Good morning, ladies and gentlemen. My name is Karrie and I will be your host operator on this call. [Operator Instructions] Please note that this call is being recorded as of today, Tuesday, July 25 at 8:00 AM Central Time. I would now like to turn the meeting over to your host for today's call, Aaron Hoffman, Vice President and Investor Relations at TransUnion. Please go ahead.

Great. Thank you, Karrie, and good morning to everyone and thank you for joining us today. This morning, I’m joined by Jim Peck, President and Chief Executive Officer and Al Hamood, Executive Vice President and Chief Financial Officer. We've posted our earnings release on the TransUnion Investor Relations website this morning. The earnings release includes schedules which contain more detailed information about revenue, operating expenses and other items, including certain non-GAAP financial measures. Reconciliations of these non-GAAP financial measures to their most directly comparable GAAP measures are also included in these schedules. As a reminder, today's call will be recorded and a replay will be available on the TransUnion 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, Form 10-Q, and other reports and filings with the Securities and Exchange Commission. We do not undertake any duty to update any forward-looking statements. So with that, I'll turn the time over to Jim.

Thanks Aaron. Before I begin my discussion of the business, I want to comment on other news we announced this morning, that Al has decided to pursue other opportunities and is leaving TransUnion on August 18. Al has been a terrific partner for me over the past five years through some very significant changes in personnel, culture, technology, business simplification, and the process of going public I relied on Al and he's been a great friend and colleague. While I am certainly sad to see him leave on behalf of myself, our leadership team, our employees and our Board, I want to thank Al and wish him nothing but success in his new endeavors. What I'm really pleased about is that we have a deep bench of finance talent and we're able to immediately backfill Al's position with Todd Cello. Todd has been with TransUnion for almost 20-years in a wide variety of critical finance roles including CFO of both our USIS and international segments, as well as the Head of Strategic and Financial Planning through our IPO and I believe some of you on this call have already met him. To our succession planning process, we have been proactively preparing Todd for this role. He is an outstanding talented finance leader who is going to continue to add real value to TransUnion. I also know that there will be a strong desire to meet him and we will do our best as Todd transitions into the role. With that, let me turn back to our quarterly performance. As you saw on our earnings release this morning, TransUnion delivered another strong quarter. We saw double-digit revenue, adjusted EBITDA and adjusted EPS growth, as well as another 170 basis points of adjusted EBITDA margin expansion. Importantly our growth continues to be…

Thanks Jim, and thank you for the kind words. I have appreciated our friendship and support since the day you arrived. It was a difficult decision to leave TransUnion after almost 10 years as a CFO but the time is right after key ownership changes, and IPO and several secondary. I also have great confidence in my team and know that I'm leaving the finance function in great hands. Todd has really been on the path for this position for many years. As Jim pointed out, he had both corporate and operating finance positions and played an integral goal in all the finding events at TransUnion over the past decades. My most sincere thanks to everyone at TransUnion who have made my 10 year here an absolutely amazing and rewarding experience. Okay, now back to the business. I’ll walk you through our consolidated and segment results. Second quarter consolidated revenue was $475 million, an increase of 12% on a reported basis and 11% on a constant currency basis compared with the second quarter of 2016. Revenue from acquisitions contributed about one point of growth in the quarter. Adjusted EBITDA was $186 million, an increase of 17% on a reported basis and 16% on a constant currency basis compared with the second quarter of 2016. Adjusted EBITDA margin was 39.2%, an increase of 170 basis points compared with the second quarter of 2016. Adjusted net income was $88 million, an increase of 29% compared with the second quarter of 2016. Adjusted diluted earnings per share was $0.47, an increase of 26% compared with the second quarter of 2016 with the adjusted effective tax rate for the second quarter of approximately 36% down about 40 basis points compared with the second quarter of 2016. Let me walk you through the details of…

Thanks Al. As I lay out our guidance, a couple of quick points about our assumptions for acquisitions and FX impact. For the full-year acquisition should add approximately one point of revenue growth and we expect no significant impact in the third quarter. For FX we expect to have no significant impact in either period. Now turning to our updated guidance for full-year 2017. We are raising our full year 2017 guidance for revenue and adjusted EBITDA and adjusted EPS. We now expect revenue to come in between 1,870,000,000 and 1,880,000,000 up 9% to 10% on a constant currency basis. Adjusted EBITDA for the year is now expected to between $730 million and $740 million up 15% to 16%. At the midpoint of our guidance, adjusted EBITDA margin is now expected to be slightly above 39%. This is a result of our strong revenue growth, the benefits of the investments we made in the company product mix and productivity improvements across the business, as well as the favorable impact of recent M&A. Adjusted diluted earnings per share for the year are expected to be between $1.79 and a $1.82 up 19% to 21%. And for the third quarter of 2017 we expect the following revenue should come in between $470 million and $475 million, an increase of approximately 7% to 8% on a constant currency basis. Adjusted EBITDA is expected to be between $185 million and $189 million, an increase of approximately 11% to 14%. Adjusted diluted earnings per share are expected to be between $0.45 and $0.46, an increase of 21% to 24% compared with the second quarter of 2016. To wrap-up TransUnion delivered outstanding broad-based top and bottom line financial results in the second quarter setting us up for the strong 2017. As I discussed we're focused on…

Thanks Jim. That concludes our prepared remarks. For the Q&A we ask that you each ask only one question so that we can include more participants and I'll be glad to take those questions.

[Operator Instructions] Your first question comes from the line of Tim McHugh from William Blair. Tim, your line is open.

Just want to ask about the marketing services practice, the pace of growth there is the strongest I think in a long while for you guys. So I know you mentioned new products and some batch I guess sales. So can you help describe I guess what new product specifically are showing up in that line and driving that growth and how I guess lumpy was some of the strength from batch processing just as we think about sustainability of the growth in that practice area? Thanks.

Sure, so a lot of that line is also traditional process right and as you - this is Jim by the way, as we discussed, before we’re in good position and we’re kind of taking share. The other thing to remember about batch that it's a little more choppy than other kinds of products because they come in batches. So I would say good percentage of that is simply a result of taking share. It also includes our new digital marketing solution so that will be something new you would see in there and that’s really what’s driving.

Yes I think just to reiterate what Jim said is, it is a lumpier line of business so we don't get too hung up on quarterly trends in year-over-year growth and it’s what we look at sustainability but in underlying that is what we talked about still a very solid and buoyant credit market and in feeding off of that half way through the year.

The next question comes from the line of Manav Patnaik from Barclays. Manav, your line is open.

Good morning, and I just like to offer my congratulations and good luck to Al on his next opportunity. One question I have for you Jim just a bigger picture, obviously your broad based growth continues organically very solid. It seems like it's a well oiled machine at this point in time and with that context I was just wondering as we look at the next couple of years, is there more appetite or is there a pipeline in terms of M&A and if so what sort of areas do you think TransUnion needs to go after from an M&A perspective?

Sure enough, so yes - I will acknowledge I think we have created a good growth machine and we’ve discussed all the drivers behind that including the technology and the other infrastructure. I think that does put us in a position to continue to buy certain kinds of assets. At least for now strategically we’re looking for stuff that's more in line with our core business. So consumer related that will either take us into new verticals or will bring capabilities that we can add to our existing capabilities to bolster our existing verticals. And we are as active as we've ever been as far as staying abreast with the different kinds of companies that are kind of targets in this space. And we'll continue to be that way and so there's no reason to think that we would not continue making similar acquisitions to the ones we've made up to this point, but I will say I think you'll always find that we’ll have a very clear strategic rationale for these things as we have always have in the past and very clear line to creating value.

The next question comes from the line of Andrew Steinerman from JPMorgan. Andrew, your line is open.

If I back into the implied organic revenue growth middle of the range for the fourth quarter it looks like it might be higher than the middle of the range for the third quarter. Is that accurate and what would be driving a higher biased growth in the fourth and the third?

That would be accurate I think having said that we're - I mean it’s, rounding right now due to the implied topline growth. I would not read too much into that. I think it’s the consistency that we’ve talked about which is a buoyant credit market. New products growth continuing to deliver, we feel good about that. Emerging verticals continue to perform above traditional growth rates, and our international emerging market is performing very, very well. So you're absolutely correct in your math, but I wouldn't read anything different from Q3 to Q4 from a trend standpoint. It’s pretty consistent and we feel good about it which is why we raised full-year guidance and revenue guidance by $20 million as we look forward.

How about consumer interactive maybe being stronger in the fourth than the third.

Consistent trend is exactly what we said, Andrew, and it’s exactly what we're seeing today. First half of year because of the renegotiation of a large contract and the acquisition, we’re going to be down flat to slightly down. And second half of the year, we see I - like we talked about, mid-single digit. So we feel good about that too.

Just to clarify, Andrew, what else of acquisition, it means the acquisition of one of our customers by competitors. So that's what.

Next question comes from the line of Toni Kaplan from Morgan Stanley. Toni, your line is open.

Thanks, good morning. You previously discussed repurchasing a $100 million a year for the next three years, but you're already ahead of that year-to-date. Do you anticipate sort of accelerating your program or should we expect no further repurchases for the rest of this year? And do you have any updated thoughts on dividend? Thanks.

Yes, two things, you’re right. We have purchased up to I think a 133, so I suggest grounding we said in the fourth quarter call, we were going to purchase 300 million over three years. We’ve exceeded that because we felt like the opportunity was right in terms of where we were and what we were doing, and feel good about that. I don't think we have a need right now to continue to rush or accelerate anything, we feel very good about our $300 million guidance over the next three years. What it does from a capital structure is it allows us to bring in some shares. But more importantly, continue to focus on building out and driving any organic related growth opportunities, pay down our debt as we continue to pay down our debt, and continue to build more cash on our balance sheet for M&A opportunities, something that has been a traditional and we believe a consistent grower for our topline as we diversify our business and we won’t see any change from that, and, no, we haven’t. We have no further discussion or thoughts on dividend, we feel very good about the financial policy that we've laid out and where we’re heading with that.

The next question comes from the line of Gary Bisbee from RBC. Gary, your line is open.

Good luck to you in whenever you do going forward, it’s been a pleasure. And then the question for Jim, I appreciate the color on the fraud and insurance opportunities and where your offerings are. Can you give us a sense how large these are and how fast they're growing? And if you don't want to comment specifically on each, at least an update on the newer verticals, and feel free to lump in healthcare and the rental screening market. But what's the scale these things now, how faster they're growing relative to the core, and any thoughts on where you stand in terms of penetration of those offerings into the potential customer base?

That's a big question. And as you know, we haven't gotten into kind of the details around each of the verticals, but I’d say they're all meaningful for us, and they're all growing double digit. So, certainly our core business is growing very well, but these are growing faster. Starting with healthcare, we have a very nice business there in the revenue cycle management space, frontend, backend. We think we have a tremendous amount of upside still because the market is fairly fragmented. We think we're the strongest player, especially in the backend, and our competition is largely the internal processes of many of these providers. And so we feel really strong about that segment. Rental screening also continues to grow very well, especially the kind of self-service of getting yourself background checked. And that demographic there, everything is kind of moving in the right direction. The insurance business, as you know, we have very strong ties from pipes into 14, 15 top insurance company. That allows us to -- we talk about DHI to give those kind of different kind of data or analytics into those pipe. That business is also meaningful and will also continue to grow nicely for us. With regards to fraud, kind of little color there. When I got here five years ago, we were being very opportunistic both with origination and even transactional fraud, right? So now, it’s been kind of a mission of ours to make a holistic solution. That’s really come together nicely. Right from when a consumer walks in the door or that you kind of see them on the Internet or whatever or online to understand, are they committing fraud to how they're behaving once you’re interacting with them or even when they're a customer, and that's what, you know, the product that we’re describing are really able to do. So we've seen substantial double digit growth there in the U.S., and we're able to take that outside of the U.S. because it uses all the same kinds of data in different countries that we have in the U.S. So we feel - and you know, I mean, that market has never gone away. It's only getting worse, and we intend to be a meaningful player there. Those are four of the verticals. Our government business is fairly nascent still, we have a ton of upside there. That’s a longer kind of row to hoe, but we feel good about that business as well. Those are just some examples.

The next question comes from the line of Jeff Miller from Baird. Jeff, your line is open.

Best of luck to Al as well for me. On the consumer interactive outlook, I would have thought you might have the potential for even faster growth as you anniversary the CreditKarma pricing adjustment, and the acquisition of your client on the indirect side, as well as I think Chase is performing well. And correct me if I'm wrong, but it gives the opportunity to cross-sell a similar solution to Chase to other banks. So with that long preamble, are you - what’s the potential offset? Is it something with - are you seeing accelerating cannibalization of the direct channel with some of the free to consumer alternatives, or are we hitting a saturation point in terms of consumers having access to this data from a lot of different sources? Just any thoughts would be appreciated.

So, I don’t think anybody out there could say that the idea of whether it’s premium or it’s actually free, it hasn’t impacted anyone's ability to sell a poor fee service. So certainly that had had some impact on our growth. You know, the karma thing, we left it but it's also not as bigger driver of growth as we’ve had in the past. And that’s something we’ve been very upfront with you guys. So we’re trying to kind of grow our way through that. And so our kind of outlook going forward which is reflected in our numbers, that we’re going to continue to penetrate the market on the indirect side which is going to drive good growth and that we’re going to continue moving our consumer business outside of the U.S. which really doesn't yet show up. In a big way, our number is starting to really pickup as well. So we still have we believe a lot of good growth prospects in that business.

The next question comes from the line of George Mihalos from Cowen and Company. George, your line is open.

Let me add my best wishes to Al. My question is, Jim, looking at some of the changes going on around credit scoring, I guess maybe excluding some of the negative data around tax liens and whatever else, do you see that as being any sort of a meaningful catalyst to your business and are there any vertical specifically that might stand out that might benefit from the modest change around that? Thank you.

Well frankly we don’t see that as having any kind of meaningful impact at all. Certainly there were changes that we had to make in order to deal with that change but we don’t see a substantial impact in either direction from that ruling and the core credit business remains as durable and strong as ever and I think I've talked about this before, it has all the upside associated with being must have kind of information and as we add other kinds of information to it, it allows us in which we’ve been doing to grow our business. I think the other thing that's happened with TransUnion is as we've been more innovative over the last several years our newer products are growing but also we are taking share which is by the bigger driver I think not only in the U.S. but around the world. And so I guess I mentioned the business model towards the end of my comment that is a business model, is taking - it’s very durable, repeatable asset taking innovation, building on top of that, saw all these new solution. And then that actually leads to a bit of kind of circular affect allowing us to take more share on that core. That's probably the most important dynamic going on. These other changes all I guess it might reflect is the continuing interest in how important this kind of information is kind of the fabric of the economy here in the U.S. and internationally.

The next question comes from the line of Shlomo Rosenbaum from Stifel. Shlomo, your line is open.

Al, can you talk a little bit about the marketing services again. I'm just trying to get a handle on in terms of the mix of revenue how much of that revenue is coming from batch work that would be a precursor to growth in the online business as usually there's marketing before you get a bunch of credit card stuff or in how much of it is taking market share and some of the newer products. Is there some like analytics you've done internally to see what's going on there?

Yes. I think Shlomo traditionally what you were saying may have been true but if you actually look back and all of this is public information, just use 2015 as an example and you push it through all the way quarterly then you compare that to online data services growth. That correlation doesn’t necessarily exist. In other words during that time period, you had low credit marketing services growth and higher online data services growth. So the way I would read it, the way I would talk about it and it wouldn’t read into big online volumes are going to come because the credit marketing services is in totality when you look at combined online credit marketing services as an example right, combine it’s probably low double-digit grower in the quarter. Not that dissimilar when you start talking about points and percentages from the first quarter and that really has to go with and to do with the overall U.S. consumer credit market today which we've talked about is pretty, pretty strong and it's very good across all of the segments. Mortgage is better than what we thought, credit card is obviously very good and you'll hear the bank talking about some of the different segmentation strategies that are going after to find new customers that all bodes very well for us, as well as even autos probably doing better than what we thought. In addition to the other credit products, when you take that coupled new product offerings such as digital marketing and some of the new entrance into the market space and CreditVision, CreditVision Link on the online side, it bodes well for our USIS business on the U.S. core consumer credit side. So, again I wouldn't read into these things, also these things can happen at the end of the quarter by our bank. Some things are predictable, some things are not, it's really the longer-term trend that we’re focused on. And if you look at 2015 and 2016, the growth in that space has been high single-digit close to double-digit . We're talking about percentages which is hard to forecast and predict.

The next question comes from the line of Kevin McVeigh from Deutsche Bank. Kevin, your line is open.

Jim, you made a comment around being a primary bureau choice. I just wonder, what does that means from kind of a revenue or a growth perspective as you shift to kind of number one versus number two historically. And does that help kind of boost organic growth 18 into 19 as you leverage kind of the trend data across different entities?

Sure. I would say 17, 18, 19, 20, right? I mean, it is part of the equation. I will clarify, I know everyone wants to make things to zero-some gain among us, companies that play in the credit space but when we've all chosen - we do compete obviously, but we’ve chosen different paths to grow on top of this core data assets we have. And I think for TransUnion, we’ve made some pretty good choices, and they’ve worked out. Now back to your question, we are very, very sticky. All three of us are very sticky. When we do happen to innovate and do new things that does help drag along core business revenue, and I think you see that affect, reflected not only in our U.S. business, but even where we compete in our international businesses. And that's what helps us. Part of what help us, certainly not all the, but close to all of it helps us stay in the top grower category. And I think you'll see us continue to do that going forward. And so I think it will affect '18. It's harder - I think 19, 20, 21, but our strategy is really to keep layering on innovative new solutions that are in our pipeline right now to drive growth that way and also to protect our revenue in the core and also to grow our revenue in the core by taking share. So it’s all part of that equation.

And the next question comes from the line of David Togut from Evercore ISI. David, your line is open.

All the very best Al. Jim, could you compare the opportunity for CreditVision in auto? What you see in mortgage kind of similarities, differences, particular in terms of the size and growth opportunity for TransUnion?

Sure. The CreditVision in auto for us is very still rather nascent, but we’re starting to get penetration, right. And it’s driven a lot by CreditVision Link. So that’s probably the big difference and CreditVision Link is standard data probably looking for more under banked kind of focus in getting them into a category where you go from subprime to primary, you go to no credit at all to subprime. So it's a different kind of layer there, but it is similar in that it helps more people get access to credit. As far as the size goes, I don't have a market size on that, but I will say it's meaningful, but obviously mortgage is - you know, I am wondering it's completely blanketing the market is, in my view, at least in the short run will have a much more rapid, or it just had a much more rapid penetration and a larger penetration. So you won't see the same kind of massive all at once shift because it's not regulated.

Great. And that brings us to the top of the hour to the end of the call. We thank everyone very much for their time today, and we will forward to talking to everyone again soon. And certainly, three months from now in the next quarterly call. Thank you.

Thank you, all.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect your lines. Have a great day.