Core Insights - The second quarter of 2025 shows a steady delinquency rate of 1.5% on total U.S. consumer debt, with total consumer debt reaching $17.86 trillion, marking a 2% increase year-over-year [1][2][9] - A K-shaped recovery is evident, with subprime borrowers experiencing increased financial strain, as their share of bankcard debt has risen to 22.1%, a 3.5% increase from May 2024 and a 50.9% increase from May 2021 [3][4] Consumer Debt Trends - Total U.S. consumer debt reached $17.86 trillion in June 2025, up from $17.80 trillion in May and $17.73 trillion in April, reflecting a month-over-month increase of 0.3% [1][9] - The total bankcard debt for subprime borrowers has surged by 135% to $233.1 billion in May 2025 compared to $99.4 billion in May 2021, while total bankcard debt for all consumers grew by only 54% [3] Student Loan Insights - Outstanding student loan debt decreased to $1.33 trillion in June 2025, an 11% year-over-year decline, with the number of active accounts falling by 15.6% to 146.7 million [5] - Severe delinquency rates for student loans have shown volatility, peaking at 18.73% in May before slightly decreasing to 17.95% in June [5] Bankcard and Auto Credit Trends - Bankcard balances increased to $1.07 trillion in June 2025, with a year-over-year growth of 4.2%, while delinquency rates fell to 2.79%, down from a peak of 3.22% in November 2024 [6][8] - Auto loan and lease debt grew to $1.68 trillion, with leases increasing by 13.6% while auto loan balances rose only 1.1%, indicating a shift in consumer preference towards leasing [7][8]

Core Insights - Equifax and Qlarifi are collaborating on a study to analyze the impact of Buy Now, Pay Later (BNPL) reporting on credit risk assessments and fraud prevention [1][2] - The study will utilize real-time BNPL data from multiple providers, marking the first of its kind in the U.S. [2][4] Group 1: BNPL Usage Trends - Over 50% of U.S. consumers currently use BNPL for payments, with 35% planning to increase their usage in 2025 [2] - The growing adoption of BNPL necessitates a deeper understanding of its predictive capabilities for lenders [5] Group 2: Study Objectives and Benefits - The joint study aims to minimize loan stacking risks, quantify the predictive power of BNPL data, and enhance consumer benefits [4] - It will explore how BNPL data can improve consumer protection by providing early visibility into financial stress and preventing overextension [5] Group 3: Company Profiles - Equifax is a global data, analytics, and technology company with nearly 15,000 employees, operating in 24 countries [7] - Qlarifi specializes in real-time BNPL consumer credit data, offering insights that help lenders make informed underwriting decisions [8]

Core Insights - Equifax's international operations are crucial for assessing its financial resilience and growth prospects, especially in a tightly interconnected global economy [1][2][3] Revenue Performance - The total revenue for Equifax in the quarter was $1.54 billion, reflecting a 7.4% increase [4] - Asia Pacific generated $85.3 million, accounting for 5.55% of total revenue, slightly below the consensus estimate of $86.43 million, and showing a year-over-year decrease from $84.6 million [5] - Latin America contributed $99.6 million, or 6.48% of total revenue, also below the expected $102.96 million, with a slight decrease from $97.3 million year-over-year [6] - Europe outperformed expectations with $99.2 million, representing 6.45% of total revenue, exceeding the forecast of $91.86 million, and showing an increase from $88.2 million year-over-year [7] - Canada generated $69.3 million, making up 4.51% of total revenue, slightly below the projected $69.4 million, with a marginal increase from $69.2 million year-over-year [8] Future Projections - Analysts predict total revenue of $1.52 billion for the current fiscal quarter, a 5.7% increase from the prior year, with expected contributions from Asia Pacific ($89.42 million), Latin America ($103.87 million), Europe ($98.71 million), and Canada ($66.3 million) [9] - For the full year, total revenue is expected to reach $6.01 billion, reflecting a 5.7% increase from the previous year, with projected contributions from Asia Pacific ($342.43 million), Latin America ($411.27 million), Europe ($383.08 million), and Canada ($266.85 million) [10] Market Dependency - Equifax's reliance on global markets for revenue presents both opportunities and challenges, making the monitoring of international revenue trends essential for predicting future performance [11][12]

Core Insights - The previous investment stance on Equifax (NYSE: EFX) was a hold rating due to uncertainty in demand outlook amid macroeconomic conditions, despite potential long-term opportunities in cloud and EWS [1] - The focus is on long-term investments while also considering short-term shorts to identify alpha opportunities, emphasizing a bottom-up analysis of individual companies' fundamentals [1] - The investment horizon is medium to long-term, aiming to find companies with strong fundamentals, sustainable competitive advantages, and growth potential [1] Company Analysis - Equifax's demand outlook remains uncertain following the 2Q25 results, indicating a cautious approach to investment in the company [1] - The investment strategy prioritizes identifying companies with solid fundamentals and growth potential, which is critical for long-term investment success [1]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission File Number: 001-06605 | EQUIFAX INC. | | | | | | --- | --- | --- | --- | --- | | (Exact name of registrant as specified in its charter) | | | ...

Core Insights - Equifax Inc. (EFX) reported strong second-quarter 2025 results, with earnings and revenues exceeding the Zacks Consensus Estimate [1] - Adjusted earnings were $2 per share, a 9.9% increase year-over-year, and total revenues reached $1.5 billion, up 7.4% year-over-year [1][10] Financial Performance - Adjusted EBITDA for Q2 2025 was $499.3 million, reflecting a 9.1% year-over-year growth, with an adjusted EBITDA margin of 32.5%, up 50 basis points from the previous year [7][8] - Cash generated from operating activities was $361.1 million, while capital expenditures totaled $122.2 million [9] Segment Performance - Workforce Solutions segment revenues were $662.1 million, an 8% increase year-over-year, surpassing estimates [3][10] - USIS segment revenues reached $521.5 million, up 9% year-over-year, also beating estimates [4][10] - International division revenues totaled $353.4 million, a 4% increase year-over-year, but fell short of estimates [5] Regional Performance - Latin America revenues were $99.6 million, a 2% increase year-over-year, while Europe saw revenues of $99.2 million, up 12% [6] - Asia Pacific revenues were $85.3 million, increasing 1% year-over-year, and Canada revenues remained flat at $69.3 million [6] Guidance and Outlook - For Q3 2025, Equifax raised its revenue guidance to $1.505-$1.535 billion, with the midpoint exceeding the Zacks Consensus Estimate [11] - For the full year 2025, revenue guidance was increased to $5.97-$6.04 billion, with the midpoint aligning with the consensus estimate [12]

Core Insights - Equifax's second-quarter earnings exceeded expectations, driven by growth in non-mortgage-related revenues, particularly in consumer lending and government sectors [2][4][5] - Despite positive results, management maintained cautious guidance due to macroeconomic uncertainties, including tariffs and their effects on interest rates and hiring [3][7] - Mortgage-related activities showed a decline, with inquiries down 8% in the latest quarter, and expectations for a further 13% decrease in the second half of the year [4][11] Financial Performance - The company's revenue for the second quarter reached $1.5 billion, surpassing previous guidance by $27 million, with U.S. mortgage revenues increasing by 14% [4][5] - Non-mortgage revenue growth was noted at 4% for B2B segments, with specific growth in auto lending and financial institutions [10] - Workforce Solutions revenues are projected to grow by 5% through fiscal year 2025, while US Information Systems revenues are expected to increase by 7% [5] Market Conditions - Elevated mortgage rates, consistently above 6.7%, along with high housing prices and low inventory, have contributed to historically low home purchase and refinance activities [11] - The economic environment remains uncertain, impacting hiring trends and overall revenue expectations for the second half of the year [8][11] Future Outlook - The company anticipates potential growth in the mortgage business once refinancing activity picks up, particularly through the integration of traditional and alternative data sources [11][12] - New solutions based on consumer-permissioned bank transaction data are set to launch in the third quarter, aiming to enhance verification processes [9]

Core Insights - Equifax reported revenue of $1.54 billion for the quarter ended June 2025, reflecting a year-over-year increase of 7.4% and exceeding the Zacks Consensus Estimate of $1.51 billion by 1.51% [1] - The company's EPS for the quarter was $2.00, up from $1.82 in the same quarter last year, surpassing the consensus estimate of $1.92 by 4.17% [1] Revenue Performance by Region - Asia Pacific operating revenue was $85.3 million, slightly below the estimated $86.43 million, marking a year-over-year increase of 0.8% [4] - Latin America operating revenue reached $99.6 million, below the average estimate of $102.96 million, with a year-over-year change of 2.4% [4] - Europe operating revenue was $99.2 million, exceeding the estimated $91.86 million, representing a significant year-over-year increase of 12.5% [4] - Canada operating revenue was $69.3 million, slightly below the estimate of $69.4 million, with a year-over-year change of 0.1% [4] U.S. Information Solutions Performance - U.S. Information Solutions operating revenue was $521.5 million, surpassing the estimated $509.88 million, with a year-over-year increase of 9% [4] - Financial Marketing Services within U.S. Information Solutions generated $63.7 million, exceeding the estimate of $62.55 million, reflecting a year-over-year increase of 6% [4] - Online Information Solutions under U.S. Information Solutions reported $457.8 million, surpassing the estimate of $443.97 million, with a year-over-year change of 21.2% [4] Workforce Solutions Performance - Workforce Solutions generated $662.1 million in operating revenue, exceeding the average estimate of $652.84 million, with a year-over-year increase of 8% [4] - Verification Services within Workforce Solutions reported $567.1 million, surpassing the estimate of $558.35 million, reflecting a year-over-year increase of 9.9% [4] - Employer Services under Workforce Solutions generated $95 million, slightly above the estimate of $94.72 million, but with a year-over-year decrease of 2.1% [4] Overall Market Performance - Equifax shares returned +1.8% over the past month, while the Zacks S&P 500 composite increased by +5.9% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - Equifax reported revenue of $1.54 billion, an increase of 8% in constant currency and 7% reported, marking the highest quarterly revenue in the company's history [7] - Adjusted EPS was $2.00, exceeding the midpoint of guidance by $0.10, with an adjusted EBITDA margin of 32.5% [9][12] - Free cash flow for Q2 was $239 million, up over $100 million from the previous year, with expectations to generate over $900 million in free cash flow for 2025 [43] Business Line Data and Key Metrics Changes - Workforce Solutions revenue grew by 8%, driven by a 10% increase in verifier revenue and a 14% increase in government revenue [13] - USIS revenue increased by 9%, with mortgage revenue up 20% and non-mortgage revenue growth of over 4% [10][21] - International revenue grew by 6% in constant currency, with strong growth in Latin America and Europe [25] Market Data and Key Metrics Changes - Mortgage hard credit inquiries declined by 8.5%, with expectations for a further decline of over 13% in the second half of 2025 [29][32] - The U.S. hiring market remains weak, impacting overall revenue growth in talent solutions [14][33] - Economic uncertainty continues to affect hiring trends and mortgage volumes, with corporate expenses expected to rise due to litigation costs [36][37] Company Strategy and Development Direction - Equifax is focusing on leveraging cloud capabilities to drive innovation and new product development, with a vitality index of 14% indicating strong new product introductions [26][49] - The company is increasing its vitality outlook for 2025 from 11% to 12%, reflecting confidence in future growth [12] - A new capital allocation framework includes a $3 billion share repurchase program and a 28% increase in quarterly dividends [43] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding economic uncertainties, inflation, and interest rates, holding full-year guidance steady despite strong first-half performance [12][48] - The company anticipates continued challenges in the mortgage market but sees potential for growth in government services due to new federal requirements [19][72] - Management remains optimistic about long-term growth, projecting organic revenue growth of 7% to 10% and a focus on multi-data solutions [45][49] Other Important Information - The company repurchased $127 million in shares during the quarter as part of its share repurchase program [12] - Adjusted EBITDA margins are expected to be flat year-over-year, impacted by higher corporate costs and litigation expenses [37][84] Q&A Session Summary Question: Can you provide perspective on the Twin State agency headwinds? - Management indicated that challenges stem from changes in federal data reimbursement policies and state budget complexities, affecting near-term performance [51][54] Question: What are the new mortgage pre-qual products driving strength? - The Twin Indicator product is gaining traction, helping to win market share in pre-qualification and pre-approval stages [55][58] Question: What is mortgage revenue as a percentage of total revenues in Q2? - Mortgage revenue accounted for 22% of total revenues, remaining flat [63] Question: What visibility exists for the government business in the second half? - Management noted that visibility is challenging due to state budget constraints and the impact of prior federal policy changes, but remains optimistic for future growth [67][72] Question: Can you elaborate on the litigation costs? - Litigation costs are driven by both general legal expenses and an increase in small claims, which are expected to continue into 2026 [86]

Financial Data and Key Metrics Changes - Equifax reported revenue of $1.54 billion, an increase of 8% in constant currency and 7% reported, marking the highest quarterly revenue in the company's history [5][10] - Adjusted EPS was $2.00, exceeding the midpoint of April guidance by $0.10, with an adjusted EBITDA margin of 32.5% [7][10] - Free cash flow for Q2 was $239 million, up over $100 million from the previous year, with expectations to generate over $900 million in free cash flow for 2025 [43][44] Business Line Data and Key Metrics Changes - Workforce Solutions revenue increased by 8%, driven by a 10% growth in verifier revenue and a 14% increase in government revenue [11][12] - USIS revenue grew by 9%, with mortgage revenue up 20% and non-mortgage revenue up over 4% [8][19] - International revenue saw a 6% increase in constant currency, with strong growth in Latin America and Europe [22][24] Market Data and Key Metrics Changes - Mortgage hard credit inquiries declined by 8.5% year-over-year, impacting home purchase and refinance activity [28][29] - The U.S. hiring market remained weak, with overall BLS data showing only slight increases compared to last year [12][30] - International growth was led by Latin America, with an 11% increase, while Canada experienced only 1% growth due to economic conditions [22][24] Company Strategy and Development Direction - The company is focusing on leveraging cloud capabilities and multi-data solutions to drive innovation and growth [25][50] - Equifax is increasing its vitality outlook for 2025 from 11% to 12%, indicating strong performance in new product introductions [10][25] - The company is committed to expanding its government business in response to new federal programs and verification requirements [15][17] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding economic uncertainties, inflation, and hiring trends, holding full-year guidance steady despite strong first-half performance [10][30] - The company anticipates continued challenges in the mortgage market but sees potential for growth as interest rates decline [28][29] - Management remains optimistic about long-term growth, projecting a 7% to 10% organic growth framework [45][48] Other Important Information - The company repurchased $127 million in shares under a $3 billion share repurchase program [10][43] - Corporate expenses increased to $152 million, primarily due to higher litigation costs [35][90] - The company is investing in new solutions that combine traditional and alternative credit data to enhance its offerings [50][26] Q&A Session Summary Question: Can you provide perspective on the Twin State agency headwinds? - Management indicated that challenges stem from changes made by the Biden administration regarding data reimbursements, affecting state budgets and contract timing [52][53] Question: What are the new mortgage pre-qual products driving strength? - The Twin Indicator product has been positively received in the market, helping to gain share in pre-qualification stages [55][56] Question: What is mortgage revenue as a percentage of total revenues in Q2? - Mortgage revenue accounted for 22% of total revenues [63] Question: What is the visibility and assumptions for the government business in the second half? - Management noted that visibility is challenging due to state budget constraints and the impact of prior administration policies [66][70] Question: Can you elaborate on the trends in the talent segment? - The talent market has shown weakness, impacting revenue guidance, with specific challenges in criminal data services due to shifts in customer relationships [72][90]