Equifax(US:EFX)2025-04-22 13:30Financial 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]