Equifax Inc. Q2 FY2025 earnings call

• Equifax had a very strong second quarter with revenue of $1.54 billion, up 8% in constant currency and 7% reported, the highest ever quarterly revenue. - Majority of revenue outperformance in US mortgage, particularly USIS from stronger preapproval product growth. - Non-mortgage solid in all BUs with outperformance in workforce solutions. - AWS had strong performance with revenue up 8%, led by verifier government consumer lending and mortgage. - USIS gaining momentum post-cloud transformation with non-mortgage revenue growth and high vitality index. - International team completed customer migrations to new cloud-based technology. - Launched new mortgage prequal credit file solution with twin indicator and expect to launch auto and p loan products powered by Twin later in 2025.

Workforce Solutions: Revenue up 8% in constant currency. Adjusted EBITDA margins of 53.3% were up 50 basis points compared to last year. USIS: Revenue up 9%, non-mortgage revenue growth over 4%, vitality index of 10%. International: Broad-based 6% constant currency revenue growth, with Latin America showing strong growth, Europe and Asia Pacific performing well, Canada impacted by weaker economic conditions. International adjusted EBITDA margins of 26.4% were up about 80 basis points versus last year.

• Held full year 2025 constant currency guidance unchanged. - Increased midpoint of reported revenue guidance by $35 million to about $6 billion and adjusted EPS by $0.03 per share to $7.48 per share. - Workforce Solutions revenue growth expected to be about 5% in 2025, EWS mortgage revenue expected to show limited growth in second half. - USIS revenue growth expected to be about 7% in 2025, mortgage revenue expected to grow about 13%. - International constant currency revenue growth expected to remain about 7%. - Full year corporate costs expected to be about $590 million, adjusted EBITDA margins expected to be about flat versus 2024. - Expect to generate over $900 million of free cash flow in 2025 with a cash conversion of over 95%.

• Economic uncertainties including tariffs, inflation, and interest rates. - Higher consumer litigation costs impacting corporate expenses. - Weaker talent market with hiring transactions slow due to economic uncertainty. - Near-term volatility in government revenue growth due to federal program structure and funding changes from prior administration.

Q: Can you give some more perspective on the Twin State Agency headwinds?

A: It's from changes the Biden administration made in 2024 around data reimbursements, states dealing with budget and contractual timing, waivers expiring, and new OBBBBA bill changes.

Q: What are the new mortgage prequal products driving strength?

A: Twin indicator product is in market, with positive discussions, helping win share in prequal/preapproval stage.

Q: What's driving the step up in USIS vitality?

A: More traction on multi-data solutions, effective use of Ignite for marketing and analytics.

Q: What is mortgage revenues as a percentage of total revenues in the second quarter?

A: 22% flat.

Q: What's the outlook for the talent business?

A: Cautious due to corporate confidence, economic uncertainty, and tariff concerns.

Q: Any updates on government vertical contracts?

A: Details on specific contracts are complex, but states are using services for eligibility accuracy and improper payment reduction.

Q: Outlook for credit cards and auto business in second half?

A: Auto has been strong and expected to continue, FI business had nice performance in first quarter, expected to see good performance in back half.