NYSE$EFX

Equifax Inc · Q3 2023 earnings

Q3 2023 earnings · · Investor relations

Briefing

Equifax's Q3 2023 performance reflected strategic execution amidst a challenging mortgage market, with revenue up 6% and adjusted EPS up 2% despite headwinds from the U.S. mortgage market and foreign exchange.

Equifax reported Q3 2023 revenue of $1.319 billion, a 6% increase year-over-year, and adjusted EPS of $1.76, up 2% year-over-year. The company navigated a weaker than expected mortgage market and unfavorable foreign exchange rates, while achieving strong organic local currency non-mortgage revenue growth of 7%. Full year 2023 guidance was revised down to $5.256 billion in revenue and $6.67 adjusted EPS.

  • Third quarter revenue increased by 6% to $1.319 billion, or 6.5% in local currency.
  • Savings of $210 million was delivered from strong execution of the 2023 Cloud spending reduction plan, with 2024 run rate savings of $275 million.
  • Organic local currency non-mortgage revenue grew 7%, driven by new product innovation and a record New Product Vitality Index of 15%.
  • The acquisition of Boa Vista Serviços was closed, expanding Equifax's capabilities in the Brazilian market.

Headline financials

Total Revenue

$1.32B

Previous: $1.24B+6.0%
EPS (adj)

$1.76

Previous: $1.73+1.7%
Workforce Solutions Operating Margin

41.8%

Previous: 41.3%+1.2%
Workforce Solutions Adj. EBITDA Margin

50.9%

Previous: 49.5%+2.8%
USIS Operating Margin

21.1%

No prior period
USIS Adj. EBITDA Margin

34.2%

No prior period
International Operating Margin

12.7%

Previous: 14.8%-14.2%
International Adj. EBITDA Margin

26.2%

Previous: 26.8%-2.2%
New Product Vitality Index

15.0%

No prior period
Capital Expenditures

-$134M

No prior period
Free Cash Flow

$162M

Previous: $166M-2.1%
Net Income

$162M

Previous: $166M-2.1%
Operating Income

$246M

Previous: $243M+1.4%
Gross Profit

-$585M

Previous: -$543M-7.9%
Cash & Equivalents

$413M

Previous: $242M+70.7%
Total Assets

$12.3B

Previous: $11.3B+9.2%
Stock-Based Comp

$9.1M

Previous: $13.7M-33.6%

Revenue & EPS history

Equifax · Revenue · Quarterly

$1.32B

Q3 2023+6%vs Q3 2022
Beat estimate in 8 of 15 quarters(53%)
ActualEstimate

Revenue by segment

Equifax · $2.18B total across 7 segments · Q4 2021

  • Workforce Solutions
    $532M+30.8%
  • U.S. Information Solutions
    $434M+12.0%
  • Verification Services
    $427M
  • Online Information Solutions
    $314M
  • International
    $288M+16.2%
  • Employer Services
    $105M
  • Financial Marketing Services
    $79.4M

Forward guidance

Equifax is reducing full year 2023 guidance at the midpoint to revenue of $5.256 billion and Adjusted EPS guidance of $6.67 per share. The reduction in both revenue and Adjusted EPS are principally due to the weaker US mortgage market and the impact of foreign exchange partially offset by the benefit from our Boa Vista acquisition. They expect the weaker U.S. mortgage market at current high interest rates to continue in the fourth quarter, and they now expect full year Equifax mortgage credit inquiries to decline about 34%.

Tailwinds

  • Reported Revenue between $1.307 billion and $1.327 billion
  • Reported Revenue Growth between 9.1% and 10.8%
  • Local Currency Growth between 9.7% and 11.4%
  • Organic Local Currency Growth between 6.0% and 7.7%
  • Adjusted Earnings Per Share between $1.72 and $1.82

Headwinds

  • Weaker U.S. mortgage market
  • Impact of foreign exchange
  • Expect the weaker U.S. mortgage market at current high interest rates to continue in the fourth quarter
  • Now expect full year Equifax mortgage credit inquiries to decline about 34%
  • Reducing full year 2023 guidance at the midpoint to revenue of $5.256 billion and Adjusted EPS guidance of $6.67 per share

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q3 2023

Historical avgQ3 2023

-0.6%

Avg return

Earnings day

-0.6%

Avg return

5 days after

+1.4%

Avg return

30 days after

43%

30 / 70 earnings

Positive

+15.2%

Q1 2021

Best reaction

-17.4%

Q3 2018

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026-4.2%-13.1%-19.4%
Q4 2025-3.8%+14.0%+18.7%
Q3 2025-0.6%+1.2%-10.6%
Q2 2025-2.1%-1.3%+1.2%
Q1 2025+13.8%+19.1%+22.4%
Q4 2024-8.4%-6.4%-5.8%
Q3 2024-3.4%-4.9%-14.4%
Q2 2024-0.2%+1.9%+10.5%
Q1 2024-8.8%-8.2%+4.3%
Q4 2023+3.6%+5.1%+11.0%
Q3 2023-1.0%-1.0%+13.5%
Q2 2023-9.0%-13.1%-19.2%
Q1 2023+3.8%+3.1%+7.9%
Q4 2022-7.3%-4.1%-13.4%
Q3 2022-9.5%-5.4%+20.6%
Q2 2022-0.2%-1.4%+3.8%
Q1 2022-7.1%-2.3%-10.9%
Q4 2021-2.1%-6.4%-5.2%
Q3 2021-6.5%+0.6%+5.7%
Q2 2021-2.7%-0.6%+0.8%
Q1 2021+15.2%+17.3%+23.4%
Q4 2020-3.4%-1.2%-4.8%
Q3 2020-2.4%-5.5%+7.5%
Q2 2020+6.2%-0.6%-4.2%
Q1 2020+1.6%+2.7%+16.8%
Q4 2019+5.8%+6.3%-8.2%
Q3 2019-1.2%-1.9%-0.9%
Q2 2019-2.1%+1.6%+0.9%
Q1 2019-2.2%-0.3%+9.3%
Q4 2018+1.1%+1.0%+3.3%
Q3 2018-17.4%-18.8%-15.1%
Q2 2018-3.1%-1.3%+4.2%
Q1 2018-2.7%-5.9%-3.3%
Q4 2017+3.7%+7.4%+4.3%
Q3 2017+1.4%+2.0%+9.5%
Q2 2017-1.5%+0.4%-2.8%
Q1 2017-2.4%-3.2%-2.2%
Q4 2016+5.8%+7.4%+10.0%
Q3 2016-5.6%-5.0%-8.0%
Q2 2016-1.9%-3.0%-3.4%
Q1 2016+2.7%
Q4 2015+0.2%
Q3 2015-4.1%
Q2 2015+2.1%
Q1 2015+4.1%
Q4 2014+8.5%
Q3 2014-2.6%
Q2 2014+2.7%
Q1 2014+0.9%
Q4 2013-2.2%
Q3 2013+3.4%
Q2 2013+0.6%
Q1 2013+2.8%
Q4 2012-6.2%
Q3 2012-0.1%
Q2 2012-2.7%
Q1 2012+6.0%
Q4 2011+0.1%
Q3 2011+5.0%
Q2 2011+3.7%
Q1 2011+3.1%
Q4 2008-2.2%
Q4 2010-2.2%
Q3 2010+2.2%
Q3 2009+2.2%
Q2 2009+3.6%
Q2 2010+3.6%
Q1 2010-4.7%
Q1 2009-4.7%
Q4 2009-4.7%

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