Equifax Conference Call Summary Company Overview - **Company**: Equifax (NYSE: EFX) - **Date of Conference**: September 16, 2025 - **Speakers**: Mark Begor (CEO), John Gamble (CFO) Key Points Industry and Market Position - Equifax has invested approximately **$3 billion** in building the Equifax Cloud, which is now substantially complete with over **90%** of revenue in the new Cloud environment [7][10] - The company aims to leverage its differentiated data sets, particularly in Workforce Solutions and USIS, to gain a competitive advantage [7][8] Financial Performance and Growth Strategy - Equifax has set a long-term growth framework of **7% to 10%** organic growth or **8% to 12%** with bolt-on M&A, an increase from the previous **6% to 8%** [11][12] - The company expects to achieve **50 basis points** of margin expansion per year, up from the historical **25 basis points** [12][14] - The mortgage market is projected to grow at **2% to 3%** annually, and even without recovery, Equifax believes it can deliver on its long-term framework [13][16] Innovation and Product Development - Equifax's Vitality Index, which measures revenue from new products introduced in the last three years, has exceeded the target of **10%**, reaching **12% to 13%** [8][11] - The company is focusing on AI to enhance product offerings, improve predictive models, and increase ROI for customers [8][9][10] - New product rollouts, such as a trended mortgage solution, have significantly contributed to revenue growth [56] Workforce Solutions and Government Business - The Workforce Solutions segment has a **$15 billion** addressable market, with Equifax currently generating around **$2.5 billion** in revenue [45][47] - The government vertical is expected to be a key growth driver, with a focus on income verification for social services, addressing the **$160 billion** in improper payments identified by the U.S. federal government [80][83] Capital Allocation and Financial Strategy - Equifax plans to maintain a **95%+ cash conversion rate** and has announced a **$3 billion** share repurchase program [19] - The company is prioritizing investments in new products, with expected CapEx of **6% to 7%** of revenue going forward, down from higher levels during the cloud transformation [186] Market Conditions and Future Outlook - The U.S. mortgage market is currently down **10%** in 2025, impacting revenue, but Equifax remains optimistic about future recovery and growth opportunities [15][26] - The company is preparing for potential rate cuts, which could positively impact mortgage activity and overall business performance [20][30] Competitive Landscape - Equifax is focused on enhancing its identity and fraud prevention capabilities through acquisitions and innovative product offerings [92][94] - The company aims to differentiate its credit file by integrating more data, such as income verification, to improve customer decision-making processes [98][100] International Operations - Equifax has seen strong performance in the UK, outperforming competitors like Experian and TransUnion [145][146] - The company is opening an AI innovation lab in Dublin to further enhance its technological capabilities [150][155] Additional Insights - The focus on explainable AI is crucial for compliance and customer trust, with Equifax holding over **300 patents** in this area [155] - The company is actively engaging with government agencies to address compliance and verification needs, particularly in light of new regulations [81][82] This summary encapsulates the key insights and strategic directions discussed during the Equifax conference call, highlighting the company's growth potential, innovation focus, and market positioning.

Core Insights - TransUnion (TRU) reported strong second-quarter 2025 results, with earnings and revenues exceeding the Zacks Consensus Estimate [1][10] - Despite the earnings beat, TRU's stock price has not shown significant movement since the results were released on July 24 [1] Financial Performance - TRU's adjusted earnings per share (EPS) of $1.08 surpassed the consensus estimate by 9.1% and increased by 9.1% year-over-year [2] - Total revenues reached $1.1 billion, exceeding the consensus mark by 3.7% and rising 9.5% from the previous year [2] - Adjusted EBITDA was $407 million, reflecting an 8% year-over-year growth and beating the estimate of $383.9 million [7] Revenue Breakdown - U.S. Markets segment revenues were $890 million, a 10% increase year-over-year, surpassing the estimate of $833.5 million [3] - Financial Services within the U.S. Markets segment saw revenues of $420 million, up 17% from the year-ago quarter [3] - International segment revenues increased 7% year-over-year to $253 million, though it missed the expectation of $258.3 million [4] Regional Performance - Revenues from Canada were $42 million, up 9% year-over-year, exceeding the projection of $41 million [4] - Revenues from India increased 5% to $67 million but fell short of the estimate of $72.9 million [5] - Revenues from the U.K. were $67 million, up 19% year-over-year, surpassing the estimated figure of $60.2 million [6] Guidance and Outlook - For Q3 2025, TRU raised revenue guidance to $1.115-$1.135 billion, slightly below the Zacks Consensus Estimate of $1.13 billion [11] - Adjusted EPS guidance was increased to 99 cents-$1.04, with the Zacks Consensus Estimate at $1.04 [12] - For the full year 2025, revenue guidance was raised to $4.43-$4.47 billion, aligning with the Zacks Consensus Estimate [13]

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]

Core Insights - TransUnion (TRU) reported strong first-quarter 2025 results, with earnings and revenues exceeding Zacks Consensus Estimates, leading to a 7.4% stock price increase since the earnings release on April 24 [1] Financial Performance - Adjusted earnings per share (EPS) for the quarter were $1.05, surpassing the consensus by 7.1% and reflecting a 14.1% year-over-year increase [3] - Total revenues reached $1.1 billion, exceeding the consensus by 2.5% and increasing 7.3% from the previous year [3] - Adjusted EBITDA was $397 million, marking an 11% year-over-year growth and beating the estimate of $383.3 million [8] Revenue Guidance - For 2025, TransUnion raised its revenue guidance to $4.35-$4.41 billion, up from the previous range of $4.33-$4.39 billion, although the midpoint of $4.38 billion is below the Zacks Consensus Estimate of $4.40 billion [2] Segment Performance - U.S. Markets segment revenues were $857 million, a 9% year-over-year increase, surpassing estimates [4] - Financial Services within the U.S. Markets generated $404 million, a 15% increase from the prior year [4] - International segment revenues were $245 million, a 2% year-over-year increase, but missed expectations [5] Cash Flow and Balance Sheet - Cash and cash equivalents at the end of the quarter were $609.9 million, down from $679 million at the end of Q4 2024 [9] - Long-term debt remained stable at $5.1 billion [9] - Cash generated from operating activities was $52.5 million, with capital expenditures of $68.4 million [10] Future Outlook - For Q2 2025, TRU expects revenues of $1.07-$1.09 billion, with adjusted EPS guidance of 95-99 cents, lower than the consensus estimate of $1.02 [11] - For the full year 2025, adjusted EPS is expected to be in the range of $3.93-$4.08, with adjusted EBITDA estimated at $1.54-$1.59 billion [12]

Financial Data and Key Metrics Changes - Equifax reported Q1 2025 revenue of $1,442,000,000, an increase of 4% reported and 5% in constant dollars, exceeding the midpoint of February guidance by $37,000,000 [8] - Adjusted EPS was $1.53 per share, which was $0.15 above the midpoint of February guidance due to higher revenue growth and improved margins [9] - Adjusted EBITDA margins were 29.3%, up 20 basis points from last year and about 80 basis points better than expected [20] Business Line Data and Key Metrics Changes - USIS revenue grew by 7%, with non-mortgage growth at about 6%, aligning with their long-term growth framework of 6% to 8% [12][29] - EWS revenue increased by 3%, with talent solutions revenue up 12% due to better hiring volumes [25] - Mortgage revenue was up 7%, driven by stronger performance in mortgage pre-qualification and pre-approval products [21] Market Data and Key Metrics Changes - International revenue grew by 7% in constant currency, with strong growth in Latin America, particularly in Brazil and Argentina [33] - The U.S. mortgage market is expected to decline by 12% for the remainder of 2025, consistent with previous guidance [24][43] - The government business is projected to grow low double digits, benefiting from a new $50,000,000 SSA amendment [28][86] Company Strategy and Development Direction - Equifax is focusing on leveraging its cloud capabilities to drive innovation and new product growth, transitioning from building the cloud to utilizing it [9][54] - The company aims to maintain a strong investment-grade balance sheet while prioritizing high-return capital investments and executing a bolt-on M&A strategy [17][18] - A new capital allocation plan includes a 28% increase in the quarterly dividend and a $3,000,000,000 share repurchase program [18][53] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth model despite maintaining 2025 guidance due to economic uncertainty [15][51] - The company is well-positioned to weather economic events, with a significant portion of revenue from recession-resilient businesses [36][38] - Management highlighted the potential for growth in government services due to increased demand for social services during economic downturns [70] Other Important Information - The company plans to return about $1,000,000,000 annually to shareholders over the next four years through dividends and share repurchases [19] - Equifax is entering a new phase of innovation, leveraging unique data assets to develop solutions that only it can deliver [54] Q&A Session Summary Question: Can you provide more color on the twin federal government discussions or opportunities? - Management noted a positive environment in Washington regarding improper payments, with significant opportunities for the Twin solution to address these issues [58][61] Question: How did you come up with the recession estimate? - The estimate was based on historical performance during past economic events and the increasing share of subscription-based revenue, which is less impacted by recessions [64][66] Question: What percentage of U.S. mortgage revenues was reported in the quarter? - U.S. mortgage revenues accounted for 21% of total revenue in the quarter [76] Question: What visibility do you have for the second quarter trends? - Management indicated good visibility in most business lines, with mortgage activity being the exception due to interest rate fluctuations [80] Question: Is the low double-digit growth in government revenue expected for 2Q? - Yes, the low double-digit growth reflects expectations for the second quarter, with the SSA amendment contributing to this growth [84][86]