Equifax : Investor Relations Presentation Q3 2024

Published: 2024-10-17 06:43:06 ET EFX

3Q24 Earnings Review

October 17, 2024

Non-GAAP Disclosure Statement

This presentation contains certain non-GAAP financial measures, including adjusted EPS and adjusted EBITDA, which reflect adjustments for certain items that affect the comparability of our underlying operational performance.

Adjusted EPS is defined as net income adjusted for for acquisition-related amortization expense, accrual for legal and regulatory matters related to the 2017 cybersecurity incident, fair market value adjustment of equity investment, foreign currency impact of certain intercompany loans, acquisition-related costs other than acquisition amortization, income tax effect of stock awards recognized upon vesting or settlement, Argentina highly inflationary foreign currency adjustment, realignment of resources and other costs, and adjustments to deferred tax balances.

Adjusted EBITDA is defined as consolidated net income attributable to Equifax plus net interest expense, income taxes, depreciation and amortization, and also excludes certain one-time items.

Local currency is calculated by conforming the current period results to the comparable prior period exchange rates. Local currency can be presented for numerous GAAP measures, but is most commonly used by management to analyze operating revenue without the impact of changes in foreign currency exchange rates.

Organic revenue growth is defined as revenue growth, adjusted to reflect an increase in prior year Equifax revenue from the revenue of acquired companies in the prior year period. This adjustment is made for 12 months following the acquisition.

Organic non-mortgage revenue growth is defined as revenue growth within our non-mortgage verticals adjusted to reflect an increase in prior year Equifax revenue from the revenue of acquired companies in the prior year period. This adjustment is made for 12 months following the acquisition.

These non-GAAP measures are detailed in reconciliation tables which are included with our earnings release and are also posted at www.equifax.com under "Investor Relations/Financial Results/Non-GAAP Financial Measures."

PROPRIETARY | 3

Strong 3Q Performance … top line, margins, Cloud completion, NPIs, TWN Records

Revenue $1.442B up 9% / 10% Organic C$ and Adj EPS $1.85 up 5%… EBITDA margins of 33%… Non-mortgage C$ revenue up 10%

EWS Verifier non-mortgageup 19%, Non-mortgageup 9%, Total EWS up 7%, Government up 29% … EBITDA Margins 52%, Active Records up 12% to 134M uniques … signed 6 new strategic partnerships including Workday, $500M+ SSA contract extension

USIS revenue up 12% / Non-mortgageup 5%… EBITDA Margins up 70 BPs from 2Q to 34%, completed US Consumer Cloud migrations

INTL C$ revenue up 18% / up 12% organic C$ ... driven by LATAM and EUR, EBITDA Margins up 210 BPs over 2Q to 28%, completed CAN Cloud migrations

US Mtg revenue up 17%... USIS revenue up 36% with 35% outperformance... EWS up 4% with over 9% outperformance which was up 300 BPs over 2Q

NPI Vitality Index of 13%... broad-strength with EWS 16%, International 11%, USIS 9%... in 3Q 100% of new models and scores built using AI / ML

STRATEGIC PRIORITIES

Strong Performance… Executing on Strategic Priorities… Cloud Completion, NPI, Records Growth

PROPRIETARY | 4

Strong 19% EWS Non-mortgage Verifier revenue growth...

Government up very strong 29%... Talent Solutions up 9%

EWS Revenue

$2,316M

$577M $560M $603M

$613M

$620M

Flat

+3%

+10%

+1%

+5%

+7%

Non-mtg +11% +11% +17% +7% +12% +9%

Mortgage -23%

-15%

-11%

-15%

-12%

+4%

Non-Mortgage as

75%

75%

80%

77%

76%

75%

% of Revenue

EWS revenue up 7%+

Verifier revenue +14% total

Employer revenue down -19%

EWS delivered 52% Adjusted EBITDA margins

PROPRIETARY | 5

Strong 29% EWS Government revenue growth … $500M+ SSA contract extension

Gov't Benefits Enrollment¹

Housing

TANF

1M

5M

SSA 12M

SNAP

23M

CMS / ACA

38M

Medicaid /

CHIP 55M

XXM

EWS Government Revenue

$5B

TAM

CAGR 50%+

$586M

$448M

$253M

Key Growth Areas

Sales execution at the Federal level and State agency levels

1. Government benefits eligibility data sourced from publicly available government websites. Number of participants is not cumulative as individual

2.

participants may be eligible for multiple benefit programs.

PROPRIETARY | 6

Note: 2024 figures are based on FY24 guidance.

Signed 6 new strategic partnerships including Workday

Total US Records

~225M Unique

Individuals (1)

182M Active +12%

163M Active +12%

134M

146M Active +16%

Unique

121M

111M

Unique

Unique

Total 584M

641M

716M

Companies on TWN

CAGR 40%

3.8M

3.0M

1.0M

Signed strategic partnership with Workday

(1) Estimated ~165M W2 individuals and ~50 - 70M 1099 / Pension individuals. 1099 and pension data sourced from publicly available data

PROPRIETARY | 7

and internal EFX estimates.

Completed customer migrations to new USIS Consumer Cloud

USIS Revenue

$1,658M $1,720M $428M $465M $478M $477M

-7% +4% +5% +10% +7% +12%

Non-mtg+5% +7% +3% +1% +1% +5%

Mortgage -32%

-5%

+16%

+38%

+27%

+36%

Non-Mortgage

75%

77%

82%

69%

70%

71%

as % of Revenue

USIS revenue up 12%

Customer migrations to US Consumer Cloud complete

PROPRIETARY | 8

Strong 18% INTL growth led by Latam and Europe

Constant Currency Revenue Growth

Key Growth Areas

✓ Significant Cloud transformation

18%

progress… Canada Consumer &

Commercial migrations to Data

BVS(1)

Fabric complete

✓ Brazil integration progressing well

✓ Strong double digit NPI 11%

✓ EFX Cloud-enabled innovation

✓ Differentiated data and insights

6%

4%

(2%)

(10%)

(2%)

2%

Asia Pacific

14%

Flat

9%

10%

12%

9%

Europe

6%

4%

1%

4%

6%

1%

Canada

29%

56%

103%

102%

124%

58%

LatAm (3Q24 organic +31%)

12%

12%

22%

20%

28%

18%

Total

11%

6%

6%

6%

12%

12%

Organic C$

26%

27%

31%

24%

26%

28%

Adj. EBITDA %

INTL 28% Adjusted EBITDA margins up 210 bps sequentially

Note: Constant currency growth rates.

PROPRIETARY | 9

(1) BVS acquired August 2023.

Strong 13% NPI Vitality Index in 3Q… 30 NPIs in Third Quarter

New Product Vitality Index1

% New Models Built Using AI / ML

80% LT

10%Goal

LT

Goal

Key Areas

100% of new models and scores built using AI / ML in 3Q

1. Vitality index is percentage of revenue in a given year derived from new product releases over the prior three years and the current year. This slide

PROPRIETARY | 10

contains forward-looking information, including FY24 guidance. Actual results may differ materially from our historical experience and our present

Slight increase in USIS Mortgage inquiries in late September

Mortgage Market Credit Inquiries (Hard Pulls)

EFX 2024 Guidance

Assumption

YoY Growth

2015-2019 Average Level of Inquiries

Number of

Inquiries

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

Full year

15%

12%

(-6%)

(-8%)

6.5%

47%

(-7.5%)

(-37%)

(-34%)

~(-7%)

Mortgage credit inquiries ~50% below 2015 - 2019 historical average

Note: EFX mortgage market inquiry assumptions that were provided in July 2024 had the following expectations: 3Q24 ~(-7%); 4Q24 Flat; and 2024 ~(-11%).

PROPRIETARY | 11

Mortgage market credit inquiries only include hard pulls.

Disclaimer

Equifax Inc. published this content on October 17, 2024, and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on October 17, 2024 at 10:42:07.162.