Slide 1: 1Q23 Earnings Call
1Q23 1Q23 Earnings Call April 20, 2023
Slide 2: Forward-looking Statements
Forward-looking Statements This presentation contains certain forward-looking information, including second 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
Strong 10% C$ Non-mortgage revenue growth 1Q Revenue $1.3B and Adj EPS $1.43… Revenue and EPS above high end of guidance range provided in February STRATEGIC PRIORITIES EFX Non-mortgage C$ revenue growth of 10% / 8% organic… Strong non-mortgage growth across EWS, USIS, and INTL US Mortgage revenue d
Slide 5: Strong 10% C$ Non-mortgage revenue growth inside LT framework
Strong 10% C$ Non-mortgage revenue growth inside LT framework EFX Non-Mortgage C$ Revenue Growth Total 8-12% EFX LT Growth Framework Organic Broad-based Non-mortgage growth against strong 2022 and hiring macro Note: Growth rates are in constant currency. PROPRIETARY | 5
Slide 6: Strong 16% Verifier Non-mortgage growth
Strong 16% Verifier Non-mortgage growth TWN records up 15% to 156M Active, 117M Unique, 618M Total Strong Mortgage Levers in Weak Market ✓ TWN records - 156M current, 618M total EWS Mtg Growth in ✓ Signed three new payroll provider arrangements Excess of in 1Q… 13 signed since 2022 Originations EWS M
Slide 7: Strong 11% 1Q EWS Non-mortgage Revenue Growth
Strong 11% 1Q EWS Non-mortgage Revenue Growth… 50% Adjusted EBITDA Margins EWS Revenue Continued Strong Performance in 1Q23 $2,035M, +39% $2,325M, +14% $596M, -8% Verifier revenue -11% total ✓ Non-mortgage +16% total +38% ● Government +33% Non-mortgage +42% +11% ● Talent +10% 54% 67% ● Consumer Lendi
Slide 8: Strong 9% 1Q USIS Online B2B Non-mtg Growth
Strong 9% 1Q USIS Online B2B Non-mtg Growth… 33% Adjusted EBITDA margins USIS B2B Non-Mortgage Revenue Growth Total 1Q23 USIS Online B2B Non-mortgage Remains Strong Inorganic ✓ B2B non-mortgage up +8% / +3% organic ✓ Online B2B non-mortgage up +9% / +3% organic ✓ 1Q23 strong double-digit growth in o
Slide 9: Strong 9% 1Q INTL Revenue Growth
Strong 9% 1Q INTL Revenue Growth… 24% Adjusted EBITDA margins 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 ✓
Slide 10: 13% Vitality Index in 1Q Above 10% LT Framework
13% Vitality Index in 1Q Above 10% LT Framework… 30+ NPIs Rolled Out Vitality Index1 and NPIs 1Q Product Roll-Outs ● OneScore (USIS) - Can combine traditional credit data with alternative data on consumer financial behaviors, for a more powerful, comprehensive decisioning tool ● Talent Report™ Employ
Slide 11: 1Q Mortgage Inquiries Down 44%
1Q Mortgage Inquiries Down 44% 2023 Outlook: 2Q ~(-33%), 2H ~(-13%), and 2023 ~(-30%) 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% 6.5% 47% (-7.
Slide 12: ~40%+ EPS Growth from 1Q to 4Q
~40%+ EPS Growth from 1Q to 4Q Adjusted EBITDA Margin Adjusted EPS 500 bps of margin expansion EPS expansion 29.2%¹ $120M cost actions driving sequential 500 BPS of margin expansion and 40%+ sequential EPS growth 1. 1Q23 EBITDA margins were 29.2%. Adjusted for timing of equity compensation EBITDA ma
Slide 13: 2Q EBITDA margins expand ~300 BPS sequentially
2Q EBITDA margins expand ~300 BPS sequentially from Revenue growth and $120M cost out in 2023 2Q 2023 $ vs 2Q 2022 % vs 2Q 2022 Revenue1 $1,310M - $1,330M (-$7M) - $13M (-0.5%) - 1.0%1 Adjusted EPS1 $1.60 - $1.70 / share (-$0.49) - (-$0.39) / share (-23.5%) - (-18.8%) Revenue Adj. EBITDA Business Un
Slide 14: Maintaining 2023 Guidance off strong 1Q
Maintaining 2023 Guidance off strong 1Q 2023 $ vs 2022 % vs 2022 Revenue1 $5,275M - $5,375M $153M - $253M 3.0% - 4.9%1 Adjusted EPS1 $7.05 - $7.35 / share (-$0.51) - (-$0.21) / share (-6.8%) - (-2.8%) Revenue Adj. EBITDA Business Units Growth Rate Margins (YTY) Guidance Specifics Workforce Solutions ~
Slide 15: Strong 1Q23 Non-mtg Performance Powering EFX
Strong 1Q23 Non-mtg Performance Powering EFX Positioned for Growth in Uncertain 2023 Strong 1Q23 non-mortgage growth up 10% amid challenging mortgage market conditions… mortgage originations down 58%... executing against strategic priorities EWS performing well and outperforming underlying markets…
Slide 16: PROPRIETARY | 16
PROPRIETARY | 16
Slide 17: Appendix
Appendix PROPRIETARY | 17
Slide 18: Revenue Trends – US
Revenue Trends – US % BU Rev² 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 Online / Verific. ~76% 57% 34% 29% 33% 28% 13% (7%) (11%) -Mortgage +50% +20% 6% 3% (13%) (28%) (38%) (38%) EWS -Non-Mortgage 65% 55% 64% 90% 90% 72% 23% 16% 2 ~46% EFX Rev Employer Svcs ~24% Flat 39% 28% 33% (3%) (7%) 5% 4% -UC /
Slide 19: Revenue Trends – International and EFX
Revenue Trends – International and EFX % BU Rev¹ 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 APAC ~32% 21% 8% 9% 6% 6% 6% 6% 11% LatAm ~19% 30% 17% 15% 23% 28% 34% 31% 32% INTL Canada ~22% 23% 7% 6% 2% 2% 12% 7% 8% (~22% Europe ~27% 25% 9% 0% 16% 16% 24% 3% (4%) EFX - CRA ~18% 23% 4% 2% 2% (1%) 7% (1%)
Slide 20: 2023 Operational Restructuring and Cloud Transformation Actions
2023 Operational Restructuring and Cloud Transformation Actions Deliver $200M Spending Reduction in 2023 Total Spending Reduction 2023 Spending Reduction Driven By: Benefits Accelerate in 2Q-4Q23 ~$165M from Workforce Reduction ✓ 10%+ reduction in current workforce of ~23,500 employees and contractor
Slide 21: 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 22: Investor Relations April 2023
Investor Relations April 2023
Slide 23: Index
Index Pages The New EFX 24-37 Workforce Solutions Overview 38-41 Identity and Fraud Overview 42-45 Supplemental Financial Information 46-59 Glossary 60-63 PROPRIETARY | 23
Slide 24: The New EFX
The New EFX PROPRIETARY | 24
Slide 25: 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 26: 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 27: The EFX Cloud
The EFX Cloud PROPRIETARY | 27
Slide 28: 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 29: 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 30: 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 | 30
Slide 31: 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 32: 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 33: 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 34: 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 35: 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 36: 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 37: 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 38: Workforce Solutions Overview
Workforce Solutions Overview PROPRIETARY | 38
Slide 39: Unique Dual-sided Business Model Driving Growth
Unique Dual-sided Business Model Driving Growth Supply Networks Dual-sided Business Model Demand Networks 615M+ TWN Employer Verification 500M+ records services Insights services TWN and 2.7M inquiries Record analytics contributors Alliance partners Employment System-to-System 50% Records via direct
Slide 40: Multiple Drivers for EWS Revenue Growth
Multiple Drivers for EWS Revenue Growth Number of Contributors (Thousands) 2023 Growth Drivers +0.2M increase ● TWN Record Growth 1Q23 vs. 1Q22 ● Penetration, more pulls ● New Products / Use cases Number of Records +20M increase (Millions) 1Q23 vs. 1Q22 ● Data Hub Expansion 117M Unique SSNs ● M&A In
Slide 41: 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 42: Identity and Fraud Alternative Data
Identity and Fraud Alternative Data PROPRIETARY | 42
Slide 43: EFX well positioned within $19B digital identity and fraud prevention 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 44: 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 45: 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 46: Supplemental Financial Information
Supplemental Financial Information PROPRIETARY | 46
Slide 47: 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 48: 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 49: 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 ~32% from
Slide 50: FY23 Guidance - General Corporate Expense, Capital Spending, D&A, Interest
FY23 Guidance - 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 are expected to be ~$150M, down Expected to be ~$125M in 2Q23 compared to 2Q22 of $
Slide 51: 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 Estimate ~26
Slide 52: 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 53: 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 54: 1Q 2023 Equifax Results
1Q 2023 Equifax Results Dollars in millions (except per share amounts) 1Q23 1Q22 Reported Revenue $1,302.0 $1,363.2 Growth % -4.5% 12.4% Local Currency Revenue $1,325.4 $1,375.9 Growth % -2.8% 13.4% GAAP Net Income $112.4 $221.8 Growth % -49.3% 10.0% Adjusted EBITDA Margin 29.2% 35.5% Growth % -640
Slide 55: 1Q 2023 Business Unit Performance
1Q 2023 Business Unit Performance Reported Local Currency Adj. EBITDA Margin Adj. EBITDA Margin Revenue Growth Revenue Growth Growth / (Decline) Workforce Solutions (8.1%) (8.1%) 50.4% (410 bps) Verification Services (11.2%) (11.2%) N/A N/A Employer Services 3.6% 3.6% N/A N/A USIS (2.6%) (2.6%) 32.6%
Slide 56: 1Q 2023 International Highlights
1Q 2023 International Highlights Geographic Region Financial Performance Commentary Revenue: $284M, +9% International Adj. EBITDA: $67M, 23.5% B2B Consumer: +8% Asia Pacific Revenue: $90M, +11% B2B Commercial: +21% European Credit Reporting Business: +8% B2B Consumer: +4% Europe Revenue: $76M, (4%)
Slide 57: 1Q2023 - General Corporate Expense, Capital Spending, D&A, Interest Expense
1Q2023 - General Corporate Expense, Capital Spending, D&A, Interest Expense and Other Income and Expense, excluding non-recurring costs General Corporate Expense* – 1Q23 Capital Expenditures (incurred) in 1Q23 were $154M, up from $141M in $146 million in 1Q23, as compared to $131 million in 1Q22 1Q2
Slide 58: Strong balance sheet and liquidity
Strong balance sheet and liquidity March 31, 2023 Cash $233M Available Borrowing Capacity¹ $918M Total Liquidity $1,151M Leverage Ratio for 1Q23² 3.50x Credit Ratings BBB (S&P) / Baa2 (Moody’s) Next debt maturity: 3.95% $400M Sr Notes Due 6/15/2023 1. $1.5 billion Revolver 2. Covenant compliance lev
Slide 59: Cash Flow and Other Metrics
Cash Flow and Other Metrics Dollars in millions 1Q23 1Q22¹ FY 2022¹ FY 2021 Operating Cash Flow* $150.9 ($198.5) $757.1 $1,334.8 Capital Expenditures (Cash) ($158.3) ($156.5) ($624.5) ($469.0) Free Cash Flow ($7.4) ($355.0) $132.6 $865.8 Cash Capex as a % Revenue 12.2% 11.5% 12.2% 9.5% Depreciation
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.