Slide 1: 4Q23 Earnings Call
4Q23 4Q23 Earnings Call February 8, 2024
Slide 2: Forward-looking Statements
Forward-looking Statements This presentation contains certain forward-looking information, including first 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 a
Slide 3: Non-GAAP Disclosure Statement
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 fo
Slide 4: Strategic Priorities
Strong finish to 2023… 4Q Non-mortgage C$ revenue up 14%, EBITDA margins up 60 BPs sequentially Revenue $1.327B up 11% / 8% Organic C$ and Adj EPS $1.81 up 19% both at high end of guidance ranges … EBITDA margins of 33.7% up 60 bps seq… STRATEGIC PRIORITIES Non mortgage (C$) revenue up 14% / 9% Organ
Slide 5: Strong 27% EWS Non-mortgage Verifier growth
Strong 27% EWS Non-mortgage Verifier growth driven by strong 47% Government performance and 11% TWN record growth Continued Mortgage Outperformance ✓ TWN records up 11%, 168M active… 657M total ✓ Signed 6 new payroll partnerships… 33 signed since the beginning of 2021… Over 3 million companies contri
Slide 6: Strong EWS performance +10% driven by Cloud NPI, record growth, pricing
Strong EWS performance +10% driven by Cloud NPI, record growth, pricing… Double digit Non-mtg growth in Government and Talent EWS Revenue Strong 4Q23 Performance $2,325M $2,316M $596M $583M $577M $560M +14% Flat -8% -4% +3% +10% Verifier revenue +15% total ✓ Non-mortgage +27% total ● Government +47%
Slide 7: ~$13B EWS Growth Opportunity
~$13B EWS Growth Opportunity TAM ($B) Market Share % EWS Revenue Opportunity EFX Other Players / Manual / Lack of Adoption $15B Talent Sol $5B 10% 90% ~$2B Empl. Svcs 16% 84% Government $5B 15% 85% ~$13B 20% 80% ~$11B Verification Employer $2B Housing1 $1.5B 40% 60% $2.3B Cons. Fin.2 $1.5B 15% 85% To
Slide 8: USIS +5%... Mortgage up 16%
USIS +5%... Mortgage up 16% from strong 33 point mortgage market outperformance USIS Revenue $1,658M $1,720M $422M $445M $426M $428M USIS revenue up 5% -7% +4% -3% +6% +7% +5% ✓ B2B non-mortgage up +1% ✓ Online B2B non-mortgage down less than -1% Non-mtg +5% +8% +8% +8% +7% +3% ✓ Strong DD Kount, Co
Slide 9: Strong 22% INTL growth led by LATAM
Strong 22% INTL growth led by LATAM Constant Currency Revenue Growth Key Growth Areas ✓ Bolt-on M&A to strengthen portfolio… Boa Vista (Brazil) ✓ NPI accelerating across INTL BVS platforms… Latam ✓ EFX Cloud-enabled innovation ✓ Differentiated data and insights ✓ Global platforms in local markets 6%
Slide 10: Strong 9% Non-mortgage organic growth in 4Q
Strong 9% Non-mortgage organic growth in 4Q driven by EWS Government and Talent, USIS Commercial, Consumer and Kount, LATAM, and Europe performance EFX Non-Mortgage C$ Revenue Growth Total BVS 8-12% EFX LT Growth Framework Organic Non-mortgage C$ revenue growth accelerating into 2024 Note: Growth ra
Slide 11: Strong 14% NPI Vitality Index in 4Q
Strong 14% NPI Vitality Index in 4Q well above 10% LT Framework… ~30 NPIs in Quarter Vitality Index1 4Q Product Roll-Outs ● Auto Gold (24 Months) (EWS) - Optimized credit worthiness product for automotive lenders/dealers ● SSV Date Range Enhancement API (One Call) (EWS) - Medicaid, SNAP, and TANF el
Slide 12: EFX accelerating AI capabilities
EFX accelerating AI capabilities… industry leading proprietary data, EFX Cloud… driving innovation Proven Results US Proprietary Data Assets % of New Models Built Using AI / ML 168M Active Records, ✓ EFX Cloud w/ Single Data 657M Total Records Fabric… Google Vertex, Ignite ✓ Leader in explainable AI
Slide 13: 2024 Framework: Revenue up ~9%, Non-mortgage up ~8.5%
2024 Framework: Revenue up ~9%, Non-mortgage up ~8.5% at midpoint EWS International Macro Factors ✓ Revenue Growth ~8% ✓ C$ Revenue Growth ~+15% ✓ US Mortgage Market ~(-15%) ✓ Non-mtg Rev growth ~10.5% ✓ Strong double digit growth in ✓ 1Q24 down over (-25%) ✓ Records, Product, Penetration, Latam dri
Slide 14: Mortgage credit inquiries 500 bps better than October Framework
Mortgage credit inquiries 500 bps better than our October Framework but still down -17% Mortgage Market Credit Inquiries EFX 2024 Guidance Assumption YoY Growth 2015-2019 Average Level of Inquiries Number of Inquiries 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Full year 15% 12% -6% -8% 6.5% 4
Slide 15: 2024 Revenue Guidance
2024 Revenue Guidance… Strong Non-mortgage growth and Mortgage outperformance $ in billions ~+2% $5.670B - $5.770B +10.5% ~(-1.9%) ~+7% ~+8.6% ~+4.5% BVS Acquisition FX $5.720B $5.265B ~(-3%) Non-mortgage organic (Midpoint) growth ~+8.5% US Mortgage US Mortgage Market Outperformance [~(-15%) in avg
Slide 16: 2024 Adjusted EPS Guidance
2024 Adjusted EPS Guidance… Revenue Growth and Higher EBITDA Margins partially offset increased D&A, Interest, Taxes $ per share ~+6% ~(-5%) ~+12.5% ~(-4%) $7.20 - $7.50 EBITDA margins up 110 bps D&A up ~$60M ~9.5% - Leverage on Revenue Interest / Other Expense Growth up ~$20M+ YTY $7.35 - $60M Expen
Slide 17: 2024 Guidance
2024 Guidance 2024 $ vs 2023 % vs 2023 Revenue1 $5,670M - $5,770M $405M - $505M 7.7% - 9.6%1 Adjusted EPS1 $7.20 - $7.50 / share $0.49 -$0.79 / share 7.3% - 11.8% Revenue Adj. EBITDA Business Units Growth Rate Margins (YTY) Guidance Specifics Workforce Solutions ~8% ~52% Depreciation and amortization
Slide 18: 1Q24 Guidance
1Q24 Guidance 1Q 2024 $ vs 1Q 2023 % vs 1Q 2023 Revenue1 $1,375M - $1,395M $73M - $93M 5.6% - 7.1%1 Adjusted EPS1 $1.33 - $1.43 / share ($0.10) - $0.00 / share (7.1%) - Flat Revenue Adj. EBITDA Business Units Growth Rate Margins (YTY) Guidance Specifics Workforce Solutions ~2% ~50.5% Depreciation and
Slide 19: $1B+ Revenue Upside from Mortgage Market Return to Normal
$1B+ Revenue Upside in 2024-26+ from Mortgage Market Return to Normal EFX Mortgage Credit Inquiries Down -50%+ EFX Mortgage Revenue ~$2.2B ~$1.1B Opportunity 50% ~$1.1B 2015 - 2019 Inquiry Level ~$1.1B mortgage revenue upside as market returns to 2015-19 levels PROPRIETARY | 19
Slide 20: Strong 4Q 14% C$ Non-mortgage and 10% FY revenue growth
Strong 4Q 14% C$ Non-mortgage and 10% FY revenue growth provides momentum into 2024 4Q Revenue and EPS at top end of guidance range… Non-mortgage C$ up 14%, Adjusted EBITDA margins +60 bps sequentially Strong 27% EWS Verification Services Non-mortgage growth… signed 6 new payroll providers… reached 1
Slide 21: PROPRIETARY | 21
PROPRIETARY | 21
Slide 22: Trevor Burns • Investor Relations
Trevor Burns • Investor Relations • trevor.burns@equifax.com Copyright © 2024, Equifax Inc. All Rights Reserved. Equifax is a registered trademark of Equifax Inc.
Slide 23: Investor Relations February 2024
Investor Relations February 2024
Slide 24: Index
Index Pages The New EFX 25-38 Workforce Solutions Overview 39-42 Supplemental Financial Information 43-54 PROPRIETARY | 24
Slide 25: The New EFX
The New EFX PROPRIETARY | 25
Slide 26: The New Equifax… we are just getting started
The New Equifax… we are just getting started EFX Revenue Growth The New EFX Yesterday Today Technology Legacy Cloud-native / AI Data Siloed Single Data Fabric New EFX Innovation Process-driven Agile, customer-driven NPI Sales-centric Product-centric EWS #2 BU Largest business M&A Opportunistic Accel
Slide 27: EFX Long Term Framework
EFX Long Term Framework Long Term Financial Framework New EFX Organic revenue growth 7-10% LTFF Revenue Growth M&A contribution 1-2% EWS USIS INTL Total growth 8-12% 13-15% 6-8% 7-9% EBITDA% margin improvement +50 bps Cash EPS growth 12-16% Dividend yield ~1% Annual shareholder return 13-18% Faster
Slide 28: The EFX Cloud
The EFX Cloud PROPRIETARY | 28
Slide 29: EFX Transformation to Cloud Native
EFX Transformation to Cloud Native TECHNOLOGY Remediation Migrations, Driving decom Robust NPI Migrate data, Enabled rapid and Build out core decom, and enabling pipeline with products, and global product transformation infrastructure and new new markets & faster path to customers development strate
Slide 30: A Robust Foundation for Comprehensive Solutions
A Robust Foundation for Comprehensive Solutions Insights are Created Through Connected and Differentiated Data Consumer Telco, Cable Employment Consumer Education & Credit & Utility & Income Consented Credentials Traditional Unique Direct from Information Degree, & Specialty National Data Employers O
Slide 31: Broadening Our Global Presence in Important Growth Markets
Broadening Our Global Presence in Important Growth Markets CANADA UNITED KINGDOM UNITED STATES IBERIA INDIA Key Revenue Drivers Consumer Credit Brazil Commercial Credit LATAM Employment & Income AUSTRALIA NEW ZEALAND Identity & Fraud Analytics Collections PROPRIETARY | 31
Slide 32: A Strong Portfolio of Businesses
A Strong Portfolio of Businesses 2023 Business Mix 2023 Vertical Mix Other 3% 2023 Revenue Growth 2023 Adjusted Resellers 3% ID&F (Constant $) EBITDA Margin 6% Healthcare 2% International +12% 26.5% Financial 19% Corporate US Telco 2% (Employers) Information +4% 34.5% 15% Commercial 5% Solutions Con
Slide 33: Workforce Solutions (WS)
Workforce Solutions (WS) Accelerating growth through The Work Number expansion, advanced analytical solutions, and vertical expertise across direct and indirect channels 2023 Revenue Mix - $2,316M Focus Areas Data HUB Innovation Acquisitions ID&F 1% Other <1% • Grow active TWN • Grow adoption and •
Slide 34: EWS Long Term Growth Framework
EWS Long Term Growth Framework Organic Revenue Growth % LTFF Growth Drivers Employer ● The Work Number® record growth thru Verifier New EFX Services direct clients, strong partnerships and 2% 13-15% alternative data 4% ● Growth in new verticals: Talent, 9-11% Government 3% 4% ● Robust set of growth l
Slide 35: US Information Solutions (USIS)
US Information Solutions (USIS) Strengthen our foundation of assets and capabilities while investing in solutions and adjacencies that accelerate sustainable growth in existing and new markets Focus Areas 2023 Revenue Mix - $1,720M Identity & Fraud Core Markets Other 5% • Fuel growth from Kount & •
Slide 36: USIS Long Term Growth Framework
USIS Long Term Growth Framework Organic Revenue Growth % LTFF Growth Drivers New EFX ● Enable the digital client experience: ● “Say Yes More” and frictionless, 2-3% 6-8% personalized experiences 5-7% ● Be the leader in Identity solutions ~2% ● New product innovation enabled by ~1% differentiated data
Slide 37: International (INTL)
International (INTL) Address customer needs through unique data assets to drive insights delivered via strategic technology platforms complemented by M&A for geographic and domain expansion 2023 Revenue Mix - $1,229M Focus Areas Data & Insights Consumer Focus AreasB2B Commercial B2B Other 6% ● Drivi
Slide 38: INTL Long Term Growth Framework
INTL Long Term Growth Framework Organic1 Revenue Growth % LTFF Growth Drivers New EFX ● EFX Cloud-enabled innovation 8-10% 7-9% ● Differentiated data and insights 1.0-1.5% 1.5-2.0% ● NPI acceleration across INTL platforms 2.5-3.0% Regions ● Global platforms in local markets range between ● Bolt-on M&
Slide 39: Workforce Solutions Overview
Workforce Solutions Overview PROPRIETARY | 39
Slide 40: Unique Dual-sided Business Model Driving Growth
Unique Dual-sided Business Model Driving Growth Supply Networks Dual-sided Business Model Demand Networks 657M+ TWN Employer Verification 500M+ records services Insights services TWN and 3.0M inquiries Record analytics contributors Alliance partners Employment System-to-System 48% Records via direct
Slide 41: Multiple Drivers for EWS Revenue Growth
Multiple Drivers for EWS Revenue Growth Number of Contributors (Thousands) 2023 Growth Drivers +0.4M increase 4Q23 vs. 4Q22 ● TWN Record Growth ● Penetration, more pulls ● New Products / Use cases Number of Records +16M increase (Millions) 4Q23 vs. 4Q22 ● Data Hub Expansion 124M Unique SSNs ● M&A In
Slide 42: EWS Non-Mortgage Products and Trends
EWS Non-Mortgage Products and Trends 4Q23: $174M; +47% 4Q23: $110M; +13% 4Q23: $102M; -7% Government Talent Solutions Employer Services Increase CMS penetration, expand Drive utilization and leverage new Grow adoption of I-9 & Federal and State contracts products based on industry needs Onboarding p
Slide 43: Supplemental Financial Information
Supplemental Financial Information PROPRIETARY | 43
Slide 44: Expanding TAM and Broadening Revenue Base
Expanding TAM and Broadening Revenue Base EFX TAM Up 3x +$1.8B Non-Mtg Rev Since 2019 $50B ~$5.7B Brazil $5.3B US – Empl. Svcs /HR $5.1B US - Govt US - Talent ~$4.6B $3.5B $4.3B Mtg ID&F $3.9B $2.8B Non-mtg Traditional Credit Bureau PROPRIETARY | 44
Slide 45: Q1 & FY24 Guidance - Corporate Expense, Capex, D&A, Interest
Q1 & FY24 Guidance - General Corporate Expense, Capital Spending, D&A, Interest Expense and Other Income and Expense, excluding non-recurring costs General Corporate Expense* – 1Q24 Capital Expenditures (incurred) in 1Q24 are expected to be slightly more Expected to be ~$154M in 1Q24 compared to 1Q2
Slide 46: 2022-2024 Effective Income Tax Rate
2022-2024 Effective Income Tax Rate The effective tax rate used in calculating our GAAP and Adjusted EPS is as follows: GAAP EPS Adjusted EPS FY 2022 24.7% 24.5% 1Q 2023 25.4% 26.1% 2Q 2023 27.4% 27.0% 3Q 2023 13.9% 26.0% 4Q 2023 26.4% 26.0% FY 2023 23.2% 26.2% 1Q 2024 Estimate ~27.5% FY 2024 Estimate
Slide 47: FY 2023 Equifax Results
FY 2023 Equifax Results Dollars in millions (except per share amounts) FY 2023 FY 2022 Reported Revenue $5,265.2 $5,122.2 Growth % 2.8% 4.0% Local Currency Revenue $5,316.4 $5,217.0 Growth % 3.8% 6.0% GAAP Net Income $545.3 $696.2 Growth % -21.7% -6.4% Adjusted EBITDA Margin 32.2% 33.6% Growth % -14
Slide 48: FY 2023 Business Unit Performance
FY 2023 Business Unit Performance Reported Local Currency Adj. EBITDA Margin Adj. EBITDA Margin Revenue Growth Revenue Growth Growth / (Decline) Workforce Solutions (0.4%) (0.4%) 51.0% (35 bps) Verification Services (1.3%) (1.3%) N/A N/A Employer Services 3.3% 3.3% N/A N/A USIS 3.8% 3.8% 34.5% (230 b
Slide 49: 4Q 2023 Equifax Results
4Q 2023 Equifax Results Dollars in millions (except per share amounts) 4Q23 4Q22 Reported Revenue $1,326.5 $1,197.9 Growth % 10.7% (4.4%) Local Currency Revenue $1,332.6 $1,228.6 Growth % 11.2% (2.0%) GAAP Net Income $132.4 $108.2 Growth % 22.4% (11.4%) Adjusted EBITDA Margin 33.7% 31.0% Growth % +2
Slide 50: 4Q 2023 Business Unit Performance
4Q 2023 Business Unit Performance Reported Local Currency Adj. EBITDA Margin Adj. EBITDA Margin Revenue Growth Revenue Growth Growth / (Decline) Workforce Solutions 10.1% 10.1% 51.2% 445 bps Verification Services 14.7% 14.7% N/A N/A Employer Services (6.7%) (6.7%) N/A N/A USIS 5.4% 5.4% 35.1% (20 bps
Slide 51: 4Q 2023 International Highlights
4Q 2023 International Highlights Geographic Region Financial Performance Commentary Revenue: $339M, +22% International Adj. EBITDA: $106M, 31.2% B2B Consumer: (4%) Asia Pacific Revenue: $82M, (2%) B2B Commercial: (5%) European Credit Reporting Business: +13% B2B Consumer: +13% Europe Revenue: $94M,
Slide 52: 4Q2023 - General Corporate Expense, Capital Spending, D&A, Interest
4Q2023 - General Corporate Expense, Capital Spending, D&A, Interest Expense and Other Income and Expense, excluding non-recurring costs General Corporate Expense* – 4Q23 Capital Expenditures (incurred) in 4Q23 were $137M, down from $163M in $112M in 4Q23, as compared to $101M in 4Q22 4Q22. Depreciat
Slide 53: Strong balance sheet and liquidity
Strong balance sheet and liquidity December 31, 2023 Cash $216.8M Available Borrowing Capacity¹ $1,303.6M Total Liquidity $1,520.4M Leverage Ratio for 4Q23² 3.15x Credit Ratings BBB (S&P) / Baa2 (Moody’s) Next debt maturity: 2.60% $750M Sr Notes Due 12/1/2024 1. $1.5 billion Revolver 2. Covenant com
Slide 54: Cash Flow and Other Metrics
Cash Flow and Other Metrics Dollars in millions 4Q23 4Q22 FY 2023 FY 2022¹ Operating Cash Flow* $324.1 $325.4 $1,116.8 $757.1 Capital Expenditures (Cash) ($145.7) ($156.1) ($601.3) ($624.5) Free Cash Flow $178.4 $169.3 $517.5 $132.6 Cash Capex as a % Revenue 11.0% 13.0% 11.4% 12.2% Depreciation Expe
Slide 55: Trevor Burns • Investor Relations
Trevor Burns • Investor Relations • trevor.burns@equifax.com Copyright © 2023, Equifax Inc. All Rights Reserved. Equifax is a registered trademark of Equifax Inc.