Equifax reported revenue of $957.9 million in the first quarter of 2020, up 13 percent compared to the first quarter of 2019 and up 15 percent on a local currency basis.

USIS first quarter results:  Total revenue was up 15 percent at $343.2 million in the first quarter of 2020, compared to $298.3 million in the first quarter of 2019. Operating margin for USIS was 31.4 percent in the first quarter of 2020 compared to 32.2 percent in the first quarter of 2019. Adjusted EBITDA margin for USIS was 44.7 percent in the first quarter of 2020 compared to 42.9 percent in the first quarter of 2019.

  • Online Information Solutions revenue was $252.8 million, up 16 percent compared to the first quarter of 2019.
  • Mortgage Solutions revenue was $42.8 million, up 33 percent compared to the first quarter of 2019.
  • Financial Marketing Services revenue was $47.6 million, down 2 percent compared to the first quarter of 2019.

“US is accelerating commercial activity and new deal pipelines remain strong. During the current market conditions, the number of pipeline opportunities as of the end of March was up 6% compared to December 2019 and up 33% from March 2019. And our win rate in the first quarter was up about 500 basis points from the first quarter of 2019” commented CEO Mark Begor during in the earnings call.

Workforce Solutions first quarter results:  Total revenue was $301.6 million in the first quarter of 2020, a 32 percent increase compared to the first quarter of 2019.  Operating margin for Workforce Solutions was 44.3 percent in the first quarter of 2020 compared to 42.1 percent in the first quarter of 2019. Adjusted EBITDA margin for Workforce Solutions was 51.5 percent in the first quarter of 2020 compared to 49.4 percent in the first quarter of 2019.

  • Verification Services revenue was $220.2 million, up 48 percent compared to the first quarter of 2019.
  • Employer Services revenue was $81.4 million, up 2 percent compared to the first quarter of 2019.

International first quarter results

  • Total revenue was $216.0 million in the first quarter of 2020, down 4 percent and up 3 percent compared to the first quarter of 2019 on a reported and local currency basis, respectively. Operating margin for International was 7.1 percent in the first quarter of 2020, compared to 5.0 percent in the first quarter of 2019. Adjusted EBITDA margin for International was 27.8 percent in the first quarter of 2020, compared to 25.3 percent in the first quarter of 2019.
  • Asia Pacific revenue was $69.7 million, down 5 percent compared to the first quarter of 2019 and up 3 percent on a local currency basis.
  • Europe revenue was $66.4 million, down 3 percent compared to the first quarter of 2019 and down 1 percent on a local currency basis.
  • Latin America revenue was $43.2 million, down 8 percent compared to the first quarter of 2019 and up 9 percent on a local currency basis.
  • Canada revenue was $36.7 million, up 1 percent compared to the first quarter of 2019 and up 2 percent on a local currency basis.

Global Consumer Solutions first quarter results:  Total revenue was $97.1 million in the first quarter of 2020, up 3 percent compared to the first quarter of 2019 on a reported and local currency basis. Operating margin was 13.5 percent in the first quarter of 2020 compared to 12.1 percent in the first quarter of 2019. Adjusted EBITDA margin was 23.1 percent compared to 23.9 percent in the first quarter of 2019.

Withdrawal of Full Year Guidance: Due to the rapidly evolving environment and continued uncertainties resulting from the economic impact globally of the coronavirus disease (“COVID-19”), we are not providing guidance for the second quarter of 2020, and are withdrawing our previously announced guidance for full year 2020, which was issued on February 12, 2020. On our earnings conference call on April 21, 2020, we will discuss the impact of the current economic situation on Equifax including providing perspective on revenue trends in April, and the impact on Equifax financial results should these trends continue for the remainder of the second quarter of 2020. We will also discuss actions we are taking to manage in this environment.

Impact of COVID-19:  During the earnings call Equifax provided a perspective on which portions of Equifax’s businesses are recession-resilient today. Second, performance during the global financial crisis and a comparison of our business mix in 2009 compared to today or 2020.   Management’s comments:

“To estimate the impact the recession could have on Equifax or will have on Equifax, we assigned our line of businesses into three categories.

  • First, recession-resistant. These businesses have drivers that are not directly aligned with economic activity in the recession and we expect them to grow through COVID-19.  The best examples of these businesses are Workforce Solutions, our US mortgage business and our government lines of businesses that we expect will continue to grow from the uniqueness of the data, including TWN or from the low interest rate environments, including mortgage.
  • Second, countercyclical businesses and these are businesses that perform better during the recession, and the best example is our Unemployment Claims Management business and Workforce Solutions, where we expect significant growth in Workforce Solutions revenue from growing unemployment claims in the United States.
  • And third, our recession-impacted businesses. These are businesses that are directly impacted by economic activity in contraction and recession and include auto, cards and P loans, where both consumer activity declines or lender activity is contracted for risk containment reasons. We expect these business lines to have negative revenue growth in a recession.

Today, about 65% of Equifax’ US businesses are either recession-resistant or countercyclical and about 55% of our global business is recession-resistant or countercyclical. This compares in the 2009 global financial crisis where only about 40% of our businesses were either recession-resistant or countercyclical compared to the 55% today. This meaningful growth – the meaningful growth in EWS and US mortgage since 2009 positions Equifax well for the COVID-19 recession.  Equifax business mix is better positioned for an economic event today than it was during the global financial crisis. Strong Workforce Solutions growth has increased their relative size in Equifax from 10% of revenue in 2009 to 27% percent of revenue today. And US mortgage has grown from 12% of Equifax revenue in 2009 to over 20% today.

Source: Equifax Press Release and Earningscall Transcript