1Q24 Earnings Call
April 18, 2024
Forward-looking Statements
This presentation contains certain forward-looking information, including second quarter and full year 2024 guidance, to help you understand Equifax and its business environment. All statements that address operating performance and events or developments that we expect or anticipate will occur in the future, including statements relating to our future operating results, improvements in our IT and data security infrastructure, the expected financial and operational benefits, synergies and growth from our acquisitions, our strategy, our long-term financial framework, changes in the U.S. mortgage market environment, as well as changes more generally in U.S. and worldwide economic conditions, such as changes in interest rates and inflation levels, and similar statements about our financial outlook and business plans, are forward-looking statements.
We believe these forward-looking statements are reasonable as and when made. However, forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or projections. These risks and uncertainties include, but are not limited to, those described in our 2023 Form 10-K and subsequent SEC filings.
As a result of such risks and uncertainties, we urge you not to place undue reliance on any forward-looking statements. Forward-looking statements speak only as of the date when made. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
PROPRIETARY | 2
Non-GAAP Disclosure Statement
This presentation contains certain non-GAAP financial measures, including adjusted EPS and adjusted EBITDA, which reflect adjustments for certain items that affect the comparability of our underlying operational performance.
Adjusted EPS is defined as net income adjusted for acquisition-related amortization expense, accrual for legal and regulatory matters related to the 2017 cybersecurity incident, fair market value adjustment of equity investments, foreign currency impact of certain intercompany loans, acquisition-related costs other than acquisition amortization, income tax effect of stock awards recognized upon vesting or settlement, and Argentina highly inflationary foreign currency adjustment.
Adjusted EBITDA is defined as consolidated net income attributable to Equifax plus net interest expense, income taxes, depreciation and amortization, and also excludes certain one-time items.
Local currency is calculated by conforming the current period results to the comparable prior period exchange rates. Local currency can be presented for numerous GAAP measures, but is most commonly used by management to analyze operating revenue without the impact of changes in foreign currency exchange rates.
Organic revenue growth is defined as revenue growth, adjusted to reflect an increase in prior year Equifax revenue from the revenue of acquired companies in the prior year period. This adjustment is made for 12 months following the acquisition.
Organic non-mortgage revenue growth is defined as revenue growth within our non-mortgage verticals adjusted to reflect an increase in prior year Equifax revenue from the revenue of acquired companies in the prior year period. This adjustment is made for 12 months following the acquisition.
These non-GAAP measures are detailed in reconciliation tables which are included with our earnings release and are also posted at www.equifax.com under "Investor Relations/Financial Results/Non-GAAP Financial Measures."
PROPRIETARY | 3
Strong start to 2024… Revenue at high end of 1Q Framework with Adjusted EPS above guidance
Revenue $1.389B up 7% / 5% Organic C$ and Adj EPS $1.50 up 5%… EBITDA margins of 29.1%… Non mortgage (C$) revenue up 9%
US Mortgage revenue up 6%... USIS inquiries down -19%... EWS inquiries down -22%
EWS up 1% / Non-mtgrevenue up 7% / Verifier Non-mtgup 15%... EBITDA margins of 51.1%... Records up strong 10% to 172M with total records up 8% to 670M… Signed significant payroll provider relationship +6M records
USIS up 10% / Non-mtgup 1%… strongest rev/ growth since 1Q21… double digit growth in Kount, Consumer… Strong growth in FI… EBITDA margins of 32.7%
INTL C$ revenue growth up 20% (up 6% organic)... strong revenue growth in Latam and Europe… EBITDA margins of 24.3%
Cloud completion progressing… 70%+ of EFX revenue in EFX Cloud… Capex down sequentially
NPI Vitality Index of 9%... NPIs leveraging new EFX Cloud… in 1Q 85% of new models and scores built using AI / ML
Maintaining 2024 Guidance… Executing on Cloud completion
STRATEGIC PRIORITIES
PROPRIETARY | 4
Strong 15% EWS Non-mortgage Verifier growth... Government up very strong 35%
EWS Revenue
$2,316M | $596M | $583M | $577M | $560M | $603M |
Flat | -8% | -4% | +3% | +10% | +1% |
Non-mtg +11% +11% +4% +11% +17% +7%
Mortgage -23% | -38% | -20% | -15% | -11% | -15% | |
Non-Mortgage as | 75% | 73% | 71% | 75% | 80% | 77% |
% of Revenue | ||||||
Mortgage | 22% | 20% | 24% | 22% | 18% | 7% |
Outperformance |
Strong 1Q24 Non-Mtg Verifier
Verifier revenue +5% total
- Non-mortgage+15% total
- Government +35%
- Talent -4%
- Consumer Lending +6%
- Mortgage -15%, with 7 pts of Mortgage outperformance from records, price
Employer revenue down -10%
- I9 / Onboarding +5%
- UC +1%
- ERC -84%… IRS pauses new transactions
Non-mortgage (total) +7%, ex UC / ERC +11%
EWS delivered 51% Adjusted EBITDA margins amid challenging mortgage market
PROPRIETARY | 5
Strong 35% EWS Government growth with big room for growth in $5B TAM
Gov't Benefits Enrollment¹ | |
Housing | TANF |
1M | |
5M | |
EWS Government Revenue
Key Growth Areas
SSA 12M |
SNAP
23M
CMS / ACA
38M
Medicaid /
CHIP 55M
XXM
CAGR 50%+
$586M
$448M
$253M
$5B
TAM
~+15%
- CMS contract extension ($1.2B)
- SNAP expansion
- State and local penetration
- Records growth
- System-to-systemintegrations enabled by Cloud native technology
- Differentiated data, NPI (incarceration)
Sales execution at the Federal level and at the State capitals
1. Government benefits eligibility data sourced from publicly available government websites. Number of participants is not cumulative as individual
2. | participants may be eligible for multiple benefit programs. | PROPRIETARY | 6 |
Note: 2024 figures are based on FY24 guidance. |
Continued strong TWN record growth
Total US Records
~225M Unique
Individuals
~50M - 70M
1099 / Pension
Individuals
172M Active +10% | |||
156M Active +15% | 126M | ~165M W2 | |
135M Active +19% | 117M | Unique | |
Individuals | |||
Unique | |||
104M | |||
Unique |
- TWN records up 10%, 172M active… 670M total
- Signed 2 new payroll partnerships including one provider with over 6M records… Over 3 million companies contributing to TWN
- Gig / 1099 and pension opportunity to extend record growth
- Dedicated record acquisition teams across channels… Direct, Payroll provider, Gig / 1099, Pension
Total Records 542M | 618M | 670M | |
Big opportunity for record growth | |||
Note: 1099 and pension data sourced from publicly available data and internal EFX estimates. | PROPRIETARY | 7 |
USIS up +10%... Mortgage revenue up 38% from very strong 57 point mortgage market outperformance
USIS Revenue
$1,658M $1,720M $445M $426M $428M $465M
-7% +4% +6% +7% +5% +10%
Non-mtg +5% +7% +8% +8% +3% +1%
Mortgage | -32% | -5% | -1% | +4% | +16% | +38% |
Non-Mortgage | 75% | 77% | 75% | 76% | 82% | 69% |
as % of Revenue |
USIS revenue up 10%
- Non-mortgageup +1%
- B2B Non-mortgage down -1%
- Online B2B non-mortgage down -1%
- Strong DD Kount, Consumer growth… FI up MSD… offset by declines in Bureau sales, Auto, Telco growth
- Offline / Batch down -1%
- Consumer Solutions up +10%
- Mortgage +38% vs US inquiries -19%
USIS Adjusted EBITDA margins of 33%
PROPRIETARY | 8
Strong 20% INTL growth led by Europe and Brazil
Constant Currency Revenue Growth
BVS
Key Growth Areas
- Bolt-onM&A to strengthen portfolio… Boa Vista (Brazil)
- NPI accelerating across INTL platforms… LatAm
- EFX Cloud-enabled innovation
- Differentiated data and insights
- Global platforms in local markets
6% | 4% | 4% | 2% | (2%) | (10%) | Asia Pacific |
14% | Flat | (2%) | (2%) | 9% | 10% | Europe |
6% | 4% | 8% | <1% | 1% | 4% | Canada |
29% | 56% | 23% | 62% | 103% | 102% | LatAm (1Q24 excluding Brazil +31%) |
12% | 12% | 7% | 12% | 22% | 20% | Total |
11% | 6% | 7% | 3% | 6% | 6% | Organic C$ |
26% | 27% | 24% | 26% | 31% | 24% | Adj. EBITDA % |
INTL 24% Adjusted EBITDA margins | ||||||
Note: Constant currency growth rates. | PROPRIETARY | 9 |
Strong 9% NPI Vitality Index in 1Q… Over 25 NPIs in First Quarter
New Product Vitality Index1 | % New Models Built Using AI / ML |
Mortgage
10%
LT
Goal
Non-mtg
Key Areas | |
80% | ✓ Strong 9% VI… broad |
LT | based across all regions |
Goal | ✓ FY24 VI 10%+ |
✓ Strong EWS NPI | |
pipeline… incarceration, | |
I9 & Onboarding | |
✓ USIS VI accelerating… | |
7% in 1Q24 vs 5% | |
in 2023 |
~85% of new models and scores built in 1Q using AI / ML
1. Vitality index is percentage of revenue in a given year derived from new product releases over the prior three years and the current year. | PROPRIETARY | 10 |
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Equifax Inc. published this content on 18 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 18 April 2024 11:13:17 UTC.