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Adjusted earnings per share of 62 cents surpassed the Zacks Consensus Estimate by 2 cents and improved 31.9% year over year. Lower tax rate, resulting from Tax Cuts and Jobs Act, significantly benefited the company’s earnings in the reported quarter.
Total revenues totaled $563 million, which outpaced the consensus mark by $24 million and were up 19% on a reported as well as constant-currency basis. The improvement was driven by strong double-digit growth in each of its operating segments — U.S. Information Services (USIS), International and Consumer Interactive — and contributions from incremental credit monitoring business from a competitor.
Contribution from acquisitions of DataLink services, FactorTrust and eBureau also drove the top line. During the reported quarter, TransUnion completed acquisitions of Callcredit, iovation and Healthcare Payment Specialists. These buyouts are expected to help TransUnion with new market entry and portfolio diversification, moving ahead.
We expect TransUnion to continue benefiting from a strong business model, focus on innovation diversified revenue streams, significant operating leverage, low capital requirements, and solid and stable cash flows.
In a year’s time, TransUnion has gained a massive 58.6%, significantly outperforming the industry’s 22.8% rally.
Let’s delve deeper in to the numbers
Operating Segments’ Revenues
The U.S. Information Services revenues of $358 million increased 20% year over year driven by strong performance in all the three platforms within the segment. Online Data Services, Marketing Services and Decision Services’ revenues of $235 million, $56 million and $67 million were up 23%, 21% and 10%, respectively, on a year-over-year basis.
International revenues surged 22% year over year on a reported as well as constant-currency basis to $106 million driven by strength in both developed and emerging markets. Within the segment, developed market revenues of $43 million increased 40% year over year on a reported basis and 37% on a constant-currency basis. Emerging market revenues of $63 million was up 12% on a reported basis and 13% on a constant-currency basis.
Revenues at the Consumer Interactive segment improved 12% from the prior-year quarter number to $118 million, aided by strong growth in both direct and indirect channels. The metric included roughly $5 million of incremental credit monitoring revenues due to a breach at a competitor.
Adjusted EBITDA was $221 million, up 19% year over year on a reported as well as constant-currency basis. Adjusted EBITDA margin remained flat year over year at 39.2%
Total adjusted operating income summed $189.8 million, up 17.7% from the year-ago quarter. Total adjusted operating margin contracted 30 basis points to 33.7% in the quarter.
Balance Sheet and Cash Flow
TransUnion had $192.3 million in cash and cash equivalents at the end of the second quarter compared with $154.3 million at the end of the prior quarter. Long-term debt amounted to $4.1 billion compared with $2.3 billion in the last reported quarter. The company generated $129.5 million in cash from operating activities and spent $43.5 million on capex.
3Q18 Outlook
For the third quarter of 2018, TransUnion expects adjusted revenues between $610 million and $615 million, reflecting an improvement of 23-24% year over year. Adjusted EBITDA is envisioned to be in the range of $237-$240 million, mirroring an increase of 22-24%. Adjusted earnings per share, including a benefit of roughly 7 cents owing to Tax Cuts and Jobs Act, are expected to be between 61 cents and 62 cents, indicating a rise of 24-26%. The Zacks Consensus Estimate for third-quarter earnings is pegged at 63 cents.
2018 View
TransUnion raised adjusted revenue, adjusted EBITDA and adjusted earnings per share guidance for 2018. It now expects adjusted revenues between $2.333 billion and $2.343 billion compared with $2.170 billion and $2.185 billion, projected earlier. The guidance reflects increase of 21% on a year-over-year basis.
Adjusted EBITDA is anticipated to be in the range of $904-$910 million compared with the earlier guidance of $845-$855 million. The projection indicates an increase of 21-22%. Adjusted earnings per share, including a benefit of roughly 28 cents from tax cuts, are anticipated to be in the band of $2.42-$2.44 compared with $2.37-$2.41, guided earlier. The guidance depicts an increase of 29-30%. The Zacks Consensus Estimate for adjusted earnings is pegged at $2.41.
Investors interested in the broader Business Services sector are keenly awaiting second-quarter earnings reports from key players like Verisk Analytics (VRSK - Free Report) , Aptiv (APTV - Free Report) and Fiserv . All the companies are slated to report their quarterly numbers on Jul 31.
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Image: Bigstock
TransUnion (TRU) Tops Q2 Earnings Estimates, Raises '18 View
TransUnion (TRU - Free Report) reported better-than-expected second-quarter 2018 results.
Adjusted earnings per share of 62 cents surpassed the Zacks Consensus Estimate by 2 cents and improved 31.9% year over year. Lower tax rate, resulting from Tax Cuts and Jobs Act, significantly benefited the company’s earnings in the reported quarter.
Total revenues totaled $563 million, which outpaced the consensus mark by $24 million and were up 19% on a reported as well as constant-currency basis. The improvement was driven by strong double-digit growth in each of its operating segments — U.S. Information Services (USIS), International and Consumer Interactive — and contributions from incremental credit monitoring business from a competitor.
Contribution from acquisitions of DataLink services, FactorTrust and eBureau also drove the top line. During the reported quarter, TransUnion completed acquisitions of Callcredit, iovation and Healthcare Payment Specialists. These buyouts are expected to help TransUnion with new market entry and portfolio diversification, moving ahead.
We expect TransUnion to continue benefiting from a strong business model, focus on innovation diversified revenue streams, significant operating leverage, low capital requirements, and solid and stable cash flows.
In a year’s time, TransUnion has gained a massive 58.6%, significantly outperforming the industry’s 22.8% rally.
Let’s delve deeper in to the numbers
Operating Segments’ Revenues
The U.S. Information Services revenues of $358 million increased 20% year over year driven by strong performance in all the three platforms within the segment. Online Data Services, Marketing Services and Decision Services’ revenues of $235 million, $56 million and $67 million were up 23%, 21% and 10%, respectively, on a year-over-year basis.
International revenues surged 22% year over year on a reported as well as constant-currency basis to $106 million driven by strength in both developed and emerging markets. Within the segment, developed market revenues of $43 million increased 40% year over year on a reported basis and 37% on a constant-currency basis. Emerging market revenues of $63 million was up 12% on a reported basis and 13% on a constant-currency basis.
Revenues at the Consumer Interactive segment improved 12% from the prior-year quarter number to $118 million, aided by strong growth in both direct and indirect channels. The metric included roughly $5 million of incremental credit monitoring revenues due to a breach at a competitor.
TransUnion Revenue (TTM)
TransUnion Revenue (TTM) | TransUnion Quote
Margins
Adjusted EBITDA was $221 million, up 19% year over year on a reported as well as constant-currency basis. Adjusted EBITDA margin remained flat year over year at 39.2%
Total adjusted operating income summed $189.8 million, up 17.7% from the year-ago quarter. Total adjusted operating margin contracted 30 basis points to 33.7% in the quarter.
Balance Sheet and Cash Flow
TransUnion had $192.3 million in cash and cash equivalents at the end of the second quarter compared with $154.3 million at the end of the prior quarter. Long-term debt amounted to $4.1 billion compared with $2.3 billion in the last reported quarter. The company generated $129.5 million in cash from operating activities and spent $43.5 million on capex.
3Q18 Outlook
For the third quarter of 2018, TransUnion expects adjusted revenues between $610 million and $615 million, reflecting an improvement of 23-24% year over year. Adjusted EBITDA is envisioned to be in the range of $237-$240 million, mirroring an increase of 22-24%. Adjusted earnings per share, including a benefit of roughly 7 cents owing to Tax Cuts and Jobs Act, are expected to be between 61 cents and 62 cents, indicating a rise of 24-26%. The Zacks Consensus Estimate for third-quarter earnings is pegged at 63 cents.
2018 View
TransUnion raised adjusted revenue, adjusted EBITDA and adjusted earnings per share guidance for 2018. It now expects adjusted revenues between $2.333 billion and $2.343 billion compared with $2.170 billion and $2.185 billion, projected earlier. The guidance reflects increase of 21% on a year-over-year basis.
Adjusted EBITDA is anticipated to be in the range of $904-$910 million compared with the earlier guidance of $845-$855 million. The projection indicates an increase of 21-22%. Adjusted earnings per share, including a benefit of roughly 28 cents from tax cuts, are anticipated to be in the band of $2.42-$2.44 compared with $2.37-$2.41, guided earlier. The guidance depicts an increase of 29-30%. The Zacks Consensus Estimate for adjusted earnings is pegged at $2.41.
Zacks Rank & Upcoming Releases
TransUnion has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Investors interested in the broader Business Services sector are keenly awaiting second-quarter earnings reports from key players like Verisk Analytics (VRSK - Free Report) , Aptiv (APTV - Free Report) and Fiserv . All the companies are slated to report their quarterly numbers on Jul 31.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Click here to see the 5 stocks >>