16% growth, up from 7% in the third quarter with strength across our verticals.

Even excluding some onetime project revenue, underlying growth was still over 10%. Insurance again grew double digits. Tech, retail and e-commerce, media, and tenant and employment also accelerated to double-digit growth. Communications grew mid-single digits and public sector grew modestly. Insurance delivered its first $100 million revenue quarter, a testament to strong execution and our unique position as the clear leading bureau serving the insurance space. Double-digit growth in insurance was supported by consumer shopping and healthy credit-based marketing activity as insurers benefit from improved rate adequacy. We continue to execute a broad-based growth playbook with strong sales across core credit, driving history, marketing and Trusted Call Solutions. Turning to Consumer Interactive.

Revenue grew 8% on an organic constant currency basis driven by strength in the indirect channel and breach remediation wins. For my comments about International, all revenue growth comparisons will be in organic constant currency terms. For the total segment, revenue grew 2%. Adjusted EBITDA margin was 43.1% as we controlled expenses for moderating revenue growth. Looking at the specifics for each region. Our U.K. business grew 10%, a second straight quarter of double-digit growth. We benefited from healthy volumes from our largest banking and fintech customers as well as new wins across verticals. Canada grew 13%. Broad-based growth was driven by fintech wins and customer expansion, innovation-led gains in financial services and growth across Consumer Indirect, insurance and auto.

2025 was our third straight year of double-digit growth in Canada, reflecting our proven global growth playbook. Latin America declined 3% due to softer economic and lending conditions. Colombia grew low single digits despite political uncertainty that weighed on activity. Our other Latin America countries declined modestly impacted by uncertainty linked to recent trade and immigration policies. Our smaller Brazilian business also declined. Asia Pacific declined 11%. The Philippines grew low single digits, but Hong Kong faced soft volumes and continued to lap onetime consulting revenue from the prior year. In both Latin America and Asia Pacific, we expect similar growth rates and dynamics in the first quarter of 2026, with improving performance as the year progresses.

Finally, Africa increased 3% with good growth across banking, insurance and fintech. Turning to India. Revenue declined 4% in the quarter and grew 2% for the year. Here are our expectations. As a reminder, in 2024, we experienced strong but decelerating growth throughout the year, and the Reserve Bank of India took proactive actions to support financial stability and slow lending by tightening regulations and targeting lower loan-to-deposit ratios industry-wide. In 2025, India experienced stable GDP growth and inflation, and the RBI steadily eased some of the lending restrictions. With that said, unsecured personal loans and credit cards, which drive our volume and revenue remained sluggish due to capital constraints and lender conservatism.

Overall, consumer loan growth in the year predominantly came from secured products like gold loans, where credit pull penetration is not significant. Unsecured personal loan and card lenders prioritize existing customers and higher notional loans as opposed to new to credit opportunities, which also impacted credit polls. This dynamic weighed on growth, particularly after U.S. tariff announcements dampened commercial lending to export-oriented sectors. Despite volume challenges throughout 2025, we continue to drive solid sales throughout the year of our innovative credit and direct-to-consumer solutions. For 2026, we expect mid-single-digit growth with high single-digit declines in the first quarter, followed by improvement over the course of the year.

Our guidance assumes a tempered recovery in the unsecured personal loan and credit card markets. Economic conditions are favorable and the recently announced trade deal between the U.S. and India reduces some uncertainty. That said, lenders remain cautious, and we will monitor conditions closely. We believe our accelerating pace of product innovation also supports improved growth in 2026 with several new consumer and small business credit scores, additional TruIQ analytics tools, and an expanded direct-to-consumer offering. Longer term, India remains a unique opportunity for TransUnion, and we believe a healthy double-digit growth compounder. We are the market leader in the world's fastest-growing market.

In addition to highly favorable demographic trends with 850 million consumers under 35 years old, rapid digitization plays into our strength in fraud and marketing. We plan to expand our offerings in India with our leading global IP, including marketing solutions, True IQ and trusted call solutions. Secular trends combined with significant vertical and solution, whitespace present multiple avenues for growth across our Indian business. Turning to the balance sheet. We ended the quarter with $5.1 billion of debt and $854 million of cash. Our leverage ratio at quarter end declined to 2.6x as we continue to push toward our long-term target of under 2.5x.

Our strengthening free cash flow and ongoing delevering positioned us to return capital returns to shareholders. We repurchased $150 million in shares in the fourth quarter, bringing the total for 2025 to roughly $300 million. We view valuation as attractive at current levels and plan to continue being active in the repurchase market over the course of 2026. We also raised our quarterly dividend from $0.115 to $0.125 per share, underscoring our commitment to growing our dividend alongside earnings growth. We expect to complete our acquisition of a majority ownership of Trans Union de Mexico in the first half of 2026. We are excited to expand our global reach and bring our expertise and solution to Mexican consumers and businesses.

Based on current exchange rates, we expect the purchase price to be approximately USD 660 million. We plan to fund the acquisition with cash on hand and debt. Ahead of the acquisition in February, we upsized the capacity on our revolving credit facility to $1 billion. Before turning to guidance, I want to provide final comments on our completed transformation investment program. In late 2023, we announced this program to optimize our operating model and modernize our technology capabilities. In addition to driving structural cost savings, the program was a clear enabler of our current innovation and growth momentum. We met all financial commitments for the program, completing it on time, and within our $355 million to $375 million budget.

Additionally, CapEx was roughly 8% of revenue in 2024 and 7% of revenues in 2025, better than expected as we manage capital investment throughout the period. The program delivered $200 million in free cash flow savings, inclusive of roughly $130 million of operating expense savings and a reduction in capital intensity to approximately 6% of revenue starting in 2026. In 2026, there will be no onetime spend related to this investment program. We expect free cash flow generation as a percentage of adjusted net income to be 90% or greater in 2026 and going forward. Turning to guidance. We have maintained a prudently conservative approach.

We assume modest U.S. lending volume growth and a tempered recovery in our international emerging markets. If conditions and business momentum continue, we expect to deliver results towards the high end of our guidance range. Additionally, our acquisition of Trans Union de New Mexico, which we anticipate being modestly accretive in its first year upon closing is not included in guidance. Throughout the year, we plan to provide transparency on the impact of FICO mortgage royalty increases, which increased our reported revenue this year but have no profit impact. That brings us to our outlook for the first quarter. FX impact is expected to be a 1 point benefit to both revenue and adjusted EBITDA.

At this point, we assume minimal impact from acquisitions. Revenue is guided to be between $1.195 billion and $1.205 billion, 8% to 9% on an organic constant currency basis or 5% to 6% excluding the impact from FICO mortgage royalties. We anticipate total mortgage revenue growing roughly 35% in the quarter compared to a modest increase in inquiries. We anticipate adjusted EBITDA to be between $414 million and $420 million, up 4% to 6%. This implies an adjusted EBITDA margin of 34.6% to 34.9%, down 140 to 160 basis points. However, excluding the 110 basis point margin drag from FICO mortgage royalties, we expect our margins to be down modestly in the first quarter.

We expect our adjusted diluted earnings per share to be between $1.08 and $1.10, up 2% to 5%. Turning to the full year. We anticipate FX and acquisitions to be immaterial to revenue and adjusted EBITDA. Revenue is guided to be between $4.946 billion and $4.981 billion, 8% to 9% on an organic constant currency basis or 5% to 6% excluding the impact from FICO mortgage royalties. Specific to our segment organic constant currency assumptions, we anticipate U.S. markets to be up high single digit or mid-single digit excluding mortgage.

Within U.S. markets, we expect another strong year from our B2B solutions and verticals and a transition year from Consumer Interactive as we lap breach wins and ramp the monetization of our freemium channel. We are guiding Financial Services to be up mid-teens or high single digit excluding mortgage, Emerging Verticals to be up mid-single digit and Consumer Interactive to decline low single digit. We anticipate international growing mid-single digit. Turning back to the total company outlook. We expect adjusted EBITDA to be between $1.756 billion and $1.777 billion, up 7% to 8%. That would result in an adjusted EBITDA margin of 35.5% to 35.7%, down 30 to 50 basis points.

However, excluding the impact of FICO mortgage royalties, we expect to expand adjusted EBITDA margins by 70 basis points at the high end of guidance, driven by flow-through on revenue growth as well as the remaining savings from our transformation program. We anticipate adjusted diluted earnings per share to be $4.63 to $4.71, up 8% to 10%. Our adjusted diluted earnings per share guidance assumes no benefit from our acquisition in Mexico nor other capital allocation actions. For other guidance items, we expect depreciation and amortization to be approximately $600 million or $310 million excluding step-up amortization from our 2012 change in control and subsequent acquisitions. Additionally, we expect net interest expense to be about $220 million.

The adjusted tax rate to be approximately 26%, and capital expenditures to be about 6% of revenue. Before handing it back to Chris, I want to provide our perspective on the mortgage market and how our assumptions inform 2026 guidance. Given the growing -- given the number of moving pieces, I want to provide our high-level view on industry structure and dynamics. First, credit data is a foundation to safe underwriting mortgage in all lending categories. Any score or analytic depends on credit bureau's data stewardship. We differentiate our data from peers as the only bureau with 30 months of trended data plus alternative data sets like rental and utility trade lines.

Second, our pricing actions preserve the profitability of our mortgage vertical while prioritizing lower costs for consumers and promoting lender choice. In 2026, we are offering VantageScore at $4, a 60% discount to a FICO score. We are also keeping the price of our credit data plus VantageScore flat in 2026 at $15. Our pricing approach [ influence ] TransUnion's profitability from potential changes in third-party score delivery models. Finally, VantageScore adoption represents incremental profit and margin opportunity for TransUnion. We have had very constructive discussions about VantageScore 4.0 and expect customers to test and validate throughout 2026. That brings me to our underlying U.S. mortgage guidance for 2026.

We anticipate generating $425 million of mortgage revenue excluding FICO royalties, up roughly 6%. This expectation is driven by core data pricing as well as new wins in TruIQ and Trusted Call Solutions. Inclusive of FICO royalties, we expect $750 million of reported mortgage revenue, up 28%. A few underlying assumptions to this guidance. We expect mid-single-digit inquiry declines based on the extrapolation of current origination trends. Given the presently low level of mortgage activity, any additional reduction in interest rates represents upside to our guidance. We assume no shift to the FICO direct licensing program in the year, informed by current observations and customer feedback. No customer has shifted to this program to date.

Again, absolute profitability is similar regardless of whether TransUnion or the reseller calculates the score. Finally, any VantageScore adoption represents profit and margin upside to our guidance. Timing and pace of adoption will be dependent on key milestones, such as the FHFA publishing its loan level price adjustment matrix for the GSEs. Given that FICO mortgage royalties impact revenue but not profit, we believe the best way to judge underlying performance is to exclude these revenues from our metrics. In 2024 and 2025, we grew high single digits even when excluding FICO mortgage royalties and expect to deliver 6% growth based on the high end of 2026 guidance.

Excluding no-margin FICO royalties also uncovers the underlying operating leverage of the business over the last several years. Based on the high end of guidance, we expect to deliver 38.2% margins with 70 basis points of expansion in 2026 or 240 basis points of expansion since 2023. This underlying operating leverage across the 3 years is again driven by strong revenue growth and the benefits of our transformation cost savings. Finally, the secular trends in mortgage remain the same, and any recovery in mortgage activity represents upside to our financial results. There are now almost 10 million mortgages with rates above 6%, creating a significant refilable population if average rates fall below 6%.

Every 10% increase in volumes would add over $40 million of adjusted EBITDA and $0.16 to earnings. A full recovery to 2019 levels equates to close to $1 in earnings or over 20% upside to our earnings base. This upside is in addition to the significant opportunity from VantageScore adoption. I'll now turn the call back to Chris for closing remarks.

Christopher Cartwright: Well, thank you, Todd. So to summarize, we finished 2025 with a great fourth quarter, growing our revenues by 12% organically and surpassing guidance. Assuming business conditions remain stable, we expect another strong year in '26. We're guiding for 8% to 9% organic constant currency revenue growth and 8% to 10% adjusted diluted EPS growth. Our '25 results and our '26 guide reflect the benefits of our multiyear strategic transformation. We remain focused on leveraging this transformation to drive innovation-led and durable growth. So we plan to share more details around our strategic momentum and our future growth prospects at our Investor Day coming up on March 10 in New York City.

We've got a robust schedule planned with opportunities to hear from our senior leaders and to see demos of our newest products. And we plan to spotlight our AI-enabled OneTru platform, our reinvigorated innovation engine and how our robust product portfolio is driving growth across our verticals and geographies. We'll also provide an updated financial growth framework. Our strategy emphasizes driving industry-leading organic growth, enhancing our earnings and our cash flows and strengthening return of capital and shareholder-friendly capital deployment. So I hope you can all join us. Please reach out to Greg and the IR team for more details. And with that, back to you, Greg.

Gregory Bardi: That concludes our prepared remarks. For the Q&A, we ask that you each ask only one question so that we can include more participants. Operator, we can begin the Q&A.

Operator: [Operator Instructions] At this time we will take our first question, which will come from Jeff Meuler with Baird.

Jeffrey Meuler: My question is on the U.S. emerging vertical guidance. It's good, but you just put up really strong growth, even excluding, I think, one timers, you said it was double digit. It's broad-based. And I would think that there would be building benefits from the product replatforming and capabilities, consolidation along with the tech transformation. So just any specific call-outs on the U.S. emerging verticals outlook beyond just the general prudent conservatism?

Christopher Cartwright: Yes, Jeff, and thank you. Yes, it was a great quarter, wrapping up another really strong year of top line organic growth. And emerging was certainly a big part of the story. We're happy to get into the guidance and the approach. Probably a good way to start the call, given some of the chatter early on here. But as you know, we're starting the year, and typically, we guide a bit on the prudently conservative side to set us up for beats and raises over the course of the year. That's been the approach over the past 2 years, and we've been outperforming consistently over the last 8 quarters. I think it's very much the same posture in '26.

So I do understand your question on emerging. Let's just have Todd take us through a quick comparison of the '25 guide versus the actual achievement and then how we're setting up in '26.

Todd Cello: Okay. Thank you, Chris, and Jeff, thank you for the question. It's a good place for us to start this morning. I think it's important just to ground us and everybody in what we feel is a very strong guide starting off 2026. And I would start with, at this point in the year, this is a guide that we have a high degree of confidence in being able to achieve. And if you were to look back to last year at this time, we were guiding our organic constant currency revenue growth at 4.5% to 6%, and we ended up growing 9%.

And if you look at the guide that we put out for 2026, we're contemplating 8% to 9% growth. So a continuation of 2025, again, a high degree of confidence. And as we typically do, we would orient you more towards the high end of that guidance just based on the assumption that conditions that we're seeing, if they stay the same, we should be about at that level. And if you look at our results, ex FICO compared to the guidance and specifically FICO mortgage, last year, we were guiding 2.5% to 4%, and we ended up at 8% growth. And this year, we're guiding 5% to 6% growth.

So you saw a significant outperformance in products and services that TransUnion is delivering into the market and adding a significant amount of value. Specific to your question on Emerging Verticals, last year, we were guiding mid-single digits, and we ended up posting an 8% growth for 2025. And right now, we're starting at mid-single digits. And again, it's just back to that, what we have high confidence in and conviction in being able to achieve at this point in the year. So we feel that it's a healthy guide at this point. But again, we oriented towards more of the high and we see upside as the year goes on.

And just from a profitability perspective, I know you're asking about revenue, but I want to round this out. Last year, we were guiding adjusted EBITDA growth at 3% to 6%. We ended up growing 10%. And right now, we're guiding 7% to 8%. And similarly, adjusted diluted EPS last year, 1% to 4%. That 4% was burdened by a change in our tax rate due to some Pillar 2 impact as well as FX at the time. We ended up delivering double digits for 2025, which was an outstanding result for TransUnion, and it's the second year in a row of double-digit EPS growth. And what you could see for 2026 is we're guiding 8% to 10%.

So we're already at the high end where we're orienting investors towards that high at 10% double digit. So if we achieve that, that would be 3 straight years, which we feel is indicative of the earnings power that we have created at TransUnion.

Christopher Cartwright: Yes. And so good detail. I mean we've leaned in more for the total guide this year as you can see. And we would expect to hit the high end and hopefully outperform that as well. On the emerging side, it's great that we have got that part of the business growing high single digits. I would expect that we can continue to do that despite a lower initial guide over the course of the year. It's really important to point out the strength that marketing solutions and fraud are showing both for full year '25, where both were, again, at the high single-digit level. And then we exited low double digits in the fourth quarter.

Now we're not going to extrapolate from the fourth quarter in our '26 guide. That's a bit too aggressive. But again, you should think of the Emerging Verticals as a high single-digit compounder now, and that's half of the revenues in the U.S., which is 80% of our total business. And you can also expect that, that is being driven by marketing and fraud now, which are now positioned post Neustar asset integration on the OneTru platform to compound mid-single digits to low double digits, which is what we told investors we would achieve when we acquired Neustar back in early 2022.

Operator: And the next question will come from Toni Kaplan with Morgan Stanley.

Toni Kaplan: Chris, you talked a lot about AI, which was very helpful. And I was hoping you could talk even more about within marketing and fraud, you talked about this already, but just maybe nail down your differentiation versus competitors and maybe more about the data assets in those areas, specifically where the data is coming from and why competitors can't get the data. All of that would be super helpful.

Christopher Cartwright: Okay. Thanks, Toni. Well, with the first component of value in our digital marketing suite is our identity data asset and our identity resolution capabilities. And all of our data has been consolidated on the OneTru platform on a common identity spine or graph. We have several different views of that. One is the individual, of course, one is the devices and one is the geo location. And now that we've achieved that, and that was a delivery over the course of '25, we consistently hear from customers that we have the best identity information in the market, period. And every effective marketing campaign starts with clean data in a clean sense of where you can access these customers digitally.

So one, I would emphasize that unless you are operating a credit bureau, fraud contributory networks, a marketing measurement platform, and you own all the public records in the U.S. plus, you're going to struggle to have the identity data that we have, plus again, we're hovering in from thousands of sources, individually contracted, a whole degree of other information that augments the identity graph. In fact at Investor Day, we're going to drill into this even more deeply. That's the first point, I would say. And that's proprietary and that's differentiated. On the audience side, it's a variety of behavioral, demographic, [ psychographic ] and some real-time consumer intent data that's flowing in.

That data, less differentiated, but also not a large percentage of our growth or profit, but very complementary to identity. And what we find is if you win identity, they then leverage from that to audience purchasing. And then from that, it moves into activation where we have invested a lot to extend the number of connections we have with publishers and platforms throughout the digital ecosystem so we can more directly activate. And then when you get to measurement, in order to measure the effectiveness of advertisements and influencing prospects within the marketing funnel, you have to negotiate and program integrations into hundreds and hundreds of different points within the digital ecosystem.

Some will be massive walled gardens that we all know about. Others will be streamers and prominent publishing sites, et cetera, et cetera. All of those contributions, which can come at an individual consumer level or a cohort level to protect privacy have to get integrated and interpreted and normalized and then aggregated for subsequent analysis. So there's a lot of proprietary information. There's a lot of proprietary integrations, a lot of data science and a lot of analytics to get coherent answers as to whether advertising is working and who you should prioritize for the next round of ads. Similar dynamics in fraud.

I mean we have hundreds and hundreds of customers around the world who run our fraud mitigation software on their computers. We see every device that connects to it. We can relate many of those devices back to individuals. We understand if there's any questionable behavior that these devices engage in. That helps us form a reputation. We're analyzing the geo locations from which they connect and the IP addresses to see if there are anomalies there. And then we're aggregating the behavior of these devices and comparing it to patterns of good and bad device behavior from a fraud perspective.

All of this are proprietary integrations, individual sales, ongoing relationship maintenance that leads again to proprietary network effect enabled data flowing into these assets. So again, there's a lot of proprietary information in the fraud and marketing world, it's difficult to access, too. You just don't get it by crawling the web or licensing a book library from a publisher.

Operator: And the next question will come from Andrew Steinerman with JPMorgan.

Andrew Steinerman: I'm looking at Slide 23, the $750 million of U.S. mortgage revenues for '26 being up 28%, which, of course, includes the FICO reps. Does that 28% figure make any assumption about market shift from FICO to Vantage? And also, are there any assumptions in your '26 guide in terms of VantageScore adoption benefiting TransUnion today, meaning in '26?

Todd Cello: Andrew, I'll take that question. So right now, in our guidance, what we are assuming is status quo. We are assuming that there is no shift to the FICO direct program based on customer feedback that we've had at this point in time. And we also are assuming that there is no VantageScore adoption as well. So needless to say, in both of those situations, if that were to happen, if we were to see a migration to the FICO direct program that would enable our profit margin to increase, similar with VantageScore as well, too. So there's just nothing but upside. So we've taken a conservative posture with both of these assumptions to start the year.

Just that there's just so many unknowns at this point in time. But the net of it is, if we do get either to move, you'll see higher profit margin.

Christopher Cartwright: Yes. We just thought it was a cleaner and clearer way to present our numbers for '26 because different of our competitors could have different assumptions around share movement and conversion and the like. So this is clear, and it's clean. But just to reinforce what Todd said, if the direct license program does get traction over the course of the year, that may erode some of our revenue, but it won't erode any of our profits. In fact, our profitability will increase because we don't have a margin on FICO royalties within mortgage.

And then once these LLPA matrices are published by the FHFA, we would expect that we're going to start selling Vantage scores that will be additive to revenue and highly accretive to profitability. And look, the whole industry is waiting impatiently for those things to come out because there's a heck of a lot of interest amongst lenders. And we're working with lenders currently, providing them with free scores and supporting analytics so they can do their backfile estimates and performance conversions and get ready for share movement.

Operator: The next question will come from Faiza Alwy with Deutsche Bank.

Faiza Alwy: I wanted to ask about consumer lending. It was interesting to see that growth rate accelerate, and I know you talked about a prudent die, but I'm curious if you can talk about the trends that you're seeing there? Is it just better market performance? You touched on some of the fintech activity. But just curious to hear a little bit more about that and what you're embedding for the guide and your confidence there.

Christopher Cartwright: Sure. So happy to talk about consumer, probably should zoom out a bit and just talk about the health of the marketplace. Again, I would reinforce what you heard the banks say that the macro conditions are still solid and stable. We've got good GDP growth. We have low levels of unemployment. Obviously, job creation is not as robust as we would like, but perhaps a little bit better than was assumed. Real wage gains, we're still eating out gains there, which is good for the consumer. And the consumer leverage ratios are still acceptable. They're still within range. Although if you're on the lower end of the economic spectrum, you're under stress.

That's unfortunately been the story, at least over the past decade that I've been here. The banks are all reporting good earnings. They're optimistic about loan growth. Their delinquencies are low or within a manageable range certainly, which is a positive. And a lot of the banks and a lot of economists are forecasting a stronger second half to the year, which is great, right? Because over the course of '24 and '25, you've seen how fast we can grow revenue in this business and the flow-through to profits and what are just kind of stable but still somewhat muted economic conditions. We are forecasting those conditions over the course of '26.

We think that's sensible and conservative to start the year at. But if we do have any improvement, we're going to have material, we're going to have nice upside to the guidance that we're giving. And again, I would point out, our organic revenue growth rate is strong. It's been at the top of the industry in '24 and '25. We're guiding at the top of the industry in '26. We would point you to the high end of our guidance, and we're going to work really hard to outperform that.

Todd Cello: Yes. And Chris, I would just add, when we talk about consumer lending, I think it's important to call out that we've had some really good success, both with FactorTrust in that space, and that grew 20% for us. And that is a really good indicator of what we've done with the OneTru platform, and that was the first product that we went and replatformed. That's embedded in the numbers. So it's a good proof point on where we're headed with OneTru. And hand in hand with that, also TruIQ was a winner in the consumer lending space for us as well, too.

So I think our data analytics and the capabilities that we'll bring to our customers, a lot of good momentum in the consumer lending space in those 2 areas.

Christopher Cartwright: Yes. And I guess just to finish up on consumer lending. We expect continued strength in that area. All the players have been able to resupply their balance sheets. We think there's still a good environment for loan consolidation and conversion of revolving card balances and the like. I think over the past, say, 4 or 5 years, because of the experience in '22 and '23, where consumer lending was hard hit, there's been an assumption that it's a more volatile space than it actually is. Consumer lending has always been an important part of the U.S. lending landscape.

It's far more robust and [ growthful ] and I think you've seen that over the past couple of years, and we expect more strength this year.

Operator: The next question will come from Andrew Nicholas with William Blair.

Andrew Nicholas: I was hoping to ask on the margin trajectory this year. I know that there's some difficulty. You provided a lot of information on what margins look like ex FICO. But it does look like it's modestly down year-over-year in the first quarter before improving as the year progresses. Can you just kind of flesh that out a little bit further, what impacts or informs expansion as the year progresses or accelerating expansion as the year progresses ex FICO?

Todd Cello: Andrew, and thanks for the question. So let's dig into this. So in the first quarter, our high guidance, we are calling for a margin of 34.9%, which would be down 140 basis points. We think it's probably best to look at our margin, though, excluding the FICO mortgage royalty. At that level, we're at 37.5%, which would be down 30 basis points. When you compare that to the full year guide. Full year, we're guiding 35.7%, which at the top, all in with the FICO mortgage royalties. So we'd be down 30 basis points. Really, where your question is at is an ex FICO, we're going to grow our margins 70 basis points to 38.2%. So several factors here.

The first one, the first quarter of any year for TransUnion is our seasonally lowest revenue amount in dollar terms. So needless to say that if you don't have higher revenue, you don't have that flow through in dollars down to profit. So that's the first thing of why Q1 is the way it is. Second, if you look at the growth rates that we've provided in the guide relative Q1 and then relative to what we would -- you'd imply for Q2 through Q4, and then we're at the high, that growth rate ex the FICO mortgage is relatively stable each quarter throughout the year.

So meaning we're not necessarily assuming that there's a significant increase in the revenue growth rate. So there's a stability in that growth rate. So then where this then leads to then is in the margin expansion that we're expecting, a lot of that's going to happen in the second half of 2026. And as a reminder, in 2025 in the second half, we were opportunistic with our performance and making onetime investments back into the business to continue to solidify the really strong advances that we made with our technology and our product teams of augmenting sellers to continue the really good momentum that we have on the top line. So we're going to lap some of those onetimes.

We won't have them in '26, so that will provide a benefit. And from a compensation perspective, in the second half of 2025, we did have higher incentive compensation accruals. We're at this point in time right now we've reset those accruals back at target, right? So that provides a natural upside for us with the margin in the second half.

Christopher Cartwright: Yes. And so look, in the [ big, ] over the past couple of years, some investors have asked whether our business still has the same degree of operating leverage that we enjoyed previously. And it's because we've been growing high single digit, and you haven't seen the top line margin flow through. As we explained, it was being masked by the FICO price increases that have been quite considerable over the period. Now that we're breaking this out, you can see that margins have expanded by 240 bps over the past several years, which is terrific. And so you can see the operating leverage is still here.

And again, we are now also supporting marketing and fraud and analytics product line that has lower margins at this point than does core credit, and we're also investing heavily in the business. So I hope from this, investors are reassured that we still have tremendous operating leverage, and you're going to see that in our profits and our EPS as we continue to compound the top line high single digits.

Operator: The next question will come from Manav Patnaik with Barclays.

Manav Patnaik: Just one question from this AI debate that's out there, and that's more tied to your selling model. Like how seat count tied or enterprise tied is your business? Just touching on the angle that everyone's worried or believes that because of AI, every industry will have materially less headcount, more efficient, et cetera. So just trying to appreciate how you think that could impact your business.

Christopher Cartwright: Yes. Well, Manav, as you know, we are a highly recurring transactional business at the core with a material chunk of subscription that's not tied to seat count necessarily more to utilization or ranges that factor under the annual subscription that we would charge a client. So I don't think there's going to be a model disruption because of anything on the AI side. I do think, to the latter part of your point, we're going to apply AI and are applying AI to drive productivity internally. You're going to see a dramatic productivity increase in our software developers.

That's not really going to translate into fewer developers because we have so many innovation opportunities that a 30% or 50% increase, I'm going to put the work on product and revenue growth. But in our analytics organization, there's going to be a massive productivity improvement. We're launching a new product, a new analytics platform that's all AI-enabled. We call it the [ Analytics Orchestrator. ] You'll see that at the upcoming Investor Day, and that's going to enable orders of magnitude improvement in the speed with which we can create models and insights across the credit risk marketing and fraud value chains within our clients.

The point of this is that more and more of our analysts will be forward deployed in the clients. There will be more of a consulting and consultative selling and an enablement aspect to how we engage in the market because now we have 3 strong product lines with highly interrelated workflows that we've pulled together on this common platform, and we want to show clients how they can become a lot more productive by consolidating their work on this platform. And the best people to show them that are in the analytics organization. So I mean I think that's how the go-to-market model is going to evolve in the coming years.

Operator: And our next question will come from Ashish Sabadra with RBC Capital Markets.

Ashish Sabadra: I just wanted to drill down on the international side. You provided a lot of good color on India, but I was just wondering if you can also talk about Canada and U.K. or other countries as well.

Christopher Cartwright: Yes, for sure. Well, look, obviously, the international division in total didn't grow as fast as we have become accustomed to. The business is in the mature markets. Canada and the U.K. are doing exceptionally well. They're growing well above the market, and we're confident that we're taking share in both markets. And look, it's because we have strong management teams. We've incorporated a lot of our new products into those markets in both Canada and the U.K., the TruIQ analytics platform has been localized for their use. And I just feel like we get great value propositions and an opportunity to grow above market for quite a bit of time.

We've had macroeconomic -- kind of macro-driven softness in India, and in Latin America to a degree as well. Focusing on India. I mean, look, India has been [ buffeted ] by some macro forces over the past couple of years. We've talked about the RBI intervention in the unsecured lending market to calm that down. We've also seen lenders reviewing the profitability of their card portfolios and also pulling back a little bit there. The tariffs of 50% that were imposed in the fourth quarter really jolted the market. A big part of the Indian economy are small- to medium-sized businesses that are export oriented. The U.S. market was important. Those tariffs kind of froze exports.

And the banks looked at that and said, "Hey, this sector of the market is less lendable, we have to be cautious here, too, right?" Now we think the fourth quarter in India and the first quarter of '26 are going to represent a bottoming out from a volume perspective, kind of a financial lending retrenchment, if you will. And then we're going to start resuming our growth. We're forecasting mid-single digits for the year. Clearly, over time, India has far better growth potential than that. Demographics are great. The economy is still growing almost 7%, inflation is manageable. There's a lot of goodness.

And I do think that the broad outline of the deal that the U.S. and India have announced is going to be helpful to bringing some stability back to that market. So we're bullish on India longer term. We are bringing our fraud marketing and analytics products into India. This year, those are going to be entirely new vectors of growth. And so we're looking forward to just getting in there and continuing to drive growth in a very fundamental way, and we're confident that over time, the macro is going to heal itself and be supportive of growth.

Operator: And our next question will come from Jason Haas with Wells Fargo.

Jason Haas: When we think about the annual guidance, excluding FICO, the 5% to 6% organic growth and the 50 to 70 bps of EBITDA margin expansion, is that a fair framework for thinking about how the business should grow longer term? Are there still costs or anything weighing on the business in 2026?

Christopher Cartwright: Yes. So look, as Todd was detailing earlier, net of FICO in '26, it's 5% to 6% organic guide. And look, as we have reminded the market, we start off with a prudently conservative guide at the beginning of the year, and we steer you guys more towards the high end, which would be 6%. And for the past 2 years, we've been able to beat and raise. And so I would just say, think about those factors in your own deliberations. But as I've said in prior calls, I think this is a business that can now organically compound in the high single digits, perhaps more annualized. And in fact, we did in '24 and '25 ex FICO, right?

So organic revenue growth was 8% in '25 ex FICO, similar in '24. So we're proving that we can grow at that level. We have exited our period of incremental investment and add-backs. We're not adding anything back. We don't need to. That is going to -- it has helped our cash flow tremendously. We're very confident in a low 90% cash flow conversion in '26. I want to reiterate that for all of you on the call this morning. And then look, in terms of just operational efficiencies and flow through EPS.

As we continue to grow at this level, particularly ex FICO, you're going to see really good flow-through to profits and you should expect double-digit growth, perhaps even mid-teens compounding in EPS. That's not the official guide, but that speaks more toward what we've delivered in '24 and '25 into the potential of this business. And remember, our tech transformation is different, right? We have built a global platform to run credit marketing and fraud businesses with this integrated analytic layer on one single platform. We're converting the U.S. to it. We're also going to convert Canada, the U.K. and the Philippines over the course of the year.

That gives us a way to continually take cost out of the business, right? And so that's another initiative that's going to improve the profitability of the business. Now with those profits, we can invest more in product innovation, in larger and more consultative selling and also in improving margins for the business overall. So I think that's an often overlooked or certainly underappreciated dynamic that we've created in our business. But you can look for us to leverage that in the coming years.

Operator: And our last question will come from Kelsey Zhu with Autonomous.

Kelsey Zhu: Could you talk a little bit more about your assumptions behind the mid-single-digit declines and mortgage increase guidance for 2026? And how the trigger leads or legislation affect total volume growth there? As well as if you're seeing any competitive pressure from Equifax credit file that also includes the work number indicator?

Christopher Cartwright: Sure. Right. So a good topic to talk about. First, I would say that triggers will not have any negative impact at TransUnion. We've been out of the mortgage triggers business for quite a while now. Other players in the space, we'll have to address that. With regard to any share movement because of bundling credit and some incoming information off the work number. Look, you can look at our mortgage results. We're still doing very well overall, relatively speaking. We've seen no share movement because of -- we had no share movement in the prequalification space. We are aware of 1 large customer that moved between our 2 competitors.

We look at that as really a case of price discounting. That trade happened at a 25% discount to the prevailing prices. So I'm not sure I would attribute it to any market innovation. Now in terms, Todd, of the setup for mortgage and the assumptions for the year, maybe some color on that?

Todd Cello: Yes, sure. So the volume assumptions in the first quarter, we're expecting to be up modestly. But for the full year, it's going to be down mid-single digits. So obviously, what that says is that Q1 is our easiest comparable because we saw volumes modestly improve throughout 2025. And then again, looking at mortgage outside of the FICO mortgage score, our mortgage business is still expected to grow 6% on a year-over-year basis, and that has to do with some of our own pricing but also driving innovation through.

Christopher Cartwright: Yes. And so perhaps, when we wrap, I'll just emphasize to everybody, Fourth quarter was a great exit to a great year. 12% cumulative growth is awesome, 6% and [ 16% ] in the U.S., we're super encouraged by. Macro factors buffeted us a bit in our emerging markets, which pulled down international. But as we've shown, that's a consistent high single-digit, low double-digit grower over time. I would expect that we can resume that pace in the coming year or so. But there's still a lot of incremental revenue and profit fall through to come because of the transformation that we've achieved.

In every country that we convert to the OneTru platform, that country will be able to bring to market the best of our credit, best credit analytics, in addition to marketing and fraud and our new analytics platform. We now have 4 market-leading horses pulling our wagon, so to speak. I think that's going to be additive to our growth rate and profit fall through. So we're excited. We're excited with where this business is at and what we can deliver for investors and we're ready to get at it.

Gregory Bardi: All right, Chris. I think that's a good place to end. Thanks for all your questions today, and have a great rest of your day. Thanks.

Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.

This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. Parts of this article were created using Large Language Models (LLMs) based on The Motley Fool's insights and investing approach. It has been reviewed by our AI quality control systems. Since LLMs cannot (currently) own stocks, it has no positions in any of the stocks mentioned. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability.

The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.