Hello. Hi, good morning, everyone. Thanks for joining us today. My name is Kelsey Zhu. I'm the Financial Information Services Analyst at Autonomous, and with me on stage, we have Chris Cartwright, the CEO of TransUnion. Welcome back, Chris, for our second year at our conference.
Well, thank you. Good to be here.
So since last year at our conference, a lot has changed at TransUnion. You're expanding your global capability center, you're migrating onto the OneTru technology platform. You're almost completing the entire cloud transformation process. I believe we have a lot to talk about today, and maybe for starters, just tell us a little bit more about these transformation initiatives, and tell us what you're most excited about in the next five years.
Okay, well, very good. Well, look, maybe I'll start with just a bit of an overview so everybody's grounded about TransUnion and what we do. We're one of the largest providers of credit information globally. One of the big three, if you will. We have diversified, you know, well beyond core credit into marketing information, into fraud mitigation, into public records-based investigative solutions, into direct-to-consumer credit enablement types of products. In total, we're comfortably over $4 billion in revenue this year and approaching roughly $1.5 billion in EBITDA, if you will. And, you know, since I've run the business for the past five years, we have been in the process of transforming it to take advantage of the next level of growth. That transformation has really had two components.
The first is extending the range of services that we provide to our customers to reflect their broader work intention, if you will, beyond just credit and understanding the risk and opportunity with extending credit or insurance policies, et cetera, to different consumer segments. And the second component was changing how we get the work done. So focusing on, you know, extending our value proposition, the roots of the business and still today, far and away, the largest single area of revenue comes from selling credit data scores, predictive models, and analytic services to lenders and insurers in a variety of other market segments. There are over 14 segments that we compete in, in the U.S. market alone. You know, beyond the core credit, it would be, you know, background and employment screening.
It would include insurance, which I mentioned. It includes telecommunications, customer acquisition, and contract origination. Credit is a very powerful and predictive data set. But, you know, the intention of those customers really is not just to understand the segments of the market that they would like to access, it's to actually go and get the customers in those segments and start a healthy, profitable, long-term relationship. And that's led us to extend, you know, organically and through acquisition, into a full range of marketing services, both the digital and the physical and the traditional, if you will.
And combine that with very strong online, device identity and authentication, so that, when a customer comes to transact with a business, after successfully reaching them through our marketing services, you can authenticate that that customer is who they're representing themselves as, and mitigate the fraud that arises from the transactions. So expanding the range of services is really going from that, focus on credit to credit, marketing, and fraud mitigation, all connected by a common identity, a common consumer identity, and that's one of the strengths of our capabilities. Look, we've got very good data, high-quality data, but we have very sophisticated processes for, matching that data around a consolidated consumer identity, both physical characteristics but also digital characteristics, their devices, their device families, et cetera.
So what we hope to do is broaden this range of services and capture revenues from adjacent processes that are highly complementary to our core. Now, the way we're doing it has changed, you know, quite considerably over the last several years. Previously, you could think of TransUnion as a series of independent businesses that were part of a common family. It was very much a multi-domestic, vertically integrated type of approach. But much of what we were selling across these 30 different markets in which we compete were similar solutions, particularly in financial services. So we said, "Hey, let's have more of a global intention and architecture to our business.
And as we create the next generation of our product offerings, let's build it once and leverage it in as many different markets as we can so that we get considerably better scale." We're in the process of doing it. That meant adopting a global approach to product management on our common services, and there are six of them. You know, credit, analytics, marketing, fraud, et cetera, the ones I've been talking about. The other thing was we recognized that not all the work that we were doing in each of these 30 markets could best be done there, and that a portion of it should be pulled out and concentrated, pooled in centers of excellence around the world, where we could standardize practices, leverage management, and bring automation to bear in creating scale efficiencies.
And we've set up those capability centers in India, in South Africa, and most recently, we're scaling in Costa Rica. TU has over 13,000 employees around the world, and by the end of this year, we'll probably have 55,000, 5,200 of that 13,000 in the capability centers. And so we're getting roughly to the balance that we want between employees deployed in local markets, where they really interact with customers and understand the wants and needs of that marketplace and fulfill, and folks that you know build analytics, develop software, provide operational customer support and corporate services at scale in the centers of excellence. So, you know, that's the fulsome story. We expect this year that our growth rates in total are going to accelerate to mid-single digits+, and we're off to a pretty good start in Q1.
That's great. I have several follow-up questions, but before we dive into kind of the key business verticals, and I do want to spend some time talking about identity and fraud, which is a very attractive end market for TU. Just one quick macro question that I want to get your thoughts on, Chris. Where do you think we are in the global consumer credit cycle? We've seen credit conditions stabilizing Q1, with Q1 basically the trough and things will just start recovering from here onwards. Or what are some of the key conditions that you're watching for that would drive that recovery outside of rate cuts?
Sure. Well, you know, credit conditions vary in the different markets in which we compete. In the U.S. and, say, the U.K. in recent years, the story has been one of contraction and retrenchment, if you will. And in India, you know, across our Asia Pacific region, really significant growth, and the same is true for Latin America. Seventy-five percent of the revenues, plus, still come out of the U.S., and I think we saw stability emerging in the fourth quarter of last year, in the first quarter of this year. And that was after a pretty marked decline in origination volumes from, say, the second quarter of 2022 through the third quarter of 2023, right?
So there was a big step back, if you will, driven by very aggressive rate increases by the Fed, and increasing pressure on household financials because of higher debt service costs, higher prices for goods and services, inflation, and just, you know, fewer cost-effective options for refinancing the debt. So all of those factors came into play, plus a flight of deposits out of the banking sector into money markets chasing higher yield, and we saw a big step change reduction in origination volumes across all categories in that third quarter. I would say now, you know, we are in more, you know, steady, trough-ish, up and down type of market conditions. It's still a weakening origination environment, but we're - some categories are up a bit, and some are down a bit.
It kind of, you know, from a volume perspective, it kind of nets out there. And that's kind of our posture for running the business, our expectation for 2024. You know, we're not expecting rate cuts. We're not expecting a dramatic change in those market conditions. The biggest risks that we see currently are geopolitical risks. And look, that's actually good news, because over the past couple of years, we've grown 3% organic in very difficult market conditions where there was a, you know, material volume decline. Now that we're in kind of more steady and stable positions, we're getting the benefit of higher sales volumes that we've been achieving in the past couple of years based on our broader product suite and our expanded sales capabilities.
So we expect growth rates to tick up, which is why we've had, you know, a more aggressive guide this year than our results in 2022 and 2023 would suggest.
Got it. What are some of the leading indicators, or data you would track to kind of see that acceleration of growth again? You know, outside of rate cuts, I'm guessing it's employment trends.
Mm-hmm.
Delinquency rates. Anything else I'm missing here?
Yeah, well, sure. Look, obviously, rate cuts will help a lot because that will reduce the debt burdens in consumer households. So will mitigating inflation, right? Particularly in an environment where there still have been some decent real wage gains, particularly amongst working-class employees who have been left behind in recent decades are starting to post some nice gains. You know, beyond that, we look at unemployment levels. Unemployment is very low, and we know that behaviorally, if consumers have a job, they tend to service their debt, unless they lose that job or they have some other financial disruption that prevents them from paying back their obligations, right?
So when they're under pressure, their discretionary consumption comes down as they prioritize paying the debt, and of course, GDP growth in the economy slows, and as we all know, that's been part of the Fed's plan for roughly a couple of years now. So we'll look at interest rates, of course. We'll look at consumer employment trends and real wage gains. And we will look at bank deposits, because you've got to have deposits available requiring you know, loan origination to cover their costs in order to feed the origination machine. And those have been the key variables. Now, of course, there are individual you know, line of business metrics, like origination volumes and delinquency rates and charge-offs and the like that you pay attention to, but those tend to be you know, the metrics that result from the higher-level macro lending metrics.
Got it. Super helpful, Chris. Let's dive into your biggest segment, which is U.S. markets financial services. In the mortgage space, you know, recently, the CFPB's director have made public remarks that kind of highlighted the price increases that we've seen in credit reports and credit scores. In the last two years, we've seen outsized pricing growth in the mortgage credit file, credit data space. Curious to get your thoughts on kind of pricing outlook for 2025 onwards, and if there is a pricing ceiling you would consider for credit files and credit data?
Yeah, for sure. So, let me unbundle the dynamics within the mortgage market. Well, certainly, the mortgage market has been hard hit by higher rates. We went from, you know, in the zero interest rate environment, it was probably the best environment ever to originate a mortgage and to refinance, and the industry benefited from that. You know, with a 500 point increase, basis point increase, you know, that volume has been cut by more than 60%, I think, from peak to presumably trough, if you will, now 60%-65%.
Hopefully.
You know, so that's the first thing to understand. And then, you know, secondly, there have been multiple changes in kind of the price and volume dynamics around reports and scores, separate items, within the mortgage market. TransUnion has maintained its mortgage pricing in this market. It hasn't been flat, but our pricing practices have been very consistent, with prior years. We charge for the credit reports themselves, and then we charge a fixed percentage fee for processing whichever score is used, be it Vantage, FICO, or some internally developed score, if you will. And there's a whole variety, although FICO is certainly far and away the market leader on mortgage origination scores.
Now, as FICO and other products were to raise their prices, it benefits us because we're charging a fixed percentage fee, but we're not really initiating the price increases. Our credit products are staying comparably priced. And you saw in the director's comments, where he singled out, I think, a couple of players that provide verified income and employment and mortgage pricing, you know, raised question on some of those pricing practices, and it'll be interesting to see how that plays out itself. You know, with regard to where I think those prices go in 2025, first of all, I don't have the detailed knowledge of that because that's another company. It's not us.
But I think those companies have provided guidance, is what they feel they should realize as part of the broader bundle of report and pricing on an origination transaction. And so I think I would look to those prior comments and understand how close are we to that, and then probably ask them about what their plans are for the future, you know, once they realize that kind of value ratio. The other thing that's changed in the market, and this is again, kind of a quasi-regulatory change, is the early assessment program by the GSEs, where a mortgage originator can get a read from the GSEs, Fannie and Freddie, about whether they would purchase the mortgage based on a single credit report pull. Now, that is a program that has been piloted for several years but is now being broadly adopted by the industry.
And in our guidance, as we thought about 2024, we were very conservative in our assumptions about the volumes that would actually materialize around this prequalification, if you will, under the Early Assessment program. The volumes and the unit pricing have proven a bit favorable to what we estimated, and that's kind of what we flowed through our guidance. But I think because that Early Assessment program is both a lower cost but also is only a soft credit pull, meaning you can access the file, but that access isn't factored into a credit score negatively, it's leading to more consumer shopping, right? So there's been some volume compensation because consumers are more willing to shop because they know the shopping behavior won't deteriorate their scores.
So again, that's just another one of the several dynamics that were at play in the mortgage market, you know, this year beyond price increase concerns in the scores or the verification area.
Got it. I have a couple follow-up questions on that. We'll come back to pre-qualification in a second, but just on the price increases for credit files and credit scores, are lenders concerned about these price hikes at all, or they're not really concerned because they're passing these costs on to consumers? And are you concerned about, you know, the potential actions the regulators can take? Or, you know, are there any potential actions the regulators can take when it comes to pricing regulation for the industry?
Yeah. Well, first of all, I do think the lenders care about pricing, right? And most of the services that we offer in mortgage and elsewhere are heavily negotiated by, particularly at the high end of the market, where you've got big, sophisticated buyers. So they care about the pricing. That said, the price of a credit score, a credit report and a credit score is a very small proportion of overall loan origination costs. And so there are other parts of the cost equation that will garner a lot of attention. You know, that said, now, in terms of what the government may do in their power, I think that's a bit of an open question.
I know, you know, I know that the concerns are real, and I know that the CFPB is a powerful regulator, and one that's willing to break with tradition and pursue, you know, different approaches to solving problems. So I think we'll just have to see how that plays out. I do know from experience, and it's a core belief, that it's probably never a good idea to take relevant data out of the equation, like this tri-merge to bi-merge proposal from the FHFA. And when we looked at that, you know, having a third credit report increases the addressable market. It does promote financial inclusion as well as more accurate pricing.
And when you go to two credit reports, the folks that are excluded tend to be financially underprivileged consumers who skew Black and brown disproportionately, and we were able to show that to the industry. It has garnered a lot of interest on Capitol Hill. There's even regulation that was or there was legislation recently proposed to require the FHFA to disclose the analysis that they did before issuing their guidance to go to two credit reports from three. Now, that proposal, the implementation timeframe has been materially extended, as the FHFA is seeking broader input from industry and and further analytics. So I think the earliest that they said it would be implemented, if it's implemented at all, would be late 2025 or beyond. So again, that's another area of regulatory concern, and we're going to have to see how that plays out.
Chris, I'm glad you brought up the regulatory update. So, you know, the FHFA has announced two-part regulatory changes.
Correct.
The first part is the Tri-merge to Bi-merge migration, which you've highlighted, and the second part is the industry is migrating from the classic FICO Score-
Yeah
to a combination of FICO 10 T and VantageScore 4.0. So curious to get your thoughts around, you know, future pricing strategy for VantageScore 4.0. Are you thinking more of, you know, pricing VantageScore on par with FICO, since now it's a, you know, FHFA already mandated credit score? Or are you more inclined to price it below FICO so that VantageScore can gain share in other verticals like credit cards and auto and others? Since in my understanding, it's the same score product across mortgage, car, auto for VantageScore.
That's right. Well, look, it's probably premature to talk about, you know, the pricing philosophy on VantageScore, because the FHFA is still studying and considering, you know, the implementation path for two scores on mortgage transactions. You know, the VantageScore has different economics for the bureaus than third party, other third scores, where we would pay a royalty to them. So we've got different and superior economics, and it's really going to be market competition, I think, ultimately, that determines how we price this. But the VantageScore, VantageScore 4.0 in particular, is an extremely accurate, broad, and inclusive score. And that's something we're very proud of because we're all about financial inclusion. It's good for consumers, it's good for banks, it's good for all of us.
I think it's smart that it's finally going to be utilized in the mortgage origination process.
Got it. Kind of coming back to the pre-qualification topic, I think previously, whenever, you know, we talk about Tri-merge to Bi-merge, the consensus from the industry is most lenders will likely stick to Tri-merge, instead of, you know, rerouting their models and now taking two files instead of three. However, what we've seen in Q1 is that the FHFA has allowed lenders to use a single bureau file to assess preliminarily, you know, the creditworthiness.
Early assessment.
Early Assessment of a new, you know, potential borrower that, who walks in the door. The pricing pass-through and the volume trends we've seen with this new product is actually way above the industry's expectations.... Does that change your view when it comes to, you know, volume expectations if the Tri-merge to Bi-merge implementation does go through? Do you believe lenders will still stick to a Tri-merge report instead of, you know, opting for a Bi-merge option since it's cheaper, potentially?
Yeah, well, look, again, I would just reinforce that there's a lot of uncertainty as to whether the Bi-merge will ever come about. I think it's a difficult position for the regulator to take an action that is going to harm financial inclusion or disadvantaged consumers already, right? I think many in Congress have spoken out and said: "Why are we doing this? It doesn't seem like that good an idea, particularly since reports and scores are a very small part of overall origination costs." Now, in terms of pre-qualification and the data and scores that are utilized there, you first have to understand that there are and have been a variety of practices at the qualification stage. It wasn't like it was all Tri-merge. Some originators certainly pulled three, some pulled two, some pulled none.
So if you have an ongoing banking relationship, you can go to your bank, and they'll probably start the qualification process because they know you, right? But, you know, with this early assessment program, they can get a nod from the GSEs as to whether they would purchase the loan or not. They may pull one, or they may pull two, because they don't want to not go forward originating a mortgage because one bureau's score was too low to get approval by the GSEs. And then on top of that, as I was mentioning, because these are soft credit pulls at the qualification process, consumers are more willing to shop mortgage rates. So there's some further volume offset to this idea that it's all going to go to one score at origination.
Got it. Got it. Maybe just one last question for the financial services vertical before we switch gears to talk about emerging verticals. So Fintech and consumer lending has been a key growth driver for TransUnion historically. I was wondering if you could tell us a little bit more about your outlook for this sector and this segment in 2024 and 2025, and if we do see a macro recovery in the second half of the year, will Fintech lenders basically be the first to recover?
I would expect so. I mean, look, Fintech is hunkered down right now, and mini Fintech, the space generally is struggling to get funding, to get liquidity to originate, right? If we have a decline in rates, you're going to see that flow into Fintechs and origination volumes will pick up substantially there. And that's good news, right? Because, you know, it's more competition, it's more access for consumers. We're not, again, we're not running our business or communicating growth expectations, anticipating any rate cuts, right? We're in a higher for longer and no rate cut posture, right? So I wouldn't expect that kind of recovery. Although we are seeing some improvement in loan marketing generally, but it's very modest, right? This is more a kind of steady trough-like, like we were describing earlier, environment.
Got it. Let's switch gears to talk about emerging verticals. In that segment, the biggest sector is insurance. This is an area where I think a lot of investors are trying to dive into and understand a little bit better right now. For this segment, I was wondering if you can first tell us a little bit more about how insurance companies use TransUnion's data and products and services. What kind of competitors do you usually see in this space? Because as I understand, it's not the usual suspects. What kind of growth rates should we expect in a more normalized environment?
Yeah. So, like in lending, but to a greater degree, insurance, credit information is one permitted type of information for evaluating the risk of a consumer and the desirability of issuing them a policy. And typically, what an underwriter will do is, well, first they'll look at their existing claims and coverage. If they're, you know, not new to the market, they'll review any insurance claims that they filed over their history, and those two information sources are provided by, by either LexisNexis or Verisk, typically. They'll look at credit, because credit information is very predictive of driving behavior. Then they'll also look at their motor vehicle driving records. Now, that information, the MVRs, typically comes from a state-level report, and that state-level report aggregates all of the driving violations that happen in municipalities, if you will.
We have a product that both provides the MVR, but also directly sources the municipal-level information, which typically is more current and broader and richer than what gets to the MVR. Now, in recent years, as states have been under revenue pressure, they've been increasing the prices of the MVR. So that means the underlying DriverRisk information, that's the name of the product that we get from the municipal level, has favorable economics, and it's been rapidly growing. The other thing is, you know, if I, if I were to get a violation in a local county or municipality, I can go to traffic court and maybe beat the rap by hiring a smart lawyer, or I can maybe do a defensive driving course, and then that's no longer included on the information that goes up to the state level.
It would be included in our policy, and it is permissible for an insurance company to rate and price their policy based on the existence of that violation. So it's also more complete data. So it's claims and coverage, it's credit, and it's driving history, and we provide two of those three elements. Now, all of the bureaus also provide credit information into this origination evaluation mix, if you will. We think we're the largest provider of that data.
Got it. In terms of kind of medium-term growth rate expectations in a more normalized environment?
Historically, as you know, it's been a high single and sometimes low double-digit grower. It struggled the past couple of years because of the struggles in the insurance industry around originating new policies. They haven't been profitable. They've needed to get price increases. They've succeeded in getting most of what they need, and so some of them, and some of the large carriers have talked about this recently, are returning to customer acquisition, and their marketing spend, you know, is going up. And so that's going to help our business. Now, we support the full ecosystem, and we think it's going to be a couple of years until the ecosystem is back, stable, and growing.
But we're going to grow faster this year, probably mid-single digits or perhaps better than we did in the prior years, and this is step one in the recovery of growth in that segment.
Got it. I think some of the large carriers and, you know, insurance data providers have talked about a second half 2024 recovery. So that's pretty much in line with your-
Yeah, I would-
Expectations.
The conditions have improved, and I expect them to continue to do so quarterly go forward.
Got it. Super helpful. Before we dive into Neustar, just one quick question on the whole ID and fraud market space. You know, this is a very large and fragmented market-
Yes.
And with Neustar and Sontiq, you're well positioned in, in this, you know, marketplace. Before the acquisition, what kind of drew you towards the whole ID and fraud space? And, you know, in your view, what kind of medium-term growth rate should we expect for the whole market? And are there, you know, pockets of growth that you're particularly excited about?
Yeah. So strategically, you know, our extension from a core credit analytic provider into the marketing space and into fraud is very much bleeding into adjacent markets, adjacent work processes, if you will. And over time, we went from, you know, providing that credit information strictly for market understanding and risk assessment to providing the initial list of consumers that a business could potentially market to because they qualified based on their credit risk profile. So we always had a role initiating the marketing process for loans and insurance policies and other policies, right? And we also, because we have very clean and authoritative and current data, we could often cleanse a corporation's consumer records before they initiated a marketing campaign. So we kind of had our foot in the water, so to speak, in the marketing space, also in fraud.
As e-commerce and phone commerce increased, we would provide authentication services based on our knowledge of what was in a consumer's wallet or what existed about a consumer in the public records. So the questions, the KBAs that you get asked online or over the phone to verify your identity, those represent the initial chapters in our extension into fraud. So the intelligence of the credit asset led us into fraud, led us into marketing. But when we pulled back the lens and we said, "Okay, we're supporting banks, we're supporting insurers, and their broader intention is to acquire customers that are attractive economically and to manage those relationships over a full life cycle. What do we need to provide to participate in the entirety of that value," if you will?
That led us from credit into marketing firmly with the acquisition of Neustar, which in combination with TU, has very good marketing data, demographic, psychographic, behavioral, intent, and activity information that can be used to further segment the lending prescreen list of consumers, and also identify how you can reach these consumers, what media properties have the characteristics of the consumers you're trying to reach, and then how do you plan for it on an analytic basis, and then measure the outcome of that marketing spend? And so by acquiring and then converging these datasets and these services on a common platform, we think we can capture that full workflow.
Now, of course, if a company's marketing efforts are successful and they engender a transaction, you see an ad and you want to engage online, or you want to call the call center and engage, you're going to have to authenticate yourself as a consumer, and that's where the fraud aspect of this comes in. We have not only, you know, knowledge about what you carry in your wallet or how you show up in public records, but we also have a broad device history through our acquisition of iovation, and we're able to track, you know, all of our devices back to the individuals and know whether those devices committed fraud in the past, but also know whether the devices are behaving in a kosher way or a non-kosher way on the website as you interact with the marketing offer you may have received.
So we view credit risk assessment, marketing, and fraud as a combination of complementary services unified by the consumer identity. And we've got market-leading consumer identity data and resolution capability, and that's what we've brought together on OneTru, and that's the result of the acquisitions that we did at the end of 2021.
That's super helpful. And talking about Neustar, which is, you know, kind of the investor focal point for the last couple of years. In 2022 and 2023, we saw mid-single-digit type of revenue growth, and I think in 2024, you're guiding for a very similar range.
Correct.
Is the medium-term goal still to generate low double-digit type of growth for Neustar? And if so, what is the path to achieve that accelerated growth rate?
Yeah, look, the one thing we got wrong in the Neustar acquisition was market timing. And, you know, the business grew 8% in the year of acquisition, was actually accelerating to 9% in the second half. And then we entered into a very different macro environment where corporations and marketers have been consistently belt-tightening. And so while we've been selling more and more product, be it Neustar, you know, marketing or communication solutions, the volume of activity in the space of advertising and marketing campaigns in general has been diminishing. In fact, you know, recently, Gartner released its annual survey of CMO sentiment. They talked to 400 different marketing officers, chief marketing officers for U.S. businesses. And over the past couple of years, their spending as a percent of revenue has gone from 11% plus to 7.7%.
And during this period, they've held the advertising spend as a % of revenue constant. So that means material dollars have been taken out of agencies and various tool providers. So it has been a, you know, tougher economic sledding, if you will, in this environment. That said, we have continued to grow mid-single digits across these businesses, and we've done a heck of a lot of product integration and innovation. And look, that's a challenge because if you don't do the fundamental reengineering to consolidate your various products and your various feature functionality onto a common platform, you never get the scale that you're hoping to get, right?
It's been a couple of years plus of heavy engineering to create a single marketing suite that has the tip-to-tail functionality you need to acquire and manage customer relationships, and running on the OneTru platform. That work will be done in the early fourth quarter of this year, as well as doing the same thing on the fraud side, where we consolidated all of our different fraud tools between the U.S., the U.K., different points around the globe, and iovation all have been moved onto the OneTru platform and rationalized. One, we're saving money, which is important to achieving the, you know, $80 billion plus in synergies. We're greatly simplifying the infrastructure, which is good for cybersecurity, but most importantly, a simplified infrastructure with broader feature functionality is going to help us innovate faster go forward.
That's why I feel like we're really going to be able to accelerate growth because the product's going to be better. We know we've invested a lot in selling, and we're doing this in a tough environment, and it won't always be this difficult.
Got it. And I think one bright spot of Neustar is Trusted Call Solutions, which we saw 60% growth in 2023, and you're guiding for 40% growth in 2024. So what's driving this impressive growth that we're seeing? You know, which verticals have you had the most success with, and which verticals are you looking forward to expand into?
Yeah, so TrustedCall is the, you know, the next generation access point solution within Neustar's communications business, and that's a mix of services. Some of them are heritage services that are late in their product maturity cycle. Things like, you know, carrier line provisioning or, Caller ID CNAM lookup. Those are flat to declining businesses. On top of it, and using the data that those businesses produce, we were able to create TrustedCall solutions and Branded Call Display, which helps businesses cut through all of the robocall noise, all of the spoofing and other fraudulent attempts, and authoritatively declare who they are. And so you can really think of those services. First, the heritage services provide the dataset on which the newer services are created, and the newer services should be thought of as either improving marketing effectiveness or reducing fraud.
So they improve marketing effectiveness. When a brand makes an outbound call, it can show itself, it can show its logo, it can even state the purpose of the call. We'll evolve to the point where you can have a picture of the call center worker who's reaching out to a customer. We can demonstrate that that greatly improves customer pickup rates. So it's super economical, and it reduces fraud with consumers, right? On the inbound side, when a customer calls in, we can authenticate the customer's number, and we can authenticate that that number is actually engaged at that point in time. That eliminates spoofing, and spoofing is a big, a big part of call bank fraud right now. Frankly, this is a global problem. I mean, we've, you know, we're here in the U.S. We experience this every day.
Many of us, most of us, don't even pick up our phone if we don't recognize the number because we know it's a political campaign, or it's a telemarketer, or somebody we don't want to deal with, or a fraudster. But around the world, in different markets where we compete, there's the potential for the product as well, and we will be expanding it globally, and we're super excited about the potential.
Got it. So for emerging verticals, overall, we have insurance where growth rates kind of range between mid-single digits to potentially low double digits.
Mid to high to low, yeah.
To high to low double digits. For new starts, kind of similarly, we saw mid-single-digit type of growth, but in the medium term, we're hoping to achieve low double-digit type of growth. Putting that all together, and there's several other verticals that we don't have time to talk about today, like telecom, tech, e-commerce. Putting all of that together for emerging verticals as a whole, how should we think about the long-term sustainable and rate growth?
Yeah. Yeah, I don't know if we've updated our guide on that. I mean, look, we've been conservative in our guide this year, and a lot of investors have said: "You know, you're guiding low single digits for emerging, even though you performed better in the quarter." And so I would first. If that's kind of the part of the direction of your question, I would just say that, you know, we are being purposefully conservative in our guide in 2024 because there's been so much volatility over the past couple of years, and we think, you know, giving investors a floor, a greater degree of certainty is important. Now, fortunately, in the first quarter, we materially outperformed that, and we increased our guidance to mid-single digits plus, if you will. And we still feel very comfortable with that.
You know, that said, we're confident emerging will grow mid-single digits plus over the long term. Hopefully, it's more on the plus side. At this point in time, we're not reconfirming the long-term growth algorithm because there's so much uncertainty in the market. We're really just focused on this year, and as we look to next year, you know, if things have stabilized, we will probably come back out and refresh that at some point.
Got it. I think switching gears to talk about international markets, and India is obviously the biggest growth driver in that space. And your India revenues grew almost 30% CAGR in the last five years. And we have, you know, the core consumer credit revenues that grew 23% in the last five years. And we have, you know, the nontraditional credit bureau business, the commercial, the FinTech, the consumer interactive revenues, that actually grew faster. I think it was 36% CAGR in the last five years. I was wondering, you know, kind of looking forward to the next five to ten years, could you talk a little bit more about the key growth opportunities in India, particularly in the nontraditional credit bureau business?
Well, last quarter, you know, we highlighted the basics of our business and, of course, the Indian economy and the tremendous growth opportunity there because of the demographics and the outsized economic growth. Historically, most of our growth has been based around providing credit information and analytics around the four core lending categories: you know, card, consumer loans, autos, and mortgages to a degree. I think there's plenty of runway for growth in those areas just because of the basic population and GDP-
Mm-hmm.
Growth dynamics. That said, we are launching into agribusiness, which is a very large lending category in India, currently not served. We're also see great potential in microloans, and over time, we think we will build those into very substantial businesses. Now, this is all within, you know, the lending portfolio, if you will. We're going to push our credit into different verticals, as, you know, appropriate from a regulatory standpoint, because we know the information is predictive. And then we're going to bring on additional services into India, particularly as we migrate the Indian Bureau onto the OneTru platform. So we want to take the suite of marketing services that we have in—from Neustar in the U.S., running on OneTru, and take it globally. India will be one of the markets we prioritize to move in.
Now, different markets have different data availability around demographic or behavioral or whatever it may be, right? So you have to... and different regulatory practices too. But there's definitely opportunity to bring our marketing services and our fraud mitigation services, as well as our broadened suite of analytic capabilities in OneTru to India, to the U.K., to all of our markets globally. But the key for us in India is going to be, continue to add all the value that we do, but extend our, our verticals and our product lines to take full advantage of that opportunity.
That sounds very exciting.
It is. It's, it's great.
I know we're coming up on time, and maybe just one last question from me today. Talking about capital allocation, currently the goal is to use excess cash to pay down debt, which you've talked about. Once you hit that, you know, kind of 3 times leverage target, what are the key priorities for returning values to shareholders after you hit that leverage target?
Yeah, well, look, the best thing we can do to create long-term shareholder value is compound the top line organically, high single digits or high single digits plus, right? And so we're very focused on doing what's necessary to integrate all the acquisitions to change the value, to broaden the value proposition in the market in order to attain that level of top-line compounding. We're also very committed to having industry-leading margins, and you're starting to see some of the benefits on the margin side from the tech modernization, but also the migration of work to our capabilities centers, right? So that's job one.
You know, once we get our leverage ratio down to a more comfortable level in this current interest environment, you know, we will again be active in looking for ways to, you know, buy unique and differentiated data sets or functionality that's very complementary to the risk marketing and fraud mitigation value prop that we're trying to bring to certainly lending insurance, but to all the 14 verticals that we serve, in the U.S. and, and to, you know, the various countries we compete in around the world.
Got it. This was all super helpful. Thank you so much for sharing with us today, Chris. Really appreciate this.
Pleasure. Yeah, thank you.
Thanks to everyone for coming to the session.