Equifax Q3 2023 Revenue Up 6%

Third Quarter Results Show Strong Execution Towards Strategic Priorities In Challenging Mortgage Market

Financial Results Summary

The company reported revenue of $1,319.1 million in the third quarter of 2023, up 6% compared to the third quarter of 2022 on a reported basis and up 7% on a local currency basis.

Net income attributable to Equifax of $162.2 million was down 2% in the third quarter of 2023 compared to $165.7 million in the third quarter of 2022.

Diluted EPS attributable to Equifax was $1.31 for the third quarter of 2023, down 2% compared to $1.34 in the third quarter of 2022.

Third quarter 2023 revenue of $1.319 billion up 6% and up 6.5% in local currency against a weaker than expected mortgage market estimated to be down 29% based on Equifax mortgage credit inquiries and the strengthening U.S. dollar, which negatively impacted revenue. Excluding Brazil revenue of $23 million that was not included in July guidance, third quarter revenue of $1.296 billion was up 4% and up 5% in local currency.
Strong execution of the 2023 Cloud spending reduction plan, delivering savings of $210 million and 2024 run rate savings of $275 million.
Organic local currency non-mortgage revenue growth of 7% with strong new product innovation leveraging the Equifax Cloud and record New Product Vitality Index of 15%.
Workforce Solutions non-mortgage revenue up a strong 11% from very strong Government growth. Total revenue up 3% due to challenging mortgage market.
USIS revenue up 7%, with B2B non-mortgage revenue growth of 8% and strong 10% B2B Online non-mortgage revenue growth.
International revenue grew 10% on a reported basis and 12% on a local currency basis, with organic local currency revenue growth of 3%.
Closed the acquisition of Boa Vista Serviços, the second largest credit bureau in Brazil, which will expand Equifax capabilities in the large and fast-growing Brazilian market.
Revising guidance down to reflect the impact of weaker than expected U.S. mortgage market and foreign exchange, partially offset by acquisition of Boa Vista Serviços. Reducing full year 2023 guidance at the midpoint to revenue of $5.256 billion and Adjusted EPS of $6.67 per share.

“Equifax executed well against our strategic priorities, our $210 million spending reduction plan, and earnings framework in the third quarter, despite lower than expected revenue principally due to a challenging mortgage market as well as foreign exchange. Revenue of $1.319 billion, including $23 million of revenue from the Boa Vista acquisition, was up 6% with Adjusted EPS of $1.76 per share up 2% versus last year. Equifax had strong organic local currency non-mortgage revenue growth of 7% from continued strong new product performance with a record New Product Vitality Index of 15%. However, throughout the quarter, we saw U.S. mortgage activity decline to levels below our expectations as interest rates increased, which impacted mortgage revenue in Workforce Solutions and USIS. Workforce Solutions delivered strong 11% non-mortgage revenue growth from very strong revenue growth in Government. USIS delivered a strong quarter, with strong B2B Online non-mortgage revenue growth of 10%, and International delivered total local currency revenue growth of 12% and organic local currency revenue growth of 3%.

In August, we closed the acquisition of Boa Vista Serviços, the second largest credit bureau in Brazil. This acquisition will expand Equifax capabilities in the large and fast-growing Brazilian market and add to our diverse International portfolio while giving Boa Vista Serviços access to our expansive global capabilities and cloud-native data, products, decisioning and analytical technology for the rapid development of new products and services, and expansion into new industries.” said Mark W. Begor, Equifax Chief Executive Officer.

“We are reducing full year 2023 guidance at the midpoint to revenue of $5.256 billion and Adjusted EPS guidance of $6.67 per share, a reduction of $44 million and $0.31 per share, respectively. The reduction in both revenue and Adjusted EPS are principally due to the weaker U.S. mortgage market and the impact of foreign exchange partially offset by the benefit from our Boa Vista acquisition. We expect the weaker U.S. mortgage market at current high interest rates to continue in the fourth quarter, and we now expect full year Equifax mortgage credit inquiries to decline about 34%, which is down over 3 percentage points from our prior framework.

While the second half of 2023 has been challenging with the accelerated decline in the U.S. mortgage market, we are energized by the expected strong 13% non-mortgage revenue growth in the fourth quarter, which represents over 85% of Equifax revenue. We are confident in the future of the New Equifax as we move toward completion of our EFX Cloud and Data transformation, leveraging our new Cloud capabilities to accelerate new product roll-outs that ‘Only Equifax’ can provide, which will drive growth in 2024 and beyond. We are energized about the New Equifax that will deliver higher margins and free cash flow.”