• Revenue of $728.3 million was up 12 percent (15 percent in local currency) compared to the first quarter of 2015.
  • Diluted EPS of $0.85 was up 16 percent compared to the first quarter of 2015.
  • Adjusted EPS of $1.23 was up 15 percent compared to the first quarter of 2015.
  • Net income attributable to Equifax of $102.1 million was up 16 percent compared to the first quarter of 2015.
  • Adjusted EBITDA margin was 34.2 percent compared to 34.5 percent in the first quarter of 2015.

Financial Results Summary

The company reported revenue of $728.3 million in the first quarter of 2016, a 12 percent increase from the first quarter of 2015 on a reported basis and up 15 percent on a local currency basis.

Equifax q1 quoteFirst quarter diluted EPS attributable to Equifax was $0.85, up 16 percent from the first quarter of 2015. Adjusted EPS attributable to Equifax was $1.23, up 15 percent from the first quarter of 2015. This financial measure for 2016 excludes the Veda acquisition-related amounts and for 2015 excludes costs for the realignment of internal resources. The financial measure for both 2016 and 2015 excludes the acquisition-related amortization expense, net of associated tax impacts, as described more fully in the attached Q&A. Net income attributable to Equifax of $102.1 million was up 16 percent compared to the first quarter of 2015. Adjusted EBITDA margin was 34.2 percent, compared to 34.5 percent in the first quarter of 2015. These financial measures for 2016 and 2015 have been adjusted for certain items, which affect the comparability of the underlying operational performance and are described more fully in the attached Q&A.

Segment Results:

Equifax Q1 2016USIS delivered double digit growth in fraud, auto, commercial and mortgage resellers which helped to offset slower growth in Mortgage Solutions and Financial Marketing Services.

  • Total revenue was $294.9 million in the first quarter of 2016 compared to $284.5 million in the first quarter of 2015, an increase of 4 percent. Operating margin for USIS was 41.6 percent in the first quarter of 2016 compared to 43.3 percent in the first quarter of 2015. Adjusted EBITDA margin for USIS was 48.7 percent in the first quarter of 2016 compared to 50.8 percent in the first quarter of 2015.
  • Online Information Solutions revenue was $218.1 million, up 5 percent from the first quarter of 2015.
  • Mortgage Solutions revenue was $31.6 million, up 1 percent from the first quarter of 2015.
  • Financial Marketing Services revenue was $45.2 million, up 1 percent when compared to the first quarter of 2015.

International‘s strong, double digit local currency growth benefitted from the broad based double digit organic growth and the Veda acquisition.

  • Total revenue was $158.1 million in the first quarter of 2016, up 17 percent from the first quarter of 2015 and a 30 percent increase on a local currency basis. Operating margin for International was 12.3 percent in the first quarter of 2016, compared to 19.9 percent in the first quarter of 2015. Adjusted EBITDA margin for International was 25.3 percent in the first quarter of 2016, compared to 25.5 percent in the first quarter of 2015.
  • Europe revenue was $60.5 million, up 10 percent from the first quarter of 2015 and up 15 percent on a local currency basis.
  • Latin America revenue was $42.5 million, down 11 percent from the first quarter of 2015 and up 15 percent on a local currency basis.
  • Asia Pacific revenue was $27.6 million, driven largely by the Veda acquisition.
  • Canada revenue was $27.5 million, down 10 percent from the first quarter of 2015 and flat on a local currency basis.

Workforce Solutions‘ strong double digit growth and margin expansion was driven by new product revenue and broadening its customer base for verification services.

  • Total revenue was $180.1 million in the first quarter of 2016, a 21 percent increase from the first quarter of 2015.
  • Operating margin for Workforce Solutions was 43.6 percent in the first quarter of 2016 compared to 40.3 percent in the first quarter of 2015. Adjusted EBITDA margin for Workforce Solutions was 49.5 percent in the first quarter of 2016 compared to 47.3 percent in the first quarter of 2015.
  • Verification Services revenue was $99.2 million, up 16 percent when compared to the first quarter of 2015.
  • Employer Services revenue was $80.9 million, up 29 percent when compared to the first quarter of 2015.

Global Consumer Solutions’ double digit growth was driven by double digit growth in Indirect and Resellers and the single digit growth in consumer direct revenue.

  • Revenue was $95.2 million, a 14 percent increase from the first quarter of 2015 and up 16 percent on a local currency basis.
  • Operating margin was 28.3 percent compared to 26.9 percent in the first quarter of 2015. Adjusted EBITDA margin was 30.8 percent compared to 29.8 percent in the first quarter of 2015.

Second Quarter 2016 and Full Year 2016 Outlook

For the second quarter, we expect revenue, including Veda, to be between $795 and $805 million, reflecting constant currency growth of 20% to 22%, partially offset by 3% of foreign exchange headwind. Adjusted EPS is expected to be between $1.34 and $1.36, which is up 17% to 18%. Excluding $0.03 per share negative impact from foreign exchange, this reflects constant currency organic EPS growth of 19% to 21%. With our strong Q1 performance and outlook for Q2, we are also increasing our full year outlook. For the year, we expect revenue, including the impact of Veda, to be between $3.05 and $3.15 billion, reflecting constant currency revenue growth of 17% to 21%, partially offset by 2% to 3% of foreign exchange headwind. This is up from the previous guidance of $3.0 to $3.13 billion and will move us above the high end of our multi-year financial model of 6% to 8% organic revenue growth. And, we also expect additional growth from our acquisition pipeline, which was not included in our current 2016 outlook.

Adjusted EPS for the year is expected to be between $5.15 and $5.25, which is up 14% to 17%. Excluding approximately $0.12 per share negative impact from foreign exchange, this reflects constant currency organic EPS Equifax 500growth of 17% to 19%. This too is up from the $4.95 to $5.05 that we guided to during our Q4 earnings call.

Source: Equifax Earnings Release