Equifax Q1 2025 slides: Revenue beats guidance, announces $3B buyback program

Executive Summary

Equifax Inc (NYSE:EFX) reported strong first quarter 2025 results on April 22, with revenue and adjusted earnings per share exceeding the company’s February guidance. The credit reporting and data analytics firm delivered revenue of $1.442 billion, representing 4% reported growth (5% in constant currency) and $37 million above the midpoint of its previous guidance. Adjusted EPS came in at $1.53, surpassing guidance by $0.15 per share.

In a significant move for shareholders, Equifax announced a 28% dividend increase to $0.50 per share and launched a new $3 billion share repurchase program expected to be executed over approximately four years. Despite the strong quarterly performance, the company maintained its full-year 2025 guidance, citing economic and market uncertainty.

As shown in the following summary of Q1 results and strategic priorities:

Quarterly Performance Highlights

Equifax’s first quarter performance exceeded expectations across all business units, with adjusted EBITDA margins reaching 29.3%, 80 basis points above expectations. The company attributed this strong performance to both mortgage and non-mortgage segments, with non-mortgage business representing approximately 80% of total revenue.

The quarterly results breakdown shows significant outperformance compared to February guidance:

By business segment, US Information Solutions (USIS) posted 7% revenue growth, with mortgage revenue up 11% and non-mortgage revenue increasing 6%. The USIS segment achieved a 34% EBITDA margin, with non-mortgage business representing 68% of segment revenue.

Workforce Solutions (EWS) delivered 3% revenue growth with a strong 50.1% EBITDA margin. The segment saw 6% growth in non-mortgage verifier revenue, led by double-digit increases in talent (12%) and consumer lending (11%). Government revenue grew 2% in Q1, with expectations for strengthening to approximately 10% growth in the second half of the year following a new agreement with the Social Security Administration.

International operations reported 7% constant currency revenue growth with a 24% EBITDA margin. Latin America led the international segment with 16% growth, followed by Asia Pacific at 7%, while Europe and Canada posted more modest growth of 1% and 2%, respectively.

Strategic Initiatives

Equifax highlighted its continued progress in cloud transformation, with Canada, Argentina, and Chile completed in 2024, and Spain completed in Q1 2025. The company expects strong progress in 2025 to complete remaining Latin America and Europe transformation activities.

Innovation remains a key focus, with the company reporting an 11% Vitality Index (revenue from new products) in Q1. The USIS Vitality Index has been accelerating post-cloud implementation, increasing from 8% in Q2 2024 to 10% in Q4 2024, with expectations to maintain 10%+ levels throughout 2025.

As shown in the following chart of USIS Vitality Index acceleration:

A significant strategic development in Q1 was the launch of the first "OnlyEFX" solution in mortgage, which integrates The Work Number (TWN) employment and income data with traditional credit file information. This integration provides lenders with deeper insights into consumer creditworthiness and supports process optimization. The company plans to expand this approach to auto loans and personal loans in the second half of 2025.

Capital Allocation & Shareholder Returns

Equifax’s strong free cash flow performance is enabling significant returns to shareholders. The company reported free cash flow of $813 million in 2024, with guidance of approximately $900 million for 2025 and expectations for 95%+ cash conversion in the future.

The company outlined its long-term capital allocation framework, balancing investments in growth with shareholder returns:

The 28% dividend increase to $0.50 per share represents a significant enhancement to direct shareholder returns. Equifax plans to grow the dividend annually in line with adjusted EPS growth, targeting a 20-30% payout ratio of adjusted net income.

The newly announced $3 billion share repurchase program is expected to be executed over approximately four years. The company plans to be consistently in the market, at minimum offsetting employee plan dilution, with flexibility to adjust repurchase activity based on M&A opportunities and market conditions.

Forward Guidance

Despite exceeding Q1 expectations, Equifax maintained its full-year 2025 guidance, citing economic and market uncertainty. The company expects:

• Full-year revenue of $5.91-6.03 billion
• Adjusted EPS of $7.25-7.65 per share
• Free cash flow of approximately $900 million

For the second quarter of 2025, Equifax provided the following guidance:

• Revenue of $1.495-1.525 billion
• Adjusted EPS of $1.85-1.95 per share

The mortgage market remains challenging, with Q1 USIS mortgage hard inquiries down 9% year-over-year. The company expects mortgage inquiries to decline approximately 12% for full-year 2025 as mortgage rates remain elevated.

Long-Term Outlook

Equifax reaffirmed its long-term financial framework targeting 7-10% organic revenue growth, supplemented by 1-2% growth from acquisitions. The company expects 50 basis points of annual EBITDA margin improvement, driving 12-16% cash EPS growth.

The company emphasized its recession resilience, noting that approximately 50% of its business is in verticals expected to grow 5-10% even during economic downturns. Equifax also highlighted a $1.2 billion mortgage market recovery opportunity when interest rates eventually decline.

In the government sector, Equifax sees significant growth potential for its TWN (The Work Number) solutions to address the estimated $160 billion in federal improper payments. The company has penetration across all 50 states and key federal agencies including CMS, SSA, and USDA, positioning it well to improve federal and state program integrity and efficiency.

Equifax’s presentation underscores the company’s transformation into what it calls "The New EFX" – a more diversified, cloud-enabled data and analytics provider with accelerating free cash flow, enhanced shareholder returns, and recession resilience. The strong Q1 2025 performance appears to validate this strategic direction, though the company remains cautious about the full-year outlook given broader economic uncertainties.

Full presentation:

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