Slide 1: 2Q23 Earnings Call
2Q23 2Q23 Earnings Call July 20, 2023
Slide 2: Forward-looking Statements
Forward-looking Statements This presentation contains certain forward-looking information, including third quarter and full year 2023 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
EFX executing against EFX2025 strategic priorities in tougher mortgage market… EBITDA margins up 350 BPs 2Q Revenue $1.3B… Revenue within guidance range despite continued mortgage market and US hiring headwinds…very strong EWS Government revenue STRATEGIC PRIORITIES Executing on EBITDA margin commit
Slide 5: Strong 4% Non-mtg Verifier growth off tough 53% comp in 2Q22
Strong 4% Non-mtg Verifier growth off tough 53% comp in 2Q22… Government and record growth helping offset EWS hiring headwinds Strong Mortgage Levers in Weak Market ✓ TWN records - Up 12%, 161M current, 631M total EWS Mtg ✓ Signed four new payroll provider arrangements Growth in in 2Q… 17 signed since
Slide 6: EWS Non-mortgage revenue up 4%, off 50%+ increase in 2Q22
EWS Non-mortgage revenue up +4%, off 50%+ increase in 2Q22, impacted by hiring slowdown… Strong Government growth EWS Revenue $2,035M $2,325M $596M $583M 2Q23 Strong Gov’t Offset by Macro +39% +14% -8% -4% Verifier revenue -6% total ✓ Non-mortgage +4% total +38% Non-mortgage +42% ● Government +21% 54%
Slide 7: Strong 9% USIS Online B2B Non-mortgage growth
Strong 9% USIS Online B2B Non-mortgage growth Total USIS B2B Non-Mortgage Revenue Growth 2Q23 USIS Online B2B Non-mortgage Remains Strong Inorganic ✓ B2B non-mortgage up +7% / +3% organic ✓ Online B2B non-mortgage up +9% / +3% organic ✓ 2Q23 strong double-digit growth in online ID&F, Commercial Orga
Slide 8: Strong 7% INTL growth led by LATAM
Strong 7% INTL growth led by LATAM INTL Outperforming Underlying Economies Key Growth Areas Constant Currency Revenue Growth ✓ Broad-based growth ✓ EFX Cloud-enabled innovation ✓ Differentiated data and insights ✓ NPI acceleration across INTL platforms, particularly LatAm ✓ Global platforms in local
Slide 9: 6% Non-mtg growth off 22% comp in 2Q22
6% Non-mtg growth off 22% comp in 2Q22… Strong EWS Government, USIS and INTL revenue offset by hiring headwinds EFX Non-Mortgage C$ Revenue Growth Total 8-12% EFX LT Growth Framework Organic Non-mortgage C$ revenue growth accelerates to 9% in 3Q23… strong EWS government, easing hiring comps Note: Grow
Slide 10: 14% Vitality Index a record and well above 10% LT Framework
14% Vitality Index a record and well above 10% LT Framework… 30+ NPIs in Quarter, 65 YTD Vitality Index1 and NPIs 2Q Product Roll-Outs ● Mortgage Insurance Attributes (USIS) - Accelerates Mortgage Insurers process of generating mortgage insurance quotes from offline to real-time through the use of new
Slide 11: BVS shareholders approve EFX merger proposal
BVS shareholders approve EFX merger proposal… Adding $160M run-rate BVS revenue…Expected to close August Run-rate Revenue M&A PRIORITIES ~$610M / ~1,150 BPS¹ Date Differentiated Data Strengthen EWS Broaden ID&F Capabilities $175M Insights 4Q21 ✓ ✓ ✓ $160M BVS³ 3Q23 ✓ ✓ Kount ID&F 1Q21 ✓ ✓ $115M Midi
Slide 12: EFX driving leading AI capabilities leveraging EFXCloud and unique data
EFX driving leading AI capabilities leveraging EFXCloud and EFX unique proprietary data US Proprietary Data Assets 161M Active Records, Investing in EFX NDT 631M Total Records EFX AI Advantages AI Capabilities ✓ Industry leading NDT AI ✓ Leveraging Google Vertex AI 32 billion digital interactions wi
Slide 13: 2Q23 Mortgage Inquiries Down 33%
2Q23 Mortgage Inquiries Down 33% 2023 Outlook Down 500 BPS: 3Q ~(23%), 4Q ~(-4%), and 2023 ~(-31%) Mortgage Market Credit Inquiries EFX 2023 Guidance Assumption YoY Growth 2015-2019 Average Level of Inquiries Number of Inquiries 2015 2016 2017 2018 2019 2020 2021 2022 2023 Full year 15% 12% -6% -8%
Slide 14: EFX on track to meet EBITDA Margin and EPS commitments
EFX on track to meet EBITDA Margin and EPS commitments…~40%+ EPS Growth from 1Q to 4Q Adjusted EBITDA Margin Adjusted EPS 500 bps of margin expansion EPS expansion 29.2%¹ Cost actions driving sequential 500 BPS of margin expansion and 40%+ sequential EPS growth 1. 1Q23 Adj EBITDA margins were 29.2%.
Slide 15: 3Q23 Guidance
3Q23 Guidance 3Q 2023 $ vs 3Q 2022 % vs 3Q 2022 Revenue1 $1,320M - $1,340M $76M - $96M 6.1% - 7.7%1 Adjusted EPS1 $1.72 - $1.82 / share (-$0.01) - $0.09 / share (-0.4%) - 5.4% Revenue Adj. EBITDA Business Units Growth Rate Margins (YTY) Guidance Specifics Workforce Solutions ~7.5% ~51.5% Depreciation
Slide 16: 2023 Guidance
2023 Guidance 2023 $ vs 2022 % vs 2022 Revenue1 $5,270M - $5,330M $148M - $208M 2.9% - 4.1%1 Adjusted EPS1 $6.85 - $7.10 / share (-$0.71) - (-$0.46) / share (-9.4%) - (-6.1%) Revenue Adj. EBITDA Business Units Growth Rate Margins (YTY) Guidance Specifics Workforce Solutions ~4% ~51.5%+ Depreciation a
Slide 17: EFX executing well against EFX2025 priorities
EFX executing well against EFX2025 priorities in challenging Mortgage/Hiring markets EFX executing well in challenging macro environment…2Q23 revenue within and Adjusted EPS above guidance range…EBITDA margins +350 bp sequentially EWS performing well despite mortgage and hiring headwinds...signed 4
Slide 18: PROPRIETARY | 18
PROPRIETARY | 18
Slide 19: 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.
Slide 20: Investor Relations July 2023
Investor Relations July 2023
Slide 21: Index
Index Pages The New EFX 22-35 Workforce Solutions Overview 36-39 Identity and Fraud Overview 40-43 Supplemental Financial Information 44-59 Glossary 60-63 PROPRIETARY | 21
Slide 22: The New EFX
The New EFX PROPRIETARY | 22
Slide 23: 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 Agile, customer-driven NPI Sales-centric Product-centric EWS #2 BU Largest business M&A Opportunistic Accelerate
Slide 24: 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 25: The EFX Cloud
The EFX Cloud PROPRIETARY | 25
Slide 26: EFX Transformation to Cloud Native on Track
EFX Transformation to Cloud Native on Track 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 developme
Slide 27: 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 28: 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 | 28
Slide 29: A Strong Portfolio of Businesses
A Strong Portfolio of Businesses 2022 Business Mix 2022 Vertical Mix Other 2% Resellers 3% ID&F 2022 Revenue Growth 2022 Adjusted (Constant $) EBITDA Margin Healthcare 3% 5% International 12% 25.7% Financial 19% Corporate Telco 3% US (Employers) Information -7% 36.8% 16% Commercial 5% Solutions Cons
Slide 30: Workforce Solutions (WS)
Workforce Solutions (WS) Accelerating growth through The Work Number expansion, advanced analytical solutions, and vertical expertise across direct and indirect channels 2022 Revenue Mix - $2,325M Focus Areas Data HUB I-9 & Onboarding Acquisitions Commercial <1% • Grow active TWN • Grow adoption and
Slide 31: 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 32: 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 2022 Revenue Mix - $1,658M Focus Areas Other 2% Growth in Core Markets Building Emerging Businesses ● Drive
Slide 33: 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 34: 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 2022 Revenue Mix - $1,139M Focus Areas Data & Insights Consumer Focus AreasB2B Commercial B2B Other ● Driving
Slide 35: 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 36: Workforce Solutions Overview
Workforce Solutions Overview PROPRIETARY | 36
Slide 37: Unique Dual-sided Business Model Driving Growth
Unique Dual-sided Business Model Driving Growth Supply Networks Dual-sided Business Model Demand Networks 630M+ TWN Employer Verification 500M+ records services Insights services TWN and 2.8M inquiries Record analytics contributors Alliance partners Employment System-to-System 50% Records via direct
Slide 38: Multiple Drivers for EWS Revenue Growth
Multiple Drivers for EWS Revenue Growth Number of Contributors (Thousands) 2023 Growth Drivers +0.3M increase ● TWN Record Growth 2Q23 vs. 2Q22 ● Penetration, more pulls ● New Products / Use cases Number of Records +17M increase (Millions) 2Q23 vs. 2Q22 ● Data Hub Expansion 120M Unique SSNs ● M&A In
Slide 39: EWS Non-Mortgage Products and Trends
EWS Non-Mortgage Products and Trends Government Talent Solutions Employer Services Optimize Social Security Drive utilization and leverage new Grow adoption of I-9 & Administration (SSA) Payroll products based on industry needs Onboarding products across Exchange, increase CMS penetration, direct, p
Slide 40: Identity and Fraud Alternative Data
Identity and Fraud Alternative Data PROPRIETARY | 40
Slide 41: EFX well positioned within $19B digital identity and fraud market
EFX well positioned within $19B digital identity and fraud prevention market growing in high-teens annually Total Fraud, Risk & Authentication Market at $35B Digital Acceleration with Digital Signals - Kount’s Identity & EFX + Kount & 1 Fraud Solutions to increase approvals and convert more good cus
Slide 42: IDentity Foundry
ID Foundry will leverage Data Fabric to fuel Identity and fraud products with insights created from multi-domain data sources (Equifax + 3rd Party) Intrinsic Value EFX Data Raw Data w/Key Meta Data (e.g. Match Score) 1 Expanding data reach in features, capabilities, and products IDentity Foundry Key
Slide 43: Kount & Midigator acquisitions and new product investment
Kount & Midigator acquisitions and new product investment to fuel EFX identity and fraud growth Revenue Growth Trajectory Financial Highlights ~$245M ~$215M ● Digital capabilities revenue to grow ~2x driven by Kount & Midigator acquisitions and new products ~$150M ● Global approach to identity and f
Slide 44: Supplemental Financial Information
Supplemental Financial Information PROPRIETARY | 44
Slide 45: Expanding TAM and Broadening Revenue Base
Expanding TAM and Broadening Revenue Base EFX TAM +$1B Non-Mtg Rev Since 2019 Non-Mortgage Up 3x Growth Levers $45B $5.3B ✓ EWS expansion into US – Empl. Svcs /HR US - Govt $5.1B Talent, Government, US - Talent I9 / Onboarding $3.5B ✓ USIS Identity & ID&F Fraud accelerating $4.2B ✓ New INTL markets
Slide 46: EFX more resilient and well positioned for potential recession
EFX more resilient and well positioned for potential recession EFX / EWS Revenue Growth Recession Resilient $5.1B, +6% CC Recession Growth Levers 1. EWS growth… records, EFX penetration, product, Employer, Talent, Government, UC 2. Cloud benefits… cost savings and $1.8B, +5% share gains 3. NPI growth
Slide 47: EFX2023 – Economic & Market Assumptions
EFX2023 – Economic & Market Assumptions US economy slows moving through 2023… Planning reflects low GDP growth w/o US Recession ● US hiring expected to decline by over ~10% from 2022 International economies also assumed to have slowing growth in 2023. US Mortgage Market Originations decline ~37% from
Slide 48: Q3 & FY23 Guidance - Corporate Expense, Capex, D&A, Interest
Q3 & FY23 Guidance - General Corporate Expense, Capital Spending, D&A, Interest Expense and Other Income and Expense, excluding non-recurring costs General Corporate Expense* – 3Q23 Capital Expenditures (incurred) in 3Q23 are expected to be slightly more Expected to be ~$120M in 3Q23 compared to 3Q2
Slide 49: 2020-2023 Effective Income Tax Rate
2020-2023 Effective Income Tax Rate The effective tax rate used in calculating our GAAP and Adjusted EPS is as follows: GAAP EPS Adjusted EPS FY 2021 21.2% 23.6% 1Q 2022 26.7% 25.9% 2Q 2022 23.9% 24.7% 3Q 2022 24.0% 24.1% 4Q 2022 22.8% 22.3% FY 2022 24.7% 24.5% 1Q 2023 25.4% 26.1% 2Q 2023 27.4% 27.0%
Slide 50: FY 2022 Equifax Results
FY 2022 Equifax Results Dollars in millions (except per share amounts) FY 2022 FY 2021 Reported Revenue $5,122.2 $4,923.9 Growth % 4.0% 19.3% Local Currency Revenue $5,217.0 $4,873.5 Growth % 6.0% 18.1% GAAP Net Income $696.2 $744.2 Growth % -6.4% 43.1% Adjusted EBITDA Margin 33.6% 33.9% Growth % -3
Slide 51: FY 2022 Business Unit Performance
FY 2022 Business Unit Performance Reported Local Currency Adj. EBITDA Margin Adj. EBITDA Margin Revenue Growth Revenue Growth Growth / (Decline) Workforce Solutions 14.3% 14.3% 51.3% (320 bps) Verification Services 16.3% 16.3% N/A N/A Employer Services 6.6% 6.6% N/A N/A USIS (7.2%) (7.2%) 36.8% (310
Slide 52: 2Q 2023 Equifax Results
2Q 2023 Equifax Results Dollars in millions (except per share amounts) 2Q23 2Q22 Reported Revenue $1,317.6 $1,316.7 Growth % Flat 6.6% Local Currency Revenue $1,333.1 $1,339.7 Growth % +1.2% 8.5% GAAP Net Income $138.3 $200.6 Growth % -31.1% -6.8% Adjusted EBITDA Margin 32.7% 35.0% Growth % -230 bps
Slide 53: 2Q 2023 Business Unit Performance
2Q 2023 Business Unit Performance Reported Local Currency Adj. EBITDA Margin Adj. EBITDA Margin Revenue Growth Revenue Growth Growth / (Decline) Workforce Solutions (4.3%) (4.3%) 51.5% (190 bps) Verification Services (6.1%) (6.1%) N/A N/A Employer Services 4.0% 4.0% N/A N/A USIS 5.6% 5.6% 36.0% (220
Slide 54: Revenue Trends – US
Revenue Trends – US % BU Rev² 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 Online / Verific. ~81% 34% 29% 33% 28% 13% (7%) (11%) (6%) -Mortgage +20% 6% 3% (13%) (28%) (38%) (38%) (20%) EWS -Non-Mortgage 55% 64% 90% 90% 72% 23% 16% 4% 2 ~44% EFX Rev Employer Svcs ~19% 39% 28% 33% (3%) (7%) 5% 4% 4% -UC /
Slide 55: Revenue Trends – International and EFX
Revenue Trends – International and EFX % BU Rev¹ 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 APAC ~30% 8% 9% 6% 6% 6% 6% 11% 4% LatAm ~20% 17% 15% 23% 28% 34% 31% 32% 23% INTL Canada ~23% 7% 6% 2% 2% 12% 7% 8% 8% (~22% Europe ~27% 9% 0% 16% 16% 24% 3% (4%) (2%) EFX - CRA ~18% 4% 2% 2% (1%) 7% (1%) 7% 7%
Slide 56: 2Q 2023 International Highlights
2Q 2023 International Highlights Geographic Region Financial Performance Commentary Revenue: $290M, +7% International Adj. EBITDA: $70M, 24.2% B2B Consumer: +8% Asia Pacific Revenue: $88M, +4% B2B Commercial: +4% European Credit Reporting Business: +7% B2B Consumer: +3% Europe Revenue: $79M, (2%) B2
Slide 57: 2Q2023 - General Corporate Expense, Capital Spending, D&A, Interest
2Q2023 - General Corporate Expense, Capital Spending, D&A, Interest Expense and Other Income and Expense, excluding non-recurring costs General Corporate Expense* – 2Q23 Capital Expenditures (incurred) in 2Q23 were $150M, down from $152M in $119 million in 2Q23, as compared to $117 million in 2Q22 2
Slide 58: Strong balance sheet and liquidity
Strong balance sheet and liquidity June 30, 2023 Cash $164M Available Borrowing Capacity¹ $1,344M Total Liquidity $1,508M Leverage Ratio for 2Q23² 3.49x 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 compliance le
Slide 59: Cash Flow and Other Metrics
Cash Flow and Other Metrics Dollars in millions 2Q23 2Q22¹ FY 2022¹ FY 2021 Operating Cash Flow* $262.1 $275.3 $757.1 $1,334.8 Capital Expenditures (Cash) ($163.0) ($158.9) ($624.5) ($469.0) Free Cash Flow $99.1 $116.4 $132.6 $865.8 Cash Capex as a % Revenue 12.4% 12.1% 12.2% 9.5% Depreciation Expen
Slide 60: Glossary
Glossary PROPRIETARY | 60
Slide 61: Glossary
GLOSSARY Term Our Definition The organization of our data and analytic professionals responsible for developing new analytic insights used for new products and other Data & Analytics (D&A) research endeavors. Insights Analytical interpretations of various data assets that enable institutions to make
Slide 62: Technology Glossary
TECHNOLOGY GLOSSARY Term Our Definition A method of project management used in software development that is characterized by the division of tasks into short phases of work Agile and frequent reassessment and adaptation of plans. API – Application A software intermediary that allows two applications
Slide 63: Technology Glossary
TECHNOLOGY GLOSSARY Term Our Definition Data Gateway A system that connects to multiple data sources and provides a single and central point of access to connect to each data source. Data Governance The overall management of the availability, usability, integrity and security of data used in an Enter
Slide 64: 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.