Why Information & Insights Company TransUnion's Shares Are Tumbling Today

TransUnion TRU shares are trading lower by around 25% after the company reported worse-than-expected Q3 FY23 financial results, issued Q4 adjusted EPS and revenue guidance below estimates, and lowered FY23 guidance.

The company reported revenue of $968.7 million (+3% Y/Y in reported and constant currency basis), missing the consensus of $982.3 million.

Revenue growth was driven by strength in International and Neustar, partly offset by higher end-market softness in U.S. Markets and the U.K.

Adjusted EBITDA rose 5% Y/Y (+4% Y/Y on a constant currency basis) to $356 million, with margin expansion to 36.8% from 36.3% the prior year.

Adjusted EPS of $0.91 missed the consensus of $0.94.

As of September 30, 2023, cash and cash equivalents stood at $421 million.

U.K. Goodwill Impairment: The company identified a triggering event requiring an interim impairment test for its U.K. reporting unit, which led to a goodwill impairment of $495 million.

Outlook: TRU expects Q4 revenue of $917 million-$932 million (consensus $974.94 million) and adjusted EPS of $0.67-$0.72 (consensus: $0.98). 

TransUnion lowered FY23 outlook for revenue to $3.794 billion-$3.809 billion (from $3.825 billion-$3.885 billion) vs. consensus of $3.87 billion and adj. EPS to $3.24-$3.28 (from $3.49-$3.62) vs. consensus of $3.57. 

Chris Cartwright, President and CEO, said, "We are revising our 2023 full-year guidance to account for slowing volumes in the U.S. and United Kingdom. We expect to deliver a good fourth quarter due to strong bookings and our vertical, product and geographic diversification."

Price Action: TRU shares are down 25.8% at $48.11 on the last check Tuesday.