Equifax Inc. (EFX) on Q4 2021 Results - Earnings Call Transcript

Operator: Hello, and welcome to the Equifax Q4 2021 Earnings Conference Call and Webcast. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Dorian Hare, Senior Vice President, Head of Corporate Investor Relations. Please go ahead, sir. Dorian Hare: Thanks and good morning. Welcome to today's conference call. I'm Dorian Hare. 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 and Events tab at our IR website, www.investor.equifax.com. During today's call, we will be making reference to certain materials that can also be found in the Presentations section of the News and Events tab at our IR website. These materials are labeled Q4 2021 Earnings Conference Call. Also, we will be making certain forward-looking statements, including first quarter and full year 2022 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 our filings with the SEC, including our 2020 Form 10-K and subsequent filings. We will also be referring to certain non-GAAP financial measures, including adjusted EPS attributable to Equifax, adjusted net income 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 the Financial Results section of the Financial Info tab at our IR website. In 4Q 2021, Equifax incurred a restructuring charge of $8.6 million or $0.05 a share. This charge was for COGS principally incurred to reduce technology development expense as we complete the Equifax data and cloud transformation. This restructuring charge is excluded from adjusted EBITDA, adjusted income and adjusted EPS. As we have previously discussed, in July 2019, we entered into a settlement agreement to resolve the U.S. consumer class action litigation arising out of the 2017 cybersecurity incident. That settlement agreement has been the subject of numerous court appeals. On January 10, 2022, the U.S. Supreme Court denied the last remaining petitions seeking to appeal, and the settlement agreement became effective as of January 11, 2022. In January, we deposited the remaining $345 million into the consumer restitution fund, and the claims administrator will begin to validate consumer claims. As a result, in the fourth quarter, we eliminated – excuse me, as a reminder, in the fourth quarter, we eliminated our GCS operational segment and moved its lines of the business into Workforce Solutions, USIS and International in Canada and Europe. As a result, Equifax now has three operating segments. In our remarks today, we will discuss 2021 and fourth quarter results as well as our 2022 guidance focused on this new structure, unless we indicate otherwise. For your reference, we have included in our 4Q 2021 earnings release Q&A reconciliations of our 2020 and 2021 prior business unit operating segment results to this new structure. Now I'd like to turn it over to Mark. Mark Begor: Thanks, Dorian, and good morning. Before I get to our strong fourth quarter results, I'd like to spend a few minutes discussing the tremendous progress and outstanding results we delivered last year. As shown on Slide 4, our financial performance in 2021 was very strong and built off an equally strong 2020. Revenue was up 19% with organic local currency revenue growth of 15% and core non-market growth of 22%, all well above our new 8% to 12% long-term financial framework, reflecting the strength of the new Equifax growth model. Adjusted EPS at $7.64 was up 10% and adjusted for the change in treatment of transformation expenses in 2021 was up a strong 24%. This is truly an outstanding year, substantially stronger than we expected when we started 2021 and despite a U.S. mortgage market that was down more than we expected at 7.5%. We delivered eight consecutive quarters of double-digit growth and 2 years of strong above-market performance with 17% growth in 2020 and 19% growth last year. Workforce Solutions delivered a milestone with revenue over $2 billion for the first time, up 39% with organic revenue growth of 34% and the business is up 2x from their 2019 revenue of $915 million. This was again driven by very strong performance in Verification Services with revenue up 46% and organic revenue growth of 41%. Active records on the work number grew by a very strong 22 million records or 19% to 136 million records at the end of the year. Mortgage revenue was up 41%, almost 50 percentage points stronger than the underlying market. And non-mortgage revenue in Verification Services had organic growth of 41% driven by talent solutions with organic growth of over 100%. USIS also had a strong year. Non-mortgage revenue was up 16% with organic growth of 10%. Total revenue was up 4% with organic revenue growth of 2% despite the 7.5% decline in the U.S. mortgage market. In total, our U.S. businesses of Workforce Solutions and USIS, which together represent almost 80% of Equifax revenue, delivered 20% total and 17% organic growth with non-mortgage revenue growth of over 21% total and 15% organic, again, all well above our new long-term framework of 8% to 12%. International also delivered a milestone in 2021 with their first year of revenues over $1 billion. Revenue grew 10% in local currency driven by double-digit growth in Asia Pacific, Canada and Latin America. In 2021, Equifax core revenue growth, the green section of the bars on Slide 5, grew a very strong 22% with fourth quarter revenue growth also a very strong 18%, both substantially above the new 8% to 12% long-term growth framework. Core organic revenue growth in 2021 was 18% and 13% in the fourth quarter, again, above our long-term framework. Non-mortgage organic growth in Workforce Solutions and USIS and growth in International drove almost 9% core organic revenue growth in 2021 and over 8% in the fourth quarter, excluding the impact of acquisitions and FX. Mortgage outperformance, primarily in EWS, drove the remaining 9% in 2021 and 5% in fourth quarter, respectively, of core organic revenue growth. As we move through 2022 and 2023, we expect to see continued strong and balanced core growth, reflecting the benefits of the – from the strength of Workforce Solutions, the new Equifax Cloud and accelerated NPIs. And we expect continued strong non-mortgage performance from both organic growth and acquisitions as well as continued strong mortgage outperformance from Workforce Solutions. Slide 6 covers our strong fourth quarter performance. Revenue at $1.25 billion was up 12% with organic constant currency growth of 6.6% despite a decline in the U.S. mortgage market of 21%, which was off a strong 23% growth a year ago in the fourth quarter. As I discussed earlier, core revenue growth was a very strong 18% in the quarter with core organic growth of 13% again driven by outstanding performance at Workforce Solutions. Fourth quarter Equifax adjusted EBITDA totaled $403 million, slightly higher than expected. EBITDA margins of 32.2% were consistent with our expectations. The decline in margins versus last year was primarily due to the inclusion of cloud technology transformation costs of $47 million in our adjusted results in the fourth quarter, which were excluded last year. Adjusting for these costs, our margins were 35.9%. John will provide more – a more detailed discussion on our 2022 margins in a few minutes and the drivers of our up to 200 basis point margin expansion in 2022 that we're targeting. Adjusted EPS of $1.84 per share was above the high-end of our guidance range. As expected, adjusted EPS was down from last year and reflected the inclusion of cloud transformation costs of $47 million or $0.30 a share in our adjusted results in the quarter, which were excluded last year. Excluding these costs, adjusted EPS would have been up 7.1%, about consistent with our organic revenue growth. The acquisitions completed in 2021 were slightly accretive to adjusted EPS. And we expect substantial acceleration and accretion in 2022 and 2023 from the acquisitions as we complete the integrations. Workforce Solutions had another exceptional quarter, delivering revenue of $532 million with reported revenue growth of 29% and organic revenue growth of 17%. And this, of course, was delivered despite the 21% decline in the mortgage market in the fourth quarter and against very strong 61% revenue growth that they delivered last year in the fourth quarter. Non-mortgage revenue was up almost 50% with organic non-mortgage revenue up about 25%. Included in Workforce Solutions fourth quarter results is about $7 million from ID Watchdog, which was previously a part of GCS and is now part of Employer Services business in EWS. The strength of EWS and uniqueness and value of their twin income and employment data was clear again in the fourth quarter. EWS is clearly our fastest-growing business and powering our results. Verification Services revenue in the quarter was $427 million, up 29%, with organic growth of almost 17%. The revenue from our Appriss Insights acquisition is included in Verification Services. Verification Services mortgage revenue grew 6% in the quarter despite the 21% decline in the mortgage market with the Workforce Solutions outperformance driven by increased records, penetration and new products. Verification Services nonmortgage revenue represented just over half of total Verification Services revenue in the quarter. Total Verifier non-mortgage revenue was up almost 65%, reflecting strong 30% organic revenue growth plus the addition of Appriss Insights in October. Non-mortgage organic revenue growth of 30% was very strong, particularly over last year's fourth quarter, which was up 15%. Our government vertical with the addition of Appriss Insights provides a broad set of solutions to federal, state and local governments. These include solutions in support of government assistance programs, including food and rental support as well as the VINE victims notification service and other law enforcement solutions acquired as a part of Appriss Insights. The government vertical represented about 40% of total non-mortgage verification revenue in the quarter and delivered 25% total and over 15% organic revenue growth. Organic growth was driven by the continued growth in the work number and the continued expansion of state benefit programs. We also continue to see a ramp in volume from our new Social Security Administration contract that went live last quarter. And we expect to see significant growth in volume as we move towards run rate levels through 2022. Talent solutions, which provides income, employment, educational background and medical certification verifications, incarceration, criminal background, medical sanctions and other information for the hiring and onboarding processes through our EWS Data Hub, had another outstanding quarter. The addition of Appriss Insights in October, educational information from the National Student Clearinghouse in August and significant growth in the work number during the quarter, substantially expanded the EWS Data Hub, supporting continued customer expansion and new products. Total talent solutions revenue represented about 40% of Verifier nonmortgage revenue in the quarter with total growth of almost 100% and organic growth of 50%. As you know, over 75 million people change jobs in the U.S. annually with the vast majority having some level of screening as a part of that hiring process. We've seen both the number and the frequency of job changes increasing in the current environment. Our ongoing addition of new data assets to the EWS Data Hub will enhance new product growth in this important vertical in the future. The nonmortgage consumer lending business, principally in banking and auto, showed strong growth as well, up over 50% in the quarter. Debt management with nonmortgage consumer lending grew over 30% in the quarter. Employer Services revenue of $105 million was up 28% in the quarter. And as you know, this is an important growth engine for Workforce Solutions that also delivers new twin records. Combined, our unemployment claims and employee retention credit businesses had revenue of about $54 million, up slightly from last year but down over 15% sequentially as we expected. Substantial declines in UC revenue in the quarter were offset by growth in ERC revenue, which, as a reminder, is our business that supports employers obtaining federal employee retention credits. Employer Services non-UC and non-ERC businesses had revenue of about $50 million, up 60% versus last year with organic revenue growth of about 35%. Our I-9 business, driven by our new I-9 Anywhere solution, continued to show very strong growth, up over 50%. In the fourth quarter, our I-9 business made up about 40% of Employer Services non-UC and ERC revenue. In August, we acquired Health e(fx), which provides services to employers to help them ensure compliance with the Affordable Care Act, which we are now combining with our existing workforce analytics business. This combined workforce analytics business represented about 25% of employer non-UC and ERC revenue in the quarter. Workforce Solutions adjusted EBITDA margins were 54.6% for 2021 and have been consistently in the mid-50s over the past two years. As John will discuss later, we expect Workforce Solutions margins to be at or above the 54.6% delivered in 2021 in both the first quarter and in 2022. As we expected, fourth quarter 2021 EBITDA margins in Workforce were 48.4% and were lower than our historic levels due to three factors. First, Appriss Insights and Health e(fx) negatively impacted margins. As expected, initial margins from these acquisitions are dilutive to Workforce Solutions. As we move through 2022 and drive synergies, this dilutive impact will be mitigated. Second, in the fourth quarter, EWS ramped one major and several smaller payroll processor record contributions to our Verifier database as well as integrated other data contributors to the data hub. As we discussed in the past, in the quarters where this occurs, we incur incremental costs related to boarding and ramping the new contributors. And as we've indicated, fourth quarter saw substantial new record additions, and these in-period costs impacted margins in the quarter. And third, our cloud transformation cost negatively impacted margins by about 200 basis points. Workforce substantially completed the Verifier cloud-native migration in the fourth quarter, so these costs will decline substantially going forward. We remain confident that Workforce Solutions margins will recover in 2022 and be above the 54.6% we saw in 2021. Rudy Ploder and the EWS team delivered another outstanding year and are well positioned to deliver a very strong 2022 and continue their above-market growth. EWS is our fastest-growing and highest-margin business. USIS had revenue of $434 million, which was about flat with the fourth quarter with the mortgage market down significantly and it includes $47 million of USIS consumer revenue previously part of GCS, which was just about flat. Total USIS mortgage revenue of $126 million was down 18% in the quarter, while mortgage credit inquiries were down 21%, about consistent with the expectations we shared in October. Outperformance versus the overall market was driven by stronger growth in mortgage solutions, including growth in services. Non-mortgage non-consumer solutions revenue of $262 million grew almost 12% with organic revenue growth of almost 6%. In the fourth quarter, insurance continued to deliver double-digit growth. Commercial, and identity and fraud were up single digits and FI, auto and telco were up low to mid-single digits. And direct-to-consumer increased over 10% in the quarter. For the full year, non-mortgage non-consumer solutions revenue was up a strong 16% with organic growth in this category of about 10%. For 2021, USIS delivered double-digit organic growth across FI, insurance, identity and fraud and D2C as well as mid- to high single-digit growth in commercial and auto and telco declined slightly. Financial Marketing Services revenue, which is broadly speaking our off-line and batch business, had revenue of about $79 million, our highest quarterly revenue in history. This was up about 14% in the quarter. The strong performance was driven by marketing-related revenue, which was up over 20%. Both risk and ID, and fraud revenue were up about 10%. In 2021, marketing-related revenue, which grew more than 20% in each quarter, represented about 40% of FMS revenue, identity and fraud above 20 and risk decisioning above 30. The USIS commercial team delivered record wins, up over 25% versus last year and 5% sequentially in the fourth quarter. Their new deal pipeline remains very strong with overall pipe slightly higher than the third quarter. USIS adjusted EBITDA margins were 39.4% in the quarter, up over 50 basis points sequentially from third quarter. The decline from the fourth quarter in 2020 was principally driven by twofactors. First, the acquisitions of Kount and Teletrack negatively impacted margins in the period. As expected, initial margins for these acquisitions are dilutive to USIS. As we move through 2022 and drive synergies, this dilutive impact will be mitigated. And second, cloud transformation costs negatively impacted margins by almost 75 basis points. As with EWS, these costs are expected to decline as we move through 2022. In 2022, we expect USIS margins to be flat to slightly below the almost 40% level we delivered in 2021. International revenue of $288 million was up 6% and over 7.5% sequentially on a local currency basis. Included in International in the fourth quarter was almost $25 million of consumer solutions revenue in Canada and the UK that was formerly part of GCS, which was down about 6% versus last year. The lower growth in the consumer revenue in the fourth quarter was in Europe, which we expect to recover to high single-digit growth in the first quarter. Asia Pacific, which is principally our Australia business, performed very well in the quarter with revenue of $88 million, up about 9% in local currency. Australia and New Zealand consumer revenue remained flat versus last year. Our ANZ commercial business combined online and off-line revenue was up 9% in the quarter. And our HR verifications business in Australia was up a strong 37%. European revenues of $90 million were about flat in local currency in the quarter, but up over 20% sequentially. As a reminder, Europe had a very strong baseline from the fourth quarter of 2020 driven by the reactivation of debt services in the UK and large electronic notifications volume in Spain, a consequence of a change in legislation. Our European credit reporting business, which is about two thirds of European revenue, was impacted by COVID lockdowns in the UK and up about 2%. Commercial data off-line and analytics and scores saw strong double-digit growth in the quarter. And consumer credit reporting offerings grew high single digit as lockdown measures eased. Included in the UK credit reporting business was $7 million from consumer solutions. Our European debt management business revenue was up over 30% sequentially but down 5% versus a very strong fourth quarter 2020. In December, Equifax was awarded a new five-year extension of the UK government debt resolutions tender, a debt collections contract with an estimated contract value of $136 million with an incremental $90 million upside from sales of analytics and other CRA-related solutions. We've seen significant increases in debt placements from the UK government over the past several quarters that we expect should deliver strong growth in debt management revenue in the first half of 2022 for our UK business. Canada delivered revenue of $64 million in the quarter, up 6% in local currency despite a weakening Canadian mortgage market that was down 4%. Canada experienced strong growth in analytics and decisioning solutions with strong growth in fintech and traditional FI, while supply issues continue to impact their auto business. Included in Canada revenue is $16 million of consumer solutions revenue. Latin American revenues of $45 million were up a strong 15% in the quarter in local currency, which was their fourth consecutive quarter of growth. Strong new product introductions over the past three years and pricing actions continue to benefit growth across our Latin American region. International adjusted EBITDA margins at 29.9% were up 320 basis points sequentially mainly due to stronger revenue and positive mix. Margins were down year-to-year due to costs related to the cloud transformation, both the cost of redundant systems and the inclusion in our adjusted results of the technology transformation costs, which were being excluded in 2020. Excluding these costs, margins were down slightly versus last year. Turning to Slide 7, Workforce Solutions continues to deliver outstanding performance and is clearly our strongest and fastest-growing and most valuable business. As mentioned earlier, core revenue growth was up 38% in the quarter and 42% for the year with core organic revenue growth of 28% in the quarter and 38% for the full year of 2021. These strong results were driven by the uniqueness of our TWN income and employment data, the scale of the TWN database and continued expansion of new products and markets driven by outstanding consistent execution by Rudy and his team. 2021 growth of 39% is well above their 13% to 15% long-term framework, which we shared with you in November and of course, is on top of 51% delivered – growth delivered in 2020. EWS' ability to consistently and substantially outgrow their underlying markets is driven by three factors. First, growing the work number TWN database. At the end of the fourth quarter, TWN reached 136 million active records, an increase of 19% or 22 million records from a year ago and included 105 million unique individuals, which is almost 70% of U.S. nonfarm payroll. This increase in records makes our TWN database more valuable to our customers from both higher hit rates and more complete employment histories. We are now receiving records every pay period from 2.5 million companies, up from 1 million companies when we started 2021 and 27,000 contributors a short two-plus years ago. Our strong momentum continued during the fourth quarter with the signing of three new exclusive agreements with major payroll processors that we expect to implement during 2022. As a reminder, almost 55% of our records are contributed directly by employers where EWS provides comprehensive employer services like UC claims, W-2 management, I-9, WOTC, ERC, ACA and other HR and compliance solutions. Our acquisitions of HIREtech, i2verify, Health e(fx) and now Efficient Hire, which we announced earlier this week, strengthen our ability to deliver these employer services both directly and through relationships with payroll processors and HR software companies, and of course, expand our TWN database. We still have substantial room to grow our TWN income and employment database and expect to continue to add new direct contributors as well as the additional – addition of payroll processors and software partners on an exclusive basis to TWN in 2022. Beyond just the – just under 50 million nonfarm payroll records not yet in the TWN database, we've expanded our focus to data records from the 40 million to 50 million gig workers and around 30 million pension recipients in the United States marketplace to further broaden and strengthen the TWN database. You probably saw we also announced an expansion of our global footprint for Workforce Solutions with the launch of our new UK income and employment verification platform. This adds to our existing Australia, Canada and India EWS business launches outside the United States. We've got plenty of room to grow TWN. Second growth lever for Workforce Solutions is increasing average revenue per transaction through new products and pricing our existing products to value, recognizing the depth of information TWN allows us to deliver to customers. Workforce Solutions new product pipeline is rapidly expanding as our teams leverage the power of our new Equifax Cloud capabilities. And the third growth lever is by increasing penetration in the markets we serve and expanding into new markets and new verticals. For example, we continue to increase our penetration of the mortgage market. Workforce Solutions received an inquiry for over 60% of combined mortgages, up from 55% in early 2020. We have significant runway to grow penetration in the mortgage vertical. We are also in the early stages of penetrating the talent market where today, we receive inquiries in about one in 10 hires in the United States, plenty of room for growth. Growing system-to-system integration is another key growth lever in driving both increased penetration and increasing the number of pulls per transaction. During the quarter, about 76% of TWN mortgage transactions were fulfilled system to system, up over 2x from the 32% in 2019, another great growth lever for Workforce Solutions. Workforce Solutions is performing exceptionally well with attractive above-market and above-Equifax growth rates and is highly accretive margins that we expect to power workforce – power Equifax growth in the future. Slide 8 highlights core mortgage revenue growth performance of our U.S. B2B businesses, Workforce Solutions and USIS. Mortgage revenue grew 19% in 2021 in a down 7.5% market and off 80% revenue growth in 2020. Our combined U.S. B2B businesses outperformed the market – the mortgage market by 28 points in 2021 and 16 points in the fourth quarter. This was driven by Workforce Solutions as they outperformed the underlying mortgage market by 51 points for the year and 27 points in the fourth quarter. John will cover our updated mortgage market outlook in a few minutes. We've reduced our outlook – mortgage outlook for 2021 – 2022 to down 21.5% versus our prior view of down 15%, reflecting the likely impact of higher interest rates. We expect to offset a large portion of that impact with stronger growth – stronger core mortgage revenue growth from EWS, from the strong TWN record additions, new products, system-to-system integrations and penetration. We now expect EWS will outperform the U.S. mortgage market by approximately 30 points, up 700 basis points from our prior view and our combined U.S. B2B businesses of USIS and EWS to outperform the U.S. mortgage market by an amount approaching 20 points, which is up 400 basis points from our prior view. 2021 was a very strong year for new product innovation and a key priority of our team. As shown on Slide 9, we delivered a record 151 new products, up from 134 last year – I'm sorry, in 2020 and a Vitality Index of just under 9%, which is our highest vitality that we've achieved since 2018 and stronger than our 8% expectations when we started 2021. Our pace accelerated in the fourth quarter as we delivered 36 new products, positioning us well for 2022. In the fourth quarter, we launched significant new products we expect to drive growth in 2022 and beyond. The EWS talent report education product provides all available postsecondary degrees instantly sourced from the National Student Clearinghouse via an exclusive Equifax ordering experience using a single SSN number input. This enhanced offering helps deliver a more efficient hiring process and the ability to make better informed hiring decisions with a holistic candidate view. Workforce Solutions' priority next-day VOE and priority two-day VOE products are our quick and seamless manual solutions that deliver verification of employment on the next business day or second business day following a client's request. These solutions are available to both our web and integrated clients and provide complete coverage when combined with our instant verification of employment solutions from TWN. The myEquifax Allow Access product, launched by USIS, allows consumers to be notified instantly when they submit an application to a participating lender that their file is frozen and with a few easy steps can unlock their files so their loan can be processed. And this is a win-win for both the lender and the consumer. The Spending Power and Affluence Index products, also launched by US, were introduced as new marketing targeting tools that utilize proprietary data to identify customers and prospects with the greatest capacity to spend on new products or services. Spending Power estimates dollars available to spend after accounting for cost of living expenses while the Affluence Index provides a score that differentiates households based on spending power and credit utilization. And then last, we continue to help our clients automate smarter digital customer acquisition decisions by enabling access to new data sources through the ID Matrix Enhancements in Australia, our clients can simultaneously identify previously undetected risk based on e-mail metadata and assess financial eligibility for a loan based on Australian residency status. Leveraging our new Equifax Cloud capability to drive new product rollouts, we expect to deliver a Vitality Index in 2022 of over 10%, which equates to over $500 million of revenue in 2022 from new products introduced in the past three years. The 10% vitality is up over 100 basis points from our strong 2021 new product results and aligns with our new long-term growth framework we provided at our Investor Day in November. Turning to Slide 10. USIS is leading the industry in offering flexible structure for BNPL providers to report consumer credit data onto the Equifax U.S. credit exchange through BNPL-specific business industry codes. This new capability will provide Equifax customers and partners the flexibility to include the fast-growing BNPL data in credit decisioning or to exclude it based on their specific needs. Our new Equifax Cloud gives us the ability to quickly ingest and manage diverse data types and develop customer reports through Equifax One and custom scores using Equifax decisioning. Our data ingestion process is simplified by the new Equifax Cloud, and time to market for products has substantially accelerated. As we move through 2022, you'll see this capability further accelerate our NPI-based revenue growth. Before I turn it over to John, I wanted to quickly discuss our guidance expectations for 2022. In October, we shared with you a framework for 2022 that included a midpoint revenue of $5.3 billion and adjusted EPS of $8.65 per share. As discussed earlier, several factors have impacted our view of 2022 compared to the framework we shared with you a few months ago. First, expectations for the U.S. mortgage market have changed meaningfully given the jump in the 30-year mortgage rates from 3% in September to 3.6% today. We now expect the U.S. mortgage market to decline 21.5% in 2022 as opposed to the 15% decline we expected back in October. On its own, the 650 basis point further decline in the mortgage market negatively impacts our revenue by over $100 million. And offsetting that, we expect Equifax core revenue growth should reach 16% in 2022, over 200 basis points higher than what we reviewed with you in October. This is principally driven by the strong outperformance from Workforce Solutions, including the accelerated pace of new TWN record additions and the faster new products rollouts. This higher core revenue growth drives just over $100 million of additional revenue, offsetting the impact of the additional 650 basis points of mortgage market decline. Our strong core growth allows us to hold our 2022 guidance at the same level as the 2022 framework we shared with you in October with our expectation that we will be at the midpoint of our 2022 guidance for revenue of $5.3 billion and adjusted EPS of $8.65 per share. Now I’d like to turn it over to John to provide more detail on our 2022 guidance and assumptions and also provide our guidance for the first quarter. We’re starting off strong in 2022, given our momentum from the fourth quarter. John Gamble: Thanks, Mark. Before we discuss 2022, I’ll share a little more detail on 4Q 2021. In 4Q 2021, items below operating income, specifically net interest and other expenses and effective tax rate, came in combined slightly weaker than expected. Net interest and other expense was slightly weaker than we expected, and our 22% effective tax rate was very close to the guidance we provided. As Mark referenced earlier, Equifax EBITDA margins came in as expected in the fourth quarter at 32.2%. The factors resulting in the year-to-year decline were considered in the guidance we shared in October. Specifically, two-thirds of the decline was driven by the treatment of cloud technology transformation costs in 2021, including them in our adjusted results. Remaining one-third of the decline is driven by the items Mark discussed earlier, specifically the impact on Workforce Solutions and USIS of the acquisitions completed in 2021 and the increased royalty costs. As Mark discussed, regarding the acquisitions, we expect to deliver synergies that will support higher EBITDA margins as we move through 2022 and 2023. And the higher royalties at Workforce Solutions were partially driven by cost related to the start-up of the significant new payroll partners launched in the second half of 2021. As I will discuss in detail in a moment, we expect 1Q 2022 Workforce Solutions margins to return to exceed 55% and overall, Equifax EBITDA margins to return to approach 35.5%, up about 325 basis points sequentially. Let’s start with more detail on our assumptions for the U.S. mortgage market. As shown on Slide 11, in 2022, we are expecting a 21.5% year-to-year decline in the U.S. mortgage market credit inquiries. With a more rapid increase in the U.S. mortgage market rates we have seen in the first quarter, reaching 3.6% last week, consistent with the increase in the U.S. 10-year and reduced Fed purchasing of mortgage-backed securities, we expect refinancing activity to drop more substantially beginning as early as late in the first quarter. 2022 U.S. mortgage market credit inquiries would need to decline an additional just under 5% from 2021 levels to return to average levels we saw over the 2015 to 2019 period. The left side of Slide 12 provides perspective on the number of home mortgages for which a refinancing would be beneficial. We have expanded this chart from versions we shared in prior quarters to provide greater perspective on the full in-the-money population of mortgages. As we’ve discussed in prior quarters, in rising mortgage rate environments, refinancings will often occur with lower levels of rate benefit. This is increasingly true during periods of high home price appreciation as homeowners look to borrow against their increasing levels of home equity. Looking at data from late January, at current mortgage rate levels, there are over 16 million homes that would benefit from a refinancing. Of this amount, about 7.8 million mortgages that have a loan to value at 80% or below and for which the borrower has a 660 or above credit score would see their mortgage rate decline by 75 basis points or more. There’s an additional 5.3 million that have an LTV of 70% or below that would see their mortgage rate decline by 25 basis points to 75 basis points. And there are another just over 3 million that have an LTV of 70% or below that would benefit by up to 25 basis points from refinancing. Although down significantly from the levels we saw earlier in 2021 when mortgage rates were around 3%, this remains a significant population similar to the levels we saw in 2009 and about 15% below what we saw in 2016. For perspective, per Black Knight data during 4Q 2021, over 35% of refinancings were by borrowers benefiting by a rate decrease of less than 75 basis points. Based upon our most recent data from July 2021, mortgage refinancings were just about 600,000 per month. As shown on the right side of Slide 12, the pace of existing home purchases continues at historically very high levels. Our 2022 assumption for U.S. mortgage credit inquiries is that we will see these high levels of purchase mortgage financings continue at levels slightly above the levels we saw in 2021. And that refinancings will decline significantly from the levels we saw in both 2020 and 2021. Slide 13 provides a revenue walk detailing the drivers of the 8.4% constant currency and 7.6% total revenue growth to the midpoint of our 2022 revenue guidance of $5.3 billion. Using current FX rates, FX is a negative impact on 2022 growth of just over 0.8%, about 0.2 percentage points weaker than we discussed in October. Total revenue of $5.3 billion is up almost 8% from 2021 and in line with the framework we provided in October. The 21.5% more – decline in the U.S. mortgage market is negatively impacting 2022 growth by about 6.6%, about 200 basis points or just over $100 million more negative than the levels we discussed in October. When combined with the expected declines in the Workforce Solutions unemployment claims and ERC business, total headwinds to 2022 revenue growth are about 8 percentage points. Core organic revenue growth on a constant currency basis is anticipated to be over 13%. This is almost 200 basis points higher than we discussed in October with this improvement driven by Workforce Solutions through the much stronger record growth and accelerating NPI and strong pricing driving higher average unit revenues that Mark discussed earlier. Non-mortgage organic growth is driving over 7% of the growth. The largest contributor continues to be Workforce Solutions with strong organic growth in talent solutions, government and employee boarding solutions, including I-9. USIS non-mortgage and international are also expected to drive core growth. Mortgage revenue outperformance relative to the overall mortgage market is expected to drive the remaining almost 6% of the core – of the organic core growth. This is driven by strong outperformance in Workforce Solutions. The acquisitions completed in 2021, plus the Efficient Hire acquisition closed earlier this week, are expected to contribute about 3.2 percentage points of growth to 2022. Core revenue growth, excluding FX, of almost 16.5% is well above our long-term framework and 200 basis points higher than we discussed in October due to the stronger core organic growth in Workforce Solutions and our good start to the year and acquisitions. This stronger core revenue growth drives just over $100 million in revenue benefit, offsetting the impact of the weaker mortgage market. Slide 14 provides an adjusted EPS walk detailing the drivers of the expected 13% growth to the midpoint of our 2022 adjusted EPS guidance of $8.65 per share. This is in line with the midpoint of the 2022 framework we shared in October. EBITDA margins are still expected to increase in the 175 to 200 basis point range we discussed in October. Revenue growth of 7.6% at our 2022 EBITDA margins of about 33.9% would deliver about 10% growth in adjusted EPS. EBITDA margin expansion of 175 basis points to 200 basis points is expected to drive 9% growth in adjusted EPS. Depreciation and amortization is expected to increase by about $40 million in 2022, which will negatively impact adjusted EPS by about 3%. D&A is increasing in 2022 as we accelerate putting cloud-native systems into production. The combined increase in interest expense and tax expense in 2022 is expected to negatively impact adjusted EPS by about 3 percentage points. The increase in interest expense reflects increased debt from the 2021 acquisitions and the higher short-term interest rates I’ve referenced. Interest rates – the interest expense is higher than our expectation in October by about $7 million. Our estimated tax rate used in this framework of 24.5% does not assume any changes to the U.S. federal tax rate. Slide 15 provides a view of Equifax total and core revenue growth from 2017 through 2022. We anticipate delivering strong core revenue growth of 16%, reflecting organic growth of 13% and a 3% benefit from acquisitions completed in 2021 plus Efficient Hire. Slide 16 provides the specifics on our 2022 full year guidance. 2022 revenue of between $5.25 billion and $5.35 billion reflects growth of about 6.6% to 8.7% versus 2021, including a 0.8% negative impact from FX. Acquisitions are expected to positively impact revenue by 3.2%. EWS is expected to deliver over 15% revenue growth with continued very strong growth in Verification Services. EWS EBITDA margins are expected to be up from the 54.6% delivered in 2021. USIS revenue is expected to be about flat, reflecting the 21.5% assumed decline in the U.S. mortgage market. Non-mortgage revenue is expected to be up 6% to 8%. USIS EBITDA margins are expected to be slightly down from the 39.9% delivered in 2021. Combined EWS and USIS mortgage revenue is expected to be down slightly with mortgage outperformance approaching 20%. And International revenues expected to deliver constant currency growth of about 7% to 9%. International EBITDA margins are expected to expand by over 175 basis points. 2022 adjusted EPS of $8.50 to $8.80 per share is up 11.2% to 15.2% from 2021. Given the greater decline of the U.S. mortgage market we discussed earlier, we believe that our guidance is centered at the midpoint of both our revenue and adjusted EPS guidance ranges. The 175 to 200 basis point improvement in our 2022 EBITDA margin from the 33.9% in 2021 is principally driven by the following main factors. Workforce Solutions revenue growth of over 15% with margins at or above their current 54.6% drives a benefit to overall Equifax EBITDA margins of over 150 basis points. Corporate expense as a percentage of revenue is declining year-to-year on higher overall Equifax revenue, improving overall Equifax EBITDA margin by on the order of 100 basis points. The drivers of the lower spend are principally lower corporate technology transformation expense and lower variable comp. International margin expansion of over 175 basis points also drives about 25 basis points in overall Equifax EBITDA margin. These are partially offset by the negative impact on overall Equifax EBITDA margins of flat USIS revenue in 2022 due to the very weak mortgage market. Slide 17 provides our guidance for 1Q 2022. We are starting 2022 strong, better than previously expected. We expect revenue in the range of $1.32 billion to $1.34 billion, reflecting revenue growth of about 8.8% to 10.5%, including a 1.2% negative impact from FX. The U.S. mortgage market as measured by credit inquiries is expected to be down approximately 24%. Acquisitions are expected to positively impact revenue by about 5.2%. 1Q 2022 EBITDA margins are expected to approach 35.5%, up about 325 basis points sequentially. The improvement is driven by the same two factors we discussed driving the improvement in our full year 2022 EBITDA margins. Looking at the business units in the first quarter, Workforce Solutions revenue is expected to be up over 25% year-to-year, and EBITDA margins are expected to be over 55% driven by significant growth in Verifier and seasonally strong Workforce Analytics revenue. Workforce Solutions will represent about 47% of Equifax revenue in the quarter. USIS revenues expected to be down 3% to 4% year-to-year driven by the 24% decline in the U.S. mortgage market. The mortgage decline is partially offset by growth in non-mortgage expected to be up mid-single-digit percentage. EBITDA margins will be down slightly sequentially from 4Q 2021 due to the weak mortgage market. International revenue is expected to be up about 8% year-to-year in constant currency. And EBITDA margins are expected to be down about 100 basis points year-to-year. The decline in EBITDA margin is driven by increased cost in Canada as we migrate our Canadian credit exchange to be in production on data fabric in the quarter and some negative mix from growth in debt management. As I just indicated, full year EBITDA margins for International should increase 175 basis points year-to-year. Corporate expense will decline year-to-year, benefiting overall Equifax EBITDA margins. We are expecting adjusted EPS in 1Q 2022 to be $2.08 to $2.18 per share compared to the 1Q 2021 adjusted EPS of $1.97 per share. Now let’s turn to Slide 18. At our Investor Day in November, we discussed the strong earnings and cash flow that can be generated by 2025 by Equifax executing our new long-term financial framework. We also shared a scenario for you to consider that assuming the U.S. mortgage market normalizes by 2025 to the average levels we saw over 2015 to 2019 and we deliver revenue growth just above the midpoint of our 8% to 12% framework growth rate, revenue in 2025 could be about $7 billion. And continuing to execute our cloud data and tech transformation at these revenue levels could deliver 39% EBITDA margins by 2025. Beyond 2025, we expect to see revenue expansion of 8% to 12% and deliver margin expansion of, on average, 50 basis points per year, reflecting our significant operating leverage and high variable margins. As shown on Slide 19, free cash flow accelerated significantly in 2021, reaching $866 million and 92% of adjusted net income. In 2022, excluding the $345 million payment on the U.S. consumer class action settlement made in January, free cash flow will exceed $1 billion and 95% of adjusted net income. As we discussed in November at our Investor Day, to the extent, we are able to deliver revenue growth and EBITDA margins I just referenced in 2025, we could generate $2.7 billion of EBITDA, $12.75 in adjusted EPS and $1.6 billion in free cash flow, almost double the $866 million that we delivered in 2021. The substantial increase in free cash flow creates significant capacity for M&A and also for a return of capital to shareholders through cash generation and increased debt capacity. Now I’d like to turn it back to Mark. Mark Begor: Thanks, John. As highlighted on Slide 20, we remain laser-focused on our EFX2023 growth strategy to leverage the new EFX Cloud with innovation new products. EFX2023 is the foundation of our new 8% to 12% long-term growth framework and the foundation of the new Equifax. We continue to make significant progress executing the Equifax cloud data and technology transformation. We now have about half of our revenue being delivered from the new Equifax cloud. This will build meaningfully in 2022 as we expect to substantially complete our North America cloud migrations. We’ve now completed almost 112,000 B2B migrations, over 10 million consumer migrations and 1 million data contributor migrations. In North America, our principal consumer exchanges are in production in the new Equifax cloud-based single data fabric and delivering to our customers. Our International transformation is also progressing and is expected to be principally complete by the end of 2023 with some customer migrations continuing into 2024. We remain on track and confident in our plan to become the only cloud-native data analytics and technology company. We’re in the early days of leveraging our new EFX cloud capabilities, but remain confident that it will differentiate us commercially, expand our NPI capabilities, accelerate our top line growth and expand our margins from the growth and cost savings in 2022 and beyond. At our Investor Day in November, we discussed how the execution of our new EFX2023 strategic priorities, including the Equifax data and technology cloud transformation, will lead to stronger revenue growth, faster margin expansion and higher adjusted EPS growth. We introduced the new Equifax long-term financial framework shown on Slide 21, with total revenue growth of 8% to 12%, including 100 to 200 basis points of growth from bolt-on M&A. We also expect to deliver margin expansion, as John mentioned a few minutes ago, with 50 basis points per year over the long-term. That will help us deliver adjusted EPS growth of 12% to 16%, which combined with our 1% dividend yield target will allow us to deliver a total return to shareholders of 13% to 18% going forward. Reinvesting our strong outperformance and strategic and accretive bolt-on M&A is a key priority for the future. As shown on the left side of Slide 22, 2021 was a strong year for bolt-on M&A with eight acquisitions closed totaling about $3 billion that added $300 million to run rate revenue, excluding synergies. Our M&A priorities are clear and focused on expanding and strengthening the core of Equifax through, number one, expanding and strengthening our strongest and fastest-growing business, Workforce Solutions; number two, adding unique data assets; number three, expanding in the fast-growing $19 billion identity and fraud space; and number four, continuing to look to expand our credit bureau footprint globally. We expect to add 100, 200 basis points in revenue growth each year from bolt-on M&A. In 2021, we completed eight strategic and accretive acquisitions shown on Slide 23. We substantially strengthened and broadened Workforce Solutions through the acquisition of Appriss as well as Health e(fx), HIREtech and i2verify. And we strengthened our identity and fraud portfolio through the acquisition of Kount and our USIS differentiated data assets through both the Teletrack and Kount acquisitions. These were critical acquisitions for Equifax that we’re now focused on fully integrating the businesses and driving synergies to accelerate our growth. Reinvesting our strong cash flow and accretive and strategic bolt-on M&A is central to our EFX2023 growth strategy and long-term growth framework. We’re starting off 2022 – we’re starting 2022 off strong with a bolt-on acquisition that we closed earlier this week. As outlined on Slide 24, Efficient Hire further strengthens Workforce Solutions by bringing expanded employer services to hospitality, building services and senior living. The acquisition also strengthens Workforce Solutions to better compete and penetrate the hourly and high-volume hiring market and provides us with incremental TWN records. Slide 25 highlights the tremendous growth of Workforce Solutions, both in revenue and EBITDA margins over the past five years. The very strong growth of the work number and the addition of Appriss Insights and expansion of the EWS Data Hub have dramatically expanded the Workforce Solutions addressable markets across new verticals of talent solutions, government, Employer Services, including onboarding as well as their core mortgage and financial services markets. Our ability to access these markets with our unique and still expanding TWN employment, income and talent data and services will allow EWS to continue to deliver above-market core growth and power EFX in the future. We’re also leveraging the new EWS cloud-based tech platform for international expansion with the announcement I mentioned earlier of our new UK income and employment verification services. This adds to our EWS solutions in Canada, Australia and India. Workforce Solutions has grown from about 25% of Equifax revenue three years ago to over 40% last year and will likely grow to over 50% of Equifax in the coming years. The above-market growth in Workforce Solutions and depth and diversity of their people-based assets have moved Equifax well beyond the traditional credit bureau space and made us a faster growing and more diverse business than we were a short three years ago. As shown on Slide 26, the new Equifax is a customer and product-centric company that will deliver 8% to 12% revenue growth in the future by leveraging our Equifax cloud-native architecture centered on a single data fabric to enable seamless use of our unique data assets to deliver new products faster and more effectively. Executing on our EFX2023 growth strategy and delivering revenue growth consistent with the midpoint of our long-term framework will allow us to deliver $7 billion of revenue and 39% EBITDA margins in 2025, as John just mentioned a few minutes ago and as we shared with you in November. Wrapping up on Slide 27, Equifax delivered another strong base quarter with above-market growth in 2021, more than offsetting a declining mortgage market. We are operating exceptionally well and have strong momentum as we move into 2022. We’ve now delivered eight consecutive quarters of strong above-market double-digit growth, reflecting the power of the new Equifax business model and our execution against our EFX2023 strategic priorities. Equifax is on offense. Workforce Solutions had another outstanding quarter and year, powering our results, delivering 29% revenue growth in the fourth quarter while integrating Appriss Insights and the three other 2021 bolt-on acquisitions that strengthened the core of our Workforce Solutions. Workforce is clearly our largest, fastest-growing and most valuable business. And Rudy and his team remain focused on driving outsized growth. USIS also delivered a strong quarter with 12% non-mortgage growth and about 6% organic non-mortgage growth, offsetting the impact of a sharp over 20% decline in the mortgage market. Sid and the USIS team remain competitive and are working and are winning in the marketplace. International grew for the fifth consecutive quarter with 6% growth in local currency as economies reopen and business activity resumes. We have high expectations for International as we move into 2022. We spent the last three years building the Equifax cloud and are in the early days of leveraging our new and uniquely Equifax cloud-based technology and single data fabric capabilities. As we move into 2022 and beyond, we will increasingly realize the top line, cost and cash benefits from these new only Equifax cloud capabilities. And we’ve already added a strategic bolt-on acquisition to Workforce Solutions this week that combined with the acquisitions we made in 2021 are contributing 320 basis points or almost $160 million to 2022 revenue growth. We continue to build our pipeline as we look to add 100 to 120 basis points of revenue growth annually from bolt-on M&A. Our 2022 guidance with core revenue growth of 16% is well above our new 8% to 12% long-term framework. And 8% growth in total is aligned with our prior guidance despite a 21% decline in the mortgage market. Our ability to offset the additional 650 basis points of mortgage decline with stronger core growth reflects the breadth and strength of the new Equifax. Adjusted EPS is expected to be up 13% to $8.65 at the midpoint, which also aligns with the 2022 framework we reviewed with you in October. I’m energized about our strong above-market performance in 2021, but even more energized about the future of the new Equifax in 2022 and beyond. We remain convinced that our new Equifax cloud-based technology, differentiated data assets in our new single data fabric and market-leading businesses will deliver higher growth, expanded margins and free cash flow in the future. I’d also like to announce today that Trevor Burns is returning to the Equifax Investor Relations team. Please join me in welcoming Trevor back to IR and feel free to contact Trevor, Dorian or Sam with any questions. And with that, operator, let me open it up for questions. Operator: Thank you. Our first question today is coming from George Mihalos from Cowen. Your line is now live. Unidentified Analyst: Good morning. This is Allison on for George. Congrats on the strong results and outlook. And thank you for taking my questions. I was hoping to drill in a bit more into the mortgage market estimate. Given how rates have been moving, I was curious if you can comment on how the 21.5% decline in mortgage market increase estimate was derived in terms of the 10-year yield in mortgage rates? And how comfortable you are with that estimate? Mark Begor: Yes. I’ll start, and John, you can jump in. As you know, forecasting the mortgage market is quite challenging. The good news is we have a lot of history which we rely on, and we have a lot of data that we rely on. But I would – you make the point that it’s obviously challenging. But we look at all of our data elements of the track record of new home purchases in the marketplace, the refi market. John went through some detail on the still sizable population of homes in the United States that will benefit from a refinancing. He also highlighted the significant increase in HPA or home price appreciation, which is I think 30% for most geographies across the United States. So the availability for consumers to access equity in their homes through a refinancing. Those certainly weighed in. And of course, offsetting that, as you point out, is the higher interest rates, which reduced the number of homes available for refi. So those were all the factors that we put into our models and our analysis. And we thought 21.5% was the right place, given everything we see today, obviously, down dramatically from the minus 15% we were using for really the second or the last portions of 2021 as we were looking forward to 2022. And then, of course, we’re pleased that the core performance of Equifax is strong. And we can offset that with our core growth, particularly from Workforce Solutions from the momentum in the fourth quarter, the strong addition of records, which helps power their business and broadly the strong performance of Equifax. John Gamble: We also look closely at run rates. So really through January through early February, the run rates are consistent with what we’ve talked about in our first quarter – the first quarter estimate down 24% wasn’t changed that really materially from the estimate we gave in October. So we look closely at those run rates. We think they’ve been relatively predictive. And we’re also, as Mark said, we try to be very open about what we’ve assumed. So that if you have a different view on mortgage, at least you’ll have a very good view as to what we put into our numbers, and you can obviously act accordingly. Unidentified Analyst: Okay. Thank you for that. That’s helpful color. And then just as a quick follow-up, shifting to EWS. How should we be thinking about pricing as a driver for 2022? Mark Begor: Yes. As you know, we don’t talk about specific pricing actions, but all of our businesses use price on an annual basis to offset inflation, of course, but also reflect the value of the solutions that we’re delivering. And we’ve been quite clear in prior discussions with you and our other investors that Workforce Solutions has more pricing power because of the uniqueness of the assets they deliver and the scale of the database. So it’s clearly one of the levers. But as you know, that’s only one. They’ve really ramped up their new product rollouts in the last 12 to 18 months, leveraging the cloud, particularly in the second half of 2021. And we talked about new solutions that we’re bringing to market in the mortgage space, for example, where we have mortgage solutions that provide more history at a meaningfully higher price point than the single solution that we have or the co-borrower solution that we now have called Mortgage Duo that is priced over $175 per poll because it provides real value on co-borrowers. So those are examples of leverage that Workforce has. And of course, the other levers, the adding of TWN records, our TWN records being up 19%. The new relationships that we’ve signed exclusively in the latter part of the year that we’ll be adding to our records in 2022. As you know, because of the very large volume of inquiries that we get on a system-to-system basis or through the web, as we add new records, we’re able to monetize those really instantly. So that 19% is another very meaningful lever for Workforce Solutions as we move into 2022. Unidentified Analyst: Great. Thank you. Operator: Thank you. Our next question is coming from David Togut from Evercore ISI. Your line is now live. David Togut: Thank you. Good morning. Appreciate all the helpful detail. If we start with the 136 million active work number records from Q4, add the three agreements you signed with payroll processors, you had additional work number records, how should we think about active work number records estimated for year-end 2022 and then the associated hit rate? Mark Begor: Yes. As you know, we don’t give detail around kind of guidance on the records that we’re adding during the year. We try to be very transparent about current period record additions. And as you know, those were added at different points if you think about 2021 during the year, so you get a year-over-year benefit in 2022 for the record. So the 19% increase will benefit the Workforce Solutions in 2022. And then, of course, these new agreements that we mentioned that we’ve signed with major – some of the larger payroll processors on an exclusive basis, we’ll be adding at different points during the year. It takes time to build the system integrations and to bring those into our data set. And then, of course, as you know, close to 60% of our records come from individual company relationships that we have from our Employer Services business. And that’s a very active area for us to add records, which we do on a – kind of on a daily, weekly basis. Actually, John and I get a report every Friday of records that are added. And those are – we’re really strengthening our ability to add records from individual companies as we build our Employer Services solutions, whether that’s I-9, Work Opportunity Tax Credit, HCA, W-2. And as you know, we did three acquisitions last year that add to that space, including one this week, that grow our solutions and Employer Services business, but they also bring records. So we have a really a multisided approach and really scale focus on adding records. And just back on the payroll processors, we still have a pipeline of the relationships we don’t have. We’re in active dialogues with those as we’ve talked about. We have real momentum. As you know, I don’t know, in the last 18 months, we’ve added some meaningful new relationships, including a large one in third quarter last year that we announced, I guess, a year ago on our fourth quarter call. And then we’ve got the three that we added on an exclusive basis in the last few weeks that will be rolling in, in 2022. So a big focus on adding those records. And as you think about it, there’s a long runway. I would encourage you to think about total records but also unique records. Remember, the 135 million is total records, but we have 105 million SSNs or unique individuals. So there’s 30 million people in there that have multiple jobs. The path from 105 million to 155 million, 157 million or 158 million whatever the right number is now, nonfarm payroll, it’s another 50 million plus individuals that we are focused on adding. And then, of course, we have a big focus of going beyond nonfarm payroll to really get those very valuable 40 million to 50 million gig records, meaning individuals that are self-employed. There is a second job beyond nonfarm payroll or someone who is just self-employed. And then also the 20 million to 30 million pensioner records that is another valuable source for income verification for those that are not in the workforce today. So you add those up, you’re looking at something north of 100 million additional records we can add. If you think about the 105 million we have unique individuals and add that potential, we have the ability to still kind of double the TWN database, and we’re focused on it. David Togut: Thanks for that. Just as a follow-up, John, for the first quarter, you’re guiding Workforce Solutions revenue growth over 25%, which is well above the 15% guidance for the full year. Can you talk through the cadence of expected Workforce Solutions revenue growth throughout 2022? And what puts Q1 so far above the full year guide? John Gamble: Yes. The big – one of the biggest factors would be the fact that we did the large acquisitions in the second half of this year. So you wrap around the addition of that revenue as you get into the third quarter, but principally the fourth quarter. But overall, we expect Workforce Solutions to continue to perform extremely well and drive very high organic growth throughout the year. David Togut: Thank you. Operator: Thank you. The next question Is coming from Kevin McVeigh from Credit Suisse. Your line is now live. Kevin McVeigh: Congrats. On the Vitality Index, it seems like you’re clearly outpacing that. And if I hea
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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.