Equifax(US:EFX)2024-02-08 19:15Financial Data and Key Metrics Changes - In Q4 2023, Equifax reported revenue of $1.327 billion and adjusted EPS of $1.81 per share, both at the high end of guidance, with EBITDA margins at 33.7%, up about 60 basis points sequentially [30][31] - The company achieved 2% organic constant currency revenue growth for 2023, with 7% organic constant currency non-mortgage revenue growth, reflecting a sequential improvement with 8% total growth and 9% non-mortgage growth in Q4 [5][30] - Mortgage revenue was $78 million in Q4, representing 18% of total USIS revenue, with a significant decline in mortgage inquiries down 17% [44][32] Business Line Data and Key Metrics Changes - EWS non-mortgage revenue grew 17%, driven by strong performances in government and talent businesses, while USIS delivered 4% revenue growth with 7% non-mortgage growth [9][13] - The company launched over 100 new products in 2023, achieving a vitality index of 14%, exceeding the long-term goal of 10% [26][50] - International revenue grew 22% in constant currency, with 6% organic constant currency growth, led by strong performance in Latin America and Europe [21][59] Market Data and Key Metrics Changes - The total U.S. mortgage market showed slight improvement, with mortgage rates declining from 7.9% to 6.8% late in the year, leading to increased activity [32][33] - Auto delinquency rates for prime consumers remained stable and below 1%, while subprime delinquencies were above pre-pandemic levels [15][35] - The company expects international constant currency growth to exceed 15% in 2024, with organic constant currency growth around 10% [59] Company Strategy and Development Direction - Equifax is focused on completing its North American cloud transformation and expects to have about 90% of revenue in the new Equifax cloud by the end of 2024 [10][95] - The company aims to leverage its differentiated data assets and new cloud capabilities to drive new solutions and maintain competitive advantages [51][72] - The strategic priority for 2024 includes completing the cloud transformation and leveraging new capabilities to drive growth [94][116] Management's Comments on Operating Environment and Future Outlook - Management noted that the U.S. consumer remains resilient, with low unemployment and strong job openings, although there are constraints in white-collar hiring [34][34] - The mortgage market is expected to recover, with potential for over $1 billion in annual revenue opportunities as inquiry levels normalize [92][94] - The company anticipates modest economic deceleration in 2024, with overall revenue growth expected to be around 8.6% [75][76] Other Important Information - Equifax incurred a restructuring charge of $19 million in Q4 2023 as part of its technology transformation [23] - The company expects to see a significant reduction in capital spending to about $475 million in 2024, reflecting progress in cloud transformation [80][106] - Adjusted EBITDA is projected to be about $1.9 billion in 2024, with adjusted EBITDA margins expected to be around 33.3% [80][83] Q&A Session Summary Question: Can you confirm the inquiries versus USIS versus twin? - Management indicated that twin inquiries are expected to perform slightly better than USIS due to better shopping activity [118] Question: What are the volume assumptions for talent? - Management did not provide specific details in the response [119] Question: Clarification on mortgage revenue percentages? - Mortgage revenue was 15% of total in Q4 and 19% for the fiscal year, expected to be around 20% in Q1 based on outperformance [122]