TransUnion (TRU) Beats on Q2 Earnings Amid Coronavirus Crisis

TransUnion TRU reported solid second-quarter 2020 results, wherein its earnings and revenues surpassed the Zacks Consensus Estimate.

Adjusted earnings of 66 cents per share outpaced the consensus mark by 34.7% but declined 4.3% year over year.

Total revenues of $634 million beat the consensus mark by 6.2% but decreased 4% year over year on a reported basis, and 3% on both a constant-currency and organic constant-currency basis.

Adjusted revenues (excluding the impact of deferred revenue purchase accounting reductions and other adjustments to revenues for the company’s recently acquired entities) also came in at $634 million, down 4% year over year on a reported basis, and 3% at both constant currency and organic constant currency.

TransUnion stated that in response to the COVID-19 pandemic, the company continues to follow the work-from-home model and is trying to be disciplined in managing investment priorities and cost structure. The company has withdrawn its third-quarter and full-year 2020 financial guidance.

The company’s president and CEO Chris Cartwright said, “During the quarter, we remained focused on delivering the right solutions and insights for our customers to help them weather the COVID-19 pandemic.”

TransUnion’s shares have gained 9.8% over the past year, outperforming 2% growth of the industry it belongs to.

Revenues by Segments

U.S. Market revenues of $405 million were flat with the year-ago quarter both on a reported and an organic basis. Adjusted revenues stayed flat as well. Within the segment, Financial Services revenues of $222 million climbed 4% year over year on a reported and an organic basis. Emerging Vertical revenues, including Healthcare, Insurance and all other verticals, were $183 million, down 5% year over year on a reported as well as an organic basis.

International revenues declined 21% year over year on a reported basis and 15% on a constant-currency basis to $120 million. Adjusted revenues also came in at $120 million, down 22% year over year on a reported basis and 16% on a constant-currency basis.

Revenues from Canada decreased 5% on a reported basis and 2% on a constant currency basis to $24 million. Revenues from the U.K. came in at $39 million, down 16% on a reported basis and 13% on a constant currency basis. India revenues declined 29% on a reported basis and 23% on a constant currency basis to $18 million. Asia-Pacific revenues came in at $13 million, down 10% on a reported basis and 12% on a constant currency basis.

Revenues from Latin America decreased 34% on a reported basis and 22% on a constant currency basis to $17 million. Africa revenues were down 36% on a reported basis and 21% on a constant currency basis to 9 million.

Consumer Interactive segment revenues improved 4% from the prior-year quarter figure to $128 million.

Operating Performance

Adjusted EBITDA was $243 million, down 8% year over year on a reported basis and 7% on a constant-currency as well as organic constant-currency basis. Adjusted EBITDA margin came in at 38.2%, down 150 basis points.

Key Balance Sheet and Cash Flow Figures

TransUnion had $432 million in cash and cash equivalents at the end of the second quarter compared with $306 million at the end of the prior quarter. Long-term debt was $3.6 billion, flat year on year. The company generated $253 million in cash from operating activities and CapEx was $46 million. It paid out $14.3 million in dividends in the quarter.

Currently, TransUnion carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Performance of Other Business Services Companies

Equifax EFX reported better-than-expected second-quarter 2020 adjusted earnings of $1.60 per share, which beat the Zacks Consensus Estimate by 22.1% and improved 14.3% on a year-over-year basis.

IQVIA Holdings IQV reported second-quarter 2020 adjusted earnings per share of $1.18, which beat the consensus mark by 12.4% but decreased 22.9% on a year-over-year basis.