Equifax Inc. (EFX) on Q2 2023 Results - Earnings Call Transcript

Operator: Greetings and welcome to the Equifax Second Quarter 2023 Earnings Conference Call. At this time all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions]. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Trevor Burns, Senior Vice President, Head of Corporate Investor Relations. Thank you, sir. Please go ahead. Trevor Burns: Thanks and good morning. Welcome to today's conference call. I'm Trevor Burns. With me today are Mark Begor, Chief Executive Officer; and John Gamble, Chief Financial Officer. Today's call is being recorded. An archive of the recording will be available later today in the IR Calendar section of the News & Events tab at our IR website www.investor.equifax.com. During the call today we'll be making reference to certain materials that can also be found in the Presentation section of the News & Events tab at our IR website. These materials are labeled 2Q 2023 earnings conference call. Also, we’ll be making certain forward-looking statements, including third quarter and full-year 2023 guidance to help you understand Equifax and its business environment. These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from our expectations. Certain Risk Factors that may impact our business are set forth in filings with the SEC, including our 2022 Form 10-K and subsequent filings. We will also be referring certain non-GAAP financial measures, including adjusted EPS attributable to Equifax and adjusted EBITDA, which will be adjusted for certain items that affect the comparability of our underlying operational performance. These non-GAAP measures are detailed in reconciliation tables, which are included with our earnings release and can be found in our financial results section of the financial info tab at our IR website. In the second quarter Equifax incurred a restructuring charge of $17.5 million or $0.10 per share. This charge is for costs principally incurred to reduce additional head counts in 2023 as we realign our business functions in advance of completing our cloud transformation. This restructuring charge is excluded from adjusted EBITDA, as well as adjusted EPS. Now, I'd like to turn it over to Mark. Mark Begor: Thanks, Trevor. Good morning. Turning to Slide 4, we executed well in the second quarter against a challenging mortgage and hiring markets, while delivering on our 2023 financial objectives. We continued to outperform our underlying markets with broad-based 6% non-mortgage growth against a tough 22% comp last year. We continued strong mortgage outperformance in a challenging market and very strong new product growth with a record 14% vitality index. We also executed well against the $200 million cloud and broad-based spending reduction program we announced in February and delivered 350 basis points of sequential margin expansion in the quarter. Globally, with the exception of the U.S. mortgage and hiring markets, we continue to see good customer demand across our consumer – good customer demand across our consumer, commercial and government lines of business. However, the U.S. mortgage market weakened relative to our expectations as we moved through the latter portions of the second quarter when mortgage rates moved above 7%, which will impact our results in the second half. In the quarter, we delivered adjusted EPS of $1.71 per share and adjusted EBITDA margins of 32.7%, both above the guidance we provided in April. Execution against our cloud and broader spending reduction programs was also very strong and drove the 350 basis points of margin expansion in the quarter. Revenue at $1.318 billion was close to the midpoint of guidance with USIS and International delivering strong quarters, both above our expectations. EWS non-mortgage revenue at up 4% was below our expectations, but off a very strong 52% comp last year, principally due to the weaker hiring market that impacted our talent solutions and onboarding businesses. EWS had outstanding operational execution in the quarter, delivering a new product vitality index of 25% and expanded current twin records by 12% to 161 million records, a growth of 5 million records sequentially. EWS also had strong cost management as they fully operational their new cloud capabilities, delivering adjusted EBITDA margins of 51.5%, up over 100 basis points sequentially and stronger than our expectations. USIS had an outstanding quarter and delivered almost 6% revenue growth, much stronger than our expectations. Total non-mortgage revenue grew 8%, led by 9% growth in our B2B online and 10% growth in consumer solutions and adjusted EBITDA margins of 36% were also stronger than our expectations, expanding over 300 basis points sequentially. Total U.S. mortgage revenue from both USIS and EWS was down about 13% or 24 points better than the 37% market decline from pricing actions, new products, records and penetration. We continue to see stronger than expected consumer shopping behavior in these higher interest rate environments. So the weaker mortgage market we saw in June had a much smaller impact on USIS than in EWS, where their mortgage activity is more aligned with closed loans. International delivered 7% growth in constant currency, also stronger than our expectations with double digit growth in Latin America and high single digit growth in Canada and the UK CRA. International delivered 24.2% adjusted EBITDA margins of 70 bips sequentially and stronger than our expectations. New product innovation leveraging our differentiated data assets and new capabilities delivered by the Equifax cloud is also executing at a very high level. Our new product vitality index of over 14% in the quarter was a record for Equifax and 400 basis points above our 10% long-term vitality goal and up over 100 basis points sequentially. This is encouraging for the future and reinforces our long-term strategy of leveraging our differentiated data assets, our new cloud capabilities to deliver new solutions for our customers. We continue to make good progress on completing our cloud transformation. At the end of the quarter, over 70% of North American revenue was being delivered from the new Equifax cloud. We're convinced that our Equifax Cloud, Single Data Fabric and AI Capabilities will provide a competitive advantage to Equifax for years to come. As we look to the second half, we expect the weaker than expected U.S. mortgage market that we saw in the latter half of the quarter to continue through the remainder of the year. Our updated guidance is for U.S. mortgage originations to be down about 37% for the year and about 20% in the second half, a reduction of five points from our prior full-year framework. We expect EFX mortgage origination outperformance to continue to be very strong in 2023. We're also expecting to see weaker U.S. hiring market continue through for the remainder of the year, impacting Workforce Solutions talent and onboarding businesses. However, we expect to offset the hiring weakness principally from strength in the Workforce Solutions government business and continued solid performances at USIS and international. EFX non-mortgage revenue growth was up 6%, up a very strong 22% comp last year. We expect non-mortgage revenue growth to strengthen in the second half to up 11% and up over 300 basis points sequentially relative to the first half from continued commercial execution and strong new product rollouts. Our 2023 cloud and broader cost reduction program executed well in the quarter. As we continue to operate more of Equifax in the new cloud environment, we're seeing more opportunities for efficiencies and expect an additional $10 million of spending reductions in the second half. These new actions will deliver additional run rate savings of $25 million next year. So we now expect to deliver spending reductions of $210 million this year and over $275 million in 2024. And as a reminder, the 2023 savings are weighted to the second half and will deliver $65 million of 2024 run rate benefit. We expect the weaker mortgage originations to impact our mortgage revenue by about $40 million in the second half. Despite the weakening in U.S. hiring, we expect to deliver 2023 non-mortgage revenue growth of about 8% from strong growth in EWS government, USIS non-mortgage and international and stronger NPI growth. This above 8% non-mortgage growth is against a strong 20% non-mortgage growth last year, and well within our 8% to 12% long-term growth framework. The net impact of the weaker than expected mortgage market of about $40 million, partially offset by positive FX, is a reduction of our 2023 revenue guidance at the midpoint by $25 million to about $5.3 billion. The impact of the lower mortgage revenue results in a reduction of our full year 2023 adjusted EPS guidance at the midpoint of $0.22 to $6.98 per share. We remain focused on delivering EBITDA margins of 36% and over $2 in adjusted EPS per share in the fourth quarter, which we believe sets us up well for 2024 and beyond. In June we received shareholder approval for the acquisition of Boa Vista Serviços, the second largest credit bureau in Brazil. We're energized to complete this strategic and financially attractive acquisition. We expect the transaction to close in early August and are actively planning for integration and the transfer of our cloud capabilities, global platforms and products to help accelerate BVS growth. The BVS acquisition will add approximately $160 million of year one run rate revenue in the fast-growing Brazilian market, and we expect the transaction to be slightly accretive to year one adjusted EPS. The guidance we provided for 2023 does not include BVS. We intend to provide more details on our expectations for BVS in 2023 at our October earnings call after we close the deal. Before I cover results in more detail, I wanted to provide a brief overview of what we're seeing in the U.S. economy and the U.S. consumer. Since our April update, outside the challenging mortgage and hiring markets I already discussed, the U.S. consumer and our customers remain broadly resilient. We continue to navigate a higher interest rate environment that's negatively impacting the U.S. mortgage market. Mortgage interest rates have trended upward since April and were slightly above 7% at the beginning of July and were just under 7% at the end of last week, which is clearly impacting originations. We expect mortgage originations, as I mentioned earlier, to further weaken in the second half with originations down about 37% in 2023 or 500 basis points weaker than our April framework. Broadly, consumers are still strong and working with unemployment at historically low levels, and the market is resilient with roughly 10 million open jobs against 5 million people who are looking for jobs. Inflation is starting to abate at 3% in July, which should mean we are approaching a peak in Fed interest rates. Consumers are spending and borrowing with average credit card and personal loan balances back above pre-pandemic levels. With consumers working and still leveraging pre-cloud stimulus and savings, delinquencies are still at historic low levels, and close to 2019 pre-pandemic levels. Subprime DQs are the only areas of stress that we're seeing. We're also seeing credit card and personal loan utilization increases with some delinquency increases in subprime, but more broadly delinquencies are back at pre-pandemic levels, which as we all know were very low, although they remain significantly below levels we saw in the last economic event in 2009 and 2010. Auto delinquency rates for subprime consumers are above pre-pandemic levels, as well as above levels we saw in ‘08 and – I'm sorry, ‘09 and ‘10. We believe there's been some credit tightening by our financial customers, but principally in FinTech and subprime. And looking forward, consumers holding student loans will need to resume making payments to begin in October, and we believe removing student loan payment fees will have a modest increase – a decrease on average credit scores. Beyond the weaker motors market and slowing white-collar hiring market, which had a larger impact on EWS than we anticipated in the quarter. The combination of white-collar job reductions and broad hiring freezes has reduced both background screening and onboarding activity, and as I mentioned earlier, we expect this to continue in the second half. Turning to Slide 5, Workforce Solutions revenue was down 4% in the quarter. Mortgage revenue was down 20%, but up about 3 percentage points sequentially. The decline of 20% compares to a mortgage origination down 37% as estimated by MBA based on data through May. As I mentioned, overall market performance in the latter part of the quarter weakened relative to our expectations, resulting in lower mortgage revenue than we expected in our April framework. Strong record growth, the positive impact of 2023 price actions, and strong NPI performance driven by the adoption of our Mortgage 36 Solution, which is a 36-month trended mortgage product, drove to 17 points of mortgage outperformance by EWS in the quarter. And during the quarter, about 50% of twin mortgage inquiries were for products that include EWS trended or historical information, and of course, these are all at higher price points. In the quarter, Workforce Solutions saw declines in low margin, manual mortgage verification services revenue, as some customers move some of these activities back in-house. And this negatively impacted mortgage outperformance by about 300 basis points in the quarter. EWS had another very strong quarter of record additions with an incremental 5 million records added to the twin database, ending the quarter with 161 million current records, which was up 12%, with 120 million unique records or SSNs, which was up almost 10%. Over the past five years, EWS has doubled the size of the twin database, a strong testament to the record acquisition strategy EWS has executed across the multiple segments of direct employers, third party payroll providers, HR software management companies, pension administrators, and self-employed individuals. As a reminder, twin’s 120 million unique records represent individuals or SSNs on the twin database, and their 161 million current records represent current active jobs on the database, which means there's close to 40 million individuals in our data set that have more than one job, including self-employed or 1099 employees and people on defined benefit pension plans, we now covered just over 50% of the 220 million working and income producing individuals in the United States. And through our cloud tech transformation, we're expanding our capabilities to ingest all levels of records, including 1099 based self-employment records. And as a reminder, about 50% of our records are contributed directly by individual employers, as they are customers of our expanding employer services business, and the remaining are contributed through partnerships, principally with payroll companies. During the quarter we signed agreements with four new payroll processors that will deliver records during the rest of the year. The twin database now has 631 million total current and historical records, from over 2.8 million employers in the United States. Increasingly, more of our new products are incorporating current and historical records, with about 50% of second quarter verification services revenue, coming from products that included historical records. Turning the Slide 6, Workforce Solutions delivered non-mortgage revenue growth about 4%, with non-mortgage revenue, now representing over 70% of Workforce Solutions revenue. And as a reminder, EWS non-mortgage revenue was up a very strong 52% in second quarter last year, which was a very tough comp. Verification Services non-mortgage revenue which now represents about two thirds of verified revenue delivered 4% growth both sequentially and versus last year in the quarter, which was below our expectations. This was also against a very challenging 90% non-mortgage growth comp by Workforce Solutions last year. The miss versus expectations was predominantly in-town solutions from weaker white color hiring. Government performed exceptionally well, consistent with the high growth that we had expected and consumer finance declined somewhat in the quarter. In government we saw continued very strong growth with revenue up 21% off over a 100% growth last year in second quarter. And revenue also up almost 10% sequentially driven by strong growth was CMS at the state level, new products in twin record growth. Government now represents about 45% of verifier non-mortgage revenue. We expect to see accelerating sequential growth in our government vertical in the second half, driven by growth from CMS Medicaid re-determinations, ACA open enrollment volume, further state penetration and pricing from state contract renewals. We began to see incremental volumes from CMS re-determinations in May and expect to see this accelerate in the second half. This strong sequential growth will also result in accelerated second half EWS growth rates. Talent Solutions were down 6% in the quarter, but up about 1% sequentially, as we are comping off a very strong 130% growth last year from record levels of hiring in the second quarter. Also as a reminder, we are currently more heavily penetrated to white collar workers including technology, professional services, health care and financial services, which has seen greater reductions in hiring activity and broader hiring freezes than the about 7% decline that BLS is reporting through May. Approaching 70% of Talent Solutions revenue in the quarter was from industries that had negative hiring growth versus last year, with many of those industries having significant double-digit negative growth in the quarter. We are out growing the declining market from penetration of our digital solutions with background screeners, strong new product growth, continued expansion of twin records in favorable pricing. We are also seeing continued customer penetration of our new differentiated educational products. We expect these new products to continue to drive above underlying market talent revenue growth through 2023 and in a 2024 beyond. -: In total, we expect to see accelerated sequential growth in verifier non-mortgage in the second half, driven by strong government growth, as well as moderate sequential growth in talent and consumer lending. Employer Services revenue of $109 million was up 4% driven by growth in our I-9 and onboarding businesses despite the negative impact of U.S. hiring. In total, our UC and ERC businesses were up slightly. Despite the slowdown in U.S. hiring, we have not seen an increase in UC revenue yet. As a reminder, first quarter employer service revenues were seasonally higher than other quarters due to the higher Affordable Care Act in W-2 volumes. In the third and fourth quarters we expect to see overall growth in Employer Services sequentially from the second quarter levels driven by penetration and I-9 onboarding. Workflow Solutions adjusted EBITDA margins of 51.5% were up 110 bips from first quarter and in line with our April guidance from strong operational execution. The EWS team continued to perform well despite the macro headwinds from mortgage in U.S. hiring, outpeforming the underlying markets from strong record growth, new products, penetration and price. As shown on Slide 7, USIS revenue of $445 million was up 6% and much better than our expectations due to stronger mortgage and non-mortgage performance. USIS mortgage revenue was down less than 1% and outperformed the mortgage market credit inquiries that were down 33% by more than 30 points. The strong pricing environment that we discussed in April, both from the addition of Telecom & Utilities attributes to our new mortgage credit solution and the increased pricing for credit scores drove the very strong out performance. At $113 million mortgage revenue was 25% of total USIS revenue in the quarter. Mortgage credit increase again outperformed MBA's current estimate of originations by about five points from increased shopping behavior. We expect this increase shopping behavior to continue as we move through the remainder of the year. Total non-mortgage revenue of $332 million was up 8% in the quarter, with organic growth of about 4% and better than our expectations. B2B non-mortgage revenue of $278 million which represented over 60% of total USIS revenue was up 7% with organic revenue growth of 3%. B2B non-mortgage online revenue growth was up 9% total and 3% organically. During the quarter online revenue had strong double digit growth in commercial and identity and fraud with auto approaching 10% growth and telco and insurance growing low single digits. Banking was up slightly consistent with first quarter, with market volumes at larger financial institutions offsetting declines with smaller financial institutions and FinTechs that were more principally focused on subprime. Financial Marketing Services or B2B offline business had revenue of $56 million that was up 1%. Strong revenue growth in fraud and header, as well as risk and account reviews was partially offset by declines in marketing, principally pre-screen marketing with IXI wealth revenue growth about flat. Pre-screen marketing revenue was at similar levels at first quarter as we continue to see significant weakness from smaller FIs and FinTech in the subprime space, which was partially offset by growth from larger FIs. USIS is using the power of their ignite platform along with their proprietary data to ensure customers – to enable customers to drive deeper marketing insights and identifying extending offers to better prospects and delivering better marketing performance management. USIS has seen incremental penetration of growing pipeline from our advanced ignite capabilities. We did see limited growth in our portfolio review business, but have not seen a meaningful increase in our risk-based portfolio reviews that typically pick up during challenging economic times. USIS consumer solutions direct-to-consumer business had another strong quarter with revenue up $54 million, up 10% from very good performances in both our consumer direct and indirect channels. USIS is winning in the marketplace with strong momentum from new solutions and differentiated data and key verticals of identity and fraud, commercial and auto. We're also in active dialogues with USIS customers about the competitive benefits of the Equifax Cloud that will deliver always unsubility, faster data speeds and Equifax Cloud enabled new products driving us, which is driving a strong active new deal pipeline, which was up from the first quarter. Todd and the USIS team are on offense as they complete their cloud transformation and pivot to leveraging their new cloud capabilities to deliver new products. USIS adjusted EBITDA margins were 36% in the quarter, up 340 basis points sequentially and the strongest USUS margins since the beginning of the mortgage market decline a year ago. EBITDA margins were up sequentially from better than expected revenue performance and good execution against their cloud and broader cost reduction program. Turning the Slide 8, international revenue was $290 million, up 7% in constant currency and better than our expectations. Europe local currency revenue was down 2% through the expected about 16% decline in our U.K. debt management business. As we discussed previously, our U.K. debt management business was very strong in the first half last year, as the U.K. government made large catch up debt placements following COVID debt collection moratoriums. As a result, we expect to see declines in the first half versus last year. We expected to see those declines. However, we do not expect – we do expect to see consistent sequential debt management growth as we move through the second half and we expect debt management to return to revenue growth later this year. Our U.K. and Spain CRA business revenue was up 7% in the quarter in a very good performance. This strong performance was driven principally by strong growth within identity and fraud decisioning consumer and direct-to-consumer. Asia Pacific delivered solid local currency revenue growth at 4%, with growth in commercial identity and fraud and D2C, as well as continued very strong growth in our India business which was up 38% in the quarter. Latin America local currency revenue was up a very strong 23%, driven by double digit growth in Argentina, Uruguay, Paraguay and Central America from new product introductions and pricing actions. This is the ninth consecutive quarter of strong double digit growth for Latin America which we expect to continue in the second half. Canada local currency revenue was up 8% with broad base growth in consumer and identity and fraud decisioning and commercial. In Canada we recently completed a full migration to our new cloud base fraud IQ exchange and now have all of our Canadian fraud exchange customers on this new cloud based solution. International adjusted EBITDA margins of 24.2% were up 70 basis points sequentially and better than our expectations. The improvement was driven by good execution against their 2023 cost reduction plans. Turning now to Slide 9 and the second quarter overall non-mortgage, constant dollar revenue growth of 6% was lower than our expectations, but against a very strong 22% growth last year. USIS and international, both delivered stronger non-mortgage growth than we expected. This was offset by the slower growth in EWS non-mortgage that I mentioned earlier in Talent and non-boarding, despite their very strong growth in their government business. As we looked at the second half, we expect non-mortgage revenue growth to grow sequentially in the third and fourth quarter, led by very strong growth in the EWS government business, and growth in EWS talent and consumer lending from new products. We also expect continued strong performance in USIS and international, resulting in third quarter Equifax non-mortgage revenue growth above 9%, which is well within our 8% to 12% long term growth framework. Turning to Slide 10, new product introductions leveraging our differentiated data and the Equifax Cloud are central to our EFX 2025 growth strategy. In the second quarter we launched over 30 new products and delivered a record 14% Vitality Index. Our second quarter VI was again led by strong performances in EWS and Latin America. In the second quarter over 80% of our new product revenue came from non-mortgage products leveraging the Equifax Cloud. Leveraging our Equifax Cloud capabilities to drive new product roll-outs, we expect to deliver Vitality Index of approximately 13% in 2023, which is 300 basis points above our 10% long term Vitality Goal Index. This equates to about $700 million of revenue in 2023 from new products introduced in the past three years. New products leveraging our differentiated data, Equifax Cloud capabilities and Single Data Fabric are central to our long term growth framework in driving Equifax top line and margins. On the right side of the slide we highlighted several new products introduced in the quarter. These new solutions are a testament to the power of the Equifax Cloud and driving innovation that can increase the visibility of consumers to help expand access to credit and create new mainstream financial opportunities. We launched a new product this quarter, Talent Report Flex 2.0, a customizable pre-higher employment verification solution, that helps solve the challenge background screeners and HR professionals may experience when seeking to verify a candidate specific employment records. With a unique and first-to-market employer preview option, a list of employer names is now available on the work number using a candidate's SSM. This allows the customization of the employment history report by selecting only the records wanted. With the power of the Equifax Cloud, we'll bring new solutions to market to meet the needs of our customers. Turning the Slide 10, we were very excited to receive shareholder approval for our new Boa Vista acquisition in late June. BVS is the second largest credit bureau in the fast growing Brazilian market with over a $2 billion TAM. We expect the transaction to close and early August and Equifax will be able to provide Boa Vista with access to expansive Equifax international capabilities, our cloud native data, products decisioning and analytic technology for the rapid development of new products and services and expansion into new verticals like identity and fraud in Brazil. As a reminder, I mentioned earlier, we expect Boa Vista to deliver approximately $160 million in run rate revenue to Equifax and to be accretive to adjusted EPS in the first year. As I mentioned earlier, Boa Vista results are not included in the guidance we're providing today. We'll provide more detail on Boa Vista’s impact in 2023 during our October earnings call after the transaction is closed. Given the size of the transaction, we plan to pause on M&A activity in the second half to focus on integration of BVS and our ‘21 and ‘22 acquisitions. And our intention is to use excess free cash flow over the coming quarters to pay down debt and reduce our leverage. Turning this Slide 12, we believe that artificial intelligence is fundamentally changing Equifax business capabilities and is becoming table-sticks for data analytics companies to manage increasingly large diverse and complex data sets, within a highly regulated data bringing unique complex challenges around AI explainability. On the left side of Side 12, our large and diverse proprietary data base – data set is a big differentiator for Equifax including our income and employment data, traditional alternative credit data, cell phone, utility and Pay TV data, identity and fraud data in our commercial and wealth data. This proprietary data at scale, heat and length in our new Single Data Fabric gives us significant advantages in using AI to build advanced models, scores and products including identity and fraud solutions, enabled by our best in class Equifax Cloud native technology. To date, Equifax has about 70 approved AI patents supporting our AI NeuroDecision Technology which we call NDT, and Explainable AI which is critical to ensuring that the correct data is used to make credit decisions that surface by AI models and scores. Equifax will continue to invest in AI as we may remain on offense, leveraging Google's Vertex AI capabilities, combined with our own Equifax NDT capabilities will be building more predictive and valuable models and scores with our expanding data set, and accelerating the speed at which we develop new model scores and products to bring more current solutions to our customers. We believe Equifax is uniquely positioned to capture the value of AI going forward. Now I'd like to turn it over to John to provide more detail on our third quarter and full year guidance. We're executing very well against our strategic priorities and delivering revenue growth and expanding margins in a challenging macro environment. -: In total, we expect to see accelerated sequential growth in verifier non-mortgage in the second half, driven by strong government growth, as well as moderate sequential growth in talent and consumer lending. Employer Services revenue of $109 million was up 4% driven by growth in our I-9 and onboarding businesses despite the negative impact of U.S. hiring. In total, our UC and ERC businesses were up slightly. Despite the slowdown in U.S. hiring, we have not seen an increase in UC revenue yet. As a reminder, first quarter employer service revenues were seasonally higher than other quarters due to the higher Affordable Care Act in W-2 volumes. In the third and fourth quarters we expect to see overall growth in Employer Services sequentially from the second quarter levels driven by penetration and I-9 onboarding. Workflow Solutions adjusted EBITDA margins of 51.5% were up 110 bips from first quarter and in line with our April guidance from strong operational execution. The EWS team continued to perform well despite the macro headwinds from mortgage in U.S. hiring, outpeforming the underlying markets from strong record growth, new products, penetration and price. As shown on Slide 7, USIS revenue of $445 million was up 6% and much better than our expectations due to stronger mortgage and non-mortgage performance. USIS mortgage revenue was down less than 1% and outperformed the mortgage market credit inquiries that were down 33% by more than 30 points. The strong pricing environment that we discussed in April, both from the addition of Telecom & Utilities attributes to our new mortgage credit solution and the increased pricing for credit scores drove the very strong out performance. At $113 million mortgage revenue was 25% of total USIS revenue in the quarter. Mortgage credit increase again outperformed MBA's current estimate of originations by about five points from increased shopping behavior. We expect this increase shopping behavior to continue as we move through the remainder of the year. Total non-mortgage revenue of $332 million was up 8% in the quarter, with organic growth of about 4% and better than our expectations. B2B non-mortgage revenue of $278 million which represented over 60% of total USIS revenue was up 7% with organic revenue growth of 3%. B2B non-mortgage online revenue growth was up 9% total and 3% organically. During the quarter online revenue had strong double digit growth in commercial and identity and fraud with auto approaching 10% growth and telco and insurance growing low single digits. Banking was up slightly consistent with first quarter, with market volumes at larger financial institutions offsetting declines with smaller financial institutions and FinTechs that were more principally focused on subprime. Financial Marketing Services or B2B offline business had revenue of $56 million that was up 1%. Strong revenue growth in fraud and header, as well as risk and account reviews was partially offset by declines in marketing, principally pre-screen marketing with IXI wealth revenue growth about flat. Pre-screen marketing revenue was at similar levels at first quarter as we continue to see significant weakness from smaller FIs and FinTech in the subprime space, which was partially offset by growth from larger FIs. USIS is using the power of their ignite platform along with their proprietary data to ensure customers – to enable customers to drive deeper marketing insights and identifying extending offers to better prospects and delivering better marketing performance management. USIS has seen incremental penetration of growing pipeline from our advanced ignite capabilities. We did see limited growth in our portfolio review business, but have not seen a meaningful increase in our risk-based portfolio reviews that typically pick up during challenging economic times. USIS consumer solutions direct-to-consumer business had another strong quarter with revenue up $54 million, up 10% from very good performances in both our consumer direct and indirect channels. USIS is winning in the marketplace with strong momentum from new solutions and differentiated data and key verticals of identity and fraud, commercial and auto. We're also in active dialogues with USIS customers about the competitive benefits of the Equifax Cloud that will deliver always unsubility, faster data speeds and Equifax Cloud enabled new products driving us, which is driving a strong active new deal pipeline, which was up from the first quarter. Todd and the USIS team are on offense as they complete their cloud transformation and pivot to leveraging their new cloud capabilities to deliver new products. USIS adjusted EBITDA margins were 36% in the quarter, up 340 basis points sequentially and the strongest USUS margins since the beginning of the mortgage market decline a year ago. EBITDA margins were up sequentially from better than expected revenue performance and good execution against their cloud and broader cost reduction program. Turning the Slide 8, international revenue was $290 million, up 7% in constant currency and better than our expectations. Europe local currency revenue was down 2% through the expected about 16% decline in our U.K. debt management business. As we discussed previously, our U.K. debt management business was very strong in the first half last year, as the U.K. government made large catch up debt placements following COVID debt collection moratoriums. As a result, we expect to see declines in the first half versus last year. We expected to see those declines. However, we do not expect – we do expect to see consistent sequential debt management growth as we move through the second half and we expect debt management to return to revenue growth later this year. Our U.K. and Spain CRA business revenue was up 7% in the quarter in a very good performance. This strong performance was driven principally by strong growth within identity and fraud decisioning consumer and direct-to-consumer. Asia Pacific delivered solid local currency revenue growth at 4%, with growth in commercial identity and fraud and D2C, as well as continued very strong growth in our India business which was up 38% in the quarter. Latin America local currency revenue was up a very strong 23%, driven by double digit growth in Argentina, Uruguay, Paraguay and Central America from new product introductions and pricing actions. This is the ninth consecutive quarter of strong double digit growth for Latin America which we expect to continue in the second half. Canada local currency revenue was up 8% with broad base growth in consumer and identity and fraud decisioning and commercial. In Canada we recently completed a full migration to our new cloud base fraud IQ exchange and now have all of our Canadian fraud exchange customers on this new cloud based solution. International adjusted EBITDA margins of 24.2% were up 70 basis points sequentially and better than our expectations. The improvement was driven by good execution against their 2023 cost reduction plans. Turning now to Slide 9 and the second quarter overall non-mortgage, constant dollar revenue growth of 6% was lower than our expectations, but against a very strong 22% growth last year. USIS and international, both delivered stronger non-mortgage growth than we expected. This was offset by the slower growth in EWS non-mortgage that I mentioned earlier in Talent and non-boarding, despite their very strong growth in their government business. As we looked at the second half, we expect non-mortgage revenue growth to grow sequentially in the third and fourth quarter, led by very strong growth in the EWS government business, and growth in EWS talent and consumer lending from new products. We also expect continued strong performance in USIS and international, resulting in third quarter Equifax non-mortgage revenue growth above 9%, which is well within our 8% to 12% long term growth framework. Turning to Slide 10, new product introductions leveraging our differentiated data and the Equifax Cloud are central to our EFX 2025 growth strategy. In the second quarter we launched over 30 new products and delivered a record 14% Vitality Index. Our second quarter VI was again led by strong performances in EWS and Latin America. In the second quarter over 80% of our new product revenue came from non-mortgage products leveraging the Equifax Cloud. Leveraging our Equifax Cloud capabilities to drive new product roll-outs, we expect to deliver Vitality Index of approximately 13% in 2023, which is 300 basis points above our 10% long term Vitality Goal Index. This equates to about $700 million of revenue in 2023 from new products introduced in the past three years. New products leveraging our differentiated data, Equifax Cloud capabilities and Single Data Fabric are central to our long term growth framework in driving Equifax top line and margins. On the right side of the slide we highlighted several new products introduced in the quarter. These new solutions are a testament to the power of the Equifax Cloud and driving innovation that can increase the visibility of consumers to help expand access to credit and create new mainstream financial opportunities. We launched a new product this quarter, Talent Report Flex 2.0, a customizable pre-higher employment verification solution, that helps solve the challenge background screeners and HR professionals may experience when seeking to verify a candidate specific employment records. With a unique and first-to-market employer preview option, a list of employer names is now available on the work number using a candidate's SSM. This allows the customization of the employment history report by selecting only the records wanted. With the power of the Equifax Cloud, we'll bring new solutions to market to meet the needs of our customers. Turning the Slide 10, we were very excited to receive shareholder approval for our new Boa Vista acquisition in late June. BVS is the second largest credit bureau in the fast growing Brazilian market with over a $2 billion TAM. We expect the transaction to close and early August and Equifax will be able to provide Boa Vista with access to expansive Equifax international capabilities, our cloud native data, products decisioning and analytic technology for the rapid development of new products and services and expansion into new verticals like identity and fraud in Brazil. As a reminder, I mentioned earlier, we expect Boa Vista to deliver approximately $160 million in run rate revenue to Equifax and to be accretive to adjusted EPS in the first year. As I mentioned earlier, Boa Vista results are not included in the guidance we're providing today. We'll provide more detail on Boa Vista’s impact in 2023 during our October earnings call after the transaction is closed. Given the size of the transaction, we plan to pause on M&A activity in the second half to focus on integration of BVS and our ‘21 and ‘22 acquisitions. And our intention is to use excess free cash flow over the coming quarters to pay down debt and reduce our leverage. Turning this Slide 12, we believe that artificial intelligence is fundamentally changing Equifax business capabilities and is becoming table-sticks for data analytics companies to manage increasingly large diverse and complex data sets, within a highly regulated data bringing unique complex challenges around AI explainability. On the left side of Side 12, our large and diverse proprietary data base – data set is a big differentiator for Equifax including our income and employment data, traditional alternative credit data, cell phone, utility and Pay TV data, identity and fraud data in our commercial and wealth data. This proprietary data at scale, heat and length in our new Single Data Fabric gives us significant advantages in using AI to build advanced models, scores and products including identity and fraud solutions, enabled by our best in class Equifax Cloud native technology. To date, Equifax has about 70 approved AI patents supporting our AI NeuroDecision Technology which we call NDT, and Explainable AI which is critical to ensuring that the correct data is used to make credit decisions that surface by AI models and scores. Equifax will continue to invest in AI as we may remain on offense, leveraging Google's Vertex AI capabilities, combined with our own Equifax NDT capabilities will be building more predictive and valuable models and scores with our expanding data set, and accelerating the speed at which we develop new model scores and products to bring more current solutions to our customers. We believe Equifax is uniquely positioned to capture the value of AI going forward. Now I'd like to turn it over to John to provide more detail on our third quarter and full year guidance. We're executing very well against our strategic priorities and delivering revenue growth and expanding margins in a challenging macro environment. John Gamble : Thanks Mark. As Mark mentioned, second quarter mortgage market originations were estimated by MBA with data through May at down about 37%, which is in line with our expectations for the quarter. As shown on Slide 13, second quarter credit increase were down 33% and also in line with our April expectations. However, as Mark mentioned, we saw weaker than expected inquiry data in June, which impacted our overall mortgage revenue for the quarter. As we look to the second half of 2023, our planning does not assume a fundamental improvement in the mortgage or housing markets from the levels we saw in late June and early July. We're applying normal seasonal patterns to these current run rates of credit and twin inquiries. In the first half of 2023, credit inquiries were down about 39% year-to-year, about 8 percentage points better than the about 47% decline in mortgage originations as estimated based on MBA data. In the second quarter, this spread narrowed to about 5 percentage points. In the third and fourth quarters, we expect this elevated impact from mortgage shopping and application activity that does not result in a closed loan to continue at about 5 percentage points. Applying normal seasonal patterns to the run rate we are seeing for mortgage credit inquiries in the end of June and early July, we expect mortgage credit inquiries to be down 31% for all of 2023, which is a slight reduction from our April guidance. However, we are expecting mortgage originations to be down about 37%, reflecting about 6 percentage points of shopping behavior that benefits credit inquiries. This is about 5 percentage points weaker than the 32% we discussed in our April guidance for mortgage originations. This full year guidance for mortgage credit inquiries would result in second half mortgage credit inquiries being down about 14%, with the third and fourth quarter credit inquiries being down about 23% and 4% respectively. And applying the 5 percentage point benefit to credit inquiries relative to mortgage originations from shopping that is consistent with what we saw in the second quarter, we would estimate mortgage originations in the second half would be down just under 20%. We are expecting the number of originations to weaken slightly in the third quarter relative to the second quarter, and fourth quarter originations to weaken somewhat seasonally relative to the third. As we have discussed in the past, Workforce Solutions mortgage revenue is more closely tied to mortgage originations. This reduction in 2023 expected mortgage originations relative to our April guidance reduces Workforce Solutions revenue in the second half of 2023 by about $40 million. As our expectation for USIS credit inquiries in the second half of 2023 is slightly weaker than our April guidance, USIS mortgage revenue did not change meaningfully. Turning to Slide 14, as Mark referenced earlier, in the second quarter we exceeded our adjusted EBITDA margin and adjusted EPS guidance and delivered well against our 2023 spending reduction plan that will now deliver $210 million in spending reduction in ‘23 versus 2022 levels, including workforce reduction, closer to data centers and additional cost control measures. For 3Q we expect adjusted EBITDA margins of about 33.5% at approximately the midpoint of our guidance range. The sequential margin expansion is driven by both revenue growth, as well as the savings related to our expanded $210 million dollar spending reduction plan Mark previously discussed. As revenue grows sequentially through the second half of ’23 and cloud and broader cost reductions accelerate, we are focused on delivering fourth quarter adjusted EBITDA margins of about 36% and adjusted EPS exceeding $2 per share in the fourth quarter. Slide 15 provides our guidance for 3Q‘23. In 3Q’23 we expect total Equifax revenue of between $1.32 billion and $1.34 billion, with revenue up about 6.9% at the midpoint. Non-mortgage constant currency revenue growth should strengthen to over 9% and will be partially offset by mortgage revenue that is down low single digits. FX is expected to have a minimal impact on revenue, and acquisitions are expected to benefit revenue by about 1%. As a reminder, this guidance does not include BVS. We’ll provide more information on BVS at our October earnings call. 3Q’23 adjusted EBITDA margins are expected to increase sequentially by about 75 basis points at the midpoint of our guidance, reflecting both sequential revenue growth and the benefits of our cost actions. Overall, BU EBITDA margins in total are expected to be up sequentially for 2Q’23, driven by Workforce Solutions returning to revenue growth in the quarter, as well as margin improvement international. Corporate expenses for 3Q’23 are expected to be about flat with 2Q’23. Business unit performance in the third quarter is expected to be as described below. Workforce Solutions revenue growth is expected to be up about 7.5%. We expect non-mortgage revenue will return to over 10% growth year-to-year from continued strong growth in government and a return to growth in Talent Solutions in consumer lending verticals. EBITDA margins are expected to be about flat sequentially. USIS revenue is expected to be up about 7.5% year-to-year. Non-mortgage year-to-year revenue growth should be up slightly from the 8% we saw this quarter, above their long term 6% to 8% revenue growth framework. Mortgage revenue is expected to return to year-to-year growth in the quarter. Adjusted EBITDA margins are expected to be down about 100 basis points sequentially, principally due to the lower revenue. International revenue is expected to be up 4.5% in constant currency. EBITDA margins are expected to increase a very strong 250 basis points sequentially, reflecting sequential revenue growth and strong cost management, including the benefit of planned cost reductions. We're expecting adjusted EPS in 3Q’23 to be $1.72 to $1.82 per share. Slide 16 provides the specifics of our 2023 full year guidance. As Mark mentioned, we're lowering our full year revenue guidance by $25 million at the midpoint of $5.3 billion from the weaker mortgage market. As Mark discussed, the reduction in revenue guidance reflects our assumption that U.S. mortgage originations will decline 37% in ‘23, 5 percentage points more than our April guidance, reducing mortgage revenue by over $40 million in Workforce Solutions. As I referenced earlier, we're seeing continued high levels of shopping, which is benefiting USIS, and as such mortgage revenue and USIS is not expected to be meaningfully impacted by the lower level of originations. Total mortgage revenue is expected to decline about 13% in 2023. Partially offsetting the reduction of Workforce Solutions, mortgage revenue is positive FX. We continue to expect non-mortgage constant currency revenue growth to be strong at above 8% in 2023, slightly stronger than our April guidance. Non-mortgage constant currency revenue is expected to grow over 11% in the second half of ‘23 as continued solid performance from USIS and international and accelerating growth in the EWS government vertical more than offset the impact of weaker U.S. hiring. Adjusted EBITDA margins are expected to improve consistently throughout 2023, with the third quarter at 33.5% and the fourth quarter at about 36%. As Mark mentioned, we remain focused on delivering both 36% EBITDA margins and over $2 per share in 4Q’23. As Mark also mentioned, we're reducing our adjusted EPS guidance for 2023 to the range of $6.85 to $7.10 per share at the midpoint of $6.98. This is a reduction of $0.22 or about $35 million in operating income. This is principally driven by the loss of over $40 million of high margin Workforce Solutions mortgage revenue. We believe that our full year guidance is centered at the midpoint of both our revenue and adjusted EPS guidance ranges. Total capital spending for 2023 is expected to be slightly over $550 million. Capital spending in the second quarter was about $150 million in line with our expectations. We expect capital spending in the third quarter to decline sequentially by almost $15 million as we continue to progress U.S. and Canadian migrations to Date Fabric. CapEx as a percentage of revenue will continue to decline in 2024 and thereafter as we progress toward reaching 7% of revenue or below. As we discussed in April, we remain focused on delivering our midterm goal of $7 billion in revenue with 39% EBITDA margins. Market conditions are significantly different than when we first discussed in November 2021, our goal of achieving these 2025 goals. The U.S. mortgage market is expected in 2023 to be down about 40% from the normal 2015 to 19 average levels we had discussed, to deliver $7 billion in revenue in 2025. Our non-mortgage revenue has grown faster than we discussed with you back in November 2021. However, even after considering the additional revenue from the BVS acquisition of recovery in the mortgage market from the levels we are seeing in 2023, of on the order of two-thirds of the loss volume still needed to achieve our $7 billion goal in 2025. We are focused on driving above market growth and delivering the cost and expense improvements committed with our expanded 2023 and 2024 spending reduction plans, and as part of our data and technology cloud transformation, which are needed to achieve 39% EBITDA margins as we exceed the 7 billion revenue level. We will continue to discuss with you our progress toward our 7 billion dollar goal as the mortgage and overall markets evolve in 2023 and forward. And I would like to turn it back over to Mark. Mark Begor: Thanks John. Wrapping up on slide 17, Equifax delivered a solid quarter with adjusted EBITDA margins and adjusted EPS above our guidance despite the challenging mortgage and hiring markets. USIS and international delivered strong quarters offsetting some weakness in the EWS Talent and Onboarding businesses, to allow us to deliver revenue at about the midpoint and EPS above guidance. The breadth and depth of our businesses and execution against our 2023 cloud and broader spending reduction program allowed us to deliver despite a challenging macro environment. Summarizing at the business unit level, Workforce Solutions continue to deliver against their long-term growth strategy. While their 4% revenue decline was pressured by mortgage and hiring macros, they were comping off a very strong 21% growth last year. We expect that growth to recover in the second half, and importantly EWS had another very strong quarter of twin record additions, adding formula payroll providers, which brings a total added since the beginning of last year to 17, and increased current records to $161 million, up $5 million from the third quarter and toward 12% versus last year, with total records growing to $631 million. Workforce delivered a very strong NPI vitality index of 25%, leveraging their cloud capabilities which will benefit them in the second half and in ‘24 and beyond. In the continued growth of Twin, strong NPI and government growth positions EWS for 15% growth in the second half. And EWS operating focus delivered 51.5% EBITDA margins, which is up over 100 basis points and stronger than we expected. Second, USIS continued their momentum for the first quarter was strong non-mortgage growth of 8% total and at the top end of their long-term framework and 4% organic, driven by online B2B non-mortgage growth of 9% total and 4% organic, as they focus on customer migrations to the Equifax Cloud. USIS delivered EBITDA margins of 36%, up over 300 basis points sequentially through revenue growth and strong cost management. International delivered strong 7% local currency growth with strong growth in what’s Latin America, Canada, India and our European credit businesses. And they delivered EBITDA margins of 24%, up 70 basis points and stronger than our expectations. As mentioned earlier, our second quarter Vitality Index of 14% is an Equifax record and was 400 bips above our 10% long-term growth framework, as we've delivered over 60 new products year-to-date, leveraging the new Equifax Cloud. The focus of our Equifax Cloud Data and Technology Transformation is in completing those North American migrations, which will allow us to further accelerate new product launches and complete legacy system decommissioning. Our Cloud native technology will differentiate Equifax and allows us to be an offense with leading systems stability and capabilities that position us to leverage AI tools to drive revenue growth and cost efficiencies. We're executing well against our 2023 cloud and broader spending reduction plan that will now deliver $210 million of savings this year, with run rate savings of $275 million in 2024. And this is up $10 million in ‘23 and $25 million in ‘24 from our April framework. We remain focused on delivering 36% adjusted EBITDA margins and over $2 per share in adjusted EPS in the fourth quarter, which sets us up well for 2024. And we're energized about receiving shareholder approval for the BVS acquisition in June, and we're on track to close this strategic and financially attractive acquisition in early August. And as mentioned earlier given the weaker than expected mortgage market, we're lowering our full year revenue guidance by $25 million to $5.3 billion at the midpoint, with full year 2023 adjusted EPS at the midpoint to be down $0.22 per share to $6.98 from the impact of the lower high – high – lower but high margin mortgage revenue. We're energized to be entering the next chapter of new Equifax as we pivot from building the new Equifax Cloud to leveraging our new cloud capabilities to drive our top and bottom line. This is an exciting time for Equifax – exciting time for Equifax, and we're convinced that our new Equifax cloud-based technology, differentiated data assets, and our new Single Data Fabric and our market leading businesses will deliver higher growth expanded margins and free cash flow in the future. And with that operator, let me open it up for questions. Operator: Thank you. [Operator Instructions] Today's first question is coming from Andrew Steinerman of JP Morgan, please go ahead. Andrew Steinerman : Hi John! Let me just ask my two questions together. The first one is, could you just tell us what second quarter mortgage revenues is as a percentage of total revenues. I didn’t catch that if you gave it. And the second one is looking at the EWS revenue growth guide for third quarter of 7.5% which is on slide 15, and then kind of taking it together with the comments for EWS revenue guide on slide 16. It seems to imply a rather strong revenue ramp for EWS in the fourth quarter compared to the third quarter, and could you just comment on that? A - John Gamble: So, your first question, it is 21%, the answer your first question. Andrew Steinerman : Thanks. A - John Gamble: And as we take a look at EWS, Mark talked about it very – I think fairly completely right. What we're seeing is we're expecting to see nice sequential improvements. I'm talking specifically about non-mortgage as we move through third quarter and into fourth quarter. A lot of it driven by very strong growth in government, which we feel very good about and the strength we're seeing in the government business, not only in the third and fourth quarter, but we've seen in the first quarter and in the second quarter. And we're also expecting to move back to see sequential growth in Talent driven by new product, and also in our consumer lending businesses, also driven by new product and to some extent penetration. So we think those factors allow us to see nice sequential growth as we go through the year. And as on mortgage and as we're now comparing against easier comps as we get into the second half of 2023 versus 2022, we see better growth rates. You're also going to see obviously better growth rates in mortgage, although we took mortgage down, right, the level of decline in mortgage year-on-year and originations declined substantially going through the year, we can expect to continue to have very good mortgage out performance in EWS, so that allows us to return to growth in EWS mortgages we get toward the best of the very end of this year. So with those two factors together, we think we're going to see nice acceleration in EWS revenue as we go through the rest of this year. Andrew Steinerman : Thank you so much. Operator: Thank you. The next question is coming from Manav Patnaik of Barclays, please go ahead. Manav Patnaik : Thank you. Good morning. Maybe my first question, just to follow-up on that. I guess you addressed the revenue visibility to seem to have as your ramp up into the end of the year. Can you just talk about the moving pieces on margins? Like how confident are you to hit that 36% and how that flows through to next year? Mark Begor: I'll start Manav and John can jump in. So we’ll leave the revenue leverage aside, so we have – you know we think its good visibility outside of the mortgage piece. As you know, we increased our cost program by another $10 million this year and $25 million next year. So we see additional efficiencies as we get further into the cloud completion. So combining that with the core program we announced in February, we just have a lot of visibility, because we know when contractors are leaving and when we're taking other cost actions. So that that gives us a lot of confidence in the cost side of that across all the businesses and at the corporate level. John Gamble: And again, as Mark said, good focus on cost, we have good visibility on cost and we do – obviously we do need to see the revenue growth we're talking about. But I think we feel very good about the sequential movements we're talking about in our non-mortgage business. We delivered well in non-mortgage other than the Talent impacts we talked about in the second quarter. And then obviously we've made an assumption on the mortgage market. We think we've made a reasonable assumption, but having the mortgage market deliberate the levels we're talking about, obviously it’s also needed for us to deliver our 36% margins in the fourth quarter. Manav Patnaik : Got it. And then just not work force solutions, I mean I guess most of the changes are just your volume assumptions. I missed what your new gross hiring assumption is, but I was also hoping you could address – I’ll confirm that you're not seeing any changes in the competitive behavior, like all these changes are really just your volume assumptions. Mark Begor: John, I'll let you jump on the hiring assumption, but you know we did mention Manav that for example in mortgage, we're seeing some mortgage originators move manual verifications back from Equifax in-house, so that had an impact us on the quarter. We expect that to continue, so that it is clearly a revenue impact and what we're seeing is that you've got mortgage originators doing less activity, so they've got people sitting in their offices and they are deciding to do some of those manual verifications in-house, so that clearly had an impact. I think there was no question that experience through, to a lesser degree, Transunion and they're kind of new focus on this or. In the marketplace we don't see that being a meaningful impact on our revenue, but they are definitely out there and they are doing more than they were a year ago. So that clearly also has an impact, particularly probably in mortgage. A - John Gamble: In terms of Talent Market I don't think we gave a percentage. I think in April we talked about the market being down like 10%. We said June was worse and that we're expecting that weaker level of the Talent Market to continue through the rest of the year. We didn't really give a number, but weaker than the 10% we talked about in April. A - Mark Begor: And again, we also commented Manav that we see ourselves over indexing to white collar employers in our customer base, and those are more impacted from both hiring freezes, you know as well as layoffs and blue collar side. Manav Patnaik : Got it. Thank you. Operator: Thank you. The next question is coming from Kevin McVeigh of Credit Suisse, please go ahead. Kevin McVeigh : Great! Thanks so much. I’ll ask one multi-part question. So thanks for framing the $40 million run off. Was that purely higher rates or any dislocation from regional banks or maybe tightening standards and then I wondered if you could give us a sense of – the sensitivity on the way up. So the extent rates started to go down. Like, what would be that theoretical level, where you may see people get a little bit more aggressive with a heloc or refinance. I mean it seems like 7% was a trigger for some weakness. What level of rate and is there any way to
EFX Ratings Summary
EFX Quant Ranking
Related Analysis

Equifax Inc. (NYSE:EFX) Earnings Report Highlights

  • Earnings Per Share (EPS) of $2.12, aligning with estimates and showing growth from the previous year.
  • Reported revenue of $1.42 billion fell short of the estimated $1.44 billion.
  • Valuation ratios such as the price-to-earnings (P/E) ratio of 55.08 and price-to-sales ratio of 5.55 reflect high market expectations and investor confidence.

Equifax Inc. (NYSE:EFX) is a leading global data, analytics, and technology company, known for its comprehensive credit reporting services and data analytics capabilities. The company competes with major credit reporting agencies like Experian and TransUnion, operating across various segments including Workforce Solutions, US Information Solutions, and International.

On February 6, 2025, Equifax reported an EPS of $2.12, which was in line with the estimated EPS of $2.12. This performance marks a positive trend, with the company having reported an EPS of $1.81 in the same quarter of the previous year, indicating a growth in earnings. However, Equifax's actual revenue of approximately $1.42 billion fell short of the estimated $1.44 billion, according to Zacks Investment Research.

The company's strong performance in the fourth quarter of 2024 was driven by robust growth across its various segments, despite missing revenue targets. The price-to-earnings (P/E) ratio of 55.08 and the price-to-sales ratio of 5.55 suggest high market expectations for future earnings growth and reflect investor confidence in its revenue-generating capabilities.

Further financial metrics such as the enterprise value to sales ratio of 6.44 and the enterprise value to operating cash flow ratio of 27.23 provide insights into Equifax's valuation relative to its revenue and cash flow generation. The earnings yield of 1.82% offers a perspective on the return on investment for shareholders. Additionally, Equifax's debt-to-equity ratio of 1.11 indicates a moderate level of debt compared to its equity, while the current ratio of 0.88 suggests potential challenges in covering short-term liabilities with short-term assets.

Equifax Inc. (NYSE:EFX) Sees Positive Analyst Outlook Amid Strategic Expansions and Innovations

  • The consensus target price for Equifax Inc. (NYSE:EFX) has been steadily increasing, indicating growing analyst optimism.
  • Strategic international expansions and innovations in fraud detection and identity verification are key drivers of Equifax's positive outlook.
  • Equifax's strong performance in non-mortgage businesses and anticipated growth in mortgage revenue due to potential interest rate cuts are bolstering confidence.

Equifax Inc. (NYSE:EFX) is a prominent player in the information solutions and human resources business process automation outsourcing industry. The company operates through three main segments: Workforce Solutions, U.S. Information Solutions (USIS), and International. These segments provide a variety of services, such as employment and income verification, credit information and scoring, fraud detection, and identity verification. Equifax serves a wide range of clients across industries like financial services, healthcare, and government, and has a global presence.

The consensus target price for Equifax's stock has been on an upward trajectory over the past year. A month ago, analysts set the average price target at $320.50, up from $317.18 a quarter ago, and significantly higher than the $299.89 target from a year ago. This trend suggests growing optimism among analysts about Equifax's stock performance, as highlighted by the recent strong quarterly earnings report. The company's robust performance in its Workforce Solutions and USIS segments has likely contributed to this positive outlook.

Equifax's strategic expansion in international markets, particularly in Asia and Latin America, is another factor driving analyst confidence. This expansion is expected to fuel future growth, as evidenced by the anticipated revenue growth in Europe and Latin America for the third quarter of 2024. Analyst Georgios Mihalos from Cowen & Co. has set a price target of $295, reflecting a positive outlook for Equifax's international ventures.

Innovations in fraud detection and identity verification are also bolstering Equifax's competitive position. The company's investment in advanced technologies is likely to enhance its service offerings, contributing to the optimistic target price outlook. Equifax's strong growth in non-mortgage businesses and expected recovery in mortgage revenue further support this positive sentiment, as indicated by the 'Strong Buy' rating and a one-year price target of $360 per share.

Equifax's recent achievements, such as an 8% organic revenue growth in the second quarter and a notable 13% increase in non-mortgage sectors, demonstrate its resilience and adaptability. Despite a decline in mortgage credit inquiries, the company has maintained strong performance. The anticipated interest rate cuts by the Federal Reserve are expected to boost Equifax's mortgage revenue and overall Workforce Solutions, potentially accelerating growth from fiscal year 2025 onwards, as supported by analyst Georgios Mihalos.

Equifax Stock Plunges 9% After Q1 Results

Equifax (NYSE:EFX) shares tumbled more than 9% in premarket trading Thursday following the company's announcement of second-quarter and full-year financial guidance that didn't meet analysts' forecasts.

In its fiscal first quarter of 2024, Equifax reported earnings per share (EPS) of $1.50, beating the consensus estimate of $1.44. However, its revenue for the quarter was $1.39 billion, slightly below the expected $1.4 billion.

For the upcoming fiscal second quarter, Equifax expects its adjusted EPS to be between $1.65 and $1.75, which is below the analyst forecast of $1.86. The company also anticipates revenue for the quarter to be between $1.41 billion and $1.43 billion, which falls short of the expected $1.44 billion.

Looking ahead to the full year of 2024, Equifax predicts adjusted EPS to range from $7.20 to $7.50, whereas analysts had projected $7.64. The company maintained its full-year revenue forecast, expecting it to be between $5.67 billion and $5.77 billion, slightly below the analyst consensus of $5.8 billion.

Equifax Posts Q3 Miss Due to Weaker Mortgage Market

Equifax (NYSE:EFX) reported its third-quarter results, which fell below Wall Street expectations, primarily driven by a weaker U.S. mortgage market.

In the third quarter, the company reported revenue growth of 6% to reach $1.319 billion, slightly missing the Street estimate of $1.33 billion. Adjusted EPS increased by 2% to $1.76, also falling short of the Street estimate of $1.79.

For the full year, Equifax revised its revenue guidance downward by $44 million to $5.256 billion, and its adjusted EPS guidance was lowered by $0.31 to $6.67 per share. These figures also fell below the Street expectations of $5.29 billion and $6.91, respectively.

Equifax anticipates the challenges in the U.S. mortgage market, driven by current high-interest rates, to persist in the fourth quarter. As a result, the company now forecasts a 34% decline in Equifax mortgage credit inquiries for the full year, which is a 3% reduction from its previous forecast.

Equifax Inc Investor Day Takeaways

Analysts at RBC Capital provided their views on Equifax Inc. (NYSE:EFX) following the Investor Day, where the company unveiled its long-term financial framework, which came in slightly below the analysts’ expectations.

The brokerage sees cloud transformation driving sustainable top-line growth moving forward in the 8-12% range (7-10% organic) in combination with around 39% EBITDA margins, around $1.9 billion in FCF, and EPS of $12.75 by 2025. While the $12.75 figure came in modestly below expectations of $15, the analysts believe the company has baked in conservatism. Bottom line, RBC Capital sees the cloud transformation and technological leadership driving further upside to conservative estimates. With greater visibility and confidence into the longer-term revenue and earnings growth outlook, which should help the stock re-rate higher, the brokerage increased its price target to $294 from $270, maintaining its sector perform rating.