Today, and thank you for standing by. Welcome to Experian's third quarter trading update, webcast, and conference call. At this time, all participants are in the listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one and one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. Please be advised that today's conference is being recorded. Now, I'd like to hand the conference over to your first speaker, Mr. Brian Cassin, Chief Executive Officer. Please go ahead, sir.
Thank you very much. Hello, everybody, and welcome to our Q3 trading update call. I'm here, as usual, with Lloyd, who will take you through the financial performance after my opening remarks. We've delivered another strong performance in Q3, reflecting continued execution against our strategy. Total Q3 revenue growth was 12% at actual rates and 10% in constant currencies, with organic revenue growth of 8%. And this continues the momentum that we saw in the first half and puts us on track against the FY26 guidance that we set out just a few weeks ago. The overall picture is consistent with when we spoke in November. North America continues to perform strongly. And in Brazil, we saw a modest improvement in the quarterly trajectory, as we had expected.
Organic revenue growth was 10% in North America, 6% in Latin America, 3% in the UK and Ireland, and 3% in EMEA and Asia Pacific. By segments, B2B organic revenue growth was 7%, with good contributions from both financial services and verticals. Globally, consumer services delivered 10% growth. Turning to the regional highlights, starting with North America, momentum remains very strong, driven by client expansions, consistently improving lender activity, and continued growth in consumer services. Regional organic revenue growth was 10%, including a strong B2B performance, which was up 11%. In financial services, excluding mortgage, we delivered a strong organic revenue growth, reflecting key client wins and increasing adoption of new products across our client base. Client activity levels continue to improve, feeding through to higher volumes for unsecured credit and providing a supportive backdrop for new product adoption. Clarity was also a very positive contributor in the quarter.
We're very encouraged by client response to newer products such as cash flow scores and analytics, and we see emerging opportunities for the Ascend fraud sandbox in 2026. Alongside this, we are progressing our plans to embed AI more deeply across our platforms, including through the introduction of new Experian assistants within the Ascend platform and enhanced model risk management features. And we have a strong pipeline of new product development underway, with further introductions planned this quarter, and we expect innovation activity to remain high as we move into next year, and we have a strong pipeline of new product development underway, with further introductions planned this quarter, and we expect innovation activity to remain high as we move into next year. In mortgage, our focus remains on making homeownership more accessible and affordable to the American people. The introduction of VantageScore into the performing mortgage market is an important step in expanding credit access to bring millions more consumers into the scoreable population.
Our approach is to provide both VantageScore and FICO on every mortgage transaction so that lenders can choose which score suits their needs. VantageScore is also available in our Ascend analytical sandbox for testing purposes, and we expect appetite to build over time, particularly given the cost savings available to lenders and ultimately consumers. Across verticals, we delivered another strong quarter led by automotive, supported by widening distribution for our AutoCheck vehicle history reports, and by health, which continues to benefit from client expansions and strong market adoption of our AI-led Patient Access Curator proposition. In marketing services, our audit and acquisition continues to perform well. Consumer Services also delivered a strong performance of 8%, and our focus remains on delivering ever more personalized experiences by leveraging the depth of our data assets, increasingly supported by Eva, our agentic AI assistant.
Marketplace was the primary driver of growth in the quarter, reflecting continued expansion in credit and insurance, alongside the ongoing growth of our free membership base. In Latin America, organic revenue growth was 6%. While B2B revenues were flat on an organic basis, we've made good progress across key areas of strategic focus. Economic conditions in Brazil remain similar to those when we discussed in November, with interest rates now peaking at around 15% and with elevated levels of consumer indebtedness, which do continue to weigh on core lending activity. The integration of ClearSale has progressed smoothly. We are combining our capabilities across the portfolio. This has been well received by clients, supporting new business opportunities. Progress in the SME segment has also been very good. Consumer services delivered a very strong quarter with 23% organic revenue growth.
Growth was broad-based, reflecting our strategy to diversify and expand the range of services available on the platform. We added new credit products to the marketplace, including private payroll loans, driving increased contributions from the credit marketplace, and the contribution from premium services also continues to expand. This, combined with another strong quarter for Limpa Nome, following a highly successful Q3 credit fair, and as we continue to support consumers to renegotiate debts and consolidate loans. In the UK and Ireland, organic revenue growth was 3%, with B2B flat on an organic basis and strong consumer services momentum, which grew 14%. While the overall economic environment remains soft, we have made steady progress in B2B. More clients are going live on the Ascend platform, and we've seen a somewhat improved backdrop for credit acquisition origination, supported by increased adoption of the Ascend sandbox.
There remains more work to do across the broader B2B portfolio, but the trajectory is gradually improving. Consumer services performance in the UK was very strong. Growth was led by the credit marketplace, with premium services also contributing positively. We introduced a new 1250 Score in December, which has been well received, with members engaging more actively as they explore its enhanced features. In EMEA Asia Pacific, organic revenue growth was 3%, which was against a strong prior year comparative. Our focus on new product introductions is paying off. We have a strong pipeline and some very encouraging performances across the region. And with that, I'll now hand it over to Lloyd.
Thanks, Brian, and good morning, everyone. As you've seen, we delivered good growth in Q3, in line with our expectations and in line with Q2 when adjusting for the one-time volume catch-up in the North American consumer services business that we had in Q2. Total revenue growth was a very strong 12%, with constant currency revenue growth at 10% and acquisitions adding 2% to growth. Organic revenue growth was 8%, led by North America business, growing at 10%. Organically, B2B globally grew 7%, while consumer services globally delivered 10% growth. Turning to the performance by region, I'm beginning with North America, where we delivered strong organic revenue growth of 10%, with 11% in B2B and 8% in consumer services. Within B2B, financial services excluding mortgage grew 9% in the quarter, up from 8% in Q2. As Brian mentioned, credit conditions continue to improve with good underlying client activity.
Clarity had another strong quarter, and we see strong commercial momentum and cash flow. Mortgage revenue grew 45% on flattish volume, and this takes total financial services growth to 13%. Verticals in North America grew 8%, with auto and health continuing to grow mid-teens and double-digit respectively, and marketing services growing modestly. Auto grew well across our credit, vehicle history, and value recovery products, while health was supported by claims management products and ongoing adoption of Patient Access Curator, our AI-powered registration solution. Consumer services grew 8% for the quarter, and as a reminder, Q2 was boosted by the one-time volume catch-up in insurance marketplace. Marketplace grew strongly, double-digit in Q3, reflecting broad growth across credit cards, personal loans, and insurance. Subscription membership revenue grew modestly, reflecting the strong prior year growth comparative.
Moving on to Latin America, which grew 6% organically, B2B was flat, while consumer services delivered very strong growth at 23%. In B2B, we saw good performance in our fraud and ID offerings, but as expected, the macroeconomic climate continued to weigh on credit activity, although we did see an uptick in the build of pipeline. Consumer services grew very strongly, with growth of 23%, and we saw growth across all products, with a very strong performance in premium and Limpa Nome, which hosted its fair in December. Turning to the UK and Ireland, which grew 3% organically, B2B was in line with the prior year, but on an improving trend across the quarters this year. Consumer services delivered another double-digit organic revenue growth of 14%, with strong growth in our marketplace business.
And we drove strong growth across both credit cards and personal loans, supported by higher customer engagement and expanding lender supply from the product launches that Brian mentioned. And on to EMEA, Asia Pacific, which grew 3%, despite the lapping of large one-off license recognition in Australia in the prior year, and good progress across most of the other markets. And finally, as you've seen, all of our guidance for the full year remains unchanged from the upgraded guidance that we gave at the half year in November. So with that, I'll hand you back to Brian.
Great. Thanks, Lloyd. And so in summary, Q3 has been another strong quarter of growth, and we're on track to deliver on our full-year guidance. So with that, we're going to open up the line for questions. So I'll pass it back to you.
Reminder: To ask a question, please press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. A moment for our first question. We will now proceed to take our first question from the line of Scott Wurtzel from Wolfe Research. Please ask your question, Scott.
Great. Good morning, guys, and thank you for taking my questions. I guess just a few from me. First one would just be if you can quantify the impact of the insurance catch-up in 2Q and how that sort of is distorting the comps a little bit on the 3Q consumer services revenue, and then we'd also love to hear about maybe you talked about some wins on the U.S. financial services side, ex-mortgage, if you can characterize the nature of those wins, as well as any updates on conversations you've had with lenders around the adoption of VantageScore. Thanks.
Sure. Dan, Lloyd, do you want to do the impact?
Yeah. So during Q2, we mentioned we had a catch-up in our insurance marketplace vertical inside consumer services in North America. It was about $19 million. So that added 1% to organic growth rate for the group. So Q2 was 8% if you exclude that, and we said at the time that we would maintain that through the second half, as you've seen we have done today, and we expect Q4 to be in line with Q3 overall. And you see consumer services in North America was also in line if you adjust for that.
Yeah. And on the FS side, we continue to see very good progress. I think we're pleased with the uptake that we've seen on the cash flow analytics and scores products. We've seen some good new wins on that, so that's encouraging. We're also just gone through a fairly significant renewal cycle on big contracts, and we've come through that extremely well. So we're very happy with the position that we've got there. And I think on the VantageScore, I think there was a third question. There isn't really much of an update. We only spoke to you, I think, back in November. Not a whole lot has changed. And I think we continue to see engagement from really all lenders to evaluate the proposition.
Remember, VantageScore is not actually yet technically available for use, although all of the work that we're doing to ensure that it is up and running as soon as that's approved is ready, and I think there is broad-based interest across the lending environment. I mean, everybody I think is going to have a look at this, so that's encouraging.
Great. Thanks, guys.
We'll take our next question from the line of Simona Sarli from Bank of America. Please ask your question, Simona.
Yes, good morning, and thanks for taking my question. So first of all, can you please comment a little bit on the potential news from Trump that the credit card fees might be cut to 10%? What are the potential implications more broadly for the industry, but also specifically implications for Experian? And if you have any solutions that might potentially help you to hedge that. And secondly, it's on Latin America. If I look at the organic growth in financial services, it clearly remained flattish in Q3. Can you comment on lending conditions and also on the potential pipeline going into fiscal year 2027? Thank you.
Thank you. I think on the first question on the proposed cap and interest rates, I think we've just gone through bank reporting season, and probably most of the institutions that a lot of you work for have commented quite extensively on this. I think the first question you have to ask is the likelihood that this would be pushed through, and I think there's a significant challenge to that. No doubt, I mean, I think you've seen comments from JPMorgan and others saying that if it were to go through, then it would obviously have quite a significant impact on the credit card market. That said, the bigger impact is probably going to be more likely to be on U.S. consumers because it will have, we believe, a more damaging impact on the availability of credit more broadly and will push consumers into more expensive forms of credit.
And the final point I'd say on that is demand for credit doesn't just disappear. Where something like this to go forward, we would expect that the market would adopt and there would be other products that would actually take their place. They may not necessarily be even more affordable products, but we would see that. Typically, certainly in post-GFC, what we saw when regulation was tightened and access to more prime credit was restricted, we saw significant growth in subprime and other forms of lending. So I think the market will fulfill whatever need is out there, and because we serve the whole market, we both expect that would find its way into other kinds of products.
So, I think there's a long way to go on that, but I think there's not a whole lot more we can add to the extensive copy I think that's been put out there on this topic. And then I think on LATAM, Lloyd, do you want to?
Yeah, sure. So two bits to your question, Simona. I think if you look at overall lending conditions, you've got what we think is probably peak interest rates in Brazil, and I think that's what the markets are looking as you look forward. So I think that's weighing on activity this year, and that's in line with what we said in November. But looking forward, I think we're seeing something maybe a little bit more hopeful into next year. Our pipeline has improved, which tells you quite a lot about the engagement of clients as they look forward. So I think we're hopeful that we'll see over the next few quarters, really into next year, the conversion of that pipeline into contracts and then into revenue.
So I think B2B trends better from here through next year, but clearly still it's a high interest rate environment, so we need to see some time for that to recover.
Can I ask just please a very quick follow-up? Is there a way that you could elaborate even high level on your exposure to credit cards, both in B2B and B2C, as well as to other forms of credit? Thank you.
Yeah, we don't break down the individual channels, Simona. As Brian mentioned, we serve all channels, so as credit demand moves around, or sorry, as credit supply changes in individual channels, you see credit demand shift. We obviously have a very fast-growing business in short-term lending in Clarity. We are probably the largest provider in our sector into Buy Now Pay Later. So there are lots of other avenues and channels for credit that we think would soak up the excess demand if you did see some supply restriction in credit cards, and we'd expect that to help us offset it.
Thank you. Thank you. We will now take our next question from the line of Suhasini Varanasi from Goldman Sachs. Please go ahead, Suhasini.
Hi, good morning. Thank you for taking my questions. Just a couple for me, please. Verticals business looks like Health and Automotive are doing well, but growth slowed a little bit in this quarter. Just want to understand what has changed at the back end and what are your expectations for the next few quarters? And maybe just a similar question on LATAM B2C, which has seen a very nice pickup, actually. Is that a trend that can be maintained over the next few quarters? Thank you.
So LATAM B2C, we said that we would be back to over 20% growth in the second half, and you've seen that. We've reached a really nice scale. We cover it in the release. We passed a major milestone in the consumer business in Brazil of over 100 million free members in Brazil now, a very significant consumer platform. And across Latin America, including Brazil, we're approaching $300 million run rate revenue annualized for that business now, which is a very significant business growing very strongly. So it is a great story for us of expanding that vertical and lots of runway still to go. So as we look ahead to Q4, we expect another really good quarter of growth in that consumer services business. As you go to the verticals in North America, so just to remind everybody, what have we seen this year?
Verticals in Q1 grew 8%, in Q2 grew 10%, in Q3 grew 8%. So pretty consistent high single-digit growth. Within that, very consistent double-digit growth in health and mid-teen growth in automotive. The marketing services segment has been softer this year, which I think anybody watching the segments with industry specialists has seen. And that was low single-digit in Q1, mid-single-digit in Q2, and low single-digit in Q3. So overall, very strong performance and very consistent, very strong growth actually in health and automotive.
Thank you. We will now take our next question from the line of Simon Clinch from Redburn Atlantic. Please go ahead, Simon.
Hi, guys. Thanks for taking my question. I was wondering if you could just expand on the U.S. credit environment and just give a sense of the growth that you're seeing across the different verticals of banking, auto, personal loans, and credit card? And then following that, I was wondering if you could just update us on your thoughts around the timing of things like the release of the LLPAs for VantageScore in the U.S.? If you've had any updates or any engagement with the FHFA, particularly since some of the tweets that we've seen earlier this year from the organization. Thanks.
Sure. I think on the U.S. credit environment, as we spoke in November, we said back then that we saw some modest improvement coming through, and I think that's continued, and again, I think we come out with our results usually around the same time as the major U.S. banks produce their results, and they're all really strong, and I think you've seen from them the outlook that they think that they're set up for a pretty good year in 2026, notwithstanding usual caveats around some caution here and there. Credit quality continues to remain very strong across the piece. I think, as any of us guessed, really, in the direction of interest rates, but it certainly seems like the direction of interest rates is down, so I think that's a pretty good setup for as we go into calendar year 2026.
We're seeing it across the piece, really. I think in the last couple of years, we've had pockets of strong performance, but we're now sort of seeing that as sort of fairly broad-based, really, across all of the categories of lending. That's a good backdrop, and I think that's reflected in the numbers, quite frankly. Then the second point on VantageScore, we don't have the exact date on that. Obviously, that will be something that the FHFA announced, but we know that they're working through that, and that should actually be fairly imminent. But we don't have the exact date, and of course, we are in constant touch with FHFA on that and many other matters as well.
Okay. Thanks very much.
Thank you. As a reminder, before we take our next question, please press star one and one on your telephone keypad if you wish to ask a question. We will now proceed with our next question from Arthur Truslove from CT. Please go ahead, Arthur.
Good morning, everyone. Thank you very much for taking my questions. Two for me, please. The first one, at the half year, you talked quite a lot about productivity, and I think, if I remember correctly, you said that organic employee growth in the first half was roughly flat. I wondered if you could just comment on how that's continuing and how that's impacting or how that shows through on the productivity. Second question, you mentioned in your release and indeed your comments that the cash flow analytics business is going extremely well. Are you able to just tell us where you're getting the data from for that? And could you comment on the barriers to entry and why you're positioned to sustainably win in that vertical? Thank you.
Do you want to answer the productivity? Yeah, sure. As you know, Arthur, the quarters, we give a revenue update, and we'll update on all the aspects of profitability of the full year. We've reconfirmed the guidance for 30 to 50 basis points margin progression. Within that, there's about a 30 basis points drag from acquisition. You can see we're expecting another strong year of organic margin progression on the back of a very strong year of organic margin progression last year also. That's coming from all the things that we talked about at the half year, including labor productivity. Just to remind everybody, we've got something like 11,000 employees involved in technology, and we're becoming more productive as we're able to use better tooling, including AI tooling, in the product development lifecycle.
And we're very much on track in the next few weeks to complete the technology transformation and the shift to cloud in North America and Brazil. So we expect that to be very favorable as we go from this year to next year in terms of the freeing up of activity that's been involved in client migrations and the cloud program. So all very positive and in line with what we've said before.
On the cash flow analytics, I think that the product has been really well received because we built it trained on our own data from the access to that we have through our consumer services business as well as other test data that we've got. So I think when you look at that in terms of the benefits of having consumer-contributed data, that's a very visible example of a product that's working very well in market that's been built on that. You need very large datasets to train it. It's not only analytics, it's also things like the categorization engines that are included within that, which need to be trained on very large datasets. Of course, that's matched up with the existing products, so it's not just a sort of single product. Cash flow analytics, cash flow scores work best alongside existing Bureau data.
Generally, a new applicant to how it will work is that the data will come both from Bureau and from client. So it's a merger of the two datasets that produce the real-time scores, real-time analytics. That's how it typically works. So we're very pleased with it, and I think we're in a very strong position because of the build of the product, the datasets that we've trained it on, the reception in the market, the position alongside the Bureau. I mean, that's a pretty strong position.
Yeah. Just sort of following up from that in terms of are you sort of getting most of the data from your own interaction with consumers, or is it coming from sort of third parties that other people can interact with? And just to sneak one more in, I think in response to a previous question, you mentioned you've done some big contract renewals, and there's been some questions in the market about pricing. I just wondered how that was progressing as well.
So that's a different question. So Lloyd, did you want to?
Yeah. Yeah. I think we've talked pretty extensively, Arthur, about how our consumer platform gives us the opportunity to interact with consumers in a way that they can permission our data to be used for their own benefit. And as a reminder, the U.S. consumer business, we've got 19 million connected bank accounts now where we're able and consented to use that data to help consumers in very specific ways. So we've got quite a number of years with huge datasets that we've been able to train our understanding of cash flow analytics on, which is unique in the market, and we're expecting to continue to grow that and to be able to bring that to a broader population.
And then on the renewals, as we mentioned, that we're seeing really good traction with that. Our objective with all these renewals is to expand our contract value with existing clients. That's going well. So I think we're pleased with the progress there.
Thank you very much.
Thank you. We will now take our last question from the line of Ben Wall from Deutsche Bank. Please go ahead, Ben.
Hi, good morning, everyone. Two questions for me, please. Firstly, on the FICO direct distribution model, your guidance obviously implies Q4 organic growth of close to 8%, thereby implying no significant effects at the start of calendar 2026 from any FICO distribution changes. Do you have a view on how you would expect potential changes to U.S. mortgage scoring to affect the top line and profit growth through the rest of calendar 2026? And then secondly, it looks like H2 and probably FY2027 are going to be periods in the North America consumer business where marketplace significantly outgrows membership. Are there significant differences in the unit economics between membership and marketplace revenue we'd call out? And should we expect high growth in marketplace to have an impact on the operating leverage and margin expansion you've been delivering in that consumer business?
Just on the first point, we don't expect anybody to change in the first quarter of 2026 in the direct model at FICO because nobody is ready yet. Whilst we said in November that we expected some of the larger resellers to be able to code and get operationally ready for this model quicker than others. Some agreements have been signed, but nobody is yet actually ready to do this. So it won't happen in the first quarter, and I think it's still uncertain exactly if and when that will progress during the course of calendar year 2026. On the numbers, Lloyd?
Yeah. As I mentioned earlier, we've been seeing pricing benefit of something like mid-forties% through this year. As we go from calendar 2025 to calendar 2026, we don't see much difference in the pricing benefit that we the contribution of the pricing benefit to growth in the mortgage vertical. Clearly, volumes have got a little bit better as we've got through this year, so it's early in the year. We'll see what happens to volumes. But the aggregated difference, we're not seeing much difference. Obviously, we'll have a bit more information as we see the things progress and when we guide for the fiscal year in May. So we'll update you then, and our marketplace, we think of marketplace and membership as a single ecosystem. As we've talked to you in the past, often what you find is that they work a little bit countercyclical to each other.
So in times when credit supply is restricted, demand for membership increases. People try to get credit fit if they can't find supply. So you see these two bits of the business complement each other. So I think you're seeing that last year and then the year before when credit supply was limited. You see good growth in membership. That's moderating this year as marketplace picks up. But we expect to continue to grow the profit contribution pretty well from the combined business. And as I say, we think of it as a combined ecosystem.
That's helpful. Just if I could sneak a quick third question, if you don't mind. Notwithstanding your previous comment, Lloyd, about the Q3 revenue update and not profit update, I just wanted to check the progression on the cloud migration, and I know previously you've talked about 100 basis points of dual running cost as that transition finalizes. How quickly do those costs fall away, and I suppose conceptually, how do you think about the opportunity to deploy that dual run cost into other areas of investment versus taking the margin expansion?
So I think I said at the half year, when you think about the investment in the cloud program, it comes back through cash operating costs, but also through lower CapEx that feeds through into depreciation over time. So probably the best guide is 20 basis points a year coming out as those costs run off. And we're clearly getting good operating leverage from the growth in the business, good progression of margin that you just mentioned from the scaling of the consumer business. We have a lot to invest in.
And when you stand back and look at the combination of that, the best guide I can give is our long-term margin framework, where we think that gives us the capacity to grow our margins well in the 30-50 basis points range and to invest into all of the opportunities we have, including the investments that we're making in AI enablement, both for clients and also internally.
Cool. Thank you so much.
Thanks, Ben.
Thank you. We have come to the end of the question and answer session. Thank you all very much for your questions, and I'll turn the conference back to Mr. Bosin for his closing comments.
Thank you, everybody, for joining today, and thanks for your questions. We hope you all have a good day, and we look forward to speaking to you again in May for our full year results. Thank you.
Thank you for your participation in today's conference. This does conclude the program. You may now disconnect your lines.