EFX - Earnings call 4 2023

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Operator

Greetings. Welcome to the Equifax Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note, this conference is being recorded.

I would now turn the conference over to Trevor Burns, Senior Vice President of Corporate Investor Relations. Thank you.

begin. may You

Trevor Burns

is morning. IR Burns. good website. Executive today's call. and later on Today's conference and reporting tab our Thanks, be Events section will me Welcome of today Trevor available call Officer. Financial With Gamble, in Chief IR recorded, are I'm and John cabinet the and today Chief to being Calendar Mark our Officer; News Begor, the

also to the tab in and statements, our be Also, XXXX These actual we'll forward-looking subsequent These factors including certain could can to making for Certain materials that including a During understand call. the statements filings. other at uncertainties the Events earnings be XX-K with labeled from its XXXX year cause that website. our found guidance risks, forth impact you business help reference Presentation and environment. XXXX SEC, certain materially first of and call, involve IR expectations. section materials quarter and Form differ business are of the are making number set full we'll conference our that be in News our factors filings may risk results to Equifax and

Results of and This a Equifax detailed financial included and $X.XX of as or charge underlying be referring our reconciliation our quarter, the is Info be restructuring comparability at IR of our to completing that non-GAAP operational tables, which Financial website. share. including found measures we Financial release section We'll excluded fourth are ahead will also and technology in realign of These charge costs functions from earnings be the EBITDA adjusted EPS. This performance. in tab the incurred charge certain measures, our was EBITDA, adjusted can items with are incurred transformation. $XX business EPS the a affect which non-GAAP In adjusted adjusted adjusted restructuring certain for million for

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

Mark Begor

Thanks, morning. Trevor, good and

spend Before I extremely minutes cover EFX results our on for well to performance. XXXX performed against strategic the XXXX I year our last a few wanted priorities. quarter, Equifax

Our organic decline our XX-plus in inquiries delivered. of and down one significant the was growth, We mortgage challenging down the with Equifax lost strong to last currency mortgage constant which years against of revenue the XX%, mortgage markets USIS long-term last mortgage X% non-mortgage end almost XX% in equates Despite performance Equifax was XX% mortgage our the $XXX organic million at which revenue year. growth revenue X% rate. delivered of revenue, constant XXXX revenue to growth X% currency with low most

the the in improvement growth Importantly, we fourth and year sequential had X% X% quarter. during total nonmortgage with growth

mortgage non-mortgage them with TWN added for We number pipeline strong XXX and that nonmortgage XX% have non-mortgage and our and record that last was up Government growth. which to records to total a sequential growth We revenue that ever grew for XX%. down despite which delivered quarter over down Verifier of with market just and products that XX% revenue They million XXX above led strong XX%. also flat allowed collar fourth white XX million, by exited total deliver hiring delivered goal. XX%, growth long-term strong was despite revenue grew EWS and million or X% grew a XX% year, was XX our over vitality partnerships XX organic EWS growth, new Talent revenue grew and the grew current under non-mortgage highest TWN or delivered XX% to Equifax million XX% well records. XXXX. new XX% records a XXX

Services also Medicaid of the to EWS the valued next And at to Medicare extension quarter, years, U.S. signed provide verification contract and the billion income a $X.X X up to part over third as Centers new history. X%. contract largest their a in for which X% Equifax's over X% framework, delivered the mortgage long-term with XX% in growth growth product while to vitality. X% contract X% nonmortgage declined is within EWS revenue USIS growth delivered

close growth Commercial organic had in organic July, strong Latin and our revenue growth growth America U.K. strong and XX% in dollar USIS continued revenue in led CRA. the over completed to strong fast-growing a products. constant penetration and led Brazilian we with years the The XX% revenue double-digit index with Consumer by constant business vitality dollar Solutions acquisition market delivered market. very new in XX% and And XX% by growth, growth very International X% BVS

delivered strong to the ending Equifax the cloud. results We of year Equifax XX,XXX revenue cloud completing Cloud. significant decommissioned migration, centers about progress X in XX% towards about data and the customers our these We with new migrated while Equifax making

products a We provide will for are better data delivering to faster convinced differentiated that and and our cloud new competitive come. are performance AI new EFX fabric years Equifax to with capabilities single advantage

the North of of progress of Equifax in transformation customer we of including America. strong cloud have American the using completing substantial in we substantial revenue XXXX, end Latin built enable will Equifax XXXX The majority By migrations scores decommissioning made new XX% expect we to to AI. the make of about our the and Also mainframes in XXXX, data XXXX, towards and activities our models being North vast and with transformation the the new American of in major in completion centers. progress expect and first half Europe

operational $XXX the EFX of centers and In American Cloud data North million excess of Equifax, broader our XXXX, major closure plan controls other cost in broader spending reflecting restructuring original across from reductions we well executed very our goal. against and

in $XX which million we We rate in that forecast expect took quarter benefit XXXX. the the run to from an due additional about of $XX incremental million spending reductions our up is will fourth prior XXXX, actions

are about and margins capital reduces lowering $XX million spending. reduces reduction, operating XXXX improving expenses These operating million spending the our $XX million business. intensity $XX this and Of actions of capital

move Equifax energized Cloud. new NPI benefits momentum, XXXX, of by I'm the we As our capabilities into the commercial and

X. to Turning Slide

quarter fourth gives of as $X.XXX guidance. $X.XX sequentially. bps end of quarter we EPS the revenue XX.X% new move strong per adjusted at year. into about were billion share Fourth EBITDA the margins Our XX high and And of our up momentum both us were at

revenue Our currency to in XX% nonmortgage at of driven currency businesses, revenue at strong XX% also XX% organic high strong growth end very international. growth, constant EWS which and our of by framework total performances quarter, with represent about X% the non-mortgage organic constant the long-term were X% and

stronger we the in USIS with than expected Total inquiries XX%. quarter down U.S. slightly mortgage market was

saw increased declined in from grow rates activity we'll late mortgage the we rates expect to late the to high do some As about XX-year during a continue decline XXXX. quarter of in October if year, we in X.X% X.X%

we've to relative of improvements a December, levels Mortgage seasonal for market market expected. has and the if and continued strengthen slightly in January, Mortgage normal during year XX% EWS which for is USIS as about outperformance were strong bottomed. in and quarter XX% to began volumes slight good sign the the last

expectations, due revenue to due our sequentially good was about quarter revenue, which stronger principally market At EBITDA XX%. the up perspectives when further guidance. our points principally and strength we level, revenue Talent adjusted our up X%, to margins our up and basis XXXX above share a nonmortgage margins in BU a EWS USIS sequentially mortgage drove which on strong adjusted Government XX% discuss above XXX XX%. above slightly expectations, EBITDA with We'll mortgage the businesses, to drove EWS to had

expectations. excluding International Pacific. margins, growth impact and the strong International acquisition. delivered stronger delivered dollar Asia growth, in adjusted Very of than about were Latin X% lower-than-expected by offset growth very revenue America principally XX.X% BVS the XX% constant constant much and currency strong points XXX and sequentially growth basis in EBITDA up Europe revenue organic our

view. X consumer open positive consumers of detail, our which U.S. with I The provide cover our of remains wanted and in to levels a our bottoming seeing economy customers we're and results million historic U.S. is business and Before remain a Broadly, appears change and of not consumer. more at the of for what be outside low unemployment what to resilient. customers. broadly overview our almost market, in lot a mortgage prior unit Employment there's with jobs, the the an I from

However, there continue to be some constraints in white hiring. collar

consumers, about of represent rates are which at the historically XX% card pre-pandemic than Credit and for levels. at levels X%, but prime less stable market delinquency low above

pre-pandemic have However, the subprime levels and past are borrower increasing XXXX above now approaching are levels. delinquencies, which year been over

saw well the in levels, Auto capacity for prime below been over for levels. are delinquency have that And subprime, keep above tiding are in pre-pandemic When fintech for has market is largely and Equifax. XX% our and above any started also a credit as ago. year are but stable above of as good the consumers represent largely financial are Delinquencies consumers pre-pandemic which we've seen their customers we well working, which on consumers, obligations, they and which current levels well the for subprime X%, about XXXX. rates to

Turning XX outperformance growth and EWS to products, Slide a positive points the penetration X, strong of TWN impact record in price quarter. mortgage strong the drove and from new

from trended As our as XXXX outperformance data the third XX sequentially expected, the product. was lapped quarter Mortgage of launch mortgage down we

grew up additions, records, quarter records adding and million another to very current TWN XXXX. X%. had EWS individuals, up in million was EWS XX the X%. million unique XXX over and TWN records XXX which million are were both XX% and current of historic record on during now strong quarter the XXX quarter X in million Total

have active we coverage room XXX payroll on XXX database. of records coverage, XX% the and current XX% we In million U.S. income-producing TWN terms grow the of At million records, Americans. about of have employment to nonfarm on plenty about

agreements added XX X with In will and the XXXX. in processors we During over past XXXX, payroll the signed have new added payroll we with payroll deliver processors. partnerships processors XX with years, X quarter, records that partnerships

During we continues surpassed trended huge contributing our X to can TWN the significant deliver. also expanding employment pay and quarter, include companies adopt that the higher-value solutions continue history focus as to a only number over The every period, with milestone Equifax on work a to that market coverage. million EWS income milestone

XX% example, the records. in over historic mortgage revenue of quarter, fourth For incorporated

is levels look XXX a the which as points saw very positive the a to highest basis Slide was strong and XXXX. very was sign up XX% in X. of growth at we XX% Turning Solutions towards we Non-mortgage and in sequentially Workforce that revenue up revenue quarter, strong XXXX.

Importantly, delivered strong non-mortgage which XX% in quarter Verifier very in about points represents XX and was XX% revenue, the the sequentially. Services up growth revenue of Verification

CMS continued in saw was SNAP XX% given Government, for slightly quarter revenue growth, and pricing. redeterminations, Government In penetration than contract, new year. and up the over the revenue growth state we record with XX% our continued stronger very strong the expectations

We first in expect XXXX second quarter. complete continued throughout prior the growth is half as Government the redetermination in stronger growth with to CMS

the Talent was and Solutions XXX up sequentially. in revenue quarter basis XX% up points

we seen XX months. a technology, has As and labor to currently and penetrated over white we freezes greater broad reduction than activity discussed, more market heavily professional the and financial the past hiring collar services workers, hiring layoffs which total to including services, are in XX

expansion slow delivered are in markets the than continued in a in to these of would in we solutions, the by and as pricing new revenue start again XX we These records. outperformed slower new over see fourth in first growth, product expect quarter January, markets quarter growth digital points underlying TWN to We strong the deliver and off we quarter. fourth Talent

quarter U.S. Services $X X% suspended about now expectations, has ERC headwinds processing our with ERC claims. down stay through the new about we'll expected ERC government through million in ERC per revenue declines of our driven Employer vertical is and line decline which revenue, from was third quarter these in XXXX. in see the and levels employer as at is to revenue XXXX, by this

again EBITDA businesses due The margins revenue, and our of above performance. revenue EWS expected clear EWS growth growth in deliver the the principally Workforce negative impact to of better would value quarter and hiring. XXXX. in and the despite driven in and impact to TWN in and I-X Services ERC income and Excluding strong better of XXXX employment growth Onboarding expected our future. expectations, Solutions of XX.X% Services market revenue strength of uniqueness than continue is data, the were Employer U.S. the their declining by adjusted Employer grew during businesses

plenty of on significant of EWS I'd room front a Slide revenue versus On still in EWS. opportunities $XX year. has last This us $X.X billion X, billion like of to the their slide for to EWS expand TAM big details grow.

to of where our As where the see, each of penetration is of with XX% order which we on the in mortgage, is can housing, range the in compete. penetration XX%, you exception market includes our target XX%

historical we stubs verifications, In deliver where productivity, pay-per-pay compete of of each broad we there's detail speed depth against instant and and coverage a forms In principally and these need existing from future verticals in Talent, for accuracy. verifications to requirement in expand Government and growth markets, of or manual and both other data, coverage Talent and mortgage, that we an the in mortgage, Americans TWN income-producing drive where XXX a strong million States. our opportunity record for and continue penetration as we United to there's penetration towards the leverage have

growth X% delivered over nonmortgage X% in expectations, Slide quarter and growth on mortgage above strong up due our strong and stronger-than-expected about were by USIS XX expectation. mortgage revenue to was outperformance. XX% the mortgage our of and up shown credit very was slightly environment drove revenue just that XX% points. The below USIS revenue. inquiries the revenue principally down As X, X% the outperformed over USIS pricing

million slightly BXB revenue. and than was online USIS below non-mortgage $XX growth expectations. XX% less down in of X% our the mortgage At revenue total quarter, was revenue

single-digit We principally flat. to about in banking data and with commercial declines bureaus to and credit lending The double-digit see our were to sell and continue growth insurance. in due in business growth telco and we where other DXC, auto weakness

mid-single-digit In the much Financial led by growth data quarter declines we wealth up in our Marketing and double-digit expectations. by BXB our our growth in marketing. business, was than saw offline IXI consumer marketing, prescreen Services, partially business X% offset better in

improvement with a prior to While down an prescreen the over marketing in revenue we marketing. see was return quarters in fintech quarter, growth did prescreen

growth FIs. revenue declines account see would we our larger growth business were if economy. smaller portfolio double-digit offset to customers Within in in weakening services, growth from levels partially risk we we but fraud, FIs, not typically within business. and a expecting in see primarily continue limited We the new And review by saw our saw to

DXC Consumer quarter, were consumer both good in very margins And our strong direct Solutions and up adjusted quarter channels. and from business in USIS very in XX.X% our indirect performances had XX% October USIS line another in with the products new they pivot to and guidance. gains. [ Cloud ] cloud half their and the new XXXX on deliver first as the complete U.S. drive to of team are capabilities and transformation share their cloud offense leveraging EBITDA

only the allowing NC+ credit manage In the relationship, the cellphone quarter, cellphone data USIS to data products team lending NCTUE including payment continue and that that to exclusively provide. our expand incorporates USIS market that file consumers, the and to signed an new differentiated can mortgage and to USIS extension database utility Equifax utility bringing solution

in Turning better-than-expected currency revenue guided in excluding to revenue constant X% revenue to local Latin constant we our above growth due management October a International Slide the up double-digit in currency, XX% America, X% XX% in organic X. business was up return the revenue. in of BVS and a business. and from impact growth strong U.K. the up as growth by quarter offset and Europe, lower our in Asia was CRE expected, currency from slightly debt U.K. Pacific to to strong

Central Brazil and local introductions year, quarter reported Uruguay, America million. a versus revenue strong last pricing growth Brazil, up by and double-digit currency America Paraguay basis in Argentina, was the product Latin was new driven revenue, on excluding XX% $XX actions. from in

bringing Equifax customers. and in Kount Brazilian to make the as strong EFX well to market as our analytics Midigator on and as progress expertise Brazil data the such progress good Brazilian integration bringing new continue solutions We with to

Equifax moving complete below Pacific, late down in our similar very global In market particularly and see due and revenue to activities, teams and lower expected. Asia volumes by engaged BVS in revenue Commercial, X% quarter the as integration accelerated November delivered the was cloud migration to in data single to to fabric. Consumer to December. including mid-XXXX. USIS, will Canada to we NPI cloud the Our forward. growth in going low Equifax -- expectations with growth are their Equifax Canada And single-digit expect

XXXX expect Asia impact to market contract extensions softer the the declining to revenue of conditions with signed customers. of long-term in due have Pacific near-term and We first several the half we large

revenue return We Pacific in to of to expect second XXXX. growth Asia the half

Despite the were reduction XXX XX.X%, EBITDA Lisa margins team. decline margins EBITDA sequentially revenue against XXX in cost International cost sequentially, plan an international the management. almost from up and basis growth our driven points basis revenue, adjusted improvement up Asia and strong XXXX adjusted Pacific were was performance. by over good The of by execution outstanding points

to points was grew up strong acceleration a overall into fourth non-mortgage basis Slide very revenue with over quarter, XX% very organic nonmortgage performance. by XX. growth as Turning in XXX good driven move constant In a EWS X%, strong sequentially, sign the very Verifier The dollar revenue organic of growth revenue we XXXX.

constant to expect about be by led above XX.X% growth be dollar driven points delivered year. As strong XXXX, we in is with nonmortgage growth growth organic to businesses. revenue organic levels EWS look Talent last their Non-mortgage to the we almost XXX again Government basis and revenue X.X%, expected growth by of over

Latin in as over We led strong the a XX. vitality, over EWS by XX% with in again Slide as to strong XX% XX% delivered Turning quarter, VI performance America. very in well

fourth to XXX and to basis in infrastructure products. closer native to cloud Importantly, and new X%, sequentially completion which cloud begin leverage USIS our accelerated for new get over up we to innovation points quarter the as was able are

products last per new new is XXXX. of XX% XXX strong the Our increasing in which led the Vitality not to close product, years, but since only are revenue up X launched results by average over Index each

product future data the to new strategy Equifax came non-mortgage deliver a differentiated about new our to solutions revenue capabilities The new our cloud Vitality long-term expect assets and in Vitality capabilities leveraging we encouraging product momentum reinforces Leveraging drive over to drive positive is XX% the of and our of cloud Index products again XXXX. from for Equifax During our new the quarter, Index customers. our cloud. of in and leveraging for NPI XX% rollouts,

driving the consumers right power new well side in to highlighted These quarter. slide, are access financial and to visibility growth can and to the products cloud Equifax that we've line and expand the the introduced create top testament as Equifax the of of of help several new credit solutions On a new opportunities mainstream the innovation margins. as drive create

to Equifax AI, EFX Equifax new Turning industry-leading our model assets, believe AI data product cloud Slide We and new is our capabilities products. and powered focus leveraging our XX. differentiated positioning scores

of On slide, data and diverse sets Equifax. side the our for of left the the significant a large differentiator proprietary is

data single data cloud new proprietary scores multi-data KeyedIn advantages Our our build us linked in AI using scale, leveraging our significant fabric products. model at to EFX in predictive gives and more

is solutions AI Vertex and EFX capabilities. developed enabled leverage our Ignite by that explainable our Our platform Google our ESXi

engine AI/ML priority explainable our beyond AI Our X,XXX over our 'XX enabled cloud-based and for model is the in modern big a complete scoring patented Equifax Equifax as Equifax cloud. we leveraging D&A capabilities and AI professionals.

with we've XX% models AI/ML tools, of a the of Slide In XXXX, middle models built in this advanced goal on year. up in in leveraging progress were building XX, XX% our our new over shown AI from 'XX made capabilities. As XX% using market-leading tremendous chart of the

traditional Our pending. generating date, AI XXX Technology, NeuroDecision Pay improved NDT, Equifax investments OneScore as XX% patents launched as our EFX for well explainable received results. new credit for has proprietary with cellphone or consumer XX or more We've AI and the performance has Equifax which such patents areas are supporting AI developing consumers approved over of alternative incorporating TV AI the to products utility solution consumers. in data, over AI, credit, To as score AI including

proprietary the Equifax to about strengthen AI that combinations. the our business capabilities richer data bringing We is our data value of are and energized through accelerate

Now XXXX to turn let's guidance.

EWS, fourth businesses against the our XX. Moving through and seeing with to the the underlying priorities. to versus of execution and slight news market mortgage and The appears in from improvements growth for strategic entered some is the XXXX January, USIS strong both EFX our we're non-mortgage momentum which future. quarter have expectations good and U.S. our Slide We bottomed XXXX

a that for current the the of of Our will basis, adjustments seasonality. XXXX and mortgage on level the for rest behavior continue year mortgage decline down planning will as shopping of inquiries assumption across moderates. U.S. inquiries We're XX%. a blended activity credit be TWN would the is by see U.S. consumer basis On with this USIS level in smaller slightly inquiries USIS EWS assuming

forecast XX% over XX is to which X.X%, down Fannie XX X.X% and mortgage units, versus perspective, forecasting which units, XXXX today. the average forecast from is our current up respectively, lower points MBA is forecasting is not X.X% and from For origination than Mae, our framework MBA, XX%. but forecast move dollar XX%. up And currently volumes rates down origination May Fannie

or current do our We And for past, the forecast our will done rate in market years. increases or we mortgage trends run in decreases X-plus continue past interest rates the we as not forecast. have EFX include as to

so for long-term see generally slightly judgments framework. U.S. our on are assume you modest to can growth growth volume market outlook own with 'XX the that below We with we X% deacceleration mortgage make will you credit assuming mortgage will the your inquiry the in continue economy Further, each we in share changes average quarter the future.

framework. currency at XX% currency to at center growth with our midpoint with major growth of X.X%. Despite we key some In XXXX growth economic of constant be revenue the Canada, to expected slowing to in markets, revenue billion is flat XX.X% GDP. at deliver Constant Australia our decline and and about Brazil, U.K. X% the of U.S. expect market of and again our midpoint X.X% GDP in growth expect long-term $X.XX and organic deacceleration reported across expect countries, guidance organic the in we international the we levels of modest about the growth our low revenue mortgage and and about of

revenue XX% our about mortgage almost decline the constant mortgage should XXX and X.X% Total revenue inquiries our grow better be the to XX in XX.X% than framework. growth. from with FX organic about X.X% about over EWS and growth dollar about basis of points points growth revenue should USIS Non-mortgage is negative

Workforce about We points are revenue revenue Solutions reflects verticals deliver about XXXX. growth EWS of expected in at X% under transactions. to XX.X%. expect than mortgage better This grow mortgage to underlying XX just almost X%, And nonmortgage up EWS

Excluding a nonmortgage support weak significant expected a the decline market program is and about the which performance in weaker last the well against ERC in XX% expected completes, revenue about pandemic EWS year. XX%, strong growth Talent very over to markets as is expected as that given comp and decline deliver grow a in in despite is over hiring growth economy. EWS overall government revenue expected is as strong X% XXXX to underlying our XX% U.S.

to EWS EFX XX% NPI over in and continued our pricing of and drive will strong growth continue record Vitality both in outperformance. growth Index penetration goal TWN

expect to X% in X%. X% USIS of long-term the of high-end of target almost to We growth XXXX their at deliver revenue growth

over expected stronger market the expected to mortgage inquiries. Mortgage decline points revenue is over grow XX% in XX% than XX

levels revenue to pass of see margins vendors increases We largest substantial on we and maintain pricing benefits by USIS. are at customers our and product from from continuing consistent USIS new pricing both to mortgage one to benefits that

expected in services Auto. to be commercial Services mid-single-digit fraud and grow by almost percent. slower and expected strong in The And we growth. to FI despite telco. about revenue Consumer grow expect to DXC modestly financial see in X% X% growth the and identity will to USIS as continued economic weaker marketing growth growth revenue with well in is low is growth grow and single-digit driven as Non-mortgage nonmortgage expected

had markets International Australia. X% year, a XXXX weakening very dollar in growth organic revenue in saw late end some particularly in good Canada the but with constant and

is to growth currency accelerating about be to in constant are expected by growth currency XXXX growth constant The seeing over benefit we inflation with overall international Argentina percentage international XX%. expect over XX% We in X organic of points. revenue

currency Although our be offset will we in by than in some Argentina uncertain, have in planning. devaluation XXXX inflation more

led Index expect product over EWS new XXXX, in Vitality our in again by We to Latin XX% America. be

accelerate Canada complete cloud USIS transformation, As their exit and XXXX. expect we rollouts as to we NPI principally their

is For the year. $X.X EPS billion, up about is XX% will expected to over share, EBITDA about full about year, margins to And up Capital $X.XX with of last XX.X%. per X.X% expected EBITDA spending about below decline be million of from by be is adjusted X% adjusted X.X% we XXXX. The revenue. $XXX million our goal over step or and our $XXX reflects to reduction a completing our towards transformation about in significant of progress as cloud exit about or

also detail Now quarter it to turn assumptions XXXX our to more over provide John like I'd and to our guidance provide and to on first framework.

record Our John? pricing. our XXXX guidance growth products, new from builds on strong XXXX nonmortgage and growth

John Gamble

Mark. Thanks,

are levels. the we XX, remaining activity assumes credit seasonality in is inquiries in EWS Slide discussed, reduction a Sequentially, as move to see of at expected shown with Mark we inquiries these with for TWN XX% XXXX. down XXXX. at XQ planning about stays and XX% inquiries on over assuming similar mortgage our year-to-year overall XXXX, As 'XX normal mortgage mortgage as quarters credit USIS levels through

the Slide inquiries XX provides is growth in decline guidance walk, of full $X.XX the XXXX growth TWN and negatively of billion. to a year XXXX XX% revenue revenue X%. revenue drivers the about total the almost mortgage The U.S. blended by midpoint detailing impacting revenue credit of our X.X%

from is revenue XX market impact expected of mortgage decline. benefit to total than the XXXX points revenue points relative about percentage to X.X%, the outperformance at revenue about Mortgage market more offsetting growth by mortgage negative the X almost

driving in overall revenue X.X% mortgage nonmortgage organic impact revenue. basis increase about As constant X.X% to is the positive in total on about revenue a a on result, growth. growth overall X.X% about expected of X% growth be the revenue expected is and was currency a

percentage last points As long-term in Mark acquisition Workforce BUs strongest is is of XXXX. referenced BVS framework expected our the growth revenue completed the to performance again, to X The broad-based within contribute X August earlier, Solutions. and is growth about and across all

walk our X.X% margins at growth midpoint XX increase guidance Slide drivers our EBITDA XX.X% XX.X% margins about deliver XXXX to per the of expansion The X.X% X detailing an about adjusted the delivers XXXX of points expanding the expected EPS expected provides adjusted share. points Revenue adjusted of XXXX. will margin EPS growth XX.X% of of EPS EPS. of XXX in and be adjusted are from in growth. EBITDA to basis about XXXX $X.XX

Consistent we X.X% reduction basis that framework, in organic revenue in by driven about will XX growth the from as executed factors: generate expansion points framework. this as about in cost revenue dollar XXXX, basis the high margins in or our XXXX of $XX The variable will about margin in expansion. in million points incremental margin The growth. announced XXXX quarter savings actions in about is generate at expense is spending XXXX with margins million is within constant on financial of related which expansion to reductions long-term charge about EBITDA our $XX actions well we we XXX

will spending took XXXX. The $XX spending an million million cost reductions million in in XXXX reductions we of spending on top reductions $XX additional action in in additional announced actions this The of in will an quarter $XXX generate we generate the XXXX. XXXX in

expense above, the in low on incentive the weak XX expansion of points second levels XXX system the the our of offsetting we XXXX points savings substantial half sales we that comp of cost XXXX, at higher compensation North and benefit. basis margin are redundant generating will 'XX migration market about normalization were about decommissioning exceed generate American of due the margin basis to from of in incurring, in XXXX costs principally infrastructure from impact will the Partially performance. variable is I In of and mortgage referenced

In levels to we target performance. XXXX, return our of planning assumes

systems the beyond As well increase about variable billion, in XXXX, production. we to D&A XXXX. by as increasing negatively is is by amortization X%. XXXX will XX.X% about about in migration benefits up $X.X putting look increase accelerate Depreciation adjusted adjusted from high as XXXX, EPS expected which EBITDA our million as to cloud-native into should improvement significant completing impact revenue in margins. expected and $XX cost XXXX, In we EBITDA drive are of accelerating to cloud growth profit

expense, BVS operating interest X and The P&L and from tax interest reflects expense the principally about of expense in to our acquisition. adjusted impact the increased below negatively line points. impact The expected rates interest by and other EPS debt increase are percentage higher items income,

XX.X% tax XX.X% principally about XX points than higher higher estimated rate is the from Our basis of foreign earnings. in XXXX,

guidance to be expected delivered XXXX, Slide Mark margins growth, at XXXX products, well by XX slide growth the specific from year margins XX% normalization partially new EBITDA detail discussed line adjusted BU up strong P&L includes on on detail. nonmortgage expected EBITDA the on comp. in This record as in and XX% as of revenue incentive our full given from offset that additional are pricing, penetration provides XXXX the items. EWS guidance specifics in

are about margins to USIS about flat EBITDA actions. cost revenue expected USIS XX.X%, from be XXXX with benefiting growth is XXXX. and

by XXXX, of performance of to in Data XX.X% cost half comp. the USIS systems first expand are margins also and the have the well growth costs migrations principally will incentive impacted the expected is versus driven Fabric. about being delivered credit consumer International actions. XX% to completion migration in costs to to good redundant of related However, prior XXXX USIS by normalization 'XX, at customer systems as on as EBITDA revenue

amortization increases functions in from in managing costs I others Corporate levels expense, to equity in excluding consistent to as depreciation XXXX. referenced such due that are compensation finance, and and have incentive actions and legal, the the cost the in XXXX relative HR, technology increasing taken XXXX incurred lower earlier. is Corporate corporate with we XXXX

As increasing revenue EBITDA XX% midpoint growth both guidance our centered at should about from and of adjusted XXXX, capital down ranges. million guidance is in million $X.X With XXXX versus that $XXX $XXX about spending $XXX the indicated, in spending be million, million XXXX. believe capital EPS to cash free billion XXXX. and we delivered we the flow in our in over $XXX over deliver We Mark expect to to declining

X.Xx our ratings. EBITDA decline We believe free cash of current the credit XXXX. of required levels X.Xx as nicely and within EBITDA these levels we levels flow, current leverage complete for BaaX level this of BBB, our the leverage about from are should to At

repurchases well significant do return as begin to these cash share achieve As shareholders to have flexibility will as we increases levels, to through to acquisitions. and dividend continue we bolt-on

the $X.XXX for X.X%. from of expected X.X% is to midpoint XQ expected Slide organic be Revenue with XQ be guidance growth at currency 'XX. our about about to billion, constant X.X% XX provides is Constant growth guidance up 'XX. about of currency

XX% despite about USIS are in Business transactions TWN about in that outperform 'XX. year-to-year. will be X% as we is mortgage to Workforce expected about Mortgage growth and is XX% This revenue expected below. being revenue performance unit quarter overall EWS XQ by we down will mortgage the XX%. of revenue down about Solutions about lap Nonmortgage first the in Mortgage inquiry saw outperformance be occurred expected growth should underlying XX%. below as substantial first grow volumes quarter constant X.X%. currency be described about revenue the is to X%, TWN grow and inquiries the XX in to

is As long-term outperformance XX% be and will past, Workforce long-term product overall to that in records, drive Solutions' to to with about price revenue XX%, we to discussed EWS TWN expected the XX%. levers have consistent XX% growth mortgage

revenue in should X% be down XX%. will Employer earlier. revenue Verifier in revenue about decline quarter to about with grow the was the up X% revenue ERC due that referenced nonmortgage Nonmortgage

in about little sequentially, to due points over significant up non-mortgage be Excluding higher employer services EBITDA XQ. Workforce the and principally expected down about margins year-to-year flat revenue, employer in a total X.X%. decline revenue Solutions XX over from are negative ERC with XX% be will seasonal revenue about mix to up basis XX.X%,

level through will as move non-mortgage XX% outperform product by Mortgage and X%, to will earlier commercial that USIS by decline we to benefiting growth growth we to expected outperformance and credit Equifax be well USIS about from year-to-year. in be and and FI is under up inquiries again to is of continued is the we In as expected inquiries discussed new credit This increases expected X% price the versus significant growth is mortgage fraud benefits. first be and consumer revenue in strong revenue pricing over the in are as FMS. be quarter, XXXX. up revenue to led XX% vendor over a identity quarter. USIS mortgage about XX%. expected USIS revenue the up nonmortgage from

first EBITDA margins due expected XX%, but USIS in the be decline revenue 'XX expected in Europe sequentially. expected margins in addition Credit be XXXX, up to revenue is incentive from flat representing incentive and Asia are 'XX normalization the about the compensation XX growth EBITDA also from about XX%, of up to about in down quarter XX% to incremental the constant sequentially and In continued the is well offset This nonmortgage in Pacific XXX half growth customer basis to currency and Canada, and Consumer as earlier. CRA growth discussed incurring are mid-single-digit 'XX, lower costs. to points impacting earlier. versus costs currency Data the decline Fabric. X% of basis margins LatAm organic XQ seasonal first strong about to seasonally be about Canada as by versus XQ U.K., and points on down referenced is constant migrations in about International Exchange we revenue of

first to margins of XQ flat quarter be the 'XX Equifax are EBITDA about 'XX. with about XX%, expected

plans and in last the in first quarter each is The corporate. expense the discussed the higher we bulk As related to in much reflected first year. of expense year, corporate quarter occurs is our equity

expense be in normalization variable principally XXXX, XQ and EBITDA compensation meaningfully will sequentially the over compensation equity 'XX. Excluding XQ in decrease 'XX Corporate the in timing reflected would as of the XX%. of equity expenses margins compensation was

$X.XX adjusted of EPS 'XX $X.XX per be compared in to We per share. are $X.XX to share XQ expecting adjusted to XQ 'XX EPS

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

Mark Begor

XX% EFX's constant unprecedented Vitality 'XX delivered mortgage close Index addition on bolt-on XX to revenue market our impact from the in strong significant dollar a Equifax had that acquisitions. of levels normal of the unprecedented mortgage The market past months the products businesses XXXX new and diverse XX the mix points growth John. over moving decline, billion from strong from market by decline XX% through Against P&L. Thanks, $X of to a XX% non-mortgage growth, XX% over percentage mortgage outperforming to

is Slide on XX, its on below our the shown As of XXXX guidance, on order XX% U.S. based mortgage the average levels. inquiry historic market

guidance. our bottoms none market recovers our billion as $X EBITDA $X tailwind represents of 'XX margins, mortgage from historic that the $X reflected 'XX mortgage of the in $XXX and the recovers. which As XXXX of a revenue 'XX, per expect deliver is P&L for norms, and that to mortgage billion of to annual market we into share opportunity Equifax, over and towards its headwind market moves and our in move would million gross would over At revenue current over

breadth model constant XX. delivered nonmortgage up with Wrapping strong and Slide another EFX and on of business revenue reflecting quarter the growth, our Equifax priorities. XX% Equifax strategic strong broad-based XXXX against for the and dollar power execution

we into strong have momentum as We XXXX. move

growth to XXX decline XX% about the and XXXX, mortgage points basis expect revenue at revenue our we cost look growth the we market. margin from expansion deliver EBITDA expected adjusted of X% and in As plans our savings despite

prior mortgage result priority cloud big and key to A bottoming our on as mortgage North normal levels. the the of to intensity and with -- is we next move years to market to significant well from slide, of several the transformation our complete a discussed market expansion benefit the returns As portions continued our move global a in expect is as XXXX inquiry as over for markets, technology margin cloud our in reductions that transformation. will data American which tailwind capital

Equifax on is milestone, team the with focusing revenue the Exiting cloud a big new growth. of XX% so in towards can move Equifax XXXX fully

the from bottom the new to entering new leveraging next capability cloud as chapter drive top pivot of cloud building we line. are to and the Equifax new Equifax We our our

EFX data market-leading of leveraging XXXX Equifax. the future. our that assets will margins the new differentiated growth, energized we even and data performance more in deliver businesses free I'm but XXXX, cash new and the strong single the fabric, new by in are AI/ML enter as momentum in cloud future flow our and expanded Equifax We energized convinced about our higher

it let open for operator, me questions. that, with up And

Operator

line the from Barclays. of Patnaik come with questions first Our Instructions] Manav [Operator

Brendan Popson

more actually TWN I I on shopping on real you little quick inquiries bit detail USIS comping, were ask actually versus want be will TWN. activity. -- a This USIS It -- to versus sounded gave is just the for guys better is your guess, next you because Brendan some on Manav. year, saying better like the

So be XX%. actually down better that than bit little it will a

worse want Just on to because than the why this inquiries confirm bit TWN have And the year, a that. USIS obviously, side. quite been then

John Gamble

Yes.

we XXXX think your a activity where answer, is big question, do was right? happening comping of So what's extremely shopping of the chunk USIS in high. So off you gave is

that's what That's kind we a in in look latter run shopping we're parts seeing relative we're their market, we're mean. them decline the the rates XXXX be and January what we we just through we that will December. when rates that So what of the to because say the we terms do and we're that of at using less seeing run the take as of XXXX growth growth look talked And year very year. as That's probably run year-on-year, of throughout a And rates. think take we -- rate we Also, driver we activity. in the about high that seeing. quite honestly, current is their biggest

both So we with what I seeing we're gave. with think and it's consistent description also the

Brendan Popson

assumptions you could assumptions more Okay. -- like you're Talent the And some then that walk your on on just volume of through X using?

John Gamble

-- think what of this grow to our so which, quarter. we and to good for fact and back we sorry, points, what that significantly in about right? going that market see a we're the year. outperform the about indicated very be ability support down of indicated well fourth to in far XX feel we're we're the we're we going is segments seeing despite is hiring just XX% probably and Talent the of in So currently again, on BLS the looking to BLS that that at right, is the over order And the in we talent, is we're we expecting by kind think to very, -- markets half going I XX%, So that -- the down continue

Operator

Andrew line the from come questions of next Steinerman Our with JPMorgan.

Andrew Steinerman

us quarter? could John, terms revenues And incremental of just much mortgage a margins as could have the in percent how the revenues guide? was revenues also, how in us a mortgage of sense you you 'XX just much tell give of fourth in

John Gamble

for order quarter fourth a And we in XX% perspective, mortgage fiscal XX%, quarter, guidance on the year think, of of just in based total. be And under was provided. on for it's we the was So XX%, the the first to right? the revenue going little XX%

Mark Begor

EWS and USIS, That's driven that in by both talked outperformance our we Andrew. about,

John Gamble

And can you ask question the again? second

Andrew Steinerman

What's the mortgage Yes. in the 'XX revenues margin on assumed guide? incremental

John Gamble

having generally dependent is EWS like which mortgage is tri-merge our the the margins. margins, our on -- this overall, margin our very obviously, what And gross gross we've in than business let's So -- we've you our obviously very solutions, blended say, on different mortgage right? of mix highest blended. different variable But the talked business generally, speaking, think USIS general our indicated business. something margins is With for X about EWS, in versus USIS in the the margin our margin that in XX% the obviously mortgage is past, than because margin it's heavily right, our on

Operator

Fargo. questions the Wells from Our line Seth Weber with next come of

Seth Weber

mind upside Just how think in could on nonmortgage maybe there you some the as guidance talk for go year. X.X% be in you we growth XXXX. the interpreting just to Can any that we for should through just be areas where your

Mark Begor

some X.X% XX% in is by is the about year-over-year nonmortgage been grow It's is our the the to impact, the amount talked talked range, pressures impact really has which inside market. company. a that, is of about we Talent And think quite basis. X% on Equifax our of we is good. that's then which the a on the curtailed meaningful John program obviously the want We've on how having, And ERC Well, that second IRS. which to

pretty that As as it's good upsides think we rate. a about to think any we upsides, don't growth because X.X% I far think

Seth Weber

half how left is sorry, of to then can or contribute? talk the that that's maybe through for much And determination Medicaid 'XX, just like here How going Okay. first you the how on is Fair the enough. much much to second quarter?

John Gamble

Yes.

continues then by specific given the are What is reminder, second was expect consistently that be we've be to the for benefit in part a haven't again, quarter, benefits quarters. government. just first we as as continue the we amounts. to occurs the that that But right, it federal of it something redetermination and programs will is us, So in a it dollar right, indicated, fourth and funded

freezes see But as there go yes, was the is, program an revenue to occurred. and redetermination seeing pandemic once through continue following across the that forward, we redetermination of of we'll end -- be our now. redetermination we driver right past So an fact it accelerated the we it get Government activity will accelerated is business, 'XX growth we're ongoing and get the

Mark Begor

one for growth we've only vertical as inside about. talked Solutions, that's And Workforce government of obviously, lever,

As you at that strong was year year in super business and million. over last up know, the ended again $XXX 'XX,

So level $XXX against there at a that TAM of million. very big we've business with big for us got potential continuing state $X plus growth that's a the penetration billion

solution there's opportunities today. lot using social get of employment, services. income They're is verification government still are which for and to using the manual our So not of a required states that

that And September extension into then USDA contract a contract in rolls big As we we couple that we contract. landed months signed to a a you the recall, new XXXX. of our It CMS ago, XXXX. obviously billion. rolls into $X.X was new was -- That

bullish we meaningful levers and growth of we're at a talked there's So as number government, about. quite

a to be XX% Solutions long-term Workforce in again significantly growth rate 'XX. that big growth to outgrow outgrow to business contributor Solutions Workforce and XX% that expect We

Operator

of next & Company. with Kyle come Peterson Our Needham questions from the line

Kyle Peterson

nonmortgage appreciate touch taking I guys the you out you called the in to Great. the guide. on I wanted that questions. growth

Auto out some of Kount such Consumer volume some whether guys on and figure color any you could those just think just the I assumptions well. around really kind in as walked delta to versus mortgage see assumptions Talent your volume you try if or areas share kind of and between trends volume other wanted I and it's to provide have to markets? through pricing on for

Mark Begor

think don't clear by now, are news in those be real it, fintech not meaning year. cards, happened year. would 'XX, change impacted to it's kind but of last Large from some fairly from bit consumers real consistent as a that we go XXXX declining, because about There's see they a tried was into might and talked in I of that half -- 'XX But we with change call as a some verticals saw with still the second start that. I'd second seems stable auto, choppiness half into little we impacted is far second the last We and any to which that liquidity declines the loans, p like of half We FIs good be of the FIs some how again, year. level about versus originating a, smaller are I in the last strong. of what not as be they're stuff. performed

Kyle Peterson

and follow-up a just I capital on guess That deployment and make sense helpful. there. it's priorities And

bolt-on are between Just how capital to see initiatives leverage or of are about increase some of of being you want near-term priorities stock where buy the and priorities and priority potential near-term front, if to -- How of the you dividend. the prioritize eventually on those mentioned the some back kind what's you thinking the guys versus and X? potentially M&A kind

Mark Begor

Yes.

I CapEx term, think So out is coming XXXX. laid this again year we in down which near XXXX, is I'll that go

cloud, in expect international year in our complete as cloud USIS the a this next to properties complete we We be milestone. big it and will of business completion of getting and again step to year half our cloud down some big the first XX%

our the frame, term, CapEx in free we to cash the medium over over over in short that So will margins flow. expand, and grow cloud you're going complete 'XX term to our to again come expect as time we continue down 'XX the see meaning which our

Our free up is year this flow almost Xx. cash

John Gamble

It's XX% year, yes. well over this

Mark Begor

Yes.

cash is So in our free up XXXX flow substantially.

to to and we 'XX as into get We grow 'XX. continue expect that

you we have been. some, in that that that as you half if we in we're we of over the we're X February continue very we're back bolt-on so 'XX, be would to of as that, of Boa that M&A 'XX, in in over M&A acquisitions. years a to the integrating like Vista, we'll done that we're as revenue XX% that be pipeline given about framework again, we have And number and on We've get M&A. do X to inside X% here But large on integrating points second growth includes going we're XX add suspect when already around call. of the a look to I X disciplined little watching. M&A from forward get talked M&A 'XX always to bolt-on focused And the --

that's the of strategy. a we our XX%, been year So have XX And margins expand XX%. and the goal of as growing our post still clearly clear crystal part of a we still have we've that goal bps and

the we significant the stock, that's years could of expect at restarting goal 'XX, cloud. free we've towards look clear look that and been our working and towards and dividend where 'XX that. meaningful As at XX% we We've cash into comes down, buying to the that that's have change you our back CapEx we in been very also move and amounts that, flow get really over the we excess as last X would no in complete when

Operator

come Autonomous line the Our questions of from Kelsey Research. with Zhu next

Kelsey Zhu

$X bit to again, you government growth billion where TAM I And TAM from? what to this in I that think if wondering of into little billion. targeting in general, was $X upside some comes the you're a number? on from or give can trying numbers, color incremental raised billion major states programs you more will have that $X to us get just the you're are that bridge

Mark Begor

Americans really is support, Yes. support. social those roughly unemployment support, food programs, social form million get whether student childcare the services And There's rent support, that services, support, different it's around lending huge. of all which cash support, it's delivery, some government government XX

you of We've on be you set. been have against depending paper those those because X Appriss and that time them, And as know, services All proof also the And getting weeks them. and have deserve generally because who's to weeks the have and employment incarceration recipient X it income. income which data many deliver really after to to there that. need bring frame manual there's is has pay the data rapidly instantly. means upon services competing, deliver the where data processes our in to We and instant them and delivers stubs, can of accurate. social is we're we which And by our of those we're of verified check quickly payroll every growing old to programs our such X broad desire course, It's to an verify real coverage. from social of

our So local and really the programs of levels federal, level. at state at kind are X

level We like some of have Social is Security verification where for us. that with contract at Administration. programs federal That's federal a done the large

we It's are You at and at the the the level operate call very USDA the level And extended. done then -- executed the earlier complex. contract. talked state state this we in contract about then federal, at the and CMS new we but levels more that state

the separate states are. has that customers deliver services, -- with the There's the who referenced a you agency come agencies large will really it's each that's are a opportunity really all of our states. is that portion portion states XX all that not our of big big Equifax, and penetration large, TAM and state growth at these at level, a That's where and

on you the I capital these to work years the over number we've think resources levels know, of at last as added resources. deploying state

have a large we So pipeline.

all a on the of we big that on out big, but states: are the focus focused and York, have Florida of we're large New imagine, might you California, some them. states As there, Texas,

of next are be is growth you states as social 'XX, that part many 'XX, to prop. the penetration And costs In as -- 'XX, value the forward into a go services. services government will very federal into subsidized cases, big a the our these are. the over the by the And data just deliver strong it's

at in those. order different XX all aligned change technology to the getting process ours deliver flow of the of each states in matter with and helping those agencies it's So

very that we're about bullish business. So

to it's said, end billion at again we growth close expect and $X.X year, As we strong the last of double-digit in XXXX.

John Gamble

to into the can see serve integrate of TAM continue serve insights one reasons Solutions think to we Workforce as government growing of that couldn't that incremental now the able there's we that portions business the is I fully, products market we're before.

the I is part our addition acquisition. the Insights set the to the of in Mark product of So think TAM broadening what increase because in of described the

good we service generate further how feel very us to TAM that as to government we So continue going even needs. over broaden to that's new allow products to time

Kelsey Zhu

too to you sure it's not if the X.X Super pricing second My think talk question vertical. I'm for how Got is, it. helpful. VantageScore about mortgage early in about

that system transitioning pricing based think time think level. line VantageScore made the this at towards for decision the being start original year. bureau I guidance, we And on score I VantageScore later X is should

for So to cutting just curious about VantageScore hear how for mortgage. prices you're thinking

Mark Begor

Yes.

XB. be bureaus, X expect X second that files Vantage the to period. it originators differences credit One the We've to you And a meaningful for that to mortgage. going then continue change because guide comment going federally add pieces of still a to between before that talked X pull I credit potential happens to supported that we as regulator are in good mortgage is when XB credit the by to files. is the there's to think That's half every forward. Equifax on X the know, requirement is second going there

X there's States. million example, United For in credit only the the X.X consumers that X files are of in

the X value quite important. is So of

the Vantage still It's thing. same period. plus FICO, On comment a in

point or mandatory haven't put it's sure we're the But that going a of be. framework if happen they're our you XXXX because FICO not to that's have to into those second a when impact out We and does. what in business either for would no, for happen it our if it happen, it's score sell about positive we to it will going on we it's if or unclear to because a pricing a And every thought -- haven't mortgage. really VantageScore,

Operator

America. come Heather of next Balsky from of Our the Bank questions with line

Heather Balsky

side. first quarter. something know issuance on I for the out last X that's is. help what there's Can guys what you. is ask And there that you're to walk wanted introduced guess issuance lot questions the just us for metric again how One getting I -- Workforce that through mortgage I you clarifying us to well, data kind you a number? of measures, around of

through think thinking of helping there, market number us should to kind kind if data comparing what out of we we're just about? be your So

the mortgage. then on And margins is incremental my question second on

up mix think a XX% fair I a earlier. you last there's realize XX% the year, said think came impact and amount, I I

too. trying reconcile Just to that,

John Gamble

do So one, okay. second I'll the

margins, margins, it can people margins. right? we higher, mark I mark business than significant vendors. through. would see there's we'll price as increase been some -- because They're impact that on from we a think up of negative was but about X maintain mortgage We up, our can't see so -- little do the don't what going simply so So -- margins little be gross pass margins, we gross We EBITDA right? it right, may it margins maintain I Incremental so variable we overall. be been gross the to to a did last on should asked about think have gave XX% a year talked I And gross about lower that

Mark Begor

markets. Regardless, incremental mortgage

John Gamble

Very high.

Mark Begor

Super be a 'XX in tried 'XX, are talking frame what in XXXX today that revenue lot about range to at in we the view billion future. potential attractive. mortgage where of to XX% we including that. And volumes normal our clear and versus the we are There's $X upside of 'XX, to below in the that try 'XX, of and

inquiries loans, shopping closed the with involved meaning only on mortgage because or which half someone in but second originators, of your inquiries, the EWS closed shopping different -- question on one. are of the X X side, or different are inquiries, about of shopping first your generally USIS do On will than half more the

So that's the difference.

opted data. to to disclose we year, last that try And

there, really There isn't those there. that's very talked cuts based a you and improvements any haven't mortgage I are volume is we as out data And call market about rate except others in lag some later volume forecasts for MBA Street forecasts market the on of data. that year can which referenced long on out basis. data, happened You forecasting some describe volume. and yet forecasting There data the what is that the and of would

'XX, we you, 'XX We've on share I've top it will been as 'XX, mortgage the mortgage return volumes on very the the time, as tried way it's mortgage to doing whether us well up. the did we're changes, way think based it clear, been and over down, bottom currently our line to to we've again, on as frame here with positive We returns been the current we'll it normal. And volumes And normal. line forecast doing impact it we potential and trends. on since it on we as that

the and see just talk rate what about because that's It's transparent is when to we'll is day. when Fed going uncertain what those make about we And we on be activity changes every our we trends. activity talk

they got last what -- to were the yesterday, have week inquiries we think the and know forward. those are know and going what we we used and be going we forecast they're to before, week what we We really

Heather Balsky

I on think but kind the there. is of potentially, same side, curious answer origination the more the was -- I

Mark Begor

get it. little complex time on frame. mortgages and the in bit happen, is It's when we different. mortgages until in originations we doesn't somewhere in close credit Originations, months after that be industry X actually, don't the file to a a see it's they posted actual process then those for to It's essence,

-- the mortgage a on that lag lots any are not Obviously, basis. of is and actual there data. origination actually people those but together, data are forecasts So put forecasts

happened current many -- we're that's how that see about just not you on basis. transparent available. what yes, determine can't You and a inquiries super Inquiries, originations yesterday, we with

Operator

of come Stifel. line Shlomo Our with next questions the Rosenbaum from

Shlomo Rosenbaum

kind kind you one, migrate. you not for talk a That's bit First those 'XX. quantifying trickling first half first substantial got. hit some necessarily this cost of maybe of risk you. the XQ as terms of getting and go the all costs of little the of is John, That start I And Could to stuff there duplicative away clients in milestones. should question to migration and during the just a XQ of into about

John Gamble

Yes.

of Shlomo's we the is about right? in think the the benefit I year, is what net indicated so first bridge, what migrations of year, costs about by XX this, And -- file the half think half which principally think you the exactly to the talked credit we the points related as to the incremental away of to described, Fabric. of in the bulk right? incurring So North American We're Data about in margin basis second the year, go right? consumer I can the

we see those in so the occurring half. And first costs mostly incremental

costs continuing see the them of migrations cetera, because substantial go redundant benefit the reduction as next to principally cost of right, we're a migration elimination costs into in from we you et also of or continue, and year. Some do but international, the elimination

the for So the cost points it's in of part biggest total, XX occurs basis half. year. The the in first

Shlomo Rosenbaum

Okay. also those back of going kind to just forecast. And inquiries then

XX%. close down quarter it are wondering, the gone guess fact the like market, that in I seems the hone said that forecast that was on why rates you forecast what seeing would can were based gone or you -- quarter, the you the bit on the that's activity about around based same down. think that this inquiries you have despite your down. fact in reason changes I be to -- like And I in shopping same of kind last the of have did talk rates -- a little forecast difference the despite you terms kept And

Mark Begor

both last I almost at net And we XX positive, why is in at said product, saw because of think grow when revenue through are again, in EWS we we a at mark-to-market Equifax. they that's which improvements the for flat in and it, businesses mortgage think as -- Equifax highlight it positive which we're a price like did used call which look the that market, a records a outperformance our EWS. view But our in some slight term more bottom down. feels we're in, I we the in slight differently, -- calling days, we a mortgage is penetration meaning because market, you we're and

is the kind those code even with improvements. in John, think XX, the ZIP of I same slight

are But we'll on call, as inquiries. others transparent forward. the continue we improvement in to you an for know be many and looking we look And

forward. to trends current around it to long When too. share going think as going. real I here But for that's are, look, in We as happens, not you, we how we Equifax and forecasted for of positive want be -- forecast going where be been we consistent with rates I've are because, economists, can't it a off we're we'll

later rate year pushed last weekend, of as out in to and Fed the of recently forecasted potential rates were the the in None and increases I decreases past think us year. that kind this as expecting March many out the the

consistent we've So we done how forecast balanced it's that's it think with prudent have historically. to a

Operator

Our Owen next the question has of line come Lau from Oppenheimer. with

Unknown Analyst

bit This trends better than is in Guru maybe about down year on the you worst it been -- talk expectation? a full or XX% please January? for was Owen. Has mortgage increased it Can little

Mark Begor

how they But in guidance with that's you would guidance than started into morning. when they're we December, said we've improvements. gave this Yes, be bit a the better little it in I we That called shared factored thought October. slight we

closely. So obviously, all watch down And going to going rates fact, Fed know to continue is we'll if, in And the watch we've the down. it forward. in and included that XX%, take that we

on levels, to tried in our expect we for mortgage future, is $X potential why billion That's and to the to rates, that news that in to levels. normal to which upgrade of that more future these we as return business mortgage versus revenue volumes to good At them the normal they waiting frame people home X and down. come to return for sitting rates X-bedroom they're want high homes a and move are

inflection is going rate going what's question that the feels from positive is and indicating a point? like it that's Now eyes for But cuts see. forward. future, with We'll and The the Equifax bottomed the Fed's in our when? inflation that be the good to market guide has and managing a tailwind

Unknown Analyst

really you this compared maybe please market know touched figure -- color some little add how maybe the at? it. that arrived you on outperformance was Also, the if mean expand I Got little upon, some bit a on to a has can XX% already more of been That's but I bit. helpful. could mortgage

John Gamble

kind outperformance, first and we've talking for X USIS you're So right? of the example, talked we quarter lapping EWS records, and first in really right, we we quarter, in order we're driven drivers, of again XX our fourth mortgage implemented expect then outperformed on fully of was XXXX. of me, right? about product, XXXX, so the And occurred think So the mortgage about kind the that's quarter points, which of by price XX, So by the it's said, -- and EWS, and pardon right? blended and as launch -- overall of in

in benefits don't that 'XX we product here recurring So the see XXXX. big saw we in

points outperformance launch incremental is products. Over continue margins. and well, And we right, seen it's talked that of extremely We at. new vendor very to continue time, as that We've our in relative on already. to and it our X really In seeing is the we strong dilutive a of the substantial that a outperformance We've to in EBITDA mark what margins, through but to increase see across that we're drivers. is to mortgage the market overall the quarter, passed USIS, we big it add something we consistently EWS. will to first try part profit from maintain will on up the generate again, significant little as from. pricing we a obviously, do That about and business. it in it our order the should

to maintain EBITDA up it mark do we margins. So

we second they relative incremental We're also the what half -- year. first the last of half last we're we first the sold have since XXXX that very saw saw year, year in levels incremental in the some some of market are products accelerated quarter seen half to acceleration transaction cycle. in mortgage early second mortgage last And last seeing the seeing of relative would growth to of growth relative in in we to year, because the

Mark Begor

rolled some out. new that And Equifax products

John Gamble

have And it's the gone products the also on across prequel industry. that

of in we're would the in USIS we why So outperformance the through products we lap as we as prequel mortgage those that's to which decline indicating periods XXXX, move launched. were level expect

Operator

Our next the with Kaplan question Stanley. Morgan come of Toni line has from

Toni Kaplan

or see subprime to the wanted ask seems you out about been delinquencies. as 'XX comment called you you has approaching the I like Do to spreading It on that getting made worse levels, -- earlier. I prime that things prime? far, haven't guess, hasn't near And so out? plays seen think But it this how and do changes behavior in you consumer that. you like guess, I

Mark Begor

in but financial space years, long at the a now services in here Obviously, Yes. for is what time. almost for for XX X years, Equifax I've been we're Synchrony.

financial the so personally, that so is services unemployment and And know Yes, So to low well. view going I is high. don't. employment and my I space not that's it's spread because primarily

they As capacity long their financial have maintain the working, to as people obligations. are

our customers to it data they're financial can those meaning back. credit using course, institutions of to that like And are offering sure make pay

been of what delinquency where pressured bands. really because in we Subprime the an in positives of has drives we're see. in inflation environment So unemployment most primarily

it's whether all While that they're gas, working demographic pressured that groceries, those group. have heat, inflation,

tightened cards small an fintechs. part, And ecosystem, then in saw prime, in prime done they've near the part, or small part a -- takes almost where it's most inflation, getting that securitization meaning of is 'XX, and lending starting they are up were a the the is subprime part, by pressured started in pressured a and and around as but of important consumers of and small of That's because up because balance of the months summer tightening most their ago, subprime services them with a most reminder, today they financial XX bank they auto sheets funded. done place funded generally

pressures. some had they So

long it like low. don't a it is lot watch it's stays. The feels and stays And that personally as So no, as I going a we it as where's watch lot low and unemployment to I unemployment. thing stay see

still jobs. X like and I new think something X million net billion people still jobs we have generating open we're with looking,

generally that's environment So services financial the industry. for good a

Toni Kaplan

a a wanted a makes ask Yes, question to way. lot slightly different on I in sense. margins of

very gave. pieces, moving you You helpful the bridge that talked about

half. more cost you then environment redundant away in -- half the thinking the margin you costs you you expected. sort the have it about way the savings growth, have And of mortgage from and is previously Better some going of redundant expansion the so normal system second I'm have the second the than in

my a positives I about where thinking year of -- the for basically, we margins. And think exiting to of lot what I'm 'XX of ballpark second guess So half in be kind should obviously, about trying 'XX? number.

John Gamble

consistently, little and through we then this said relative move and margin year. to for what early see I nice we've as expect to too sequentially be year third delivered us think we get look, it's last that's we But a quarter guidance. both to fourth and in improvements

we expect So to happen. -- we continue to that continue

expansion think see year. as through to And should And based then a was progression extent we expect summarized we margin occurs, mortgage our good as what I this accelerated that forecast right, margins gross we have there to which profit you variable right? very against we about you margin very recovery, the do we see go obviously, apply very, that well, mortgage. on to talked that

Operator

the reached to question-and-answer over I We session. turn floor remarks. our of back end would the to have Trevor now closing Burns like any for

Trevor Burns

I follow-up any out want reach has hope questions, have do everybody for to today. a to great myself day. joining And everybody please Sam. or just thank the you I call

Operator

does This participation. you. appreciate today's Thank teleconference. your We conclude

at lines your disconnect the rest your may You this of Enjoy day. time.

Equifax (EFX) 8 Feb 242023 Q4 Earnings call transcript