EFX - Earnings call transcript Q1 2018

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Operator

Good day, and welcome to the Equifax First Quarter 2018 Earnings Call. Today's call is being recorded. At this time, I'd like to turn the call over to Trevor Burns. Please go ahead, sir.

Trevor Burns

Thanks and good morning. call. conference today's to Welcome I'm Trevor Investor Relations. Burns, me Barros; John are Investor Begor, and Mark Paulino Officer; Relations. Executive Chief Gamble, Dodge, With Jeff today Chief Officer; Financial is recorded. call Today's being the the About tab today of An available at Web Equifax will Relations in Investor of later archive section in recording site the www.equifax.com. our be

that financial we forth operational and a making Equifax factors certain call, certain business business environment. and in Also, of referring cause number items will its and we EBITDA, SEC, including and risk filings could These statements uncertainties, to non-GAAP EPS the this comparability in set are underlying to from the During be involve results which forward-looking will for be subsequent including statements to of attributable our factors, risk measures, XXXX adjusted our be adjusted understand Equifax differ filings. help expectations. that our actual with Form you adjusted will factors the other XX-K materially certain inherent performance. affect our to Certain

from income as adjusted well XXXX adjusted further and and EBITDA defined our security Adjusted enhance liability the projects projects These also adding XXXX. security. to income, expected that throughout EPS, occur of attributable substantially cost certain data contingent incremental later Adjusted but the consolidated Equifax for this IT the therefore earnings manage excluded IT systems related networking Equifax to which projects. include first items to data early to to certain and Included EPS cost Form global replace income as the This cost cost non-GAAP incident. costs infrastructure, cybersecurity as the attributable with with to data and will will included to and security or the excludes the to net theft costs not IT related XX-Q, and to infrastructure at stock stage our site. implement the tax systems, recognized and to is proceedings. expense possible projects be of a cybersecurity processes services future tax including are also cybersecurity XXXX, protection file and or In adjusted attributable and are our other associated transform posted are and disclose the also our to to our amortization, on back designed EPS excluding amortization are to of quarter free among investigate incident effects to non-recurring Equifax the Equifax the vesting of well to security is interest identity IT interest our yet consumers. monitoring losses services cyber release These professional and enhance incident, reconciliation to estimable in includes and litigation income we project from upon related for as measures awards incident. with enhance costs credit and case the filed and EPS tables, as depreciation These things, acquisition-related legal attributable at today, For expense, settlement. providing one-time net excludes, expense, in these detailed and Web reasonably

to over Now, it to Mark. turn I'd like

Mark Begor

Trevor, everyone. and morning Thanks, good

absolute Paulino week and exciting joined a absolute Equifax It's consumer and most IT as making pivotal part continuing our Equifax also such earnings of at I the of team to consumers our I think two and into I'm Equifax. I commitment, well for entrusted, customers at for week, sensitive to to and history. my I assuring a as which our helm have and team's all take personal time a to my we Equifax comments take leadership minute the of into my call. outstanding leader in a understand start want in importantly, by of me individuals with CEO did as commitment, first to to manage empower join Equifax security, to here last And customer so you want data early thank data protect been the for job he XXXX. be interim to data. as and to know,

to industry Paulino's our progress following and empower cybersecurity those as elements in four transforming of protection Equifax consumers. outlined as to security this time leader John our IT significant Equifax in the an investments has four made will are in the in sizable incident. levels. identity infrastructure become quarter success to first security Number in about CEO Number During while industry XXXX. leadership And data areas focus transforming and the protect and data in two, are: one, and critical talk

improve sound team. commitment as in Equifax I to I decade weeks in strategy two the the as came of and principle critical of analytics past in decisioning, data-driven customer-specific asset-based drew data business, Equifax at the and customers and solve human work and for and with make me and success believe my verification, to And get Equifax analytical bodies our XX GE processes. Warburg, new my industry-leading the deliver customer-leading products other I regulatory government of and confidence that industry-leading and role little been data, respond going. fraud machine investigate transformation incident. partners, the fourth, days lead to customer to the rebuild in as I'm well is income the shareholders. with has customers, the and unique In the Third, creating over excited the My and learning, customer I'll insights and It's deliver a have we immerse leadership on progress and and two fourth opportunity energized Equifax on the believe future providing March, as this combining plans the there. they customers In Equifax, bit business. a security, massive identify in I'll be and me Ensuring resource to in Equifax, to financial this has position and I talk infrastructure with the CEO believe to about that team. we're and investment communities, in again services. progress to that these leader underway. because leader detail execution help first strategy to team covered my closely years that consumers, Equifax's in and already across to great transformation and problems a employees, call, focus myself continued our Paulino yet the making well work in my in our convinced and in opportunity the quarter support simple that's to Equifax ago areas. including I'm credit based data and products and the consistent entire FICO personal earnings early board John identification, in experiences take this over IT

leadership our I to workforce deepen my in that few Equifax the talent, know requires engagement expand delivering I in there And And IT areas in efforts one, this, team. part deploying deep think customers, transformation. you of new data we're our consumers of the our and aggressive that a we members of really excited particularly leadership in Number transformation. new the do in employee and has that and talented leadership IT as understand and leadership As we're team. domain. security. some taking They our our team. prioritize about engage commitments and steps team, improve And I critical believe the They made products, customers very to technology. fully a technologies our have also of I'll team, bring I'm on

on being aggressive and in two, I customer support, IT meeting shareholders both critical many data bringing includes another initiatives. and enhance and Synchrony of that's time months. continuously strengthening constituents, talent culture and with Depot, spending time know to in in a the direction. And to a our nine of and as with dinner the we're customers. absolute improving best me, meeting the all partner focused and and This that and around I've to in in transformation Boston. landing four, you priority focus and drive Jamil the out we're CISO in as to we transparency had And in to data, a It arrived, very and that Equifax. critical meetings a be market and strengthening is security, we're and partner. culture importantly, I data with also from our look consumers, ensure CTO in consumer data people actually forward we leading transformation my building their GE, of to shareholders this customer weeks. bring BXC to Equifax expect to execution in on all with are another a enhance our things we about with it's customers public area another transformation Number highly it and a I a and company. customer Home our leading competitive the coming forward. these I to leaders out I'll you investing also ensuring in in IT those me We're Number trust the taking support. a space. before security a there is business Financial very Engaging our customers security big a business includes infrastructure. interaction ago, part close the relationships confidence and GE processes think our at weeks one reestablishing leadership central This with already got tomorrow world-class on tonight coming I'm will going the Farshchi, premier our a heavily we new also data meeting critical supporting me to security focus security ago. areas. efforts on two Engaging weeks talent I first acquisition and few meeting strengthens years to I'm We're weeks from input your to into and me, the a three, continued focus with governance. team. our getting the all and and with attracting IT leader, for customers, regain brought business to was the its and and was with technology. our begin in IT when trust Number one customers is Equifax in our priority performance initiatives

then customers the in with as and launch X% the our and was start of and John the details Equifax. $XXX above last our X% for will quarter quarter EPS through up of take made was was year. data the up revenue X% well year. as reported improving the than basis basis solid I'll our Total our quarter our revenue consumer on down & Both and for to a performance. guidance Lock last you range quarter, focus on the and and We support highlights through in year walk versus financial IT a areas expectations. our positive $X.XX, EPS a results. currency and on Adjusted improving local First the versus were progress progress for million, security, importantly, with adjusted Alert, better

X%. continued first saw we of many So X% online we importantly reviews with March. and Marketing are guidance revenue credit progress the team last the services. been about feel his with part although versus quarter. working following was positive the was of down with of customers momentum out slightly, great in in down consistent cybersecurity was I've services Total USIS really provided revenue regarding we year, incident. those. our some Trey growth making coming marketing down the

of We more been with In breach leaders and holding incident customer I've the regular and also. formal We're were trust. customers the have period on part from our communications. those focused both and security customers. naturally updates And after the non-security the institutionalized confidence a rebuilding

new about our our [ph] and also customers, a with and both reopen applicable seeing opportunities, with pipeline new then to While priority we're increasingly central that of new topic discussion business still discussions for willing is products. strengthening core and us is

get Our our us. on back normal to want discussion growth customers investments with infrastructure, and are data to in security but a focused they also

discussed new expanded new in We well allows have marketing 'XX earnings business. service to that quarter moving we've position customers calls. credit normal continue in This around engage as better to and quarter success to fourth as the third us 'XX and products our both transactions

Our than Workforce quarter a Solutions solid X% business year, up with had versus very revenue expected. slightly we last better

governments, across a was solutions, management. talent XX% up strong Employer the down revenue by strong verifier was driven Importantly, mortgage, growth X%. and Services debt

our team the basis quarter on a team international very Solutions quarter. solid his continue another to digit a up revenue local and local Pacific in with double-digit had XX% and So currency quarter growth had the and revenue America basis credit first European slightly had strong in expectations. in John on X% stronger reported Canada their than local Asia and serve Workforce growth. and Latin a currency operations single Rudy strong currency

declined government. slightly local in revenue declined better we at Global we be quarter venture debt within least X% therefore again revenue quarter customer any XX% in U.S. services will X% the had our indicated U.K. will in specifically decline basis and Consumer currency European the through in we was down second on see reported driven the by a Direct Lastly basis, consumer consumer our U.S. not advertising than performance quarter, doing expected. churn. and revenue direct business we in with on quarter continued XXXX expectations as down last

and make We Canadian on business performed the quarter. seen reseller the by in partially growth decision as in these business U.S. two offset Consumer expect business our also Direct our Consumer in the operations watchdog growth to continued Direct first over was ID next have we well acquisition This the quarters. a coming and decline over the

will we must and to a our to importance transformation data support, that also While to be back us move essential at security in on leadership to team delivering customer it's the insights the to commitments improve practices and to focusing operating our products and critical to priority IT new a our drive broader position customers. continue first and deliver operations, IT back get that Equifax

my of data customer back both the lot on a even get working to our investments with importantly they're making infrastructure time of on focusing spending growth. I'm as balancing to So teams but security

impacted Equifax to consistently plan project a has technology focus despite growth resources New in and and management product NPI security, lever as innovation start tracking is XXXX, data been to being a or strong off for we're and with a consistent new we IT on year quarter strong of the NPI a second will good in number potential for all believe has future last strong news. at and of in NPI versus and products is revenue of which us Equifax. be Several launches focus the the we

the clients access quickly most combining Canada, leveraging deployable in sophisticated a deep that to more into improves and our is customer or and the regulators and these advance analytics learning reviewed machine Neuro major learning decisioning, lifecycle and Pending is Argentina and wherever risk. using and Cambrian data Premier customers how development applicable process by critical Direct analytical incorporate learning we're advanced improve marketplace, capabilities Ignite and to deployments Cambrian based score the decisions techniques and direct provide in develops This is and deliver marketplace routinely our Equifax which credit machine NPI customer Technology now of on Ignite practices important insights. recently of public Our utilizing with industry analytics customer are the Decision Patent in compliance and to behavior analytic four model to of global neural global deployments experts. cards support is accuracy and machine from Ignite and to are gives Ignite U.S., learning results we data unique solutions with full to data Cambrian scoring network capabilities NDT, insight deployment. facing We when followed scoring is regulatory customer Australia Solutions data credit and This performance leading Cambrian employed geographies, enable system technology informed NDT Ignite to ability assessing regulators Cambrian an first customers appropriate. of and example make traditional

increasing Argentina launched team. our NDT excited improved the platform in efforts technology. leadership We're a excited support the machine here creating priority variety all to NPI and learning for is leader In Cambrian me I'm faster deliver data techniques housing committed information. demonstrate for past for in Continuing our unit our the revenue identify is Argentina allows in together industry the data regaining products beyond. in Ignite So progress also support personally. us be Launch I the our to opportunities new in the discussed solution InstaTouch, growing and include of with first how the excited Cambrian new enhance their for to I customers which insides of XXXX of team also decisioning. critical IT team globally, verticals. in leadership Equifax. problem. customers Equifax. and issue. and and up Ignite to I'm industry is the objectives while delivering team the about and such the to the against we're new utilizes And in forward execute and delivering continue at know and Argentina customers in address to NPI access to and we're more deploy regaining today extension me new committed be at out and on also value FraudIQ auto U.S. bringing team entire customers that quarters. we secure in data the making allow enabling and with second be product will critical this confidence industry we that committed data Digital making at and in we team drivers analytics a Equifax the to Equifax is critical path quarter quarter, customers to and FraudIQ to will a to We're solutions the this are I performance better This of the the manage unique entire priority and excited strategy. the part which bust We're and in Equifax Data the employing in and security ID our models of to in which providing priority the an our that the area. Other and about consumers scoring IV, with most partners. customers trust ramp Fraud to of fraud and

to is The quarter XXXX. solid a start first

it that, With strong We we're have a to making of work hand and do lot to progress. me let John. very over

John Gamble

Mark Thanks, everyone. good morning and

generally on a from financial before basis. referring represented GAAP results continuing As be to operations the I'll

our additional 'XX to the costs project incurred related XXXX For and the items details margin litigation items We'll launched to professional we for the of excluded of from adjusted of from provide one service $XX the incremental or and related resulting cybersecurity have those EBITDA infrastructure lock-and-alert analysis. non-recurring in government $XX and our launch other $XX IT results security XQ, fees XQ, non-GAAP million. and related can outstanding In generally by costs our adjusted were for a gross related investigations services and implement plans non-recurring time 'XX. cybersecurity in recoveries million insurance develop million were legal at of to generally costs in offset improve incurred total EPS. principally charge and cybersecurity onetime excluded the consider data incident, $XX to million. and on free your the incident. incident non-recurring partly net The These cost to $XX you been million charges other

free be million expenses Total lock-and-alert million. ongoing at related recoveries service costs premier by to incident Going and cost to our trust $XXX to Give all 'XX. gross related included costs and we forward, P&L. incurred to in thing XQ, 'XX about accrued onetime cybersecurity are the incurred million IT all citizens. of project in XQ, offered in related $X non-recurring will offset since other in the gross were insurance up $XX incremental committed operating

in We offsets today cost E&L commitments $XXX pay under we which partially recoveries reference above. have a received the our $XX million which cybersecurity of to against million insurance policy

utilized continue expect the to We policy. fully claims to made

per EPS Equifax For from XQ, much down 'XX; in EBITDA margin in a basis ongoing of in million insurance the being $X.XX Much from indicated last was XQ, XQ, down 'XX part of 'XX reduction ongoing increased the of reflects two-thirds XXX specifically Adjusted X% in share incurred $XXX and about business 'XX. the is XX.X% in of revenue year. as was related of in Cash up related costs of are points Mark XQ, security penny a the from security as guidance. our security referenced increases directly units. margin costs March XXXX other was increases,

risk quantifying we As at continues planning the in with cybersecurity XXXX risk saw XQ, of we expecting million impact by and X% Workforce our decline with does online continued our March going revenue solutions the as Solution information to year. the for commercial at versus decline. $XXX the government was We impact and from ago USIS in are in and business. The XXXX impact in for to USIS incident down more was Identity consistent of in in the CFM. however and the remainder than Online length was the period. revenue and impact identity and decline commercial allow a since compared comparison incident the XXXX in in was greater of This of other expectation wills to point not solutions the revenue we compared half explained XXXX down of first $XXX and be time reasonable our year premiums drove the decline the of this million fraud majority fraud expectations. transition first forward to not expectations. X% online discussed quarter

revenue related USIS revenue X%. online to was related the Total growth return commercial Solutions mortgage half including Equifax up Workforce in online for was expect second for revenue XXXX, X%. X%. of Over the down We core also about up is risk mortgage mortgage

continue mortgage. reports we business inquiries growth revenue USIS overall bureau digits and XQ, expect down XXXX mortgage be the slightly XX%. and market was services XXXX marketing Tri for for than was million. mortgage of we which to in million about down three data to the bureau volumes expect XQ, be In for XQ, single we saw X%. XXXX, to mortgage solutions launch of mortgage benefited Financial $XX market was Our volumes XXXX which just stronger trended all declined $XXX in sell down mortgage under high market by revenue

of revenue which down marketing slightly services was revenues in in credit the IXI services Importantly XQ was about transactions. 'XX lumpy up revenue represents XQ, as quarter the XX% and traditionally revenue of decline IXI in the reflects specific financial XXXX 'XX. it in marketing was over XQ, delay in timing

indicated As progress the incident. with Mark earlier, volume we to working and reduced in cybersecurity customers make continue

in transactions reflected and For impact NPI event customers increased principle increased and plans today, factors. related of to that to XX.X% security products this we of last Consistent best prior reflected and mix worked primarily margin progress guidance share our cost impact sales discussion mortgage as well 'XX March, our down sell XXXX. impact margins cost. made by USIS This other as moved were as and Revenue particularly discussions was We services from loss in -- marketing represented in ability marketing certain services, remainder the impact then being the financial mortgage XXXX. technology particularly resulted have principally in in with into impact, the impacting half will through XQ and increased year. online in likely legal sell XXX impacting diminishing customers for basis The as efforts almost three benefit our the through we as with impacted third-party sales to credits and we process. XXXX some principally on some adjusted look believe approximately EBITDA good forward our into USIS was today points have online.

XQ across The verification X% of growth expect panel government referenced Mark growth 'XX levels million reflects expectations. and that was in and slightly services XQ we management XXXX. Workforce revenue quarter a the better solutions XX% USIS Looking at revenue expense substantially mortgage and increase solutions, and double-digit to mortgage XQ, of XXXX is debt from reflecting mix than lower to margins management. compared when

from million revenue up to both records in Florida, We from and 'XX. an is Unemployment is of up XQ also was active continues the slightly X% of improvement Act. grew Affordable low service Workforce by and 'XX. by makes than about total of year which analytics $XX half In slightly less down last again XQ status being regarding the of claims, impacted unemployment be impacted Care remainder employer rate. the U.S. uncertainty very services

verifier. XX.X% increase cost EBTIDA in explained down a partially technology than adjusted The actual offset on also more in margin was seeing boarding XQ positive shift basis and some verification and and are plan. 'XX number due and of was of security weakness and toward XXX related services by expected The workforce services the positive The consistent continued work We growth decline services across XQ 'XX. long-term points growth solutions from related businesses. by our with revenue the and is verification the to in mix to mix the

basis up EBTIDA workforce flat XXXX. and on XQ in to be on to versus a slightly to solutions continue International currency in We XX% revenue up expect was $XXX 'XX margins local reported basis. million X% up XXXX a

U.S. and up dollars local $XX commercial and currency. identify in XX% up government our vertical million Europe's and consumer driven currency products. in by U.S. local X% strong revenue was 'XX was $XX revenue in dollars Pacific growth million XX% up and XX% in Asia XQ

on the Aventure currency in continues to and high to in debt with government. growth U.K. we offset specifically business combined operations. U.K. As the deliver our our Mark local currency than This mentioned decline single-digit management a revenue Aventure expected local value was greater credit earlier, by saw same government.

'XX in than However, first the half prior the lower in U.K. budget resulted year. government are revenue cycles

U.S. and was in based broad be to debt year. local America's recovers Ecuador. our revenue growth currency Latin million XX% in currency local Mexico We strong 'XX year revenue the $XX with in the up Revenue as services, the U.K. and U.K., as local well revenue double-digit government for expect the of currency. dollars up half full second and total flat about XQ was XX% as in with cluster in as growth Argentina

growth by execution. Candidates' local Chile was good reflect Canada's in million and growth suggested their XQ in and and U.S. 'XX across International EBITDA XX% up up services was to saw driven also volume strong dollars X% continues Central We and local 'XX. in currency. revenue X% analytical decline points we as basis America. at $XX XX.X% a data basis in X% down random XXX was margin was currency as increase down on XQ million well expected revenue, down on as The growth from Consumer globally. a reported in and expand and $XXX analytics reflects spend XQ basis. 'XX solutions technology online

revenue quarter. direct declined in XX% consumer U.S. Our the

we not March, U.S. as consumer reflects a during continued U.S. revenue. Non of 'XX this consumer slightly now least just GCS in up did decline for in discussed by 'XX. XQ in not XX% revenue offset advertise growth is Canada direct the was reduction business subscriptions As at a will reflecting and direct over U.K. XQ we

growth approximately and benefited we completed which reseller in insurance XQs. you Our $X the acquisition XQ for GCS Revenue March. was revenue non-recurring business, $XX in reflecting cybersecurity partner adjusted cost was security quarter incident, 'XX delivered revenue, Watchdog In of XX% in well. XQ the following a 'XX quarter in ID mid growth with by million is associated single-digit spend as expected that the from the discussed and with increases corporate expense transformation general million in up

includes the income Our XX.X% GAAP tax a from awards. benefit million effective effective stock tax of rate $X

adjusted was 'XX tax effective calculating XQ for EPS using rate Our non-GAAP XX.X%.

XX% be million from lower XX.X%. and cash related approximately was capital 'XX the including spending, Capital respectively. cash million. to rate tax cash In up XQ spending insurance the outflow $XX XXXX benefited by flow spend and was effective recoveries. flow cash quarter incident Net flow cash variable working our free for XX% related partially and million the in net $XXX operating was expect to by of cybersecurity incurred $XX other to received compensation capital offset We

For continue 'XX Total XXXX, capital of debt net spending X% approximately we to end of expect to was be billion. at $X.XX the XQ revenue.

did end shares 'XX. leverage expect times and QX the QX, repurchase XQ and gross not X.XX We do was leverage was times XQ of X.X 'XX at net Our not in 'XX.

from XQ and 'XX to our million XXX range on from is to $XXX versus be XQ expect the XXX Using we of years. X% average decline to per the last XQ FX X% between midpoint over reflecting EPS in share, turning to guidance consistent with at and expected 'XX. benefit exchange expected be Now to the with XQ X% $X.XX the Adjusted no XQ million 'XX. EPS in of growth between rates is five increases is be current which our guidance of X% our FX to versus for X% this exchange impact based XQ current 'XX, $XXX share 'XX reflects a quarter. rates adjusted in 'XX, per revenue approximately

Equifax As margins a reminder, was a strongest per ever EPS quarter XQ and XX%. of share adjusted EBITDA 'XX had adjusted of $X.XX

March growth market Consistent guidance, XXXX. in Equifax XXXX benefit to guidance we of revenue XX% Equifax on FX continue year, and X%. revenue with for year In unchanged $X.XXX a and about expect are the revenue volumes assumes EPS for total, current this X% This reflects our to the in call. full between mortgage X% Our rates to billion from expected March revenue XXXX. decline $X.XXX based to of billion. total is be

adjusted our per expected be FX to be to XXXX. unchanged up in to is EPS benefit share between guidance. XXX X% from EPS We expected share per $X and March

continued what the million in $XX data or governmental damages, fines regulatory 'XX. in to excluded IT and cybersecurity be and litigation to estimates related being In expected results costs gross to about claims assumed professional being guidance. expect we cost $XXX security XX% approximately $XXX less XQ cost data investments are costs in insurance was legal offset to These and the our and these by announcements the fees litigation incurred projects million and of incurred resolution and net incur estimates This cybersecurity IT expect financial from do proceeds. incident. XQ from to 'XX, in to not specifically of at non-GAAP are result of for cost. or represent represents XXXX million the investigations slightly of other of investigations that or include address incremental the relates We in incident. to These and any security Investments than

billion for we it 'XX to share about of up relative the open year with guidance. of of adjusted $X.XX to XXXX start the will EPS very using XXXX XXX provides midpoint our our revenue at questions. and guidance, that, half was Looking a per first full strong XQ And

Operator

with [Operator take from Thank ahead. Manav we first you. Patnaik will go Instructions] our And Please question Barclays.

Manav Patnaik

area. been Mark. do think process, to are in security you to would call, infrastructure stages and in welcome lot Thank about the mid and long I Mark, know continues? early in your and or you guess, spend of the initial this there's talked how that My you how first a where you describe just question, clearly assessment, you've commitment that I

Mark Begor

I of your to in weeks say a Yes, morning, a also. early making we're to is give detailed team, last ask work lot progress. of thanks the only the good weigh work hard there's by John, would been that's still seven for and still me But maybe there's done months good that a in assessment. also it's for in look Manav, six my I'm But comments. do. so lot it's so days, I'll to two

know, new less to just, only bringing system than that? of on for I this work to talent, a I got you new in he's add people early of rest is We've the been to days, summary and year? some As a guess, in John, would he days. ground the in has lot really say strong anything XX do our

John Gamble

run through update visibility, activities of move indicated we've greater And at as and on that we through we MD the as doing. we'll will XXXX, obviously we're have the spend least XXXX people how Absolutely.

Mark Begor

it's will one and about this. data extremely that, it massive feel leadership team, hope to I sure that and commitment we're very to undertaking just of and by go it's to our rest a security effort phone and maybe serious we're committed on feel year. the the This others you this a around industry through for for But the on large is close

Manav Patnaik

I that the down was rest up much mix ID the most, breakout, think the that consumer there slightly of Got expectations that in I then with on I just middle John, XX% the up you was -- -- little global beat me little but help watchdog piece like threw think XX%, as over it through felt something a it. digits but went was think well. you quickly, it a say and And you then direct, and of did think then that just said the was that? was in you so which the contributed Can single I the you you where how area to and what

John Gamble

Sure.

reseller, said direct Canada was which ECS the watchdog it revenue, and ID partner and under as we growing declining that's about So million. And and single-digits. contributed up is XX% our we U.K. U.K. then Canada was and $X the up that revenue non-consumer was mid said our slightly. really and And just

Manav Patnaik

Thanks, right. All guys. Okay.

Operator

question ISI. We'll go ahead. our take Please next Togut from David Evercore with

Rayna Kumar

is Good Rayna for this David morning, Kumar Togut.

some government idea get if In so better we is terms some with previous that going are track provide your of can the can were how a quarters, just of delayed flush of some you us those just can can progress milestones of contracts in conversations out those we contracts. how and you

John Gamble

with the work and really then progress in considering that quarter us. of and indicated very point services continue And the about products working agreements us we we're anything there our CMS making agreements and we winning we're as you what where Mark doing But been there walked think some with I of on government rather is we September our last going general we deferrals since marketing which execute as new cyber been in with would incident we've with spoken assume specifically said moving forward business about was new Yes, business. we customers new financial contracts, think customers have just to in actually so customers. our lost. And deferred in as we that that's good through, security to haven't talked but new transactions we

So around government. of impacts year. incident think some But discussion don't talked the specifically what I we provided last the was we security about cyber

Rayna Kumar

it. Got

can with your just One trended card trended is and to into discuss of outside competitors the data? data of sell and your auto mortgage you starting verticals; plans credit

John Gamble

Sure. Absolutely.

We're process. our growing apply we of do We there's data in So our part start we'll data do credit be think a the to critical we NPI trended consider in applications quite also trended card, data, and around is as honestly, seeing trended there's applications business to in think something auto, well. world.

growth see we expect future move So as through areas we that would those well. the from will we as

Rayna Kumar

question… final one Okay. And

John Gamble

trended just commercial launch score quarter. this a we And did

Rayna Kumar

restart do to One me, That's when expect very you helpful. share buyback? final from question

John Gamble

Kumar of so Yes, not have likely this share around look a like. the that executing action Q litigation outcome right, repurchases we until so little litigation, may other liability bit last talked clarity quarter, and the until a of understanding we we'll good we class - consumer about have what and you. Thank Rayna be

Operator

to right. question, Please All Steinerman with Andrew will move next go our ahead. We'll come from JPMorgan.

Andrew Steinerman

spend in industry Equifax security and IT the to IT just build the run does data through heavy leading spend you and at of security total in that description a lifting to XXXX be have quarter spend sense my will full XXXX," is question so XXXX, what least, an Mark. then the was and least system? and will John, Welcome, IT the "At last mentioned data

Mark Begor

and has is quarter, good you. color about decided do answer that that. at that time. and talked that first The no. John Andrew, -- what to John, hard to jump have to we we're but we're with full here more probably, for in crack for The connect I don't working visibility take last first for and in you I'll the with is very great planning We visibility a would in should that yet, characterize the think I XXXX team pretty do the

we We my into and yet, get hope that security infrastructure that. visibility we second data is our would 'XX as be half will to 'XX will can of some beyond complete haven't beyond but you there I and really go give the year, gone that expectation around rebuild work the

Andrew Steinerman

Thank Okay. you.

Operator

Please George go We'll to ahead. with move Mihalos Cowen. next

George Mihalos

Good Mark, and morning guys, aboard. welcome

Mark Begor

Thanks, George.

George Mihalos

from willing inquiries non-traditional of though like around Just not seeing that been wanted that more to customers with Are the have customers you your script in of -- to potentially to is past well, around as back using tenor go basically one the services? buying in are improving. it conversations Equifax your people comments have some conversations sounds

Mark Begor

And want and I'd senior with on in investments some is data little color communication myriad you our color with John, I upgrades. deeply got we've of executives individual pace customers lost. meetings our as the processes you meetings our security understand of That's got when customer can I've give the customers, it. that a around that maybe our to been give a you [indiscernible] know customers. on

dialog So transparency, the they they that the I expect the characterize appreciate transparency. would

leadership color that to scale same around want to had customers, beyond around get my back and taking our is also pleased incident about I how think products, NPI, the any that comments it, and that? don't been the about the they existing so commitment customers dialogs I the we know, it serious around the made industry around with John of my At we've interactions investment data we're growth, our pre normal new time, with meetings with to they're that have security.

John Gamble

Sure.

to fintech bit interaction us in different customers with existing of Some markets. example, in the last as for a for Also with attract increased of our pursuing activity talked year potentially is little new like as parts InstaTouch, our of about well we we've fintech customers. starting products the terms new

further of products also new and we it the reasons. Some of has been offered have because

months. of So had have we over six eight past the to that's the we probably think focus an that expansion

George Mihalos

that's the that's it sort tougher Okay, that the be then quick And side slowing helpful. revenue in little particularly down X% John, suggests guide follow-up, in as a will of call quarter. comp the -- is a it number? impacting or bit on from USIS the QX Anything just first just revenue growth the down the X%

John Gamble

the than year. anything as else drives you performance lightly see be in if should consumer thing accelerate. see GCS more Generally, the we're will of go through be to up that would the that going so move probably impact -- occurring decline We rest what you'll we the weaken, expect the

George Mihalos

you. thank Okay,

Operator

with Brett Huff Please question Our next Stephens ahead. come go will from Inc.

Brett Huff

guys to morning Mark and call. the welcome Good

Mark Begor

Brett. Thanks,

Brett Huff

all kind questions I questions, Mark, quick the around the you're picture could you a to talked one middle just of that and one, in it. consumer one of know lot you weighing of and Two on puts fate of consider or we've a follow-up. direct takes GCS that sort decision issues but as the the we've have outline are big that sort you that. of then main business, or I strategically, gotten on the of But

Mark Begor

I'll one to on start that Yes, and John ask too. in jump

than what going around better that. For what There's take may lot days and of the the the to in a looking their consumers really want are to I we're access value-added little Really it. been opportunities? some and what on be week around future here in giving nature. I've a only committed offer for services in we and control it's are that had activities me something that early to the at and to balance to the data a hard around some half a committed a we're look of going we're and dialogs to more and consumer paid space free is that's real deliver consumers at for

really of for me. kind calculus that's So the

from I and we the could that the of you second both is to the conclusions BXC a I appreciation the deliver synchrony updates take good and a as services add, think you kind got as can there well value-added a for the as us I part for a kind feel of about. I consumers mentioned background think protection data real better strategy but going would my come to to of consumer about quarter, it's of third

that going We analysis. it we and when share we thoughtful complete be about to that are will

John Gamble

covered, direct as that how through market direct delivered at referenced. market resellers And because the and past continue, is changing relooking believe consumer are also broadly somewhat market we models of and over that premium several through as we has the to as know state Mark going or to basically years Mark, the we been much be

still think that also that doing ago, we in market obviously couple we the at are growing then, us we whether specifically of happened, opportunity. participate look think to, still be we well, not what anything we we going think let general that to years a and is has market we would see have that So if did a again to now, going is differentiate or

So, work to still more do.

Brett Huff

so understanding long cybersecurity of will helpful. kind from issues, of part allocation will is talent impact of your some the of up to this in much guys if there cyber am we on think the NPI, is understanding incident that the how term? question I culture. some near do ongoing key to do hallmarks you negatively one It's sort the NPI, And But was, continue -- the resources shift and something that know, of in then, and for sort of was right second how Thanks. issues know Equifax well, NPI, I the of projects you really talent NPI about the heat of the that my

Mark Begor

my short Yes, it's a on just here. great is question. This time mind a one I've been

been fill out the First strength we want real are have around working the business it's processes things data NPI long we to and products attracted infrastructure we resources bringing is and history Equifax many there. their as built, the had we you resources a we I on but some to think would hard, think there side. security you properly and a the so you customers be that got to also around as that out new side on point of market those and rigor pointed areas on with NPI partnering technology breach of doing working and They has other that

is our hard customers there because of some goal important we there. with it's and to resources work So that important to the addition going pressure NPI us to and will be My expect mitigate around focus forward. to

I NPIs that was did there hard we the that to expectation. metrics think encouraging it's to market any plus first the probably around quarter kind our bring of articulate on versus

plus the six continues. ours are real to and even incident, products of that market since sure focus we but bringing that it months resource be - to So make into to will momentum continue

Brett Huff

Great. Thank you.

John Gamble

very and Mark with you confirmation Thank customer. progress

as launch. well it's to the able a are we we to the products can improve turn the important very and customer acceptance how get of so re-launching rapidly them back new even of one then, revenue customer more as engagement type normal as that to obviously their after are, with we So, the that with impact and with one so products, we

impact those two an on certainly for So, reasons. this NPI year

Brett Huff

Great. I it. appreciate

Operator

Our from ahead. next question Please Jeffrey Andrew come go will with SunTrust.

Andrew Jeffrey

working good Hi, forward the with taking call. guys. appreciate, Mark. you Look morning I to

Mark Begor

Welcome.

Andrew Jeffrey

obviously Have focus how in you costs the to think started think it. the motion about of the positioning to platform this get lot you delivery technology new competitive the about and business? benefit investment new growth management and could re-platform Equifax's headed and of are But there a long-term you investment, the security as and have past

Mark Begor

Yes, question. it's great I a think

Just of we obviously at Equifax my here being just mind heat up projects wondered security ramping the our infrastructure some and of wondered data nine it on days are around rebuild. in

side. with speed is to this dependability team market had making with on to Some investment of higher other like allow of the or of to of of investments the we our get I'd other dialogue infrastructure liability I ability the us goals on quickly the to the market products have will bring an side and are

security these structure my and a cost I infrastructure are will is we a going that to foremost forward. us after goal improve leading we our some market So first it position hope be will and industry competitively that data should the as of data make that investments going have well infrastructure and and

Andrew Jeffrey

time benefits been to extent you is with the will talking and our anticipate expectation? that that Okay, next associated this year, have about a reasonable

Mark Begor

think I next visibility some around I time, very on our great that, goal. a it's that's year this At in think years having and simple very, side

Andrew Jeffrey

you follow-up, and demand particular the John U.K. sounds is a to of fresh a segment bit transitory. little as softness impacts this year? specifically think like and some and Okay, with sub how growth it revenue TDX Can the you European regard in out just the that that

John Gamble

with single-digit we right business those local credit said growth. performed currency Yes, well, the high very

we is business large the very U.K. specific the The really with at good. improving think that is debt, are rates rates very really above we government. service the very contract which contract collections we well, are one specific the collecting around expectations itself to are we the the mostly performing expectations are customer, think debt with impact was above that is our So of the at

through that's that cycle of part the us, of project the level working However, but something is this in of terms cycle to U.K. has we resulted bit working of cycle, and government that in to budget in a through now. that's little government the budget right Obviously, first of year. U.K. the half funding the are lower specific it's new a that activity

hopeful So of of of type we isn't budget we work are through be year the throughout back performance specific that will performing I a and government U.K. well, it's really to to cycle. but to able said that move issue very as is product performance just it the Aventure of the the

Andrew Jeffrey

Thanks. Okay, helpful.

Operator

will next from William go ahead. McHugh with Please question Our Tim come Blair.

Tim McHugh

emphasizing in things thought to are kind at time the there kind the your describe of other was terms of you've otherwise are it get of high I getting that but it, one, given would and call that Are partially you the level just things a I than, you plan a at understanding guess are maybe motion. in there differently us you want you first early of perspective. thought understand to out point I as some guess walk in was maybe your Mark helpful, lot, we Thanks. of kind there we contacts what more I in you this lot days

Mark Begor

interest Yes, has me got a patent place big plan I the a you about of our is days think work I ownership done a has I around there all might in in as of been, areas I'll accountability kind and the around about leaders. first accountability start it's great nine projects, lot of team here follow-up for I'm think and when being - is think imagine with

around these on to we place on So say that to timely and team try to that will executing going are those strengthen that, sure just projects the really a prophecy I I'm had make basis.

Second, let's this is and quickly. team with done leader that really and bar was on operating my also and would get that's be team that next around get high these the I'm projects place a one. around the

and transparent being our four is conversations with connections kind customers really items being really that's with six table a for customers rather of go important me strong the our contributing in the really off relationships with and those are more the them are we so I open lot I be take we sure you clear can make have, resources would few was initiative transparency. some the me and and really and the and talent around talent want team having about in adding important people, I focus that's perhaps emphasis last here areas and that Third, from towards adding to an retaining aren't top we think bunch of organization what but probably a to try months one last on how clear is business. they around doing that be and I in want different to the really and from as were lead customers a those in I

Tim McHugh

five does And Is question, year? the I believe quarters? reports being should one couple see guess old That's we from John, that when I during a that helpful. a full numbers kick I in fact of throughout the type that the now next just guess rest fully of year trended, that

John Gamble

yes, bulk I occurred this should quarter. the of was We but that that quarter think the

forward. some second of it the to the quarter actually and to revenue first see Obviously high quarter earlier year So tail-off in investment live does throughout in mortgage you be year. quarter any that going tend relatively of in a but the see will tends percentage the

Tim McHugh

you. thank Okay,

Operator

go will Goldman Sachs. from Tong question with come next Please ahead. Our George

Allison Chou

in for key of revenue grew on XX% as there growth? Chou your is segment The is outlook that regions, as internal sustain how initiatives can environment you International for this couple in place my the Allison and evolving for strengthened Thanks business the you Hi, question. in discuss XQ have George. has International to operating taking well

John Gamble

very other America, U.K., very were about rate talked across Latin Canada, good. nicely, nice all than actually Australia, very about management Yes, very international it international talked which growth that so major looks feel like really good we economy this our year well in countries of the going we that perform about fortunate We're we that. is all to and so are performed we relatively think performed the

Some goal NPI, decisioning covered the around continuing areas be frequently focus really perform of the of of tend company, Mark the Cambrian to our strong XX% major vitality long right the above been of already them in are NPI it performer of is a for very they and systems NPI, deployment and growth our engine to International has then new and Also international faster products about and something in and our markets international accelerating them talked we beneficial we is delivering terms now going is that really major very allow of faster. that to through of think in learning is develop as new machine international our Cambrian go deliver forward. will to expectation products is be most Mark index what

in we're trend business has strong. businesses credit been about So across it the very those the really and excited

Allison Chou

headcount about revenue shifts Thanks, you new or ongoing kind contribution is in a to year of the guys and launches which and impact up kind year-over-year. product number will you Brett, NPI the how growth? of NPI on XXXX Can of that's personnel as products new XX this launched follow-up And or helpful. discuss changes XX% really

John Gamble

and in we terms of products is kind new correct. in fraction XXXX Just launched that of mid-XXs

Mark Begor

versus there prior is backfill question, diverted no of been we've I including pretty in some on what areas rebuild resources we're said work data all on security those I in got incident and the constraints think to mentioned rebuild. business I NPI to have infrastructure working IT earlier the infrastructure is is hard as that question NPI resource and over

is quarter pressures work hard think when we and important quarter and quarter to would I we that to the I the go want mitigate year try that expect say some year we see on last through only to a we we rollouts growth to So and want to pressure, to versus first it said earlier start it's say us. for it comes was first good the NPI

Allison Chou

thank Great, you.

Operator

ahead. with Warmington Wells We will go next to Fargo. move Please Bill

Bill Warmington

Good morning everyone.

Mark Begor

Hey, Bill.

Bill Warmington

first to hire confess though you, on bit think feelings the it's of that's welcome. you offset. of I you're Equifax it's but board so nice a we're for FICO, in welcome Mark, I to all it, losing because kind of have So But a mixed the

Mark Begor

business I and missed years Will the my a great and have board. I three on his team enjoyed

Bill Warmington

or can of So fully of that are be business? completed about are the completed most greenlighted so questions and to side, on talking ask for those reviews by you the think, first new the couple when how the to return be some they now the I of wanted business are you there a expect for marketing are project you, clients going, you'll and based still ongoing them is

John Gamble

really Mark opening his it's what think covered I right. Bill, in comments,

that normal, of the very to moving good but right ongoing, continue have consideration to really and CMS we last and continue year backward quite back discussions end year We to evolving make progress backward are we been an process continue make conversations quarter customers. honestly an set the very as we impacted consideration Mark progress, date as through of much indicated, of this products with towards probably as jobs and through is progress the new This good haven't and type of certainly degree. a

progress don't an end we good but very I something of think in we So think can do. date that's setting terms

Mark Begor

what the dialogue technology business the example and minutes will through partnering on so us Bill an kind investments over spent one data do from data let's with week customers, help and together spend of the we're a we're I the we great talking to said XX he CEO time of grow. about going the or first we and all live and the our of you meeting update there, the were give incidents, big a ago actions in about security the taking rest of giving a security presentation our halfway around

next the They back three us and they're how help So out NPIs example as in reporting serious making are infrastructure to in talking doing or see counting them but on and I meaning as counting progress of can dialogue they we're what our grow. be investments, about with we and the of making on can for to how security them improvements. our growth longer that this I we're going customers think want are it business that, those in get and may be quarters long data the to an

Bill Warmington

security going And forward. like clients in opportunity to the an really then clients versions sounds of and is older have on delivery system side. of has products going has the then found win-win and you done transitions a how like to of down terms part more less to you my the shut and receptive support follow-up number latest question those I it? IT what the a ask preacher move It wanted to base sounds to given for are system you with is as and SaaS and getting that expensive simpler well no also you for secure guys them of

Mark Begor

the I think their head. first the off nail you in hit

of going you simplicity; elements in towards got have say cost, the we've days, it's the I'm a I and infrastructure say to with they around first and simpler the we're a lot started and move I data what this to of I hopefully the think our improvements transformation since to John Allow come infrastructure would that lot because to we was the to the correct last with early wrong incident, months most we still and of they're lot described it would but of for or efforts us how six us of security our opportunity products to interact first do improvements you and to market the but if also. faster also side security a in other work be customers bring and a our so months out couple the customers. our to the data benefit trying laid we're ask us

John Gamble

our And the to on so have sizzling some much been the SaaS system go system the for some to going transactions is moving acceleration of that time we make of they just things quicker. this been customers occurring

Bill Warmington

thank you very insight. much Got the it. All right, for well

Mark Begor

Bill. Thanks,

Operator

will next We Please our Jeffrey ahead. Baird. take Meulerw go with question from

Unidentified Analyst

This [indiscernible] is guys. good on Hey, for morning Jeff.

that of to outlined GC since the Despite look stripping there you XXXX? excitements costs I mortgage Just how the anything impacting to but then rest other in outside that as margins talk else guess quarter. ramping onetime non about trying the QX your guys onetime out at the for surprising you what should mentioned may shift about sequence little that the you've the is some can of be ask throughout think of cost to John the make and

Mark Begor

and that very I that to consistent think security IT gave those script, the quarter to our the XXXX we year some that the we discussion we try related did and insurers related for have in is impact we're well so given the and cost, well we seeing specific to bridges businesses likely margins around in costs there information certainly talk incur as as in guidance in and they're the quarter think in those, security expected the first to about think each Yes, and other with investments as fourth we impacting than and related throughout in to of the we provide the cost really I will as we March. in we present impacting saw on are it right, GCS

Unidentified Analyst

year-over you similar relative to guys specific would GCS expect of that QX was you just in given marketing kind Okay, XXXX? to margin are -year QX to

Mark Begor

marketing the was acceleration and please acceleration Direct spend can Consumer the continue guidance margins decline do it going the of an business, quarters prior so to really on remember in you business. we're direct in but out is the right didn't provide We see of out decline and see consumer

So certainly margin. effect has an on that

Unidentified Analyst

Okay, Thanks. helpful. that's

Operator

Lynch. Merrill Our America from Bank Ridley-Lane next Please will of go David question with come ahead.

David Ridley-Lane

details the direct-to-consumer making just business point help that on year with the later Appreciate the be understand when still impact? this decision direct shareholders you're the U.S. that Sure. to business on consumer related business at direct-to-consumer to revenue profitable the potential

Mark Begor

outcome into of the deliver. Obviously can we account to the decision, we take level on right, of move how forward profitability are will going the that

we I we as time USIS in really on specifically, how give can don't address I you will are point think updates that this at but we'll at So, performing and see, obviously and get the we through can drive level that to important point we an think be of move we of going the profitability as year, we the will making decision consideration. forward wait

David Ridley-Lane

in this just is quarter contribution And revenue year? of versus last year Understood. the first how NPI-related

Mark Begor

Yes.

but gave generally the by specifics don't give on perspective products to to it the in update number tend I give of in indicated because simply impacts we we few specifically had continuing the by we see very So was people quarter. NPI a see seeing We think year. revenue of that customer in quarter, we today. that launches, momentum impacted today were we launched talked expect the are -- year to we around we NPI are about And to revenue that pretty would product the give times some so that

David Ridley-Lane

Understood, thank very you much.

Operator

with We Stanley. Toni ahead. from will Kaplan Please take go Morgan our final question

Toni Kaplan

Hi. Welcome, Mark.

Mark Begor

Hi, Toni.

Toni Kaplan

lower would your know pretty some growth other sort of the in versus be is or the a of could upselling and just just and directionally of that I question, spending ways a way like but understanding, think be how has this very of I of in growth start one like, from difference just side? been competitors think of there couple much government there but commercial delayed of you. you asked some you customer, sort your in or quantify helpful. on that some Thank to to directionally, just this you impacts quantify So deferrals, coming if lower want on is the way USIS know, and in I last even mentioned it between the helpful is primary

Mark Begor

give the is now, we're mean, of I event we we be isn't so been cybersecurity really detail Yes, level Toni. impact what because comparison forward, to reasonable a that to quantify going just incident that think long since from can the going dollar I it's the occurred point. provided right trying specifically indicated we

So this think about moving in and at did how point I think forward forward, provide can it's going the more revenue but the talk don't we we I than script. will we generate we detail

John Gamble

we our like infrastructure towards really those there comfortable conversations new call we large know, the and we is more investments back the you as get some pressure, no our are around are times, has -- infrastructure. said work And delay moving with product more I seeing characterized seen or they and are customers. normal is data making some around it feels couple while a It's think invested in the seriousness of it a get team rebuilt. from and in couple comfortable cybersecurity that of I times USIS they the pressure that question discussions of

as you that the color kind front in we that's So, to get have customers. is so working rollouts of imagine, of team product NPIs the those other hard far, and might and

Toni Kaplan

answer there on versus gone no the Okay. how a but customers is And give many way sure no, sort is us else just you? guess I have of continuing actually color somewhere to with conversations I'm

Mark Begor

today given I think have we the can detail provide. we is what

Toni Kaplan

Thank you.

Okay.

Operator

to the session question-and-answer concludes This conference additional turn for for Burns would I our like any closing remarks. today. over to Trevor back or

Trevor Burns

want appreciate just for time. everybody call. your joining the day. I thank Have I good a to

Operator

you your Thank This participation. for concludes today's conference.

now may You disconnect.

Equifax (EFX) 26 Apr 182018 Q1 Earnings call transcript