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TransUnion TRU reported impressive third-quarter 2024 results, wherein earnings and revenues beat the Zacks Consensus Estimate.
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Better-than-expected earnings failed to impress investors as the stock declined 4.6% since the earnings release on Oct. 23.
TRU’s quarterly adjusted earnings (adjusting 69 cents from non-recurring items) of $1 per share surpassed the consensus mark by 2% and increased 14.3% on a year-over-year basis. Total revenues of $1.1 billion outpaced the consensus mark by 2.2% and increased 12% from the year-ago quarter.
The TRU stock has gained 51.5% over the year-to-date period, outperforming the 11.9% rally of the industry it belongs to and 23.4% growth of the Zacks S&P 500 Composite.
YTD Price Performance
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TransUnion’s Revenues by Segments
The U.S. Markets segment’s revenues of $848 million increased 12% year over year and surpassed our estimate of $816.3 million. Within the segment, Financial Services’ revenues of $367 million grew 17% from the year-ago quarter. Emerging Vertical revenues were $307 million, which increased 3% on a year-over-year basis. Consumer Interactive revenues were $174 million, which rose 21% from the third quarter of 2023.
The International segment’s revenues increased 11% year over year on a reported basis and 12% on a constant-currency basis to $242 million, and beat our expectation of $240.5 million. Revenues from Canada were $39 million, which grew 7% year over year on a reported basis and 9% on a constant-currency basis. The metric missed our estimate of $40.8 million.
Revenues from India gained 21% on a reported basis and 23% on a constant-currency basis to $68 million and missed our anticipation of $68.7 million. Revenues from the Asia-Pacific were $26 million, up 11% from the year-ago quarter on a reported basis and a constant-currency basis, marginally missing our estimate.
Revenues from Latin America rose 7% on a reported basis and 13% on a constant-currency basis to $33 million and missed our anticipated figure by a slight margin. Revenues from Africa increased 12% on a reported basis and 10% on a constant-currency basis to $17 million, surpassing our estimate of $14.9 million. Revenues from the U.K. were $58 million, up 6% year over year on a reported basis and 4% on a constant-currency basis, outpacing our projection of $56.4 million.
TRU’s Operating Performance
Adjusted EBITDA was $394 million, marking year-over-year growth of 11% on both reported and constant-currency basis. The reported figure beat our estimate of $371.5 million. The adjusted EBITDA margin was 36.3%, 50 basis points lower than the year-ago figure.
Balance Sheet & Cash Flow of TRU
TransUnion had $643.2 million in cash and cash equivalents at the end of the quarter compared with $543.2 million at the end of the second quarter of 2024. The long-term debt was $5.1 billion compared with $5.2 billion in the previous quarter.
Cash generated from operating activities in the quarter was $229.3 million. Capital expenditure was $68 million.
TransUnion’s Q4 & 2024 Outlook
For the fourth quarter of 2024, TransUnion lowered its revenue outlook to $1.01-$1.03 billion from the $1.04-$1.06 billion given in the previous quarter. The Zacks Consensus Estimate for revenues is pegged at $1.03 billion. TRU reduced its guidance for the adjusted earnings per share (EPS) to 92-98 cents from the previous quarter’s view between 97 cents and $1.02. The mid-point (95 cents) of the company’s guided range is lower than the Zacks Consensus Estimate for earnings of 97 cents per share. The guidance for the adjusted EBITDA was lowered to $360-$375 million from the $367-380 million mentioned at the end of the previous quarter.
For 2024, TransUnion raised its guidance for revenues to $4.16-$4.18 billion from the previous quarter’s view of $4.10-$4.14 billion. The mid-point ($4.17 billion) of the company’s revised revenue guidance is in line with the Zacks Consensus Estimate. TRU hiked its adjusted EPS guidance to $3.87-$3.93 from the $3.78-$3.90 view given in the previous quarter. The mid-point ($3.90) of the company’s revised guided range is marginally higher than the Zacks Consensus Estimate for earnings of $3.89. Adjusted EBITDA has been raised to $1.48-$1.5 billion from the $1.46-$1.49 billion view given in the previous quarter.
TRU flaunts a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Snapshot of TRU’s Peers
Fiserv, Inc. FI reported mixed third-quarter 2024 results.
FI’s adjusted EPS (excluding $1.3 from non-recurring items) of $2.3 beat the consensus mark by 2.2% and gained 17.4% year over year. Adjusted revenues of $4.9 billion missed the consensus estimate by a slight margin but rose a tad on a year-over-year basis.
The Interpublic Group of Companies, Inc. IPG posted third-quarter 2024 results.
IPG’s adjusted earnings (excluding 65 cents from non-recurring items) of 70 cents per share met the Zacks Consensus Estimate and was flat with the year-ago quarter. Revenues before billable expenses (net revenues) of $2.2 billion missed the consensus estimate by 2.3% and declined 16.2% year over year. Total revenues of $2.6 billion fell 1.9% year over year and outpaced the Zacks Consensus Estimate of $2.3 billion.
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