TransUnion (NYSE:TRU) Q1 2023 Earnings Call Transcript

TransUnion (NYSE:TRU) Q1 2023 Earnings Call Transcript April 25, 2023

TransUnion beats earnings expectations. Reported EPS is $0.8, expectations were $0.74.

Operator: Good day, and welcome to the TransUnion 2023 First Quarter Earnings Conference Call. All participants will be in a listen-only mode. Please note, this event is being recorded. I would now like to turn the conference over to Aaron Hoffman, Senior Vice President, Investor Relations. Please go ahead.

Aaron Hoffman: Good morning, everyone, and thank you for attending today. Joining me on the call are Chris Cartwright, President and Chief Executive Officer; and Todd Cello, Executive Vice President and Chief Financial Officer. We posted our earnings release and slides to accompany this call on the TransUnion Investor Relations website this morning. Our earnings release and the accompanying slides include various schedules, which contain more detailed information about revenue, operating expenses and other items, as well as certain non-GAAP disclosures and financial measures, along with the corresponding reconciliations of these non-GAAP financial measures to their most directly comparable GAAP measures. Today’s call will be recorded, and a replay will be available on our website.

We will also be making statements during this call that are forward-looking. These statements are based on current expectations and assumptions and are subject to risks and uncertainties. Actual results could differ materially from those described in the forward-looking statements because of factors discussed in today’s earnings release, in the comments made during this conference call, and in our most recent Form 10-K, Forms 10-Q and other reports and filings with the SEC. We do not undertake any duty to update any forward-looking statement. With that, let me turn the time over to Chris.

Christopher Cartwright: Thanks, Aaron, and let me add my welcome and share our agenda for the call this morning. First, I’ll discuss the macroeconomic conditions in TransUnion’s markets around the world. Then I’ll provide an overview of our strong first quarter financial performance. I’ll also review the continued progress with Neustar to accelerate revenue growth, achieve targeted savings, and leverage its technologies across the enterprise. Finally, Todd will detail our first quarter results, along with our second quarter and full year guidance. Inflation in our developed markets around the world remains elevated although its signs of subsiding as central banks have raised interest rates to slow consumer demand and return to long-term inflation targets.

Higher prices and higher rates have pressured consumer finances and economic growth has slowed as a result. However, thus far, developing economies have been less impacted by these factors. Lending volumes in our emerging markets as India, Asia Pacific, South Africa and LATAM have remained strong. In the U.S., consumers remain healthy relative to historical norms with modest spending growth, high employment levels and some real wage increases. Credit performance metrics have continued to normalize and remain within the range of pre-pandemic and historical levels. Against this backdrop, we’ve seen increased caution from banks. While their financials are still strong and consumer demand for credit is healthy, banks are concerned that their markets might slow further and as a result have tightened lending standards, reduced marketing and originations and increased loss reserves.

Thus far, we’ve seen some limited impact on our business from these changing conditions. However, like our customers, we remain cautious about the rest of 2023. And I note that the recent failure of a few lenders should not cause the lending system to contract materially. We are confident that even if certain institutions slow their pace of origination, other lenders will take advantage of the situation to garner new business and satisfy strong consumer demand. And given this confluence of concerns and despite our outperformance in the first quarter, we will maintain our full year guidance at this point to account for market uncertainties. Todd will walk you through the details later of our second quarter and full year guidance and expectations for each of our markets and verticals.

Now turning to first quarter highlights, we beat our guidance on a revenue adjusted EBITDA and adjusted diluted earnings per share. Our financial services vertical performed slightly ahead of our expectations down 1% organically and flat excluding the impact of mortgage. Auto lending increased due to the easing of supply chain constraints and strong new business wins. Card was flat despite comparing to continued very strong originations for over a year. Although consumer lending declined, it also face challenging comparisons over exceptional growth last year and mortgage was down mid-single-digits, but better than expected U.S. emerging verticals delivered moderate growth in line with our expectations, given the comparison to strong year ago performance.

Importantly, we’ve seen early signs of the temporary issues we faced in tenant and employment screening and insurance are abating setting us up for a good full year. Our International segment again grew constant currency revenue by double-digits for the eighth consecutive quarter, led by 32% growth in India and double-digit growth in Asia Pacific, Africa and Latin America. We continue to outperform our underlying markets as a result of strong lending growth, market share gains and our successful innovation. As I’ll detail in a moment, we had another good quarter integrating Neustar and continue to see strong customer adoption of our platforms and solutions. Finally, we continue to point our free cash flow toward reducing our debt levels and in the first quarter, we prepaid $75 million of debt with intent to make additional prepayments in the second quarter and the second half of the year.

Neustar delivered 3% of revenue growth largely in line with our expectations as we compared against last year’s strongest growth quarter. For the full year, we continue to expect high-single-digit revenue growth at the 32% margin fueled by the revenue growth and achieving our aggressive integration cost savings. We have line of sight to the revenue growth based on our strong bookings and the momentum achieved by joint sales teams aligned by our market verticals. We also enjoy a favorable portfolio effect from the broad range of Neustar Solutions. Our customers are challenged by compliance with privacy and regulatory requirements and also increasing focus on cost management and vendor consolidation, all of which play to our strengths as a scaled platform provider of identity-based solutions.

Our solutions are highly relevant regardless of the macro backdrop as we help customers unlock value in their first-party data, reach consumers reach consumers in a cost-effective manner, measure the return on their marketing investment, mitigate fraud and improve communication effectiveness. We see this relevance playing out with meaningful new business wins across our verticals including a top 10 traditional lender, a large fintech player, a major auto manufacturer and a large used vehicle retailer. Now this next slide illustrates the key Neustar integration and innovation initiatives. We made significant progress on each with meaningful path to deliver more value as we complete each initiative. As we execute our plan, we’ve identified substantial incremental opportunities for cost reduction and commercial success.

On previous calls, we’ve shared important progress on many of these initiatives. Infrastructure savings have been driven by data consolidation, rather data center consolidation in the migration of Neustar’s cloud computing to the Google Cloud which supports improved performance at a lower cost. This enables a stronger cyber security stance, the opportunity to eliminate redundant tools and cost savings. We’ve also made meaningful progress and are already seeing valuable lift and cost savings from combining TransUnion and Neustar data. Underlying the integration of Neustar is the combination of its data assets with TU’s, bringing our data together on a common tech platform has given us 15% greater coverage of all adults in the U.S., a 10% increase in email coverage and a 15% improvement in telephone number coverage.

At the same time, by bringing more data sets in-house, we’re realizing cost reductions and superior performance. Work is underway to bring together additional data sets, like offline household data, real-time digital interactions and phone signals, which should yield incremental uplift in performance when we complete this year. Importantly, all of our US verticals and all product types benefit from these improvements. Greater value in our data assets is achieved by connecting them into a more complete and powerful identity graph where each company previously had its own identity graph per product, we now have one that performs considerably better. With this work well, underway, we’re beginning to deploy this single identity graph across all products.

I’ll offer you some compelling examples in a minute. At the same time, bringing all of our data together is just start. Underpinning all this progress is a single enterprise data and analytics platform, OneID. We benefit from improved data ingestion speeds in the ability to quickly link and match the data. We can also deliver superior analytics rapidly to our customers. This is all done in a highly privacy compliant manner, to support both regulatory and customer-specific requirements. From there, we made progress in expanding and improving our customer data analytics enablement. We’re migrating the Prama platform onto OneID where it will combine with Neustar’s clean room functionality to create the next-generation of advanced analytic capabilities.

All this work has allowed us to consolidate products into integrated platforms like the TruAudience marketplace, enhanced call center capabilities and the combination of all of our best-in-class fraud solutions. Let me spend some time on the significant progress we’ve made in aligning relevant TU and Neustar platforms. In the first quarter we announced a key milestone in the integration of Neustar with the launch of TruAudience marketplace. We married the expansive consumer data in identity resolution, audience building and targeting capabilities of TU and Neustar into a comprehensive and interoperable site of privacy-enhanced marketing solutions. Additionally, the products now offers closed-loop marketing measurement and attribution and credit informed marketing solutions, which weren’t previously available.

TruAudience enables clients to improve marketing effectiveness by increasing audience reach, improving the quality of consumer insights and leveraging more accurate and up-to-date identity data across all marketing and measurement activities. Clients have reported seeing a 40% reduction in duplicate CRM records and a 30% increase in conversions from higher performing audiences. TruAdience now leverages the proprietary data ecosystems of TU and Neustar spanning 200 authoritative data sources including data from over 16 billion monthly phone signals offline consumer data covering over 125 million US households and data spanning 10 billion real-time digital interactions daily. Additionally, TruAudience combines TransUnion’s direct media and technology partnerships across the television and streaming media world with Neustar’s integrations across the Walled Garden and digital media ecosystem to ensure clients can reach and measure consumers across the channels that matter most.

This includes partnerships with over 250 leading media owners and publishers networks and more than 100 advertising data management and cloud providers, as well social and retail media platforms, ad servers, demand-side and sell-side platforms, and customer data platforms. In Communications, our Innovative family of trusted call solutions, which includes branded call display and caller name optimization continues to provide differentiated growth. While landline caller ID continues to decline, we are more than offsetting that headwind with considerable growth in TCS, which delivered a very strong first quarter and is expected to grow almost 50% in 2023. In the first quarter, we onboarded one of the largest retailers in the US to our trusted call suite.

A key part of the growth is the expansion of Branded Call display, which should triple in size this year and then represent about half of all TCS revenue. We’re in the early days of penetrating the market with Branded Call, but we are scaling rapidly. We quadrupled the number of customers using this solution over the past year. In addition to the impressive TCS growth, we continue to realize considerable cross-sell revenue from call center solutions, most notably with financial services and insurance customers. Further, we are creating a blended phone append that will lead to best-in-class right party contact solutions, leveraging our contact center and specialized risk data assets. And in fraud, we continue to push toward the completion of a single, integrated platform that marries all of our best-in-class solutions including those acquired from Neustar.

Early testing has shown substantial lift in match rates reduction in false positives and an increase in identification of fraudulent activity driven through the combination of TU and Neustar data. We expect to have this fully formed offering in market by the end of this year. Just as we’ve integrated and redefined our solutions, we also announced an important rebranding of our global business solutions. We organize thousands of existing B2B products and dozens of brands into seven solution lines globally defined by business need and unified by a promise to deliver a true picture of consumers, a robust multi-layered and actionable view of each person stewarded with care. You’ll find explanations of each of the new brands on this slide. TU’s rebranding clarifies our product offerings and better demonstrates our expertise in our heritage and new markets, while also making it easier for customers to find what they need.

After almost 20 acquisitions in the last decade, this rebranding is a logical step in the company’s evolution. We can now offer more powerful consumer insights than ever before allowing us to meet the needs of our customers in more ways and at a much deeper level. I want to conclude by noting that we recently published our annual sustainability and diversity reports, which can be found on our investor relations website. In both cases, you will find expanded disclosure and meaningful progress against important topics like diversity representation among our associates and more comprehensive ESG reporting. I encourage all of our investors to read these important documents. As a reflection of our progress News Week recently named TransUnion one of the 500 most responsible companies.

That wraps up my comments on our market conditions, first quarter performance, progress in integrating Neustar, our global rebranding in our ongoing commitment to diversity in ESG. Now, Todd will provide you with further details on our first quarter financial results, second quarter outlook and the full year 2023 outlook. Over to you Todd.

Todd Cello: Thanks, Chris, and let me add my welcome to everyone. I’ll start off with our consolidated financial results. First quarter consolidated revenue increased 2% on both a reported and organic constant currency basis. Argus added about two points to inorganic revenue, while foreign exchange was a two point headwind. Our business grew 2% on an organic constant currency basis, excluding mortgage from both the first quarter of 2022 and 2023. Adjusted EBITDA declined 4% on a reported basis and was flat on an organic constant currency basis. Our adjusted EBITDA margin was 34.3%, down 200 basis points compared to the year-ago quarter, as we had expected. Excluding the impact of Argus, our organic constant currency, adjusted EBITDA margin was 35.4% or down about 90 basis points year-over-year.

First quarter adjusted, diluted EPS declined 13% as a result of lower adjusted EBITDA, and higher interest expense. Before I get into US markets’ results, a reminder that we are now reporting Neustar within our vertical market structure to drive accountability and internal reporting clarity. And we will discontinue providing standalone Neustar reporting at the end of 2023. Now looking at segment financial performance for the first quarter, US market’s revenue was up 3% compared to the year-ago quarter. Organic revenue was flat in the quarter and was up 1%, excluding mortgage. Adjusted EBITDA for US markets declined 8% on an as reported basis and declined 6% on an organic basis. Our adjusted EBITDA margin was 32.2% for 33.9% on an organic basis.

Financial Services, revenue grew 5% as reported and was down 1% organically, excluding Argus. Excluding mortgage, organic revenue growth was flat despite comparing to a 21% growth rate in the first quarter of 2022 implying a 10% two year growth CAGR. Looking at the individual end-markets, consumer lending revenue declined low-double-digits against a mid-30s growth rate in the year ago quarter. As expected, lenders are pulling back and investors continue to be selective, but activity remains solid relative to historical levels, particularly in the BNPL space where we continue to see strong activity and new entrants. We are in an advantage position to focus on strategically extending and expanding existing relationships. The breadth of offerings that we can provide allows us to further penetrate existing accounts with solutions like fraud mitigation, marketing, call center management and advanced analytic capabilities.

Many of these capabilities are the results of recent acquisitions, especially Neustar. Our credit card business was flat against mid-20s growth in the prior year quarter. Issuers continue to market with a focus on gaining top of wallet share with consumers, helping to drive origination activity. They are also benefiting from our relationships with larger firms that are aggressively utilizing digital marketing. Our auto business delivers 8% growth in the quarter on the strength of continued share gains, strong pre-qualification volumes, the impact of cross-selling Neustar marketing and call center solutions in addition to improving market conditions. For mortgage, revenue was down only 6% in the quarter, despite origination volumes falling about 47%.

The volume declines were offset by pricing, strong HELOC and marketing activity. At this point, refinancing activity is almost non-existent while the purchase market has maintained decent origination levels and been helped by recent, so modest declines in mortgage rates. On a trailing 12 month basis, mortgage represented about 6% of total TransUnion revenue. For 2023, we now expect the inquiry market to be down roughly 20% and our revenue to increase in the mid-20s. In addition to slightly improved volume expectations, we are seeing a higher share of volume from smaller, end-user customers, which are facing higher third-party pricing markups this year. Let me now turn to our emerging verticals, which grew 1% in the quarter, despite a tough year ago, comparison.

Insurance delivered another good quarter. Importantly, we are seeing carriers receive approval for rate increases and beginning to pass those increased prices to consumers, which is driving a recovery in shopping activity. At this point, insurers have largely limited their marketing activity to brand-oriented campaigns and have yet to substantially reactivate personalized marketing to drive new applications. We remain confident that this recovery will come to fruition over the course of the year and improve the already attractive growth for our insurance vertical. Tenant and employment screening growth again improved as a result of early signs of a recovery in the tenant market, with month-over-month declines in rental rates, increases and move rates, and an increasing supply of rental units as new construction comes online.

This growth was somewhat offset by a softer employment screening market as employers take a more cautious approach to hiring. Our Media vertical declined in the quarter, as a result of some market softness. Despite that, based on the new business wins we’ve achieved, we continue to expect the vertical to deliver growth for the full year. Consumer Interactive revenue declined 5%. Adjusted EBITDA margins were 49.2%, up 310 basis points as a result of reduced advertising spending. Our Direct business continues to decline as we recalibrate our marketing approach to focus on higher value consumers. Thus far, we’re seeing good returns on the revamped tactics with better-than-expected, customer acquisition stats at attractive cost to acquire. In our Indirect business, we grew in the first quarter on the strength of new business wins and a modest improvement with some of our partners that offer paid monitoring.

Importantly, we continue to make progress fully integrating Sontiq into our global operating model, which we believe will facilitate increased cross-sell opportunities with existing customers and continue to provide us differentiated features in the market. For my comments about International, all growth comparisons will be in constant currency. For the total segment, revenue grew 12% with four of our six reported markets growing by double-digits. Adjusted EBITDA margin was 43.6%, up 80 basis points as a result of our strong revenue growth. Now, let’s dig into the specifics for each region. In the UK, revenue declined 8%. Excluding the revenue related to one-time contracts including with the UK government, we would have grown about 2% in the quarter despite a challenging macro environment.

We continue to see strong demand for consumer loans and large banks staying active to satisfy this demand. At the same time, we have seen good performance for our affordability in trended credit solutions, to help lenders assess portfolio risks. Our Canadian business grew 9% in the first quarter, driven by material business wins with a large bank, a major fintech lender and deepening credit use case in adjacent markets, which contributed to offset a generally softer demand for consumer credit. In India, we grew 32%, reflecting strong market trends and generally healthy consumers. The diversity of our portfolio remains a real strength in India. We saw meaningful growth in both Consumer and Commercial Credit markets, as well as from fraud, employment screening and direct-to-consumer offerings.

In Latin America, revenue was up 11% with broad-based growth across our markets, including another quarter of double-digit growth for our largest market Columbia. While macro conditions have softened in the region, our teams continue to win new business in financial services, particularly with fintechs and neo banks, insurance, government and telcos. We also continue to see strong adoption of credit vision and our fraud solutions. In Asia Pacific, we grew 25% from continued good performance in Hong Kong, driven by new business with fintech players and exceptional growth in the Philippines, which is now running well ahead of pre-COVID levels as the economy has now fully re-emerged from COVID and resumed its strong growth trajectory. Finally, Africa increased 14% based on broadly strong performance across the portfolio, and the region despite a challenging environment in several of our largest markets.

In South Africa, core business growth was augmented by continued strength in fast-growing verticals like telco, and gaming. Outside of South Africa, we continue to see very strong revenue growth in markets like Kenya and Zambia, particularly with micro and fintech lenders. We ended the quarter with roughly $5.6 billion of debt after prepaying $75 million in the quarter. That left us with $439 million of cash on the balance sheet. We finished the quarter with a leverage ratio of 3.8 times. At this point, we intend to prepay additional debt in the second quarter and the full year. Looking back, since we announced the acquisition of Neustar in September of 2021, we’ve prepaid about $1.3 billion of debt. And to reiterate our previous comment, at this time, we have no intention to pursue any large-scale acquisitions and even smaller bolt-on acquisitions are not currently in our plans.

We are focused on integrating, and maximizing the growth potential of Neustar, Sontiq and Argus. That brings us to our outlook for the second quarter. In the second quarter, we expect about one point of headwind from FX on revenue and adjusted EBITDA. For revenue, there is no impact from acquisitions. We expect revenue to come in between $948 million and $958 million or flat to up 1% on an as reported basis and up 1% to 2% on an organic constant currency basis. Our revenue guidance includes an approximate one point tailwind for mortgage, meaning that we expect the remainder of our business will be flat to up 1% percent on an organic constant currency basis. We expect adjusted EBITDA to be between $330 million and $335 million, a decrease of 4% to 6%.

We expect adjusted EBITDA margin to be down 200 to 220 basis points as a result of the impact of revenue mix. We also expect our adjusted diluted earnings per share to be between $0.81, and $0.83, a range of down 15% to 18%, a result of lower adjusted EBITDA and higher interest expense. Turning to the full year, most of our guidance remains largely unchanged. We expect about one point of headwind from FX on revenue and adjusted EBITDA. For revenue, we anticipate less than 1% of benefit from the acquisition of Argus. We expect revenue to come in between $3.825 billion and $3.885 billion or up 3% to 5% on an as reported basis and in organic constant currency basis and up to 2% to 4% excluding the impact of mortgage. For our business segments, on an organic basis, we expect US markets to grow mid-single-digits, but low-single-digits without the impact of mortgage.

We anticipate Financial Services to be up low-single-digits, and down low-single-digits excluding mortgage. While the overall guidance for Financial Services is unchanged, we have modestly reduced our expectations for Consumer Lending and Card to reflect an uncertain lending environment. We expect emerging verticals to be up mid-single digits. We can see the benefits of our diversified portfolio playing out and allowing us to maintain our full year revenue guidance. We now anticipate that International will grow, low-double-digits in constant currency terms, up from high-single-digits and driven by ongoing strength in emerging markets and we continue to expect Consumer Interactive to decline, low-single-digits. Turning back to total company outlook, we expect to adjusted EBITDA to be between $1.388 billion and $1.421 billion, up 3% to 5%.

That would result in adjusted EBITDA margin being flat to up 30 basis points with the significant benefits of the Neustar cost savings, partially offset by the inclusion of Argus’ relatively lower margin in the first quarter, and some revenue mix considerations. We anticipate adjusted diluted EPS being flat to declining 4%, with higher interest expense offsetting adjusted EBITDA growth. And we continue to expect our adjusted tax rate to be approximately 23%. Depreciation and amortization is expected to be approximately $525 million and we expect the portion excluding step up amortization from our 2012 change in control, and subsequent acquisitions to be about $225 million. We anticipate net interest expense will be about $275 million for the full year, down slightly from our previous guidance due to our debt prepayment and a modest reduction in the forward LIBOR curve.

And we expect capital expenditures to come in at about 8% of revenue. I’ll now turn the call back to Chris for some final comments.

Christopher Cartwright : Thank you, Todd. To wrap up, we had a good first quarter and we’re holding our full year guidance out of an abundance of caution given the level of uncertainty in the market. At the same time, we continue to make meaningful progress integrating Neustar and delivering business wins from the combination. Now, let me turn it over to Aaron.

Aaron Hoffman: Thanks, Chris. And that of course concludes our prepared remarks today. For the Q&A, as always, we ask that you each ask only one question. So that we can include more participants. Operator, we can begin the Q&A now.

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Q&A Session

Operator: The first question today comes from Andrew Steinerman with JP Morgan. Please go ahead.

Andrew Steinerman: Could you speak about the three sub-segments of Neustar in terms of Neustar revenue growth both in the first quarter actual and in the 2023 goals of high-single-digits? And also, if there’s anything else to talk about with Neustar in the first quarter in terms of the revenue growth deceleration besides for the year-over-year comparison, could just give us a little more color on that?

Christopher Cartwright : Sure. Good morning, Andrew. Yeah, I guess, let me address the full year first. And I’ll start by just reaffirming that we hit our plan for the first quarter for Neustar 3% above prior year comp in the quarter of 9% which is the high watermark for Neustar’s growth in 20202. We feel like, we’ve got good confidence and good line of sight in the high-single-digit organic growth for the full year for Neustar in large part, because, it is largely 80% plus a subscription business retention rates that have been strong. Plus we’re layering in, we’re ramping up on a very good year of sales and the good news is that, the bookings are continuing to be strong this year. So we’re going to get some additional in year kind of revenue momentum.

And then look, all three lines of business grew nicely in the first quarter and I expect them to grow well for the full year, marketing continues to do well, despite having a cyclical component, which is the audience generation piece of it. But marketing continue to looks good. The Communication’s data assets, all around trusted call or Branded Call display. As you can see from our commentary, they’re doing really well. And I expect that to continue for the foreseeable future, and of course, fraud is doing well, as you would expect. So, I’d say, strength across the board and Todd’s going to elaborate that.

Todd Cello: Yes Andrew, just more specifically on the numbers themselves. As Chris already said, Neustar met our expectations in the first quarter, what I would say is across Communications, Marketing and Risk, we saw all three product lines grow in the quarter. But when we flip back to the to the full year, as we have said on the – in our prepared remarks, we are expecting high-single-digit growth and what we’re seeing in Communications, Marketing and Resolutions is, that all three of those grow high single. For the full year it’s our expectation.

Andrew Simon: Yes.

Operator: The next question comes from Kelsey Zhu with Autonomous. Please go ahead.

Kelsey Zhu : Thanks for taking my question. So for Mortgage, there’s quite a bit of outperformance compared to your peers, and you talked about pricing and strong performance in share and additional marketing products, can you just give us little bit more colors on what’s going on there?

Christopher Cartwright : Yeah, sure. Well, I mean, you’re right to cite a number of variables that contribute to overall revenue growth in a vertical, right? So the Mortgage vertical for us, it could be pricing, it could be share, it could be volume and it could be just the broader basket of services that we’re now marketing. But, the net-net while the magnitude of decline in the quarter was less than we expected most of the outperformance you’re seeing is coming from the pricing impact that we’re seeing roll through, a combination of third-party pricing and some pricing from TransUnion, as well. And it’s really the mix implication, right? The assumed mix versus the actual mix is a little bit different in the first quarter.

It was more skewed towards smaller lenders, who typically pay higher unit prices that may be because the composition of mortgage volume, it was more toward purchases, which tend to be broadly distributed or representative across the market as opposed to refi, which gets more weighed at the higher end of the market. But I would say, it’s really a story of outperformance on the pricing dimension.

Operator: The next question comes from Jeff Meuler with Baird. Please go ahead.

Jeff Meuler: Yeah. Thank you. Good morning. So, I can certainly respect the prudence of not flowing Q1 upside into full year guidance raise in this macro. But as it relates to, I guess US financial markets and I think your language was an abundance of caution of what could come. Just, how much of this is about what’s possible versus what you’ve seen already. So have you seen much client response yet in marketing spends origination criteria, I guess and/or bookings and pipeline progression or conversion? Thank you.

Christopher Cartwright : Yeah, it’s a good question. Todd and I’ll weigh in on this together. But let me start. Yeah, look, it’s one of those situations I guess, where, we’ve outperformed if we were to, beat and raise the guidance for the year and then half the market would say, oh, well, that’s risky. If we take a more prudent approach, like I think we have then some might argue it’s too conservative. But look, it’s an uncertain market as we can all agree. And in terms of the impact, particularly from the banking stability that we had about a month ago, while we may have had some wobble in the daily volumes and in our conversations with clients we know that they’re going to continue to be cautious about new originations and they are more cautious in terms of marketing and origination activity.

There’s still pretty good volume and pretty good demand. Now, as we forecast it across the remainder of the year, in keeping with the methodology that we talked about in the last call, we didn’t try and declare when a recession might happen or the depth of the duration of the recession. We just forecasted from the current subdued market characteristics and applied a bit of caution on top of that based on what we’ve seen in the first quarter. But at this point, I can’t say that the market has become materially more cautious in its marketing or origination posture than it already was.

Operator: The next question comes from Manav Patnaik with Barclays. Please go ahead.