TransUnion
For the period ended Sep 30, 2024. Filed Oct 23, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Oct 23, 2024
TRU$81.18-2.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-07-25.
0001552033-24-000065
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-10-23.
0001552033-24-000075
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 267 previous paragraphs and 261 current paragraphs.
190 unchanged; 59 reworded; 9 added; 15 removed; 3 previous and 3 current paragraphs rearranged.
Tables are not compared: 22 previous and 22 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (9)
Current report
•an increase of approximately $8.0 million from our operating model optimization program,
Current report
partially offset by:
Current report
•a decrease of approximately $9.0 million in integration costs of our business acquisitions, an initiative that was completed last year.
Current report
partially offset by:
Current report
Restructuring expenses relate to our operating model optimization program. For thethree and nine months ended September 30, 2024, these expenses include$40.5 millionand$42.1 million, respectively, related to facility exit costs, including a loss on early termination of a facility lease. There were no employee separation expenses for the three months ended September 30, 2024 and $24.7 million of employee separation expenses for the nine months ended September 30, 2024.
Current report
For the three and nine months ended September 30, 2023, we reported an effective tax rate of (7.6)% and (43.1)% respectively, which was lower than the 21.0% U.S. federal corporate statutory rate primarily due to the impact of non-deductible goodwill impairment.
Current report
Financial Services: For the three and nine months ended September 30, 2024, revenue increased $53.6 million, or 17.1%, and $128.1 million, or 13.5%, respectively, compared with the same periods in 2023. A majority of the growth in Financial Services comes from our Mortgage line of business, primarily due to increases in price and batch activity. Our other lines of business also grew in both periods, primarily due to an increase in batch activity, partially offset by a decrease in volume, and price increases in our Auto line of business.
Current report
Emerging Verticals: For the three and nine months ended September 30, 2024, revenue increased $9.9 million, or 3.3%, and $35.2 million, or 4.0%, respectively, compared with the same periods in 2023. For the three-month period, the increase was due primarily to an increase in the Insurance vertical from new business wins and an increase in volumes, partially offset by a decrease in the Media vertical. For the nine-month period, the increase was due primarily to increases in the Insurance and Services & Collections verticals from new products, new business wins and an increase in volumes.
Current report
In September 2024, we entered into interest rate swap agreements with various counterparties that effectively fix our variable interest rate exposure on a portion of our Senior Secured Term Loan or similar replacement debt. The swaps commence on December 31, 2024, and expire on December 31, 2027, with a current aggregate notional amount of $400.0 million that amortizes each quarter. The swaps require us to pay fixed rates varying between 3.0650% and 3.1495% in exchange for receiving a variable rate that matches the variable rate on our loans. We have designated these swap agreements as cash flow hedges.
Removed paragraphs (15)
Previous report
•an increase of approximately $3.0 million from our operating model optimization program in our Corporate unit;
Previous report
•a negligible increase from the impact of foreign currencies on the expenses of our International operations,
Previous report
•a decrease of approximately $3.0 million in integration costs of our business acquisitions, an initiative that was completed last year.
Previous report
•an increase of approximately $6.0 million from our operating model optimization program in our Corporate unit;
Previous report
•an increase of approximately $1.0 million from the impact of foreign currencies on the expenses of our International operations,
Previous report
•an increase of approximately $3.0 million from our operating model optimization program in our Corporate unit,
Previous report
•a decrease of approximately $2.0 million in integration costs of our business acquisitions, an initiative that was completed last year; and
Previous report
•a negligible decrease million from the impact of foreign currencies on the expenses of our International operations.
Previous report
•an increase of approximately $7.0 million from our operating model optimization program in our Corporate unit; and
Previous report
•a negligible increase from the impact of foreign currencies on the expenses of our International operations,
Previous report
Restructuring expenses relate to our operating model optimization program. For the three and six months ended June 30, 2024, these expenses include approximately$7.9 million and$24.6 million, respectively, related to employee separation, and$0.2 millionand$1.7 million, respectively, related to facility exits.
Previous report
For the three months ended June 30, 2023, we reported an effective tax rate of 25.2%, which was higher than the 21.0% U.S. federal corporate statutory rate primarily due to the impact of increases for foreign withholding taxes, uncertain tax positions, and nondeductible expenses primarily in connection with executive compensation limitations, partially offset by benefits from the foreign rate differential and the research and development credit.
Previous report
For the six months ended June 30, 2023, we reported an effective tax rate of 24.9%, which was higher than the 21.0% U.S. federal corporate statutory rate primarily due to the impact of increases for foreign withholding taxes, uncertain tax positions, and nondeductible expenses primarily in connection with executive compensation limitations, partially offset by benefits from the foreign rate differential and the research and development credit.
Previous report
Financial Services: For the three months ended June 30, 2024, revenue increased $35.1 million, or 10.8%, compared with the same period in 2023. Our Mortgage line of business had most of the growth primarily due toprice increases. Our Auto line of business increased primarily due to price increases. Our Card and Banking and our Consumer Lending line of businesses decreased primarily due to a decrease in volume. In addition, all lines of business except Auto had an increase in revenue from batch jobs. For the six months ended June 30, 2024, revenue increased $74.5 million, or 11.7%, compared with the same period in 2023. Our Mortgage line of business had most of the growth primarily due toprice increases. Our Auto line of business increased primarily due to price increases and new business wins. Our Consumer Lending and our Card and Banking line of business decreased primarily due to volume decreases. In addition, all lines of business except Auto had an increase in revenue from batch jobs.
Previous report
Emerging Verticals: For the three and six months ended June 30, 2024, revenue increased $12.9 million, or 4.4%, and $25.3 million, or 4.4%, respectively, compared with the same periods in 2023, primarily due to increases in all markets except Communications and Tenant & Employment, due to a variety of market improvements, new product and other volume increases, and business wins in our markets to varying degrees in both periods, partially offset by a decrease in the Tenant & Employment market due to decreased volumes and price concessions in both periods.
Reworded paragraphs (59)
Previous wording
During the first six months of 2024, the U.S. economy and labor market remained resilient with solid GDP growth, rising but still low unemployment, and rising wages, despite the Federal Reserve maintaining higher interest rates in the face of subsiding inflation. The relative macroeconomic strength of the U.S. was also reflected in broad strength in our emerging markets and improved indicators in the U.K. The U.K. is beginning to show signs of recovery driven by falling inflation and a recovery in economic activity. Additionally, our International segment began to see a slight positive impact from foreign exchange rates. In the U.S., the impact of higher interest rates has slowed demand for consumer loans and auto loans, and has been more pronounced in the housing sector, where higher borrowing rates impact both home affordability, driving down purchase activity, and demand for mortgage loan refinancing. The impact of continued elevated interest rates on slowing aggregate demand is expected to result in a mild increase in unemployment levels over the next year, which is likely to reduce consumer credit activity. At the same time, a slowdown in economic activity and job growth could prompt the Federal Reserve to begin lowering interest rates, which could spur increased demand for rate-sensitive lending products, in particular mortgage loans. Foreign central banks including in Canada and Europe have already begun to lower rates which we expect will increase demand for these rate-sensitive lending products. These dynamics impact the comparability of our results of operations, including our revenue and expense, between the periods presented below.
Current wording
During the first nine months of 2024, the U.S. economy and labor market remained resilient, with solid GDP growth, rising but still low unemployment, rising wages and subsiding inflation. The U.S. Federal Reserve maintained higher interest rates into September, which had the effect of slowing aggregate demand, resulting in slower jobs growth and a mild increase in unemployment levels. Higher interest rates have also slowed demand for consumer loans and auto loans, and have been more pronounced in the housing sector, where higher borrowing rates impact both home affordability, driving down purchase activity, and demand for mortgage loan refinancing. The slowdown in economic activity and job growth along with lower inflation prompted the U.S. Federal Reserve to begin lowering interest rates at the end of the third quarter of 2024, which could spur increased demand for rate-sensitive lending products, in particular mortgage loans, as well as renewed consumer confidence. The U.K. is beginning to show improvement driven by falling inflation and a resurgence in other economic indicators. Foreign central banks, including in Canada and Europe, have also begun to lower rates which we expect will increase demand for these rate-sensitive lending products. These dynamics impact the comparability of our results of operations, including our revenue and expense, between the periods presented below.
Previous wording
We believe that inflation has had and will continue to have a negative impact on our business and results of operations, including decreased demand for our services resulting from the Federal Reserve and other central banks raising rates. While central banks have paused rate increases and current conditions indicate that they may begin to cautiously lower rates from the higher interest rates established to combat inflation, rates that remain higher may result in slowing consumer spending on non-essential goods and services, and consequently lower demand for credit. The impact of elevated but subsiding levels of inflation and the resulting response by the Federal Reserve and other central banks to maintain higher but decreasing interest rates could have a material adverse impact on various aspects of our business in the future.
Current wording
We believe that inflation has had a negative impact on our business and results of operations, including decreased demand for our services resulting from the U.S. Federal Reserve and other central banks previously raising rates. The U.S. Federal Reserve and several international central banks have begun lowering interest rates in response to significant reductions in inflation levels, and have indicated that further interest rate reductions in the future are likely. However, rates that remain elevated relative to historic levels may result in depressed consumer spending on non-essential goods and services, and consequently lower demand for credit, which could have a material adverse impact on various aspects of our business in the future.
Previous wording
On November 12, 2023, our Board of Directors (“Board”) approved a transformation plan to optimize our operating model and continue to advance our technology. We expect to recognize one-time pre-tax expenses associated with this transformation plan of $355.0 to $375.0 million from the fourth quarter of 2023 through the completion of the transformation plan at the end of 2025, with the majority of costs to be incurred by the end of 2024. All pre-tax expenses will be cash expenditures, other than approximately $15.0 million of non-cash, facility exit costs. In addition, we anticipate capital expenditures to increase to approximately 9% of revenue in 2024 and then return to approximately 8% of revenue for 2025 due to investment in our technology infrastructure in connection with this transformation plan. Upon completion of this plan, we expect to generate annual savings of $120.0 to $140.0 million and reduce our capital expenditures from 8% of revenue to 6%, based on 2023 revenue. The following summarizes initiatives under the transformation plan.
Current wording
On November 12, 2023, our Board of Directors (“Board”) approved a transformation plan to optimize our operating model and continue to advance our technology. We expect to recognize one-time pre-tax expenses associated with this transformation plan of $355.0 to $375.0 million from the fourth quarter of 2023 through the completion of the transformation plan at the end of 2025, with the majority of costs to be incurred by the end of 2024. All pre-tax expenses will be cash expenditures, other than approximately $15.0 million of non-cash, facility exit costs. In addition, we now expect capital expenditures to be 8% of revenues in 2024, below our prior expectation of 9%, driven by more efficient spend throughout the year in addition to higher revenues, and remain at 8% in 2025 due to investment in our technology infrastructure in connection with this transformation plan. Upon completion of this plan, we expect to generate annual savings of $120.0 to $140.0 million and reduce our capital expenditures from 8% of revenue to 6%, based on 2023 revenue. The following summarizes initiatives under the transformation plan.
Previous wording
For the three months ended June 30, 2024, we incurred total expenses associated with the transformation plan of $14.6 million, comprised of restructuring expenses of $7.9 million for employee separation and $0.2 million for non-cash impairment charges associated with leased facilities, as well as $6.5 million of other business optimization expenses. For the six months ended June 30, 2024, we incurred total expenses associated with the transformation plan of $39.1 million, comprised of restructuring expenses of $24.6 million for employee separation and $1.7 million for non-cash impairment charges associated with leased facilities, as well as $12.8 million of other business optimization expenses. Employee separation costs and non-cash impairment charges are included in restructuring expenses in our Consolidated Statements of Operations. Since the inception of the operating model optimization program, we have incurred cumulative expenses of $116.7 million.
Current wording
For the three months ended September 30, 2024, we incurred total expenses associated with the transformation plan of $47.3 million, comprised of $40.5 million for a loss on an early termination of a leased facility, as well as $6.8 million of other business optimization expenses. For the nine months ended September 30, 2024, we incurred total expenses associated with the transformation plan of $86.4 million, comprised of restructuring expenses of $24.7 million for employee separation, and $42.1 million of facility exit charges, including a loss on an early termination of a leased facility, as well as $19.6 million of other business optimization expenses. Employee separation costs and facility exit charges are included in restructuring expenses in our Consolidated Statements of Operations. Since the inception of the operating model optimization program, we have incurred cumulative expenses of $164.0 million, of which $77.6 million was incurred in the three months ended December 31, 2023.
Previous wording
We have accrued liabilities for payment of employee separation costs of $35.1 million and $64.9 million as of June 30, 2024 and December 31, 2023, respectively. See Part I, Item 1, “Financial Information - Notes to Unaudited Consolidated Financial Statements,” Note 8, “Restructuring.”
Current wording
We have accrued liabilities for payment of employee separation costs of $23.0 million and $64.9 million as of September 30, 2024 and December 31, 2023, respectively. During the nine months ended September 30, 2024, we made cumulative payments of $66.5 million for employee separation costs and $30.0 million for an early termination penalty for a leased facility. See Part I, Item 1, “Financial Information - Notes to Unaudited Consolidated Financial Statements,” Note 8, “Restructuring.”
Previous wording
During the three months ended June 30, 2024, we prepaid $80.0 million of our Senior Secured Term Loan B-5, funded from cash-on-hand. During the three and six months ended June 30, 2023, we prepaid $75.0 million and $150.0 million, respectively, of our Senior Secured Term Loan B-6, funded from cash-on-hand. These transactions affect the comparability of interest expense between 2024 and 2023, as further discussed in “Results of Operations – Non-Operating Income and (Expense) – Interest Expense” below.
Current wording
During the three and nine months ended September 30, 2024, we prepaid $25.0 million and $105.0 million, respectively, of our Senior Secured Term Loan B-5, funded from cash-on-hand. During the three and nine months ended September 30, 2023, we prepaid $75.0 million and $225.0 million, respectively, of our Senior Secured Term Loan B-6, funded from cash-on-hand. These transactions affect the comparability of interest expense between 2024 and 2023, as further discussed in “Results of Operations – Non-Operating Income and (Expense) – Interest Expense” below.
Previous wording
Results of Operations —Three and Six Months Ended June 30, 2024 and 2023
Current wording
Results of Operations —Three and Nine Months Ended September 30, 2024 and 2023
Previous wording
For the three and six months ended June 30, 2024 and 2023, our results of operations were as follows:
Current wording
For the three and nine months ended September 30, 2024 and 2023, our results of operations were as follows:
Previous wording
We revised the Consolidated Statements of Operations for the three and six months ended June 30, 2023, to correct the classification of certain expenses between cost of services and selling, general and administrative. See Part I, Item 1, “Financial Information - Notes to Unaudited Consolidated Financial Statements,” Note 1, “Significant Accounting and Reporting Policies” and Note 19, “Revision of Previously Issued Financial Statements.”
Current wording
We revised the Consolidated Statements of Operations for the three and nine months ended September 30, 2023, to correct the classification of certain expenses between cost of services and selling, general and administrative. See Part I, Item 1, “Financial Information - Notes to Unaudited Consolidated Financial Statements,” Note 1, “Significant Accounting and Reporting Policies” and Note 19, “Revision of Previously Issued Financial Statements.”
Previous wording
For the three months ended June 30, 2024, revenue increased $72.8 million, or 7.5%, compared with the same period in 2023, due to growth in both segments, partially offset by a decrease of 0.1% from the impact of foreign currencies, as further discussed in the Segment Results of Operations section below.
Current wording
For the three months ended September 30, 2024, revenue increased $116.3 million, or 12.0%, compared with the same period in 2023, due to growth in both segments, partially offset by a decrease of 0.2% from the impact of foreign currencies, as further discussed in the Segment Results of Operations section below.
Previous wording
For the six months ended June 30, 2024, revenue increased $153.8 million, or 8.1%, compared with the same period in 2023, due to growth in both segments, including an increase of 0.1% due to the impact of foreign currencies, as further discussed in the Segment Results of Operations section below.
Current wording
For the nine months ended September 30, 2024, revenue increased $270.1 million, or 9.4%, compared with the same period in 2023, due to growth in both segments, with no impact due to foreign currencies, as further discussed in the Segment Results of Operations section below.
Previous wording
For the three months ended June 30, 2024, cost of services increased $19.7 million compared with the same period in 2023. The increase was due primarily to:
Current wording
For the three months ended September 30, 2024, cost of services increased $79.9 million compared with the same period in 2023. The increase was due primarily to:
Previous wording
•an increase of approximately $52.0 million in variable and non-variable product costs resulting from the increase in volume in both segments, and an increase in certain product cost pricing primarily in our U.S. Markets segment;
Current wording
•an increase of approximately $62.0 million in product costs resulting from an increase in variable postage related to a breach job in our U.S. Markets segment, an increase in certain product cost pricing primarily in our U.S. Markets segment and an increase in volumes in both segments; and
Previous wording
•a net decrease of approximately $12.0 million in labor costs as we realize benefits from our operating model transformation, partially offset by an increase in annual incentive compensation; and
Current wording
•a net increase of approximately $18.0 million in labor costs, primarily due to an increase in annual incentive and stock-based compensation, partially offset by a decrease in headcount as we realize benefits from our operating model transformation plan.
Previous wording
For the six months ended June 30, 2024, cost of services, increased $45.2 million compared with the same period in 2023. The increase was due primarily to:
Current wording
For the nine months ended September 30, 2024, cost of services increased $124.9 million compared with the same period in 2023. The increase was due primarily to:
Previous wording
•an increase of approximately $28.0 million in variable and non-variable product costs resulting from the increase in volume in both segments, and an increase in certain product cost pricing primarily in our U.S. Markets segment;
Current wording
•an increase of approximately $118.0 million in product costs resulting from an increase in variable postage related to a breach job in our U.S. Markets segment, an increase in certain product cost pricing primarily in our U.S. Markets segment and an increase in volume in both segments; and
Previous wording
For the three months ended June 30, 2024, selling, general and administrative expenses increased $18.3 million compared with the same period in 2023. The increase was primarily due to:
Current wording
For the three months ended September 30, 2024, selling, general and administrative expenses increased $14.9 million compared with the same period in 2023. The increase was primarily due to:
Previous wording
•an increase of approximately $3.0 million in technology costs, including our accelerated technology investment; and
Current wording
•an increase of approximately $9.0 million in technology costs, including our accelerated technology investment; and
Previous wording
•a decrease of approximately $5.0 million in integration costs of our business acquisitions, an initiative that was completed last year.
Current wording
•an increase of approximately $5.0 million from our operating model optimization program.
Previous wording
For the six months ended June 30, 2024, selling, general and administrative expenses increased $39.3 million compared with the same period in 2023. The increase was primarily due to:
Current wording
For the nine months ended September 30, 2024, selling, general and administrative expenses increased $54.4 million compared with the same period in 2023. The increase was primarily due to:
Previous wording
•a net increase of approximately $13.0 million in labor costs, including annual incentive compensation, stock-based incentive compensation and employee benefits;
Current wording
•a net increase of approximately $25.0 million in labor costs, including annual incentive compensation, stock-based incentive compensation and employee benefits;
Previous wording
•an increase of approximately $18.0 million in certain legal and regulatory expenses, primarily in our U.S. Markets segment;
Current wording
•an increase of approximately $19.0 million in certain legal and regulatory expenses, primarily in our U.S. Markets segment;
Previous wording
•an increase of approximately $6.0 million in technology costs, including our accelerated technology investment; and
Current wording
•an increase of approximately $10.0 million in technology costs, including our accelerated technology investment,
Previous wording
For the three and six months ended June 30, 2024, depreciation and amortization increased $2.8 million and $7.1 million, respectively, compared with the same periods in 2023 primarily due to the increase in capital expenditures related to our accelerated technology investment initiative.
Current wording
For the three and nine months ended September 30, 2024, depreciation and amortization increased $2.3 million and $9.4 million, respectively, compared with the same periods in 2023 primarily due to the increase in capital expenditures related to our accelerated technology investment initiative.
Previous wording
For the three and six months ended June 30, 2024, interest expense decreased $4.8 million and $7.9 million compared with the same periods in 2023. This decrease was due to a decrease in outstanding principal balance due to the prepayments made in 2023 and 2024, partially offset by an increase in theaverage periodic variable interest rate on the unhedged portion of our debt.
Current wording
For the three and nine months ended September 30, 2024, interest expense decreased $6.1 million and $14.0 million compared with the same periods in 2023. This decrease was due to a decrease in outstanding principal balance due to the prepayments made in 2023 and 2024 and the debt refinancing transactions over the last 12 months, partially offset by an increase in theaverage periodic variable interest rate on the unhedged portion of our debt.
Previous wording
For the three and six months ended June 30, 2024, debt-related expenses included $6.0 million and $9.1 million, respectively, of unamortized original issue discount, deferred financing fees, and other related fees expensed as a result of our debt prepayments and refinancings, and $0.6 million and $1.1 million respectively, of amortized deferred financing fees. For the three and six months ended June 30, 2023, debt-related expenses included $1.0 million and $2.1 million, respectively, of unamortized original issue discount, deferred financing fees and other related fees expensed as a result of debt prepayments, and $0.5 million and $1.1 million, respectively, of amortized deferred financing expenses.
Current wording
For the three and nine months ended September 30, 2024, debt-related expenses included $0.1 million and $9.2 million, respectively, of unamortized original issue discount, deferred financing fees, and other related fees expensed as a result of our debt prepayments and refinancings, and $0.5 million and $1.6 million, respectively, of amortized deferred financing fees. For the three and nine months ended September 30, 2023, debt-related expenses included $1.0 million and $3.1 million, respectively, of unamortized original issue discount, deferred financing fees and other related fees expensed as a result of debt prepayments, and $0.3 million and $1.5 million, respectively, of amortized deferred financing expenses.
Previous wording
For the three months ended June 30, 2024, other income (expense), net consists of $1.3 million of net currency remeasurement gains, a $1.2 million gain related to post-acquisition adjustments from previous acquisitions, and a $0.9 million gain of other miscellaneous non-operating income and expenses, partially offset by a $0.7 million net loss from fair value and impairment adjustment. For the six months ended June 30, 2024, other income (expense), net consists of a $5.7 million loss related to post-acquisition adjustments from previous acquisitions, $1.3 million of net currency remeasurement losses and a $0.8 million net loss from fair value and impairment adjustments, partially offset by a $0.7 million net gain from other miscellaneous non-operating income and expense items.
Current wording
For the three months ended September 30, 2024, other income (expense), net consists of a $3.0 million loss related to post-acquisition adjustments from previous acquisitions, partially offset by a $1.7 million net currency remeasurement gains and $0.1 million net other income from other miscellaneous non-operating income and expenses. For the nine months ended September 30, 2024, other income (expense), net consists of $8.7 million net loss related to post-acquisition adjustments from previous acquisitions and a $0.8 million net loss from fair value and impairment adjustments, partially offset by $0.4 million of net currency remeasurement gains and $0.8 million of net other income from other miscellaneous non-operating income and expense items.
Previous wording
For the three months ended June 30, 2023, other income (expense) consists of a $11.9 million net loss from fair value and impairment adjustments, $3.0 million of net currency measurement losses, and a $2.5 million loss related to post-acquisition adjustments from previous acquisitions, partially offset by a $3.1 million net gain from other miscellaneous non-operating income and expense items. For the six months ended June 30, 2023, other income (expense) consists of an $11.5 million net loss from fair value and impairment adjustments, $5.7 million of net currency remeasurement losses and a $5.1 million loss related to post-acquisition adjustments from previous acquisitions, partially offset by a $4.3 million net gain from other miscellaneous non-operating income and expense items.
Current wording
For the three months ended September 30, 2023, other income (expense) consists of a $10.7 million net gain from fair value and impairment adjustments and $1.8 million net other income from other miscellaneous non-operating income and expense items, partially offset by $0.8 million of net currency remeasurement losses. For the nine months ended September 30, 2023, other income (expense) consists of $6.5 million of net currency remeasurement losses, a $5.1 million loss related to post-acquisition adjustments from previous acquisitions and an $0.8 million net loss from fair value and impairment adjustments, partially offset by $6.1 million net other income from other miscellaneous non-operating income and expense items.
Previous wording
For the three months ended June 30, 2024, we reported an effective tax rate of 25.7%, which was higher than the 21.0% U.S. federal corporate statutory rate primarily due to foreign withholding taxes, nondeductible expenses primarily in connection with executive compensation limitations and uncertain tax positions, partially offset by benefits from the foreign rate differential and the research and development credit.
Current wording
For the three months ended September 30, 2024, we reported an effective tax rate of 25.7%, which was higher than the 21.0% U.S. federal corporate statutory rate primarily due to foreign withholding taxes, jurisdictional mix of income, and uncertain tax positions, partially offset by benefits from the research and development credit.
Previous wording
For the six months ended June 30, 2024, we reported an effective tax rate of 21.6%, which was higher than the 21.0% U.S. federal corporate statutory rate primarily due toforeign withholding taxes, nondeductible expenses primarily in connection with executive compensation limitations and uncertain tax positions, partially offset by benefits from the foreign rate differential, the remeasurement of deferred taxes due to changes in state apportionment rates, and the research and development credit.
Current wording
For the nine months ended September 30, 2024, we reported an effective tax rate of 22.9%, which was higher than the 21.0% U.S. federal corporate statutory ratedue to foreign withholding taxes, nondeductible expenses primarily in connection with executive compensation limitations and uncertain tax positions, partially offset by benefits from the research and development credit and the remeasurement of deferred taxes due to changes in state apportionment rates.
Previous wording
Segment Results of Operations—Three and Six Months Ended June 30, 2024 and 2023
Current wording
Segment Results of Operations—Three and Nine Months Ended September 30, 2024 and 2023
Previous wording
Management, including our CODM, evaluates the financial performance of our businesses based on revenue, segment Adjusted EBITDA. As discussed above, we have reorganized our operations and now have two operating segments, U.S. Markets and International. Prior period amounts have been recast to conform to our current operating structure. For the three and six months ended June 30, 2024 and 2023, our segment revenue, segment Adjusted EBITDA and segment Adjusted EBITDA Margin were as follows:
Current wording
Management, including our CODM, evaluates the financial performance of our businesses based on revenue, segment Adjusted EBITDA. As discussed above, we have reorganized our operations and now have two operating segments, U.S. Markets and International. Prior period amounts have been recast to conform to our current operating structure. For the three and nine months ended September 30, 2024 and 2023, our segment revenue, segment Adjusted EBITDA and segment Adjusted EBITDA Margin were as follows:
Previous wording
For the three and six months ended June 30, 2024, U.S. Markets revenue increased$46.1 million, or 6.0%, and$95.0 million, or 6.3%, respectively, compared withthe same periods in 2023. An increase in our Financial Services and Emerging Verticals was partially offset by a decrease in Consumer Interactive in both periods.
Current wording
For the three and nine months ended September 30, 2024, U.S. Markets revenue increased$94.0 million, or 12.5%, and$189.0 million, or 8.4%, respectively, compared withthe same periods in 2023, with increases in all verticals in both periods.
Previous wording
Consumer Interactive: For the three and six months ended June 30, 2024, revenue decreased $1.9 million, or 1.3%, and $4.9 million, or 1.7%, respectively, compared with the same periods in 2023. A decrease in our Direct channel from slowing demand for paid credit products was partially offset by an increase in our Indirect channel driven by breach revenue in both periods.
Current wording
Consumer Interactive: For the three and nine months ended September 30, 2024, revenue increased $30.6 million, or 21.4%, and $25.7 million, or 6.0%, respectively, compared with the same periods in 2023. For both periods, an increase in breach revenue was partially offset by a decrease in our Direct channel from slowing demand for paid credit products.
Previous wording
For the three and six months ended June 30, 2024, Adjusted EBITDA increased $27.3 million and $43.7 million, respectively, compared with the same periods in 2023, primarily due to an increase in revenue and a decrease in labor costs from our operating model optimization program, partially offset by higher variable product cost and an increase in litigation expenses in both periods. For the three and six months ended June 30, 2024, Adjusted EBITDA margins increased 1.2% and 0.5%, respectively, compared with the same periods in 2023, primarily due to revenue growth and realization of cost savings from the transformation plan.
Current wording
For the three and nine months ended September 30, 2024, Adjusted EBITDA increased $26.3 million and $70.0 million, respectively, compared with the same periods in 2023, primarily due to an increase in revenue and a decrease in labor costs from our operating model optimization program, partially offset by higher variable product cost from breach jobs and an increase in annual incentive compensation, and an increase in litigation expenses in the nine-month period. For the three and nine months ended September 30, 2024, Adjusted EBITDA margins decreased 1.2% and 0.1%, respectively, compared with the same periods in 2023, primarily due to higher variable product costs on breach revenue and an increase in annual incentive compensation, partially offset by revenue growth and realization of cost savings from the transformation plan.
Previous wording
For the three and six months ended June 30, 2024, International revenue increased $27.3 million, or 13.1%, and $60.0 million, or 14.6%, respectively, compared with the same periods in 2023 primarily due to higher local currency revenue in all regions, driven by increased volumes from improving economic conditions and new product initiatives, partially offset by a decrease of 0.6% for the three month period and an increase of 0.3% for the six month period from the impact of foreign currencies.
Current wording
For the three and nine months ended September 30, 2024, International revenue increased $24.5 million, or 11.3%, and $84.5 million, or 13.4%, respectively, compared with the same periods in 2023 primarily due to higher local currency revenue in all regions, driven by increased volumes from improving economic conditions and new product initiatives, partially offset by a decrease of 0.8% and 0.1%, respectively, from the impact of foreign currencies.
Previous wording
Canada: For the three and six months ended June 30, 2024, Canada revenue increased $3.5 million, or 10.0%, and$9.5 million , or 14.1%, respectively, compared with the same periods in 2023, primarily due to higher local currency revenue from broad-based volume increases, new business wins, and increased batch and breach services in both periods, partially offset by a decrease of 2.0% and 0.8%, respectively, from the impact of foreign currencies.
Current wording
Canada: For the three and nine months ended September 30, 2024, Canada revenue increased $2.5 million, or 6.8%, and$12.0 million, or 11.5%, respectively, compared with the same periods in 2023, primarily due to higher local currency revenue from broad-based volume increases, new business wins, and increased batch and breach services in both periods, partially offset by a decrease of 1.9% and 1.2%, respectively, from the impact of foreign currencies.
Previous wording
Latin America: For the three and six months ended June 30, 2024, Latin America revenue increased $4.3 million, or 14.3%, and$8.4 million, or 14.3%, respectively, compared with the same periods in 2023, primarily due to higher local currency revenue from broad-based growth across several of our markets in both periods, partially offset by the impact of a one-time contract in 2023 and an increase of 1.5% and 4.4%, respectively, from the impact of foreign currencies.
Current wording
Latin America: For the three and nine months ended September 30, 2024, Latin America revenue increased $2.3 million, or 7.2%, and$10.7 million, or 11.8%, respectively, compared with the same periods in 2023, primarily due to higher local currency revenue from broad-based growth across several of our markets in both periods, partially offset by the impact of a one-time contract in 2023 for the nine-month period, and a decrease of 5.5% for the three-month period and an increase of 1.0% for the nine-month period from the impact of foreign currencies.
Previous wording
United Kingdom: For the three and six months ended June 30, 2024, United Kingdom revenue increased $2.6 million, or 4.8%, and$4.6 million, or 4.4%, respectively, compared with the same periods in 2023, primarily due to volume and batch increases in both periods, and an increase of 0.8% and 2.4%, respectively, from the impact of foreign currency, partially offset by the impact of a drop in volume for a one-time contract in the prior year for the six-month period.
Current wording
United Kingdom: For the three and nine months ended September 30, 2024, United Kingdom revenue increased $3.3 million, or 6.0%, and$7.9 million, or 4.9%, respectively, compared with the same periods in 2023, primarily due to volume and batch increases in both periods, and an increase of 2.3% and 2.4%, respectively, from the impact of foreign currency, partially offset by the impact of a drop in volume for a one-time contract in the prior year for both periods.
Previous wording
Africa: For the three and six months ended June 30, 2024, Africa revenue increased $1.3 million, or 8.8%, and$1.8 million, or 6.2%, respectively, comp ared with the same periods in 2023, primarily due to meaningful new business wins and contract renewals as well as volume growth in emerging countries and emerging verticals in both periods, partially offset by a decrease of 1.2% and 4.8%, respectively, from the impact of foreign currencies.
Current wording
Africa: For the three and nine months ended September 30, 2024, Africa revenue increased $1.9 million, or 12.3%, and$3.7 million, or 8.3%, respectively, comp ared with the same periods in 2023, primarily due to meaningful new business wins and contract renewals as well as volume growth in emerging countries and emerging verticals in both periods. The impact of foreign currencies result in a revenue increase of 2.8% for the three month period and a decrease of 2.2% for the nine month period.
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Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
•an increase of approximately $12.0 million from our operating model optimization program; and
Current report — wording carried from elsewhere
•Accelerated technology investment includes Project Rise and the final phase of our technology investment announced in November 2023. Project Rise was announced in February 2020 and was originally expected to be completed in
Current report — wording carried from elsewhere
During the three and nine months ended September 30, 2023, we recorded a goodwill impairment of$414.0 million related to our United Kingdom reporting unit in our International segment.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
•a net decrease of approximately$15.0 million in labor costs as we realize benefits from our operating model transformation, partially offset by an increase in annual incentive compensation; and
Previous report — wording carried elsewhere
•an increase of approximately $6.0 million in certain legal and regulatory expenses, primarily in our U.S. Markets segment; and
Previous report — wording carried elsewhere
•a net increase of approximately $21.0 million in labor costs, including annual incentive compensation, stock-based incentive compensation and employee benefits;