Slide 1: 1Q24 Earnings Call
1Q24 Earnings Call April 18, 2024
Slide 2: Forward-looking Statements
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
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 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% STRATEGIC PRIORITIES US Mortgage revenue up 6%... USIS inquiries down -19%... EWS inquiri
Slide 5: Strong 15% EWS Non-mortgage Verifier growth... Government up very strong 35%
Strong 15% EWS Non-mortgage Verifier growth... Government up very strong 35% EWS Revenue Strong 1Q24 Non-Mtg Verifier $2,316M $596M $583M $577M $560M $603M Flat -8% -4% +3% +10% +1% Verifier revenue +5% total ✓ Non-mortgage +15% total ● Government +35% ● Talent -4% Non-mtg +11% +11% +4% ● Consumer Lend
Slide 6: Strong 35% EWS Government growth with big room for growth in $5B TAM
Strong 35% EWS Government growth with big room for growth in $5B TAM Gov’t Benefits Enrollment¹ EWS Government Revenue TANF Housing 1M Key Growth Areas 5M SSA 12M ✓ CMS contract extension $5B ($1.2B) SNAP TAM 23M ✓ SNAP expansion CAGR 50%+ ✓ State and local penetration CMS / ACA 38M ✓ Records growth
Slide 7: Continued strong TWN record growth
Continued strong TWN record growth Total US Records ~225M Unique Individuals ~50M - 70M ✓ TWN records up 10%, 172M active… 670M total 1099 / Pension Individuals ✓ Signed 2 new payroll partnerships including one provider with over 6M records… Over 3 million companies contributing to TWN ✓ Gig / 1099
Slide 8: USIS up +10%... Mortgage revenue up 38%
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 USIS revenue up 10% -7% +4% +6% +7% +5% +10% ✓ Non-mortgage up +1% ✓ B2B Non-mortgage down -1% ✓ Online B2B non-mortgage down -1% Non-mtg +5% +8% +8%
Slide 9: Strong 20% INTL growth led by Europe and Brazil
Strong 20% INTL growth led by Europe and Brazil Constant Currency Revenue Growth Key Growth Areas ✓ Bolt-on M&A to strengthen portfolio… Boa Vista (Brazil) ✓ NPI accelerating across INTL platforms… LatAm BVS ✓ EFX Cloud-enabled innovation ✓ Differentiated data and insights ✓ Global platforms in local
Slide 10: Strong 9% NPI Vitality Index in 1Q
Strong 9% NPI Vitality Index in 1Q… Over 25 NPIs in First Quarter New Product Vitality Index1 % New Models Built Using AI / ML Key Areas Mortgage 80% ✓ Strong 9% VI… broad 10% LT based across all regions LT Goal Goal ✓ FY24 VI 10%+ ✓ Strong EWS NPI Non-mtg pipeline… incarceration, I9 & Onboarding ✓
Slide 11: USIS Mortgage credit inquiries expected above February Framework
USIS Mortgage credit inquiries expected to be 500 bps above February Framework at ~(-11%) vs 2023 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%
Slide 12: 2Q24 Guidance
2Q24 Guidance 2Q 2024 $ vs 2Q 2023 % vs 2Q 2023 Revenue1 $1,410M - $1,430M $92M - $112M 7.0% - 8.5%1 Adjusted EPS1 $1.65 - $1.75 / share ($0.06) - $0.04 / share (3.5%) - 2.3% Revenue Adj. EBITDA Business Units Growth Rate Margins (YTY) Guidance Specifics Workforce Solutions ~3% ~51% Depreciation and
Slide 13: Maintaining 2024 Guidance
Maintaining 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 ~7% ~52% Depreciation and
Slide 14: $1B+ Revenue Upside in 2024-26+ 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 ~$1.1B ~50% 2015 - 2019 Inquiry Level ~$1.1B mortgage revenue upside as market returns to 2015-19 levels PROPRIETARY | 14
Slide 15: Strong start to 2024
Strong start to 2024… 1Q C$ Non-mortgage revenue growth of 9% 1Q Revenue at high end of guidance range and Adj EPS above top end of range… Non-mortgage C$ up 9%... Adj EBITDA margins 29% in line with guidance Strong 15% EWS Verifier Non-mortgage growth… signed 2 new payroll providers with one provide
Slide 16: PROPRIETARY | 16
PROPRIETARY | 16
Slide 17: 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 18: Investor Relations April 2024
Investor Relations April 2024
Slide 19: Index
Index Pages The New EFX 20-34 Workforce Solutions Overview 35-39 Supplemental Financial Information 40-51 PROPRIETARY | 19
Slide 20: The New EFX
The New EFX PROPRIETARY | 20
Slide 21: 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 Data Siloed Single Data Fabric New EFX Innovation Process-driven AI / ML NPI Sales-centric Product-centric EWS #2 BU Largest business M&A Opportunistic Accelerated Security Comp
Slide 22: 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 23: The EFX Cloud
The EFX Cloud PROPRIETARY | 23
Slide 24: EFX accelerating AI capabilities… proprietary data, EFX Cloud
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 172M Active Records, ✓ EFX Cloud w/ Single Data 670M Total Records Fabric… Google Vertex, Ignite ✓ Leader in explainable AI
Slide 25: 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 26: 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 27: 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 | 27
Slide 28: 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 29: 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 Other 1% • Grow active TWN • Grow adoption and • Augment E
Slide 30: 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 31: 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 32: 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 33: 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 34: 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 35: Workforce Solutions Overview
Workforce Solutions Overview PROPRIETARY | 35
Slide 36: Unique Dual-sided Business Model Driving Growth
Unique Dual-sided Business Model Driving Growth Supply Networks Dual-sided Business Model Demand Networks 670M TWN Employer Verification 500M+ records services Insights services TWN and 3.1M inquiries Record analytics contributors Alliance partners Employment System-to-System 48% Records via direct c
Slide 37: Multiple Drivers for EWS Revenue Growth
Multiple Drivers for EWS Revenue Growth Number of Contributors (Thousands) 2024 Growth Drivers +0.4M increase 1Q24 vs. 1Q23 ● TWN Record Growth ● Penetration, more pulls ● New Products / Use cases Number of Records +16M increase (Millions) 1Q24 vs. 1Q23 ● Data Hub Expansion 126M Unique SSNs ● M&A In
Slide 38: ~$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 39: EWS Non-Mortgage Products and Trends
EWS Non-Mortgage Products and Trends 1Q24: $175M; +35% 1Q24: $106M; -4% 1Q24: $126M; -10% 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 40: Supplemental Financial Information
Supplemental Financial Information PROPRIETARY | 40
Slide 41: 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 | 41
Slide 42: 1Q 2024 Equifax Results
1Q 2024 Equifax Results Dollars in millions (except per share amounts) 1Q24 1Q23 Reported Revenue $1,389.4 $1,302.0 Growth % 6.7% (4.5%) Local Currency Revenue $1,409.6 $1,325.4 Growth % 8.3% (2.8%) GAAP Net Income $124.9 $112.4 Growth % 11.1% (49.3%) Adjusted EBITDA Margin 29.1% 29.2% Growth % -4 b
Slide 43: 1Q 2024 Business Unit Performance
1Q 2024 Business Unit Performance Reported Local Currency Adj. EBITDA Margin Adj. EBITDA Margin Revenue Growth Revenue Growth Growth / (Decline) Workforce Solutions 1.1% 1.1% 51.1% 65 bps Verification Services 4.5% 4.5% N/A N/A Employer Services (10.1%) (10.1%) N/A N/A USIS 10.3% 10.3% 32.7% 20 bps O
Slide 44: 1Q 2024 International Highlights
1Q 2024 International Highlights Geographic Region Financial Performance Commentary Revenue: $321M, +20% International Adj. EBITDA: $78M, 24.3% B2B Consumer: (3%) Asia Pacific Revenue: $78M, (10%) B2B Commercial: (20%) European Credit Reporting Business: +6% B2B Consumer: +11% Europe Revenue: $86M,
Slide 45: 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 46: 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 47: 1Q2024 - General Corporate Expense, Capital Spending, D&A, Interest Expense
1Q2024 - General Corporate Expense, Capital Spending, D&A, Interest Expense and Other Income and Expense, excluding non-recurring costs General Corporate Expense (Including D&A)* – 1Q24 Capital Expenditures (incurred) in 1Q24 were $125M, down from $154M in $151M in 1Q24, as compared to $146M in 1Q23
Slide 48: Q2 & FY24 Guidance - General Corporate Expense, Capital Spending, D&A
Q2 & FY24 Guidance - General Corporate Expense, Capital Spending, D&A, Interest Expense and Other Income and Expense, excluding non-recurring costs General Corporate Expense* – 2Q24 Capital Expenditures (incurred) in 2Q24 are expected to be ~$125M, down Expected to be ~$127M in 2Q24 compared to 2Q23
Slide 49: 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 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 24.3% 26.8% 2Q 2024 Estimate ~26.2% FY 2024 Estimate
Slide 50: Cash Flow and Other Metrics
Cash Flow and Other Metrics Dollars in millions 1Q24 1Q23 FY 2023 FY 2022¹ Operating Cash Flow $252.7 $150.9 $1,116.8 $757.1 Capital Expenditures (Cash) ($131.9) ($158.3) ($601.3) ($624.5) Free Cash Flow $120.8 ($7.4) $517.5 $132.6 Cash Capex as a % Revenue 9.5% 12.2% 11.4% 12.2% Depreciation Expens
Slide 51: Strong balance sheet and liquidity
Strong balance sheet and liquidity March 31, 2024 Cash $201.0M Available Borrowing Capacity¹ $1,387.1M Total Liquidity $1,588.1M Leverage Ratio for 1Q24² 3.07x 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 compli
Slide 52: 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.