Experian(EXPGY) - 2025 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported Q3 organic revenue growth of 6%, which was 8% on an underlying basis when adjusting for data breach impacts, continuing the strong trend from Q2 [1][4] - Total group revenue growth was 8% at constant currency and 6% at actual rates, maintaining high single-digit growth despite a subdued environment for unsecured credit activity [2][5] - Acquisitions contributed 2% to growth, while exchange rates posed a 2% headwind due to the depreciation of the Brazilian real [20] Business Line Data and Key Metrics Changes - B2B organic revenue growth was 6%, while Consumer Services grew by 5%, rising to 15% when excluding data breach impacts [3][20] - In North America, organic revenue growth was 6%, with B2B growth at 8% and Consumer Services at 2% [21] - Latin America achieved 8% organic growth, with B2B growing 4% and Consumer Services delivering a strong 22% growth [26][27] Market Data and Key Metrics Changes - North America showed strong underlying trends with 9% growth excluding data breach impacts, while EMEA/Asia Pacific grew by 9% [2][17] - UK&I growth was subdued at 1%, but Consumer Services in the region delivered a strong performance with 10% growth [15][16] - The mortgage profile revenue in the U.S. grew by 71%, primarily driven by price increases rather than volume growth [88] Company Strategy and Development Direction - The company is focused on executing growth investments to sustain momentum, including enhancing subscription services and expanding insurance offerings [11][20] - The strategic progress in Consumer Services is evident, with a strong emphasis on acquiring new members and improving engagement [14][16] - The company aims to maintain organic revenue growth guidance of 6% to 8% and margin expansion at the upper end of the 30 to 50 basis points range [29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the underlying performance of the business despite a challenging credit environment, highlighting structural resilience [94] - The company anticipates continued cautiousness in credit supply, with stable to moderately improved conditions noted in the U.S. [65] - Concerns regarding the fiscal situation in Brazil were acknowledged, but management does not foresee immediate deterioration in the credit cycle [117] Other Important Information - The company is seeing good progress in the integration of acquisitions, which are expected to contribute to growth in the coming years [83] - The insurance marketplace is projected to reach an annualized run rate of about $100 million, with significant growth opportunities identified [39][66] Q&A Session Summary Question: Insights on North America B2C credit marketplace - Management noted strong growth in the insurance marketplace and early signs of recovery in the credit marketplace, with a focus on expanding partnerships [40][41] Question: Data breach services and market trends - Management clarified that the data breach business is lumpy and difficult to predict, with expectations of normalization in Q2 FY '26 [37][42] Question: Trends in LatAm B2B - Management indicated that B2B growth in Latin America improved slightly, with ongoing cautiousness in lending linked to the fiscal situation [43] Question: Health business growth expectations - Management expects strong growth in the Health business due to a robust sales pipeline and high margins [47] Question: Regulatory concerns in the U.S. - Management expressed no worries regarding the CFPB lawsuit, stating it lacks merit and emphasizing a constructive relationship with regulators [51][56] Question: Q4 organic growth expectations - Management anticipates organic growth of around 7% to 8% for Q4, excluding data breach impacts [57] Question: Credit supply recovery signs - Management noted stable conditions in the U.S. but did not expect significant changes in credit supply [65] Question: Insurance marketplace outlook - Management highlighted the potential for significant growth in the insurance marketplace, with expectations for continued success in customer acquisition [66][68] Question: Verification Services strategy - Management confirmed ongoing efforts to grow the Verification business, focusing on building a strong database and exploring consumer permission opportunities [100][101]